Thrown into financial chaos by the secret dealings of its banking industry and its government, and battling the threat of IMF-mandated privatizations, Icelanders are fighting back.
The crisis was precipitated by the collapse of all three of the island nation’s major banks in late 2008, with impacts that weighed heavily not only on Iceland but also in Great Britain and the other Scandinavian countries, where the banks had made deep inroads.
The crisis tanked Iceland’s stock market and heavily damaged its currency.
“Iceland is under attack. It’s not military attack, but the objective is exactly the same. It’s to get control of your resources, your national resources, your money. Paying foreign debt is very much like paying foreign tribute but without the cost of a military overhead or an occupation,” said economist Michael Hudson in this April, 2009, interview with an Icelandic journalist.
“This is not the normal way of doing business at all. And the European Community and international banks have acted in a predatory way towards Iceland. They have tried to extract as much revenue as they can and they found out that doing it financially is the easiest way to get control of a country, much easier than doing a military invasion, in which case people really fight back. But Iceland hasn’t been fighting back against a financial attack. . .No country should essentially let itself be looted.”
Hudson said Iceland was facing the forced sale of all its natural resources and half of the country’s homeowners faced the prospect of their dwellings.
“No country in history has ever paid it’s debts. . .there’s simply no way these debts can be paid off,” he said.
“Government has essentially been handed over to the foreign bankers” by the International Monetary Fund, Hudson said, and was being run not for the benefit of Iceland’s citizens but for the benefit of the banksters, something, Hudson said, that “goes against every democratic tradition of Western Europe.” He called on Iceland to evict the IMF. “Look at what they’ve done to Latin America. Look at the history of what they’ve done to every single country.”
The popular rebellion in Iceland targets not only the idea that ordinary citizens should be held responsible for the failures of corrupt bankers, but the weapon the banksters have used to suppress journalists who tried to expose the corruption, “libel tourism.”
That odd pairing of words describes the practice in which litigants shop the
world’s courts in search of the most favorable venues to press their suits. London’s a favorite jurisdictions for corporateers, since English common law places the legal burden of proof on the defendant, who must prove that the publication or broadcast wasn’t libelous.
In the 15 January 2009 edition of the New York Review of Books, Alan Rusbrudger of the Guardian wrote an account of that paper’s disastrous encounter with British libel law.
In Britain, the burden of proof in defamation cases is squarely placed on the defendants’ shoulders. Libel lawyers have recently offered potential clients who are seeking damages against publishers conditional fee arrangements—no win–no fee—and these have led to daunting legal bills for newspapers, large and small. There is no constitutional protection of free speech such as that provided by the First Amendment in the United States.
British libel laws—with the burden of proof on the defendant, conditional fee arrangements, the ability of lawyers to ratchet up eye-watering costs, and a still uncertain degree of qualified privilege protection for “responsible” journalism—remain a formidable weapon in the hands of claimants, whether rich individuals or powerful corporations.
A month earlier, Global Integrity Commons, had reported on the practice, looking at another case featuring the same institution—the extraordinary website Wikileaks—that would soon play a leading role in the Icelandic case.
Whistle-blowing website Wikileaks has made it their trade to host content censored online. While this brings to mind China or Myanmar, their most challenging threats have come from the West — in this case, they’ve posted a series of stories quietly scrubbed from the archives of British papers by a hyperactive British libel law.
The stories in question detail the business dealings of Nadhami Auchi, a British-Iraqi billionaire with business and political ties worldwide, including contacts with Illinois Governor Rod Blagojevich and a US$3.5 million loan from Auchi’s company, General Mediterranean Holding, to Tony Rezko, shortly before Rezko was convicted of 16 counts of corruption and bribery.
Recently, Auchi has taken aim at a mixed bag of British media outlets via libel suits; Auchi was convicted of corruption by a French court in 2003, and has sued papers that fail to mention he is contesting the verdict in the European Court of Human Rights. Media largely stopped reporting on Auchi shortly after the suits began.
The same non-profit Internet site that figured in the Auchi case, Wikileaks.org, played a central role in exposing the shady dealing of the Icelandic banks. Just what is Wikileaks?
