Confirmed: The so called Financial Regulator is rotten to the core

Former AIB internal auditor Eugene McErlean confirmed today what we at Public Inquiry have been saying for years (as far back as 2005). He told the Committee on Economic Regulatory Affairs:

“It is my opinion that the Financial Regulator’s report published in December 2004 failed to tell the whole story about overcharging. The report gave the impression that the regulator had acted in the public interest. I think it is relevant to consider that if a whistleblower had not exposed the problem in 2004 then the overcharging practices may have carried on indefinitely.”

This statement makes the following points:

The so called Financial Regulator acted against the public interest by deliberately keeping secret, information that was vital for consumers.

By its actions the so called Financial Regulator was acting in the interest of a bank that was robbing consumers.

By failing to take action against this robbing bank the so called Financial Regulator exposed consumers to potentially great loss.

By failing in its duty to act against this robbing bank the so called Financial Regulator has helped to endanger the international reputation of Ireland.

The so called Financial Regulator has a putrid record of tolerance and facilitation of thieving financial institutions and as Mr. McErlean points out is quite prepared to tolerate theft indefinitely. There is no evidence whatsoever that this policy has changed, we are still waiting for even a single banker to be arrested.

Mary O’Dea, currently acting head of the Financial Regulator, should be sacked immediately. In recent weeks we have heard several so called informed commentators praising this woman because she questioned the mafia style actions of one bank at one meeting after the avalanche of filth had already engulfed and enraged the general public.

She has been a senior director of Ifsra since its establishment in 2003, she is and was fully aware of all its rotten policies that effectively protected corrupt financial institutions and exposed the general public to great loss and has seen the international reputation of Ireland in tatters.

And she’s not the only one who should be fired in disgrace. For years, I’ve had to listen to insulting, condescending, bullshit from a number of departments at Ifsra about so called financial complexity; about secrecy laws, about ‘who the hell do you think you are Mr. Sheridan calling us and asking impertinent questions.

The whole rotten edifice should be cleaned out once and for all and that should include all staff members who knew, by dint of their position, what was going on in this organisation that has betrayed the Irish people.

They will have to be sacked because, clearly, their long and close association with the rotten stench coming from the Irish financial sector has long ago destroyed their sense of morality, a sense of morality that would, in normal people, lead them to immediately resign in shame.

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Financial Regulator (so called)

Very strange goings on at Irish Nationwide Building Society

Very strange goings on at Irish Nationwide Building Society (Irish Independent).

Apparently, Noel Harrington a branch manager in Limerick, was asked to step aside while an independent inquiry was conducted into the way he handled his own loans and those of a property developer with borrowings of €36 million.

Yet, Mr. Harrington faces no allegations, is on full pay and is not regarded by his employer as being under suspicion.

The independent inquiry into non allegations that Mr. Harrington’s employers have no suspicions about apparently concerns a substantial €1.2 million difference in a redemption fee, in other words, €1.2 million has gone astray somewhere.

And who is conducting this ‘independent’ inquiry, is it someone inside the Society? Is this not a matter for the Financial Regulator or the Garda Fraud Squad or did the Financial Regulator tell the Society – go away and hire a private investigator, we have enough on our plate already.

The real cause of the global financial crisis

Most people agree that there are two principal reasons for our ongoing financial crisis; the global crisis that originated in the sup prime market in America and the bursting of our own property bubble.

Sunday Independent columnist Gavin Duffy, however, thinks differently. According to Mr. Duffy we Irish are suffering from a persecution complex, we’ve convinced ourselves that the situation in Ireland is worse than any other country (Questions & Answers, 1st question).

In fact, says Duffy, every country in the world is suffering from a property bubble on the same scale as we are because of “an unholy trinity of three seismic events that happened in the last twenty years.”

1. The fall of Communism resulted in a sudden flow of huge amounts of money into the West.

2. Technology that moved this money around the world faster than anyone could count it or any regulator could police it.

3. After a millennium of serfdom the Chinese decided to open up their country and provide the global economy with low cost manufacturing.

That money flowed into the West and it had to find a home and it found it in property and that’s what caused the global financial crisis.

So, does everybody understand? The fall of the Soviet empire, fierce fast money and an evil Chinese plot to swamp the world with low cost goods.

Now Duffy, pass me that joint, you’ve been sucking on it for far too long.

Hurley: Stating the obvious

“The State was facing a difficult year in 2009.”

This was one of the gems of wisdom from John Hurley, governor of the Central Bank, a man who receives but doesn’t earn; an outrageous salary of €368,000 per annum (Irish Times).

Every child in the land knew years ago that the situation was serious when the likes of Hurley was saying there was no problem.

Hurley: A government lapdog

I’m delighted to see that the cowardly and dishonest ramblings of John Hurley, governor of the Central Bank, to the Joint Committee on Economic Regulatory Affairs last week have been exposed.

