Words by

Marc Vincenz

“…Iceland’s misadventure in imitating the banking excesses of bigger countries has let it to imitate their judicial excesses.” Christopher Caldwell, Financial Times
Public patience has once again reached breaking point. Although current protests may have been ignited by Alþingi’s recent debacle—a surprising event which vindicated former ministers of Finance, Foreign Affairs and Business Affairs of all blame in Iceland’s economic collapse, but singled- out ex-PM Geir Haarde, voting to indict him for gross negligence—the question Icelanders are asking is: Can anyone here get our house in order? Commenting on the indictment of Geir Haarde, the Financial Times noted: “In large countries a crusading judiciary is either the sign of a feeble political class or the modus operandi of a corrupt one. Maybe, where everyone knows everyone else, statesmen can be disciplined ad hominem without creating damaging constitutional precedents. Maybe the prosecution of Mr Haarde is more tribal than political.”
In an interview with Bloomberg Television, Geir stated that his indictment was absurd. “The crisis,” he said, “was not due to political decisions. It was partly the banks’ own doing.” Without pointing fingers, he admits that there were mistakes made within his own government, but for him, this indictment is a case of “political opponents settling their scores.” Geir H. Haarde, the first political leader to lose power as a direct result of the economic crisis, is also the first—and potentially only one—to be indicted. He told the Financial Times that he and his colleagues “did not cause the crisis any more than George Bush in the US or Gordon Brown in the UK.”
Geir may be on to something here. Hoping Geir’s indictment could set precedent other former political leaders are being singled-out for the chopping block in the UK and even the US. In fact, the Daily Telegraph proposes the UK government mount a similar case against Gordon Brown: “…he failed to control the recklessness of the banks… he stripped the Bank of England of its powers…and gave them a…wholly inept regulator…he misled parliament over the state of the public finances…” The Wall Street Journal concurs wholeheartedly, but it’s highly unlikely that a major political leader could be brought to court either in the UK or the US due to negligence any time soon. Set up in 1905, Iceland’s Landsdómur, a special chamber to try ministers accused of crimes, appears to be a rather unique institution.
In the US, Foreign Policy Magazine had a look at the legal framework covering a potential indictment of former President George W. Bush and former Federal Reserve Chairman Alan Greenspan, but found that “it’s not against the law for [US] politicians to screw up.” Apparently mistaken regulatory decisions and lax oversight are not grounds for criminal charges, and in fact even civil charges are highly unlikely. “Unless U.S. regulators were purposely colluding with companies to defraud investors, they can’t be held responsible. Iceland’s law is pretty unique, but countries under the Westminster system—those based on the British parliament—traditionally operate under a principle of ‘ministerial responsibility’.” The Financial Times points out that, “A simple-minded ideology, foolishly imposed is not the same as a crime. Negligence, no matter how gross, is not corruption.”
To make matters worse, progress in charging former Icelandic ‘oligarchs’ and their ‘banksters-in-crime’ appears to be geriatric to say the least. The Daily Mail states: “The Financial Services authority, as Kaupþing’s UK regulator, does not appear to have been in a great hurry to release regulatory material to the Serious Fraud Office.” And here in Iceland, despite a year and a half of evidence-accumulation, not a single ‘bankster’ has been brought to justice. Meanwhile, despite all the current government’s promises to the contrary, and at the behest of the IMF, homes are being repossessed, taxes are higher than ever, and social benefits are being cut left and right. One wonders who really governs the country.
This last month the FT noted that Ágúst Guðmundsson, founder of Bakkavör and one of the largest shareholders in the now-defunct Kaupþing, settled a London lawsuit filed against him. He was charged with acquiring an unprecedented 10 million USD loan from his former bank in 2007 for a holiday chalet in the French Alps. In the US, Glitnir’s ongoing 2 billion USD lawsuit with Jón Ásgeir Jóhannesson appears to be nowhere near reaching a close. Quoted last month in the Daily Telegraph, he says: “For Glitnir to suggest that the overseas incorporation of these [my] companies is evidence of a complex web of international interests designed to conceal my assets is clearly nonsensical.”
On the surface, it seems—with the exception of Geir Haarde—that no one is guilty of a single thing. For a frustrated Icelandic nation there appears to be only one thing to do: Crack out those pots and pans and get banging again.