Category: Banks & Finance

Minister O'Cuiv puzzled by banker's greed

When the Minister for Social Protection, Éamon Ó Cuív was asked on The Week in Politics about the €1.5 million top-up to Bank of Ireland chief executive Richie Boucher’s pension he replied:

I don’t understand why people like him who made a total mess of the banks and our economy doesn’t voluntary hand back some of what they have.

Could the explanation be that Mr. Boucher is following the example of some serving TDs, ministers and one former Taoiseach, who played no small part in the downfall of our country, continuing to draw down massive pensions in addition to a very generous salary?

Lenihan, making it up as he goes along

George Hook of Newstalk Radio asked Minister for Finance Brian Lenihan how it was that in the UK bankers like Fred Goodwin of RBS were not allowed to hold on to lucrative retirement packages while failed Irish bankers walked away with millions.

Lenihan’s response was a classic make it up as you go along explanation.

I don’t know about Fred Goodwin’s case, he mustn’t have had a firm contractual position or they wouldn’t have been able to rescind it.

When the Government took control of the banks Mr. Goodwin didn’t have a finalised package.

A lot of these gentlemen have finalised packages in Ireland which were written into their contracts long before the guarantee… I’m faced with a legal brick wall.

So, Lenihan starts off by saying he knows nothing about Goodwin’s case. He then immediately contradicts himself by stating that Goodwin made himself vulnerable by not having a finalised package.

Irish bankers on the other hand, according to Lenihan, were clever in making sure they had watertight contracts and as a result he was up against a legal brick wall in regard to taking action against them.

The Kelly's: Like father, like son

Somebody by the name of Simon Kelly wrote an article recently in the Sunday Tribune thanking Anglo Irish Bank for being there to help the Irish people in the early days of the Celtic Tiger.

According to Kelly thousands of jobs would not have been created if Anglo wasn’t there to support business and grow the economy.

In other words Kelly is saying that the countless billions needed to keep zombie Anglo alive is a fair price to pay for a few thousand jobs.

This is akin to saying – Ok, Hitler had his failings but he created thousands of jobs building the autobahns, or, the people of Haiti should be thankful for the massive death and destruction visited on their country by the earthquake because the disaster resulted in massive international aid.

Here are a few more gems of wisdom from this former developer.

It’s a national phenomenon (the financial crisis) caused by the actions of hundreds of thousands of people, each in their own way causing a boom, and now a bust.

Everybody had skin in the game so stop looking for scapegoats as a way to hide personal guilt.

So I say to Charlie Bird and the like; get off David’s lawn and get out of Sean’s front drive. They have lost everything but they still have to live. The bank failed because we all failed.

If you want to know what caused the crash and the failure of Anglo, have a look in the mirror. We all built the boom and we all caused the bust.

So there you have it, we’re all to blame for what went on in Anglo. Seanie and the others are being scapegoated just so we can all hide our personal guilt for the part we played in destroying the country.

So who is this Simon Kelly? Well, it turns out he’s none other than the son of property developer Paddy Kelly. I wrote about Kelly Snr. after listening to an interview he gave to Eamon Dunphy in November 2009.

The interview occurred before the putrefying stench from Anglo had seeped out and infected the entire nation.

Like his son, Paddy Kelly also blamed others for the financial disaster. It was the fault of the planning process; it was the fault of government policy.

Kelly openly admitted that ‘brown envelopes’ were taken to smooth out planning problems that were so tedious, they would try the patience of Job. He also admitted that he would build anywhere no matter what the consequences once he got planning permission.

When asked about Anglo he said:

Well, I think of the skill of Anglo Irish and the people involved, those people are so creative.

All the banks are in danger but you’ll find that as the weeks go on Anglo Irish are in very good shape and you’d be surprised how good the quality is of the people in there…watch Anglo and be optimistic.

We can see from this interview and the Sunday Tribune article why the Kelly’s are failed property developers but I don’t think the people of Ireland, who will be paying for the activities of the ‘creative’ people in Anglo for decades to come, will appreciate being blamed for the recklessness and greed of property developers and bankers.

Copy to:
Simon Kelly

Time to bury the body of our diseased nation

I’m certainly not going to influence the regulator in any respect. I think that would be bad for the country and I think we really need to learn the lessons of the banking crisis.

The perception that the regulator can be subject to political interference or influence would be very bad for this country. (Brian Lenihan, Minister for Finance).

From 1922 until 2003 Ireland had no financial regulator whatsoever. As a result the Irish financial sector became infested with criminals who acted with impunity under the protection and connivance of a corruption political system.

