The CHC fraud proves that there is no effective financial regulation in Ireland

Prior to the collapse of Ireland’s economy in 2008 there was a universal belief that Ireland possessed a functional financial regulatory system.

Subsequent to Ireland’s economic collapse there was a universal belief that light touch regulation was the core factor in bringing about the catastrophe.

Presently there is a universal belief that financial regulation has been radically reformed and is now fit for purpose.

All of the above beliefs are false.

Ireland has never enjoyed the benefits of real financial regulation. This is not an opinion, it’s a fact.

No financial institution or official has ever been charged with a crime despite the theft of countless millions over the decades.

Ireland did not suffer from light touch regulation; it was destroyed because there was no effective financial regulation whatsoever.

So called regulators knew about most of the major crimes committed over the years, like DIRT and Ansbacher, but did nothing.

When the media and whistleblowers (the real regulators) uncovered crimes that the Financial Regulator was not aware of no significant action was ever taken against the criminals.

As I write Irish citizens are continuing to suffer great losses because there is still no effective financial regulation in Ireland.

If what we are told by politicians, government officials and so called regulators is true, then the people involved in the Custom House Capital fraud would, at the very least, be under arrest.

That the people involved in this fraud are still walking around, enjoying the same rights and freedoms that law abiding citizens are entitled to, proves that there is still no effective financial regulation in Ireland.

Custom House Capital specialised in pensions for wealthy customers and managed investments of about €1.5 billion for about 1,400 clients.

The firm also invested in property in France and Germany on behalf of clients.

The company misused €56 million in clients’ money to cover up troubled property deals.

A report on the matter submitted to the High Court states:

There was a systematic and deliberate misuse of assets and cash belonging directly or indirectly to clients of CHC.

This misuse was deliberately disguised by CHC through the use of false accounting entries and the issue of false and misleading statements to clients.

The High Court ordered all reports on the matter to be sent to the Director of Corporate enforcement, the DPP, the Garda Commissioner and Revenue.

The so called Financial Regulator investigated CHC in 2009 after somebody noticed a strong odour coming from the company but, predictably, found nothing of great import.

Some managerial changes were recommended and the matter was dropped.

It was only when another company, Appian Asset Management, had taken over the non-property investment assets of CHC that serious concerns were raised.

It was only after this company acted that the so called Financial Regulator took any significant action.

Let’s repeat these facts as starkly as possible.

In 2009 the so called Financial Regulator carried out an in-depth investigation into CHC and found that, apart from some supervisory and organisational issues there was no significant problems with the company.

Here’s what the Regulator decided to do.

Following the identification of these supervisory concerns, related to compliance and organisational issues, the strategy was to encourage CHC to identify and engage with potential buyers for the firm, which would be the best outcome to protect client investments and funds.

CHC took that advice and shortly thereafter sold part of its business to another company, Appian Asset Management.

It seems that this was an attempt by CHC to off load that section of its business where the fraud occurred while holding onto its property assets.

Remember, this is, effectively, what the Financial Regulator advised.

The crucial point in all this is that a company that wasn’t engaged in any investigation easily discovered major fraud in a company that had just been investigated by our so called reformed and fit for purpose Financial Regulator.

It should also be noted that CHC was heavily engaged in fraudulent activity in 2009 when the Financial Regulator was, allegedly, investigating the company.

One of the victims of this CHC/Financial Regulator scandal precisely summed up my views on this matter (My emphasis).

I would like to see some criminal charges against those involved.

I would like to see an action taken against the Central Bank (Financial Regulator) because they were protecting the firm when they should have been protecting the consumers.

As I say; there is no effective financial regulation in Ireland.

Copy to:

Financial Regulator
Dept. of Finance
Director of Corporate Enforcement
DPP
Revenue
All political parties

Standards in public life

Letter in today’s Irish Examiner.

Need for debate about standards in public life

Saturday, December 03, 2011

AN abiding theme of recent letters to The Irish Examiner is the helplessness experienced by the Irish people to take effective action to redress the Government’s brazen funnelling of the nation’s wealth into the pockets of those who already have too much.

The moral corruption that permeates political life seems incurable. We are witnessing the logical consequence of the separation of morality from politics, with the consequent failure to bring politicians to account. The Dáil has become an inward looking, self-authenticating club that lives for itself and not for the country it purports to serve. The Seanad, intended as a provider of checks and balances to the deliberations of the Dáil, is a toothless observer of the TDs’ concern with their own cheques and bank balances.

