- President to speak to ruling parties before considering request to dissolve parliament
- Prime minister has called for early elections if coalition partner doesn’t support government
- Prime minister under fire after leaked documents revealed ties to offshore company
Gunnlaugsson has been under intense pressure to resign since leaked documents hacked from a Panamanian law firm revealed his links to an offshore company, triggering mass protests in the capital Monday.
Critics said the revelations around the company, which allegedly had holdings in Iceland’s collapsed banks, have shattered public confidence in his leadership and could affect the country’s international reputation.
On Tuesday, Gunnlaugsson said he planned to dissolve parliament and call for fresh elections as soon as possible if lawmakers from his party’s coalition partner — the Independence Party — did not support his government.
But after meeting with Gunnlaugsson, Iceland’s President Olafur Ragnar Grimsson said he would not consider the request to dissolve parliament before he had spoken with both parties in the coalition, according to Iceland’s national public service broadcaster RUV.
Gunnlaugsson has led the island nation of 330,000 people since 2013, his Progressive Party governing in a center-right coalition government with the Independence Party.
An estimated 10,000 demonstrators — a huge number considering the population — 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, reflecting widespread discontent 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 memory.
“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.
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.
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.
Protesters to Prime Minister: ‘Farewell’
The Prime Minister’s statements have done little to quell anger over the revelations.
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.
“People are in a similar shock as after the financial crisis in 2008.”
CNN’s Inga Thordar, Jethro Mullen, Bharati Naik, Vasco Cotovio, Laura Perez Maestro, Rosemary Church and Catherine E. Shoichet contributed to this report.
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