Brussels, April 6: The Panama secrecy leak claimed its first casualty on Tuesday after Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned following allegations he had sought to hide his wealth and dodge taxes.
The decision was announced in parliament after the legislature had been the focus of street protests that attracted thousands of Icelanders angered by the alleged tax evasion efforts of their leader. Gunnlaugsson, who will step down a year before his term was due to end, gave in to mounting pressure from the opposition and even from corners of his own party.
“What this exemplifies more than anything else is that there’s a growing lack of tolerance over the way that the international financial system has been gamed and rigged by corrupt elites,” Carl Dolan, director of Transparency International’s EU division, said in a phone interview from Brussels.
The Panama files, printed in newspapers around the world, showed that the 41-year-old premier and his wife had investments placed in the British Virgin Islands, which included debt in Iceland’s three failed banks. The leaked documents therefore also raise questions about Gunnlaugsson’s role in overseeing negotiations with the banks’ creditors. Ironically, the offshore investments were held while Iceland enforced capital controls.
Gunnlaugsson is the second Icelandic premier to resign amid a popular uprising, after Geir Haarde was forced out following protests in 2009.
Gunnlaugsson always looked to be the most vulnerable of the politicians implicated in the documents. From Moscow to Islamabad and Buenos Aires, most public figures have managed to beat off the revelations with either outrage, denial or indifference. None of those tactics worked for Gunnlaugsson, whose first response was to walk out of an interview with Swedish TV, a clip that went viral after the leaks were published on Sunday.
“The Iceland PM is the tip of the iceberg in terms of how much political instability we’ll see long-term on the basis” of the leaks, Ian Bremmer, president of the New York-based Eurasia Group, said by phone on Tuesday.
Iceland’s electorate balked at the alleged tax evasion and Gunnlaugsson’s initial refusal to budge. Police on Monday erected barricades around the parliament in Reykjavik as protesters beat drums and pelted the legislature with eggs and yogurt. Almost 10,000 people gathered, according to police, while organizers said the figure was twice as high. Thousands more had signed up on Facebook to attend a second round of protests that was due to take place on Tuesday afternoon.
Other political leaders have also been forced to defend themselves since the leaked documents surfaced. U.K. Prime Minister David Cameron said he has no offshore funds or trusts amid demands for an inquiry from opposition leader Jeremy Corbyn.
Dolan said that if the situation in Iceland is replicated, whereby a politician “has a secret stake in a company that has benefited from the decisions of his government,” then he would expect “more heads to roll.”
In recent years, “we’ve had prime ministers in Slovenia and the Czech Republic who have resigned over these kinds of issues,” Dolan said. “The only difference with the Panama papers is the source of the information — it came from a massive data leak.”
Gunnlaugsson is one 12 world leaders to be singled out after the International Consortium of Investigative Journalists, or ICIJ, uncovered that he and his wife had an offshore account to manage an inheritance. His wife, Anna Sigurlaug Palsdottir, previously revealed the account in a Facebook posting in March after the premier was questioned about the money.
