Corruption on Iceland

Frederik Obermaier and Bastian Obermayer:

The interrogation room in which Iceland’s recent history was rewritten is sparse, furnished only with a table, some chairs, and a computer. A camera is fixed to the wall, and the frosted, double-glazed windows have completely blocked out the sound of the gale-force winds in Reykjavik’s Faxafloi Bay.

It was in this room that some of Iceland’s most powerful bankers, executives, and investors had to answer to special investigator Olaf Hauksson. A tall man with a heavy build, Haukkson has spent the past six years investigating the transactions that brought Iceland’s economy to its knees in October 2008.

At the time, the country’s three biggest banks folded within just three days, in part because their senior executives had illegally doctored the stock listings of their own banks. “Market manipulation”, as Hauksson curtly calls it.

When asked what happened to the three bank bosses in the end, Hauksson grins. “They all went to jail,” he says, pointing to the empty chairs. “They sat right there.”

Olafur Hauksson has only just begun to wrap up proceedings for the biggest scandal in Iceland’s history. And it’s entirely possible that the publication of the Panama Papers will trigger the next one (…)

Iceland is in for another storm, it seems.

People flying into Reykjavík in early 2016 land in a country still healing from the last crisis. The fault lines of the financial earthquake that hit the country in the fall of 2008 ran deep. For several months, Iceland found itself at the center of the global financial crisis. At the time, three of Iceland’s largest banks – Landsbanki, Kaupthing, and Glitnir – collapsed almost simultaneously under the weight of their foreign debts.

The Panama Papers leak is astounding, although not shocking. And the journalists analysing them actually kept everything under wraps.

P.S. This particular story concerns Iceland’s Kaupthing bank among others, which always reminds me of this series of brilliant ads with John Cleese.