UPDATED: Nicolai Tangen, the expatriate Norwegian billionaire who was recently tapped to head Norway’s huge Oil Fund, firmly denies he was seeking any favour when he hosted a luxurious seminar at the University of Pennsylvania’s Wharton School of Business last fall. On his guest list were, among others, Norway’s trade minister, Norway’s ambassador to the UN and the current head of the Oil Fund, Yngve Slyngstad.
Stories about the exclusive gathering, first published in newspaper VG over the weekend, have put Tangen on the defensive. They described how the man who’ll be in charge of Norway’s sovereign wealth fund flew both Norwegian and international leaders from Europe to Philadelphia in private jets, put them up for three nights at a Hilton Hotel, hosted all food, drink and two shows with international stars including Sting in mid-November last year. They all took part in debates and discussions on a wide variety of topics, many of which were led by leading academics at Wharton.
The stories about Tangen’s seminar have prompted a committee of the monitoring board for Norges Bank (Norway’s central bank, which is responsible for the Oil Fund) to “discuss Tangen’s hiring” at a meeting this week. Julie Brodtkorb, a former state secretary to Prime Minister Erna Solberg who leads the central bank’s Representatskapet, told newspaper Dagens Næringsliv (DN) that the board committee will consider calling an additional “extraordinary meeting,” to receive “an orientation on (Norges Bank’s) process around the employment of Tangen.”
Question have already swirled around Tangen’s vast personal investment holdings and his London company’s registration of hedge- and share funds in the Cayman Islands, known as a tax haven. DN has earlier reported that Tangen also has holdings worth around NOK 1.3 billion in a trust on Jersey in the Channel Islands and a company in the British Islands, also viewed as tax havens. Norwegian professors have noted that such holdings may send “unfortunate signal effects” but they’re not illegal and can be viewed merely as “aggressive tax planning” to maximize investment potential.
‘Full overview’ sent to the bank
Tangen has responded that he has sent a “full overview” of his investments and their ownership structure to Norges Bank. His elaborate seminar, meanwhile, has raised more questions about why the expat Norwegian who made a fortune building up a highly successful investment management and finance business in London would spend millions on such an event. “The entire program was just incredible,” Knut Brundtland, the lawyer and son of former Prime Minister Gro Harlem Brundtland, told VG. “We were invited as guests, without paying anything ourselves. It was unusually generous of Tangen.”
More than 30 of the invited guests were Norwegian, the rest reportedly were mostly American and British. Around 130-150 people took part, including former British Foreign Minister William Hague and chef Jamie Oliver, all of them among Tangen’s friends and acquaintances. Tangen told VG it was his “dream seminar,” and that he spent two years planning it and setting up the program called “Back to University” that included discussions about finance, architecture, art, men and power, cancer research, climate, food and music.
Tangen has the support, meanwhile, of central bank chief Øystein Olsen, who’s in charge of the Oil Fund. Olsen told state broadcaster NRK that there’s “absolutely” no connection between Tangen’s seminar and his appointment a few months later as the Oil Fund CEO to succeed Yngve Slyngstad.
Olsen, speaking on state broadcaster NRK’s debate program Politisk kvarter Monday morning, stressed that Tangen had not applied for the job as Oil Fund boss himself. He instead was recommended by the executive search firm, Russell Reynolds, hired by Norges Bank as part of its effort to replace Slyngstad, who’d been at the helm for nearly a decade. Olsen strongly denied Tangen’s seminar had anything to do with his job prospects, nor was Slyngstad “in any way” involved in the search for his successor.
Olsen added that it was “very natural” for the central bank’s monitoring board to discuss Tangen’s employment process. “Nicolai Tangen has his background … we have thought a lot about that,” Olsen said, but the central bank chief insisted that it was Tangen’s highly acclaimed leadership abilities, his clear investment competence and, not least, “his ambitions for the Oil Fund” that won him the job. Olsen, who will serve as Tangen’s boss, said Tangen has been widely viewed as being able to “give a new boost” to the fund and its ongoing growth potential.
Tangen’s hiring nonetheless surprised many, not least since it means he’ll take an enormous pay cut to sever his ties with the financial managment firm he founded in London, Ako Capital, when he assumes his new position later this year. DN reported earlier this month that taking on the Oil Fund job will actually cost the 54-year-old Tangen around NOK 13 billion, since he must turn his company over to the charitable Ako Foundation, which will then receive Ako Capital’s formidable income, not Tangen. As Oil Fund boss he’ll simply be paid a salary similar to Slyngstad’s, Olsen has said, which was NOK 6.9 million (USD 669,000) a year. Tangen earned between GBP 130 million and GBP 240 million a year from his ownership stake in Ako.
He’s already been a member, however, of The Giving Pledge, an association for some of the world’s wealthiest who commit to giving away most of their fortunes to charity. Members must have at least USD 1 billion worth of personal net worth, including what they’ll eventually donate. Tangen has also advocated inheritance tax rates of 100 percent, claiming that everyone should earn their money as he has, not simply inherit it.
