This all remains to be seen and the real effects will probably not be known for another twenty years. But the political manouverings of Indefence are interesting to say the least. Here is a non governmental organization which has sprung forth in two years as a major policy influencer. How and why? Remember Bjarni Benediktsson’s conversation with the US Embassy?

Bendiktsson said that, in an attempt to force the issue into the courts, he intends to oppose the government-sponsored Icesave bill when it comes up for a vote in Parliament.  (Note:  Benediktsson, along with most of his

opposition Independence Party colleagues, abstained when the previous law was passed in August.  End note).  He acknowledged, however, that the coalition government probably had the votes necessary to pass the measure through parliament.  He also admitted that, were he to have his way and the bill fail in parliament, it could further stall Iceland’s recovery efforts.  It would certainly mean no further loans from the IMF and, without that cash inflow, the government would be unable to lift its capital control restrictions and would likely have to issue Euro bonds to raise the necessary capital.  He also said he was not anxious to assume leadership of the government, but preferred to remain in opposition until after the May 2010 municipal

elections to benefit candidates from his party.

So how about this from the opposition political leader? First we will throw any obstacle we can in the way of the government so that it is weakened in the eyes of the voters. Secondly we will use this to ride a wave of discontent back into the seats of power. Thirdly, it does not matter whether the nation as a whole suffers, as long as the party is back on its feet.

But how do the two most unpopular political organizations of 2009-2010 go about advancing their agenda? Supporting and influencing an organization battling vehemently against key issues for the government would seem like a good idea. Indefence anyone?

Olafur Eliasson of Indefence has scoured internet forums and blog comments to deny this. He maintains that the group’s agenda is to prevent the people of Iceland assuming massive debts which will hinder prosperity in Iceland’s future. He states that himself and Agnar Helgason had the original idea of creating the Indefence group and have fought to keep it bipartizan in nature.

It would be imprudent to accuse those two of holding political beliefs which they might not, but it is hard to look past the company they keep. Amongst the first prominent Indefence members was Sigmundur David Gunnlaugsson, who soon thereafter assumed the leadership of the Centre Party. He has now hired Johannes Skulason, another vocal Indefence member to be his assistant. Another, Magnus Arni Skulason has held positions on behalf of both the Independence Party and the Centre Party. Eirikur S. Svavarsson is a pronounced supporter of Gudlaugur Thor Thordarson, the former IP minister who was instrumental behind the giant donations the party got from Landsbankinn and FL Group in 2006. Lawyer Helgi Ass Gretarsson has been one of the most active legal supporters of the current fishing quota system so precious to the Independence Party and the Centre Party and Sigurdur Hannesson represented the Centre Party on the committee on foreign investment last year. Least we forget the “invisible member” of Indefence, David Blondal who is the son of one of the Independence Party’s most vocal members of Althingi Petur Blondal.

Perhaps Olafur Eliasson and others were working in good faith in something they absolutely believed in. But one lesson from Indefence and the events of 2008-2011 in Iceland is that in democracies, NGO’s can influence national policy and adapt it to their goals.

The only question is, who elects them to do so and whose agenda are they pushing?

Related posts:

1. InDefence: Request For A Meeting With The Dutch Finance Committee
2. IcelandTalks: The Indefence group, Kaupthing and the Progressive party
3. From The Ashes, Dirt Rises With New Iceland

TREASURY FOR MYERS AND NORTON
NSC FOR HOVENIER 

E.O. 12958: DECL: 11/13/2019
SUBJECT: INDEPENDENCE PARTY LEADER SEEKS MEETING WITH WHITE
HOUSE TO DISCUSS IMF 

Classified By: CDA SAM WATSON FOR REASONS 1.4 (B) AND (D) 

1.(C)  Summary. Charge d'Affaires (CDA) met Bjarni
Benediktsson, leader of the opposition Independence Party, to
discuss a range of issues on November 11.  Benediktsson was
eager to discuss a letter that he had sent recently to the
National Security Council (NSC) requesting a meeting with a
senior White House official.  Were he to receive such a
meeting, Benediktsson said he would express outrage with how
the IMF was used as a tool against Iceland in the Icesave
dispute.  He also would like to talk about future
opportunities for bilateral cooperation between Iceland and
the United States.  End Summary. 

