The long-awaited report is out and it appears that the wait was worth it. It is more revealing and tougher than most people expected. Bits and pieces here taken together from the reporting of visir.is, dv.is, eyjan.is, pressan.is and mbl.is
Of course many Facebookers and bloggers of left and right leanings are already finding blame with each other. The focus in the media appears slightly biased towards its ownership groups.
- David Oddson who is hiding abroad questions whether two of the members of the three man committee which delivered the report were fit to work on it due to a comment in a US school newspaper by one and the fact that the other’s daughter in law worked at the Financial Authority. Better late than never for the man who got his son, his relatives and his group of friends an array of official positions and jobs to worry about nepotism and connections.
The 30 people who owed the banks’ the most money
1 Robert Tchenguiz 113,4 billions ISK (Exista chairman, UK investor and major pub crawler)
2 Jón Ásgeir Jóhannesson 102,0 billions ISK (Baugur, Glitnir, FL Group, Hamleys and other toys)
3 Ólafur Ólafsson 61,1 billions ISK (Kaupthing, used Hauck & Aufhauser as a front in getting Bunadarbankinn, Samskip, Elton John afficionado)
4 Hannes Þór Smárason 51,8 billions ISK (Formerly of Decode and FL Group. Dabbled around in Reykjavik Energy with the Independence Party and Progressive Party city councilmen)
5 Ása K Ásgeirsdóttir 50,8 billions ISK (Jon Asgeir Johannesson’s mother. Grandmother unavailable for sale)
6 Ingibjörg Stefanía Pálmadóttir 50,7 billions ISK (Jon Asgeir Johannesson’s wife and 101 Hotel owner)
7 Jóhannes Jónsson 50,5 billions ISK (Jon Asgeir Johannesson’s father and founder of Bonus which would like you to know that the company has never sold cigarettes and is therefore socially responsible)
8 Björgólfur Guðmundsson 47,3 billions ISK (Russian brewer in shouting distance with the Independence Party)
9 Pálmi Haraldsson 39,9 billions ISK (Jon Asgeir Johannesson’s little… Fons, FL Group, Iceland Express, proved his mantle when found guilty of price collusion)
10 Björgólfur T Björgólfsson 39,3 billions ISK (Bjorgolfur’s son who believes in money heaven. Landsbankinn, Actavis, Novator)
11 Lýður Guðmundsson 36,5 billions ISK (Bakkavor brother, Siminn, Exista, Kaupthing)
12 Ágúst Guðmundsson 36,5 billions ISK (Bakkavor brother, Siminn, Exista, Kaupthing)
13 Jóhannes Kristinsson 35,4 billions ISK (Fons, Palmi Haraldsson’s partner)
14 Magnús Kristinsson 31,4 billions ISK (Fishing quota king, Toyota Iceland, Domino’s Pizza)
15 Lóa Skarphéðinsdóttir 28,4 billions ISK (Magnus Kristinsson’s wife, Arni Johnesen fan)
16 Unknown foreigner 28,3 billions ISK (who?)
17 Jákup á Dul Jacobsen 27,9 billions ISK (Faroe Island businessman of Rumfatalagerinn. Built the tallest building in Iceland in the good times)
18 Jón Helgi Guðmundsson 26,0 billions ISK (Byko, Norvik, IP acceptable grocer)
19 Karl Emil Wernersson 23,2 billions ISK (Milestone, Glitnir, Lyf og Heilsa…dabbles in property with Independence Party chairman Bjarni Benediktsson)
20 Hreinn Loftsson 22,9 billions ISK (Jon Asgeir Johannesson’s former oddjob…David Oddson’s former assistant)
21 Kristín Jóhannesdóttir 22,8 billions ISK (Jon Asgeir Johannesson’s sister)
22 Steingrímur Wernersson 22,1 billions ISK (Karl’s brother)
23 Gylfi Ómar Héðinsson 18,3 billions ISK (BYGG, constructions)
24 Kristján V Vilhelmsson 18,2 billions ISK (Fishing quota king, Samherji)
25 Guðmundur Kristjánsson 18,2 billions ISK (Brim, fishing quota king)
26 Gunnar Þorláksson 18,1 billions ISK (BYGG, constructions)
27 Þorsteinn Már Baldvinsson 17,5 billions ISK (Former Glitnir board chairman, fishing quota king, Samherji)
28 Benedikt Sveinsson 15,6 billions ISK (Bjarni Benediktsson’s father. N1)
29 Þorsteinn M Jónsson 14,2 billions ISK (Coca Cola Iceland, FL Group, Jon Asgeir’s little…)
30 Guðbjörg M Matthíasdóttir 13,8 billions ISK (Fishing quota queen, Morgunbladid’s owner, David Oddson fan)
- Jon Asgeir Johannesson, his family and their companies became too big to fail in a literal sense by owing 700 billion to the banks at the end of 2008. The same could be said of the Bjorgolfurs’ at Landsbankinn and Olafur Olafsson at Kaupthing. If the banks had called in on any of those then it would have had disastrous consequences.
