Sigrún Davíðsdóttir's Icelog

The trial over ex-PM Geir Haard (updated)

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Monday March 5 was the first day of trial against Geir Haarde, Iceland’s Prime Minister June 2006 – Februar 2009. Haarde is being tried by a special court, “Landsdómur,” never before convened in the history of Iceland. This court’s only function is to try ministers and is modelled on the Danish legal system.

The trial has been covered by the world media, ia by the BBC, Guardian and Sky.

The five charges brought against Haarde regard alleged omissions in office and are the following:

1 A serious omission to fulfil the duties of a prime minister facing a serious danger

2 He didn’t take the initiative to do a comprehensive analysis of the risk faced by the state due to danger of a financial shock

3 He omitted to ensure that the work of a governmental consultative group on financial stability led to results*

4 For omitting to guarantee that the size of the Icelandic banking system would be reduced

5 For not following up on moving the Landsbanki UK Icesave accounts into a subsidiary**

Regardless whether people think it’s fair to indict only one minister it is already clear after the first two days that the trial will provide an interesting insight into a whole range of issues related to the collapse of the banks. Although the setting and the purpose differ, in Iceland the court hearings are being compared to “a truth commission” since it will give the general public the possibility to hear what politicians, civil servants and bankers have to say on the various issues in question.

Unfortunately, the court has decided against broadcasting the hearings. There are only ca 40 places available in the court hall for the media and the general public to share. The court has been asked to reconsider its decision. The hope is very much that it will change its mind.

On the first day, Haarde was questioned for eight hours. Tuesday, witnesses were called in for questioning. Below is a list of the witnesses published by the court:

Monday March 5:

Geir Haarde

Tuesday March 6:

Bjorgvin Sigurdsson former Minister of Trade

Arnor Sighvatsson former chief economist, CBI

David Oddsson former Governor of the CBI

Wednesday March 7

Ingimundur Fridriksson former Governor of the CBI

Baldur Gudlaugsson former permanent secretary of the Ministry of Finance

Bolli Thor Bollason former permanent secretary of the Prime Minister’s Office

Aslaug Arnadottir former head of department in the Ministry of Trade and chairman of the board of the Deposit Guarantee Fund

Jon Sigurdsson former chairman of the board of the FME and member of the board of the CBI

Jon Th Sigurgeirsson head of the Office for the Board of Governors of the CBI

Thursday March 8:

Jon Thor Sturluson former assistant to the Minister of Trade

Jonas Fr Jonsson former director of FME

Jonina Larusdottir former permanent secretary of the Ministry of Trade

Hreidar Mar Sigurdssonr former CEO, Kaupthing

Gudjon Runarsson director of the Icelandic Financial Services Association

Runar Gudmundsson head of the Insurance Department FME

Thorsteinn Mar Baldvinsson former chairman of the board at Glitnir

Friday March 9:

Sigurdur Sturla Palsson former head of CBI’s International Department

Tryggvi Thor Herbertsson former economic adviser to the Government

Vilhelm Mar Thorsteinsson former head of treasury, Glitnir

Heimir V Haraldsson former member of Glitnir ResCom

Johannes Runar Johannsson former member of Kaupthing ResCom

Larentsinur Kristjansson former chairman of Landsbanki ResCom

Vignir Rafn Gislason certified accountant PWC

Kristjan Andri Stefansson former head of department, Prime Minister’s Office

Sylvia Kristin Olafsdottir former head of contingency planning, CBI

Ossur Skarphedinsson former Minister of Industry

Johanna Sigurdardottir former Minister of Social Affairs

Monday March 12:

Ingibjorg Solrun Gisladottir former Minister of Foreign Affairs

Sigurdur Einarsson former chairmand of the board, Kaupthing

Larus Welding former CEO Glitnir

Stefan Svavarsson chief accountant CBI and member of the board, FME

Halldor Kristjansson former CEO Landsbanki

Sigurjon Arnason former CEO Landsbanki

Bjorgolfur Gudmundsson former chairman of the board, Landsbanki

Tueday March 13:

Tryggvi Palsson former head of financial stability, CBI

Gudmundur Jonsson head of lending, FME

Jon Thorsteinn Oddleifsson former head of treasury, Landsbanki

Sverrir Haukur Gunnlaugsson former Icelandic ambassador, UK

Arni M Mathiesen former Minister of Finance

Sigridur Benediktsdottir member of the SIC

Tryggvi Gunnarsson member of the SIC

Atli Gislason member of Althing

Birgitta Jonsdottir member of Althing

Eyglo Hardardottir member of Althing

Lilja Rafney Magnusdottir member of Althing

Magnus Orri Schram member of Althing

Oddny Gudbjorg Hardardottir member of Althing

Steingrimur Sigfusson member of Althing

As this list show, both Prime Minister Johanna Sigurdardottir and Minister of Economic Affairs Steingrimur Sigfusson will appear before the court. It’s also an intriguing thought that bankers Sigurdur Einarsson, Hreidar Mar Sigurdsson and Larus Welding have already been indicted by the Office of the Special Prosecutor. The two CEOs of Landsbanki have been sued by the bank’s WUB and will most likely, at some point, be indicted by the OSP. The first OSP case ruled on by the High Court was against Baldur Gudlaugsson who recently was sentenced to two years in prison for insider trading.

Last but not least, Bjorgolfur Gudmundsson might have a flash back when he takes place before the court: it was in this same hall that Gudmundsson, together with his son Bjorgolfur Thor Bjorgolfsson and their business partner from St Petersburg Magnus Thorsteinsson, signed the agreement to buy 42% of Landsbanki in January 2003.

*The consultative group was comprised of civil servants from the Prime Minister’s Office, the Ministry of Finance, the Ministry of Business Affairs, the FME and the CBI. It was founded with a written agreement on February 21 2008. Its remit was financial stability and contingency planning. On its purpose and work see the executive summary of the SIC report. – I will be following the trial, unfortunately from abroad, but will try to bring a short digest of interesting testimonies.

**The charges have been updated from an earlier version.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

March 7th, 2012 at 6:18 am

Posted in Iceland

3 Responses to 'The trial over ex-PM Geir Haard (updated)'

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  1. Apparantly it was the UK’s fault…for not rolling over and taking the losses due to poor financial and political management.

    Is there going to be an laternative viewpoint at this trial, or are we going to see a series of culpable individuals blame everyone except themselves?

    andrew Jackson

    7 Mar 12 at 10:54 am

  2. That was also the viewpoint of the Select Committee on the Isle of Man into the collapse of KSFIOM.
    “Nothing to do with us, it was everyone else’s fault”

    Lets hope the Iceland system is stronger, more transparent, more searching in its questions than that on Isle of Man

    Tricky Dicky

    7 Mar 12 at 3:48 pm

  3. Firstly, thank-you for covering this.
    The whole episode is about the actors hiding behind each other. It is about mob behaviour. The reason the ex-PM is on trial is that he was expected to lead and not to follow. That he didn’t is of course a difficult charge to prove, but I believe that everyone ‘knows’ that he wasn’t leading but was ‘enjoying the fruits of permitting looting’.
    Of course he says he’s innocent. He’s a “sin verguenza” as they say in latin countries. What we are waiting to see is if the Icelanders have actually learnt the lessons from the crisis or whether they think on balance their ex PM was ‘just human’ in his corruption, or alternatively whether a corrupt ‘class’ still hold power in Iceland.
    Once again thank-you for your coverage.


    8 Mar 12 at 1:55 am

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