Frustration with the IMF,s Role in Icesave
--------------------------------------------- -
2. (C)  Charge d'Affaires met opposition Independence Party
Chairman Bjarni Benediktsson to discuss a range of issues on
November 11.  Benediktsson said that one reason he hoped to
meet a high ranking official from the White House was to
express frustration with the role the IMF played in the
Icesave dispute. He opined that the Icesave matter was,
originally, an issue that involved only the
Governments of Iceland, Great Britain and the Netherlands.
The dispute among the three countries, he said, centered on
whether the Icelandic government must serve as guarantor for
British and Dutch depositors that lost money when the
Icelandic banking system collapsed.  There was no EU
legislation, according to Benediktsson, that obligated
Iceland to act as such a guarantor and legal precedents on
the topic were murky at best.  Great Britain and the
Netherlands, he said, understood that they were not operating
from positions of strength and brought the IMF into the
equation to force Iceland's hand.  The threat of withholding
IMF loans until the Icesave dispute was resolved was used to
force the Government of Iceland to capitulate.  It was, he
contended, a great misuse of the IMF and completely unfair to
Iceland. 

3. (C)  Benediktsson suggested that, at this point, the best
thing that could happen for the Icelandic people would be for
the measure to fail in a Parliamentary vote.  The British and
Dutch would then, he said, be forced to sue the Government of
Iceland and seek compensation via the courts.  A legal
solution would, he felt, be more preferable than the
negotiated settlement that is being thrust on the people of
Iceland.  Benediktsson added that if the British and Dutch
did not feel comfortable pursuing the matter via Icelandic
courts, he would be happy to suggest that the issue be
resolved by a tribunal of independent judiciaries.  He even
suggested that a U.S. Supreme Court Justice could play a role
as an arbitrator in the proceedings. 

4. (C) Bendiktsson said that, in an attempt to force the
issue into the courts, he intends to oppose the
government-sponsored Icesave bill when it comes up for a vote
in Parliament.  (Note:  Benediktsson, along with most of his
opposition Independence Party colleagues, abstained when the
previous law was passed in August.  End note).  He
acknowledged, however, that the coalition government probably
had the votes necessary to pass the measure through
parliament.  He also admitted that, were he to have his way
and the bill fail in parliament, it could further stall
Iceland's recovery efforts.  It would certainly mean no
further loans from the IMF and, without that cash inflow, the
government would be unable to lift its capital control
restrictions and would likely have to issue Euro bonds to
raise the necessary capital.  He also said he was not anxious
to assume leadership of the government, but preferred to
remain in opposition until after the May 2010 municipal
elections to benefit candidates from his party. 

Increased Bilateral Cooperation with the U.S.
--------------------------------------------- --
5. (C)  Benediktsson also hoped to discuss with the White
House ways to promote bilateral discussion and cooperation
between the United States and Iceland.  He said that when the
U.S. withdrew from the Keflavik Air Base in 2006 it created a
public perception that the relationship between Iceland and
the United States was deteriorating.  This perception, he
suggested, has only been enhanced with Iceland's recent
application to join the European Union.  Benediktsson
acknowledged that the Strategic Dialogue allows for annual
high level meetings between U.S. and Icelandic government
officials.  He felt, however, that even more dialogue was
necessary.  Benediktsson was somewhat vague with suggestions
on how to accomplish this but suggested that the Parlimentary 

REYKJAVIK 00000203  002 OF 002 

Foreign Affairs Committee visit the United States.  He then
asked whether, considering Iceland's current financial
problems, there might be some U.S. financing available to
facilitate such a trip.  (Note: Benediktsson later sent CDA a
follow up email expressing continued interest in meeting with
an official from the White House even if he came alone. End
note.) 