The 16th century writer, Machiavelli, has been a very powerful role model for those who do not allow moral scruples to get in the way of the quest for political power. I have yet to meet a politician who believes that good ends can be brought about without resort to dubious means. The end is assumed to justify the means. The difficulty here is that the politician is corrupted by the dubious means but not healed again by the achievement of what was seen as a good end.

In Ireland, a more subtle factor is involved in the raw political expediency and moral blindness of so many politicians. Religious belief seems to provide the wayward politician with a comforting assurance that a loving God is waiting round the corner with the offer of forgiveness. I knew one politician who seemed to boast of his capacity for dodgy dealing. His constituents overlooked his chicanery as he was a daily communicant.

Clearly there is an urgent need for a widespread debate about standards in public life. I had thought that the end of Fianna Fáil would usher in a new dawn. Sadly, we seem to have changed the cast but not the play.

Philip O’Neill
Edith Road
Oxford
England

The ones that got away

According to a report in yesterday’s Irish Independent Fine Gael Cllr. Pat Kennedy is surprised that I made a complaint against him regarding his ‘mistake’ in claiming expenses.

The report from Limerick City Council makes clear that it was forwarded to the Standards in Public Office for their information.

But, just in case, I rang SIPO to inquire whether they intended taking any further action.

Yes, I know, a waste of a phone call.

SIPO will be filing the report, probably under – The ones that got away.

Prime Time/Fr. Reynolds scandal: The religious vultures are out

RTEs mismanagement of the Fr. Reynolds scandal has released the religious vultures from their cages.

For years they were kept in check, busily defending their church as the full horror of the child abuse holocaust spewed out its dark secrets.

These militant Catholics are now using the Reynolds/Prime Time scandal as a stick to assault the entire media effectively claiming that their obnoxious church is a victim of media prejudice.

Some of the principal militants are: John Waters; David Quinn; Breda O’Brien, Mary Kenny, Fr Sean McDonagh and Senator Ronan Mullen.

This group have already begun their media campaign of duplicity coupled with the usual warped Catholic moralising.

Mary Kenny has an article in this week’s Irish Catholic with the heading:

We all have to learn humility

Kenny warns her readers not to be too quick to crow over the faults of others and then goes on to do just that; some quotes.

Don’t get too much above yourself – pride will cause you to make a serious mistake.

It is merely human pride to persist in a line of thinking in which your ego is invested.

RTE is so vigorous in calling for ‘accountability’ from other sources; shouldn’t they practice what they preach?

Cllr. Kennedy: It was an honest and genuine mistake

I finally received the Cllr. Kennedy report last Friday. Its contents were predictable.

Cllr. Kennedy outlined the matter pretty much as it appeared in media reports.

His principal point was that he had made an honest and genuine mistake which, when it was brought to his attention, he immediately refunded the payments.

Limerick City Council, after considering Cllr. Kennedy’s excuse, decided that he was telling the truth.

The Council summed up as follows:

The matter highlights the importance of ensuring that claim forms are properly and accurately completed before being submitted for payment.

Having regard to this and the requirement for openness and transparency in the public service, the undersigned have decided to refer a copy of this report to the Standards in Public Office Commission for their information.

It would, of course, have been astonishing if the outcome had been any different.

I considered submitting the complaint to SIPO but it’s an absolute certainty that the outcome would be the same – and Christmas is nearly upon us.

RTE replies

I received the following email from RTE in response to my article on the Fr. Reynolds scandal.

Dear Mr Sheridan

Your email has been forwarded to me with the request that I reply on behalf of RTÉ . There are currently three inquiries taking place into the Prime Time Investigates programme that defamed Fr Reynolds. RTÉ has apologised for the inaccuracy of the programme and paid substantial damages to Fr Reynolds. It would be wrong to anticipate the outcome of those inquiries, but in the meantime the Managing Director of News and Current Affairs and the Editor of Current Affairs have stood down from their positions and the reporter and executive producer have been reassigned.

I do not know what else RTÉ can do until the inquiries report.

