Iceland’s Prime Minister is facing calls to resign after leaked documents revealed personal financial arrangements that critics say has shattered public confidence in his leadership and will affect the country’s international reputation.
Opposition lawmakers say they plan to push for a vote of no confidence in Prime Minister Sigmundur David Gunnlaugsson and his Cabinet and call for fresh elections when the parliament meets Monday afternoon, while protests have been called in the capital, Reykjavik.
Meanwhile, Iceland’s President, Olafur Ragnar Grimsson, has cut short a personal trip to the United States, Iceland’s national public service broadcaster RUV reports, citing his press secretary.
Elected leaders implicated
Gunnlaugsson is one of a number of world leaders facing scrutiny since a group of news organizations jointly published reports Sunday drawing on millions of documents hacked from Mossack Fonseca, a Panamanian law firm that allegedly helped elected leaders and top officials set up secret shell companies and offshore accounts.
The reports accuse Gunnlaugsson, who has led the country since 2013, of having ties to an offshore company, Wintris Inc., that were not properly disclosed.
CNN hasn’t been able to verify independently the leaked documents — which were obtained from an anonymous source by German newspaper Sueddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists.
Gunnlaugsson has not responded to a request for comment from CNN.
Mossack Fonseca said in a statement to CNN on Monday that while the firm “may have been the victim of a data breach, nothing we’ve seen in this illegally obtained cache of documents suggests we’ve done anything illegal, and that’s very much in keeping with the global reputation we’ve built over the past 40 years of doing business the right way.”
Questions over declaration of interest
According to the journalism group, which carried out a yearlong investigation into the documents in cooperation with more than 100 news organizations, Gunnlaugsson and his wife, Anna Sigurlaug Palsdottir, purchased Wintris from Mossack Fonseca in 2007.
The journalism organization alleged the shell company was used to invest millions of dollars in inherited money, and that Gunnlaugsson did not disclose, as required by parliamentary rules, that he co-owned Wintris when he entered parliament in April 2009.
But in a statement attributed to Gunnlaugsson and Palsdottir published on the Prime Minister’s website on March 27, he denied having breached the rules, saying that only companies with “commercial activity” had to be reported, while Wintris was simply a holding company for his wife’s assets.
He had “therefore followed the rules for declarations of interests ever since he took a seat in parliament in 2009, regardless of how you look at this case,” the statement read.
On the last day of 2009, Gunnlaugsson sold his half of the company — headquartered on Tortola in the British Virgin Islands — to Palsdottir for $1, the International Consortium of Investigative Journalists reports, citing the leaked documents.
When asked about Wintris during a videotaped interview with Swedish public television station SVT, Gunnlaugsson ended the conversation and said the journalists had asked an inappropriate question. “You are asking me nonsense,” he said.
In a statement later provided to the investigative journalist group, his office said that, as a holding company for his wife’s assets, Wintris brought no tax advantages and had been created to avoid conflicts of interest in Iceland.
“It’s been clear since before I began participating in politics that my wife had a considerable amount of money,” he wrote in a post on his website Monday.
“Some people find that in itself very negative. I can’t do much about that because I’m neither going to divorce my wife nor demand that she relinquish her family inheritance.”
The journalism group reported that among Wintris’ more notable holdings were bonds of three major Icelandic banks that collapsed in 2008. It said it was not clear how Gunnlaugsson’s political activities could have affected the bonds’ value.
The Prime Minister said in his statement on his website that his wife had never benefited from his political activities — “quite the contrary.”
“My political participation and the policies I have fought for have resulted in her wealth being decreased,” he wrote.
Lawmaker: ‘A complete collapse of ethics’
But the Prime Minister’s statements have done little to quell anger over the revelations in a country where the 2008 financial crisis — that saw the collapse of its currency, stock market and several major banks — is a painful recent memory.
One former prime minister, Johanna Sigurdardottir, said Gunnlauggson and his government needed to resign immediately.
“It is not just the credibility of the nation internationally that is at stake,” she wrote on her Facebook page.
“The nation will never tolerate what the leaders have been found out doing. There has been a total breach of confidence between the government and the people of the country.”
Birgitta Jonsdottir, a lawmaker for the opposition Pirate Party, said lawmakers would put forward a motion of no confidence and call for fresh elections when parliament convened Monday.
“He has already done so much damage for people’s trust in the state, and he’s completely defamed Iceland in the eyes of the international community,” she said.
She said Icelanders were “embarrassed” and “in shock” to see their leader appear in news reports on the leaked documents alongside Russian President Vladimir Putin and other world figures.
The reports allege the files show the existence of “a clandestine network operated by Putin associates that has shuffled at least $2 billion through banks and offshore companies,” although Putin isn’t mentioned by name in any of the documents. Kremlin spokesman Dmitry Peskov has labeled the reports a “series of fibs.”
“We usually compare ourselves to Scandinavia and Western Europe. And to see our leader in the company of Putin and those people – people feel very embarrassed in Iceland,” Jonsdottir said.
“People are in a similar shock as after the financial crisis in 2008 because it is a sense of a complete collapse of ethics.”
Gunnlaugsson told Iceland’s Channel 2 on Monday that he had not considered resigning and apologized for his poor performance when confronted with the allegations in the television interview, RUV reported.