Icelandic prime minister’s downfall in Panama corruption scandal

This video says about itself:

Icelanders egg parliament over Panama Papers offshore scandal

5 April 2016

Thousands of protesters gathered outside Iceland’s parliament in Reykjavik, last night, calling for the resignation of Prime Minister Sigmundur Davio Gunnlaugsson and the government following the release of the Panama Papers. Protesters banged drums and threw eggs at the parliament building. One person was reportedly arrested early in the protest for throwing a yoghurt drink.

Opposition parties in Iceland had a vote of no confidence in Gunnlaugsson after the Panama Papers leak unveiled that his wife owned an offshore company with huge claims on the country’s collapsed banks. An online petition demanding that Gunnlaugsson steps down has already received more than 26,000 signatures.

From Reuters news agency:

Iceland’s Prime Minister Resigns After Panama Papers Leaks

04/05/2016 09:29 am ET | Updated 9 minutes ago

LONDON/REYKJAVIK, April 5 – Iceland’s Prime Minister Sigmundur David Gunnlaugsson is to step down after leaked documents from a Panamanian law firm showed his wife owned an offshore company with big claims on collapsed Icelandic banks, his party said.

Gunnlaugsson became the first prominent casualty from the revelations in the so-called Panama Papers, which have cast light on the financial arrangements of an array of politicians and public figures across the globe and the companies and financial institutions they use.

Earlier on Tuesday, Gunnlaugsson had asked Iceland’s president to dissolve parliament in the face of a looming no-confidence vote and mass street protests over the revelations.

The deputy leader of his [center right] Progressive Party, Sigurdur Ingi Johannsson, told reporters the party will suggest to its coalition partners in the [right-wing] Independence Party that he should become the new prime minister.

With the fallout from the leaks reverberating across the globe, British Prime Minister David Cameron came under fire from opponents who accused him of allowing a rich elite to dodge their taxes.

The more than 11.5 million documents were leaked from the Panamanian law firm Mossack Fonseca. Among those named in them are friends of Russian President Vladimir Putin, relatives of the leaders of China, Britain, Iceland and Pakistan, and the president of Ukraine.

The papers have caused public outrage over how the world’s rich and powerful are able to stash their cash and avoid taxes while many people suffer austerity and hardship.

Thousands gathered outside the Icelandic parliament in Reykjavik on Monday to protest about what the opposition said was Gunnlaugsson’s failure to disclose a conflict of interest over his wife’s offshore company, which has big claims on Iceland’s collapsed banks.

Icelandic government bonds saw their biggest sell-off in five months due to the uncertainty, with yields on 10-year bonds jumping 15.6 basis points to 5.891 percent.


In Britain, the leader of the opposition Labour Party demanded that the government tackle tax havens, saying it was time Cameron stopped allowing “the super-rich elite” to dodge taxes.

“There cannot be one set of tax rules for the wealthy elite and another for the rest of us,” Labour leader Jeremy Corbyn said. “The unfairness and abuse must stop.”

He said Britain had a huge responsibility since many tax havens, such as the British Virgin Islands and Cayman Islands, are British overseas territories, while others such as Jersey or the Isle of Man are British crown dependencies.

According to media that have seen Mossack Fonseca’s files, more than half of the 200,000 companies set up by the firm were registered in the British Virgin Islands, where details of ownership do not have to be filed with the authorities.

Cameron has cast himself as a champion in the fight against tax evasion in British-linked territories. But he was put on the spot by the leaks, which named his late father and members of the ruling Conservative Party among the list of clients who used Mossack Fonseca’s services.

Other leading figures and financial institutions responded to the leak with denials of any wrongdoing as prosecutors and regulators began a review of the investigation by the U.S.-based International Consortium of Investigative Journalists (ICIJ) and other media organizations.

Britain, France, Australia, New Zealand, Austria, Sweden and the Netherlands are among nations that have started inquiries.

French Finance Minister Michel Sapin said Paris would put Panama back on its blacklist of uncooperative tax jurisdictions. The Central American nation is one of the most secretive of the world’s offshore havens and has refused to sign up to a global transparency initiative.

Mossack Fonseca has set up more than 240,000 offshore companies for clients around the globe and denies any wrongdoing. …

The Hong Kong government said its tax department would take “necessary actions” based on any information it received.

Credit Suisse and HSBC, two of the world’s largest wealth managers, dismissed suggestions they were actively using offshore structures to help clients evade tax.

Both were among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money, according to ICIJ.

Credit Suisse CEO Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets.

Both banks have in recent years paid big fines to U.S. authorities over their wealth management or banking operations.

