Author: Anthony

A flawed and deadly assumption

On 4th Oct last I wrote:

“There will be no sacking of senior bank management, there will be no appointment of outsiders to bank boards or if there is they will be given the job of making the coffee. There will be no financial cost to the banks; there will be no strings attached to the deal because it is the banks that are calling the shots.”

Here’s what happened.

No banker has been sacked.
No banker has had his pay reduced or capped.
No banker has suffered any restriction on bonuses or share options.
The committee set up to oversee bonuses and pay for bankers is a joke.
No independent outsiders are being appointed to bank boards. The observers being appointed will be chosen by the bankers from a panel approved by the Minister. These observers will have no power whatsoever; they are nothing more than window dressing.

Ireland is the only Western state that has failed to take effective action against the greedy and irresponsible bankers – Why?

Again, on 4th Oct I gave the answer:

“We at Public Inquiry have been shouting the message for years – Ireland is a corrupt state, the politicians do not work in the interests of the people, the civil servants for the most part serve the politicians and the Government, not the people. Banks and other big business do as they please with impunity; they are never, ever brought to account. How long will it take before the message gets through?”

Let me be even more precise. Instead of acting in the interests of the State and its people the Government, the regulators and the bankers are acting to protect the corrupt system of administration that has evolved in Ireland over recent decades.

This is not to say that any person involved in the present scandal are themselves corrupt individuals. It is to say that the actions of those involved are exactly what can be expected from those who are making decisions within a corrupt system.

This is why people like Shane Ross, David McWilliams and others always express puzzlement at the reaction of politicians and regulatory authorities to these scandals.

Their mindset includes an assumption that Ireland is just like any other any other Western democracy. They assume that the Government and regulatory authorities will always act in the best interests of the State and its people. This assumption is the fatal flaw in their reasoning.

During the period when we were waiting to see the details of the guarantee scheme that the Government and regulatory authorities were working out with the greedy and irresponsible bankers these financial experts expressed views on what action would or should be taken.

They are now expressing shock that all their predictions and analysis turned out to be wrong. They have expressed astonishment that the Government has, in effect, allowed the bankers off the hook.

Why is it that we here at Public Inquiry can make an accurate prediction of how the authorities are going to act based on our analysis of the situation and all the experts get it wrong? The answer is simple – We start off from the undeniable fact that the administration of Ireland is intrinsically corrupt.

Once this fact is accepted everything else falls into place. There will be no surprise when banks and other financial institutions are allowed to rob their customers, no surprise when state authorities fail to act against stock market fraudsters, no surprise when politicians who blatantly commit perjury are not made accountable.

Nothing will change in this country until the reality of what we are as a nation is accepted. No individual, organisation or state can begin to reform itself until the reality of their situation is faced and accepted, it is only when that point is reached that the rot can be cut out.

We are a long way from that place.

Copy to:
Senator Ross
Financial Regulator

Doctor's greed defended by Fine Gael

Fine Gael health spokesman Dr. James Reilly just couldn’t bring himself to admit the reality of his situation on the Marian Finucane Show on Sunday.

It was Dr. Reilly who negotiated the grotesquely greedy deal that saw doctors receive €640 for every patient over the age of 70. Now he’s trying to condemn the Government for attacking the elderly while at the same time defending his part in the deal.

When asked did he think the fee was a valid one he replied:

“I do because it works out at €55 per patient per visit and that is not excessive in my view.”

This was a cynical attempt to suggest that the fee is dependant on patient visits. In fact the €640 is paid whether or not a patient visits. I assume the €55 fee Reilly mentions is an additional fee for every visit making the deal even more objectionable.

On Liveline during the week another doctor moaned about overheads in an attempt to justify the greed. A doctor’s receptionist told me recently that her pay is so low she qualifies for a doctor only card.

Reilly would be better advised to come out straight and admit that doctors, like most other professions in Ireland, have lowered their moral standards in exchange money.

Copy to:
Dr. Reilly

No courage for the truth

Crooked politicians and dodgy businessmen are not the only ones who suffer from severe amnesia when it comes to accountability; journalists too, it seems are prone to the condition.

Jody Corcoran, writing in the Sunday Independent, uses a scatter gun to blame all and sundry for the mess we find ourselves in.

The present government, the Opposition, the Trades Unions, our flawed political system, an apathetic electorate, a grotesquely fattened public service, the HSE, the Mahon Tribunal, Charlie McCreevy and the OECD – All, that is, except Bertie Ahern.

Apparently, Ahern, who was the most powerful man in the country from 1997 to May of this year had no hand, act or part in the mess the country finds itself in. In a long and rambling article (over 2,000 words) Corcoran only mentions Ahern once in relation to benchmarking.