From 2003 until the appointment of Matthew Elderfield last year we had a so called financial regulator that cooperated with and protected the same criminals under instruction from a corrupt and conniving political system.

Today we have a real financial regulator being subjected to massive pressure from the same corrupt and conniving political system because, for the first time in the history of the state, a financial regulator is making an honest attempt to clean up the mess.

Let me make something crystal clear – Mr. Elderfield will not succeed in his job. The corruption and rot is far too deep, far too widespread throughout Irish society for him to have any hope. We are a diseased nation, terminally infected with the disease of corruption, not even radical surgery can save us.

Lenihan’s words about perceptions and political interference in financial regulation are decades too late. He, his party and the entire political system is a dinosaur way past its extinction date.

We need to accept that as a nation we are a failed entity, a dead nation. We need to bury the diseased body of our corrupt political system and start again.

The brutal truth in numbers

Letter in today’s Irish Independent.

Our bank bailout bill just doesn’t add up.

The final cost of the US bank bailout is €65bn. The ESRI just announced our bank bailout will be €73bn.

America has a population of 350 million people. We have a population of four million people.

America allowed Lehman Brothers to go bankrupt, even though it was systemically important as the subsequent stock market crash proved.

We rescued Anglo Irish Bank, even though it was not systemically important. We now know it was purely a gambling medium for the country’s greediest people.

Per head of population, Americans now owe €185 and 71 cent each for the greed of its banking fraternity. By contrast, we now owe €18,250 per head of population.

In spite of these staggering numbers, the Government, which promoted this level of greed and which is now passing the colossal bill to the taxpayer, the public sector, the unemployed and poor, refuses to accept any responsibility or admit how badly it got it wrong.

They are still in power, still deciding the fate of a country they have broken.

To borrow a recent notable quote from a highly offended individual of delicate sensibilities: “I find this, more than anything, to be beyond the Pale.”

Jarlath Challoner
Portlaoise, co Laois

McStay: Denial and stupidity

John McStay, liquidator and long time friend of Sean Fitzpatrick was asked how Fitzpatrick was dealing with the pressure (Marian Finucane Show – Sunday).

I think probably as well as any of us would. He’s a strong person, he’s had to be to develop the business he did but there’s enormous pressure.

At a human level I might condemn the sin but not the sinner.

This is the same hypocritically obnoxious stance taken by the Catholic Church on the question of homosexuality.

Fitzpatrick and his bank has destroyed the lives of countless thousands of Irish citizens and done enormous damage to the country and yet this fool thinks that he should not be condemned.

Apart from demonstrating an innate stupidity McStay’s attitude tells us just how deep in denial many Irish people are regarding corruption in Ireland.

Alan Dukes – On another planet

Alan Dukes and Kevin Gardiner, economist and the man who coined the phrase Celtic Tiger, were discussing the ongoing financial crisis on Today with Pat Kenny during the week (Thursday?).

According to Gardiner it’s all to do with confidence. People are feeling bad about themselves and the country. All that’s needed is a change of mindset and everything will be just grand.

Dukes, the alleged taxpayer’s representative on the board of Anglo Irish Bank, was in full agreement.

Taxpayer’s have cause to worry as to what planet Dukes is living on after listening to his plans for Anglo Irish Bank.

We have put together a restructuring plan. The first phase is the NAMA operation. The next phase is to stabilise the operation of the bank and finally to split the bank into a new Anglo and a bad bank and make the new Anglo a business bank and perhaps part of the third banking force.

When asked what was the bad bank part of the new Anglo he replied.

It’s a bit like NAMA, it’s where you park the less well performing bits of the loan book and gradually work them out over a period of time.

But, but…I could hear worried taxpayer’s saying…Isn’t that what NAMA is supposed to do in the first place?

As for the third banking force? Senator Shane Ross, writing about it in today’s Sunday Independent calls it the third banking farce. It’s worth a read.

Central Bank governor now well integrated into the system

The astronomer was explaining to his audience that the earth would be destroyed in 4.5 billion years time when the sun explodes.

A lady, shocked to hear this news, checked with the astronomer. Did you say the earth would be destroyed in 4.5 million years?

No, replied the astronomer, 4.5 billion. Oh, said the lady, sitting down, that’s a relief.

The same logic can be applied to the Central Bank scandal where, apparently, everybody was relieved to learn that 52 spouses of staff had gone on 71 trips over two years and not, as was first thought, altogether on one trip.

I can see this ‘trick’ being enthusiastically taken up by politicians and officials as the ultimate red herring. Politician X, discovered to have defrauded the taxpayer of €50,000, will be off the hook when it’s learned that the fraud was only €49.000.

