Groundhog Day (again)

From an Irish point of view there is absolutely nothing new about the recent scandals involving Anglo Irish and other banks. Theft and fraud within the Irish financial sector has long being an integral part of Irish culture.

Such activity is common because the State itself officially accepts such behavior as the norm and, over the years, has developed a whole raft of mechanisms and strategies to protect those in the financial sector who regularly engage in criminal activity.

We only have to look back at any one of the many scandals of the past thirty years or so to confirm the truth of the situation.

In this case I’ve chosen the Ansbacher scandal because, like the Anglo Irish Bank scandal, it involves secret names and a golden circle.

It will be obvious after reading the following quotes, opinions and comments that nothing has or is about to change in corrupt Ireland.

((My comments are in brackets, emphasis mine).

On the 27th September 1999 the then Tanaiste, Mary Harney, gave the following excuse for not publishing the Ansbacher names.

“If the Government were to break the law and publish the names, everybody on the list would walk free and prosecutions would not be brought.”

(During the Ansbacher scandal Harney constantly made the case for secrecy because, she claimed that she was absolutely determined that prosecutions would follow, that justice would be done).

When the Ansbacher report was finally published in 2002, five years after the scandal was first uncovered, Mary Harney’s party colleague and Minister for Justice Michael McDowell cautioned against public expectations that a rash of arrests and prosecutions would follow.

(This is thinly coded message for the crooks – Don’t worry, our strategy of putting things on the very long finger worked, you’re all off the hook).

(Nobody was ever prosecuted for the Ansbacher criminality. Those involved did secret deals with Revenue and a few were banned from acting as company directors. The exact same strategy is being adopted by the present Government to protect the bankers).

Mary Harney (Still in office) must have had a moment of Déjà vu as she listened to Brian Cowen.

“Be assured that the suggestions being made quite frankly by political opponents that I’m in some way not very much in favour of bringing this into the public domain as soon as possible consistent with the proper investigation of this which wouldn’t put anything at risk or compromise any future prosecutions that would be deemed to be appropriate.”

Here are some more quotes from the Ansbacher scandal to confirm that strategies employed by government to protect the corrupt are still the same.

“The Fine Gael motion calls on the Government to ensure that names of all persons who held Ansbacher accounts are made public via a Dail committee.”

(The Opposition made the same suggestion regarding the Anglo Irish Bank names and the Government has rejected it, just like they did in 1999).

The Ansbacher report was finally published in 2002.

“The Director of Public Prosecutions James Hamilton is also considering a copy of the report. Responding to queries yesterday he pointed out that if any criminal offence disclosed by the report requires further investigation for the purpose of prosecution, this will be a matter for gardai, the Revenue Commissioners, the Director of Corporate Enforcement or the Central Bank.”

(As I mentioned, no prosecutions were ever brought).

“The Ansbacher report is not just a damning indictment of those wealthy and powerful individuals who evaded their due taxes, broke company law and engaged in criminal conspiracies from the 1970s to the 1990s, it reflects the failure of Irish regulatory authorities and professional bodies to uphold the standards required of them in the interest of the common good. There is a great deal to be ashamed of in the report and many lessons to be learned. New and rigorous standards must be applied by the authorities.”

(No lessons have been learned because the same corrupt administration is still in place)

“In a series of interviews at the weekend, the Minister for Justice, Mr. McDowell, hoped for a change in Irish attitudes so that people who engaged in multi-million pound tax fraud were not regarded as heroes in their local yacht clubs while those who fiddled their social welfare payments were sent to jail”

(Just recently, we heard Ulick McEvaddy refer to the Anglo Irish ‘names’ as heroes. He’s not the only one who thinks this way).

“Nobody believes it will be easy to successfully prosecute some of the extremely wealthy individuals involved. But, if a determined attempt is not made, the consequences will do lasting damage to our democracy. The belief that there is one law for the rich and another for the poor will grow and flourish.”

(Only the corrupt or the very ignorant would claim that there isn’t, in fact, one law for the rich and another for the poor).

“The Government will face strong opposition demands today for assurances that prosecutions will follow arising from the publication of the Ansbacher report.”

“The public must be shown that such behaviour will not be tolerated. The most obvious and public penalty is a jail sentence for the guilty.”

(Nobody went to jail; corruption in the business and political sectors is still rampant).

The following is a statement from the Paul Appleby, Director of Corporate Enforcement, on 6th July 2002, in response to the publication of the Ansbacher report.

It is worth reproducing in full to give an indication of what action we can expect from this toothless tiger regarding the Anglo Irish Bank scandal

6TH JULY 2002

I am determined that action will follow.

Speaking at a press briefing in Dublin on Saturday morning, Mr. Paul Appleby, Director of Corporate Enforcement, said:

“The company, now known as Ansbacher (Cayman) Ltd., secretly operated in this jurisdiction for over twenty years and conducted business which, the Inspectors have found, amounts to evidence tending to show that it contravened prevailing banking, tax, company and other legislation. When its activities came to light in 1997, the nation was shocked that such activity had occurred and had remained effectively hidden from official authorities for so long.

In a sense, these revelations infected our collective psyche in subsequent years, creating suspicions that it was possible to evade legal or other obligations without effective sanction and thereby undermining respect for the rule of law and damaging public confidence in the State’s institutions.

