A snap press conference
On Monday, October 10, Finance Minister Bjarni Benediktsson called a snap press conference.
The call came on the heels of an opinion authored by the Parliamentary Ombudsman that concluded that the Minister of Finance’s role in the ongoing privatisation process of the Íslandsbanki bank – which had been nationalised following the 2008 banking collapse – had not conformed to state guidelines.
The official opinion of the Ombudsman stated: “In light of the fact that a company owned by the Finance Minister’s father was among the buyers in the sale of the state’s 22.5% share of the Íslandsbanki bank, sold in March 2022, the Minister was unfit to approve of a proposal made by Icelandic State Financial Investments (ISFI) to go ahead with the sale.”
Given this conclusion – and given the Minister’s decision to call a press conference – some speculated whether Bjarni would resign; most remained doubtful.
It was therefore with some surprise that Bjarni announced his decision to step down as Minister of Finance: “I believe it is important to respect the opinion of the Ombudsman, who is a special trustee of Parliament. I say this wholeheartedly even though I have my own views, reasons, and understanding of how the conclusion was reached. The opinion must be respected,” Bjarni observed.
Bjarni’s decision – at the time, at least – could be viewed both as a “historic act,” given that, since the Republic was founded in 1944, only six ministers have resigned from office following criticism or protest, and also as the latest chapter in an extended, and oftentimes controversial, political career. Though as noted later on, the historicity of the act has been somewhat tempered by recent developments.
Who is Bjarni Benediktsson?
Bjarni Benediktsson was born on January 26, 1970 into a family of means and political ambition.
He is the namesake of his great-uncle, Bjarni Benediktsson, who served as Iceland’s Prime Minister from 1963 to 1970. In 1970, while staying at the official Prime Minister’s residence at Þingvellir with his wife, Sigríður Björnsdóttir, and their four-year-old grandson, Benedikt Vilmundarson, a fire broke out, tragically claiming all their lives.
During the 50-year anniversary of the event, Bjarni Benediktsson paid homage to his great uncle in writing, noting that, “the family’s grief was deep and painful. And for Icelandic society, the loss was significant.”
Bjarni would eventually follow in his great uncle’s footsteps in more ways than one; Bjarni graduated from the MR Junior College in 1989, and – like his great uncle – obtained a law degree at the University of Iceland. He went on to study German and law at the Goethe-Institut and the University of Freiburg respectively, prior to attending the University of Miami in 1997, where he graduated with a master’s degree in law.
Business and politics
Upon his return to Iceland, Bjarni was employed as an attorney and became a licensed securities trader.
In 2003, he was voted into Parliament as a member of the Independence Party. From that time, he served simultaneously as an elected representative and a business executive. In 2008, Bjarni was implicated in a series of business transactions (later referred to as the “Vafning case”) related to the refinancing of his family company’s shares in the Glitnir bank, calling into question Bjarni’s dual roles and underscoring a possible conflict of interest.
Bjarni has always maintained his innocence regarding the case: “As I have repeatedly stated, I had no other involvement in the matter than to assist shareholders in meeting the bank’s collateral requirements. Once again, these are baseless political attacks.”
After the banking collapse that same year, Bjarni decided to withdraw from the Icelandic business world: “I admit that I find it somewhat inappropriate to be an active participant in the business world after the banks came under state control,” Bjarni admitted. “This could potentially lead to some distrust that might harm the interests of the companies. I don’t think that’s a good position.”
A 2017 investigative report, authored by Icelandic journalists in collaboration with the Guardian, revealed that Bjarni had sold several million króna of assets in the Glitnir bank shortly before an emergency law placed Iceland’s failed financial institutions under state control in 2008.
Bjarni maintained that he was not privy to insider information, stating that “all sensible investors would have considered selling at this time,” and the Guardian admitted that it had seen “no evidence of wrongdoing;” nevertheless, as noted by the UK media outlet, “his involvement raises questions about a possible conflict of interest between his roles as an MP and as one of the bank’s most valued clients.”
Leader of the Independence Party
At the age of 39, on March 29, 2009, Bjarni was elected leader of the Independence Party at its national convention. He received 58.1% of the vote to Kristján Þór Júlíusson’s 40.4%. In his acceptance speech, Bjarni quoted his father-in-law:
“I’m like skyr – stirred.”
His first elections at the helm proved disappointing; during the April 2009 legislative elections, the Independence Party secured only 16 seats – 9 fewer than in the previous elections. Having conceded defeat on April 26, Bjarni admitted that his party had lost the trust of voters: “We lost this time but we will win again later.”
And win again he would.
In the 2013 Parliamentary elections, the Independence Party, and its ally the Progressive Party, won 19 seats respectively. Bjarni went on to assume the position of Minister of Finance and Economic Affairs in a cabinet led by Progressive Party leader Sigmundur Davíð Gunnlaugsson.