John McManus, writing in the Irish Times, effectively concluded that Hurley was/is nothing more than a lapdog for a government that didn’t want to know about the very dangerous bubble that was building, a bubble that was bound to burst with dire consequences.

No accountability, no justice, no hope.

On 11th December last Bernard Madoff was arrested by police on allegations of major fraud. Yesterday, (three months later) he was taken away to jail in handcuffs from a court of law and will receive a jail sentence in June of up to 150 years. He is likely to spend the rest of his life in jail. While waiting for his trial Madoff was kept under house arrest.

On 18th December last Sean Fitzpatrick, then chairman of Anglo Irish Bank, resigned when it was revealed that he had engaged in some very suspect financial transactions. No investigation by the police took place and no arrests were made.

Mr Fitzpatrick is still walking around and can even head off to sunny climes when the Irish weather gets him down, despite the suspicious nature of the transactions. The Financial Regulator and the Government appear to have made an immediate judgement that Fitzpatrick had done nothing illegal. Surely that is for a properly resourced fraud squad to decide?

As Madoff rots in jail the Office of the Director of Corporate Enforcement is still considering his options on the Fitzpatrick case. Judging from past experience we can expect, at some point in the distant future, that a High Court inspector will be appointed to investigate.

That investigation will take anything up to six years before the matter returns to the ODCE who will then consider, for an unspecified period, his next move.

He may refer the matter to the DPP, but that is highly unusual but even if he does the DPP will also ponder his options for at least three or four years.

The most likely choice for the ODCE will be to try and get Fitzpatrick barred from acting as company director; this is the absolute minimum punishment for corporate crime.

It’s difficult to say how many years this will take as the ODCE has never successfully completed a major case. He has been on the National Irish Bank case since 1998, the Bailey brothers for about six years and Jim Flavin of DCC is still only at the High Court inspector stage. Very conservatively, we are looking at ten to fifteen years before even minimum justice is imposed.

Conclusion:

America – Police, arrest, courts, jail – all within three months.

Ireland – No police, no arrests, no courts – No accountability, no justice, no hope.

Copy to:
ODCE

Ireland's international reputation – the can of worms is open

Bob Semple, partner in the Risk Management Services department of PricewaterhouseCoopers was talking about corporate governance on Today with Pat Kenny (Thursday).

Asked about the damage done to Ireland’s international reputation from recent scandals he said;

“I think we’re very badly damaged. A colleague over at a meeting in Amsterdam just last week with PwC colleagues from all around the world and every second joke was a crack against Ireland. It really makes me so sad and mad and we really must do something about this.” We have to get directors to stop and reassess where they’re at.”

Pat’s next question was curiously worded;

“Do people have to go to, I wont say go to jail because that would probably be a first time for white collar crime in Ireland, do people need to be punished.”

Semple.

“I think they do and I’m surprised at the number of people who are saying to me that handcuffs and prison bars is the only answer to restoring our reputation internationally.”

Clearly, Semple and Pat would be amazed if someone actually ended up in jail. This is an indication of how far away we are from reality.

Isn’t it also amazing to see people like Semple coming out of the woodwork screaming that something will have to be done about white collar crime in Ireland – only after the international community has rumbled us?

None of these people had the slightest concern for the massive damage done to Ireland and its people by white collar criminals so long as so called Irish regulatory agencies were able to keep a lid on the tin of worms.

The all powerful 'independent legal advice' defence

Before Patrick Neary completely disappears into his very rich sunset there’s one fact that needs to be put on the record.

The board of the Financial Regulator gave themselves the power to decide what they should be paid. In other words Patrick Neary himself decided that he was worth a lump sum of €428,000, a special sum of €202,000 for keeping his mouth shut and an annual pension of €142,670 (Irish Independent).

Some politicians ranted and raved when they discovered that civil servants had taken on such amazing powers but, to date, they’ve done nothing to bring these greedy and incompetent people down to size.

It seems that this reluctance to act is closely related to that most powerful and mysterious concept of Irish public life – Independent legal advice.

Once these holy words are uttered no more questions can be asked. Not even simple questions like; what, precisely was the advice offered and who gave it? No, once these most powerful of words are uttered the silence is total, complete, nothing more can be said on the matter.

It is even said that a member of this special club could get away with robbing a bank operating under the ‘independent legal advice’ concept. In fact, such robberies are quite common in Ireland.

It should be noted, however, that the ‘independent legal advice’ defence is only available to certain classes of people like senior civil servants, politicians and the higher echelons of the business sector. Peasants do not qualify as they are provided with their own special system commonly known as criminal law.

Moving on – to planet Duffy

When I awoke on Saturday morning I had no idea that I was about to be transported to another planet. But that’s exactly what happened when I tuned into the Marian Finucane Show and was whisked off to planet Duffy by the soon to retire chief executive of Bank of Scotland Ireland, Mark Duffy.

First a little background before lift off. According to Duffy he first became interested in banking when he was introduced to the lovely house and cars belonging to the daddy of a former girlfriend. He stressed, however, that he is not interested in nor motivated by money.

