Icelandic Prime Minister Resigns After Panama Data Leak (bloomberg.com)

Omar Valdimarsson, reporting for Bloomberg: The Panama secrecy leak claimed its first scalp after Icelandic Prime Minister Sigmundur David Gunnlaugsson resigned following revelations about his personal finances. The decision was announced in parliament after the legislature had been the focus of street protests that attracted thousands of Icelanders angered by the alleged tax evasion of their leader. Gunnlaugsson, who will step down a year before his term was due to end, gave in to mounting pressure from the opposition and even from corners of his own party. The Panama documents leak, printed in newspapers around the world, showed that the 41-year-old premier and his wife had investments placed in the British Virgin Islands, which included debt in Iceland's three failed banks. An article on The Guardian sheds more light on this: The leaked documents from the Mossack Fonseca law firm show Gunnlaugsson and his wife, Anna Sigurlaug Palsdottir, bought a British Virgin Islands-based offshore company, Wintris Inc, in December 2007 to invest her share of the proceeds of the sale of her father's business, Iceland's only Toyota importer. Gunnlaugsson sold his 50% stake to his wife for a symbolic $1 at the end of 2009, eight months after he was elected to parliament as an MP for the centre-right Progressive party. He failed, however, to declare an interest in the company either then or when he became prime minister in 2013. His office has said his shareholding was an error due simply to the couple having a joint bank account and that it had "always been clear to both of them that the prime minister's wife owned the assets." The transfer of ownership was made as soon as this was pointed out, a spokesman said. The prime minister denies he was required to declare an interest.

Comments

wow, they have a real accountable democracy

[liquid_schwartz]

Kinda cold for me and I'm not a huge pickled fish eater but otherwise they always sound great.

Re:wow, they have a real accountable democracy

[Archangel Michael]

The difference between a "joint checking" and separated accounts is merely a formality and not one of any real significance. Pretending it is enough separation is functionally idiotic.

Re:wow, they have a real accountable democracy

[quintessencesluglord]

Keep in mind this is the same country that allowed banks to fail and threw the bankers responsible in jail during the 2008 crisis. Everyone predicted their economy would implode, but actually recovered more quickly than several other European countries.

I imagine the sting from that has made them more wary of even a hint of corruption, which is oddly starting to reverberate through the US after TARP, TPP, and now no real recovery in sight.

Re:wow, they have a real accountable democracy

[Rei]

That is not in the slightest the issue.

First off, this government's popularity has gone totally down the drain because of their continued efforts to enrich themselves and their friends at the expense of the nation (selling off bank assets in no-bid auctions at a tiny fraction of their value to family members of government officials, fighting to get Iceland expanded fishing quotas and then just handing them off to the fishing barons, etc), their continuous attempts to stifle press freedom, and countless other things. The prime minister's, before this incident, was in polls the choice of only 12% of the electorate. This is just the latest outrage in a long string of them.

Now, for the actual issue. Simmi and his wealthy wife, back before the financial crash, set up an offshore shell company to secretly buy shares in the three large Icelandic banks that turned out, one year later, to go catastrophically belly-up. Now the two of them (50-50 owners in the company) were creditors, scrambling with the other creditors over the right to the remains of the banks. They were what we refer to as "vultures". But this was in secret.

Then Simmi ran for office as the head of Framsóknarflokkurinn (Progress Party), a right-populist party (some might call it the "Idiot Party", as they run every year on some variant of "We're going to give you TONS OF MONEY, and nobody's going to have to pay for it, not EVERS!"). His big thing was that he was part of a group fighting against the wicked vultures trying to pick Iceland dry. When in actuality, of course, he was a vulture.

We haven't gotten to the problem part yet.

Because then he was elected. And the regulations (beyond general conflict of interest) are that if you own more than a 25% stake in an investment company, you have to disclose it. He was prime minister for months before he did anything. And that "doing something" was not to disclose his secret holdings, but to sell them to his wife for $1 (which still didn't remove the conflict of interest).

Still not to the problem part.

Because as the head of the government, he then pursued policies to get 2B euro of money that otherwise would have gone to the state to instead go to the creditors. "The creditors" including his wife and other secret accounts owned by other members of the governing coalition.

Basically, he robbed the country to make up for his investment losses.

Furthermore, people, stop the whoop-di-doo about his resignation. Because he's just stepping back to running the party behind the scenes while one of his ministers is taking over. The governing coalition isn't leaving. Actually Simmi reportedly tried to break the coalition, but the president wouldn't let him. Now he says that the president is lying about that, that he never planned to break it.

Re:wow, they have a real accountable democracy

[Rei]

Pickled fish isn't widely eaten here. A commonly eaten thing you're not used to is harðfiskur, which is basically fish jerky. But most food here is pretty standard western fare...probably the most commonly eaten food here is pizza.

Now, if you want weird stuff, we've got no shortage of options! Want rotten ammonia-reeking poisonous shark? You can have it with some fermented whale and sheep head if you'd like....

Re:wow, they have a real accountable democracy

[MightyMartian]

He sold the asset in question to his wife for one dollar, and the mere fact that his wife still held that asset as he was assuring that funds intended to shore up Icelandic banks was instead redirected to creditors pretty much makes this a case of out and out corruption. You can't just get rid of a conflict of interest by selling your assets to your spouse, particularly when the actual sale was for such a nominal fee that it raises the question as to whether it was even a legitimate transfer.

