Sigrún Davíðsdóttir's Icelog

Last Thursday, the fabulous BBC radio 4 programme ‘In our time’ discussed the Volga Vikings who didn’t plunder the British isles and France but left Scandinavia and headed east. Crossing the Baltic they settled in present-day Russia and Ukraine. An Arab scholar who travelled among the Volga Vikings wrote that they were physically perfect but otherwise ‘the filthiest of God’s creatures’. Interestingly, the Arab scholar observed that they bonded by sharing their female slaves and that their women were strong.

Quite appropriately, this was the week that brought out reminders of strong women and stories about the present-day ‘Viking raiders’ and their shared fondness of escort women if not exactly sharing the same women. As dedicated readers of Icelog know it’s mostly about economics and politics but this time the subject is more saucy in order to illuminate non-Icelandic speakers on a new Icelandic book that deals with stories that have long been in the rumour mill. Now it’s stuff that a book has been written about.

Jonina Benediktsdottir is an illustrious business lady who has run fitness centres in Iceland and Sweden and now runs a detox centre in Iceland and Poland. About a decade ago, when Baugur was coming into being, she was on intimate terms with Johannes Jonsson, the father of Jon Asgeir Johannesson. The love relationship went sour, later Benediktsdottir kept Iceland enthralled with leaked emails, allegation about fraud and deception at Baugur and with yet another amorous relationship, this time with a married man, Styrmir Gunnarsson. Gunnarsson was at the time hugely influential as the long-sitting editor of Morgunbladid, for decades the most influential newspaper and closely connected to the (conservative) Independence Party.

Now, Benediktsdottir has published her memoirs – and as could be expected, she writes on Baugur, the banks, on Jonsson and Gunnarsson. After the break-up with Jonsson she has spread her inside-information on Baugur, painting in vivid colours what she claims to be a story of fraud and greed. She has often appeared on TV over the years but this time it’s her whole story, not juts bits and pieces.

The Baugur case started in August 2002, when the offices of Baugur in Iceland were raided. In 2005, Johannesson, his father, his sister, and three others accountant were charged. The issues related to Johannesson ranged from abuse of Baugur’s credit card and embezzlement. At the time, Baugur was a public company.

The case sprung from a dispute between Baugur and Jon Gerald Sullenberger, a businessman in the US and a Baugur fixer there, now owning a supermarket in Iceland. In 2001, Baugur had invited bankers and businessmen, allegedly also men (only men were on this trip) from some pension funds to Miami to celebrate a business deal. Sullenberger took care of a yacht that Baugur had use of, with the rather odd name ‘Thee Viking’. Sullenberger wasn’t in Florida when the Baugur expedition turned up but when he returned the boat had been wrecked. It took Sullenberger and his staff quite some effort to clean it and repair the damages. A bill of $19.000 for escort service was dropped on Sullenberger when Kaupthing Luxembourg stopped Johannesson’s payment to the escort service, allegedly at Johannesson’s request.

Later, it was decided that Baugur would refund Sullenberger by him making out an invoice on Baugur for the amount he had paid on behalf of Baugur. Sullenberger later claimed that the bank did in the end facilitated Johannesson’s payment directly to the escort service so he toar up the invoice. However, by the invoice had been faxed, Sullenberger became embroiled in the case he helped to instigate and was in the end convicted for making a false invoice. Though the court in Iceland dropped most of the charges in the Baugur case against Johannesson he was finally found guilty on a few charges and sentenced to a suspended three months prison in the summer of 2008, five years after the case started. Consequently, he had to resign from many board posts both in Iceland and the UK. The suspended sentence has now lapsed but because he was found guilty Johannesson is called ‘a convicted white-collar criminal’ in the Glitnir charges in New York.

Benediktsdottir knew everything about the Florida trip. After her own business failures she was on the verge of bankruptcy when she couldn’t meet payments with Kaupthing. When the bank was about to repossess her flat she had a woman-to-man talk to Kaupthing’s CEO Hreidar Mar Sigurdsson.

“I immediately asked Hreidar what he was thinking,” she writes in her new book, “if he wanted to continue living like a slave of Jon Asgeir. By then, I had nothing to lose and was seriously aggressive. At this meeting, I did indeed go very far and reminded him of the charges in the US related to the Miami Beach Escort Service (Baugur had countersued Sullenberger in the US and that’s how the story of the escort service surfaced) and asked him if his wife knew of the charges and if he would be happy to see his wife behave as he himself did.”

Benediktsdottir told Sigurdsson “I’ve done everything to hinder that Jon Gerald charged you as well. And that’s how you repay me. Does your wife know what you do when you travel abroad, the Delano Hotel in Miami and the yacht in Florida.” She claims that Sigurdsson begged her not to go further with this information after which she stormed out, calling him “a loser”. She then told both Sigurdsson and Kaupthing’s executive chairman Sigurdur Einarsson that she was ready to feed these stories to the Icelandic media. It didn’t take long before the bank sent her a letter, confirming that all her debt would be written off. In a TV interview last week Benediktsdottir said she was by no means proud of her behaviour at the time but that there had been nothing left for her but talked to the bankers in a language they understood.

The stories of Thee Viking, the escort girls and Baugur’s guests have long been circulating in Iceland as they came out in the Miami charges that Baugur brought against Sullenberger. Some will muse if the use of escort girls was a one-off treat in 2001 or if the contemporary Vikings in general stuck to their ancestors’ bonding method and shared their women. Escort girls are notoriously silent about their clients and so far no first-hand stories have emerged but all along the rumour mill has been moving at high speed on the life style of some of the Viking raiders and their bankers.

Apart from the saucy details, Benediktsdottir raises a serious issue, indicating that Johannesson possessed compromising material on those who had been on the yacht in 2001. Johannesson did very well in some of his business ventures such as his shops in Iceland and his media ventures, now owned by his wife. Abroad, there were plenty of failures and flops, from the Dollar Stores in the US, to Wyndeham in the UK and the hubristic Nyhedsavisen in Denmark. But the earlier failures didn’t dent the banks’ faith in him. And though his companies have been failing left, right and centre these bankruptcies haven’t dragged him into personal bankruptcy, something that puzzles many Icelanders considering the enormous sums lent personally to Johannesson and his companies. In October 2008, he and his companies owed the Icelandic banks close to Iceland’s GDP, conjuring up images of Viking-like plundering of the banks.

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