Category: Corporate

Simple law enforcement; not special juries, are the solution to white collar crime

The Director of Public Prosecutions, James Hamilton, gave a very interesting interview on The Week in politics last Sunday.

He believes that expert juries are needed to tackle the rise in white-collar crime. He also spoke about the difficulties posed by the absence of a whistleblower’s charter.

The following are some of the answers he gave during the interview followed by my comments.

Why have you chosen this time to outline your views on white collar crime?

I think the whole question of financial regulation has become a very topical one and we’re obviously in an era where we’ve moved from the former idea of light regulation into a different mode. I anticipate that in the future we’re going to be seeing more files in the area of white collar crime and therefore it’s an appropriate time to look at whether or not we have the appropriate tools to do that.

The whole area of financial regulation has been topical since, at least 1979, when the criminal politician Haughey gained power and banks and other financial institutions were given a free hand to engage in criminal activity without fear of accountability.

Many countries, especially America, now regret the policy of light touch regulation and, unlike Ireland, are taking strong measures to rectify the situation.

Irish governments have always followed a policy of no regulation whatsoever, light touch regulation was and is irrelevant in the Irish ‘Wild West’ financial sector.

Practically nothing has been done to bring the financial criminals to justice and the little that has been done is nothing more than an attempt to fool the international community that Ireland is a normal, functional state.

There is no requirement for special juries, simple law enforcement will resolve the problem of white collar crime.

Why do you think a whistleblowers charter is now necessary in this country?

Essentially, a decision was made not to have whistleblower legislation back in 2007. The main reasoning behind that decision seems to have been that whistleblower legislation might cut across our system of light regulation and wasn’t appropriate given that that was the type of legislation we had at the time. I think there’s a case for looking again at that.

What? Whistleblower legislation might cut across our system of light regulation? Only a fool would put forward never mind actually believe such drivel.

The reason whistleblower legislation was rejected in 2007 and the reason it is still not even being considered is simple. If such legislation existed, the watertight protective systems set up by politicians and operated by so called regulators would fail thus exposing the criminals operating within the Irish financial sector.

Some may wonder whether our existing laws are up to the job?

Some aspects of it are quite robust. For example, in 2001, we amended our Prevention of Corruption Act and strengthened them in quite a significant way by introducing a presumption that where a payment is made to an official and that includes Ministers, TDs and Senators who makes a decision affecting a citizen that’s there’s a presumption that the money is paid corruptly.

There have been significant prosecutions under that legislation.

Significant prosecutions – who, when? I rang the DPPs office for a list and was met with the standard reply.

Oh no, Mr. Sheridan, that’s privileged information, we couldn’t possibly give that out.

When I pointed out that any such prosecutions were likely to have taken place in a public court accompanied by widespread media and public comment I was told to put my request in writing.

The letter is in the post.

Senator Ross: Still shocked after all those scandals

Once again Senator Shane Ross is shocked by the activities of greedy bankers.

His shock on this occasion was caused by the news that greedy bankers had hatched yet another sly scheme to get around government restrictions on pay and pensions (Newstalk).

The details of this latest greedy manoeuvre are not very important. It is, after all, just the latest scam hatched by greedy bankers who know they have absolutely nothing to fear from anybody.

What’s really fascinating about these events is how so called financial experts like Shane Ross can remain completely blind to the reality of the situation.

People like Senator Ross continue to believe that there is some kind of division between politicians and bankers; that politicians and regulators are acting in the interests of ordinary citizens and the good of the country.

The Senator seems to believe all this despite overwhelming evidence to the contrary.

Since the foundation of the state no bank or bank official has ever been convicted of a crime. This is despite the fact that they have been robbing their customers and the state with impunity for decades.

It is only in very recent times and only after the total collapse of the economy that some minimum actions have been taken against these people.

Senator Ross apparently believes that the establishment of a Financial Regulator in 2003 was a genuine attempt to bring law and order to the Wild West Irish financial sector when the facts point to the complete opposite.

The Financial Regulator operates under strict secrecy laws that would be seen as extreme in the former Soviet Union.

