Category: Banks & Finance

The safest place in the Cosmos for those suspected of white collar crime is in the welcoming arms of the ODCE

The investigation into the collapse of Anglo Irish Bank has been formally put into cold storage where it will remain until all those involved are dead and/or the whole scandal becomes nothing more than a thesis subject for students of history.

With hardly a murmur from the media and complete silence from the body politic the High Court has extended the investigation by the Director of Corporate Enforcement (ODCE) by a full year.

To date the ODCE had been granted only six month extensions which were, at least initially, strongly questioned by judge Peter Kelly.

But Judge Kelly has long since been put into his box and is now in full conformity with the State’s handling of the investigation.

The ODCE had sought a three year extension but, I suspect, this was to allow judge Kelly to look tough by granting just one year.

Next year, the ODCE will probably ask for a five year extension and receive three from the ‘tough’ judge.

In addition to endless extensions to what in other countries would have been a relatively simple legal process, we have also been informed that there will be a long wait before a trial date is even set.

This is because there is a need, apparently, for a ‘mammoth’ disclosure of documents by the DPP to the defendants.

The processing of ‘massive’ amounts of documents has now been added to the long list of State excuses for delaying investigations into white collar crime.

And when (if) a trial finally does commence we are told by the DPP it is likely to go on for some time because of the matters being investigated.

In functional jurisdictions such matters are dealt with regularly, efficiently and as a matter of legal routine.

And just in case somebody slips up and the process is accidently accelerated from a snails pace to that of a tortoise the ODCE seems to have taken out a little insurance policy

Apparently the investigation has disclosed (mysterious) matters that would warrant other decisions from the DPP.

Naturally, the great unwashed are not told what these ‘matters’ are but we can be sure they’re good for a least another couple of years delay.

Ok, let’s return to the real world.

As I have written on many previous occasions nobody will be held accountable for what happened at Anglo Irish Bank or any of the other banks.

The safest place in the Cosmos for those facing allegations of white collar crime is in the warm, welcoming arms of the ODCE.

Copy to:
ODCE

Minister Coveney may have helped bankers get off the hook

I wrote recently about how the Irish Examiner completely misinterpreted the comments of Agriculture Minister Simon Coveney regarding the jailing of bankers.

Notwithstanding this misinterpretation the fact remains that Minister Coveney did, according to news reports, utter the words:

I’d love to see bankers in prison.

This utterance could prove very useful to those bankers facing trial for alleged wrongdoing.

In 2000 former Tanaiste and Progressive Democrats leader Mary Harney expressed the opinion that former Taoiseach Charles Haughey should be convicted for his wrong doing as a politician.

Haughey’s lawyers immediately argued that his trial should be postponed until such time as the unfairness created by such adverse pre-trial publicity abated.

Incredibly, the judge in charge of the case agreed with this argument and the case was postponed indefinitely.

The judgement meant, effectively, that Charles Haughey was immune from prosecution until such time as all memory of his career was collectively forgotten by the nation.

As a result of Simon Coveney’s comments about jailing bankers we are likely to see the legal representatives of these people dusting down the Haughey case file in the hope of obtaining a similar judgement.

As the bizarre Haughey judgement was never overturned or even challenged there is every likelihood that they will be successful.

What Minister Coveney was really saying

An editorial in the Irish Examiner takes Agriculture Minister Simon Coveney to task for talking the talk on rogue bankers and politicians but not walking the walk when it comes to action.

Curiously, the editor has completely misread the meaning of Minister Coveney’s comments.

Coveney is not actually calling for bankers to be jailed.

Rather he’s dismissing all those who are calling for bankers to be made accountable.

Some quotes from the minister makes the point

Ireland needed to find solutions to get “out of the painful mess” rather than focusing on who was at fault.

All of that stuff would be satisfying, I’d love to see bankers in prison. I’d love to see senior politicians from previous governments losing pensions, I’d love to see people in the dock.

That will take its course through police investigations, through Oireachtas Committees on banking and so on.

But people wanted higher incomes or solutions, he said, rather than him “bitching politically” about previous governments.

Translation:

Yes, I’d love to see bankers in jail but – it’s not going to happen.

Yes, I think politicians from previous governments should lose their pensions but – it’s not going to happen.

Trying to find out who is to blame for the catastrophe is just a waste of time.

We must never look back, it could be embarrassing.

Better to park all investigations with the police and Oireachtas committees where they will never see the light of day.

Economist frightened and surprised by banks behaviour

The head of Bank of Ireland, Richie Boucher, gave two fingers to the Oireachtas Finance Committee yesterday.

