Mary O'Dea and the IMF

I couldn’t let this one pass without comment either. Mary ‘shop around’ O’Dea has landed a new job at the IMF, as the Irish Independent reported earlier this month.

O’Dea, currently director general of financial operations at the Regulator, will become the IMF’s alternative executive director this July.

“I’m really looking forward to what I know will be a challenging role, especially at a time when Ireland is itself in an IMF/EU programme,” O’Dea told the Sunday Independent. This paper asked the Regulator two months ago if O’Dea would be taking up a new job in the IMF.

I suppose you could with some jest say that she is getting out of dodge when the going is good. Rumour has it there were no promotion prospects internally at the now expanding Central Bank, so she was bumped off to Washington. Apparently the job is a rather nice 3 years in Washington DC tax-free with expatriate benefits (including private schools).

Oddly though she goes from sitting in our Central Bank/Financial Regulator up to and during IMF intervention, to now sitting on the other side of the table to perhaps help scrutinise our adherence to an IMF deal.

(H/T P O Neill)

A city as a platform

Rachel Sterne, who had the good fortune to meet in New York last year, speaking about her new role as New York’s Chief Digital Officer. She is formerly of GroundReport and DayLife. I know there are some very good people in Dublin who want to replicate some, if not all, of this.

But how about go wild and make Ireland itself a platform?

The Programme for Government

This blog was largely on a hiatus during the election campaign. I’m quite ambivalent about campaigns, and don’t pay much attention to the horse race generally. Whoever wins, wins.

A new government is about to be formed, so now it is important to look at what they are promising in terms of the goals of this blog. Critically, it is important to be aware that promises are promises, but actions are actions, and we will be watching closely to see how much, or little of the programme is implemented.

The promises that are particularly relevant, for the record:

We will legislate to restore the Freedom of Information Act to what it was before it was undermined by the outgoing Government, and we will extend its remit to other public bodies including the administrative side of the Garda Síochána, subject to security exceptions.

We will extend Freedom of Information, and the Ombudsman Act, to ensure that all statutory bodies, and all bodies significantly funded from the public purse, are covered.

We will introduce Whistleblowers legislation.

We will introduce spending limits for all elections, including Presidential elections and constitutional referendums, including for a period in advance of scheduled Local, European, General and Presidential Elections.

We will significantly reduce the limits on political donations to political parties and candidates to 2,500 and 1,000 respectively, and require disclosure of all aggregate sums above 1,500 and 600 respectively.

We will introduce the necessary legal and constitutional provisions to ban corporate donations to political parties.

We will amend the Official Secrets Act, retaining a criminal sanction only for breaches which involve a serious threat to the vital interests of the state.

We will introduce a statutory register of lobbyists, and rules concerning the practice of lobbying.

Our open government legislation will also establish an Electoral Commission to subsume the functions of existing bodies and the Department of the Environment.

We will amend the rules to ensure that no senior public servant (including political appointees) or Minister can work in the private sector in any area involving a potential conflict of interest with their former area of public employment, until at least two years have elapsed after they have left the public service.

• Where appropriate, agency boards will be scrapped and agency managers will report directly to Ministers and their Departments on performance against targets.

• We will put in place a Whistleblowers Act to protect public servants that expose maladministration by Ministers or others, and restore Freedom of Information.

• There will be no more “golden handshakes” for public servants that have failed to deliver.

• We will overhaul TLAC (Top level Appointments Commission), with the chairperson and the majority of members drawn from outside the public sector.

• We will require Departments to carry out and publish Regulatory Impact Assessments (RIAs) before Government decisions are taken.

• We will introduce a reformed incentive system for all grades within core Government departments to reward cross-departmental teams that deliver audited improvements in service delivery and cost effectiveness.

• In local services, we will establish a website – www.fixmystreet.ie – to allow residents to report problems with street lighting, drainage, graffiti, waste collection and road and path maintenance in their neighbourhoods, with a guarantee that a local official will respond within 2 working days.

Public sector bodies will be required to publish balance sheets and to move to accruals from cashflow accounting. Every Purchase Order by a Government Department or agency for more than €20,000 will be published online. We will give the Comptroller and Auditor General and Oireachtas Committees the extra powers needed to carry out value-for-money audits of State programmes.

It has to be said all of these measures are to be welcomed. But it also depends how and when they are introduced. As with any Programme for Government, it is short on detail. But some questions arise, as to what certain things mean, namely:

We will legislate to restore the Freedom of Information Act to what it was before it was undermined by the outgoing Government, and we will extend its remit to other public bodies including the administrative side of the Garda Síochána, subject to security exceptions.

