On AIB

Ah, poor Tom, poor Tom Mulcahy. After 29 years of dedicated service, he is stabbed in the back by his former employer. The former chief executive of Allied Irish Banks recently claimed that he was squealed on to the Revenue Commissioners on alleged tax evasion charges. Tom, however, is determined to set the record straight.

He admitted to Revenue that he had an undisclosed non-resident account in England containing ‘several hundred thousandâ€? but there had been no transaction on it for years. This sounds like the “Father Ted’ defence; the money was just “resting’ in my account? Several hundred thousand? Sure, who could be expected to remember such a petty sum hidden away in an illegal account?
Anyway, Here’s how he described his settlement with Revenue “I am not saying that I was always compliant. I made a voluntary disclosure and paid what I thought was due, which is the right open to all citizens”

This is a very interesting statement, not just because it reveals that people like Tom are allowed to decide how much tax they will pay but also because he seems to genuinely think that it is a “right’ due to all citizens. He seems to be unaware that ordinary “peasants’ are not afforded this “right’.

Over the years, AIB has robbed many millions from the State and its own customers through various frauds. Tom defends his time as chief executive of this dodgy organisation between 1994 and 2001 by adopting the “I know nothing’ plea made famous by the Spanish waiter, Manuel’ in Fawlty Towers. ‘A chief executive’s role is to be positive and focus on driving the bank forward, rather than look for hidden problems.â€? He tells us.

Miraculously, Tom seemed to have developed a talent for finding hidden problems during his time as effective chairman of Aer Lingus. He’s very proud of the great job “he‘ did to turn the airline around, ‘I was in there seven days a weekâ€?, he tells us. Alas, once again, he was stabbed in the back, with all the praise going to that young whipper-snapper, Willie Walsh.

It seems poor old Tom just can’t win. He knew nothing about the dodgy dealings when he was the main man at AIB but still had to pay tax on his own dodgy account. He claims that he was the golden boy in turning Aer Lingus around but the credit went elsewhere – Ah, poor Tom, there’s just no justice in the world.

Allied Irish Banks investigates itself

The latest in a long line of scandals involving Allied Irish Banks was reported by the Irish Times as earlier this week.

It emerged yesterday that AIB has been investigating new claims that AIB deliberately and repeatedly overcharged foreign exchange customers in its branches during the 1980s and the 1990s

Those unfamiliar with how things are done in the Banana Republic of Ireland may be surprised to learn that AIB, the largest financial institution in the country, is allowed to investigate itself with very little interference from the State. The full situation, however, is even more bizarre. The Sunday Business Post, who broke the story relates how AIB compliance officers from its business ethics unit grilled several staff members for hours.

The methods used by this unit are what one would expect in a… well, in a banana republic.
Those grilled were given no legal or union representation, warned (threatened?) about possible future consequences arising from the matter, sworn to secrecy and pressurised into informing on their colleagues.

It should be kept in mind that the Gardai, (the official state police force) have no involvement whatsoever in this matter. The Financial Regulator seems to play only a peripheral role in so far as AIB keeps the body informed of its activities. Indeed, a spokeswoman for the regulator said that its main priority in any investigation is (merely) to identify the customers involved. (My italics)

It is also likely that AIB will be permitted to act as judge and jury on staff members based on the results of its investigation. Last year, after a similar scandal, AIB handed down ‘punishment’ on several staff members for their misdeeds. One man, however, had the temerity to challenge his ‘sentence’ and took AIB to a ‘real’ court. He won his case and claimed he was very happy with the outcome. AIB, however, insisted that no special deal was done. Who do we believe? Was he paid off or did he suddenly realise that AIB was really only concerned with his best interests? The Financial Regulator, of course, had no comment to make.

To give a better perspective on how things are done in the Banana Republic of Ireland it can be useful to make comparisons with how other jurisdictions handle these cases. At the moment a case not unlike the AIB matter is under way in Australia. So far, two men have been sentenced, one to 16 months and the other to two and a half years in jail.

