The Royal Ministry of Foreign Affairs, Oslo Press Division

Norway Daily No. 227-31/96 OeW/kj

Date: 25 November 1996

Opposition Demands Full Disclosure (Arbeiderbladet)

Terje Roed-Larsen is taking a break from the media until the tax office has re-examined his case. The opposition, however, strongly advises him to bring all the facts out into the open immediately. Several items of information have turned up in the course of the weekend indicating major discrepancies between Mr. Roed-Larsen’s statements and documents from his period in the Fideco enterprise. But the role of the tax office is now being viewed with mounting interest, and the question of why it did not assess the profit made by Mr. Roed- Larsen on the sale of his shareholdings as taxable income.

Union Boss Urges Roed-Larsen to Consider Resignation (Dagbladet)

Kjell Bjoerndalen, head of the powerful Norwegian United Federation of Trade Unions, asks Planning Minister Terje Roed- Larsen to consider resigning. “He must weigh the situation very carefully and do what is best for the Government,” he says. Labour’s central executive committee will meet this afternoon to discuss two issues: the troublesome budget situation and Mr. Roed-Larsen’s predicament.

Worth Noting Text that may have been struck out of Terje Roed-Larsen’s options agreement eight months after the date of the agreement may constitute new information which will make it necessary to reassess his taxes. (Verdens Gang)

Date: 26 November 1996

Labour Digging in its Heels (Arbeiderbladet)

Prime Minister Thorbjoern Jagland and Finance Minister Jens Stoltenberg, who are also chairman and deputy chairman respectively of the Labour Party, were assured the full backing of the party’s national executive committee yesterday in pursuing a tough budget strategy. The need to rein in a galloping economy has increased further since the budget was presented in October. The Labour Government is therefore prepared to reject every one of the Storting’s budget measures with the exception of approximately NOK 2.2 billion in additional funding for health and the elderly. They plan to raise indirect taxes in an effort to check the surge in private spending, and they are renewing their warnings not to touch petroleum revenues.

Jagland Calls For Full Disclosure (Aftenposten)

During yesterday’s press conference, Prime Minister Thorbjoern Jagland was confronted with the fact that Terje Roed-Larsen’s lawyers cite case documents that they refuse to lay before the public. “Of course they must back up their words,” replied Mr. Jagland. The PM suggested that another statement from Mr. Roed-Larsen will be forthcoming, but he did not say whether it should come before or after the tax office has reviewed his assessment. He felt the review should be carried out promptly.

Today’s Comment

Many serious voices are now calling for Planning Minister Terje Roed-Larsen to step down. It is said that his credibility and authority are now impaired, detracting from confidence in the Government. There are a number of good reasons for keeping him on, though. In the context of the situation at hand, Prime Minister Thorbjoern Jagland’s references to the rule of law are beside the point, of course. They merely indicate that the PM is unable to tackle difficult situations. The tax offices are not and should not be the proper venue for handing down judgements defining the public confidence in our politicians. The deciding issue is whether Mr. Roed-Larsen has performed his duty to the voters in good faith after taking on the duties of his office. Most of the signs indicate that this is not the case. Ministers who must resort to lawyers to provide their explanations, and whose memories are as selective as Mr. Roed-Larsen’s gain neither confidence nor honour. If Mr. Roed-Larsen stays on, the Prime Minister and the rest of his Government could possibly find themselves in a weaker position when dealing with the failings of the business world. Mr. Jagland still seems to view stock options in a negative light, but his disapproval is likely to take somewhat milder forms if Mr. Roed-Larsen remains in office. Taking one thing with the other, Mr. Roed-Larsen’s presence could lead to a Government that is less disparaging and arrogant and more understanding and tolerant. This would certainly be a step forward. Nor would it be amiss if his presence contributed to a defeat at the ballot-box. (Dagens Naeringsliv)

Date: 27 November, 1996

Roed-Larsen Started the Ball Rolling (Verdens Gang)

In the current controversy surrounding Terje Roed-Larsen’s financial affairs, it was Mr. Roed-Larsen himself who first set in motion the whole process that may bring his service in Thorbjoern Jagland’s government to a premature end. Having met tax auditor Roy Kristensen on several occasions in Oslo restaurants, Mr. Roed-Larsen set forth a number of glaring accusations of misconduct in Bird Technology, conveying a shocking impression of the activities of central people in the Bird organization. The accusations were so alarming that Mr. Kristensen and his colleague, Sigurd Botnen, proceeded to conduct a full audit, according to a newswatch programme aired on NRK1 (Norwegian Broadcasting Corporation) last night.

Allegations from Bird Technology (Aftenposten)

Senior officials at Bird Technology allege that Terje Roed- Larsen antedated his options agreement, provided false information on its content, and never exercised his option – all contrary to what he has stated.

Roed-Larsen Affair a Difficult Political Issue (NTB)

Prime Minister Thorbjoern Jagland admits that the latest developments in the Roed-Larsen affair have made the matter difficult to deal with politically. Questioned upon his return from a visit to Stockholm this morning, Mr. Jagland told an NRK news team that the case is becoming quite serious. “The latest allegations have given things a new turn,” he says, adding that he still does not have all the information. “The case has so many aspects and any number of approaches, and so many allegations have been made that I cannot take a stand on it right at the moment,” he says.

