GGGI facing collapse after Luxury Lars scandal
GGGI's continued existence relies heavily on Norway recommitting its support
The scandal that has persisted over the past couple months involving the climate organisation Global Green Growth Institute (GGGI) and Lars Løkke Rasmussen’s (V) exuberant spending has already cost Christian Friis Bach (R) his job as the minister of development. Now, the organisation itself is staring into the abyss.
According to a November letter from GGGI head Howard Bamsey to Friis Bach obtained by Information newspaper, the organisation is running out of funds and could be over 20 million kroner in debt in the first quarter of 2014.
Jan Mouritsen, the head of the Department of Operations Management at Copenhagen Business School, said that GGGI needed to act soon or face bankruptcy.
“GGGI must get the money or slash expenses so that they match the income,” Mouritsen told Information. “Otherwise it won’t be able to pay its bills and, in worst case scenario, could be forced to close down.”
Norway is the key
The major issue for GGGI is that Norway has frozen its financial support to the organisation after the South Korean state auditor revealed excessive spending and financial discrepancies in the climate organisation.
Should Norway choose to continue its support of GGGI, the organisation would have over eight million kroner left in its coffers, but should Norway completely pull out, GGGI’s debt could end up being insurmountable.
Norway decided to freeze its support of GGGI in late October, just days after it was revealed that Rasmussen had spent close to one million kroner flying first class as GGGI chairman.
GGGI was due to receive the equivalent of 52.6 million kroner from Norway in 2013 and 2014 but the Norwegian environmental minister, Tine Sundtoft, said that the government would await the results of a Danish investigation into the case before recommitting its support.
Despite 'Luxury' Lars Rasmussen being the primary player in the GGGI scandal, he has repeatedly said that he will not step down as the climate organization's chairman.