- Inga Jona Thordardottir resigned from FL Group’s board in 2005, because 3 billion ISK disappeared from the company’s accounts without explanation. The chairman of the board, Hannes Smarason was doing things without CEO Ragnhildur Geirsdottir’s knowledge and she threatened to go to the police. Ragnhildur resigned shortly after with a large parachute. Inga Jona is the wife of Geir Haarde.
- The Coalition of Young Independence Party Members (SUS) says it did not know anything of grants amounting to 33,7 and 8 million ISK from Landsbankinn and Kaupthing in 2005-2007. Then chairman, Borgar Thor Einarsson, Geir Haarde’s stepson. CEO of Landsbankinn, former SUS member Sigurjon Th. Arnason. Borgar Thor’s successor, Thorlindur Kjartansson, Landsbankinn’s employee.
- Current MP Tryggvi Thor Herbertsson, then economic advisor to Geir Haarde lied to Jon Thor Sturluson on September 27 2008, when the minister of commerce’s assistant when he called to ask what meetings were taking place in the prime ministry. He said nothing was going on, just talking about the banks.
- Jon Asgeir Johannesson and his wife Ingibjorg Palmadottir have moved their legal residence to the UK.
- Members of the press owed the banks a good deal of money. Bjorn Ingi Hrafnsson has temporarily stepped down to “defend his good name”. Bjorn Ingi, a Progressive Party city councilman, assistant to PM Halldor Asgrimsson and now editor of Pressan.is owed Kaupthing 536 million ISK. Then Morgunbladid’s editor, Styrmir Gunnarsson owed all three banks around 100 million in 2007. Oli Bjorn Karason, one of Iceland’s reporters most likely to work for Fox News owed 200 million.
- David Oddson’s relationship with the Social Democrat’s ministers was such that regularly important meetings on the banking sector were held without the Minister of Commerce knowledge. David did warn about the impending financial crash, but offered no advice how to respond expecting the government to shoulder responsibility. It in turn expected the same.
- Processes and documenting from David Oddson’s time in the Central Bank were lax to say the least according to the report. For example, in March 2008, the Central Bank forgot to extend a 500 million USD line of credit with the BIS in Basel, depriving the bank of much needed currency.
- Arni Mathiesen, then minister of finance thought about asking his wife to go out and buy as much milk as possible on September 30, 2008 after a meeting with David Oddson. Arni and David are both accused of gross negligence in the report, as are Ingimundur Fridriksson and Eirikur Gudnason the other two CB governors and Geir Haarde, Bjorgvin G. Sigurdsson and Jonas Fr. Jonsson of the Financial Authority.
Ten members of Parliament with more than 100 million outstanding to the banks through their own ventures or their spouse’s:
1. Solveig Petursdottir, Independence Party (Speaker of Parliament)- 3.635 million
2. Thorgerdur Katrin Gunnarsdottir, Independence Party (Vice Chairman and Minister of Education) – 1.683 million
3. Herdis Thordardottir, Independence Party – 1.020 million
4. Ludvik Bergvinsson, Social Democrats – 755 million
5. Jonina Bjartmarz, Progressive Party – 283 million
6. Arni Magnusson, Progressive Party (Minister of Social Affairs) – 265 million
7. Armann Kr. Olafsson, Independence Party (Currently leading the IP candidacy in Kopavogur’s council elections) - 248 million
8. Bjarni Benediktsson, Independence Party (Chairman) – 174 million
9. Asta Möller, Independence Party – 141 million
10. Olof Nordal, Independence Party – 113 million
- Bjarni Armannsson’s contract as Glitnir CEO quintupled in three years from 9 million a month to 50 million ISK a month from 2004-2005. Larus Welding’s 5 billion ISK contract was sealed in half an hour.
