Reykjavík Grapevine - 05.11.2010, Page 12

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The Reykjavík Grapevine
Issue 17 — 2010 Egill Helgason is a man of many talents, in case you were wondering.
Besides running a political talk show on Icelandic State TV, he also runs a
literary programme there. And he blogs a lot for website Eyjan.is. Busy man!
Analysis | Egill Helgason
Eva Joly shocked some of her
admirers in Iceland when she
said a few weeks ago that
Iceland should join the Eu-
ropean Union. For many of Joly's fans
this was not acceptable. For one and a
half years, Eva Joly has enjoyed a hero-
ine status in Iceland. In a country sadly
lacking in trust, she has been a force of
almost unquestionable moral author-
ity. Now she is running for president in
France, but if rules allowed she could
more easily become president of Ice-
land.
One of the results of the economic
collapse in Iceland is a total lack of con-
fidence in most institutions: the Parlia-
ment, the banks, the civil service. There
was talk of getting foreign specialists to
help this scarcely populated nation sort
out the mess it had gotten itself into—it
obviously lacked experience. Not much
happened.
AN OvERNIGHT SENSATION
Eva Joly came to give her opinion on
the collapse in a television interview in
March 2009. As is her custom, she was
extremely blunt. She claimed that the of-
fice of the special prosecutor, founded
to investigate criminality within the col-
lapsed banks, was a joke. The prosecu-
tor himself was a totally inexperienced
sheriff from a small town in the west of
Iceland, appointed because nobody else
wanted the job; he had no knowledge
of white collar crime, and a staff of only
three people.
Eva Joly was an overnight sensation.
At first the government wasn’t happy
with her criticism, but she was adopted
by the general public. Pressure on the
government mounted. A few days after
the interview, Joly was appointed as a
special advisor to the prosecutor. She
brought in foreign specialists and be-
cause of her efforts we soon will have
an office of ninety people, including four
prosecutors, researching possible mis-
deeds before and during the crash. This
seems quite exemplary.
FROM GRüNERLöKKA TO THE pAL-
AIS dE jUSTICE
Eva Joly has had an exceptional career.
She is Norwegian by origin, born Gro Eva
Farseth to a tailor in the modest Grüner-
lökka neighbourhood in Oslo in 1943.
The family was not rich, but the daugh-
ter was blonde and quite beautiful. She
went to France as an au pair, landed in
a very bourgeois home and ended up
marrying the son against the will of the
rather snobbish family. She started tak-
ing evening classes in law and later spe-
cialised in financial law.
Thus began her tireless crusade
against corruption that eventually led
her to become an investigating judge.
She became famous for conducting the
investigation of the Elf scandal—one of
the biggest fraud inquires in European
history, involving politicians and busi-
nessmen—as well as the case of Bernard
Tapie and Crédit Lyonnais. For some in
France she was a folk hero, but the elite
didn't like her much. She received death
threats and bodyguards had to watch
her around the clock.
Before Eva Joly came to Iceland she
had left her post as an investigating
judge and was working for Norad, the
Norwegian Aid Organization, travelling
around the Third World advising on how
to fight against corruption and capital
flight.
A pRESIdENTIAL CANdIdATE
This was a fairly low profile job for this
soft spoken but tough woman. Since
then things have changed for her. She is
now again one of the most talked about
people in France. Soon after she came
to Iceland she was invited to run for
the European Parliament for the French
Greens. She was second on the list, af-
ter Daniel Cohn-Bendit, the flamboyant
leader of the student revolt in Paris in
May 1968. They adopted a very Europe-
an platform and won a resounding vic-
tory. And now it has been decided that
she will become the presidential candi-
date for the Greens in the 2012.
This will probably not result in her
becoming the president of France, but
with her standing she might get a good
outcome, given the ennui with tradition-
al politics. And it is a credit to the French
and their policy of accueil that Joly can
get this far, despite being of foreign ori-
gin and having dual French/Norwegian
citizenship.
NO INSTANT RESULTS
But where will this leave Iceland, a coun-
try that invested so much trust in Eva
Joly. She terminated her contract here in
early October, after one and a half years
on the job. She was adamant that the
investigation was now in capable hands
and that we would see results. But many
still eagerly await news from the special
prosecutor’s office, indicating that the
directors and the owners of the banks
will be held responsible. Very little has
happened as of yet.
But then, Eva Joly never promised
instant results. She herself said many
times that the investigation would take
a long time, and that one of the dangers
was that the public and the press might
lose their patience, and maybe turn
against the prosecution itself. She cited
instances where this has happened; in
Iceland we have the experience from the
so-called Baugur affair—instigated to
look into the business affairs of tycoon
Jón Ásgeir Jóhannesson—which was a
total flop.
ICESAvE, MAGMA ANd THE EU
Eva Joly is a very blunt person, even
though she seldom raises her voice. You
ask her a question and she will usually
try to answer it, short of compromis-
ing an investigation. During her tenure
here—she usually came once a month
and stayed for four days—she started
to become involved in Icelandic politics.
This was not universally popular. The
government was quite intimidated by
some of her utterances, but because of
her standing ministers really didn’t dare
to confront her directly.
She was very outspoken on the Ic-
esave affair, claiming that it was outra-
geous for the Icelandic public to pay
huge sums for the horribly handled af-
fairs of a private bank. Then she got in-
volved in the Magma affair, where a geo-
thermal company in the southwest has
been sold to a Canadian financial adven-
turer—Joly claimed that this was the kind
of business that bankrupted Iceland in
the first place. And lastly, when she ad-
vocated that Iceland should join the EU,
some of her supporters felt estranged
from her. But others, who had resented
her meddling in Icesave and Magma,
were quite happy.