“Bertie Ahern did not want the hassle, so he set up the benchmarking body.”

That’s it, one sentence and the great Bertie is free of all responsibility.

Of course, the reason for this unbalanced and unprofessional article is simple. For years Corcoran has worshipped the ground that Ahern walked on. No matter how bizarre or pathetic the actions and words of his hero Bertie, Corcoran defended him to the last.

And, like his hero, Corcoran simply doesn’t have the courage to tell the truth.

Copy to:
Jody Corcoran

The nightmare facing Irish taxpayers

Understandably, all attention will be on today’s hair shirt budget but believe me it is a minor event in comparison to the following statement from the CEO of the Financial Regulator, Patrick Neary, to the Joint Oireachtas Committee on Economic Regulatory Affairs (RTE News, 1st report).

“The six Irish banks covered by the (guarantee) scheme have a total regulatory capital base of €42 billion. This figure takes account of provisions of €2.1 billion against impaired loans totally €3.6 billion. Speculative lending to construction and property development in Ireland amounts to €39.1 billion of which €24 billion is supported by additional collateral or alternative sources of cash flow and realisable security. This leaves a balance of €15 billion secured directly on the underlying property.”

This, in effect, means that the six banks in question are insolvent and will have to be bailed out by the taxpayer.

The €15 billion that Neary mentioned is only a minimum estimate of the massive bill facing Irish taxpayers. It is very likely that at least a portion of the €24 billion allegedly supported by ‘additional collateral or alternative sources of cash flow and realisable security’ will also prove to be lost money recklessly loaned out by greedy bankers.

Neither did Neary make any mention of taxpayer’s exposure as a result of the extended government guarantee to a number of non Irish banks last week.

Irish taxpayer’s could be facing a bill of between €20 and €25 billion.

Here’s what the so called Financial Regulator is going to do in response to the disaster.

“We will immediately recruit an additional 20 senior supervisory staff with banking experience to be placed on site (pun, I assume, not intended) in key banks to monitor developments. We are now requiring banks to set out new business plans focusing on the need to reduce their risk profile and how their models of banking are sustainable in the new environment. There will be enhanced reporting obligations in relation to capital, asset quality and individual large loans to supplement our daily liquidity reporting requirements.”

This, of course, is pure bullshit. What’s the point of requiring banks that are now insolvent because of their reckless greed to focus on their need to reduce risk?

It is, of course, no accident that Neary announced the full extent of the nightmare facing Irish taxpayers on hair shirt budget day. He’s using the event as a means of covering up his own incompetence.

But then again he’s only following the example of the Government who are hiding behind the global financial crisis to cover up the crucial part they played in allowing bankers and property speculators to destroy the economy.

Neary on Prime Time recently:

Doctors – Feeding in the gutter

Question – What do you get when you mix political stupidity, grasping greed and gross incompetence?

Answer – A ripped off taxpayer.

During a discussion on RTE (1st report, 2nd item), political correspondent for the Irish Times Stephen Collins revealed that doctors get €640 for every medical card patient over the age of 70. This is in stark contrast to the €180/200 they get for all other medical card patients. How did this outrageous situation come about?

In the 2000 budget the then Finance Minister Charlie McCreevy stupidly announced, without any consultation whatsoever, that all citizens over the age of 70 would be automatically entitled to a medical card.

Because of McCreevy’s stupidity in not negotiating first, the doctors were able to extract the enormous and immoral fee from incompetent civil servants. These civil servants are probably the same idiots who ‘negotiated’ the fees for tribunal lawyers.

As for the doctors? Well, there was a time when the medical profession was held in high esteem. Now, they’re down there, feeding in the gutter with priests, politicians, policemen, solicitors, estate agents and all the other so called pillars of society.

Fitzpatrick – Tripped up by his ego

The chairman of Anglo Irish Bank, Sean Fitzpatrick, is being investigated by the Irish Stock Exchange over allegations of insider trading. The investigation will, of course, be a farce. The ISE, like the Financial Regulator, doesn’t really do regulation.

Fitzpatrick bought €1.1 million worth of Anglo Irish shares after talks had opened between the banks, the Financial Regulator, the Central Bank and the Government.

The banker turned a tidy little profit of €326,000 from the deal when Anglo Irish shares increased by 18pc after the Government bail out was announced.

Still, despite having nothing to fear from the ISE, Fitzpatrick was foolish to allow himself to be ambushed by Marian Finucane in a recent interview (Sat. 4th Oct).

Finucane very cleverly massaged Fitzpatrick’s ego by asking him how influential he was in the €400 billion government deal with bankers.