Worth Noting

  • Key documents have disappeared from the files of the Directorate of Taxes and the Oslo Tax Office. There are rumours that these documents have been removed from the archives. One of the missing documents is the statement submitted by Terje Roed-Larsen in 1988. (Dagbladet)
  • Norwegian Federation of Trade Unions (LO) president Yngve Haagensen has complete confidence in Terje Roed-Larsen. He takes the view that the Minister of Planning may remain in office even if he is proven to have committed punishable offences. (Aftenposten)
  • Arent M. Henriksen, Socialist Left politician and mayor of Bjugn, will take over after January Reinaas as chairman of the board of the Norwegian State Railway (NSB). This news is viewed with optimism by employees. (NTB)
  • With the recent period of growth in the stock market, the value of the government’s bank equities is now higher than the amount spent by the government shoring up the banking industry. Taking interest into account, however, the government is at the break-even point. (NTB)

Today’s Comment

The turn of events has now become so acute that Terje Roed- Larsen must give a full, documented account of his entire Fideco dealings. The gravity of the documented facts of the matter is mounting day by day, to the point where Mr. Roed- Larsen is now being accused of unlawful conduct. In a situation of this nature, the various people involved may have obvious as well as concealed reasons for either letting things out or keeping tight. All this aside, there is no point whatever in waiting until the case is reviewed by various tax authorities. Mr. Roed-Larsen had best lay all the facts on the table right now. The four statements he has already issued have given rise to more questions than they have answered; the urgent need for a clarification is of Mr. Roed-Larsen’s own doing. If he does not perceive this, the Prime Minister should explain it to him immediately. Thorbjoern Jagland can no longer disregard the mounting backlog of unanswered questions. Neither should he consign the fate of his Planning Minister to the outcome of a tax assessment review. (Dagbladet)

Date: 28 November 1996

“I do not deserve this…” (Arbeiderbladet)

Terje Roed-Larsen was unable to conceal his embitterment following the official news conference at which he announced his resignation. The Fideco affair was his downfall, despite his adamant insistence that he is guilty of no wrongdoing. Yngve Haagensen continues to maintain his unreserved support for Mr. Roed-Larsen, prompting reactions even among his own people. The National Authority for Investigation and Prosecution of Economic and Environmental Crime will now investigate all aspects of the Roed-Larsen affair, but Anstein Gjengedal denies that the decision to investigate was a result of Government pressure. If it conclusive proof is found that Mr. Roed-Larsen antedated his options agreements, he could risk a jail sentence.

Roed-Larsen Forced To Go (Verdens Gang)

Right up to yesterday morning, Planning Minister Terje Roed- Larsen was still prepared to fight for his political life. After several talks with Prime Minister Thorbjoern Jagland, however, he realized that his term of office was over. “As matters now stand, we had no choice. There are now allegations of illegal conduct, which is quite a different matter from the tax reassessment and the other things that have appeared in print lately. We talked the matter over, listened to each other’s advice, and exercised reason. It was not difficult for him to come to a conclusion,” said Mr. Jagland at yesterday’s press conference.

Jagland Government Weakened (Aftenposten)

The entire Storting opposition concludes that this affair has weakened Thorbjoern Jagland’s Government. “Tragedy”, “lamentable” and “unfortunate” are terms used by many opposition politicians in commenting on Mr. Roed-Larsen’s departure yesterday. “The Government is in a weaker position, and we should take a closer look at the whole complex of connections between the unions, the Institute of Applied Social Sciences, the Labour Party and business,” says Conservative party chairman January Petersen. “This is a major personal tragedy for Terje Roed-Larsen, and a bad day for Norwegian politics,” is the comment of Socialist Left chairman Erik Solheim. “Terje Roed-Larsen himself is chiefly to blame, yet it is obvious that the Government has lost one of its most fascinating members,” says Lars Sponheim, chairman of the Liberal Party. “It is clear to us now that our prime minister is not very good at crisis management,” says Progress party chairman Carl I. Hagen. “It was necessary for Terje Roed- Larsen to step down for his own good and for the good of the Government”, says Kjell Magne Bondevik, parliamentary leader for the Christian Democrats. “The Government’s entire inaugural address was based on the house of Norway into the next century. This project cannot be put aside now,” says Johan J. Jakobsen, parliamentary leader for the Centre Party.

