Serious allegations made against prime minister in blackmail scheme

Two Icelandic women, sisters and known journalists, were arrested last week after an unsuccessful attempt to blackmail the Icelandic prime minister.

Hlín Einarsdóttir and Malín Brand have both confessed to taking part in the scheme, which involved threatening to release proof of Sigmundur Davíð Gunnlaugsson’s alleged involvement in securing a bank loan for his friend and fellow Progressive Party member, media tycoon Björn Ingi Hrafnsson.

The threat came via a letter posted through the mailbox of Mr. Gunnlaugsson’s home on Friday. The letter has not been made public but according to Vísir’s sources, a total of ISK 8 million (nearly 55,000 euro) was to be paid in exchange for the information being kept secret.

Mr. Gunnlaugsson alerted police immediately and Einarsdóttir and Brand were both arrested at the site where the money was supposed to be delivered.

Deny the prime minister's involvement in a media takeover

The would-be blackmailers claimed to be in possession of proof that the prime minister had, shortly after he took office in 2013, exerted his influence on MP Bank to secure a loan for Pressan, the media company of which Hrafnsson is publisher and shareholder.

Hrafnsson, an ex-city council member for the Progressive Party in Reykjavík, last year acquired the DV newspaper after a hostile takeover that saw the paper’s editor, Reynir Traustason, fired and several journalists resigning their post. Hrafnsson and Mr. Gunnlaugsson have, in recent days, both denied that the prime minister had anything to do with financing the takeover.

Einarsdóttir and Hrafnsson were in a relationship between 2011 and 2014 and she served as editor of Bleikt.is, one of Hrafnsson’s news websites.

Mr. Gunnlaugsson’s connections to MP Bank have long been known. Sigurður Atli Jónsson, the bank’s CEO, is married to the prime minister’s sister. Furthermore, the bank’s asset management director is one of the minister’s must trusted economic advisors.

Jónsson told Vísir on Wednesday that his ties to Mr. Gunnlaugsson had not affected the bank’s decisions and that police had not contacted him in relation to the investigation into the attempted blackmail. No official records exist proving financial ties between the prime minister and Hrafnsson or any of his companies.

Another case of blackmail surfaces

In an unexpected development, a man today filed charges against Einarsdóttir and Brand, claiming they blackmailed him several weeks ago. The man says he paid the sisters ISK 700,000 (4,700 euro) in exchange for them not accusing him of raping Einarsdóttir.

The man claims to have slept with Einarsdóttir in April and that Brand contacted him two days later, claiming to have proof that he raped her sister. He supposedly paid them off, only to file charges after he read of their attempted blackmail of the minister and subsequent arrest, which Vísir first reported yesterday.