Iceland: Fronting or Fighting Corruption?

Recently, four Icelandic businessmen were sentenced by the Icelandic Supreme Court to a total of 19 years in jail for artificially inflating the stock price of Kaupþing (the bank they owned and managed) in the months leading up to the financial crisis in 2008. With each serving four to five years in jail, these sentences for “white collar crimes” are unprecedented in Iceland.

“I believe that the judges first decided what the outcome should be and then afterwards wrote the verdict,” said Ólafur Ólafsson, one of the convicted, to Reuters shortly after being sentenced. His opinion seems to be shared by a large number of Iceland´s business elite. “I’ll at least never take on a job at a bank,” wrote Brynjar Níelsson, an Icelandic majority congressman and lawyer, in a blog post after the lower courts first convicted the bankers in December. Níelsson went on to object the court’s decision, claiming that the allegations of fraud had not been proved beyond reasonable doubt. As reported by the Icelandic Business Journal–last week the congressman discussed these matters in a 250-person meeting organized by the wife of one of the convicted to discuss the conclusion of the Supreme Court.

To be clear, the court ruling is unambiguous. The initial ruling was made by the lower court and has now been confirmed by the Supreme Court. Their verdicts were uniformly condemning.

Iceland is a large piece of land but home to a very small population: 329,100 people to be exact. We are a homogenous bunch–mostly white, protestant, well-off and happy by most measures.The nation does many things well. Most people are liberal, celebrate equality, love their water and their nature and leave their doors unlocked at night. Icelanders have also proudly accepted the global community´s praise for its efforts at self-discipline following the financial crisies.

But in spite of the reports published and jail sentences served I wonder what the real result is. A congressman will get away with trivializing a ruling that reads: “Their actions were thoroughly organized, conducted with demonstrated intent and incredible recklessness and indifference to their impact.” The media sympathizes and writes stories about the sad looks on the convicts’ faces as they showed up to serve their time. At the same time The Minister of Internal Affairs holds her ground for a year before resigning after a major leak of confidential information from her office. And these are only a couple of examples from the past year.

Now, nepotism and crony capitalism happens all over the world regardless of the size and shape of the respective countries. But wouldn’t you think we could,given how small we are, be better at fighting it? If we really believe in clean politics and accountability, let’s not allow our elected representatives to undermine our progress. We do after all have the oldest running parliament in the world. Democracy has served us well thus far. If we believe our people have broken the law, let’s use our courts to determine what is right, and then trust the court‘s decisions.

Lilja Jonsdottir, Iceland


Lilja is a former journalist at the Icelandic Business Journal where she covered everything from energy to politics. She has a BS in Economics from the University of Iceland and is currently an MBA candidate at the Harvard Business School. She led the Student Council for the University of Iceland and has worked for political parties in Iceland.

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