As the nonprofit announced in appearing online in December, 2006,
Wikileaks.org is an uncensorable version of Wikipedia for untraceable mass document leaking and analysis. It combines the protection and anonymity of cutting-edge cryptographic technologies with the transparency and simplicity of a wiki interface.”
Wikileaks is developing an uncensorable Wikipedia for untraceable mass document leaking and analysis. Our primary interests are oppressive regimes in Asia, the former Soviet bloc, Sub-Saharan Africa and the Middle East, but we also expect to be of assistance to those in the west who wish to reveal unethical behavior in their own governments and corporations.
A San Francisco federal court judge ordered the site silenced after Swiss bankers sued, claiming it had published confidential bank documents. As CNET reported at the time,
Wikileaks’ summary of the leaked documents centers on Rudolf Elmer, the former chief operating officer of Bank Julius Baer in the Cayman Islands. The summary alleges the bank supports “ultra-rich’s (sic) offshore tax avoidance, tax evasion, asset hiding and money laundering.” The bank has refused to comment.
Earlier, ah, leaks by the site have included an operations manual for the Guantanamo Bay detention camp and documents on Kenyan government corruption that were cited by the U.K. Guardian newspaper.
Icelandic television journalists who turned to the site for a document exposing insider dealings at one of the banks were hit with an inunction moments before they weere to air their report. Instead, the camera focused on the image of the WikiLeaks site, enabling citizens to go there for information that couldn’t be aired.
Government change, investigation
In a speech delivered last New Year’s Eve, Iceland’s prime minister, Jóhanna Sigurdardóttir, described the impact of the crisis on ordinary citizens of her country.
“It is shocking to note that the increases in taxes on individuals equal the interest and indexation from the State Treasury’s payments necessitated by the mistakes made by the Central Bank in the period leading up to the banking collapse. During the government of the Independence Party and the Progressive Party, from 1995 until 2006, the tax burden was largely shifted from higher-income groups onto lower- and average-income groups. This, coupled with the freezing of the level of untaxed income, and the shrinking of child care allowance and interest allowance, greatly reduced the income equalising role of the tax and benefit system and increased social inequality.”
In an interview with the New Statesman published two weeks later, Sigurdardóttir was asked, “Is the request that Iceland repay its bankers’ debts reasonable?” She answered, “Almost every Icelander finds it unreasonable that Icelandic taxpayers should have to pay thousands of pounds each, for a failed private bank, because of mistakes the taxpayers had nothing to do with. But someone has to pay. The question is really how this burden should be divided between the parties involved.”
Sigurdardóttir, a Social Democrat, was named to her office following three months of public protests over the crisis which forced the resignation of her neoliberal predecessor, Ólafur Ragnar Grímsson. She also became the world’s first openly lesbian national leader.
Soon after her appointment, the government appointed a special investigator with an eye toward seeking prosecutions in the banking collapse. Eva Joly, now 67, is the Norway-born French juge d’instruction [magistrate] who had previously conducted the investigation of Elf Aquitane, a probe which produced criminal indictments and cast a dark light on several key members of the Mitterand government.
As the Irish Times reported on 21 January,
In March, 2009, Joly was appointed by the Icelandic government as a special adviser to support a criminal investigation into possible white-collar crime being led by police commissioner Olafur Hauksson. “She is a very strong character,” Hauksson said in an interview last November with the Financial Times . “We are agreed on some parts [of the investigation] and not agreed on others but that is the natural way.”
Joly has become popular with the public. But while Icelandic banks and those who ran them bear responsibility, Joly believes ultimate responsibility rests with the greed culture spread by Wall Street and the City of London. She has no time for free market capitalism, which she regards as intrinsically corrupting. She dislikes ordinary people paying for the errors of the bankers, politicians and regulators. “This is what you see all over the world,” she told the FT . “The rules are not for the elite.”
She described the Icelandic investigation as “huge” by comparison to the Elf probe. She said: “It will involve other European banks. It will show that what happened in Iceland is not just an Icelandic problem.”
She is strongly critical of demands from the British and Dutch governments that their citizens who opened deposit accounts with Icelandic banks, lured by the promise of high returns and who lost everything, should be reimbursed by Iceland to the tune of some €4 billion plus interest. Such demands are immoral, she said last August.
