Anniversary of scandal that brought down Icelandic government

One year and one day ago, a special edition of tv show Kastljós was aired, dealing with publication of the ‘Panama Papers’, a collection of millions of documents leaked from a Panamanian law film showing how influential people have exploited tax havens.

The list of those connected with offshore companies – with the alleged intention of hiding their assets – included the Iceland Prime Minister Sigmundur Davíð Gunnlaugsson and two cabinet ministers, Bjarni Benediktsson and Ólöf Nordal.

Aired in the show was an interview with Gunnlaugsson in Swedish media STV. Mr. Prime Mini­ster, what can you tell me about a comp­any cal­led Wintris?”

“What are you trying to make up here?” Sigmundur Davíð Gunnlaugsson PM asks his interviewers. “This is totally inappropriate.” And after a short talk where he was found to be dishonest, he walked out.

Wintris is a company owned by Gunnlaugsson’s wife, and half of it used to be his. On 31 December 2009 – the day before Gunnlaugsson’s obligation to disclose information on the company, its operations and revenue to Icelandic authorities kicked in – the PM reportedly sold his half to his wife for the token sum of $1.

He was accused of a major conflict of interest, inasmuch as he – as PM – was instrumental in striking a deal for the banks’ claimants while himself being closely related to one of them.

Outrage in Iceland

The revelations that came to light that evening set Icelandic social media on fire, with many outraged at what they perceived to be immoral and corrupt behaviour on the part of the PM.

The opposition demanded the government should step down. “There are two nations in Iceland,” Lilja Rafney Magnúsdóttir (Left-Green Movement) told fellow MPs. “The ‘power elite’ and the ‘great unwashed commoners’.”

Following, what is said to be the biggest protests in Iceland’s history took place at Austurvöllur, before Alþingi, the Icelandic parliament.



After much mixed messages from the PM and the parties in the government, Gunnlaugsson stepped aside as PM a few days later. Soon after the government answered the call for a new vote, which took place the following fall.

Support for Gunnlaugsson's party, The centrist Progressive Party ('Framsóknarflokkurinn'), diminished. The conservative Independence Party ('Sjálfstæðisflokkurinn'), which was in government with The Progressive Party at the time of the scandal and had two cabinet ministers implicated (one the head of the party), rallied and is still one of the biggest parties in Iceland, again a part of the government. The head of the party, Bjarni Benediktsson, who's name alco came up in the Panama Papers, is now a Prime Minister.

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