In 2015, a data breach of Ashley Madison, a website promoting infidelity, led to something of a public embarrassment for Bjarni, as it was revealed that he had registered on the website under the username IceHot1 (the account was linked to an address in Florida, which was believed to be the US residence of his father).
Following these revelations, Bjarni’s wife issued a statement on social media stating that the couple had indeed registered in 2008 – filling out the required details in “a lighthearted manner” – although they had never revisited the site, had made no payment, and had not engaged in any interactions or breaches of trust. (The investigative news outlet Heimildin would later dispute these claims, claiming that the account had been updated twice after being created.)
The Panama Papers
Embarrassing as these revelations were, however, they were overshadowed by another, more wide-reaching scandal that led to the collapse of the coalition partnership between the Progressive Party and the Independence Party in 2016.
Following the mounting public outrage that the Prime Minister had sheltered money offshore, as revealed in the so-called “Panama Papers,” Sigmundur Davíð resigned from office. During the infamous Wintris interview, Sigmundur Davíð found himself in an uncomfortable situation when confronted with questions regarding his connections to an offshore company, leading to a notably awkward departure from the interview.
Bjarni Benediktsson’s name also appeared in the Panama Papers. Documents showed that he and two Icelandic businessmen held power of attorney over a shell company created in 2005 in the Seychelles. Bjarni downplayed his involvement and stated he established the company in 2006 for real estate transactions in Dubai.
Unlike Sigmundur Davíð, Bjarni weathered the Panama Papers scandal without resigning. He emerged relatively unscathed, and this, among other factors, eventually earned him the nickname “Teflon Bjarni.”
Bjarni’s father was also linked to a shell company in Tortola, the largest of the British Virgin Islands, in the Panama Papers.
Sins of the father
During his press conference when he announced his resignation as Finance Minister, Bjarni Benediktsson remarked that his father – entrepreneur and investor Benedikt Sveinsson – remained “his greatest supporter.” To followers of Icelandic politics, the statement had a slightly ironic ring to it, given that Bjarni’s father had, on more than this occasion, plunged his son’s political career into turmoil.
During the 2016 Parliamentary elections, Bjarni’s Independence Party won 21 seats (the Progressive Party won only 8). A new coalition was formed between the Independence Party, the Reform Party, and Bright Future in January 2017, with Bjarni becoming Prime Minister.
His tenure was short-lived.
In September 2017, it was revealed that Bjarni’s father had signed a letter of recommendation for Hjalti Sigurjón Hauksson, a convicted child molester, seeking a restoration of honour from the Icelandic government. Benedikt disclosed that Hjalti, having connections to his acquaintances and spouse from school years, sought his aid for financial or job-related issues, and clarified that their interaction was limited to that. He emphasised that the process of recommending Hjalti for “restored honour” was solely seen as a legal pathway to regain civil rights, expressing regret as this act exacerbated the victim’s trauma.
When it emerged that Bjarni – then Prime Minister – had known of his father’s endorsement since July, it led to the dissolution of his government after the Bright Future party ended its coalition with the Independence Party, citing a “serious breach of trust.”
Finance Minister once again
After the 2017 Parliamentary elections, Katrín Jakobsdóttir succeeded Bjarni as Prime Minister, and in a coalition agreement, Bjarni Benediktsson once again became Finance Minister – until his resignation on October 10.
And his current tenure as Finance Minister has not been without its controversy. The first of which involved a 2020 Christmas event, during the Covid pandemic, in which Bjarni attended a gathering in the Ásmundarsalur gallery in Reykjavik, violating health regulations. The venue should have been closed, and there were too many attendees without masks. Bjarni later apologised on Facebook for his oversight. Despite public outrage and calls for his resignation, the incident had no further repercussions for him.
Ministerial reshuffling
Following Bjarni Benediktsson’s resignation as Finance Minister, opposition leaders voiced concerns over the government’s mandate. Some lauded Bjarni for “taking responsibility,” while others highlighted the internal disputes within the government.
Prime Minister Katrín Jakobsdóttir commended Bjarni’s decision but deflected when asked about the possibility of him assuming another ministerial role, emphasising the focus on effective governance regarding the Íslandsbanki sale.
On October 14, a ministerial reshuffle was announced. Bjarni became the Foreign Minister, and Þórdís Kolbrún Reykfjörð Gylfadóttir took over as Finance Minister, amidst a challenging political and economic environment. Both expressed optimism for their new roles, emphasising the importance of addressing the ongoing issues like the Íslandsbanki sale and high inflation.
After the announcement, Þorgerður Katrín Gunnarsdóttir, Chairperson of the Liberal Reform Party, expressed her discontent with the decision. “Stepping aside, in my opinion, means shouldering responsibility. It doesn’t mean changing seats or assuming other ministerial robes – that’s not stepping aside to shoulder responsibility.”