But this is Eva Joly, not a person who
fits easily into any category.
(Full disclosure: The author of this article, Egill
Helgason, invited Eva Joly for an interview on
Icelandic TV in March of 2009, so he is partly
responsible for her coming to Iceland in the
first place).
Words
Egill Helgason
Illustration
Lóa Hjálmtýsdóttir
Adieu, Eva joly
News | Iceland in the International Eye: October
Everything Well Under Control?
Some of you may recall the
wave of Nigerian scam
emails that hit businesses
the world over in the 1990s.
Generally the offending email, a
bit of f luff promising a hefty return
on investment (supposedly penned
by some ousted colonel or ex-bank
manager on the run), would request
the recipient to transfer an small per-
centage to some offshore numbered
account in the form of a deposit to
secure the hidden millions. Stltoday.
com, a St. Louis, Missouri news web-
site, ran a story this month that the
Lincoln County Sheriff’s Office was
investigating a scam whereby the
alleged Icelandic lottery was to pay
out Missouri residents, winners of
the so-called Icelandic office of the
MTA Sweepstakes, after a one-time-
handling fee of USD 1.000.00. “Win-
ners” received fake cheques under the
name of the Icelandic Lottery.
Two years after the collapse of
Iceland’s banking system, Iceland
is still struggling to come to grips
with the demise of everything that
once made it the richest country in
the world. The Special Investigator’s
Office, working in collaboration with
the UK’s Serious Fraud Office (SFO),
are supposedly preparing hundreds
of cases, yet the Icelandic nation has
yet to see a single ‘bankster’ brought
to trial. In October, The Daily Mail
pointed out that the SFO is investigat-
ing some of Kaupþing’s largest lend-
ers. Among them Robert Tchenguiz,
who borrowed over 1.2 billion GBP,
which he used to buy stakes in UK
retail chain Sainsbury’s, and Sports
Direct founder Mike Ashley, along
with three ‘unnamed’ others. Yet, the
Daily Mail states that “the Icelandic
government is keen for any trial to be
held on the tiny North Atlantic island.
But it is understood the authorities
are not interested in pursuing any in-
dividuals who do not have an Icelan-
dic surname.” Does the expression
“burying ones head in the sand” ring
any bells?
In a Bloomberg interview, Atli
Gíslason, chair of the committee that
recommended former Prime Minis-
ter Geir H. Haarde’s indictment said,
“I’m growing impatient waiting for
indictments from the special pros-
ecutor. I have strong indications that
there was a lot of criminal activity
within the banks from the beginning
of 2008 leading up to their collapse;
criminal acts were committed.
In the same vein, it appears that
despite a turnout of an approxi-
mated 8.000 protesters in front of
Alþingi on October 6, and Jóhanna
Sigurðardóttir’s renewed promise of
finding a workable solution for the
massive wave of insolvencies, appears
to have made little progress. Despite
a five month moratorium on foreclo-
sures, and numerous proposals put
forward for a blanket debt forgiveness
of the equivalent of USD 1.8 billion,
the government appears to be giving
into objections posed by the pension
funds, which claim the blanket pro-
posal will damage their assets and
force them to reduce pension pay-
ments (even further). Gunnar Helgi
Kristinsson, a professor of political
science at the University of Iceland,
was quoted by Bloomberg as saying:
“I can’t understand [Jóhanna’s sup-
portive gesture] any way other than
as theatrical…By pretending this was
actually on the table and being con-
sidered, Jóhanna managed to provoke
opponents such as the pension funds,
which look at these matters seriously
and know this idea is completely lu-
dicrous.’ As Bloomberg aptly stated
earlier this month: “A write-down of
USD 1.8 billion is equivalent to 8% of
the total assets of Iceland’s three big-
gest banks.”
NASDAQ’s recent economic in-
dicators paint a very grim picture of
things to come:
- Actual inf lation has risen by
41%from January 2007 through
September 2010
- Disposable incomes have dropped
by over 20% last year
- Wages have fallen by over 10% from
2007 to August 2010
- 63% of Iceland’s mortgages are on
the brink of bankruptcy
- 40% of homeowners are already
‘technically’ insolvent
It appears then, that the only way
to solve the mortgage crisis is for the
Icelandic government to cover the
losses. After all, you can’t have over
50% of the country on the street, can
you? Yet, strangely, on October 12, an
unnamed Icelandic finance ministry
official told the AFP that, “We are
weighing our options and debating
whether we actually need the loan
from the Nordic countries at the mo-
ment.”
So, everything is well under con-
trol then?
Dian L. Chu, a NASDAQ econo-
mist, speculated that although the
dramatic 60% plunge of the Icelan-
dic króna has assisted Iceland in its
exports, “Iceland [has essentially]
been held together…by ‘technical de-
faults’ and capital control…domestic
inf lation, and asset devaluation, most
likely will wipe out the entire middle
class.”
Eiríkur Bergmann Eiríksson, pol-
itics professor at Bifröst University,
was quoted this month in the Finan-
cial Times in relation to the October
6 demonstration. He said, “Two years
ago this week, the financial system
collapsed. This week, we’ve found out
that the political system has also col-
lapsed.”
“One of the results of
the economic collapse
in Iceland is a total
lack of confidence in
most institutions: the
Parliament, the banks,
the civil service.”
MARC vINCENz
páLL HILMARSSON