Category: Civil Service

The sheriff is not for the good guys

BANKING Rottweiler Liam O’Reilly still doesn’t trust the banking sector not to get up to mischief again. “There’s an old saying. Trust . . . and verify,” he smiles.

The above quote is from an interview with the Financial Regulator’s chief executive, Liam O’Reilly in last Sunday’s Independent .

Anyone unfamiliar with the fact that Ireland is a corrupt state might get the impression that O’Reilly is an Eliot Ness type figure relentlessly pursuing the corrupt and protecting the interests of honest citizens.

An analysis of the article will clear up any such misconceptions.

AIB will have more reason than most to cheer O’Reilly’s impending retirement from the Financial Regulator’s office, having been hit for €34m after the forex rip off

AIB were not hit for €34m. They were not hit for anything. The €34m in question was the amount they stole from their customers and that’s all they were required to pay back.

At the time the Financial regulator did not have the power (even if it wanted to) to impose any punishment on AIB because the civil servants who established the organisation did not provide for any such power. This is like a car manufacturer designing a car with no petrol tank – in other words, gross incompetence.

There was always a very clear determination by (AIB chairman) Dermot Gleeson and the board to sort it out. It’s not to say that in this room that there weren’t some very hard and tough conversations. But it was always businesslike. It was never personal,” he says. “A bit like the mafia.

Unwittingly, O’Reilly hits the nail on the head here. ‘A bit like the Mafia’ Can you imagine the Securities Exchange Commission (SEC) the American equivalent of our Financial Regulator, inviting Enron into the office to “sort out” allegations of very serious corruption? All done in private with no police involvement.

In the US, the police and SEC were involved from the start. Everything was done in public and through the courts, in other words justice was seen to be done. Our Financial Regulator operates, for the most part, in secrecy. This policy benefits the corrupt and damages the interests of ordinary citizens.

On the Cologne Re corruption, O’Reilly is quoted as follows.

“We were on top of that from day one…”We were quietly moving on it.’

Quietly is the operative word here. The Australians and the Americans immediately initiated legal action, keeping their public (customers) fully informed of events while our Financial Regulator kept things quiet preferring to merely “monitor” the situation. This is despite the fact that the corruption originated in Dublin’s IFSC centre. No wonder the New York Times labeled the IFSC “the financial wild west”.

‘Up until May of this year the regulator had secured over €69m in refunds for consumers’

‘In refunds’?? The consumer, somehow, is supposed to be grateful that the regulator managed to get refunds for stolen money. No fines, no police involvement, just quietly refund the stolen money.

‘Some 32 institutions have been nailed for 259 cases of overcharging since May 2004.’

What does O’Reilly mean by “nailed’?? None of these institutions were punished in any way whatsoever for their corruption. All of them are protected by the regulator through a policy of secrecy. This secrecy puts the ordinary citizen at a serious disadvantage in that he is unaware that he may be dealing with an organisation that has a record of stealing from its customers.

‘Perhaps AIB won’t be the only bank who’ll be happy to see the sheriff leave town.’

AIB were never afraid of O’Reilly nor do they care who replaces him. They are safe in the knowledge that his successor will maintain the policies that have always protected the financial institutions at the expense of ordinary citizens.

That’s how things are done in the financial ‘wild west’ sector in Ireland

Irish/Italian accountability

The ongoing case involving the Bank of Italy’s governor, Antonio Fazio makes an interesting comparison with how things are done in the Banana Republic of Ireland.

Fazio is facing questioning by magistrates for allegedly abusing his position by favouring Italian banks over foreign banks. If Italian standards of investigation and accountability were applied in Ireland, there would be dozens if not hundreds of Irish executives and politicians in jail.

Let’s just compare the Italian case with one of the hundreds of corrupt practices uncovered in the Banana Republic in recent years.

Irish banks and other financial institutions robbed hundreds of millions from the State through a well organised fraud involving DIRT tax. The Central Bank, Dept of Finance, Revenue Commissioners and various Ministers for Finance all knew that this fraud was in operation. Indeed, Revenue actually facilitated the fraud by issuing a memo that specifically prevented its own officials from checking the banks.

When the media (the only effective regulator in Ireland) uncovered the fraud, the banks were only required to pay back a portion of the money stolen, with some interest. No police, no magistrates, no courts, no jail, no accountability.

