From Iceland — Special Prosecutor

Special Prosecutor

Published November 12, 2009

Special Prosecutor

Ólafur Hauksson, the Special Prosecutor in charge of investigating the financial crimes that helped bring Iceland’s banking system to its knees, has said that his office is making progress in its inquiry, though it still faces challenges in its quest to bring criminal bankers to justice.
To date, although about seven or eight cases have either already been wrapped up or dismissed in court. Hauksson says that his team has worked on roughly fifty cases in total. With a report from Alþingi set to be released in February about financial crimes in the run-up to the kreppa, it would not be a stretch to say the number of cases that land on Hauksson’s desk may grow in the coming months. “The institution is expanding and growing with the workload,” he said, adding that three new prosecutors have recently joined the team at its Laugavegur office.
Not surprisingly, one reason that the Special Prosecutor’s office is expanding is because investigations have taken on a global scope. Akranes resident Hauksson has already been to London, where he met with British officials from the Serious Fraud Office (SFO).  Though he was unable to divulge too much information about where in the world the investigation will lead him, Hauksson revealed that Luxembourg—that bastion of financial integrity—is a real place of interest for the Special Prosecutor’s office. Hauksson’s partner-in-crime, Eva Joly, also told national broadcaster RÚV that the Norwegian State Prosecutor has offered assistance. Both the British and Norwegian assistance were described by Hauksson as being “very positive.”
“Heavy burden”
The Special Prosecutor’s office has already been successful in recovering some tainted assets. Hauksson said that a “serious amount” of cash in connection to Kaupþing’s takeover of Sainsbury has already been recovered, for example, but some assets may never be recovered. “A heavy burden of proof is on the state before it can make a decision [to freeze assets],” he explained. Though some of the money may be sufficiently hidden or spent by the time criminal financiers have been charged, this will not entice him to act rashly.
“You have to be thorough. We cannot afford to have cases thrown out in court.” The October 1st raid of accounting firms KPMG and PricewaterhouseCooper’s Reykjavik offices, for example, has not yet yielded leads to other monetary mischief. “There is a huge amount of information to go over,” Hauksson said. “It is much too soon to give information about that.”
As the name suggests, forensic accounting is a painstaking process.
Pesky journalists aren’t much of a help either to a man whose job it is to be as discreet as possible for as long as possible. Has the Special Prosecutor been working with Russian law enforcement? “There have been news stories abroad that we haven’t commented on,” he said, in a possible reference to a 2006 Danish newspaper report that Icelandic banks were helping Russians launder money.
What about [former Kaupþing executive] Sigurður Einarsson, who, according to the Guardian, has been named as a suspect and is currently in London? Are you worried he may try to avoid extradition?
“We haven’t given any information about individual’s statuses and who has been asked to come in for questioning,” he replied. “Most of those we have requested to come to Iceland have appeared.”
Thus the responsibility of being Iceland’s top cop in charge of going after arguably the country’s most hated criminals in its history does not seem to get to Hauksson, who has been working in law enforcement since 1989. “Pressure in this line of work isn’t a new thing,” he exclaimed with a chuckle when asked if he found it difficult to maintain objectivity in such troubled times.   
But there is only so much that Hauksson and his team of financial cops can do. The Special Prosecutor’s mandate does not include a fact-finding mission. Whistleblowers are welcome to directly tell the Special Prosecutor’s office anything they might know, which they can do either by phone or online, but information comes to the office primarily from the Financial Services Authority and task forces established by the new banks.
Though it might seem a bit odd that Hauksson’s team must rely on information provided to it by people with some connection to the old banks, he described the new banks’ information as ‘helpful.’ “Glitnir, for example, has hired auditors to run over everything to see if money was loaned illegally. Kaupþing has done the same,” he said, adding that the old Landsbanki winding-up committee has also cooperated.
How far does this rabbit hole go?
Just how long the Special Prosecutor’s office will remain in existence is unclear, though more will be known when parliament issues its report in February.  At first, the Special Prosecutor’s office was only supposed to cover the time just before and after the collapse. It has since broadened its investigation, and the office may still exist after February 1st, 2011, when a review by the Alþingi on the status of the Special Prosecutor’s office will take place.
Much of Hauksson’s work is currently focused on stock market manipulation facilitated by illegal loans, though as the investigation matures, even the privatization of the banks themselves may come under his scrutiny.  Hauksson, however, will have to wait on orders from above to see where the inquest is going. “It is a matter that will be touched upon by the Parliament committee’s report,” he said in closing.  

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