Re:wow, they have a real accountable democracy

[MightyMartian]

Exactly. I can't think of any jurisdiction, at least in the West, where selling your holdings to your spouse for a dollar somehow means the conflict of interest goes away. This is the kind of idiotic scam someone about to go bankrupt would try, and with the same result. Handing it over to your spouse doesn't make the conflict go away.

Re:wow, they have a real accountable democracy

[MightyMartian]

Tax shelters have probably been around forever. They are more sophisticated these days simply because financial systems are more complex, and reporting requirements far greater than they were in the past. Like any scam, tax dodges have to invoke more and more misdirection as investigators gain better powers.

There is a case to be made, however, that these tax shelters are a symptom of the rule makers working in their own self-interest, and creating taxation rules that benefit them. And that's why leaks like this are so important, because in the case of systemic fraud, about the only way you close the holes is by generating a lot of outrage.

Look at Switzerland, whose banking industry was notorious for decades for helping everyone from despots to drug cartels hide cash. For chrissake, even the Nzis were stowing gold they'd stolen from the Jews they were marching off to the gas chambers in Swiss banks. It was only after sustained pressure from international agencies and governments like the US that Switzerland finally began to close the loopholes. And it wouldn't surprise if that's why these tax shelters have become more popular. As the older means of hiding your cash from the taxman (or in some cases, the police) dried up, more sophisticated rackets were formulated.

For me, as bad as it is that rich and powerful people are doing this, the real target here should be the bankers, lawyers and accountants of dozens of countries who set up these schemes. While it will doubtless please the mob that a few politicians and international types fall over this, I'd like to see murky investment scheme organizations like Mossack Fonseca & Co. torn wide open. Otherwise, the people that create these dodges and shelters will just regroup and build some new schemes.

Re:wow, they have a real accountable democracy

[Aighearach]

They did the transfer the day before a new law that would have required disclosure; the transfer didn't do anything to the conflict of interest, but it did prevent him from being required to disclose it, and kept it secret until this leak.

Nobody ever claimed the purpose was to remove the conflict of interest.

Re:wow, they have a real accountable democracy

[Aighearach]

The funny part is him trying to dissolve Parliament preemptively before they could even take up his scandal, and the President's blocking of that action. That's the real reason he had to resign suddenly; his ass-covering maneuver failed spectacularly, and Parliament was going to be really, really pissed.

The cover-up attempt bit a lot quicker than the scandal.

Pirate Party

[doconnor]

Of interest to Slashdotters is that the Pirate Party of Iceland currently has a generous lead in the polls if an early election is called.

Re:Pirate Party

[interkin3tic]

Odd. I feel like pirates would be much more likely to have their booty buried in Panama.

Re:Pirate Party

[Rei]

Trivia on the subject. The Icelandic name for the Pirate Party is "Píratapartýið" But that's not Icelandic for "Pirate Party" - pirate is "sjóræningur" and political party is "flokkur". "Pírati" is an Icelandification of "Pirate" as in the international Pirate Party movement (they wanted to differentiate themselves from literal pirates), while "partý" is a loanword for the type of party where you go out and have fun (not the political kind).

Give Islanders credit

[Lucas123]

Iceland's citizenry turned out by the thousands to protest their PM's refusal to resign after the Panama Papers revealed his corruption. The Kremlin on the other hand has already called the Panama Papers a CIA plot, (big surprise there). Hopefully, if the Panama Papers do reveal Putin used a shell to hide his money, Russia's citizens will not stand for it and force his hand. Let's hope other nation's citizens follow suit, including here in the U.S.

Re:Nordic honesty.

[Opportunist]

Well, at least their politicians still have the decency to resign when they get caught with the hand in the cookie jar instead of shrugging and basically saying "And what you're gonna do about it, plebs?"

Re:Upheaval

[DNS-and-BIND]

Iceland has zero diversity. It's all white, all the time. They are also 87% Christian, Islamophobia seems popular there. The other Scandinavian countries are having great success with immigration adding value to their countries, Iceland is culturally backwards and stuck in the 20th century.

Re:Upheaval

[Rei]

Iceland has a higher percentage immigrants than Europe on average - more than all the other Nordics except Sweden. The second to fourth (it varies) most common immigrant nationality in Iceland is filipino. Despite high church registration, Iceland consistently polls as one of the least religious countries in the world, with one recent poll finding that not a single young person in the hundred-something that they polled backed a creationist worldview over that of the Big Bang. Iceland has been far more welcoming to immigrants during the immigrant crisis than mainland Europe.

Re:Nordic honesty.

[DarthVain]

Well 22k citizens of a possible total of 330k showed up to protest... 6.6% of their entire population.

That would be the equivalent of about 22 Million people showing up outside the Whitehouse (or 2.3 Million in Ottawa) ... I'm pretty sure there would be no "And what you're gonna do about it, plebs?". More likely there were be a lot of awkward silence and a hasty departure.

I mean a lot of people made a big deal about the "million man march"... now do that 22 times bigger. Regardless of police or military, that would make a corrupt politician pretty damn nervous....

What is even crazier about the Iceland numbers is that 330k population includes things like babies, and the very elderly etc... Meaning that an even higher percentage of the able population showed up!