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Thursday, April 18, 2024

Another minister lands in trouble

Foreign Minister Anniken Huitfeldt of the Labour Party has become the latest member of the Norwegian government to land in serious trouble over potential conflicts of interest. She claims she didn’t know that her husband had invested in several Norwegian companies including weapons producer Kongsberg Gruppen, while she’s been in office over the past two years.

Foreign Minister Anniken Huitfeldt of the Labour Party seemed to often bow her head in shame during Wednesday’s press conference, at which she admitted to conflicts of interest regarding her husband’s investments. PHOTO: NRK screen grab

Calls were already going out Wednesday afternoon for Huitfeldt to resign. She struggled to answer several of the questions raised during a sudden press conference on Norway’s latest government crisis. The press conference was arranged just after newspaper VG broke the news that Huitfeldt’s husband Ola Flem had bought and sold shares in a long list of companies traded on the Oslo Stock Exchange.

The problem is that the Norwegian government also has stakes in several of the same companies, and does business with them. Catching the most attention was Kongsberg Gruppen, which is involved in major defense contracts with the government not least involving military aid to Ukraine. As foreign minister, Huitfeldt has been closely involved with all defense support for Ukraine.

Other companies on her husband Ola Flem’s transaction list include Seadrill Ltd, Norwegian Air, Norske Skog, Aker Solutions and salmon producer Mowi. All of them are or can be directly affected by government policy.

Huitfeldt quickly admitted that it’s likely she has violated government rules meant to prevent conflicts of interest. She claimed she was sorry and “apologized deeply” for, among other things, failing to question her husband about his investments (made through his wholly owned investment firm Flemo AS). She repeatedly acknowledged that it was her responsibility to flesh out any potential conflicts of interest that the couple could face.

The foreign minister’s press conference was well-attended, not least since it involve the fourth case of conflicts of interest among Labour-Center government ministers in the past two months. PHOTO: Utenriksdepartementet

She couldn’t explain, though, why she failed to question him, even after three of her government colleagues ran into similar conflicts of interest earlier this summer. Two resigned (Anette Trettebergstuen of Labour and the Center Party’s Ola Borten Moe) but one, Huitfeldt’s Labour Party fellow and friend Education Minister Tonje Brenna, has hung on after Labour Prime Minister Jonas Gahr Støre said he still had confidence in her. That led to charges from some oppositon politicians Wednesday afternoon that Støre, who has said he still has confidence in Huitfeldt, too, was treating his ministers differently.

The biggest question swirls around Huitfeldt’s husband’s investment in Kongsberg Gruppen, not least because her former government colleague Moe’s resignation was forced by his own holdings in Kongsberg. Huitfeldt said she thought most of her husband’s investments were in funds, but it turned out many were in individual companies traded on the Oslo Stock Exchange. VG reported that his investments resulted in gains for Flemo AS of nearly NOK 1 million over the two years 2021 and 2022.

Huitfeldt said all of his holdings in individual companies were sold off on August 22. She admitted she hadn’t been aware of the extent of his investment activity. He also has a job in IT consulting firm Oda Consulting AS, in which Flemo has a 50 percent stake. It was profits from Oda Consulting that Flem placed in his investment company Flemo and ultimately in shares.

Huitfeldt also apologized for having to blow her nose during her nationally televised press conference, as she battles a cold. It was not a good day for Norway’s foreign minister. PHOTO: NRK screen grab

Huitfeldt claims her husband had never given her a detailed account of his various investments, in order to avoid conflicts of interest or accusations of any insider trading. He wanted to maintain a “watertight” distinction between their work, she said, claiming also that she never shared information with him that could have influenced his purchase or sale of stock.

She admitted to VG and at the press conference that she should have asked him for details of his portfolio, though, and “given him better instruction” on what he should have revealed. She acknowledged that it was her responsibility to prevent any conflicts of interest: “I have not fulfilled my duty in accordance with the rules to gather information about my husband’s economic activity.”

