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Alan Dukes and Kevin Gardiner, economist and the man who coined the phrase Celtic Tiger, were discussing the ongoing financial crisis on Today with Pat Kenny during the week (Thursday?).

According to Gardiner it’s all to do with confidence. People are feeling bad about themselves and the country. All that’s needed is a change of mindset and everything will be just grand.

Dukes, the alleged taxpayer’s representative on the board of Anglo Irish Bank, was in full agreement.

Taxpayer’s have cause to worry as to what planet Dukes is living on after listening to his plans for Anglo Irish Bank.

We have put together a restructuring plan. The first phase is the NAMA operation. The next phase is to stabilise the operation of the bank and finally to split the bank into a new Anglo and a bad bank and make the new Anglo a business bank and perhaps part of the third banking force.

When asked what was the bad bank part of the new Anglo he replied.

It’s a bit like NAMA, it’s where you park the less well performing bits of the loan book and gradually work them out over a period of time.

But, but…I could hear worried taxpayer’s saying…Isn’t that what NAMA is supposed to do in the first place?

As for the third banking force? Senator Shane Ross, writing about it in today’s Sunday Independent calls it the third banking farce. It’s worth a read.

The astronomer was explaining to his audience that the earth would be destroyed in 4.5 billion years time when the sun explodes.

A lady, shocked to hear this news, checked with the astronomer. Did you say the earth would be destroyed in 4.5 million years?

No, replied the astronomer, 4.5 billion. Oh, said the lady, sitting down, that’s a relief.

The same logic can be applied to the Central Bank scandal where, apparently, everybody was relieved to learn that 52 spouses of staff had gone on 71 trips over two years and not, as was first thought, altogether on one trip.

I can see this ‘trick’ being enthusiastically taken up by politicians and officials as the ultimate red herring. Politician X, discovered to have defrauded the taxpayer of €50,000, will be off the hook when it’s learned that the fraud was only €49.000.

The official reaction to the Central Bank scandal makes one thing clear, nothing has changed.

The new Governor, Patrick Honohan, on first taking up his post naively expressed puzzlement at how banks could have been so reckless and called for an inquiry; he wanted to get at the truth.

Clearly, this unprecedented attempt to bring accountability to a corrupt banking system sent shock waves throughout financial and political circles.

There must, therefore, have been great relief when Honohan’s response to the expenses scandal clearly demonstrated that he had quickly learned how to work the system.

I knew nothing about this, I’m not responsible but I have put a stop to the practice and then, in traditional Irish style, he pulled down the shutters.

Was former governor John Hurley accompanied by his wife on a taxpayer funded trip to a symposium in the Rocky mountain ski resort of Jackson Hole? – Not telling you.

Was former governor John Hurley accompanied by his wife on a trip to Cape Town in 2007? – Not telling you.

Was former governor John Hurley accompanied by his wife on a trip to Paris in 2006? – Not telling you.

What about details on a number of foreign trips taken by senior officials in 2007/08? – Not telling you.

Yes, Mr. Honohan is well and truly integrated into the Irish system of secrecy and non accountability.

We’ll hear no more calls for investigation from this man.

The latest report by the Comptroller & Auditor General (C&AG) into FÁS reveals some very questionable activities by its staff.

€200,000 on flights for people not working for the agency. Apparently, this gravy train, funded by the taxpayer, included journalists, politicians, spouses and friends.

There was also questionable expenditure on golfing events, sporting events and concerts, the majority approved by the incompetent, disgraced but well compensated Mr. Molloy.

Money was spent without authority, the FÁS board was effectively lied to and credit cards were thrown around like drunken sailors in a brothel.

But the most shocking and disgusting aspect of this scandal is the arrogance of the civil servants involved including the C&AG himself.

For example, it is reported that up to six top executives at FÁS were paid bigger bonuses than they were entitled to in 2008. These bonuses were approved by the incompetent Mr. Molloy and sanctioned by the Departments of Enterprise and Finance.

Incredibly, the executives have not been asked to pay back the money which FÁS says was paid in error.

If this was a social welfare ‘error’ the applicant would instantly find himself the subject of an investigation and the money would be deducted from his income forthwith.

A spokeswoman for the Department of Enterprise declined to comment. The incompetent Mr. Molloy also declined to comment.

These people are effectively telling the ripped off taxpayer – take a hike, we don’t have to account for how we spend your money.

Despite constant praise from the media the office of the C&AG also has questions to answer.

Former acting chairman of FÁS, Mr. Niall Saul, was told by Mr. Buckley that controls at FÁS were excellent, that there were no serious problems.

Mr. Saul rightly concluded that if the C&AG was a private company it would be lucky not to be fired.

This shouldn’t surprise ripped off taxpayers when we remember the infamous Bord na gCon investigation carried out by the C & AGs office.

