David Oddson
The significance of the relevation behind the Independence Party’s acceptance of 55 million ISK from FL Group and Landsbankinn should not be underestimated. It is one of the biggest newsstories in Icelandic history. Here is why:
FL Group was a company listed on the Icelandic Stock Exchange where Jon Asgeir Johannesson of Baugur Group and Chairman of the Board Hannes Smarason were controlling stakeholders along with their front men of choice, Palmi Haraldsson and Magnus Armann.
Landsbankinn was a state owned bank that was sold during the 2002-2003 privatization to Samson, the company of father and son Bjorgolfur Thor and Bjorgolfur Gudmundsson. Originally the state wanted a diverse group of shareholders but the Independent Party cancelled those plans after their government coalition party, the Progressive Party had handed Bunadarbankinn to favorable businessmen.
The Samson team and the FL Group shareholders used the banks to lend themselves incredible amounts of money to invest in all major sector of Icelandic business. The group around Exista completed the circle with Kaupthing. Soon this small group of businessmen were controlling most of the major companies in Iceland, airlines, communication, retail, insurance, pharmacy, property and so on, all while controlling the three major banks.
It was always obvious that Bjorgolfur and Bjorgolfur Thor were considered favorable by the Independence Party. A close ally of David Oddson and Geir Haarde, Kjartan Gunnarsson, the CEO of the Independence Party was the head of Landsbankinn’s management, former youth participants were CEO’s and spread through middle management. It soon became a running joke within the financial industry that you had to be a card-carrying member of the Independence Party to succeed within the bank.
Jon Asgeir and Hannes on the other hand were the bad capitalists who were painted as reckless and irresponsible by the party, especially by David Oddson and those closest to him. When the state went after Baugur and Jon Asgeir in a financial mismanagement case the public opinion hardly doubted that the charges were true, but people became suspicious of the reasons why this group of capitalists were facing charges while others (those connected to Landsbankinn) seemed to be invincible.
Jon Asgeir Johannesson
David Oddson and the Independence Party always tried to link Jon Asgeir and Baugur to the Alliance Party, suggesting immoral ties between shady businessmen and the Indpendence Party’s main political rivals. At some point during the middle of the decade, all matters in Iceland seemed to revolve around either being for or against David Oddson or Jon Asgeir Johannesson. All attempts at calculated discussions on political or business matters could be easily dismissed with linking the speaker to either side.
When the economic crisis hit Iceland, a massive scramble began by leading Independent Party members, such as David Oddson and Geir Haarde to cast the blame firmly in the direction of “irresponsible criminals posing as businessmen”, and no-one was left doubting the identity of those irresponsible criminals.
Curiously, Jon Asgeir Johannesson and Hannes Smarason never portrayed themselves as anything but supportive of the Independence Party. Jon Asgeir’s father even took out a full page in the major newspapers encouraging people to vote for the party in 2006, albeit encouraging people to remove Bjorn Bjarnason, Minister of Justice from the ballot.
The finances of the political parties have been firmly closed off and therefore they did not have to disclose who were their largest supporters. A few weeks back it was finally disclosed who had supported the parties in the last couple of years and the Independent Party was embarrased into admitting to having recieved a 300.000 ISK grant from the Emergency Rescue Hotline, which it returned after the relevation. Businesses owned by the government are not allowed to support political parties and therefore the party should not have accepted it. Andri Ottarson, the CEO of the Independence Party issued a statement, “On the behalf of the party I regret this mistake. The contribution from the Rescue Hotline has been repaid and all contributions that are against the law, will be repaid to those who made them. Furthermore we will increase our scrutiny and go over our processes regarding the acceptance of donations to make sure that we will receive donations only from those who are legally able to contribute.”
Andri Ottarsson
The Hotline revelation seemed like small potatoes after all the whispers in Icelandic society through the years regarding the Independence Party belonging to powerful businessmen. And the party held its convention two weeks ago during which David Oddson, now removed as Central Bank Governor used his farewell speech to fire some sharp arrows in the direction of his old foes, the Alliance Party and Baugur. The new leadership elected at the convention was hardly new, chairman Bjarni Benediktsson belongs to the very family which has been most prominent in the party and Icelandic business for almost a century, and former Minister of education Thorgerdur Katrin Gunnarsdottir kept her post as vice-chairman.
But then Channel 2 reported on the massive grant accepted by the party from FL Group in 2006. Thirty million ISK, three days before a new law regarding the financing of political parties took effect, limiting individual contributions to 300.000 ISK: The man behind the new bill, Prime Minister Geir Haarde. And then it was revealed that Landsbankinn had paid the party 25 million ISK.
It is an understatement to say that the nation is in shock. Those against the Independence Party at the amounts and are demanding outrage, those for the party are stunned into silence, and some weak utterings that others had probably been doing it too. Andri Ottarson, who had been so regretful a couple of weeks earlier, has not been available to speak to the press since the story broke.
Geir Haarde
Then Geir Haarde stepped forward and took full responsibility. The ploy was obvious, he has nothing to lose anymore. But Morgunbladid then revealed that Gudlaugur Thor Thordarson, one of the highest ranking members of parliament from the party had been the middle man.
Gudlaugur Thor has enjoyed a prosperous career as a career-politician. A member since infancy, a student activist he worked for Sigurjon Arnason who would become CEO of Landsbankinn at Bunadarbankinn back in the day. His campaign office in 2006 was an old branch of Landsbankinn. He was also the Chairman of Reykjavik Energy on behalf of the Independence Party when FL Group almost staged an audacious coup in securing valuable intellectual rights from the company, owned by the citizens of Reykjavik. The coup had been organized through Glitnir bank and was made possible by the Independence Party and Progressive Party which controlled the majority in the city council. Gudlaugur was one of those involved invited by FL Group on a fishing trip that was excused by the same old adage “we have known each other for a long time and are friends, business and politics have nothing to do with it”. Gudlaugur by the way did not know anything about the grants until Morgunbladid had reported that he did.
So the party that was so proud of itself and its accomplishments only 20 months ago is now revealed as the emperor without clothes, stuck with his hands in the cookie jar. As the veil of secrecy is lifted in Icelandic politics and business, people are finally given hope that their society might become fairer after all. The old elite cannot get away with sucking the society dry anymore, at least not without people knowing about it. Gudlaugur Thor sees no reason why he should withdraw from the party’s ballots, the voters have trusted him he says. Geir Haarde and David Oddson ride off into the sunset portrayed as the gimps of an elitist group of businessmen. Can you imagine the irony of David’s old foes being his largest backers?
Independence Party members might be desperately pointing their fingers in all other directions while its ship is siniking into the mud but at least they cannot sell anyone the story of Iceland being the least corrupt country in the world anymore.
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April 10th, 2009 → 11:57 am @ Dadi
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