From Iceland — The Fishrot Files: A Tale Of Two Countries

The Fishrot Files: A Tale Of Two Countries

Published December 6, 2019

Andie Sophia Fontaine
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In mid-November, Wikileaks dropped a bombshell of a story: the Fishrot Files, over 30,000 documents detailing how Samherji, Iceland’s largest fishing company, bribed Namibian officials to gain access to a massive fishing quota, and then subsequently squirrelled away the proceeds into a bank account owned by a shell company in the tax haven of the Marshall Islands.

This story—widely reported by Stundin, Kveikur, Al-Jazeera and The Namibian—catalysed responses in both countries, but the differences between how Iceland and Namibia have responded so far say a lot about the countries.

So what exactly happened?

The story was brought to light thanks in large part to whistleblower Jóhannes Stefánsson, the former managing director and CEO of Samherji in Namibia who left the company in 2016. By his account, he was the frontman for the paying of bribes, but eventually became wracked with guilt about “robbing the Namibian people” and how Samherji does not hesitate “to use bribes and break the law so that they can take as much money as they can out of the country and leave nothing behind but burnt soil and money in the pockets of a corrupt political elite.”

Strong words, but we should have in mind that Samherji’s other dubious practices have been a matter of public record for years now: journalist Ingi Freyr Vilhjálmsson was reporting in 2012 that Samherji was plundering African fishing stocks—mostly off the coasts of Morocco, Western Sahara, Mauritania and Namibia—snatching up quotas that African companies could have used, and taking all the profits out of the local economies.

What makes the Fishrot Files revelations special is that we now have evidence that Samherji secured their Namibian quotas not by outbidding African fishing companies but through directly bribing the Namibian politicians responsible for awarding quotas.

Money in, money out

The Fishrot documents show that Samherji paid some $10 million USD in bribes to several Namibian officials, including (now former) Minister of Fishing Bernhardt Esau, (now former) Justice Minister and former attorney general Sacky Shanghala, and James Hatuikulipi, an investor and the (now former) chair of Fishcor, Namibia’s state-owned company which distributes fishing quotas. These bribes were, of course, not listed as “bribes” in Samherji’s accounts, but rather “consultation fees” and “facilitation fees.”

The payments were often very complex. For example, Samherji paid $3.5 million USD to a company known as Tundavala Investments Limited in Dubai—which happens to be owned by James. The payments originated from Esja Seafood Limited, a Samherji holding company in Cyprus.

Once the cash from these quotas came in, Samherji did their best to ensure that they could hang onto as much of it as possible. Many of these proceeds were funnelled to the Marshall Islands, a tax haven, and put in a bank account there of a shell company called Cape Cod FS. While Norwegian financial services company DNB NOR (now DNB) ended up closing that account because they could find no information on the actual beneficial owner of Cape Cod FS, Samherji had been using that account for about seven and a half years prior, and continued to be a major client of DNB NOR.

The Namibian response

There has been a stark contrast between how Namibian and Icelandic authorities have responded to the news. Within hours of the story breaking, Namibian President Hage Geingob announced that he would fire both Bernhardt and Sacky. Shortly thereafter, they both resigned. James also vacated his post, and, at the time of writing, all three have warrants issued for their arrest. In fact, six arrests in all have been made at the time of this writing.

It is important to note that it is an election year in Namibia—ballots were cast on November 27th—which may have inspired President Geingob’s swift response. The Namibian people remain resolved of all, as they took to the streets the same day the news broke, demanding the president’s resignation.

Further, the editorial staff of The Namibian issued a statement of their own, arguing that “no amount of firing of ministers and convicting top officials will fix the looting of state resources, unless loopholes in the system are closed… It is systemic, and the looters are getting more and more sophisticated to enrich themselves at the expense of many ordinary Namibians.” This paper has also been continuously reporting on how Samherji and other colonisers have effectively been taking food out of the mouths of Namibians.

This swift and unequivocal response stands in stark contrast to Iceland’s response; it also underscores the reprehensible blame-shifting some Icelandic politicians have engaged in.

The Icelandic response

In Iceland, the Fishrot Files have underscored just how great an ideological gap there is between the government and the general populace.

