As international crude benchmarks get clobbered (though not quite as badly as their American cousin), major oil-producing nations have been a major focus on Monday. The markets have taken a keen interest in how they plan to weather this unprecedented market dislocation, or whether the damage to the local energy industry might set production capacity back for years.
However, we've found an intriguing story from Norway - Europe's biggest oil producer - and its sovereign wealth fund, one of the biggest - if not the biggest (it has got some pretty stiff competition in the Middle East) - piles of fossil fuel blood money in the world.
The story is this.
The fund's former chief executive, who announced his plans to resign last fall, as well as his successor have become embroiled in a scandal involving the appearance of what might be a bribe involving a seminar appearance, five-star treatment including food and musical performances by major artists (we hear Sting is very popular in Norway), and a ride back home on a luxury jet when an affordable public option was available.
Here's more from Bloomberg:
The world’s biggest sovereign wealth fund faces serious questions over the conduct of its outgoing chief executive and the selection process of his successor amid a scandal involving a luxury jet and a private performance by Sting.
CEO Yngve Slyngstad has had to explain why he accepted a flight paid for by Nicolai Tangen, the hedge-fund manager who was eventually tapped to succeed him. The development has now prompted the central bank’s watchdog to look into convening an emergency meeting to examine more closely the circumstances under which Tangen was selected.
The revelations have stunned Norwegians and created the appearance of scandal around one of the country’s most revered institutions. Tangen’s appointment had already raised eyebrows. To some, his jet-set lifestyle seemed at odds with the spirit of a fund created to safeguard the savings of an entire nation.
The Supervisory Council of Norway’s central bank, which oversees the $1 trillion fund, will try to find out whether the events "represent a breach of regulations applying to Norges Bank’s activities," its head Julie Brodtkorb, said in a text message on Monday.
In his defense, Tangen, a billionaire who doesn't really even need this job, said he booked Slyngstad years ago when the seminar was first planned, and that the other accoutremonts were last-minute requests, and perhaps reflective of bad judgment.
At this point, who would even want that job? Slyngstad grew the fund's capital by many, many hundreds of billions during his tenure as a rode a global equity bull market to riches. It certainly doesn't sound like a good fit for somebody who's no longer 'hungry' to make a name for themselves.
For foreigners who are reading this and trying to understand why such a small appearance of impropriety is being taken so seriously, the FT explained it's simply the latest reminder of how cozy Norway's elites are. It seems they all know each other, because they probably do.
Norway’s central bank governor Oystein Olsen, who led the search, told the FT on Monday that he has "concluded" an investigation into whether Slyngstad breached ethical guidelines by agreeing that the central bank should pay Tangen for the costs of the hotel in Philadelphia and the flight home. Put another way: The central bank has decided to put to rest questions of improper financial gifts made to a public official by reimbursing the alleged 'giver' of said gift for the costs of the gift.
Now, if they had asked Slyngstad to reimburse Tangen - who was already treated with suspicion by many in Norway's establishment due to his flashy jet-setting lifestyle - that would have made more sense. But this?...
"Judged from now, he [Mr Slyngstad] should have taken another route home," said Mr Olsen, who added that he now regarded the matter as closed.
The central bank published a long overview of the hiring process on its website, including the entire history of email exchanges between Slyngstad and Tangen. It also said it had decided to try to refund Slyngstad’s expenses.
Tangen is officially due to take over as CEO of the fund in September, unless his appointment is somehow rescinded, or he declines to accept it under pressure (or simply because he's realized he'd rather be chilling on a yacht like Obama).
Back in October when we reported Slyngstad's decision to resign after more than 20 years at Norway's central bank and the sovereign wealth fund (which is an arm of the central bank, though it maintains a level of independence), we noted that Slyngstad was still planning to have some kind of hand in investment strategy via an advisory role with the fund's renewables group. We must admit that raised eyebrows at the time. Is it still a good idea for Slyngstad to have any involvement with the institution after being the one who solicited the jet-ride? Perhaps we shall learn more in the coming weeks and months.