In Italy, Fazio is merely accused of favouring an Italian bank over a foreign bank in a takeover bid. For this he could be facing a three year jail sentence. In Ireland, this kind of activity would attract praise and promotion.

But most astonishing of all for Irish citizens, used to living in a state without integrity or accountability, is to witness the Italian Economy Minister, Domenico Siniscalco, resign in protest over the scandal saying that Italy’s reputation was being damaged.

On the waste of money

Looking back at Leader’s questions from last week I continue to be amazed, or dismayed even, at the nonsense Bertie Ahern comes out with. Machiavelli would be proud.

The Taoiseach: Deputy Kenny tried to say that it is an IT system. It is not an IT system.

Mr. Allen: It is a system that does not work.

The Taoiseach: It is a human resource system being developed for the entire HSE into the future. A large part of it is working.

Ms Enright: It is not working.

The Taoiseach: The firm in question, Deloitte & Touche, did not get the money just for consultancy. It implemented the system, trained 140,000 staff and tried to put the entire system together. That is what the money was paid for. We should have more honesty. There are difficulties with the system, but we should not have presentations, either here or elsewhere, which are totally dishonest.

Mr. Allen:A donkey is always a donkey.

Mr. Kenny: I have rarely heard such rubbish as the Taoiseach’s defence of this system.

The Taoiseach: The Deputy does not like the truth.

Mr. Kenny: He has blamed the consultants, he has blamed the health boards, he has blamed the workers and he has blamed the nurses for not working regular hours.

Ms O. Mitchell: He has blamed Fine Gael.

The Taoiseach: I have not blamed anyone.

I think that’s part of the problem Bertie.

It’s not an IT system now. But wait:

The Taoiseach: …The ICT system in question——

Ms Burton: The Taoiseach said earlier that it is not an IT system.

The Taoiseach: ——was procured following an EU tendering process and international evaluations.

Ms Burton: He said it a few minutes ago.

Truly great leadership we have.

Deloitte's services cost almost €60m

So over half of the money for the PPARS system was spent on Deloitte consultants. And what have we got to show for it? Either the civil servants are incompetent or Deloitte were taking the proverbial.

The Irish Times understands that Deloitte received €40 million in consultancy fees over recent years for the PPARs payroll and staff records system and a separate €18.12 million for work on the FISP financial information system project.

The board of the HSE, as expected, decided yesterday to put on hold plans to expand the PPARs systems beyond the four locations where it is in use.

Government 'not to blame' over €150m pay system

Mary Harney has come out and said that the present government is not to blame. Huh? Is ist just me or has the current government not been in power since 1997? Noted Harney:

“The real problem is the fact that in the health service, we have a jumble of incoherence as far as work practices are concerned, we’ve thousands of pay variations, thousands of rosters, many different grade structures and individual working arrangements,” she said.

“We had 11 different health boards: if there was any argument for getting rid of them, and many opposed their abolition, it is that this kind of chaos wouldn’t have happened.”

What a ridiculous load of shite. And going by the state of the PPARS website (one of the most backward and ugly websites I have seen in years), it seems that nobody knows what they are doing.

HSE to suspend roll-out of €150m computer system

Is this just plain incompetence or is there something more sinister involved?

The Irish Times understands that the system will have cost €150 million by the end of this year, and more than €230 million if fully implemented.

Despite this, less than one third of the people within the health system, or 37,000 people, are covered by it at present.

After he took up office in August, Prof Drumm ordered an internal review following internal complaints and reports about the system, which failed to identify a mistake where one staff member was paid €1 million in error. The mistake came to light when the staff member reported the overpayment to superiors.

Last July, when news of the overpayment emerged, the HSE blamed it on “human error”. It said PPARS was “working well and will be extended to all staff “.

In July Ta¡naiste Mary Harney said she had asked for a report from senior staff at her department on the project.

“If we have got it wrong we must put our hands up,” she said. According to her spokesman, Ms Harney has yet to receive that report.

Last night Fine Gael leader Enda Kenny, who is expected to raise the controversy in the Dail later today, described PPARs as “a farce that will make the money wasted on e-voting seem like small change”.

“A project initially costed six years ago at €8 million is now heading towards a completion cost of a quarter of a billion euro because of chronic planning, management and oversight. We get to see why under this Government health budgets are increased while front-line services still suffer.”