Fitzpatrick couldn’t resist asserting his self importance; here are some of his comments before he finally realised he was being set up by Finucane.

“I knew lots of things were happening because we had discussions obviously with the Central Bank and the Financial Regulator and the Dept of Finance over the previous weeks.”

“Well, I met the Dept of Finance officials and I met the Minister and clearly I spoke on a regular basis with the regulator and the central bank.”

Finucane asked him about his contact with Minister for Finance Brian Lenihan.

“I was explaining the difficulties and he was explaining the difficulties they had, there was lots of things being discussed by lots of people in different ways… We had to get the difference between what was happening externally and get that across and remove the issue about the bad debts…which we eventually did and he saw that very, very clearly.”

“What I was trying to do was explain the situation to him, we certainly exchanged ideas”.

Fitzpatrick finally realised he was being set up when Finucane asked him about a report in the Sunday Independent concerning allegations of insider trading. Suddenly, the banker wasn’t so influential.

“Did you have a sense that the Government was going to bail out the banks, asked Finucane?”

“No, I didn’t.”

“Did you not know before hand that the Government was going to bail the banks out?”

“Of course I didn’t, that wasn’t out until Monday night.”

“But you had been talking to the Minister the previous week.”

“I had been talking to the Minister the previous seven days about various issues, about what he could do but I wasn’t sure what he was going to do..”

“Were the banks all talking to each other at this stage?”

“Not on a constant basis…there was no cohesive, no group meeting with the Government at all.”

AIB: Gut instinct

There’s been a lot of speculation on which Irish bank is most vulnerable to collapse in the present crisis. Most commentators seem to think that Anglo Irish will be the first to go but I think AIB is most at risk.

After all, AIB is the most powerful and most ruthless of all the banks. It has always been allowed to operate pretty much as it likes, has never been properly investigated despite robbing millions from its own customers and the State.

It seems obvious that such a powerful and untouchable entity would be much more likely to take huge risks in property speculation and development confident that a facilitatory regulatory regime was always close to hand should things go wrong.

Of course, this is just gut instinct on my part.

Obsessed with RTEs obsession

Noel O’Reilly, the producer of RTEs flagship news and current affairs programme Saturday View was in a quandary – Two stories, but which one to broadcast.

The first story concerned the world’s financial system which was in meltdown. Our own government had just staked all our futures on a €400 billion bail out of the Irish banking system. Everything was in flux; the news was red hot, dramatic. Historic events that will have far reaching consequences for every human on the planet were occurring from minute to minute.

The second story concerned a civil rights march that occurred in Derry 40 years ago.

Here’s how the presenter, Rodney Rice, introduced the show.

“I thought we could all do with a weekend away from the financial crisis. So we’ve come to Derry to be part of the recollection of that famous march on Oct 5th 1968.”

Actually, RTE was not giving us a break but rather was yet again indulging in its obsession with all things Northern Ireland. Nothing, absolutely nothing takes precedence over events in NI.

If somebody throws a stone, if a Catholic looks crooked at a Protestant, if a politician breaks wind – RTE will be there with their permanent and ever alert outside broadcasting unit.

RTE has thousands of secret agents operating all over the dismal province constantly on the look out for anything that could be defined as news. Deep in the bowels of Montrose, in a cellar the size of a Shuttle hanger, thousands more constantly pore over millions of miles of film and other archival material incessantly working on stories, putting together documentaries and preparing for yet another anniversary.

Last month a team leader was severely upbraided for failing to notice that a Mrs. Jones from the Falls Road in Belfast was knocked over and cut her knee during a riot in July 1974. A documentary commemorating Mrs. Jones’ knee is now in the final stages of production.

But RTE doesn’t just operate in the depressing and irrelevant past when it comes to NI. The Director General has a direct line to Moscow and Washington and is daily updated on how much time the world has before Armageddon should the red buttons be pressed.

Happily, it would take at least half an hour before total annihilation – Just time for one last documentary on the dismal province before we all go down the spout.

Yes, yes, I know. I’ve become obsessed with RTEs obsession – Bring on the nukes.

Copy to:
Saturday View

Politicians: Nothing more than messenger boys

It is widely assumed that the banks were pleading for help when they rang the Minister for Finance, Brian Lenihan last Sunday night.

Wrong – The banks were summoning the Minister to instruct him on what action they required of him.

And it’s not just the Minister who jumps when the banks come calling; the so called Financial Regulator and Central Bank also dance to whatever tune the banks are playing.