The official reaction to the Central Bank scandal makes one thing clear, nothing has changed.

The new Governor, Patrick Honohan, on first taking up his post naively expressed puzzlement at how banks could have been so reckless and called for an inquiry; he wanted to get at the truth.

Clearly, this unprecedented attempt to bring accountability to a corrupt banking system sent shock waves throughout financial and political circles.

There must, therefore, have been great relief when Honohan’s response to the expenses scandal clearly demonstrated that he had quickly learned how to work the system.

I knew nothing about this, I’m not responsible but I have put a stop to the practice and then, in traditional Irish style, he pulled down the shutters.

Was former governor John Hurley accompanied by his wife on a taxpayer funded trip to a symposium in the Rocky mountain ski resort of Jackson Hole? – Not telling you.

Was former governor John Hurley accompanied by his wife on a trip to Cape Town in 2007? – Not telling you.

Was former governor John Hurley accompanied by his wife on a trip to Paris in 2006? – Not telling you.

What about details on a number of foreign trips taken by senior officials in 2007/08? – Not telling you.

Yes, Mr. Honohan is well and truly integrated into the Irish system of secrecy and non accountability.

We’ll hear no more calls for investigation from this man.

Lies, secrecy and arrogance is still the prevailing attitude

The latest report by the Comptroller & Auditor General (C&AG) into FÁS reveals some very questionable activities by its staff.

€200,000 on flights for people not working for the agency. Apparently, this gravy train, funded by the taxpayer, included journalists, politicians, spouses and friends.

There was also questionable expenditure on golfing events, sporting events and concerts, the majority approved by the incompetent, disgraced but well compensated Mr. Molloy.

Money was spent without authority, the FÁS board was effectively lied to and credit cards were thrown around like drunken sailors in a brothel.

But the most shocking and disgusting aspect of this scandal is the arrogance of the civil servants involved including the C&AG himself.

For example, it is reported that up to six top executives at FÁS were paid bigger bonuses than they were entitled to in 2008. These bonuses were approved by the incompetent Mr. Molloy and sanctioned by the Departments of Enterprise and Finance.

Incredibly, the executives have not been asked to pay back the money which FÁS says was paid in error.

If this was a social welfare ‘error’ the applicant would instantly find himself the subject of an investigation and the money would be deducted from his income forthwith.

A spokeswoman for the Department of Enterprise declined to comment. The incompetent Mr. Molloy also declined to comment.

These people are effectively telling the ripped off taxpayer – take a hike, we don’t have to account for how we spend your money.

Despite constant praise from the media the office of the C&AG also has questions to answer.

Former acting chairman of FÁS, Mr. Niall Saul, was told by Mr. Buckley that controls at FÁS were excellent, that there were no serious problems.

Mr. Saul rightly concluded that if the C&AG was a private company it would be lucky not to be fired.

This shouldn’t surprise ripped off taxpayers when we remember the infamous Bord na gCon investigation carried out by the C & AGs office.

Despite findings of at least one case of serious fraud and many other questionable activities the C&AG, who, bizarrely, is also the auditor of Bord na gCon, concluded that

in general the funds of Bord na gCon were properly applied.

As I write another scandal has broken involving the C&AG and the Central Bank. The media is focusing on an error made by the C&AG when he reported that 52 spouses of staff attended meetings on a single trip when in fact the meetings involved several trips.

The real scandal here was the refusal by the C&AG to disclose what organisation was responsible for this alleged abuse of taxpayer’s money.

Once again, Irish citizens had to rely on the media, RTE on this occasion, to provide them with information that should be immediately forthcoming from state agencies.

Just who does Mr. Buckley think he is in refusing this information to Irish citizens? What were his motives in putting the interests of Central Bank staff above the interests of the people he is allegedly representing?

And what does this affair tell us about the new and much praised Central Bank governor, Patrick Honohan?

On the first occasion he is asked to account for his office he tells us to take a hike. Even now he is refusing to disclose who went on the trips or how much they cost. Irish taxpayer’s have a right to know this information.

And what does all this say about the so called reform of the political and financial sectors? Well, it’s obvious;

There is no reform, secrecy is still the name of the game, ripping off the taxpayer is still rampant, lies, half truths and dissembling is still the favoured response and arrogance is still the predominant attitude.

The political, administrative and financial system that has run this country into the ground is beyond reform.

Nothing will change until the Irish people wake up and throw these people and their corrupt system out of office and out of power.

Copy to:
Central Bank
Comptroller & Auditor General
FÁS