Two Laws

Every once in a while a case/report appears in the media that crystalises how things are done in the Banana Republic of Ireland. Last Saturday’s Irish Times reported on the case of a Land Registry official who is facing charges of corruptly accepting cheques. The Department of Justice issued the following statement.

“A number of irregularities came to light in the Land Registry during 2003 in relation to the processing and payment of fees for certain services.”The gardaa­ were duly notified and they undertook an investigation into the matter. The matter is now before the courts. No further comment can be made at this stage as it is subjudice.”

In today’s Irish Times we read

Minister for Enterprise, Trade and Employment Micheal Martin has directed that information amassed in an inquiry into three companies linked to the Ansbacher affair be passed from his department to a number of other public bodies.

The ordinary official is in court on corruption charges two years after his alleged crime but according to the Irish Times report involving the Ansbacher scandal

the findings of the investigations into Hamilton Ross, Guinness & Mahon Ireland and College Trustees remain secret, some seven years after they were initiated

(Just allow me to repeat that – remain secret some seven years after they were initiated)
The case of the ordinary official in the Land Registry office is a good example of how real democracies deal with alleged corruption – Investigation: charges: trial: appropriate punishment. (All carried out efficiently and applied to the rich and powerful as well as to ordinary citizens)
This system results in respect for justice, respect for law and order, a sense of equality in society, and international respect for our democracy.

The Ansbacher criminality primarily involves rich and powerful citizens. None of those involved will face criminal charges, none will see the inside of a jail. Deals will be done, arrangements will be made, secrecy will be maintained.
This system results in cynicism, loss of respect for law and order, loss of respect for democracy, international contempt and the deserved title – Banana Republic of Ireland.

Minister defends OPW over spending accusations

Yet more juicy stuff from the Public Accounts Committee.

The report says that over €19 million has been spent acquiring accommodation for asylum seekers which was never used. It also says it is likely that a considerable amount of this investment will be lost when the properties were sold.

The report also says that the cost of renovating a property for the Probation and Welfare Service ran to 10 times the original estimate of €150,000.

It also criticises a lease arrangement, originally entered into by Cork County Council , for the provision of temporary premises for Cork courthouse.

The report also reveals that the provision of overtime cover for prison officers on sick leave cost €8.6 million in 2002.

The Irish Times report continues:

The vice-chairman of the committee, John McGuinness (FF), said there had been a number of “ridiculous decisions” taken by the OPW in relation to property projects. He said that he hoped that the same would not happen in the roll-out of the Government’s decentralisation programme.

Mr McGuinness said he believed that if the OPW was a private company that it would be closed down as it could not go on with such losses. He said if Mr Parlon did not believe there were problems he should “take his head out of the sand”.

However, Sean Ardagh (FF)said that he would not accept that there was incompetence within the OPW.

Mr Parlon told The Irish Times yesterday the committee’s report was dated and unfair to the OPW.

He said the OPW had been involved in the provision of accommodation for asylum seekers in 120 locations around the country and the committee had highlighted five centres which were held up due to local legal challenges.

Mr Parlon said the OPW had generated €100 million last year from sales of State property. He said that if OPW was a private company he would be in line for a bonus payment. Mr Parlon described Mr McGuinness as “an opposition spokesman within the Government”. He said that Mr McGuinness was a constant critic and that he did not know what axe he had to grind.

Taxpayer facing 'some loss' over OPW deals – Parlon

I guess that would depend how you define ‘some’.

In Cork alone the renovation of the courthouse on Washington Street went over budget by €23 million. Yes over budget by €23 million. So one has to ask, was it a bad estimate in the first place or were the cost overruns the fault of the contracted builder? Indeed is there any comeback at all? Do the OPW just carry on as before or are the people responsible held accountable?

Parlon’s thoughts are:

Responding to criticism about Cork courthouse, Mr Parlon said “If the PAC or anyone else thinks that job could have been done for €3.8 million they have to be absolutely joking.”

He said the project had been estimated at €3.8 million a number of years ago but because it had dragged on the cost had risen to €26 million. “We will be much more careful about initial estimates for jobs in the future.”

Mr Parlon added that although he was looking forward to reading the report and taking its recommendations on board, he was annoyed “certain bits are being picked out for attention”

Money quote:

He was responding to criticisms contained in a report to be published today by the Public Accounts Committee (PAC) this afternoon which says more than €19 million has been wasted and €23 million overspent at OPW.

The report says the OPW spent €19 million on five properties to house asylum seekers that were never used…