Economic Disaster Area » FL Group

Icelandic police investigate FL Group

Dadi — Mon, 15 Jun 2009 13:02:22 +0000

The offices of a firm of lawyers, Logos, and a house belonging to its chief executive, Hannes Smarason, have been raided by police looking into the sales and re-sales of Sterling Airlines, a Danish carrier that failed last year.

The company’s collapse in October with debts exceeding £1bn was the first domino to fall in the Icelandic banking crisis, which left thousands of councils, charities and savers unable to access their savings accounts.

From the Telegraph

Paid For By Baugur And FL Group

Dadi — Wed, 22 Apr 2009 10:46:11 +0000

Gudlaugur Thor and Illugi Gunnarsson

One major factor in why people should think twice about voting for the same old parties is that they haven’t managed to be transparent about who are paying their way.

Fortunately Channel 2 has decided to inform voters about the six politicians from the Independence Party, Social Democrats and the Progressive Party who were sponsored by Baugur and FL Group in the last election. In some cases receiving donations amounting to almost two million ISK.

The Independence Party foes who are becoming increasingly suspectible, Illugi Gunnarsson and Gudlaugur Thor Thordarson are amongst the named and shamed MP’s. So is their colleguae Gudfinna Bjarnadottir and Social Dems Steinunn Valdis Oskarsdottir and Helgi Hjorvar. To nobody’s surprise the former city councilman of the Progressive Party, Bjorn Ingi Hrafnsson rounds off the list.

None of the politicians have denied the report from last night.

Stooges & Secret Companies

Dadi — Tue, 21 Apr 2009 23:32:20 +0000

FL Group – In English

Dadi — Tue, 21 Apr 2009 09:48:24 +0000

Mission Impossible

Dadi — Sun, 12 Apr 2009 13:19:15 +0000

After accepting over 70 million ISK in the last campaign year from Landsbankinn and the controlling owners of Glitnir (FL Group) when it was considered normal to accept donations of 300.000-500.000 ISK, how on earth was the government of the Independence Party and Social Democrats supposed to rein in the banks on the way to their doom?

How could Geir Haarde, Arni Mathiesen, Ingibjorg Solrun Gisladottir or David Oddson seriously control Hannes Smarason and Thorsteinn Jonsson of FL Group and Sigurjon Arnason of Landsbankinn when they had accepted these large amounts from them, knowing that if they would be made public it would be considered one of the greatest scandals in Icelandic history?

A mission impossible if there ever was one. One that could only ever blow up in their face.

Wating On Useless Information From The Progressive Party

Dadi — Sun, 12 Apr 2009 12:36:55 +0000

Trustworthy?

Right now the nation is waiting on the most useless information ever from the Progressive Party. Who were their largest donors in the last few years? Even though the party will open up its books, the sensitive info will be nowhere to be seen.

Last night, new Independence Party chairman Bjarni Benediktsson tried to convince the nation that the party had cleaned up the mess regarding the FL Group/Landsbankinn scandal. That is with the resignation of Andri Ottarsson and the disclosure of a manager from Landsbankinn, Steinthor Gunnarsson and Thorsteinn Jonsson, a large shareholder and board member of FL Group that Gudlaugur Thor Thordarson only asked them to go and raise money for the party. So the party that held its convention two weeks ago under the slogan “Lets go to work with a clean slate”, is now mostly annoyed that this scandal was made public before the election.

The Social Democrats (what they prefer to be called than the Alliance Party) got 36 million ISK in contributions above 500.000 ISK in 2006.

Actavis hf – 3.000.000, Baugur Group hf – 3.000.000, Eignarhaldsfélag Samvinnutrygginga – 1.000.000, Eimskipafélag Íslands – 1.000.000, Exista – 3.000.000, Eykt – 1.000.000, FL Group – 3.000.000, Glitnir – 3.500.000, Kaupþing – 5.000.000, Ker hf. - 3.000.000, Landsbankinn – 4.000.000, Milestone – 1.500.000, SPRON – 1.000.000, Straumur Burðarás – 1.500.000, Teymi – 1.500.000

I don’t know, I have a lot of experience in marketing and relationship management and when businesses or individuals have funded my projects I make sure they are happy. Similarly when I have funded projects I have expected goodwill instead from the recipient. But Icelandic politicians seem to think of themselves as charities. That’s probably why some of them were so apparent on invitation trips abroad on the behalf of businesses like FL Group and the banks, Bjorn Ingi Hrafnsson of the Progressive Party for example.

At least Bjarni Benediktsson had to answer a straightforward question on the news last night, whether he had been on a trip to an NBA game in the private jet of Hannes Smarason. The answer was a resounding no and it is comforting to hear a politician answer a difficult question, although most people are probably still doubting the honesty of his answer. But then, that just comes with that slogan about cleanliness one week and then all sorts of misleading answers about the donations and who were behind them (Kjartan knows nothing, Gudlaugur knows nothing, then they know, no one is telling, then they are when proof is presented…all very trustworthy).

Now the media awaits the information that the Progressive Party itself says it is dying to reveal. They firmly believe that in order to win back the trust of people, all books should be open back until 2006. Or that is at least what MP Birkir Jon Jonsson says, the chairman Sigmundur David Gudlaugsson has had the most convenient case of flu in recent history and not been available to the media. It is funny though, most people outside their circles would prefer to see the books of all parties since 1998 since Iceland was turned into a Ponzi scheme.

