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:

Official Business March 17, 2015, 4:01 am

Radio Hustle

Listen to the broadcast version of “American Hustle,” Alexandra Starr’s story, for the April 2015 issue of Harper’s Magazine, about how elite youth basketball exploits African athletes.

Official Business January 8, 2015, 3:57 pm

The Art of Outrage

We defend Charlie Hebdo’s right to publish its cartoons—and our right to critique them.

Memento Mori September 2, 2014, 5:33 pm

Charles Bowden (1945–2014)

Get access to 164 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

April 2015

The Joke

= Subscribers only.
Sign in here.
Subscribe here.

Abolish High School

= Subscribers only.
Sign in here.
Subscribe here.

Beat Reporter

= Subscribers only.
Sign in here.
Subscribe here.

Going It Alone

= Subscribers only.
Sign in here.
Subscribe here.

Rotten Ice

= Subscribers only.
Sign in here.
Subscribe here.

Life After Guantánamo

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

[Browsings]
Photograph by the author
Article
Rotten Ice·

= Subscribers only.
Sign in here.
Subscribe here.

“When I asked if we were going to die, he smiled and said, ‘Imaqa.’ Maybe.”
Photograph © Kari Medig
Article
Life After Guantánamo·

= Subscribers only.
Sign in here.
Subscribe here.

“I’ve seen the hell and I’m still in the beginning of my life.”
Illustration by Caroline Gamon
Article
Going It Alone·

= Subscribers only.
Sign in here.
Subscribe here.

“The call to solitude is universal. It requires no cloister walls and no administrative bureaucracy, only the commitment to sit down and still ourselves to our particular aloneness.”
Photograph by Richard Misrach
Article
No Slant to the Sun·

= Subscribers only.
Sign in here.
Subscribe here.

“She didn’t speak the language, beyond “¿cuánto?” and “demasiado,” but that didn’t stop her. She wanted things. She wanted life, new experiences, a change in the routine.”
Photograph © Stuart Franklin/Magnum Photos

Years it would take Jim Bakker to earn enough to pay his federal fine at his current job cleaning prison toilets:

2,331

Zoologists speculated that cannibalism among hippos might have led to an anthrax outbreak in Uganda that has killed at least 220 of the beasts. “I knew hippos were nasty,” said one anthrax expert, “but I didn’t know they went around eating each other.”

A white man in St. Louis was charged with punching a black man at a gas station after telling him to “go back to Ferguson.” “I’m going to let the authorities handle this,” said the victim, a former Major League baseball player, “but I’ve had enough of St. Louis.”

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

HARPER’S FINEST

Driving Mr. Albert

By

He could be one of a million beach-bound, black-socked Florida retirees, not the man who, by some odd happenstance of life, possesses the brain of Albert Einstein — literally cut it out of the dead scientist's head.

Subscribe Today