The System Is Working in Iceland: Iceland's Supreme Court Upholds Jail Sentences of Four Banking Executives

Vatic Note:   This is probably one of the best videos that unintentionally proves that the “slur” used against truth tellers, that they are tin foil hat conspiracy nuts….is in fact a “conspiracy fact” and actually happened.   We needed something to pass around to the sheep to show that alll the elements of a conspiracy that actually materialized was not a “theory” but a reality that the Icelandic people could do something about, once it was exposed.

And they successfully did so, including pressuring their elected leaders into action.  We did an article way back when they arrested those bankers, and it was titled “The Mouse that Roared” and boy did they roar.  I just went to find the link and put it up, but the blog has been gutted and no longer available.  Sorry about that. 

Its Vatic Projects hope that this will be passed around with that point being made, that not all conspiracies that are exposed are just “THEORIES”, rather, more and more are becoming our realities, with serious ramifications to our nations, economies, peoples, etc. and that we need to do like Iceland and take action through our systems to stop this before its too late.

One example that needs to be stopped immediately is the TPP global trade agreement that Obama has indicated he would sign, so we must push congress and the senator to reject it as soon as possible if not sooner, since that trade agreement, ends the USA and our Constitution and government as we know it. It even guts our courts, thats how bad it is.  So help us by getting this out and about to everyone you know.  This is good news, in that it shows WE CAN STOP THIS IF WE MAKE THE EFFORT.  Its really up to us now.  Finally, BE CAREFUL WHO YOU VOTE FOR IN THE PRIMARY AND GENERAL ELECTION.  Make sure they are not owned by the cabal. 

Iceland’s Supreme Court Upholds Jail Sentences of Four Banking Executives 
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=13238

Transcript

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. And welcome to this edition of the Bill Black report. And for a change, we have a good news Bill Black report today. 

The Supreme Court of Iceland last Thursday upheld the convictions of four former banking executives charged with market manipulations. The case demonstrated the possibilities that other nations could take their own criminal bankers to court and succeed in convicting them. 

Since 2012, Iceland’s government has tried and convicted executives at each of the country’s three largest banks. Here with us to discuss how the pursuit and the convictions came about is Bill Black. And as you know, Bill is a former banking regulator, and he is also a professor of economics and law at University of Missouri-Kansas City. And he’s joining us from Minneapolis today. 

Thank you so much for joining us, Bill.BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.

PERIES: So, Bill, how did Iceland manage to do this, convict their bankers?  

BLACK: So I’ve been to Iceland twice at their invitation and involved in, to some extent–I’m not claiming any credit–helping to train the regulators and assist the prosecutors with some of the experiences we had in the savings and loan debacle. So let’s start with the difficulties. 

These three banks were massive. These are the three banks that brought down the entire Icelandic economy. They had deposits or liabilities that were ten times the total GDP of Iceland. So it was a really difficult task. 

These entities were huge, financially sophisticated, could hire top lawyers, and had very complex patterns of subsidiaries and affiliates under different rules in different countries and such, and many of the top people fled Iceland as well, which made it difficult.

PERIES: And so how did they manage to convict the top four bankers?

BLACK: So what they did is create a special unit to go after them. Now, this is particularly difficult in the Icelandic context. We’re talking about a nation that has very few people. The total population is that of a moderate-sized city. 

And so, as soon as you got any significant staff, the odds were pretty good that anybody you investigated would be at least a collateral relative of one of your staffers. I call this the second cousin problem in Iceland. They advertise for the position of the special prosecutor, and they got one person who was willing to do it. And he was a regional police official from–and there’s only one big city in Iceland, and he didn’t live in it. So he had never done anything remotely close to this. 

But he built a staff, and with assistance from Madame Joly, who is French and Norwegian and a former prosecutor who helped, along with public protests in Iceland, to get, over time, enough budget to hire a real staff of investigators, prosecutors, and experts that they needed, like accountants. 

So how do they prosecute? They did it the old-fashioned way: they looked at the facts. They also had the good fortune–immediately after the crisis, they got rid of their top regulator and brought in a very good guy, who, unfortunately, was forced out eventually. But he was a real aid to these prosecutions as well. 

