Panel of judges convicts former prime minister
Published: Tuesday, May 1, 2012
Updated: Tuesday, May 1, 2012 01:05
Former Prime Minister of Iceland Geir Haarde ’73 was found guilty of failing to adequately inform other Icelandic officials of events that led up to the 2008 financial crisis, according to an April 23 New York Times article.
Haarde, who majored in Economics at Brandeis, is the first world leader to be criminally charged in relation to the 2008 global economic crisis. Out of the six original charges he faced, two were dropped in October and three were cleared as a part of his final verdict.
Haarde’s charges of “gross neglect of duty” and failure to “conduct an in-depth analysis of the risks posed to financial institutions” were dropped, according to an Oct. 6, 2011 IceNews article. According to the judges of Iceland’s Landsdómur High Court, “gross neglect of duty” was too vague of a charge and the latter charge was deemed as not an actual crime.
Haarde was then cleared of “failing to move Landsbanki’s UK Icesave accounts into a subsidiary, not reducing the size of the banking system, and failing to heed the warning of a 2006 government report” according to an April 23 Financial Times article.
In an email to the Justice, Haarde called the outcome a “95-percent victory.”
According to the Financial Times article, conviction of those three “more serious” charges could have resulted in up to two years in prison. Instead, Haarde will not face any punishment and all of his legal costs will be paid for by the Icelandic government, leading him to call the result a “gigantic slap in the face” for those who voted for his indictment.
According to Haarde, nine judges out of a 15 judge court voted him guilty on the one count but six judges voted to acquit Haarde of all counts. In his email, Haarde defended his actions during his time in office, writing that he followed a “time-honored practise” of discussing the economic problems with “smaller groups of cabinet members.”
Haarde called the charge a “formal” one, as opposed to the five other “substantive” charges of which he was cleared.
Witnesses who testified in support of Haarde during the trial argued that “no one person” should be held responsible for the economic collapse.
“I feel that I have taken a hit on behalf of almost all my predecessors in the post of prime minister,” wrote Haarde in his email.
Haarde also wrote that he is “a bit frustrated that [the outcome] was not a 100-percent victory.” He and his lawyers are considering bringing the case to the European Court of Human Rights for “a review of the conclusion and the procedures involved.”
In addition to Haarde, former heads of one of Iceland’s banks have pleaded not guilty to charges of “fraud and market manipulation” and will appear in court later this year, according to The New York Times article. As many as 90 people may be charged in relation to the economic collapse.
Haarde served as prime minister of Iceland from June 2006 to his resignation in February 2009. During his term, Iceland suffered from the global financial crisis which caused large banks to default, the unemployment rate and house prices to rise and the currency to “plung[e],” according to The New York Times article.
Since the collapse, Iceland has shown signs of recovery, in part due to “its traditional tourism and fishing industries,” according to The New York Times. An April 30 Reuters article said that this year’s Iceland’s gross domestic product growth is estimated at 2.6 percent.
According to The New York Times, some economists say that the collapse of the banks have aided Iceland’s recovery.
“Iceland also did what other parts of Europe haven’t dared to do—let its banks go under,” according to Reuters. “It took some of the cost itself but forced foreign creditors to take the biggest hit.”
The article also noted Iceland’s growth compared to that of many other countries, which “seem headed for stagnation.”
As for Haarde, he wrote that while he has not yet decided what to do now that his trial has concluded, his “background and different experiences qualify” him for various positions both in and out of Iceland. He plans to write and lecture until he decides on more permanent plans.