Today’s Comment

The papers agree that Planning Minister Terje Roed-Larsen had no choice but to step down after further details of his involvement in the Fideco affair were made public. They do not share Mr. Roed-Larsen’s view that he did not deserve the sort of exit to which he has been subject. Aftenposten states that the course of events in the so-called Roed-Larsen affair left no other option open. For Prime Minister Thorbjoern Jagland, having to dismiss a minister in whom he had invested so much prestige was a major political defeat. According to Verdens Gang, Mr. Roed-Larsen’s tragic exit has left the Norwegian labour movement with an ugly wound that will be long in healing. Politically and morally, the whole affair leaves Mr. Jagland and his Government in a weaker position. The paper characterizes the affair as a personal tragedy for Mr. Roed- Larsen. His departure will also cause serious damage Mr. Jagland’s masthead project, the House of Norway. Arbeiderbladet takes the view that it was painful, but necessary for Mr. Roed-Larsen to step down. Even if it turns out that he is innocent, which we find difficult to believe at this point, it is impossible for a minister to turn in a satisfactory performance with accusations of this gravity hanging over his head. Vaart Land also agrees that Mr. Roed- Larsen’s departure had become an imperative, noting further that the man who was to be one of the pillars of Mr. Jagland’s Government became his Achilles heel after only a month. Klassekampen says the Roed-Larsen affair ended in scandal. No surprise that the Prime Minister looked somewhat haggard yesterday as he accepted Mr. Roed-Larsen’s resignation, for there was no doubt that the entire affair has been a disaster for Mr. Jagland. Dagens Naeringsliv voices the opinion that the case is shocking, and that it gives cause for concern for the unity of the House of Norway. Dagbladet proclaims that Mr. Roed-Larsen’s resignation was unavoidable. It is obvious that a person who is under investigation for criminal offences and for tax irregularities cannot hold a ministerial post. He himself felt he could not defend himself against his accusers as long as he was in the Government, so there was nothing left to do but tender his resignation. Nationen declares that Mr. Roed-Larsen’s departure is a serious blow to the prestige of the Prime Minister. The paper feels Mr. Jagland’s handling of the situation has been unusually clumsy. Finansavisen’s Trygve Hegnar writes that the PM’s insistence that he still has full confidence in Terje Roed-Larsen is beyond belief. Faedrelandsvennen observes that Mr. Roed-Larsen’s questionable working style and offhand professional ethics had finally caught up with him. The paper says he was felled by his own actions, and that his misfortune has dealt a serious blow to the Jagland Government and the Prime Minister himself.

Date: 29 November 1996

NRK Newsman in Double Role (Dagbladet)

NRK (Norwegian Broadcasting Corporation) news editor Alf R. Jacobsen had arranged and was present at the confidential meeting between Terje Roed-Larsen and government tax auditor Roy Kristensen in 1987. Mr. Jacobsen, who is in charge of the NRK newswatch programme “Brennpunkt” (Focal Point), had produced the dramatic programme on the Roed-Larsen affair that was aired the day before Mr. Roed-Larsen tendered his resignation. NRK director Einar Foerde and Kent Nilsen, head of the television division, had been informed of Mr. Jacobsen’s role before the programme went on the air. By his own account, Mr. Jacobsen had urged Mr. Roed-Larsen to describe the events in connection with the meeting with Roy Kristensen. “I contacted his lawyers with a very strong appeal for him to tell the truth. The burden of truth on persons in such prominent positions is much greater than it is for others.

Jagland Thought It Would Blow Over (Dagens Naeringsliv)

Prime Minister Thorbjoern Jagland was convinced right up until the end that the Roed-Larsen affair would blow over. Even as late as Labour’s central executive committee meeting on Monday evening, he did not view the affair as a major problem. According to persons who were present at the meeting, Mr. Jagland provided a five-minute account of the Roed-Larsen affair in which he gave the impression that the Government could live with it, and that it could be properly managed.

FAFO Cover-up by Hernes (Klassekampen)

The first application for government funding filed by the Institute of Applied Social Sciences (FAFO) contained information that was directly misleading. On the basis of this information, Terje Roed-Larsen received government grants for six years without ever filing audited accounts. The situation was called to the attention of the Ministry of Education, Research and Church Affairs in 1992 while Gudmund Hernes was head of that ministry. Mr. Hernes, however, had been Mr. Roed- Larsen’s immediate superior in FAFO until leaving to commence his term of service as Minister. Mr. Hernes never made any attempt to rectify the situation, and he never gave a thought to avoiding a conflict of interests. His response to criticism consisted of ridicule and cover-ups.

Today’s Comment

Yngve Haagensen, president of the Norwegian Federation of Trade Unions (LO), has discovered why the news media have taken such a close interest in Terje Roed-Larsen’s financial affairs. Apparently, there was some feeling that Prime Minister Thorbjoern Jagland’s succession to the Prime Ministry went too smoothly, so as Mr. Haagensen would have it, something had to be found to take him down a notch or two. Mr. Haagensen has also stated that being guilty of an illegal act does not disqualify one from a ministerial post. He has further added that the media have conducted an all-out witch- hunt against Mr. Roed-Larsen. Finding ourselves in the line of Mr. Haagensen’s fire, so to speak, we would be interested in knowing more about what Mr. Haagensen has in mind. Are his statements no more than a defence of a close friend in the heat of the moment, or are the upper echelons of the Labour Party really fretting about the possibility of a conspiracy? It would also be worth knowing whether the standards Mr. Haagensen expects of government ministers apply only to his own friends and political colleagues. We are quite certain that many members of the Norwegian Federation of Trade Unions would also like answers to these questions. Not all of them are as close to the Labour Party and the Government as is Mr. Haagensen, member of the national executive committee and the elections committee. (Dagbladet)