She also stated at her press conference the “I should have done more to prevent landing in this situation.” Her husband, in the meantime, has apologized for putting her in such an awkward and publicly embarrassing situation.

Questions remain over why Flem didn’t reveal his investment in Kongsberg after a similar investment caused so much trouble for ex-minister Moe, who earned a fortune in offshore oil and gas investments. His case made headlines for weeks, and still is because of all the investigations going on, yet it apparently didn’t ring any alarms for Flem.

It wasn’t, according to Huitfeldt, until she asked him about his portfolio while traveling home from summer holiday on August 6 that the issue came up. Flem allegedly told her not to worry, indicating there were no conflicts of interest, but after more probing she said she realized there probably were. She then asked government legal advisers for their opinions and contends her goal now is to “clean up” the entire situation.

Støre isn’t firing her
Huitfeldt, a veteran of the Labour Party, has not volunteered to resign herself, claiming that’s up to Prime Minister Støre. He claimed on Wednesday that he still has confidence in her: “She made a mistake … and has been unqualified within the government and her own ministry without being aware of it herself. She should have obtained an overview over her husband’s purchase and sale of stock, so she’d be able to evaluate her competence. That’s important because it has to do with public confidence.”

Støre gives her credit, though, for taking the initiative herself to chart the situation “and clean up.” He said Huitfeldt has also assured him that she has made a major effort to follow government guidelines. “She has apologized for the mistake she made,” Støre told Norwegian Broadcasting (NRK) Wednesday afternoon. “Based on the information that has come forward, I have confidence in Anniken as a minister.”

Prime Minister Jonas Gahr Støre had to deal with even more problems within his government, just weeks before local elections in Norway. PHOTO: Statsministerens kontor

At a press conference later in the day, Støre stressed the difference between Moe’s case and Huitfeldt’s, since Moe himself was behind his sales and purchases. He admitted that four cases involving conflicts of interest within his government threaten public confidence, so rules aimed at avoiding conflicts of interest are being toughened effective immediately. From now on, ministers holding shares must either sell them, freeze them or put them in a trust for others to manage. Similar rules will apply to spouses.

Many Members of Parliament weren’t satisfied. The leader of the Parliament’s disciplinary committee, Peter Frølich of the Conservatives, called the new violations of rules to prevent conflicts of interest were “serious, and come as the latest in a string of others.” Frølich said the committee would now definitely expand the inquiries already underway in the Moe, Brenna and Trettebergstuen cases.

‘Poor leadership’
The Greens Party (MDG), which has held city government power with Labour in Oslo for the past eight years, quickly announced it had lost confidence in Huitfeldt and that she should resign as foreign minister. The Reds Party also called for tougher action and a ban on share holdings by ministers and their spouses.

Hans Andreas Limi of the Progress Party claimed Støre has exhibited “poor leadership” and accused him of applying different standards among his ministers. “This is another confirmation of how the government doesn’t understand its own rules,” Limi told NRK. “That’s extremely serious.” Grunde Almeland of the Liberal Party also called the situation “extremely serious” and it will be taken up in the Parliament’s disciplinary committee, as have the three previous cases of ministers running foul of the rules.

“I think we have a prime minister who has a problem explaining how this can happen, and why some ministers have to resign and others don’t,” Almeland said. “It’s a minister’s responsibility to ask questions (about a spouses’ financial holdings).” Most agree that Huitfeldt was slow to do so.

With local elections looming in mid-September, this latest conflict of interest within the government is extremely embarrassing for those running for re-election from both the Labour and Center parties. A professor at business school BI, meanwhile, viewed Huitfeldt’s case as “nearly the same as the Borten Moe case,” telling NRK it raises questions of insider trading as well. It remained unclear whether Norway’s white collar crime unit Økokrim would launch an inquiry, as it has in Moe’s case. Berglund



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