Précis — June 17, 2013, 8:00 am

McKenzie Funk Searches Iceland for the Man who Tried to Sell Glaciers

“There was no country more in the thrall of commercial banking and paper wealth. . . . All this helped explain why no one in Iceland seemed worried about building an economy on water, not when the last one had been built on air.”

“People come up with a great dream, then they get into that dream,” says Kenneth Krys, who worked to unwind Bernie Madoff’s Cayman Island funds and played a similar role for a hedge fund founded by a dentist named Otto Spork. In 2008, Spork secured the water rights to a glacier north of Reykjavik, quit his dental practice and founded Sextant Capital Management, the most successful hedge fund in Canada. His pitch was simple: the world was warming and water was running out. Sextant bought water companies, hundreds of Canadian and offshore investors bought in, and all went smoothly until December 8, 2008 — three days before Madoff was arrested — when Spork was accused by the Ontario Securities Commission of a massive fraud. Spork then disappeared.

“Spork inflated fees — that was his rip-off,” says Krys, who, in twenty years in the Caymans, has seen only half a dozen true Ponzi schemes. “Madoff never invested his money. It just sat in his bank accounts,” he says. Spork spent nearly all his money. “I just don’t think he’s given up the dream of selling Iceland’s water,” says Krys, who has yet to determine the amount that will be returned to Sextant’s investors. Harper’s Magazine contributor McKenzie Funk travels to Iceland, where Spork may or may not live, in attempt to find the man and determine whether Sextant was a kind of Ponzi scheme from the start, or if Spork truly believed he could sell Icelandic water to a drought-stricken world.

“I think the next war in the world is about water,” says the mayor of Rif, an Icelandic fishing village sought out by water seekers from all over the world. He’s seen companies from England, from Norway, from Denmark, he tells Funk. “An Arab from Kuwait. An agent for a guy from China.” Spork was the first outsider to build anything tangible to collect Icelan’s water. “Otto could sell the Northern lights, he was such a good salesman,” says Reykjavík banker Sverrir Hermann Pálmars, Spork’s onetime fixer, “but I think he was trying to honestly establish this company. We worked long hours. He worked long hours with us. Maybe Otto was maybe five or six years too early, because I think the price of water is going up.” Since Spork vanished, Sverrir has been consulting on a water project involving Chinese buyers.

“He goes from being a dentist to a hedge-fund manager. That’s quite a leap,” says Eric Sprott a Canadian self-made billionaire who made wildly successful bets on gold and silver, and who Spork may have been trying to emulate. To him, the plan to export Icelandic glacier water does not seem outlandish. “Lots of people invest in commodities,” he tells Funk. “There are all sorts of waters that we get all the time, and they’re all from some special goddamn place,” he says. “Iceland might make some sense.”

Share
Single Page

More from Harper’s Magazine:

Memento Mori September 2, 2014, 5:33 pm

Charles Bowden (1945–2014)

Mentions July 16, 2014, 7:00 pm

“The End of Retirement” on MSNBC

Watch Jessica Bruder on MSNBC’s The Cycle

Official Business June 25, 2014, 8:00 am

Garry Winogrand at the Metropolitan Museum of Art

A retrospective exhibition from June 27 to September 21 in New York City

Get access to 164 years of
Harper’s for only $39.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

October 2014

Cassandra Among the
Creeps

= Subscribers only.
Sign in here.
Subscribe here.

“Today Is Better Than Tomorrow”

= Subscribers only.
Sign in here.
Subscribe here.

PBS Self-Destructs

= Subscribers only.
Sign in here.
Subscribe here.

The Monkey Did It

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
“This is not a fable about a young woman whose dreams were dashed by a sexual predator. Maya’s narrative is one of institutional failure at a school desperately trying to adapt.”
Photograph © AP/Josh Reynolds
Article
Kandahar’s Mystery Executions·

= Subscribers only.
Sign in here.
Subscribe here.

“He told me he was made to stand on an ice block for thirty minutes at a time, and would then be forced to run barefoot across the gravel while an officer cable-whipped him.”
Photograph (detail) © Victor J. Blue
Article
The Tale of the Tape·

= Subscribers only.
Sign in here.
Subscribe here.

“Heroin isn’t the weakness Art Pepper submits to; it’s the passion he revels in.”
Photograph (detail) © Laurie Pepper
Post
Art Beyond Politics·

= Subscribers only.
Sign in here.
Subscribe here.

Arab artists take up — and look past — regional politics
“When everyday life regularly throws up images of terror and drama and the technological sublime, how can a photographer compete?”
“Qalandia 2087, 2009,” by Wafa Hourani
Criticism
The Soft-Kill Solution·

= Subscribers only.
Sign in here.
Subscribe here.

"Policymakers, recognizing the growing influence of civil disobedience and riots on the direction of the nation, had already begun turning to science for a response."
Illustration by Richard Mia

Percentage of G.O.P. House and Senate members in an April 2006 poll who believed humans are causing climate change:

23

Bees can remember human faces, but only if they are tricked into thinking that we are strange flowers.

“All I saw,” said a 12-year-old neighbor of visits to the man’s house, “was just cats in little diapers.”

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

In Praise of Idleness

By

I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.

Subscribe Today