The Senator probably thinks that such secrecy laws just accidentally appeared on the statute books, he probable thinks that politicians had absolutely nothing to do with the drawing up of these secrecy laws.

These secrecy laws have just one affect – they provide total protection for the widespread criminality within the Irish financial sector, criminality that continues unchallenged to this day.

The Senator told listeners:

People don’t seem to realise that the banks are running rings around the Government.

Wrong Senator, it is patently obvious that politicians and the regulator are willing participants in a system that defends the interests of bankers at the expense of ordinary citizens and the good of the country.

Copy to:
Financial Regulator
Senator Ross

Greencore scandal and the Irish Stock Exchange

I came across the following report (undated, but I think it’s sometime in the early 1990s) published in the then Cork Examiner concerning the Greencore scandal.

The Greencore saga lives on.

Last night in an extraordinary statement the Stock Exchange said it wanted to make it ‘clear’ that it ‘neither confirms nor denies that it is or is not investigating or monitoring dealings in any stock at any time for the purpose of identifying any possible insider dealing’.

The Cork Examiner has been given assurances that a high powered team of experts has been set up to unravel the real meaning behind the statement.

Insider dealing may have taken place in the shares of Food Industries now the subject of a £54 million bid by Greencore.

The Stock Exchange statement is indeed extraordinary, even bizarre but not unusual within the context of so called Irish financial regulation.

Even today, decades later, the Irish Stock Exchange is a completely secretive organisation accountable to nobody but itself.

See Gavin’s blog and Sunday Independent for full details on this particular scandal.

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

Banks recapitalisation: Good time to bury bad news?

It’s no accident that AIB raised its mortgage rates on the eve of the recapitalisation of the banks, the biggest fraud perpetrated against Irish citizens since the foundation of the state.

But it seems that AIB is not the only organisation taking advantage of this opportunity to minimise or hide the effects of bad news.

Just hours before the Irish people are to be officially screwed by the banks and the government the Financial Regulator has announced that two administrators are to be appointed to Quinn Insurance Ltd and that an investigation has commenced

into certain matters within Quinn Insurance Ltd that have very recently come to light.

I wonder would those certain matters have anything to do with the dodgy dealings that went on between Anglo Irish Bank and Quinn Insurance?

Another event that will be buried beneath the media storm surrounding the banking crisis will be a decision tomorrow by the Cabinet, based on the Farrell Grant Sparks report, on whether to initiate further investigations into the scandals involving the Dublin Docklands Development Authority.

This would be an ideal opportunity, from the government’s point of view, to quietly bury this potentially explosive matter.

Time for Niamh Brennan to come down from her ivory tower

Professor Niamh Brennan is obviously a highly educated woman but unfortunately a good education does not guarantee what I would call an informed intelligence.

Brennan was on the Marian Finucane Show yesterday (Sunday) commenting on a number of matters and it was clear from listening to her that she has no idea what life is like outside of her ivory tower.

On industrial action by public servants.

They should be grateful for the fantastic jobs they have and should be contributing to helping to get us out of this mess.

Clearly, Brennan is unaware that thousands of public and civil servants are living on a pittance and it is those people the Government has targeted for the biggest pay cuts.

She had nothing to say regarding senior civil servants, judges, army officers, and academics like herself who have all received special treatment when it comes to pay cuts.

On the HSE and professor Drumm’s bonus.

Professor Brennan is in agreement with some guy called Gerry Robinson who thinks that professor Drumm should be paid €2 million.

She further defended Drumm’s bonus by saying it was a contractual entitlement and related to a period well before the current public sector pay cuts.

It’s curious how this argument is valid for professor Drumm and the rest of the governing class but invalid for the great unwashed.

On the Government.

According to the professor the rest of the panel were being unfair to the government. She thinks the government is being very effective in speedily recalibrating public sector costs.

If, she continued, the French government took the same action there would be riots. Bizarrely, she suggests that our ability to talk things through, to engage in public soul searching is keeping the rioters at bay.

On the Irish Glass Bottle site scandal.

Professor Brennan is chairperson of Dublin Docklands Development Authority and clearly finds the position a little unnerving.

