The connection of Minister of Education Illugi Gunnarsson with Orka Energy has been a bone of contention lately.
Prime Minister Sigmundur Davíð Gunnlaugsson told RÚV yesterday that the relation is perfectly normal and will have no effect on Illugi’s position in government. Monday, Minister of Health Kristján Þór Júlíusson told RÚV, on the other hand, that the controversy had weakened Illugi, especially given the fact how long it took for him to explain his connection with the company.
In past weeks, the issue has been much debated because of accusations of corruption and a conflict of interest. While on unpaid leave of absence as member of parliament, Illugi served as consultant for the company in 2011, but in March this year, he, along with other government officials, took a trip to China, where he met with Chinese officials and representatives of Orka Energy. The result of that trip was a major investment on the part of Orka Energy in a Chinese company.
For months, Illugi avoided questions by Stundin regarding his connection with Orka Energy, but gradually, certain facts have come to light: Illugi used to be on Orka Energy’s payroll. His total earnings for the company amounted to ISK 5.6 million (USD 45,000, EUR 39,000) before taxes, ISK 2.95 million (USD 24,000, EUR 21,000) of which was paid beforehand, according to Kjarninn. The pay stub was issued in February of 2012. Illugi denies the ISK 2.95 million was a loan. He has said he is best friends with Haukur Harðarson, chairman of Orka Energy’s board, to whom he sold his apartment last summer during financial difficulties and now rents it from him.
In August of 2011, Orka Energy Holding LTD purchased a 49 percent share in the company Enex-China from Geysir Green Energy and Reykjavík Energy for USD 15.5 million (EUR 13.6 million). Enex-China has a share in Shaanxi Green Energy Geothermal Development, according to Stundin.
While refusing to give Stundin an interview, Illugi last weekend spoke extensively with Fréttablaðið about the controversy. There, he admits the matter has not improved his position, but insists it doesn’t warrant his resignation as minister.