You’re talking about the Kaupthing case. But the Kaupthing case is the third major success. In other words, Iceland has now convicted the top officers of all three of its major banks. In this case that you’re talking about at Kaupthing, they successfully convicted Mr. Sigurðsson, who was the former CEO. They successfully convicted Mr. Einarsson, who was the CEO of their Luxembourg entity. They convicted Mr. Guðmundsson. And they convicted Mr. Ólafsson, who was the bank’s second-largest shareholder. 

So they got the former chairman in Einarsson, the former CEO in Guðmundsson (and huge shareholder). And behind the scenes, of course, this prosecution also demonstrated that a Qatari sheik, a member of the ruling family in Qatar, was used by these four Icelandic executives and shareholders to do a phony purchase of shares that was designed to make it look like the bank was still healthy. And they did this when it was actually on death’s door and was in fact deeply insolvent.

PERIES: Do we know who the Al Thani‎ member of the Qatari royal family is so that we could put up a picture so you could see?

BLACK: Well, the family name is the Al Thani‎. I don’t recall the other portions of the name in terms of a picture. But it’s an old-fashioned scam. It’s one that I talked to the prosecutors about in Iceland because of our experience with a very similar scam in the savings and loan debacle. 

And what you do is simply loan the money to someone who will take part of that money and buy stock. And if they buy stock, then /uːmvɑˈlɑ/, your capital just went up. But, of course, nothing has really improved. In fact, you’ve simply taken a greater credit exposure, and you’re deceiving other creditors, other depositors, and other shareholders, potentially, as well. 

We had, also, a variant involving the Middle East. The most notorious fraud in the savings and loan crisis was Charles Keating. We found that his huge hotel development, luxury hotel development, the Phoenician, which they spent $300 million to create, had a market value that was only $200 million. So what did Keating do? Well, poof! Suddenly the Kuwaiti investment office ends up buying half of a hotel at a price that would suggest it was worth $300 million. 

Of course, eventually, after Lincoln Savings fails, you get a look at the files, and you find out that as soon as they started putting this deal together, they began emergency research on the Foreign Corrupt Practices Act. That’s the anti-bribery statute, because there was over a $20 million fee to arrange this loan–or, as I joked at the time to my colleagues, this–fellow savings and loan regulators, we haven’t discovered the market value of the Phoenicia Hotel; we’ve discovered the market value of a Kuwaiti prince.

PERIES: And, Bill, what can we take away from the Iceland prosecutions that could possibly be adopted in the same sort of way? I mean, if it is the old-fashioned way that we need to exercise here in order to restore some sanity in the banking system, what can be done here in the U.S.?

BLACK: Well, we’ve run a real-world test. It was much, much, much harder in the Iceland context to be able to get these prosecutions. And I need to tell you that the Icelandic courts in the past, including the Supreme Court, have been very favorably disposed towards elite white-color alleged criminals. So this is one of the hardest places in the world to achieve what is again now the successful prosecution of the senior leaders of all three of the big fraudulent Icelandic banks. 

If Iceland can do it, the United States, with all the resources of the FBI and the Justice Department, and much more favorable law and courts that we have in the United States, and more favorable accounting principles that we have the United States, could have gotten the prosecutions as well of our elite bankers. 

And so what Iceland has proved is it’s a matter of wealth. So kudos to the prosecutor, kudos to the new regulatory leader, but huge kudos not only to the Supreme Court, but to the people of Iceland who got out into the streets repeatedly and demanded changed government and a government that would provide the resources and the backbone to actually bring the prosecutions, even though they were going to embarrass many of the most powerful people in Iceland. 

And we need to rediscover and put in force leaders with the same. And it takes people getting out into the streets and demanding their government change.

PERIES: Thanks so much, Bill.BLACK: Thank you.  And thank you for joining us on The Real News Network.
EndDISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

The article is reproduced in accordance with Section 107 of title 17 of the Copyright Law of the United States relating to fair-use and is for the purposes of criticism, comment, news reporting, teaching, scholarship, and research.