Despite findings of at least one case of serious fraud and many other questionable activities the C&AG, who, bizarrely, is also the auditor of Bord na gCon, concluded that

in general the funds of Bord na gCon were properly applied.

As I write another scandal has broken involving the C&AG and the Central Bank. The media is focusing on an error made by the C&AG when he reported that 52 spouses of staff attended meetings on a single trip when in fact the meetings involved several trips.

The real scandal here was the refusal by the C&AG to disclose what organisation was responsible for this alleged abuse of taxpayer’s money.

Once again, Irish citizens had to rely on the media, RTE on this occasion, to provide them with information that should be immediately forthcoming from state agencies.

Just who does Mr. Buckley think he is in refusing this information to Irish citizens? What were his motives in putting the interests of Central Bank staff above the interests of the people he is allegedly representing?

And what does this affair tell us about the new and much praised Central Bank governor, Patrick Honohan?

On the first occasion he is asked to account for his office he tells us to take a hike. Even now he is refusing to disclose who went on the trips or how much they cost. Irish taxpayer’s have a right to know this information.

And what does all this say about the so called reform of the political and financial sectors? Well, it’s obvious;

There is no reform, secrecy is still the name of the game, ripping off the taxpayer is still rampant, lies, half truths and dissembling is still the favoured response and arrogance is still the predominant attitude.

The political, administrative and financial system that has run this country into the ground is beyond reform.

Nothing will change until the Irish people wake up and throw these people and their corrupt system out of office and out of power.

Copy to:
Central Bank
Comptroller & Auditor General
FÁS

The Central Bank expects the economy to exit the recession in the second half of this year,

The following quote is taken from a report in today’s Irish Independent.

Nevertheless, Anglo faces a tough task demonstrating that it can repay taxpayers’ money after five years, as necessitated by EU state aid rules.

If Ireland was the most efficient and best regulated country in the world with a political and business leadership of vision and courage solely focused on what was best for Ireland and its people the above plan would be a near impossibility.

As a backwater banana republic led by a mafia type body politic and a regulatory regime that facilitates widespread criminality the above plan is a complete and utter impossibility.

Over the next few years the remaining good assets of Anglo Irish Bank will be stripped clean by friends of the political system after which the rotting carcass will be left to stench up the nostrils of Irish taxpayers for generations to come.

Recently, a panel of guests was asked for their predictions for 2010 on the Tonight with Vincent Browne Show.

One of the guests, Sam Smyth, when asked did he think there would be an inquiry into the banking crisis, replied.

No, because if they did no one would ever again invest in banks.

I replayed the clip to see if Smyth was being ironic, humorous or cynical, but no, he seemed to genuinely believe in what he was saying.

What hope is there for Ireland if Smyth, a man who is seen by most as an intelligent journalist/commentator, believes that the best way to deal with very serious corruption is to bury your head in the sand and hope that nobody notices?

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.

Letter in today’s Irish Independent:

Bank probe would drive investors away

Regrettably, I have to agree with the Taoiseach’s view that an independent investigation of the causes of our economic crash would damage our international reputation and lead to further economic hardship for the country.

Yes indeed, Taoiseach, you are right, the ‘markets’ would react very unfavourably to the exposure of the fact that the people who were responsible for the disaster are still in their positions of power within the banks, the Government, the Department of Finance and indeed, in many instances, the regulatory system.

What investor in his right mind would want to invest in a banana republic that bails out the bankers and fails to punish the incompetent, the negligent and even the corrupt at the higher echelons of its society?

Instead, let us keep things ‘hush, hush’ and maybe the ‘markets’ won’t notice and our problems will magically disappear.

Jimmy Finn
Claremorris, CO MAYO

Oh dear, what an embarrassing position those nasty boys at AIB have created for our boys Brian and Brian.

Everything was going fine, the banks, bankers, developers, politicians and all the rest of the ruling elite had their wealth, power and positions insulated against the financial crisis.

The entire system, including much of the media, were well into a propaganda campaign designed to convince the peasants that it was all their fault and they must pay the price.

But those nasty AIB boys just couldn’t control their innate greed and have spoiled the party by jumping the gun too early. Now the wealthy ruling elite will have to wait a little longer while Brian and Brian revert once again to pretending that they’re working in the best interests of the peasantry.

A week or two should do it before a fudge can be cobbled together which will allow the AIB boys to get back to what they’re really good at – ripping off their customers.

Minister for Finance, Brian Lenihan, is amending Nama legislation to give himself power to issue guidelines to banks relating to the flow of credit to viable businesses.

The key word here is ‘guidelines’, there will be no legislation enacted that will force the banks to play their part in national recovery.

Lenihan’s guidelines mean absolutely nothing; he may as well be issuing guidelines to prevent potato blight on the moon.

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