In real democracies, when white collar crime is detected, the following procedures usually ensue – Police investigation, arrests and trial if enough evidence is found, appropriate punishment including jail sentences for the guilty. In the Banana Republic of Ireland?… Ah,sure, you know yourself!

Toothless IFSRA

During the 80s and 90s, Irish banks and other financial institutions robbed tens of millions from the State through DIRT, Ansbacher and other frauds. During this time the Dept. of Finance, various Ministers for Finance, the Central Bank and the Revenue Commissioners all knew about this theft but took no effective action.

When it all eventually came to light, the most common excuse was: “we were afraid that any action would lead to a flight of capital out of the country’. Since then, hundreds of millions have been spent investigating this corruption in never-ending tribunals, all paid for by the taxpayer. One would imagine that after all this; the so-called State regulatory bodies would have got their act together and financial institutions would be more than willing to co-operate in cleaning up their business.

Not so, apparently. The so-called Irish Financial Services Regulatory Authority (IFSRA) has timidly proposed some modest regulations to test the integrity and competence of senior personnel in the banking industry. The arrogant response by various financial institutions demonstrates that they have no fear of the Financial Regulator and are determined to maintain the freedom that almost total self-regulation affords them.

Some of the objections to the modest proposals include: Unduly burdensome, deterrent to recruitment of personnel, overly bureaucratic or damaging to Ireland’s attractiveness as a base for international financial services and, yes, you’ve guessed it, fear of a flight of capital from the country. So, what is involved in this proposed oppressive and despotic regime? Well, just three requirements:

1. Directors will have to disclose that they are tax compliant and provide a tax clearance certificate every year.
2. A person would be unsuitable as a director if they had dealings with a tribunal of inquiry
3. A director would have his/her suitability examined if they failed to manage finances.

Now the banking industry is constantly reminding us of how important they are, how crucial their industry is to the financial health of the country. The employment of thousands, financing of industry, provision of mortgages, they have even claimed that they created the Celtic Tiger. So what is the problem with meeting a few modest and reasonable conditions in order to qualify to work in an industry that is apparently of such crucial importance to the future of this great little nation?

The problem is of course, accountability. Our bankers are not used to answering to anyone other than themselves. On a practical level, there is no problem meeting the above requirements but on a psychological level, it is an impossibility. The very idea that the great and good of our banking sector would have to submit to regulation, no matter how minimal, is, for them, simply outrageous and unacceptable.

So, how will this be resolved? Well, judging by how things have always operated in the Banana Republic of Ireland, the following is likely. A deal will be struck that will save face for both parties. The so-called Financial Regulator will issue yet another glossy pamphlet trumpeting how it is protecting the interests of the consumer and the banks will continue to do what they do best, make massive profits within their own self-governing financial republic where they are untouchable.

Guess who loses out?

Only one event at centre this year is equestrian

Everyone remembers the controversy surrouding State funding for this center in Kildare, then Charlie McCreevy’s constituency. It seems now that all that taxpayers money was given away for nothing, as we all expected.

Just one event taking place in the controversial Agricultural and Equestrian Event Centre in Punchestown this year can be described as either equestrian or agricultural, an Oireachtas Committee heard yesterday.

During a meeting of the Public Accounts Committee (Pac) the €15 million State-funded centre was described by the Department of Agriculture as meeting a need in the agricultural and equestrian sectors for such a facility.

The department was presenting a review of the project which claimed it was properly sited at Punchestown and provided a positive economic and social benefit.

Pac chairman Michael Noonan of Fine Gael questioned the relationship between a series of events taking place at the centre this year and the agricultural and equestrian sector. These included a chilled food show, the Oxegen Rock concert, a car show, a house and garden exhibition, a Christmas trade show and a commercial truck show.

He said that of the 10 events at the centre this year, the only event that appeared to be linked to agriculture was the Kildare Growers’ show, a horticultural show taking place at the moment.

“There seems to be a divergence between the theory and the practice,” Mr Noonan said.

McDowell defends Rossiter inquiry

The mechanism being used to investigate the death of Brian Rossiter is a rather odd one, and McDowell has come under fire because of it:

The Minister for Justice has insisted that the inquiry he has set up into the 2002 death of 14-year-old Brian Rossiter after a night in Garda custody will be able to get at the truth.

