Bank drama escalates
into political row
 Bjørn Skogstad Aamo, head of the regulator agency now probing insider trading allegations at DnB NOR, initially claimed he had no conflict of interest. PHOTO: JON HAUGE Rune Bjerke, chief executive of DnB NOR, is an old friend of Prime Minister Jens Stoltenberg from their days as members of the Labour Party's youth organization AUF. He has claimed he didn't have advance knowledge of Stoltenberg's bank crisis plan. PHOTO: HEIKO JUNGE/SCANPIX |
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Bjørn Skogstad Aamo, head of financial regulatory agency Kredittilsynet, announced Tuesday afternoon that he wouldn't lead the investigation into alleged insider trading at DnB NOR after all. Rather, Aamo said, the agency's regulators would report directly to Kredittilsynet's board, and not to him.
The drama Aamo got caught up in involves powerful figures tied to Norway's Labour Party, which heads the ruling government coalition. Prime Minister Jens Stoltenberg, his chief of staff, DnB NOR's chief executive, Aamo himself (as intially in charge of the investigation of contact among the first three) and even the head of the parliament's finance committee – which was holding a hearing related to the matter Tuesday – all hail from Labour.
Opposition leader Siv Jensen of the Progress Party already has called the vast Labour Party network at various levels of business, the government and the state bureaucracy "a problem for democracy" in Norway.
On Tuesday, the Christian Democrats stepped up the criticism, especially after Aamo suggested to newspaper Aftenpostenthat he could understand why there was direct contact between the Office of the Prime Minister and DnB NOR's CEO Rune Bjerke in the days leading up to Stoltenberg's announcement of a government crisis plan aimed at boosting Norwegian banks' liquidity. It's that contact that's fuelled speculation of insider trading, since DnB NOR sold off government bonds just before the crisis plan cut their value. The banks that bought the bonds from DnB NOR -- among them Nordea, Handelsbanken, Fokus Bank, SEB and Swebank -- now face losses and some can’t even benefit from the government’s crisis plan.
Kredittilsynet's Aamo was chief of staff for former Labour Prime Minister Gro Harlem Brundtland from 1990 to 1993. His background in the Labour Party raised questions over his ability to objectively carry out an investigation into the contact between Stoltenberg and Bjerke, who is an old friend of the prime minister's from their days in the Labour Party's youth organization.
Aamo claimed there's no conflict of interest and he told Aftenposten that he hadn't found any reason to withdraw from the investigation. He stressed that he hasn't been active in politics for 15 years and that he hails from "another generation" of the Labour Party than Stoltenberg and Bjerke.
He noted, however, that his years working for a Labour prime minister himself came during Norway's last bank crisis, and that he received lots of information from many sources at the time. He said heads of state in many countries now feel an extra sense of responsibility to follow the banking industry during times of crisis.
Aamo's comments sparked concern from heads of opposition parties. Dagfinn Høybråten of the Christian Democrats said it was, "to put it mildly, unwise" of Aamo to express understanding for the role Stoltenberg has played in the drama. Per Kristian Foss, a former finance minister for the Conservatives, suggested it was inappropriate for the prime minister and his or her chief of staff to have direct contact with bank officials.
Høybråten thought legal experts should evaluate whether Aamo could conduct an impartial investigation into the insider trading allegations at DnB NOR. One law professor, Eivind Smith, stated that there isn't necessarily a conflict of interest just because Aamo has been in the same political party as the prime minister.
"As long as they're not close friends, I can't see any reason to doubt Aamo's impartiality," Smith said. Aamo ultimately changed his mind, and left the investigation to others.
Nina Berglund/NTB
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