Both were among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money, according to ICIJ.

… (Reporting by Reuters bureaux, Writing by Angus MacSwan; Editing by Kevin Liffey and Anna Willard)

Panama Papers: Icelandic Pirate Party ‘ready’ to form part of government in event of snap election. A poll in March showed the political group is now Iceland’s biggest with 37 percent of voters backing it: here.

Britain and the Panama Papers: David Cameron dodges question when asked whether he benefited from offshore fund set up by his father: here.

USA: Bernie Sanders Called Out Panama As A ‘World Leader’ In Tax Evasion Years Ago. He worried that a 2011 free trade agreement would help corporations and rich people hide their money: here.

The Panama Papers could hand Bernie Sanders the keys to the White House. For some Americans, Hillary Clinton is the embodiment of a global elite which benefits from tax avoidance schemes. Bernie Sanders, her opponent, is its antithesis: here.

13 thoughts on “Icelandic prime minister’s downfall in Panama corruption scandal

  1. Pingback: Bernie Sanders’ Wisconsin victory, and the Panama Papers | Dear Kitty. Some blog

  2. Wednesday 6th April 2016

    posted by Morning Star in World

    by Our Foreign Desk

    ICELAND’S Prime Minister Sigmundur David Gunnlaugsson resigned last night as the Panama Papers scandal claimed its first political scalp.

    Earlier in the day Mr Gunnlaugsson, leader of the Progressive Party, asked President Olafur Ragnar Grimsson to dissolve parliament and hold fresh elections because he had lost the support of junior coalition partners the Independence Party.

    But the president said he could not consider the request without speaking to both parties and mounting pressure — vast crowds had demanded the PM’s departure from Monday.

    Documents leaked from the Mossack Fonseca law firm showed Mr Gunnlaugsson had failed to declare a 50 per cent stake in Wintris, a British Virgin Islands-based company which he and his wife used to stash their family fortunes, when he was elected to parliament in 2009. He later sold Wintris to his wife, Anna Sigurlaug Palsdottir, for $1.

    The company had investments in the bonds of three Icelandic banks, meaning when Mr Gunnlaugsson — elected on an anti-banker platform following the financial crash — struck a deal with the creditors of failed financial institutions his wife was a direct beneficiary.

    The mushrooming scandal also forced the resignation in Chile yesterday of the head of the country’s branch of Transparency International after he was linked to five shell companies set up by Mossack Fonseca, which is now under investigation by the Panamanian state prosecutor’s office.


  3. From Britain:

    Wednesday 6th April 2016

    posted by Lamiat Sabin in Britain

    Corbyn tells PM it’s time to stop running and tell the truth about British tax havens

    JEREMY CORBYN challenged David Cameron yesterday to publish his tax returns after it was exposed that he partly inherited an offshore firm that did not pay tax for 30 years.

    The Labour leader demanded an independent probe of the tax affairs of those exposed in the 11 million-document leak from Panamanian law firm Mossack Fonseca — which named Mr Cameron’s late dad Ian Cameron as a client.

    Mr Corbyn said if the Tory PM wanted to “set the record straight” then he should “stop pussyfooting around” and take steps to tackle tax havens that are “honeypots of corruption.”

    Mr Cameron said that he had “no shares, no offshore trusts, no offshore funds, nothing like that” and refused to say whether his family had benefited or was likely to in the future from offshore tax-avoidance.

    He claimed that his father’s untaxed business was a “private matter.”

    A Downing Street spokesperson deflected questions by highlighting a part of his wife Samantha Cameron’s financial interests and insisting that “the Prime Minister, his wife and their children do not benefit from any offshore funds.”

    Mr Corbyn disagreed that it would be a “private matter” if tax had been avoided and said that an independent investigation “must take place” in light of the revelations.

    Mr Cameron also said that wealthy companies and individuals should pay tax they owe but refused to call for an investigation into the secretive, but legal, sector.

    This includes firms like Mossack Fonseca, which has 72 current and former world leaders as clients and claims to have operated “beyond reproach” for decades.

    Mr Cameron’s father, as a director of Blairmore Holdings Inc, used unregistered bearer shares until 2006 to protect clients’ identities.

    He ran an offshore fund that avoided paying a penny to the Treasury by roping in residents of the Bahamas, including a part-time bishop, to sign the paperwork.

    The Prime Minister is preparing to chair an international summit on tackling corruption next month, where tax havens are expected to be high on the agenda.

    Mr Corbyn suggested that the Tory ­government might intervene to take direct “immediate control” of British offshore tax havens by using an order in council because the Queen’s Privy Council, of which the Cabinet is just a standing committee, is a regular governing body of the British Overseas Territories.