Yours sincerely

Peter Feeney
Head of Broadcast Compliance

Reminder: Ireland is not to blame for the catastrophe

At the very beginning of a Prime Time special last night viewers were ‘informed’ of who was responsible for Ireland’s woes.

2,000 miles away a country in turmoil lit the spark in a wildfire that would overwhelm Ireland and threaten to destroy the single currency.

Greece, according to the programme, was brought to the brink of financial collapse by a combination of corruption, chronic indebtedness and a dysfunctional tax system.

Ireland, on the other hand was ‘damaged’ by a combination of reckless banks, inept regulators and disastrous economic policies.

For a full hour the programme analysed the loss of Ireland’s financial independence without once mentioning the word ‘corruption’.

It is no mean achievement to analyse a country brought to ruin by political, financial and administrative corruption without once referring to that reality.

Greece is corrupt; Ireland is not, apparently.

So let’s bring ourselves up to date on who is to blame for the catastrophe visited upon Ireland.

The global financial crisis.

Lehman Brothers.

The German and French banks

And now – the Greeks.

Copy to:

Prime Time

For Marian Finucane's information…

One of the ‘sensational’ claims made by David Drumm to journalist Niall O’Dowd was that Central Bank and the Financial Regulator knew everything that was going on in Anglo and that they in fact acted as a ‘team’ throughout 2008.

O’Dowd admitted that he was completely unaware of this situation and clearly sees it as a major, new, news story.

Finucane was also astonished on hearing the claim. It would be quite extraordinary, she gasped.

Such ignorance from O’Dowd is understandable, he lives in America and is obviously not the brightest of journalists.

But there is no excuse for Finucane who has, for decades, been at the centre of events in Ireland.

She must know (or maybe she doesn’t) that the Dept. of Finance, the Financial Regulator and senior politicians knew about the DIRT fraud, knew about the Ansbacher fraud and knew about dozens of other frauds within the Irish financial sector over the decades.

The authorities never took any action to bring these frauds to an end. The criminals were allowed free rein to plunder the state and its citizens at will, without fear of ever being brought to justice.

And just for Marian Finucane’s information, the situation remains exactly the same as I write.

That is, there is still no financial regulation in Ireland when it comes to the financial sector; crime is still rampant within the sector.

Copy to:
Marian Finucane

Simon Kelly: The scumbag returns

While checking out O’Dowd interview with David Drumm I came across this piece by the journalist.

What’s interesting here is the comment by one Simon J Kelly. (The comment has been cleaned up of spelling and grammatical errors).

David’s (Drumm) story is spot on. Anybody who thinks that pinning the blame on a few bankers for Ireland’s collapse is delusional.

That is also the informed opinion of the official report carried out on the banking collapse by Nyberg.

I screwed up like so many other Irish people and so did David. We need to learn from it and get over it, it’s a witch hunt.

AIB will loose almost as much as Anglo, but I don’t see the government chasing those guys.

There are winners and losers. That’s the nature of all things.

We just need a system that accepts this rather than punished people who try and fail.

The Irish in Ireland need to learn from the Irish in America.

This Kelly is, I believe, one of the scumbag developers responsible for the impoverishment of the Irish people.

Niall O'Dowd: Completely fooled by David Drumm

Niall O’Dowd is an Irish American journalist and author, he’s also a very gullible individual.

He spoke to Marian Finucane (Sunday) about an interview he conducted earlier this month wth former CEO of Anglo Irish Bank, David Drumm, in which the disgraced banker poured his heart out.

Now, the first question that any competent journalist would ask himself is – what’s this man’s agenda, why is he so eager to speak to a journalist?

O’Dowd never noticed that he was being used and fell for Drumm’s bullshit hook, line and sinker.

Some quotes:

He wanted to make his side of the story plain; I think he felt he had been the victim of a witch hunt in Ireland both in the media and personally.

He wanted to give an interview to a journalist in America rather than in Ireland, he was more comfortable with that scenario.

I’ll bet he was and he made a good choice – an obviously uninformed and naïve journalist.

What I was looking for Marian was the human story because behind all these great scandals there are lives and that’s what I tried to bring out in the interview.

I think you’re looking at a guy in very deep anguish for all the obvious reasons.

What was interesting to me was his very deep sense that he was one of many yet he felt he’s been singled out.

Ahhhhh, wouldn’t your heart be broken listening to such tragedy?