Planned his ‘dream seminar’ for years
Tangen told NRK on Sunday that the seminar he hosted at the Wharton Business School had been planned several years before the Oil Fund job came up. Invitations, he told NRK, went out 18 months before it was held in November of last year.
“I had no plans at all that I would be sitting in that chair (at the Oil Fund) when I was at the seminar,” Tangen said. Asked what he thinks about the Norwegian politicians now suggesting that the seminar “smacked of camaraderie” and greased the skids for his hiring, he responded “that’s just wrong, because there wasn’t anyone from the (Oil Fund’s) hiring committee who made the trip to the seminar, and Yngve Slyngstad wasn’t involved in my employment.”
He said he did speak at the seminar about the job with Slyngstad, whose second term as Oil Fund boss was running out. “We had one single conversation at the seminar in Philadelphia, where we talked in general about the importance of the Oil Fund in Norway, and how important it was for the fund to have good leadership,” Tangen told NRK, “but he didn’t encourage me to apply, and we didn’t discuss whether I’d be a potential candidate.” Tangen claimed he and Slyngstad haven’t spoken either before or after he was appointed.
Tangen covered the attendance costs for all his guests at the seminar, including transportation, hotels, food and drink. Slyngstad reportedly traveled back to Norway on one of the private jets chartered by Tangen after the seminar at Wharton that included presentations by some of the world’s leading academics. Tangen graduated from Wharton himself.
Impressive guest list
Guests included Norway’s ambassador to the UN Mona Juul, Norway’s trade minister at the time Torbjørn Røe Isaksen, the head of Norwegian media firm Schibsted Kristin Skogen Lund, Arctic explorerer and publisher Erling Kagge, philosopher and Nobel Peace Prize Committe member Henrik Syse, the director of Oslo-based foreign policy institute NUPI Ulf Sverdrup and the Norwegian government’s lead attorney and prosecutor Fredrik Sejersted, who has described himself as “an old friend” of Tangen. Knut Kjær, the Oil Fund’s first chief executive who preceded Slyngstad, was also present.
Norway’s UN delegation, under the auspices of Norway’s foreign ministry, has since expressed regrets that Tangen covered all of Juul’s costs to attend the seminar, and said it will now reimburse Tangen. The government, meanwhile, said it will reimburse Tangen for Isaksen’s food. The minister was already in the US at the time, traveled to Philadelphia from Washington, and did not travel on Tangen’s specially chartered and highly luxurious large private jets.
Tangen told NRK Sunday evening that he’s aware it’s not customary in Norway to spend so much money on such luxious trips, conceding that “this is the type of event I’d hold in my old life. In my job as chief of the Oil Fund, I clearly can’t host something like it again.”
Opposition in Parliament
As the central bank’s monitoring committee launches a probe into the seminar, politicians in opposition in Parliament were raising questions about Tangen’s appointment as Oil Fund chief. The central bank (Norges Bank) that oversees the Oil Fund is responsible for maintaining confidence, “and they’ve raised questions they now must answer for,” Hadia Tajik, the Labour Party’s finance police spokesperson, told NRK. “What’s come forward now makes many ask whether (hosting a luxurious seminar) is how he got the job.”
Kari Elisabeth Kaski of the Socialist Left party (SV) told NRK she was “worried,” both in light of his (Tangen’s) network of contacts and how he hosted this trip to the US, but also how some of his fortune has been placed in tax havens. “We will ask for a full accounting of all this,” Kaski said, since, she added, the leader of the Oil Fund “must have widespread confidence” among the public.
Center Party leader Trygve Slagsvold Vedum joined Tajik on NRK’s radio program Monday morning, claiming that the seminar, with “so many top people there,” set off warning lamps, coming just before Tangen was hired for one of the most important jobs in Norway.
Isaksen, who now serves as Norway’s Labour Minister, countered that he certainly had no role in Tangen’s hiring and viewed the seminar as “relevant” to his work as trade minister at the time. He claimed Tangen’s invitation had been sent to the ministry, was logged as usual and that the seminar itself was “interesting.” He refuted a claim from Tajik, a former government minister herself, that the seminar “was not something a government minister would attend.” Isaksen stressed that he often attends conferences and seminars, and stressed that his hotel bills in Philadelphia were paid for by the ministry.
Finance Minister Jan Tore Sanner, who’s in charge of Norges Bank, said he would answer questions from parties in opposition in Parliament if he gets any. Otherwise he had no comment, and he was not among invited guests.
Tangen said he welcomes any investigation into the seminar he hosted, since that would “shed light on the issue and bring forward all the facts.” Commentators on Monday were calling the entire controversy “unfortunate,” and that it led to “the worst possible start” for a new head of Norway’s Oil Fund.