Category: Government

Fitzpatrick – Tripped up by his ego

The chairman of Anglo Irish Bank, Sean Fitzpatrick, is being investigated by the Irish Stock Exchange over allegations of insider trading. The investigation will, of course, be a farce. The ISE, like the Financial Regulator, doesn’t really do regulation.

Fitzpatrick bought €1.1 million worth of Anglo Irish shares after talks had opened between the banks, the Financial Regulator, the Central Bank and the Government.

The banker turned a tidy little profit of €326,000 from the deal when Anglo Irish shares increased by 18pc after the Government bail out was announced.

Still, despite having nothing to fear from the ISE, Fitzpatrick was foolish to allow himself to be ambushed by Marian Finucane in a recent interview (Sat. 4th Oct).

Finucane very cleverly massaged Fitzpatrick’s ego by asking him how influential he was in the €400 billion government deal with bankers.

Fitzpatrick couldn’t resist asserting his self importance; here are some of his comments before he finally realised he was being set up by Finucane.

“I knew lots of things were happening because we had discussions obviously with the Central Bank and the Financial Regulator and the Dept of Finance over the previous weeks.”

“Well, I met the Dept of Finance officials and I met the Minister and clearly I spoke on a regular basis with the regulator and the central bank.”

Finucane asked him about his contact with Minister for Finance Brian Lenihan.

“I was explaining the difficulties and he was explaining the difficulties they had, there was lots of things being discussed by lots of people in different ways… We had to get the difference between what was happening externally and get that across and remove the issue about the bad debts…which we eventually did and he saw that very, very clearly.”

“What I was trying to do was explain the situation to him, we certainly exchanged ideas”.

Fitzpatrick finally realised he was being set up when Finucane asked him about a report in the Sunday Independent concerning allegations of insider trading. Suddenly, the banker wasn’t so influential.

“Did you have a sense that the Government was going to bail out the banks, asked Finucane?”

“No, I didn’t.”

“Did you not know before hand that the Government was going to bail the banks out?”

“Of course I didn’t, that wasn’t out until Monday night.”

“But you had been talking to the Minister the previous week.”

“I had been talking to the Minister the previous seven days about various issues, about what he could do but I wasn’t sure what he was going to do..”

“Were the banks all talking to each other at this stage?”

“Not on a constant basis…there was no cohesive, no group meeting with the Government at all.”

Politicians: Nothing more than messenger boys

It is widely assumed that the banks were pleading for help when they rang the Minister for Finance, Brian Lenihan last Sunday night.

Wrong – The banks were summoning the Minister to instruct him on what action they required of him.

And it’s not just the Minister who jumps when the banks come calling; the so called Financial Regulator and Central Bank also dance to whatever tune the banks are playing.

Up until last weekend the tune was simple – No matter what the evidence is, no matter how stupid you look, you are to maintain the charade that Irish banks, unique in the world, are not in any kind of trouble, you are to deny all suggestions that we have recklessly loaned out billions to property speculators and developers.

As recently as 6th Sep last Lenihan was doing what he was told.

“I can assure your listeners that the Regulator has maintained a very detailed supervision of Irish banks and that the Irish banks are not in anything like the difficulties that their counterparts in the US are.”

Here’s what I had to say about the Minister’s comments (Link as above).

“This Minister knows nothing about the real situation because his information comes from the Central Bank and the so called Financial Regulator who take their orders from the banks. Taxpayers should hold on tightly to their wallets, the banks will soon be looking to do some more pick pocketing.”

Now, €400 billion later the Minister, regulatory authorities and the taxpayer are dancing to the banker’s new tune.

Even the experts don’t seem to know what’s really happening. Economist David McWilliams, who was first to openly state that Irish banks were in trouble, is naïve in the extreme when it comes to his views on how the banks should pay for their sins. He’s worth quoting at length (RTE, 1st report, 2nd item).

“I would hope that the Government moves very quickly to replace the senior management of many of the banks that have behaved extremely recklessly. And that means by making board appointments of outside people, not civil servants, but people who have the national interest at heart. The Government guarantee cannot come for free, it can’t be a blank cheque, it has to come with strings attached…Brian Lenihan and his advisors are in the driving seat and if they think about their position they can change the way Irish banking works.”

“We’ve got to get rid of Gombeenism; we’ve got to get rid of the proximity between developers, banks and the Government. We’ve got to get rid of these idiosyncratic ways in which our society was run for the last four or five years.”

Like most Irish citizens, McWilliams seems to be completely and innocently unaware of the kind of country he lives in; he genuinely seems to believe that Ireland is a normal democratic country.

His reference to Gombeenism and our idiosyncratic ways might just be the beginning of a realisation that Ireland is unlike any other Western state, that there is something seriously dysfunctional about the way our country is governed.

We at Public Inquiry have been shouting the message for years – Ireland is a corrupt state, the politicians do not work in the interests of the people, the civil servants for the most part serve the politicians and the Government, not the people. Banks and other big business do as they please with impunity; they are never, ever brought to account. How long will it take before the message gets through?

