- President to speak to ruling parties before he considers request to dissolve parliament
- Prime minister has called for early elections if coalition partner doesn’t support his government
- Prime minister under fire after leaked documents revealed alleged ties to offshore company
Iceland’s President Olafur Ragnar Grimsson will not consider Prime Minister Sigmundur David Gunnlaugsson’s request to dissolve parliament until Grimsson has spoken to both parties in the governing coalition, he told Iceland’s national public service broadcaster RUV on Tuesday.
Gunnlaugsson earlier said he would call for fresh elections if lawmakers from his coalition partner did not support his government amid fallout from the so-called Panama Papers leaks.
[Original story, published 9:39 a.m. ET]
Iceland’s embattled Prime Minister Sigmundur David Gunnlaugsson says he will dissolve parliament and call for fresh elections as soon as possible if lawmakers from his party’s coalition partner do not support his government.
Gunnlaugsson, who made the statement Tuesday on his Facebook page, has been under intense pressure to resign since leaks from the so-called Panama Papers revealed alleged links to an offshore company with holdings in Iceland’s collapsed banks, triggering mass protests in the capital.
Critics said the revelations in the leaks have shattered public confidence in his leadership and could affect the country’s international reputation.
On Tuesday, Gunnlaugsson met with President Olafur Ragnar Grimsson at the latter’s residence, Iceland’s national public service broadcaster RUV reported.
An estimated 10,000 demonstrators packed the streets Monday evening outside parliament in Reykjavik as opposition lawmakers called for a vote of no confidence in the Prime Minister. Further protests have been called for at 5 p.m. Tuesday.
“I’ve never seen as many people show up for a protest,” Birgitta Jonsdottir, a lawmaker for the opposition Pirate Party, told CNN on Tuesday.
Gunnlaugsson has led the Nordic island nation of 330,000 people since 2013, his Progressive Party governing in a center-right coalition government with the Independence Party.
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 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 German newspaper Sueddeutsche Zeitung obtained from an anonymous source and then shared with the International Consortium of Investigative Journalists.
Gunnlaugsson has not responded to a request for comment from CNN.
He told Iceland’s TV2 on Monday that he felt “betrayed and disappointed” by the accusations and wouldn’t step down.
“I have not considered resigning, nor am I going to resign, because of this matter,” he said.
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.
He told TV2 that he had walked out of the Swedish television interview because he was startled by the questions, and apologized to Icelanders for how he had handled the questioning.
“They started talking about tax havens and such. Then, they made the impression that I had been involved in that. It is very important to remember that my wife’s company has never been in a tax haven. And it isn’t really an offshore company since it has always been taxed in Iceland,” he said.
“This, of course startled me. And I think I should apologize for my performance in this interview. Even though I felt betrayed and disappointed, I shouldn’t have let it faze me.”
Protesters to Prime Minister: ‘Farewell’
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.
Opposition lawmakers filed a motion for a no-confidence vote, which could be debated later in the week.
At Monday’s protest, thousands gathered, with many carrying placards with messages such as “Tell the truth” and “Farewell.”
“Yesterday one could say that people sensed the ethical collapse happening with the political elite,” Pirate Party lawmaker Jonsdottir said Tuesday.
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, she said.
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.”
Former Prime Minister Johanna Sigurdardottir said Gunnlaugsson 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.”
CNN’s Inga Thordar, Jethro Mullen, Bharati Naik, Vasco Cotovio, Laura Perez Maestro, Rosemary Church and Catherine E. Shoichet contributed to this report.