While Iceland's President Olafur Ragnar Grimsson was luring investors to Iceland, Prime Minister Sigmundur David Gunnlaugsson was returning the money to sender through straw companies designed specifically to avoid such social obligations as tax.  (Photo: Art Bicnick/Reykjavik Grapevine)
While Iceland's President Olafur Ragnar Grimsson was luring investors to Iceland, Prime Minister Sigmundur David Gunnlaugsson was returning the money to sender through straw companies designed specifically to avoid such social obligations as tax. (Photo: Art Bicnick/Reykjavik Grapevine)
Arne O. Holm
Editor in Chief in High North News, and Special Adviser at the High North Center, Business School, Nord University, Bodø, Norway.
06/04/2016

For ten years, Nordic politicians have fought to increase investment in the High North. Over the same time-period, ministers, bank CEOs and investors in the same countries have siphoned resources off the North and into hidden bank accounts in tax havens abroad.

Norwegian version of this comment here.

Right now, Norwegian newspaper Aftenposten, along with 400 journalists around the globe, are uncovering a world of economic adjustment and fraud the extent of which is enough to make even a thick-skinned journalist faint.

While the world waits with baited breath for new revelations from this “secret” world, where respect for personal gain is the only respect that matters, one of the first casualties, Prime Minister Sigmundur David Gunnlaugsson, is being tarred and feathered in Iceland’s capital, Reykjavik.

In Russia, where the struggling economy is sending new thousands of people into hunger and misery, Putin’s lot has assured their own finances.
This they have achieved with the help of the same tax advisors who ensured Prime Minister Sigmundur David Gunnlaugsson’s escape from the economic crisis that hit Iceland just a few years ago.

The unknowing boss

From his glass palace with a view of the Norwegian Opera House, CEO Rune Bjerke of the partly state-owned bank DNB sent his richest customers out of the country, directly to the exact same tax havens that Putin’s allies and the Icelandic Prime Minister have made use of.

Rune Bjerke is the only involved person in the North to claim that he was not aware of what he was participating in. With his ample salary, in addition to uncountable options and bonuses, Rune Bjerke must be one of the world’s best paid social democrats. That he readily admits to being paid for not knowing what his bank is carrying on with must also, for all I know, be some kind of world record.
Perhaps he is also unaware that while banking is flourishing in Luxembourg, DNB is closing most branches in Northern Norway.

Escape from social responsibility

Iceland has, in a short space of time and despite its location, become a central player in international ventures in the High North. One of the architects behind this work is President Olafur Ragnar Grimsson. Each year he lures the world’s best-known investors to the saga islands, to the conference Arctic Circle. The tourists are also drawn in.

Tourism in Iceland has positively exploded in recent years. Hotel prices are so high that soon only tourists with untaxed earnings will be able to afford a room. The international currency floods the island which, with surprising speed – in the Icelandic way – turned its back on the economic crisis that hit it in 2008. Behind this turn-around were, among other initiatives, strict regulatory measures implemented by Icelandic authorities. Severe punishment for tax avoidance was not the least of these. Prime Minister Gunnlaugsson has personally and acerbically criticized those of his fellow citizens who attempted to evade this crystal clear social responsibility.

However, it appears that while President Olafur Ragnar Grimsson has being luring investors to Iceland, Prime Minister Sigmundur David Gunnlaugsson has been returning the money to sender through straw companies designed specifically to facilitate the evasion of social obligation.

The bottom of the barrel

Then Norwegian Minister for Foreign Affairs Jonas Gahr Støre followed by Norwegian Prime Minister Erna Solberg and current Norwegian Minister for Foreign Affairs  Børge Brende have, one after the other, made pilgrimage to the North. They have all had political aims, but their travel has also been economically justified. Ensuring the nation’s economy lies in the High North and waking the interest of investors.
It has basically been declared and determined that there is too little capital in the northern part of Norway in order to take advantage of the value in the North, whether it is the natural resources or the expertise and innovative forces.

Today we know that DNB’s response to such political challenges from the government, which also happens to be the bank’s largest owner, is to point toward investment in conglomerates devoid of all values and morals, other than that which is to be found at the bottom of a barrel of selfishness and immorality.

Avoidance of tax and social obligation will always be more profitable for investors lacking in spine. As long as no criminal activity is revealed, such actions are also both simpler and more profitable for the banks that facilitate tax evaders.

So far, DNB’s top management is red-faced, while Iceland’s Prime Minister has asked for “a break”. 


Rewarded with a parachute

The rolling of heads, which occasionally happens in the aftermath of a scandal, is not much more than a diversion. History has, with all clarity, shown that poor judgement and handy-work within banking and finance is rewarded with gilt parachutes.

And so the road for new cultures of greed, new management and new parachutes is paved. In the meantime, new media advisors send dutifully completed invoices advising that Rune Bjerke and his peers should keep their heads down.

And there they will remain for all intents and purposes until one of the countries increasingly fewer journalists wakes them to life with new revelations.



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