6. (C)  Comment:  Benediktsson continues to seek a meeting
with a high-ranking  White House official to discuss
increased cooperation and the IMF vote even though IMF board
review vote is long past.  His request may be a political
ploy designed to embarrass his opponents in the government
and make waves in the media.  On the other hand, it could
also fit into the agenda of his Independence Party, an
organization which has traditionally supported strong ties
with the United States and fiercely opposes Iceland's
application to join the EU.  Given his proposed solution on
Icesave, namely send it to the courts, his angle appears more
likely political than economic.  End comment.
WATSON

Related posts:

1. The Drunk In The Pond
2. Complexity Of IceSave Too Much For Althingi?
3. Ogmundur Resigns Amid IceSave Chaos

…apart from the UK and Holland not showing any signs of rushing into negotiating…

….nothing.

Related posts:

1. No Vote In IceSave Referendum
2. An MP Answers Why She’ll Vote Yes on IceSave
3. National Referendum: A Sad Day For Democracy in Iceland

It is quite a bit strange to hear people say that they would still vote for the Independence Party today, even after its Icarian flight of the past two decades and its nepotistic distribution of the wealth of the nation.

But it so happens that there are sensible, moderate people lurking in the party’s backrooms. They just have to start claiming their party back from the fanatic right. It is time for them to build from the ground what many Independence Party members think their party is about, a democratic party favorable to independent business owners and individual rights, and weed out the frentic big government, oligarcich  Friedmanites (yes, the irony but that is what the party had become).

The party attempted to confront the need to reform itself  in the wake of the 2009 elections and produced an interesting self-examination and plan for a new beginning.  But by stirring fresh and old wounds alike, the still hypnotic Great Leader managed to stir up enough hate and venom at the party’s convention that it put those plans to a halt.

David’s heir, Bjarni Benediktsson has appeared too frail to go to work on claiming the party back for its people from the special interests of fishing quota kings and fanatic republicanite ideologues.  A large part of voters of the party have been had for fools for too long now and would doubtlessly celebrate a lead from a leadership who is not afraid of the world around them, who attempt to distribute the wealth in the most efficient directions and is committed to building a prosperous nation instead of self-serving billionaires.

The old ghosts could be pushed out to the fringes where they belong with the Progressive Party. At a time when Iceland is divided because of those interest groups, a reformed Independence Party migh just hold the keys to a successful reconstruction. The moderates need to step out and claim their place, if they don’t they risk unsettling their country even more. But that place will not be theirs unless they stop the rot.

Related posts:

1. The Independence Party Follows The Republican Way
2. An Independence Party Split?
3. Independence Party Tragedy

What could have been so hard to misunderstand about the InDefence petition’s opening statement?
“I challenge the president of Iceland, Mr. Olafur Ragnar Grimsson to reject the new IceSave bill. I think that it is fair to demand that the economic burden imposed on the Icelandic public and the future generations of this country will be put to a national referendum where the Icelandic nation gets to vote on it.”

The front page of Frettabladid also reveals an interesting turnabout. Sigmundur David Gunnlaugsson and especially Bjarni Benediktsson are now against a national referendum. They would prefer the bill to be revoked and new negotiations should take place between Iceland and the UK and Netherlands. Petur Blondal, the Independence Party MP who sponsored a bill a couple of weeks ago asking for a national referendum said yesterday that “MP’s have to sponsor bills all the time which they don’t necessarily agree on wholeheartedly” as he now claims that a national referendum would be less preferable to renegotiating.

What could have been so hard to misunderstand a few days ago when these very politicians sponsored and voted on a bill for a national referendum?

Related posts:

1. The Enemy Reveals Himself
2. No Vote In IceSave Referendum
3. No He Didn’t! President Asks For National Referendum

As Prime Minister and Finance Minister, David Oddson and Geir Haarde privatized Landbankinn into the hands of Bjorgolfur Gudmundsson, who had no experience in banking but had served a sentence for his part in the bankruptcy of Hafskip and made a mint in post-communist Russia. Half of the purchasing fee was borrowed from Bunadarbankinn (which became Kaupthing) and never repaid. Landsbankinn returned the favour for their Progressive Party counterparts.

Bjorgolfur Gudmundsson and his son, Bjorgolfur Thor wasted no time and appointed a host of Independence Party members to key positions in the bank. They also used the bank as their own personal piggy bank, borrowing billions upon billions to acquire publishing houses, newspapers, pharmaceutical companies, telephone companies to name a few businesses. Landsbankinn’s loans to connected individuals were way above anything which could have been considered as normal in banking. Or imagine Fred Godwin borrowing billions from RBS to buy Penguin, The Telegraph, Vodafone etc.