When asked about the Irish Glass Bottle site scandal she seemed shocked when telling listeners that it cost €412 million but was now only worth €50 million.

Apparently about a third of the remaining €360 million went to Dublin Port and the rest went to a guy called Paul Coulson, who, Brennan tells us is now a fabulously wealthy man as a result of the transaction and, not surprisingly, no longer lives in Ireland.

Dublin Docklands Authority has a curious feature on their website where they publish interesting facts about the area. Here’s the current piece.

Docklands Fact
A downtrodden Leprosy hospice was located on Misery hill, hence its name! It was believed lepers were “the unclean” and would be walked to the hospice on Misery Hill with a man tolling a bell and another carrying a 40 foot pole to keep everyone at safe distance. Today this is where we get the expression “I wouldn’t touch him with a 40 foot pole!”

Ironically, this piece is a perfect metaphor for the position of the taxpayer after the glass bottle site debacle.

All the leper taxpayers are up on Misery Hill paying for the stupidity and greed of the DDA and there’s not a businessman in the world that would touch such an incompetent body with a 40 foot pole.

On child abuse by the Catholic Church.

Brennan was ‘uncomfortable’ with the panel’s criticism of those involved in the child abuse holocaust.

Like most defenders of the Catholic Church she labours under the delusion that only a minority of priests were involved in the horror.

This suggests that she disagrees with the Murphy and Ryan reports which between them found that abuse was systematic, widespread and well planned.

They also found that church authorities went to extreme lengths to cover up the horror thus condemning hundreds, if not thousands, more innocent children to torture and rape.

It really is time professor Brennan came down from that ivory tower.

Bizarre decision benefits CRH?

I wrote recently that, while Cement Roadstone Holdings (CRH) have been brought to account for breaking the law in a number of countries, they seem to be immune from accountability in Ireland.

The latest controversy surrounding this very powerful company involves a farmer in Kilkenny who has been trying for the last 19 years to find out what’s been contaminating his livestock (Six One News, 8th report).

The farmer, Dan Brennan, claims that the highly toxic substance cadmium is the cause and most likely comes from a neighbouring brick factory owned by CRH.

CRH strenuously deny the claim.

After years of investigation the Dept. of Agriculture published an 800 page report on the matter earlier this month and it is this report that has shocked MEPs on the EU Petitions Committee.

It seems that because cadmium levels were so high in bovine blood samples that those conducting the investigation decided that the samples must have been contaminated and therefore excluded them completely from the analysis.

The first and most obvious thing to be noted here is that this bizarre decision by Dept. of Agriculture officials appears to be of benefit to CRH, who have always claimed cadmium levels around the factory are in fact very small.

The second point to note is the damage such inexplicable but suspicious decisions do to Ireland’s already tattered reputation.

Such considerations don’t seem to matter, however, when the interests of powerful organisations are at stake as the recent Jim Flavin/DCC farce amply demonstrated.

Developers savaged by (dead sheep) NAMA chief McDonagh

Have a look at this report (2nd item) where NAMA chief Brendan McDonagh delivers what RTE News describes as a ‘stark warning’ to developers who are not cooperating with NAMA.

“If we don’t think you’re viable we will take enforcement action against you,”

McDonagh (darkly) warns.

If I was a developer listening to Mr. McDonagh I would feel very safe. The NAMA chief sounds like a frightened schoolboy threatening the well built school bully with dire consequences if he refuses to hand back stolen pocket money.

As we start out on the long NAMA road let me make something crystal clear.

No developer will face enforcement action, no developer will lose out financially or otherwise, all developers and especially those who have made generous political donations will be well looked after.

Why? Because that’s the way things are done in a dysfunctional country like Ireland.

Developers are already well ahead of NAMA in protecting their interests. The Mail on Sunday (January 3rd) reports that two members of the infamous Anglo Irish Golden Circle, Gerry Gannon and Joe O’Reilly have signed over several tranches of multimillion property assets to their wives.

The paper also reported last July that developer Liam Carroll and Sean Dunne transferred properties to their wives.

The State will do nothing to stop these transfers until all developers have secured their assets.