Up until last weekend the tune was simple – No matter what the evidence is, no matter how stupid you look, you are to maintain the charade that Irish banks, unique in the world, are not in any kind of trouble, you are to deny all suggestions that we have recklessly loaned out billions to property speculators and developers.

As recently as 6th Sep last Lenihan was doing what he was told.

“I can assure your listeners that the Regulator has maintained a very detailed supervision of Irish banks and that the Irish banks are not in anything like the difficulties that their counterparts in the US are.”

Here’s what I had to say about the Minister’s comments (Link as above).

“This Minister knows nothing about the real situation because his information comes from the Central Bank and the so called Financial Regulator who take their orders from the banks. Taxpayers should hold on tightly to their wallets, the banks will soon be looking to do some more pick pocketing.”

Now, €400 billion later the Minister, regulatory authorities and the taxpayer are dancing to the banker’s new tune.

Even the experts don’t seem to know what’s really happening. Economist David McWilliams, who was first to openly state that Irish banks were in trouble, is naïve in the extreme when it comes to his views on how the banks should pay for their sins. He’s worth quoting at length (RTE, 1st report, 2nd item).

“I would hope that the Government moves very quickly to replace the senior management of many of the banks that have behaved extremely recklessly. And that means by making board appointments of outside people, not civil servants, but people who have the national interest at heart. The Government guarantee cannot come for free, it can’t be a blank cheque, it has to come with strings attached…Brian Lenihan and his advisors are in the driving seat and if they think about their position they can change the way Irish banking works.”

“We’ve got to get rid of Gombeenism; we’ve got to get rid of the proximity between developers, banks and the Government. We’ve got to get rid of these idiosyncratic ways in which our society was run for the last four or five years.”

Like most Irish citizens, McWilliams seems to be completely and innocently unaware of the kind of country he lives in; he genuinely seems to believe that Ireland is a normal democratic country.

His reference to Gombeenism and our idiosyncratic ways might just be the beginning of a realisation that Ireland is unlike any other Western state, that there is something seriously dysfunctional about the way our country is governed.

We at Public Inquiry have been shouting the message for years – Ireland is a corrupt state, the politicians do not work in the interests of the people, the civil servants for the most part serve the politicians and the Government, not the people. Banks and other big business do as they please with impunity; they are never, ever brought to account. How long will it take before the message gets through?

Next week, when the bankers finally reveal the details of their plan, when they tell us what decisions they have made regarding the future of our country, we will hear a lot waffle, a lot of weasel words and a lot of breast beating from our politicians but believe me there will be no challenge to the status quo.

There will be no sacking of senior bank management, there will be no appointment of outsiders to bank boards or if there is they will be given the job of making the coffee. There will be no financial cost to the banks; there will be no strings attached to the deal because it is the banks that are calling the shots.

Our politicians are nothing more than messenger boys for the real power in this country.

Now I'm really scared

Obviously something needed to be done about the ongoing financial crisis but only time will tell whether the Government has made the right decision.

In America everybody knew what was going on, the Opposition was actively and centrally involved and ordinary Americans were listened to as they expressed their anger at the prospect of greedy bankers being allowed off the hook.

The deal was rejected and now everybody is back at the table trying to work out a deal. It is virtually certain that ordinary American taxpayers will get a better deal; that strict new regulations will be introduced and enforced and already some bankers are under investigation by the FBI.

In Ireland the Government met in the dead of night with the Financial Regulator and bankers to work out a deal. Nobody else was consulted; the Opposition was kept in the dark, the views of ordinary people don’t count. It’s now nearly 24 hours since the deal was announced and we still don’t know what conditions are being imposed on the bankers.

Here’s my guess – Absolute minimum conditions will be enacted in the legislation but even these will never be enforced. Neither will any bank or bank official be investigated; no Irish government or financial regulator have ever acted against the banks. There’s no reason to believe that things will be any different on this occasion.

The Irish Government can act like this because we effectively live in a one party state where democracy has been diluted to the point of irrelevance.

America, the richest and most powerful economy in history is spending $700 billion in an attempt to save their economy and by extension save the world from global recession.

The Irish government is spending €400 billion, more than half what the Americans are committing, in an attempt to bail out six banks that recklessly and greedily lost the run of themselves during the building bubble.

According to an expert on Prime Time last night; Irish banks have loans out totaling €110 billion and can expect losses of at least 10 to 20 billion.

The $700 billion represents $5,000 for every American citizen. The €400 billion represents €100,000 for every Irish citizen – Mention that to your banker the next time you apply for a loan.

Minister for Defence, Willie (Groucho) O’Dea confidently told the nation on Prime Time that the assets of Irish banks exceeded their liabilities and that Irish citizens were not at risk.

Now I’m really scared.