The conclusion of the Ansbacher inquiry and the publication of this Report represent, in my view, the first phase in purging these doubts and regaining lost ground. In defining publicly for the first time the company’s Irish business, the High Court Inspectors (past and present) have done a remarkable public service.

Indeed, the Companies Act 1990, and particularly the company investigation provisions of that Act, have again proved their worth and highlighted the importance of these legal provisions in investigating circumstances suggesting unlawful corporate conduct.

As this important phase of fact-finding investigation concludes, the relevant State Authorities, including my Office, will now examine what remedies are available to address the findings in the Inspectors’ Report.

My staff and I have commenced identifying the matters which fall within our statutory remit. Every line of potentially valuable inquiry will be examined thoroughly, and I am determined that appropriate action will follow. I am mindful, however, of the Inspectors’ comment (at page 18 of their Report) that they foresee some difficulty in bringing prosecutions arising from the matters investigated by them.

(Damn, there’s that Michael McDowell message to the corrupt again)

As early as next Monday, I will be seeking the approval of the High Court to gain access to certain of the Inspectors’ papers, in order to allow us to follow up on a number of issues in the Report. We will also be supporting in due course an application for the recovery of the costs of this Inquiry, in order that the taxpayer does not bear further financial loss as a result of the events described in the Report.

In the coming weeks, I will be considering what further action is warranted to remedy or sanction the conduct which is indicated in the Report and is relevant to my responsibilities under the Companies Acts.

I have no doubt that other relevant State Authorities, such as the Central Bank, the Revenue Commissioners and the Director of Public Prosecutions, will closely evaluate their own legal options in the light of the information contained in this Report.”

(They did indeed evaluate their legal options and, as is the norm in Ireland, did nothing).

Here are some comments on the Regulators in the report. (Note: The Central Bank was the so called financial regulator at the time).

“Failures by the Central Bank meant the Ansbacher scheme went undetected for years”

“The bank’s failure to test, appraise and gather information “available to it” resulted in the true nature of the activities going undetected for longer than ought to have been the case.”

“The bank had reservations at all times about the loan-book, but took at face value assurances by the scheme’s mastermind, the late Mr. Des Traynor, that the amount of loans extended to Irish residents was being run down.”

(Just as the present so called financial regulator took the word of Anglo Irish Bank lawyers that its controversial €300 million share deal last summer was above board. This is no accident, it has nothing to do with incompetence, it is, effectively, an official policy).

The Tánaiste, Ms Harney, on the failures of the Central Bank.

“It seems extraordinary that we lived in a time where the culture, even amongst State organisations, was one of ‘let’s pretend we don’t know’ because clearly in some cases where organisations knew or should have known they seemed to take the view that they didn’t want to know.”

(The exact same attitude and practices are still dominant in the Irish regulatory system today).

Writing in the Irish Times 8th July 2002 Mark Brennock made the following comments and observations.

“The Government must now reassure the scandal-weary public that this can never happen again.”

(Corruption within the financial sector never stopped, never even waned. That situation will continue for so long as Ireland remains a corrupt entity in itself),

“Governments are responsible for the level of regulation, and there was clearly a massive regulatory failure. This systematic evasion went on for over two decades, unhindered by the Central Bank, the Revenue Commissioners, company law regulators or prosecuting authorities.”

(Hardly an hour passes without some politician, journalist or banker telling the Irish people ‘there was clearly a massive regulatory failure’ regarding Anglo Irish Bank. We will continue to hear this into the future until somebody actually establishes a proper regulatory systems that puts people in jail rather than, effectively, facilitating their crimes)

“The Tánaiste yesterday pointed to a new system for regulating the accountancy profession, new legislation to encourage “whistle-blowers” and enhanced powers which have been given to the Revenue Commissioners.”

(None of this was done and politicians are still waffling on about the ‘urgent’ need for such reform as a result of the Anglo Irish scandal).

“The powers of a new financial services authority are detailed in a Bill currently before the Dáil.”

(This ‘new’ financial services authority was finally established in 2003. It was hailed as a powerful and hard hitting agency that would forever rid Ireland of the corrupt vermin that infects the financial sector – it was a complete failure.

Today this failed ‘authority’ is investigating itself for its part in the Anglo Irish Bank scandal. It will clear itself of all charges and continue to implement policy and secrecy laws that, effectively, protect fraudsters).

Then Tanaiste, Mary Harney on the Ansbacher report.

“The report is a watershed in Irish life” for the clarity of the insight it gives us of how a section of the political and business class in this State used to operate. The political task is to demonstrate to a scandal-weary public that it can’t happen again.”

(Harney is still in power and a scandal-weary public is still waiting).

And finally.

“The report showed that there was now the capacity in Ireland to “lift the veil of secrecy” over such activity. The Government had already begun the process of ensuring there was a coherent and comprehensive body of law to ensure “that our society is a fair and just place in which to live and do business“.

There is virtually no prospect that our corrupt system will suddenly decide to reform itself and therefore the only hope we have of ridding ourselves of the rampant corruption that infects our political, business and bureaucratic sectors lies with EU intervention.

I fervently hope, for all our sakes; that we see such an intervention before very long.

Copy to:
Financial Regulator
ODCE
Government