Bankers have been giving the two fingers to politicians and by extension to the people of Ireland for decades with no fear whatsoever that they will be brought to account.

For decades, politicians have been ‘outraged’ by the arrogant and greedy behaviour of bankers but for some odd reason never seem to get around to actually doing anything about the situation.

And it’s not just politicians who seem to be completely powerless in the face of the all powerful banks.

Take Tony Foley for example. Mr. Foley is a seasoned academic; he’s a senior lecturer in economics, no less, at DCU.

But despite his academic credentials, position and experience Mr. Foley effectively admits that he has no idea what’s going on when it comes to bankers in Ireland.

Not only that but Mr. Foley is also frightened, very worried and greatly surprised by the antics of Irish bankers.

Here’s some of what he had to say on The Late Debate (1 Nov) the other night.

AIB is 99% owned by the Government. It frightens me that AIB are talking about raising interest rates by about five or six percent, that they would have to increase their margins hoping to offer investors a return of about 8 to 12% in equity.

And the thing that surprised me greatly was, this is a government owned bank.

Has the Government told them that this is the target equity requirement?

They talked about talking to investors; I didn’t know the Government told them to talk to investors.

They were talking of maybe in two years investors might be willing to put money in.

I wasn’t aware there was a timetable for re-privatisation of AIB.

What do you think is going on Mr. Foley was asked.

I think they’re forgetting that they’re owned by the state and I think they’re behaving as private sector banks.

We don’t want investors now because the Government owns the equity. We want the bank to operate on behalf of the public.

Later on we might be looking for investors if we want to sell them so I don’t even know why they’re talking to investors right now.

As my good deed for the day I’m going to enlighten Mr. Foley, I’m going to try and relieve him of some of that fear, worry and surprise under which he is clearly labouring.

The state does not own AIB; it’s all pretence.

AIB and the State are marking time in the hope that the crisis will work itself out.

The state is marking time in the (vain) hope that AIB and the economy will somehow recover.

When (if) that happens the pretence that the people own the bank can be quietly dropped.

AIB will then return to what it does best, exploiting and ripping off its customers.

The billions owed by the bank, will of course, remain off the books and on the shoulders of citizens for decades to come.

AIB is also marking time until things settle down. In the meantime it’s continuing to operate, with the full backing of the political and administrative system, as a private sector bank.

This is the part that puzzles Mr. Foley and many other ‘experts’.

They simply cannot accept a brutal reality that has been obvious for many decades.

The state/administrative/political system supports the banks no matter what they do. We saw it with the Dirt scandal, with Ansbacher, with NIB, and endless other scandals.

It’s crucial to understand that state authorities knew about and in some cases actively supported these activities as they were happening.

It’s also crucial to understand that white-collar crime is not actually a crime in Ireland; it’s an intrinsic, well-established aspect of the governing process.

That’s why politicians, bankers and other people of power and influence are, and never will be, brought to account.

The situation will only change when enough people realise that our corrupt political/administrative system does not act in the interests of Ireland and its people.

Copy to:
Tony Foley

Ireland: Still the Wild West when it comes to financial regulation

It has always been the view of Public Inquiry that Ireland is the Wild West when it comes to financial regulation.

And despite the fact that an almost complete lack of financial regulation played a major role in the destruction of our country there is still little or no regulation when it comes to financial activities.

This view is confirmed by a report on One News (8th report) today.

Researchers at Griffith University in Australia found Ireland among the easiest countries in the world in which to set up an untraceable shell company.

Shell companies, which have anonymous and untraceable owners, are often used by criminals and terrorist organisations to launder money.

It is illegal under Irish and international law to set up such a company.

The researchers contacted 3,700 corporate service providers in 62 countries enquiring about setting up shell companies.

Ireland was ranked 56th out of the 62 countries for the apparent ease with which researchers were able to find a provider willing to set up an untraceable shell company.

In a better performing country it took 25 or more different attempts by researchers to find a corporate service provider that would set up an untraceable shell company, in Ireland the figure was less than five.

In other words: Don’t mind about all that regulation/law stuff, we’ll deal with anybody, even terrorists, it seems.

Kevin O’Doherty Managing Director of Compliance Ireland, which specialises in advising firms on their legal responsibilities in this area, was not happy.

It’s a matter of concern.

That has to be the understatement of the year; he goes on:

We’re down there with the Philippines, Ghana and Kenya, which is not the sort of company we want to be with.

People will often throw insults at so-called tax havens but Jersey and the Cayman Islands were right up at the top with 100% compliance.

And that’s where we need to get Ireland Inc. playing. We don’t want people saying that our standards are actually quite shoddy.

