Iceland jails and sues banksters

The AFP publishes a story on the only country in the developed world with enough courage to jail their banksters. We could all do better to imitate the spirit of Iceland's people.

Related:

Iceland: a ray of hope in a dark world
Ireland could learn from Iceland
Ireland should be leading

Maybe there is hope for us afterall.

Bankers jailed, sued as
Iceland seeks culprits for crisis

More than a year and a half after Iceland's major banks failed, all but sinking the country's economy, police have begun rounding up a number of top bankers while other former executives and owners face a two-billion-dollar lawsuit.

Since Iceland's three largest banks -- Kaupthing, Landsbanki and Glitnir -- collapsed in late 2008, their former executives and owners have largely been living untroubled lives abroad.

But the publication last month of a parliamentary inquiry into the island nation's profound financial and economic crisis signaled a turning of the tide, laying much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for.

On Wednesday, the administrators of Glitnir's liquidation announced they had filed a two-billion-dollar (1.6-billion-euro) lawsuit in a New York court against former large shareholders and executives for alleged fraud.

"I think this lawsuit is without precedence in Iceland," Steinunn Gudbjartsdottir, who chairs Glitnir's so-called winding-up board, told reporters in Reykjavik.

"It is about higher figures than we have ever seen," she said, adding that she expected Glitnir to file more lawsuits going forward, but that "it is unlikely any will be this big."

Glitnir said it was suing "Jon Asgeir Johannesson, formerly its principal shareholder, Larus Welding, previously Glitnir's chief executive, Thorstein Jonsson, its former chairman and other former directors, shareholders and third parties associates with Johannesson for fraudulently and unlawfully draining more than two billion dollars out of the bank."

The bank also said it was "taking action against its former auditors PricewaterhouseCoopers (PwC) for facilitating and helping to conceal the fraudulent transactions engineered by Johannesson and his associates, which ultimately led to the bank's collapse in October 2008."

Glitnir's suit, filed in the New York state Supreme Court on Tuesday, blamed most of the bank's woes on "Johannesson and his co-conspirators," who had "conspired to systematically loot Glitnir Bank in order to prop up their own failing companies."

Johannesson, the former owner of the now-defunct Baugur investment group with stakes in a number of British high street stores including Hamleys, Debenhams and House of Fraser, said he was shocked by the lawsuit.

"The distortions and the nonsense in the lawsuit are incredible," he told the Pressan news website.

Glitnir's administrators "can get a 10-year-prison sentence for misusing US courts in this manner," he insisted.

The bank's chief administrator Gudbjartsdottir took his comments in stride.

"I didn't expect him to be happy with the lawsuit," she said.

In addition to its New York suit, Glitnir said it had "secured a freezing order from the High Court in London against Jon Asgeir Johannesson's worldwide assets, including two apartments in Manhattan's exclusive Gramercy Park neighbourhood for which he paid approximately 25 million dollars."

Gudbjartsdottir said Johannesson had just 48 hours to come up with a satisfactory list of his assets.

"If he does not give the right information he faces a jail sentence," she said.

Four former Kaupthing executives, who all live in Luxembourg, have meanwhile been arrested in Iceland in the past week and Interpol has issued an international arrest warrant for that bank's ex-chairman, Sigurdur Einarsson.

Former head of the bank's domestic operations, Ingolfur Helgason, and former chief risk officer Steingrimur Karason were arrested late Monday on arrival from Luxembourg, just days after former Kaupthing boss Hreidar Mar Sigurdsson, along with Magnus Gudmunsson, who headed the bank's unit in Luxembourg, were taken into custody.

The 49-year-old Einarsson, who lives in London, said late Tuesday he had no plans to travel to Iceland to be arrested.

"I'm absolutely flabbergasted about the latest news," he told the Frettabladid daily.

"There is in my opinion no need for the arrests or custody rulings, and I will not of my own free will take part in the play that it appears is being staged to soothe the Icelandic people," he said.

"I'll put the human rights I enjoy here in Britain to the test and will not therefore come home (to Iceland) to these conditions without being forced," he added.

Iceland: a ray of hope in a dark world

For a while now, I have been lamenting about the demise of real democracy. An ignorant populace cannot really be democratic because knowledge is necessary for free choice. What passes for knowledge these days is what the mass media tells people is happening. And people digest this propaganda whole, sheltering themselves in apathy because either they feel politically impotent, or they have no concept of the obligation each person has to seek the truth when exercising one's vote in a democracy.

People who can make us believe absurdities can make us commit atrocities. To protect ourselves from becoming zombified media consumers, we need freedom of information to empower people.