    He will also demand extra resources for HM Revenue and Customs (HMRC), whose own offices are owned by companies registered in havens, to enable the taxman to tackle tax avoiders.

    At the launch of Labour’s local election campaign in Harlow, Essex, he said that the avoidance of tax by wealthy firms and individuals was starving public services of vital funding.

    “It is unacceptable that while councils’ budgets are cut and the services on which people rely are being cut back, the super-rich elite dodge their taxes and flout the rules.

    “As the leaked documents show, tax havens have become honeypots of international corruption, tax avoidance and evasion.”


    • Wednesday 6th April 2016

      posted by Morning Star in Editorial

      JEREMY CORBYN’S forthright demand for an independent inquiry into the tax affairs of everyone implicated in the Panama Papers scandal has to be supported.

      Rather than tax-dodging being a fringe activity by a handful of rich companies and individuals, Corbyn is right to describe it as being on an “industrial scale.”

      Downing Street has already begun squealing and not simply because his father’s offshore investment benefited David Cameron personally.

      The Prime Minister has made a name for himself as the self-designated scourge of offshore tax evasion and what he calls aggressive tax avoidance.

      If this reputation is accepted as justified, it adds weight to the Tories’ fraudulent “all in it together” argument.

      But, if there is less to Cameron’s self-proclaimed virtue than meets the eye, it shows that the government has promoted form over content.

      Cameron insists that he has no share in offshore operations, but his careful restriction of the issue to himself as an individual begs questions about other family members.

      This can be verified either way by setting up a wide-ranging and independent investigation.

      Rather than take up Corbyn’s call and cleanse the Augean stables once and for all, Downing Street prefers to play the man not the ball by accusing Labour of having done next to nothing while in office.

      That may be true, because the governments of Tony Blair, Peter Mandelson and Gordon Brown were in the pockets of big business, especially the private banks, and the wealthiest 1 per cent.

      The Tories can claim quite plausibly to have done more about offshore tax-dodging since 2010 than New Labour did over 15 years, but this isn’t the full story.

      The likes of Corbyn, John McDonnell and Diane Abbott spoke out throughout the New Labour years to demand that the spotlight be shone into international tax haven boardrooms and that effective government action be taken.

      If Cameron, George Osborne and company were serious about doing more than scratching the surface of dodgy dealing, they would have welcomed Corbyn’s proposal with open arms.

      Their preference for throwing insults at Labour rather than reacting positively invites the conclusion that they are playing games.

      Set-piece global conferences are all well and good, offering the PM a chance to milk the limelight, but prioritising international agreements over direct action can set the velocity of meaningful change to the pace of the most tardy slowcoach.

      Even Cameron would have to agree that Britain’s crown dependencies and overseas territories have dragged their feet, preserving their secret and very profitable arrangements.

      But former attorney general Dominic Grieve describes demands by Corbyn and former minister Vince Cable that the government take control of territories used as tax havens as a “bit of a nuclear option.”

      In his view, this would “destroy the livelihoods” of British Virgin Islands inhabitants working in the finance industry.

      Who remembers Grieve shedding tears for the tens of thousands of finance-sector workers sacked in Britain in recent years?

      Britain has a responsibility to people living in BVI, but this should not extend to collusion in the swindling of governments all over the world through tax evasion and avoidance.

      For too long the parliamentary consensus has been that rich people should be free to avoid paying their fair share of taxation and to thank politicians for their licence to do so by funding their parties.

      After changes in the Labour leadership and in the public mood, those days are over.

      Political leaders will no longer be judged by their words against tax-dodging but by what they agree to do to end it.


  4. Pingback: Panama tax-dodging for 1%, austerity for 99% | Dear Kitty. Some blog

  5. Pingback: Icelandic anti-corruption demonstrations continue | Dear Kitty. Some blog

  6. Pingback: British Chancellor Osborne and Panama Papers scandal | Dear Kitty. Some blog

  7. Pingback: Icelanders keep fighting their ‘Panama Papers’ government | Dear Kitty. Some blog

  8. Pingback: Panama Papers scandal and Britain | Dear Kitty. Some blog

  9. Pingback: ‘Panamist David Cameron, resign as British Prime Minister’ | Dear Kitty. Some blog

  10. Pingback: Spanish minister in Panama scandal, resigns | Dear Kitty. Some blog

  11. Pingback: British 1% and 99%, more inequality than ever | Dear Kitty. Some blog

  12. Pingback: Donald Trump and foreign policy | Dear Kitty. Some blog

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.