Look at developing nations like Saint Kitts and Nevis and Albania scored way higher than Ireland.

And you would like to think we would have stronger controls and procedures in place.

The reference to Jersey and the Cayman Islands suggests that unlike these two islands, Ireland is not just an offshore tax haven but is also quite prepared to risk facilitating criminals and terrorists.

As for shoddy (financial regulation) standards, Ireland fully deserves to be ‘down there’ with the Philippines, Ghana, Kenya and Albania.

Like these countries, corruption in Ireland is not just an occasional event but is a normal and officially accepted part of how business is done.

Oddly enough, it’s the Department of Justice rather than the Central Bank that deals with this matter.

I phoned today to ask some questions but was told that those who deal with such matters don’t talk to the public.

All queries must be submitted in writing.

Copy to:
Department of Justice
Central Bank

The curious case of Alibrandi's bank accounts

I see the former papal nuncio to Ireland archbishop Gaetano Alibrandi legged it out of the country in 1989 when it emerged that there were large amounts of unaccounted for money in three Irish bank accounts belonging to him.

What’s really curious about this affair is that it was the Department of Foreign Affairs that, apparently, challenged Alibrandi on the matter.

It’s curious because during the 1980s Ireland was an open sewer of corruption.

The criminal politician Haughey was busy plundering the nation’s wealth with the willing assistance of his business and political cronies.

Such corrupt schemes as Ansbacher and DIRT were in full swing and the banks were openly robbing the state and their customers as a completely normal part of their financial activities.

In other words; unaccounted for money in banks during the 1980s was a fully acceptable aspect of Irish culture.

So-called law enforcement authorities, who should have been doing what Department of Foreign Affairs personnel, were, apparently doing, simply held their collective noses as they stepped over the rotten sewer.

So why, I ask, did those gentle, nothing to do with law enforcement folk at the Department of Foreign Affairs, get all hot and bothered about poor old Albrandi’s accounts?

Of course I don’t know but I am certain of one thing.

It wasn’t because Irish authorities were so shocked at the discovery of a dodgy bank account that they asked Alibrandi to leave the country in case such practices were to infect the honesty of Ireland’s governing class.

The ECB is coming to town to replace Irish 'Wild West' financial regulatory system

Last Wednesday the Central Bank deputy governor Matthew Elderfield told the Irish Funds Industry Association that change is coming.

Change is coming and it will be significant. As I said my key message to you is engage in the debate and be prepared to adapt.

Adapt indeed – and quickly. Why, because the days of gombeen regulation are rapidly coming to an end.

For decades, Ireland, the Wild West of European finance, allowed and facilitated dodgy financial activity that, ultimately, played a major role in the onset of the current economic catastrophe.

But the good times are coming to an end, the European Central Bank (ECB) is coming to town and, thankfully, the Irish gombeen (non) regulatory regime will be no more.

The ECB will have wide ranging powers including the ability to shut down banks, carry out raids and fine them 10% of their annual turnover for not complying with regulations.

So, not only can Irish citizens breath a sigh of relief that, at last, a truly professional financial regulator will be looking after their interests, they can also look forward to something they have never witnessed before, banks actually being raided and fined substantial sums for robbing their customers and other crimes.

The Irish Central Bank will be (rightly) reduced to the level of ensuring that ECB instructions are properly carried out although, given its record to date, even that task will require major reform and a management cultural change of gigantic proportions.

The only worrying aspect of the new regime is that the Central Bank will retain some oversight of banks and be responsible for consumer protection.

I’m sure, however, that the ECB will quickly realise that even these duties are beyond the capabilities of our Wild West style of ‘regulation’ and take appropriate action.

Copy to:
Central Bank

Bazooka assets and the 'rich' bankrupts

Minister for Justice Alan Shatter has said he would need convincing that those applying for bankruptcy should be allowed to keep high value items like rings and other personal jewellery (Irish Independent).

One individual’s €100 ring that has ceremonial significance might be another individual’s €200,000 or €300,000 diamond bazooka that they regard as having a great deal more ceremony than the €100 ring.

They’re looking for a debt relief notice but they want to hold on to the ring worth €300,000 or €400,000.

Now let’s get real about what we’re talking about here.

In order to get more ‘real’ Minister Shatter could perhaps tell us why the bankrupt Sean Quinn is allowed to retain his palatial, multi-million (bazooka) house while ordinary peasants will have to prove that their assets are under €400 in order to qualify for bankruptcy.

And are we to believe that Sean Fitzpatrick has been denied access to all his ‘bazooka’ assets?