Next week, when the bankers finally reveal the details of their plan, when they tell us what decisions they have made regarding the future of our country, we will hear a lot waffle, a lot of weasel words and a lot of breast beating from our politicians but believe me there will be no challenge to the status quo.

There will be no sacking of senior bank management, there will be no appointment of outsiders to bank boards or if there is they will be given the job of making the coffee. There will be no financial cost to the banks; there will be no strings attached to the deal because it is the banks that are calling the shots.

Our politicians are nothing more than messenger boys for the real power in this country.

Now I'm really scared

Obviously something needed to be done about the ongoing financial crisis but only time will tell whether the Government has made the right decision.

In America everybody knew what was going on, the Opposition was actively and centrally involved and ordinary Americans were listened to as they expressed their anger at the prospect of greedy bankers being allowed off the hook.

The deal was rejected and now everybody is back at the table trying to work out a deal. It is virtually certain that ordinary American taxpayers will get a better deal; that strict new regulations will be introduced and enforced and already some bankers are under investigation by the FBI.

In Ireland the Government met in the dead of night with the Financial Regulator and bankers to work out a deal. Nobody else was consulted; the Opposition was kept in the dark, the views of ordinary people don’t count. It’s now nearly 24 hours since the deal was announced and we still don’t know what conditions are being imposed on the bankers.

Here’s my guess – Absolute minimum conditions will be enacted in the legislation but even these will never be enforced. Neither will any bank or bank official be investigated; no Irish government or financial regulator have ever acted against the banks. There’s no reason to believe that things will be any different on this occasion.

The Irish Government can act like this because we effectively live in a one party state where democracy has been diluted to the point of irrelevance.

America, the richest and most powerful economy in history is spending $700 billion in an attempt to save their economy and by extension save the world from global recession.

The Irish government is spending €400 billion, more than half what the Americans are committing, in an attempt to bail out six banks that recklessly and greedily lost the run of themselves during the building bubble.

According to an expert on Prime Time last night; Irish banks have loans out totaling €110 billion and can expect losses of at least 10 to 20 billion.

The $700 billion represents $5,000 for every American citizen. The €400 billion represents €100,000 for every Irish citizen – Mention that to your banker the next time you apply for a loan.

Minister for Defence, Willie (Groucho) O’Dea confidently told the nation on Prime Time that the assets of Irish banks exceeded their liabilities and that Irish citizens were not at risk.

Now I’m really scared.

Cowen saves the world

We are constantly told that our Prime Minister, Brian Cowen, is an extremely intelligent man but I have yet to see any hard evidence for this claim.

Yesterday we heard that he doesn’t understand why a group of senior civil servants wanted to remain anonymous after they called for radical reforms of the Public Service, including massive redundancies. Mr. Cowen is obviously not familiar with the term ‘career suicide’ used by the civil servants.

Our Great Leader is pictured on the front of today’s Irish Times with some guy called Bono, who, judging by his dress, is some kind of vagrant. Beneath the picture Cowen is quoted:

“I think everyone understands that this is the economic environment in which we now have to operate. So we’re facing some difficult times.”

Surely, future generations will be forever grateful that our Great Dear Leader did not selfishly restrict these pearls of wisdom to the confines of Dail Eireann where only the Irish nation would have benefited.

Instead, he generously shared his insightful and enlightened assessment with the entire world during a visit to UN headquarters in New York.

Surely, now, the world is truly saved.

The C & AGs annual (farce) report

The Comptroller and Auditor General has once again revealed a massive waste of taxpayer’s money caused by the incompetence of various government agencies. There are only two certainties about this annual farce – the wastage will continue and nothing will be done.

Here’s how three of our most senior, so called leaders, responded to the latest report.

The Taoiseach, Brian Cowen refused to make any comment whatsoever.

The Minister for Finance, Brian Lenihan, also refused to make any comment and instead referred the matter to the useless Dail Public Accounts Committee.

The Minister for Justice, Dermot Ahern said he ‘didn’t ever involve himself in procurement issues.’ He then bizarrely went on to congratulate the officials that were criticised by the C & AG.

Here we go again…

Tánaiste and Enterprise, Trade & Employment Minister Mary Coughlan has asked the Comptroller and Auditor General to launch a special investigation into FÁS expenditure since 2000.

Let us be in no doubt. This investigation will be a complete waste of time, resources and money. The C & AG is a completely powerless organisation. It does not have any power to bring charges as a result of any wrongdoing discovered; it is empowered merely to offer an opinion – that’s it.

In its most recent investigation, into Bord gCon, the C&AG uncovered very serious corruption, fraud and incompetence, yet, bizarrely, concluded that

“In material respects the financial affairs of the company were properly run.”

No action whatsoever was taken by any government authority as a result of these very serious findings. It should be noted at this point that the C&AG was the auditor of Bord na gCon while many of these dodgy activities were going on.

The C&AG is also the official auditor of FÁS. So what are the chances that the organisation responsible for signing off on the finances of FÁS every year is going to make any serious criticisms of that organisation? Isn’t it more likely to conclude that ‘In material respects the financial affairs of FÁS were properly run’?

When completed, the C&AGs report on FÁS will be passed on to another completely powerless body – The Public Accounts Committee.