The Department of Justice issued a statement to this effect at the weekend after the Rossiter family’s solicitor Cian O’Carroll said he had concerns about the legislation on which the inquiry was based, the Dublin Police Act. Mr O’Carroll said he believed this Act only allowed for an investigation into alleged wrongdoing if there was a complaint against a specific named garda.

“For that reason, it would not appear to give Hugh Hartnett licence to embark into a general inquiry into the manner and condition of Brian Rossiter’s arrest and detention,” he said.

Officials at the Department of Justice worked over the weekend on the terms of reference for the statutory inquiry to be conducted by barrister Hugh Hartnett SC. Mr O’Carroll said yesterday that the Rossiter family would like the inquiry to take place in public, but they did not yet know whether this would happen.

The department said yesterday it would send the terms of reference to Mr Hartnett next week “following consultation with the relevant parties”. Mr O’Carroll confirmed yesterday that as the family’s representative, he was among those to be consulted.

“The terms of reference will enable Mr Hartnett to inquire into all the circumstances surrounding the arrest and treatment in custody of Brian Rossiter and the role of all gardaa­ who came into contact with him over the relevant period,” the Department said.

“The Minister is completely satisfied that this can be achieved through the inquiry format which has been decided upon, ie the Dublin Police Act 1924, as amended,” it added.

Mr O’Carroll said he believed the most appropriate mechanism to carry out a full and proper inquiry would be through the Commissions of Investigations Act 2004, which would allow for a comprehensive and more efficient inquiry.

On this score I would be inclined to agree with the family’s solicitor.

Here is the Dublin Police Act 1924
Here is the Commissions of Investigations Act 2004

Firm disputes claims of leaks at aquatic centre

The NAC story continues to escalate, Bertie’s baby is a disaster. There is something distinctly iffy going on, and the whole truth may never come out. The SBP reported Sunday that the Center may cost upwards of €20 million to repair. Dublin Waterworld sound like a very strange organisation indeed.

Despite repeated claims that the pools in the centre were leaking “like a sieve”, it is understood that in the examination yesterday the only leaks detected were in piping in the centre. Such piping is the responsibility of Dublin Waterworld.

This examination also contradicted a report for Dublin Waterworld by engineering firm Malachy Walsh & Partners which found evidence of leaks from cracks in the pools.

While cracks were found yesterday, these were said to be dry. Such cracks were also described as a normal offshoot from the construction process. The examination also found no evidence that the building was at risk from subsidence.

Rohcon’s spokesman declined to comment on the examination, stating only that a full statement would be issued when the examination was complete.

CSID chief executive Donagh Morgan also declined to comment on the findings.

“They’re in the process of conducting investigations into the alleged defects that have been published in the media and CSID look forward to the completion of those investigations,” he said.

Minister for Sport John O’Donoghue said yesterday that the centre was not “a shambles” and added that he supported CSID’s legal action. “The impression has been created that there is some kind of a shambles of a building up in Dublin falling down and leaking 5,000 gallons of water every now and then. This is to my knowledge untrue.”

Anthony O'Sullivan on 5-7 Live

It took RTE a while to cop onto the Brian Rossiter story. I started posting about it on Friday June 24th, prompted by Vincent Browne. While the VB show is broadcast on RTE, it took the RTE news department nearly a full week to start covering the story. And when they did, it was not their Crime Correspondent Paul Reynolds, but instead Political reporter David McCullagh. I would guess that has something to do with Reynolds wanting to keep his sources.

I think it started with a 6 o’clock news bulletin on RTE1 on June 30th, to report on McDowell setting up an ‘investigation’ into the incident.

Since then 5-7 Live have been covering the story, including an interview with Brian Rossiter’s father, and on Friday last, his friend Anthony O’Sullivan.

The interview with Anthony O’Sullivan by Philip Boucher-Hayes is something everyone should listen to. I should say that it is very emotional, Hayes ends up consoling Anthony on the death of his friend, and reminding him that Brian’s death was not his fault.

