The first victim of the “Panama”: why is the resigned Prime Minister of Iceland

Prime Minister of Iceland Sigmundur David Gunnlaugsson Tuesday resigned — it was announced by the Minister of fisheries and agriculture and Vice-Chairman of the ruling Progressive party of Sigurdur Ingi Jóhannsson, who will take his place.

Ethical crisis

Starting Sunday, the Prime Minister has come under fire of the opposition: an investigation of the International consortium of investigative journalists (ICIJ) on materials of Panamanian law firm Mossack Fonseca revealed that the gunnlaugsson and Finnish his wife Anna Sigurlaug Palsdottir secretly owned registered in the British virgin Islands offshore company. In Reykjavik there have been numerous in Iceland, with its population of 330 thousand people protests: according to Bloomberg, on Sunday evening they attended up to 4 thousand people, the next day — already 10 thousand on Tuesday evening was scheduled for another rally. Every seventh citizen of the island nation have signed a petition demanding the resignation of the Prime Minister. The opposition brought in Parliament a vote of no confidence in the government.

To put from itself powers Gunnlaugsson at first refused: he said national television, his study showed good results and it would be unfair to dismiss. He stressed that participation in the offshore declined in 2009, and in the accounts of the company the assets were part of the inheritance of his wife, who was lying motionless. On Monday, Gunnlaugsson appeared in Parliament, and was faced with sharp criticism of members of his own party, in supporting him refused and the leader of the independence Party, partners in the ruling coalition, Bjarni Benediktsson.

“People felt that the political elite is experiencing an ethical collapse, said Monday the member of Parliament from the Pirate party Birgitta jónsdóttir. — People have experienced the same shock, as during the financial crisis of 2008”.

The crisis in the real estate market in the USA then crippled actively vkladyvayasj in mortgage bonds of the Icelandic banks and the entire financial system of the country — Krona rapidly went down, people took to the streets, and the government of the geirr Chord Palo. The former Prime Minister eventually got to court for negligence that led the country to financial crisis, but was acquitted. One of the bondholders of the bankrupt banks and, consequently, required the payment debts the lender — was Gunnlaugsson, it became clear from the documents Mossack Fonseca.

The forgotten offshore

In November 2007, Gunnlaugsson, at that time still a journalist and broadcaster, and his wife anthropologist Palsdottir steel in equal shares by the holders of shares of the offshore company Wintris Inc., shortly before this registered in the British virgin Islands. The company owned bonds of all three major Icelandic banks — Landsbanki, Kaupthing Bank and Glitnir — for a total amount of €3.6 million In 2008 they went bankrupt and were nationalized.

The following year, Gunnlaugsson started his political career: he became the leader of the Icelandic Progressive party and was elected to the Parliament. Although local legislation and demanded that the deputies declared exceeding 25% participation in the companies, Gunnlaugsson never told about his share in Wintris Inc. In December 2009, Gunnlaugsson Palsdottir sold its stake in Wintris Inc. for $1, it follows from ICIJ published documents. After Palsdottir became his wife in 2010, Gunnlaugsson did not include in the Declaration details of the company she owns — the three largest creditor banks in the country. In the Declaration the offshore does not appear, even when in 2013 the politician headed the government of the country.

The conflict of interest became evident, when the Cabinet of Gunnlaugsson abolished the tax of 39% with any amount that foreign creditors (among which the company Wintris) received from Icelandic debtors. The experts, whose opinion leads Süddeutche Zeitung, believe that this decision cost the Icelandic budget of more than €2 billion.

The claims addressed to Gunnlaugsson became known a fortnight before the publication of the ICIJ array of investigations. In mid-March, the Prime Minister gave an interview to Icelandic and Swedish journalists who collaborated with the Süddeutsche Zeitung. They asked him about the share in the offshore company — the issue led Prime Minister of Iceland in confusion, he began to say, and after clarifying questions stopped the interview. A few days later Palsdottir wrote in his Facebook that he has always been the sole owner Wintris, and Gunnlaugsson was named as one of the owners of the company by mistake. When they were planning the wedding in 2009, they allegedly found the error and fixed it.

Süddeutsche Zeitung found the employee who accompanied the registration of the offshore company, the Luxembourg branch of Landsbanki Bank, which in 2007 applied to Mossack Fonseca. The possibility of this error he called “extremely unlikely”: the Bank has requested from Mossack Fonseca the attorney for Palsdottir gunnlaugsson and Finnish. The letter stated that in Wintris Inc. they will own 50%. In March 2008, the company opened an account in the Swiss Credit Suisse.

On the way to retirement

Mass protests drove Gunnlaugsson in the corner. “This is a complete collapse of trust between the Prime Minister, the government and the people, explained to Deutsche Welle the leader of the Social democratic party of Iceland Christian Burgess. — People ask whether we have learnt something if we have received the same government that operates the same way as previous”.

On the third day of protests members of the independence Party were given to understand that they are ready to leave the office. The Prime Minister decided to take a chance, announcing that in the event of a collapse of the coalition would insist on early elections, which would be disadvantageous to his partners — their leader Benediktsson and found himself among the defendants in the “Panamanian securities”.

It seemed that the Prime Minister received a deferral election may appoint a President Olafur Ragnar grímsson, and that after a meeting with Prime Minister said that he would take a decision only after consultation with both parties. But in the evening, after repeated meetings with the leaders of his own party, Gunnlaugsson decided to resign.

The Prime Minister will be the Minister of fisheries Jóhannsson, and Gunnlaugsson will retain leadership in the party. Such castling will allow the progressives to retain control over the government — they have already offered independence Party, to approve the reshuffle. Benediktsson, in turn, agreed to hold talks with Jóhannsson.

Not only Prime Minister

Bjarni Benediktsson, leader of the right-wing liberal independence Party and Minister of Finance and economy, according to the ICIJ, along with two unnamed partners owned the company Falson in Seychelles. The company they supposedly bought through a Luxembourg branch of Landsbanki in 2005. Shortly thereafter, Falson has released a series of bearer shares, often used to save the name of the owner secret. According to the version of Benedictsson, he acquired Falson to manage its four apartments in Dubai. In 2009, as head of the independence Party, he sold the property at a loss, and the next year the offshore company Falson was eliminated.

Another Icelandic politician from the materials Mossack Fonseca — Minister of internal Affairs Olef nordal, the former Deputy head of the independence Party. At home nordal known as a representative of a famous political family: her father more than 30 years as head of the Central Bank of Iceland. A consortium of journalists interested in the politician because of the business her husband. Thomas Sigurdsson, spouse nordal, is a top Manager of an American industrial concern Alcoa. In the fall of 2006 he created the British virgin Islands company Dooley Securities, which was owned by the Luxembourg branch of Landsbanki. Sigurdsson said ICIJ that neither he nor his wife are the owners of the company not acted, Dooley Securities was created to hold proceeds from options on Alcoa securities, but the company he never took advantage of. With the onset of the global financial crisis the company was liquidated.