While the impacts of the financial crisis are still unfolding, a growing number of Icelandic folk have become furious with libel tourism, and a legislator has teamed with WikiLeaks to introduce a measure in the Althing [as parliament is known] calling for a change in that nation’s libel laws designed both to stop libel tourism and to make Iceland a haven for journalists.
As Editorsweblong.org reported on 15 February,
Some Icelandic MPs, with the help of non-profit website WikiLeaks, are hoping to turn their small island in the North Atlantic Ocean into a destination for investigative journalists with a new proposal to be submitted to Iceland’s parliament on February 16th.
WikiLeaks editor Julian Assange has been in Iceland for the past two months, consulting parliamentarians on the bipartisan Icelandic Modern Media Initiative (IMMI) that hopes to turn Iceland into a “journalism haven,” he told the BBC. The proposal would implement some of the strongest legal protection in the world for the press and its sources.
If the IMMI passes through parliament, it would also end “libel tourism,” a legal tactic used by plaintiffs to file libel suits in jurisdictions with strict laws against libel, no matter where the alleged defamation took place. Journalists, publishers, and internet hosts have all been targets of libel tourism in the past.
In the wake of the recent financial crisis, Kaupthing, Iceland’s largest bank, engaged in some libel tourism of its own when it filed a libel suit in London against Danish newspaper, Ekstra Bladet. London has emerged as the de facto capital of libel tourism due to a 19th-century libel law that places the burden on proof on the defendant.
Under current British libel law, a publication produced in another country can be sued if only a handful copies are sold in Britain. The same is true if a foreign broadcast is reproduced or excerpted by British television or radio stations.
Videos on the concept are found in this BBC report here.
On 15 February, the Guardian published an interview with WikiLeak’s Assange on the proposal.
Assange told the Guardian that “on 31 July last year, -WikiLeaks released Kaupthing’s confidential large loan book, which exposed €6bn of loans. Kaupthing threatened us and our source with a year in prison under Icelandic banking secrecy law. The leak was to become a major story, but five minutes before the national broadcaster, RÚV, could report it, the news desk was slapped with an injunction by Kaupthing. The first such Icelandic newsdesk injunction in living memory. Lost for words, RÚV filled the time with an image of WikiLeaks, outraging the public, who could all access a copy of the primary source document.
One positive impact of the crisis has already begun in England, where parliamentarians have taken the first steps towards reforming that nation’s pernicious laws.
As the London Times reported Wednesday,
Judges who allow wealthy foreign litigants to take advantage of our “overly flexible” libel laws have seriously damaged the country’s reputation as a haven of free speech, MPs said.
The Commons culture, media and sport committee, which has spent 18 months investigating the country’s libel and privacy laws, said the “humiliating” problem could only be solved by the biggest shake-up of Britain’s libel laws in a generation.
In a report published today, the committee recommends a change in the law to allow cases to be heard in the High Court only if the main publication of an alleged libel was in Britain.
It also suggested a series of other recommendations to curb the “chilling effect” of libel cases on free speech, including severe restrictions on “no win, no fee” arrangements for lawyers and changes in the burden of proof in corporate libel suits.
WikiLeaks in trouble
Researchers looking for documents at Wikileaks have been greeted recently with an error message, announcing the site can’t be found.
For journalists, the site has been a gold mine. The site provides the Internet security system to give whistleblowers a way to provide the public with critical reports and other documents without fear of exposure.
Among the secret reports to first appear on the site was the U.S. Army’s Standard Operating Procedures for Camp Delta, a manual which explicitly stated that some prisoners had been designated as off-limits to the International red Cross—a policy the Pentagon had repeatedly denied.
With hundreds of thousands of documents available from scores of countries, the site has been plagued with legal threats and the occasional court-ordered takedown. But the biggest problem WikiLeaks faces is lack of funding to pay for the $200,000 a month in bandwidth and system costs.
WikiLeaks is currently considering the auction of limited-time rights to newsworthy documents as one means of raising money, as reported in an interview with Assange in Medien-Ökonomie-Blog.
The site has already struck exclusive rights deals with two German media companies—Stern and Heise—for use of Wikileaks materials there.