In all this darkness of today's economic and political meltdown, there is a single ray of light which Ireland would do well to follow: Iceland. Birgitta Jonsdottier has come forth to lead her country in practicing real democracy, of the people, for the people and by the people.
The people of Iceland were hit hard by the banking collapse - but they did something about it. They demanded that the people VOTE on the use of their tax money to pay off debts caused by the deriviative fraudsters. They also demanded freedom of information about what their government was doing. In short, the implemented real democracy for their island.

I needed the hope Icelanders are giving me: that people can take control of their country's government and future - if they want to - non-violently and democratically.

The interview below explains the changes the people of Iceland have made following the collapse of their banks. I hope you will enjoy it as much as I have.





Find the next two parts of the interview here.

Ireland could learn from Iceland

The difference between the two countries is much greater than just one letter in their spelling. Both have suffered devastating economic collapse. Both are islands.

But the response of the people and governments to the crisis of today is quite different. Ireland is still trying to emulate the US style of business and to boost itself with the same strategy that gave birth to the Celtic Tiger: attracting foreign direct investment (jobs from foreign multinationals). Apparently, the leaders have not learned what Einstein said: One cannot fix a problem with the same thinking that created the problem.

Ireland is still hot to attract those major corporate employers to save the country. It is difficult to understand how so many do not notice that most of Ireland's skyrocketing unemployment is the direct result of reliance on foreign corporations (who now find Irish workers too expensive). Iceland, which suffered a much greater economic collapse is using another strategy: to reinvent itself. As someone once said, 'Insanity is not doing something entirely strange: it is doing the same thing over and over and expecting different results'.

Iceland is forging ahead with a government that is now much more responsive to the people of Iceland - of course they did have to overthrow it to accomplish this, but then, that is the way of history. Iceland is going to make itself the global center of internet freedom of expression with the Icelandic Modern Media Initiative. The plan is brilliant: it not only supports the values of the people but promises to stimulate the economy and make Iceland a unique haven in the world.

"The Icelandic Modern Media Initiative addresses the key issues for free expression in the digital age, and may yet be the catalyst for the kind of legislative reforms that all 21st Century democracies will need." —Index on Censorship

"I am proud to advise the Icelandic Modern Media Initiative's proposal to create a global safe haven for investigative journalism. I believe this proposal is a strong way of encouraging integrity and responsive government around the world, including in Iceland. In my work investigating corruption I have seen how important it is to have have robust mechanisms to get information out to the public. Iceland, with its fresh perspectives and courageous, independent people seems to be the perfect place to initiate such an effort towards global transparency and justice." —Eva Joly MEP

I urge you to glance through the link above. The entire idea inspires hope in an age of darkness and demonstrates that people must demand their governments implement legislation which reflects the will of the people.

To my mind, this is not the case in Ireland. People are frightened here; and that fear of loss of the 'good life' or perhaps even a 'decent life' clouds their anger toward a government which has become entrenched in Jurassic age economic thinking - following the USA down the rosy path. People are grasping at straws and not yet damaged enough to say, 'Enough is enough!'

In only the past week, three high government officials left office; two because of the grinding mechanisms of the current political culture and another resignation due to perjury in the High Court. Yet it's only a bit of gossip. Public sector employees demonstrated against paycuts in the last budget. But these are the same people who voted to give away our fiscal power to Brussels by voting 'yes' on Lisbon. In essence, they voted themselves their own paycuts - and they didn't even know it. They followed Fianna Fail's party position without really looking at the issues the 'no' side was questioning. Now, they are clueless.

Had the Irish government listened to its own public sector employees protesting, it would have gotten the same treatment the EU is now giving Greece: austery cuts in public services mandated in Brussels. Ireland could re-invent itself as Iceland is doing.

The country has much to offer as a leader in the world. Ireland could brand itself the capital of organic farming and cuisine. It could market its unique history and scenic green hills to China. It could imitate the Swedish system of social welfare and medical care. I am sure there are many other ideas for Ireland to use its unique assets to create employment and economic growth.

But it won't happen. Because, unlike the Icelanders, the Irish are afraid to take their government to task for the purpose it was created: to serve the citizens. Things are not bad enough here - people will not rebel until they must. The major parties here are filled with the equivalent of American 'good ole boys'. They are a blast from the past...and intend to keep things that way.

I am thinking Iceland looks pretty good. It will not be long until Ireland is simply a dancing puppet on the EU stage chasing the specter of the glory days of the Celtic Tiger. But the people voted this in - isn't democracy great!

We the people, wherever we are, will not get a better shake until we demand it. This is the real lesson from Iceland. I admire the courage of the people there and wish them the best in this new endeavour. And I hope we Irish learn something from them.