A demonstration held on November 23rd in front of Parliament, attracting some 4,000 people, illustrates well the grievances that many Icelanders have with the situation, as a major theme of the demonstration demanded the resignation of Minister of Fisheries Kristján Þór Júlíusson.

Kristján used to be on Samherji’s board, and is life-long friends with Samherji CEO Þorsteinn Már Baldvinsson, who has temporarily stepped aside as investigations into his company continue. The fishing minister is also responsible for awarding quotas. In the eyes of many, including key members of the parliamentary opposition, this puts him too close to the case to be effective in his position.

Not that it matters to Kristján—he told reporters that he was completely unmoved by the demonstration and sees no reason to vacate his post. And there’s little reason for him to feel otherwise, considering that even Prime Minister Katrín Jakobsdóttir has defended him and asked his critics to back off.

“Forced” to bribe

While opposition MPs have diligently criticised the response, bear in mind that former Samherji CEO Þorsteinn Már Baldvinsson is still very much a free man. Even as tax authorities and at least two banks are pouring over Samherji’s records, Þorsteinn and his friends have secured platforms on various media outlets to wax poetic about how unfair this whole thing is, and have paid visits to Samherji fish factory workers to characterise the investigations as an attack on all of them.

Meanwhile, Þorsteinn’s pals in the Independence Party have gone on the defensive in a major way, blaming Namibia for Samherji’s malfeasance. The crowning example of this is Minister of Finance Bjarni Benediktsson telling television station Stöð 2: “Corruption in these countries, that’s perhaps the root of the problem in this particular case. A weak government, a corrupt government in this country. That seems to be the underlying problem that we’re seeing crop up now.”

This statement made world news, and for good reason. It is not just a spectacular example of blame-shifting; it also reflects a colonial mentality about African countries, painting them as so woefully corrupt that honest European businessmen simply have no choice but to pay bribes to African officials. It also ignores the fact that Icelandic fishing company CEOs ingratiate themselves to Icelandic politicians, donating to their campaigns—those same politicians have been lowering taxes on these companies, for some reason.

“The swift and unequivocal response in Namibia stands in stark contrast to Iceland’s response and underscores the reprehensible blame-shifting some Icelandic politicians have engaged in.”

So what now?

While Icelandic tax authorities are combing through Samherji documentation, both Arion Bank and Íslandsbanki are reportedly investigating the fishing giant’s activities. Tina Søreide, one of Norway’s leading experts on corruption, also told reporters that the FBI and the Securities and Exchange Commission could possibly get involved, on account of how Bank of New York Mellon stopped a fund transfer from one of Samherji’s shell companies. The FBI, for the record, will neither confirm nor deny whether they are interested in the case.

Meanwhile, in Norway

Remember when we mentioned DNB? Well, they haven’t escaped the Fishrot Files unscathed. As reported, Samherji was a major client of DNB, which helped in the transfer of around $70 million USD into shell companies in tax havens. That much is a matter of public record. What is less clear is how culpable they are, and management at the bank has been very vocal about getting to the bottom of this—especially since the Norwegian government owns a 34% stake in the bank.

Timing plays a crucial role in this. DNB’s former CEO, Rune Bjerke, retired last September, and the new CEO is now Kjerstin Braathen. She is now in the difficult position of managing the fallout of DNB activities that preceded her post.

In this respect, she seems to be handling herself well. Speaking to the newspaper Dagens Næringsliv, Kjerstin said in no uncertain terms that DNB was taking the case seriously “and we can’t rule out that we have been misused,” emphasising that a full investigation is necessary.

Norway’s Minister of Finance, Siv Jensen, completely agrees, urging DNB to “lay all its cards on the table,” adding, “DNB must contribute so we can get to the bottom of this, I think that’s in DNB’s own interests.”

Nonetheless, Kjerstin has been just as adamant about DNB’s innocence as Icelandic businessmen have been about theirs.

“Sometimes you can get the impression that it’s DNB that’s accused of criminal operations,” she told Dagens Næringsliv. “I want to stress that these are complaints tied to a fishing firm in Iceland. It’s not nice when customers of DNB are alleged to be involved in crime. What we can do is bring forth information that can enlighten the situation.”

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