The father and son retained Kjartan Gunnarsson as the chairman of the board. Meanwhile he was also the CEO of the Independence Party.  It was a cosy relationship. A few days before the Independence Party government approved a new law limiting the amounts of grants political parties could accept,  25 million ISK found their way from the bank to the party. A big chunk but still just a part of the pie as MP Gudlaugur Thor Thordarson’s finances have revealed.

The man who approved the huge grant was former youth officer of the Independence Party and then CEO of Landsbankinn, Sigurjon Th. Arnason. A new employee at Landsbankinn in 2007 recounted how when he started working there, Sigurjon’s friend from the Independence Party and mid-level manager told him about the “real organization chart”, which showed how things really worked if you wanted to get ahead in the world of Landsbankinn’s type of international banking. 

The other CEO, Halldor J. Kristjansson had been the assistant of Progressive Party minister who turned billionaire through the privatization of Bunadarbankinn into Kaupthing. When financing the risky model that Landsbankinn like the other Icelandic banks were running, the bank came up with IceSave.

Alistair Darling is the finance minister of the UK. The UK allowed Landsbankinn to prey on the savings of the Brits when it should have been clear that the Icelandic Central Bank had no way of acting as a lender of last resort.

But neither did his Dutch counterpart and the Dutch National Bank do their homework. They allowed Landsbankinn to move in on the Dutch when one simple look at the Central Bank of Iceland’s foreign reserves should have told them not to.

They should have stopped it because this  guy wasn’t going to. Jonas Fr. Jonsson was the CEO of the Financial Authorities in Iceland and an Independence Party member. His job safety depended on not rocking any boats.

And guess who was by then calling the shots at the Central Bank of Iceland?

New chairman of the Independence Party, wasted no time in using IceSave for the political gain of his party. By screaming from the top of its lungs the party has managed to divert attention from its own role in the economic collapse of Iceland. No other issues have been able to hold the spotlight, such as the several times larger bankruptcy of the Icelandic Central Bank under the management of David Oddson, a review of the bank privatization process or the finances of the political parties.

Of course, distinguishing the Independence Party from IceSave is a hell of a task. Thorlindur Kjartansson and Erla Osk Asgeirsdottir ran for Althingi in 2008 as the young, shining stars of their party. They had just come off their jobs at Landsbankinn where they were supposed to do market research into which other countries Landsbankinn could launch IceSave. If they are next in line to succeed on the party’s behalf then surely a diversion tactic is needed to cast the blame for IceSave elsewhere.

The smoke and mirrors game also suited the old ally of the Independence Party, the Progressive Party under new leader Sigmundur David Gunnlaugsson who has cried wolf from the top of his lungs on the IceSave issue. The Progressive Party has a long history of chasing easy votes. It was not hard to convince a large part of the Icelandic nation that it might not have to honour its obligations.

So the InDefence group was formed. Behind the group which sort of promised Icelanders who signed their petition that they would not have to pay the IceSave debt is a nice little group of Progressive Party members, such as economist Magnus Arni Skulason who had to resign from the board of the Central Bank earlier this year for trying to assist wealthy parties in by-passing the currency restrictions in place in Iceland. A trustworthy and honest group if you ever saw one.

And the unloved lame-duck president bought the hype.

Finally we can only have ourselves to blame. For not being more alert to people who had grown so accustomed to running the country that they considered it a birthright. For not being more critical until after the crash. We were too busy keeping our jobs, TV’s and our cars safe that we forgot our basic rights and liberties. The Icelandic people allowed this to happen by becoming oblivious to criticism and celebrating cronyism. And for not wanting to learn from what has just happened.

Obviously the government of the Social Democrats and the Left Greens approved the IceSave agreement at the end of 2009. But it is sort of ridiculous and evil even to blame the cleaning crew for the mess left behind from the party.

Isn’t it?