Duffy started off his banking career with Sean Fitzpatrick a man for whom he still has great respect although he did concede that Seanie had created a bit of a problem.

Throughout the interview Duffy repeatedly informed the nation that there is only one solution to the present crisis – take the bad apples out of the barrel and move on. By bad apples he means, primarily, the bad debt in the system. He didn’t specify who should take responsibility for all this bad debt but we can guess.

Here’s a synopsis of reality on planet Duffy. (My translations are in brackets so that ordinary earthlings can understand the language of planet Duffy).

“It really appalls me as a proud Irishman who has committed his life here to actually see how the outside world views us at present; we have to stop. The banks are us and if we inflict pain on the banks we’re actually inflicting pain on Ireland.”

(Keep quiet, don’t rock the boat, pretend nothing happened, move on).

“Everybody needs a hate figure, the banks are a suitable hate figure; Sean Fitzpatrick is a suitable hate figure; we’ve got to move on.”

(Neither the banks nor Sean Fitzpatrick did anything wrong, they just happen to be a random target selected by the public to vent their anger for some perceived but as yet unknown wrong).

“The bankers have taken a terrible punishment from the media.”

(As above).

“In Ireland we have only a small number of people (capable of running the banks); it takes years to get the skills to actually operate at that level.

If we take them out and shoot them (we wish) or have bank policy decided by chat shows and the media we’re going to lose some critical talent going forward.”

(A year in Mountjoy is more than enough to provide the skills and habits necessary to run Irish banks as they have been over the past several decades).

“I asked my own press office to put together the amount of media, radio and TV comment on it and it is just enormous. We are making ourselves the laughing stock, we need to move on.”

(It says a lot about Duffy that he would actually ask his press office to make such a list. Again, the ‘laughing stock’ comment is the usual denial – ‘let’s all pretend that there was no corruption involved in case the international community finds out the truth about Ireland’).

“We don’t have a toxic debt problem in Ireland, what we have is a property problem.” “The downturn won’t last long, not the five or ten years of the doom and gloom merchants.”

(What?? And this man is paid millions for, as he says above, his very rare ‘skills’).

On his reasons for leaving the bank. (No, really, he’s serious).

“I can do no more in the bank; I want a bit of time out, bit of free time with my family. It’s been a hectic 16 years, I’ve worked very hard, 130 flights a year; it takes its toll…I’m a hands on manager, I get my hands dirty, I’m a people’s person. You’ve got to set standards, honesty and service is what people are going to be looking for going forward.”

(If the word ‘bank’ is taken out of this quote and replaced with ‘church’ or ‘charity’ you could be forgiven for thinking that this man is a priest working for the poorest of the poor).

At this point we returned to earth when Marian said there was a whole stream of very angry listeners calling in but it wasn’t long before we were back on planet Duffy

“We understand that, people are venting anger, we need to fix the problem and move on. I mean bank staff are being spat at and abused verbally and physically. People have a generic across the board anger that they’re venting at present.

I can understand that but we’ve got to move on…I’ve lost money, my family have lost money, we’ve all lost money as a society but we’ve got to move on.”

(Hands up all those who believe that he and his family lost money – thought so. And we can be sure that this man is safely removed from all this public venting of anger).

“There’s a difference between the UK and Ireland. I’m sure they’ve got the same level of scandal but they don’t wash their dirty linen in public. They’re getting on with solving the problems…hurting banks ultimately hurts us all, we’ve got to move on.”

(Again, denial and insulting waffle).

On being asked does he still trust the banks? “I’d put my money in Anglo.” (Yeah, right).

Back on earth a listener called in to the show.

“I have lost my job, my pension, my bank shares and my home is worth 50% less than it was last year. I don’t qualify for dole because of some cash savings that I have, I have to feed my kids and pay my mortgage.

If it was up to me, he, and other bankers, would be going to jail and not into the sunset waving goodbye to us suckers. We want our pound of flesh and we want blood.”

(Clearly, Duffy, not used to hearing about the brutal reality created by his type, hesitated before answering as he struggled to say something different, anything to avoid repeating the waffle he had spouted so far – he failed).

“Well, you know, again, that’s a very, very angry comment and I can understand that. I don’t agree with a lot of what she said but I can understand. People are just not differentiating between bankers and banks (what?). It’s just a generic problem…we’ve got to move on.”

Meanwhile, back on planet Duffy. Marian asked: Did you get a massive handshake?

“You can ask but I won’t tell you, Duffy coyly replied. I was extremely well treated by the bank after 16 years and I leave it very happy, very satisfied and I’m looking forward to my freedom.”

(Ah yes, his freedom, his wealth, his happiness, his satisfaction – the complete opposite of what faces the many victims of the banking sector).

Marian asked him would he be worried about the groceries.

“I’m not financially motivated; I’ve always being lucky with money. I have bills to pay and a salary helps with that.”

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Mark Duffy