- David Oddson threatened Tryggvi Thor Herbertsson on September 29, 2008 when the latter said that if the state took over 75% in Glitnir the consequences would be disastrous. Tryggvi says that David had said “Outside the PM is shaking like a leaf in the wind and can not make a decision. He listens to you and you are undermining this. If this does not work out then I will personally make sure you can not thrive in Iceland anymore”.
- Ossur Skarphedinsson was naked in the locker room in World Class when Ingibjorg Solrun Gisladottir asked him to go to a crisis meeting in Glitnir and not involve Bjorgvin G. Sigurdsson, minister of commerce from their own party.
- Bjorgolfur Thor managed to borrow 24 billion ISK from Landsbankinn on September 30, 2008.
- David Oddson wanted to lead an emergency government when the collapse was taking place. The Social Democrats rejected it. Ossur Skarphedinsson says that Geir Haarde was shaken when he replied “You can not do this to me. I can not go up there and tell David this”. He did and the Central Bank governor who would be leader stormed out.
- Glitnir’s Fund 9 grew rapidly from April 2007 when Baugur Group became a large shareholder in Glitnir. Its investments grew by 400% and almost only contained shares in companies connected to Baugur. One of the fund’s chairs was Independence Party MP, Illugi Gunnarsson.
- The committee thinks it was “unfortunate that former politicians are chosen to lead the Central Bank”.
- Employees from the Central Bank told economist Jon Steinsson that David Oddson described Geir Haarde as an “idiot”.
- Sigurjon Th. Arnason says that the people from German bank Hauck & Aufhauser which fronted the offer from the S-Group for Bunadarbankinn could just as well have been buying an ice cream store. “It was absolutely no way that it could be betting so much money so I have been convinced that this was just a front.”
- Icelandic companies paid dividends of 463 billion ISK from 2003-2009. Scores of businesses paid out dividends despite losses and negative equity.
- According to Jon Asgeir Johannesson, the CEO’s of the three banks always behaved like children in meetings. The two “kings” Hreidar Mar Sigurdsson of Kaupthing and Sigurjon Th. Arnason of Landsbankinn were always sensitive to the other talking bad about the other and Larus Welding was the “pawn” inbetween.
- A 300 million payment to Larus Welding was delivered after he announced an improved balance sheet at the first quarterly meeting in 2008.
- Sigurdur Einarsson, Kaupthing CEO to Magnus Gudmundsson, CEO of Kaupthing Luxembourg: “Hi Magnus, We did not finalize a bonus for last year. I suggest 1 million Euros. What do you think? Rgrds. Se” Magnus’ reply: “Thanks, more than enough 
”.
- Landsbankinn should have been reported to the police because its loans to Bjorgolfur Thor one of its owners amounted to more than half of its equity or 55 billion.
- Elin Sigfusdottir was hired to work for Landsbankinn eight days after she approved a loan from Bunadarbankinn to Bjorgolfur Gudmundsson, Bjorgolfur Thor and Magnus Thorsteinsson to buy Landsbankinn.
- The total liabilities of the three banks + Straumur, SPRON and the S&L Bank were 14.250 billion ISK in October 2008, half connected to 246 business coalitions registered as connected to the banks. Loans were sometimes made without collateral and often just with the bank’s own shares as collateral.
- The banks lended out large amounts of foreign currency loans to individuals and businesses with income in ISK. Meanwhile they made agreements with large individuals and businesses connected to them which in fact transferred the currency risk from the biggest risk takers in the economy onto the public and smaller businesses.
- The banks’ Luxembourg operations were used to hinder transparancy. Five of Kaupthing’s riskiest loans in Lux involved large owners of the bank. Landsbankinn was used to finance Bjorgolfur Thor’s operations.
- Bjorgvin G. Sigurdsson, the minister of commerce who wasn’t invited to David’s and Geir’s meetings has resigned as chairman of the Social Democrats MP’s. He is urging for National Court to be assembled for the first time (examining the responsibility of ministers and government). He does not consider resigning as an MP on the other hand.
- After appearing on Silfur Egils in September 2008, stating there was no chance of his bank going under, Larus Welding transferred 318 million from his account to a foreign account. Good for him.
- Instead of examining the advice on offer from foreign journalists and experts, the government replied with helping the banks on a PR journey. Thorgerdur Katrin Gunnarssdottir suggested that a Merrill Lynch expert should seek re-education and questioned his motive. For Thorgerdur’s own exposure to the banks see list of MP’s above.
- Glitnir’s risk assesment department did not have risk assessments on 20 of the bank’s largest borrowers.