Then, at some point in the future we will see politicians and officials like Mr. McDonagh wringing their hands as they tell us that it’s too late to act so the taxpayer must pay but, going forward, we must make sure this kind of thing never happens again.

We only need to read a report on the same page in the same newspaper to understand why the State will not take enforcement action against non cooperative developers.

Developer Michael Bailey has bribed politicians, committed perjury and robbed millions in unpaid taxes and yet he’s still walking around a free man.

The weak and ineffective ODCE has been trying for years, and failing, to impose even the minimum sanction open to the state, to ban Bailey from acting as a director of a company.

Not only is the State allowing this crook off scot free but it seems that Anglo Irish Bank, fully owned by the taxpayer, is preparing to pump millions into his company in an effort to rescue it from financial ruin.

This level of state cooperation and support for a corrupt developer puts Mr. Mc Donagh’s ‘stark warning’ into context – Non cooperative developers can sleep soundly in their beds.

See here for report on possible support for Bailey’s company by Anglo Irish Bank and here for an excellent analysis of the proposal by Fintan O’Toole.

CRH – Immune from the law in Ireland?

I see Poland’s competition regulator has imposed a massive fine of €26 million on CRH for alleged price fixing and other anti-competitive behaviour (Irish Examiner).

In 1994 the European Commission ruled that CRH was part of an EU wide cartel involved in fixing prices and two years later UK authorities fined the company for similar activities.

Notice that all this law enforcement against CRH took place outside Ireland. The company is never subject to such indignity from so called Irish enforcement authorities.

For example, over 100,000 tons of waste was dumped illegally on a CRH site near Blessington Co Wicklow over a ten year period up to 2001.

The company denied all knowledge of the illegal dumping and, of course, they were believed. The DPP decided to take no action.

The most notorious case involving CRH was the revelation that Haughey’s criminal bagman, Des Traynor, operated the illegal Ansbacher bank from the head office of CRH for years.

This criminal bank, which the Central Bank and Financial Regulator knew about, funded the criminal Haughey for years along with several others from the Golden Circle.

When the mafia operation was revealed CRH denied any knowledge of what had gone on despite the fact that eight of its board members held Ansbacher accounts.

Needless to say, no action was ever taken against CRH or its board members – the very idea!

Nothing new in Ireland

Serious allegations of widespread fraud have emerged from within CIE. Three employees have been dismissed and there’s a vague reference about a report to the Gardai.

The FAS farce continues apace. We’re told there’s also a Garda investigation there but, please, don’t hold your breadth.

Dentists are under scrutiny over allegations that they made fraudulent claims under the publicly funded Dental Treatment Services Scheme. Here’s a mad prediction – no dentist will be found guilty, nothing will happen.

Fianna Fail backbenchers are up in arms over drink-drive levels even though the retention of the present level will result in at least ten additional deaths every year. When it comes to protecting their power base Irish politicians are completely ruthless.

Practically every financial institution in the country is regularly defrauding elderly citizens of their life savings. All the political parties, the Gardai and every so called regulatory agency in the country are fully aware of the situation but refuse to act.

Approximately 2,000 retired teachers, in receipt of generous state pensioners, are still working as substitute teachers. Around 1,500 of them are working in primary schools at a rate of €206 a day, while the remainder is earning €49.60 per hour in secondary schools.

Apparently, it’s all part of a wink, wink, nod, nod network. Meanwhile, thousands of young, newly qualified teachers are desperately searching for a start in their profession.

250,000 shoppers are now crossing the border into Northern Ireland to do their shopping costing traders in the republic up to €800 million in lost revenue.

Even when factors like the VAT rate are taken into account there still remains the unique Irish rip off (theft) factor.

It seems that no matter how bad things get Irish businesses are incapable of weaning themselves off this long established tradition.

Here’s just one small example. I went into a Dublin café recently for a cup of coffee and a cake. The (very small) cakes were €2.80 to eat on the premises and €2.50 to take away – yes, take away cakes from a café.

Not surprisingly, the café was empty with the (soon to be redundant?) staff twiddling their thumbs.