Related posts:

1. Silly Debate On IceSave
2. Top 10: Who’s To Blame For The Icelandic Crash
3. Priorities Of Icelandic Politicians

The chairman of the Independence Party who is normally afraid of speaking his mind under the watchful gaze of his predecessors says in an interview with Frettabladid today that he is pro-European. He claims that it is ridiculous to maintain that the EU is somehow an enemy to Iceland. He thinks that the possibility of a good outcome of negotiations with the EU is false hope at best.

But, he thinks it is “incomprehensible stubbornness on the behalf of the EU not to open the possibility for the EEA countries to enter the common currency, to adopt the Euro.” He thinks the EU’s stance on this matter is the equivalent to an attack on the EEA agreement. The same can be said about its attitude towards IceSave. He thinks this means that the EU states would nothing rather than destroy the EEA agreement, that they don’t want exceptions or differences. “It is just politics.”

Well, duh! After a decade in which one of the smallest states in Europe wreaked havoc in its financial sector, by utilizing the “exceptions” and “differences” granted to it by the EEA agreement, and allowed to do so by the Independence Party, why would Europe want to grant Iceland a safe haven without further participation? With great power comes great responsibility and all that. With save currency havens come responsibilities as well.

According to my information, Bjarni Benediktsson and other members of the Independence Party and other parties in Althingi should take a long hard look at themselves before accusing European nations of a malicious attitude towards Iceland in the IceSave dispute. From the Netherlands we hear surprised voices who wonder why Iceland has not sent delegations, ministers or MP’s to speak on the country’s behalf to politicians, savers and the public. If it had been handled by a real European country then the discussions might have been much more successful and agreeable.

Instead Althingi sought the foxholes it knew too well. A partisan argument which lasted for months, when the best solution would have been a bi-partisan agreement to go forth and speak united on the country’s behalf against the much more powerful nations which had been wronged by Icelandic banks and Icelandic bankers. Don’t forget that due to Landsbankinn’s reckless management of IceSave and the government’s inaction a large number of ordinary citizens, charities and communities in the Netherlands and the UK have lost huge amounts of money.

What the EU member states for all their faults do much better than Icelandic politicians is that they talk, discuss and find a common ground to agree on. Icelandic foreign policy mirrors its internal politics, where statements fly between trenches and parties looks for their own maximum gain instead of a common agreement. But as Bjarni would maybe say, “it’s just politics”.

Not that you’d expect much from the chairman who scolded the Nordic countries a month ago for not coming to a “family members” aid in a time of need. Completely unaware that the Nordic countries believe themselves to be a part of a larger, more agreeable family called the EU. Regarding the EEA agreement, it seems ridiculous to think that the EU should want to spend its efforts on maintaining it were it not for Norway’s oil. Iceland has so far just tagged along. If Norway’s oil were to disappear, they’d be in the EU faster than an Independence Party member could say “bloody foreigners”.

Bjarni Benediktsson is an icon of the Icelandic drunks who stumbled into freezing pond in the middle of winter and don’t understand why others are hesitant coming to their aid unless they promise to make amends.

The rest of us would like to try something different from the whine being served from his backyard.

Related posts:

1. Complexity Of IceSave Too Much For Althingi?
2. Bjarni Benediktsson: Were He To Have His Way It Could Further Stall Iceland’s Recovery Efforts
3. Independence Party Tragedy

According to Gunnar, N1′s third quarter report states that the company’s earnings have grown threefold before tax, interests and amortization, compared to last year.

This during the heaviest recession ever to hit Iceland. How could it be? This is surely business prowess to celebrate with “Businessmen of the Year” awards.

The answer is in the increased margin, the high price consumers are made to pay. The company has used the uncertain times to its benefits, unnecessarily charging more.

Gunnar says that a company which can hike its prices that high, without it affecting sales is in effect a monopoly. Which N1 has strived to become, buying up every little roadside gas station and auto service related business it could get its hands on.

It was easy for the chairman who oversaw the expansion to get financing from Glitnir. Glitnir also let N1 borrow handsomely to buy a share in Icelandair so it could get petroleum business from the airline. Einar Sveinsson, Glitnir’s former chairman of the board is also on the board of N1 you see. Within two years, Glitnir had taken back the shares and written off the loans.