- Steingrimur Ari Arason resigned from the privatization committee when the Icelandic banks were due for privatization, in disgust as he claimed that the politicians David Oddson and Halldor Asgrimsson were taking over the process.
- Ossur Skarphedinsson describes a government meeting with Halldor J. Kristjansson, Sigurjon Th. Arnason and Bjorgolfur Thor from Landsbankinn. “They came to introduce to us some “great offer”. And he (Bjorgolfur) sat there in his fine suit, a real “seller” and selling something where they were supposed to get Glitnir free and a lot of other things and then all the currency reserve and some “guarantee” as well. Halldor Kristjansson sat there like a beaten dog and didn’t comment much. Then the meeting was over. Sigurjon was there, there were pastries on the tables, cut in half, big pastries. Sigurjon a large man has a big mouth and when they were leaving, he got one of the pastries, shove it in his face and said, “I don’t believe in this, I don’t believe in this”. Then a hand with a gold-watch came and pulled him out of there.”
- Little is known about why Illugi Gunnarsson, Independence Party MP and Bjarni Benediktsson, Independence Party chairman and then a regular MP was meeting with Jon Asgeir Johannesson, Thorsteinn Mar Baldvinsson and others in Stodir’s headquarters at the end of September 2008. Bjarni was a shareholder in Glitnir through a company of his.
- Hreidar Mar Sigurdsson on David Oddson, “He (David) used to speak ill of our competitors when we spoke under four eyes. Of course I thought of how he talks about me when I am not in the same room”
- Hannes Holmsteinn Gissurarson, thinks it is strange why the Special Investigation Committee chooses to focus on David Oddson’s negligence instead of looking at the fact that he was the only official warning about the crash.
- Birna Einarsdottir, current Islandsbanki(Glitnir) CEO and former executive with Glitnir to Styrmir Gunnarsson editor of Morgunbladid “You should stand by us. You should not criticize the banks or ask questions, you are supposed to stand by us”.
- When Kaupthing’s London management thought it would become part of a rescue package from the UK government, Hector Sants, the chief of the UK financial authority said, “No, that’s not meant for you”.
- It surprised the Icelandic CEO’s to see the coordinated efforts of the British in the wake of the crash, comparatively the Icelanders seemed paralyzed.
- Larus Welding on the highly paid executives at Glitnir and Landsbankinn. “I often said to them in London, stop buying Porsche’s and drink so much liquor and then you’ll feel better, stop changing wifes, it will save you a lot of money”.
- “God damn it. Do I have to do it then?” Hreidar Mar Sigurdsson on what David Oddson said when Hreidar said Kaupthing could not lend Glitnir 600 million Euros.
- Sigurdur Einarsson: “We are in competition regarding employees in some of the places we operate and we are paying relatively low wages, even if they would seem incredibly high. The pay I have had at this bank since 2003 have been incredibly low compared to those with similar jobs. That’s the way it is.”
- Geir Haarde: “It is my sincere belief regarding the committee’s comments that none of them can lead to the conclusion that there was any negligence on my part according to the meaning of 2nd chapter.”
- On the report, blogger Jonas Kristjansson: It surprises me most in the report what sort of idiots Geir Haarde and David Oddsson were during and after the crash. Their incompetence is such that I would not trust them to go to the fish-store. Actually the government system was impotent at that time because of stupidity and lack of knowledge. Bureaucrats were mostly fronts, appointed by the ministers of the Independence Party. This tells me that the system will not be fixed any time soon with any other means than giving up sovereignty to international organizations. The EU is bad but it is a holiday compared to the idiocy which went on here. The nation simply cannot man important positions.”
- Hreidar Mar Sigurdsson: “Despite partying and socializing with the rich and famous in London, Armann had not managed to make any good contacs in the government or the official system, nor did he understand it enough.”
- So far not a single person named responsible in the report has declared responsibility.
Guardian: How Iceland’s banking flaws brought down the country’s economy
Reuters: Iceland probe accuses former PM and ex-central bank head
AP: Iceland bank meltdown under microscope
BBC: Icelandic authorities “negligent” over banking collapse
Deutche Welle: Extreme negligence caused Iceland’s economic collapse, report says
Telegraph: Iceland has its truth report into the financial crisis – now what about one for the UK?
WSJ: Iceland Government Slammed in Report on Banking Collapse
Related posts:
- The Icelandic Discourse in A Nutshell
- MP’s Two Million ISK Payment For Mishkin Report
- Just Some Private Business Downtown