This group of useless politicians will discuss the matter once in public and once in private and that folks will be the end of the matter. It doesn’t matter how much corruption, fraud or incompetence is uncovered – nothing will be done.

In my opinion it is no accident that the C&AG is powerless, it is no accident that the PAC is powerless and it is no accident that Minister Coughlin has decided to hand over this very serious matter to these powerless agencies.

If Ireland was a properly functioning and accountable democracy the police would be ripping through the files at FAS, civil servants would be answering questions under police caution and politicians would be wondering how their heads fell off.

Depressingly, Ireland is not a properly functioning democracy, there will be no police action, no political heads will roll and corruption and incompetence will continue at all levels of Irish society.

Copy to:
C&AG
FAS
PAC

Tammany Hall passport service to remain exclusive

I finally got talking today to a member of the committee that reviewed the special passport facility for members of the Oireachtas.

I wanted to know if details of the service would be published in the Department’s literature and website.

No, I was told. The service is provided for members of the Oireachtas, it’s not a service that’s directly available to citizens therefore details would not be published.

This, of course, is complete rubbish.

I pointed out that he was a servant of the public, the passport office existed exclusively as a service to the public and politicians are servants of the public and therefore this special service should be fully available to all citizens as of right.

There then followed a discussion about what exactly ‘public’ meant. In the end he finally conceded that all services provided by his department were by definition public.

My next question concerned fees. The standard fee for a passport is €75. If the passport is provided by express there is an extra charge of €8. If an urgent passport is required there is an extra €50 charge on top of the €75 standard charge.

The special facility for members of the Oireachtas allows politicians to bypass the system and personally provide a passport within a few days for ‘special’ citizens at no extra charge.

This Tammany Hall facility is just one of the scams operated by politicians as a means of buying votes. The whole system of Clientism that has evolved over the decades is itself one of the chief sources of corruption in Ireland.

Manipulated and discredited law

My posting ‘Two Views’ was a comment on the ridiculous practice of prosecuting people because they had broken what is effectively a religious law. Michael Kelly makes an equally valid point, strongly supported by comments, that judges should not be allowed to pick and choose which laws are to be applied.

The existence of medieval like religious laws and the casual attitude to law in general are simply reflections of the kind of country we live in.

Here are just a few examples.

The Beef Tribunal uncovered massive fraud and corruption within the Irish meat industry. Apart from a few minor officials who received a slap on the wrist nobody was made accountable. The only person to be charged, for refusing to reveal her sources, was Susan O’Keeffe the Granada Television reporter who broke the story.

It would have been extremely embarrassing for Ireland if O’Keeffe was found guilty after the tribunal whitewash had exonerated all those who were actually guilty. A legal technicality was conveniently discovered and O’Keeffe was acquitted.

It is almost certain that Bertie Ahern committed perjury at the Mahon Tribunal. The facts are simple. He stated under oath that he never dealt in significant amounts of sterling. The tribunal produced irrefutable evidence that Ahern’s statement was untrue.

In a functional democracy it wouldn’t matter that the tribunal was ongoing, it wouldn’t matter that the alleged perjurer was Prime Minister, immediate police and legal action would have been taken.

The conflict between Irish Times journalists Geraldine Kennedy and Colm Keena and the Mahon Tribunal over the disclosure of sources is still unresolved nearly a year after the event.

It is a very serious case where the journalists openly admit that they destroyed evidence despite being ordered not to do so by the Tribunal. It doesn’t matter that the journalists are, at least, morally right, it doesn’t matter that the tribunal is ongoing.

If Ireland was a country where the law enjoyed the same respect as it does in functional democracies both these journalists would long ago have been made accountable for their actions.

These cases and countless other examples ranging across every level of society demonstrate that Ireland is not like any other Western democracy, that Ireland is a country where the law is manipulated to suit events and circumstances rather than acting as a protector of society in general.

Within a few days…

Last week I mentioned that a member of the Passport Review Committee promised to get back to me within a few days with an answer to one of my questions. Not surprisingly – she didn’t, so I rang again today.

I was talking to someone new, which surprised me; I thought I had already spoken to everyone in DFA.

Anyway, I filled him in on the case background and again put my question – Would the special passport facility for members of the Oireachtas be advertised in the Department’s literature and posted on the Passport Office’s website so that all citizens could avail of the service?

He assured me he would check it out and get back to me – within a few days.

Banking sector looks for help

It was only a matter of time before the Irish banking sector was forced to make a move on the growing sub prime crisis.

The headline in this morning’s Irish Independent “Banking chiefs seek ‘dig-out’ from taxpayers” leaves us in no doubt as to who they think should pay to get them out of the mess.

Richie Boucher, the chief executive of Research Financial Services Ireland wants long term funding to the banks to be “provided domestically” by taxpayer’s.

Why domestically? Well, Boucher explains that it wouldn’t be prudent to be ‘overly reliant’ on the European Central Bank for borrowings.

What he really means, I suspect, is that the ECB would impose strict conditions and demand accountability for any rescue package whereas Irish politicians can be pressurised into handing over taxpayer’s money without the need for all that awkward repayment and accountability stuff.