Also on the board of N1 is Gunnlaugur M. Sigmundsson, Progressive Party leader’s Sigmundur David Gunnlaugsson father.

And said CEO who oversaw the expansion of N1, wait for it…Independence Party chairman Bjarni Benediktsson.

Now who said that they were in Althingi to look out for the interests of the Icelandic public?

And what was that about the connection between Icelandic businesses and politicians?

Ms. Joly? Someone? Help us!

Related posts:

1. The Obvious About Gunnar Birgisson
2. The Suffering Daugther
3. A Mad Place

Bjarni Benediktsson – Independence Party
1. Defend the interests of family’s friends and Independence Party fat cats.
2. Try to ignore David Oddson.
3. Pretend to be leader of the Independence Party.
4. Be against everything he was for 11 months ago.
5. Ask nation to please look forward, not backwards.
6. Blame everybody else.
7. Try to ignore David Oddson.
8. Blame the foreigners.
.
100. Defend the interests of the Icelandic public.

Johanna Sigurdardottir – Social Democrats
1. Regret lost chance of retirement.
2. Defend the interests of Social Democratic, Independence Party and Progressive Party fat cats.
3. Fruitless search for other leadership candidates within own party.
4. Clean up mess from others party.
5. Scold misbehaving little kids from Progressive Party.
6. Ask PR rep to address nation.
7. Avoid appearances to calm nation.
8. Defend the interest of Icelandic public.

Steingrimur J. Sigfusson – Left Greens
1. Clean up mess from others party.
2. Defend the interests of Independence Party, Progressive Party and Social Dem fat cats.
3. Defend the interests of capital owners.
4. Attempt to keep Ogmundur Jonasson heavily sedated.
5. Remind people who is really to blame for the mess.
6. Address nation like it is stupid and too demanding.
7. Help banks and bankers get back on their feet.
8. Defend the interests of Icelandic public.

Thor Saari – The Citizens’ Movement / The Movement
1. Cheat voters.
2. Break promises.
3. Be against everything.
4. Act like everyone else is stupid.
5. Buy Sudoku puzzles for Margret Tryggvadottir.
6. Love the attention.
7. Talk with behind.
8. Come up with bad policy suggestions.
9.  Defend the interests of Icelandic …oh, who are we kidding?

Related posts:

1. The Icelandic Discourse in A Nutshell
2. Icelandic Politicians And Businessmen on Facebook
3. EU Membership – The Time and The Place of the Social Democrats

Do they really belong in the same corner of society as David Oddson, Bjorn Bjarnason, Hannes Holmsteinn Gissurarson, Kjartan Gunnarsson and Oskar Magnusson?

Or is their political career “paid” by the same interest groups?

The list of Independence Party coat-tailers whose reputation is in tatters from fighting on the front lines for the party is quite impressive. Illugi Gunnarsson, Tryggvi Thor Herbertsson, Gudlaugur Thor Thordarson, Thorlindur Kjartansson and Sigurdur Kari Kristjansson are all relatively young and ambitious but will forever carry the tags of Fund 9(Illugi), The Mishkin Report(Tryggvi), FL Group(Gudlaugur Thor), IceSave(Thorlindur) and the infamous alcohol bill(Sigurdur Kari). They might argue, but credibility has shown them the red card from the game of politics.

The ambiguity surrounding Thorgerdur Katrin’s loan for shares at Kaupthing puts her in a sensitive spot, but it is hard to believe that people with such connections to the commercial sector of Iceland like her, Bjarni and Olafur really hold the same belief system as their powerful party elders. The CEO of an oil company must realize how dangerous the ISK really is and Olafur has long been outspoken about Iceland joining the EU.

So the question is, do they have the guts to break away? To form a new party on right for people who don’t want to live in the past forever?

Or do they really belong with the old guard, like Arni Johnsen, Agnes Bragadottir and Bjorgolfur Gudmundsson?

Related posts:

1. The Independence Party Follows The Republican Way
2. For Iceland To Get Back On Its Feet Important Reform Is Needed Within Independence Party
3. The Independence Party FL Group/Landsbanki Scandal