But even though the Progressive Party will open its books, they are hardly full of damning information. Many serious donors in the past decade have been surprised to find that when they have tried to transfer their donations to the party, the owners of the receiving accounts have not been the party at all but little known background people in the party.

Lets just hope they have covered their tracks well enough, so that the trust they say they deserve will not diminish.

Who Were Able To Dump Their FL Group Stock Into Fund 7 and Fund 9?

Dadi — Sat, 11 Apr 2009 09:00:32 +0000

Glitnir

The Independence Party might have enough on their plate with the scandal surrounding the donations from FL Group and Landsbankinn. Andri Ottarsson has resigned as the CEO, issuing a statement saying he had nothing to do with the donations but he still wanted to resign to help the party regain some credibility (why is he resigning if he didn´t do anything wrong?). His predecessor, Kjartan Gunnarsson says he knows who was behind this whole mess but his loyalty lies with the party and its backers, not the people of Iceland who are left with the ruins of his old bank so he won´t disclose their names. If Gudlaugur Thor Thordarson´s political career is not over then his good name at least is.

But there are still plenty of questions unanswered. One revolves around Fund 7 and Fund 9 in Glitnir, the infamous funds that were temporarily closed for business when Glitnir was nationalized. So far, the government of the Independence Party and the Alliance Party as well as the Central Bank have refused to answer why the state pumped 200 billion ISK into some funds in the defaulting banks before allowing investors access again.

The supporters of Gudlaugur Thor Thordarson have not tired of pointing to his foe within the party, MP Illugi Gunnarsson who sat on the board of the notorious funds. The story goes that Geir Haarde and finance minister Arni Mathiesen were bailing out their fellow Independence Party MP as the funds had become loaded with worthless bonds from FL Group, a large shareholder in Glitnir, criminally ignoring the published investment policy of the funds.

But why did the funds end up with all that FL Group waste? The more plausible story goes like this;

- At the end of 2007 it was clear to everyone on the inside that the Icelandic economy was heading for a crash and FL Group stock had become virtually worthless.
- Those holding the stock were unable to find buyers and were stuck with the rapidly declining company.
- But inside the banks, some were being offered the chance to get rid of the toxic waste into these funds.
- So the connected business elite (and maybe some politicians, we don´t know?) facilitated a rescue mission for each other, getting cash from the owners of the funds (thousands of small and large individuals and businesses) without their knowledge at a price not available to other investors in FL Group. Essentially using the money in the funds to bail out some investors.
- Then, the taxpayers, through Geir Haarde and Arni Mathiesen paid for this rescue mission.

This might just be a story, but as such it is a good one. It rhymes with what has become common knowledge, that some customers, employees and former employees of the banks were warned before the crash so they could rescue their assets. It would be nice to have this story confirmed or denied before the upcoming elections.

The Independence Party FL Group/Landsbanki Scandal

Dadi — Fri, 10 Apr 2009 11:57:16 +0000

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.

Gudlaugur Thor Thordarson Bought By FL Group?

Dadi — Thu, 09 Apr 2009 13:20:01 +0000

Guðlaugur Þór Þórðarsson

The relevation of Morgunbladid that the facilitator of FL Group’s 30 million ISK donation to the Independent Party, then Health Minister Gudlaugur Thor Thordarson is quite interesting on many levels.

FL Group tried to save its own skin by acquiring a 20 year exclusive contract with Reykjavik Energy that would bring the intellectual rights of RE in the area of geothermal energy, towards export to the company. It has been revealed a long time ago that at around that time, FL Group invited top people from Independent Party and the Progressive Party to a fishing trip, including said Gudlaugur Thor.

Fishing trips are renowned in Iceland as the place to do some serious business, while treating your clients to the max.

Independence Party = Enron

Dadi — Thu, 09 Apr 2009 10:48:39 +0000

Indipendence Party = Enron

The biggest story this week was the relevation that the Independence Party accepted two enormous donations from FL Group and Landsbankinn in 2006. At the same time, Geir Haarde was behind a bill in parliament that would limit individual donations to political parties to 300.000 ISK. The FL Group donation of 30 million ISK was received by the party just days before the new law was in effect. Landsbankinn’s donation was of 25 million ISK.

Geir Haarde released the following statement.

“With my knowledge and intent, the Independent Party actively worked on improving the party’s finances in accordance to the existing laws on financing by political parties. Many were involved.

At the same time I was the speaker for a bill of new laws on financing that became

effective as of January 1, 2007.

One of the donations that were made at that time has been in the news lately, the one from FL Group late in December 2006.

The current CEO of the party who had just started his new job at the time did not initiate nor was he instrumental in this donation. I accepted this donation as it was explained to me that it included the donations of many individual donors which FL Group was delivering on their behalf.

As the chairman of the party I am solely responsible. Current and previous CEO’s were not responsible.”

The donations are extremely embarrasing for the Independent Party. They have tried to maintain that the responsibility behind the economic crash lay with the viking raiders in Baugur and FL Group but then it turns out the party was massively financed by those very businessmen. Also while continually pointing the finger in all directions except for Landsbankinn and its owners, the father and son team of Bjorgolfur Thor and Bjorgolfur Gudmundsson, it is now painfully obvious that they did in fact pay the party handsomely for having been handed the bank on a silfer platter during the privatizaiton.

Geir may seem sorry but he has nothing to lose. Morgunbladid says that the go-between in the deal with FL Group was Gudlaugur Thordarson, Minister of Health in Geir Haarde’s government and one of the prince’s of the party.