Rabbitte's anger over delay in tribunal

Rabbitte smells blood, a shame we are so close to summer recess for the Dail.

Mr Rabbitte said that as a result of a story in The Irish Times on Saturday, they now knew what had been asserted from the Labour benches was true, “that both the minister for justice of the day (Mr O’Donoghue) and the attorney general of the day (Mr McDowell) had full knowledge from a report submitted by then Deputy Commissioner Conroy in August 2000 of what was happening in Donegal and the circumstances surrounding the framing of the McBrearty family and so on”.

Mr Rabbitte claimed Mr McDowell had created a circumstance where Mr O’Donoghue was on the run and was even not prepared to appear on Questions and Answers when invited. He repeated his assertion that there was a nine-month delay between the time Mr O’Donoghue saw the details of the case and when the tribunal was set up.

Mr Rabbitte said that Assistant Commissioner Conroy had summarised the gravamen of the allegations in a 37-page legible, intelligible report to Mr O’Donoghue and Mr McDowell, “and now they are covering up why they failed to investigate one of the most serious public interest issues in this jurisdiction”.

Mr McDowell, who was sitting on the Government benches, remarked: “That is wrong.”

Taoiseach Bertie Ahern said that in February 1999, Assistant Commissioner Carty was appointed by the Garda Commissioner to investigate allegations that gardaa­ in Donegal had engaged in criminal and unethical behaviour.

In July 2000, Assistant Commissioner Carty submitted his report, which was the investigation file, to the DPP. In August 2000, Assistant Commissioner Conroy forwarded a 37-page summary of the Carty report to the Department of Justice. This, said Mr Ahern, was not the Carty report.

Talk about clutching at straws.

Taoiseach criticises running of aquatic centre

And Bertie has been on the defensive for his pet project:

He acknowledged that the aquatic centre was a “pet project” of his. “Indeed, I am proud to claim that it is such.” The Government’s motivation was to provide a 50-metre pool and to provide a location for the Special Olympics aquatic events. “The project was delivered on time and on budget,” he insisted to Opposition heckling and laughter.

The Taoiseach was responding to Fine Gael leader Enda Kenny who described the “debacle” of the centre as an “apt metaphor for the Fianna Fail/Progressive Democrat Government – massive costs to the public, a so-called state-of-the-art attraction that is all splash, with fake waves, the roof blown off and leaking like a sieve”.

Mr Kenny claimed that the Taoiseach as the sole promoter and shareholder of the project “is personally responsible for the huge failures that have been exposed”.

He asked the Taoiseach to confirm that the aquatic centre “is leaking water at the rate of five million litres per month and that a consultants’ report has found that the original roof structure was substandard, suggesting that either corners were cut or plans were washed away at construction stage”.

Mr Ahern said he was “very sad to see the Opposition aligning themselves with the company that CSID has take to court and acting as its mouthpiece in the House today.

“Deputies appear to have no compunction about making public statements on matters before the court.”

He said he and the Government were not at all happy with Dublin Waterworld, which runs the centre. The company had “done a very good job in Killarney in the Kerry operation but it has not done a good job in this case”.

CSID had taken the company to court for breaches of the lease agreement, including failure to pay rent, to provide audited accounts, failure to pay insurance on the building and to establish a sinking fund.

A dispute over whether the company had to pay more than €10 million in VAT was referred to arbitration and a dispute over repair and maintenance had been referred to an architect for determination.

Mr Ahern said the Minister for Sport had described the capital expenditure on the centre as value for money “and I fully agree with him”.

When Mr Kenny asked who was responsible for the roof being blown off the building, the Taoiseach replied: “The wind”. He said: “I am hugely powerful but I do not organise that”.

The Fine Gael leader said that the same wind blew over a lot of other roofs at the same time and “none of those blew off”, but Mr Ahern said the freak storm in January this year damaged a large number of buildings in the area, uprooted 200-year-old trees and hit the centre.

“Our primary concern at all times must be to protect the taxpayers’ investment and that is what we are doing.”