What will this mean? Will it mean a reversion to the 1997 Act, including Section 19 being moved back from 10 years to 5 years? Will it include a removal of all fees, within reason? Will the Office of the Information Commissioner get extra resources to cope with a likely rise in appeals? Why is only the administrative side of the Gardai to be brought under the legislation? Will any new public bodies be automatically brought under FOI?

We will amend the Official Secrets Act, retaining a criminal sanction only for breaches which involve a serious threat to the vital interests of the state.

I would be interested to see exactly how this will be done. Why not repeal the Act entirely?

In local services, we will establish a website – www.fixmystreet.ie – to allow residents to report problems with street lighting, drainage, graffiti, waste collection and road and path maintenance in their neighbourhoods, with a guarantee that a local official will respond within 2 working days.

This is clearly inspired by the excellent MySociety website FixMyStreet.co.uk. This forms part of the MyGov.ie (with which I am involved) plan to roll out a number of apps, including KildareStreet.com integration and the recently built ElectionLeaflets. Clearly we would have an interest in helping to build such an app, as government has a poor track record in doing it themselves.

Every Purchase Order by a Government Department or agency for more than €20,000 will be published online. We will give the Comptroller and Auditor General and Oireachtas Committees the extra powers needed to carry out value-for-money audits of State programmes

A good first step if implemented. But it could easily be far more expensive. We will have to wait and see.

Without sounding too cynical, I trust not the words of politicians, but their actions. I will be closely watching how things are done, and indeed if necessary lobbying for greater transparency or changes to proposed legislation where I think such changes are flawed, or do not go far enough.

Honohan on Primetime

Irish Central Bank governor Patrick Honohan was on RTE Primetime tonight, and I was particularly interested in the final part of his interview. In relation to mortgages, emphasis mine:

RC: We dont need to fight them of because no firesales.

RC: The number of people who are now defaulting on their mortgages..the people who are in serious trouble…

PH: They are in arrears…

RC: …in arrears…but some defaulting and with the possibility of an interest rates rise, real interest rates rise later in the year, possible more people will be pushed into that. Isn’t it possible that the mortgage book of these banks is in far more serious trouble than we’ve thought heretofore, and that the hole therefore is much bigger?

PH: Of course the biggest part of the banks’ books that were not taken into NAMA is the mortgage book. SO from that point of view the mortgage book is the subject of specific scrutiny in our country. We are tracking the increases in arrears were tracking the increases in renegotiations, renegotiation and rescheduling of loans where people are in difficulty is part of the bread and butter of the banks. There is an increase in the potential losses as time goes on, we’ve been tracking that. There are also of course the important human problems, family problems that need to talked about when you’re not talking about billions, you’re talking about hundreds of thousands.

So perhaps a hint at what might happen to mortgages? But just how big will the losses be? Probably – huge.

Oireachtas spending – breaking it down. Part 1

One of the first names to stand out for me in the Oireachtas database was this:

45544 Stephen Kearon 300200061626018 – OSS Min SA RSA – FullyVouch(A) IT services Web Hosting €3250 23/04/2009

Of course I recognised the name – after many hearty disagreements on Twitter with @skearon. Stephen is a former adviser to Dick Roche, from Wicklow, and I think it would be fair to describe him as a strong Fianna Fail member. In 2009, €3,250 was charged to the Oireachtas for “IT services Web Hosting” in relation to a Minister. I wonder which Minister that could be? As someone who hosts websites myself, €3,250 seems a bit steep.

Cowen's meetings and Anglo problems

Right at the end of Leader’s questions last week, and with reference to his meetings in 2008, Mr Cowen said:

That would have been organised by Fintan Drury who organised the golf outing. It was about being able to sit down with people at the end of the day and having a chat about the economy. The Deputy will recall we had a mini-budget and saw recession on the horizon and a big slowdown in our economy. As Taoiseach, I was there chatting to see if there were ideas and to find out other people’s views of things and to see if things could be done which might be helpful. As the Deputy will know, those people would have some views on that. That was basically the total sum of it.

Except the ‘mini-budget’ was not held until April the following year, almost 10 months after the golf outing. I also don’t recall much in the way of pre-recession planning in the works by FF in the summer of 2008. As I recall the party was still getting over the euphoria of a new party leader and new Taoiseach. The way the Taoiseach talks about it here, one would be left with the impression that the mini-budget had happened, the economy was spiraling out of control, and he was seeking the views of some businessmen/bankers on what to do.

But the meeting took place before Lehman, before FF realised the extent of the crisis and before the recession took hold. This means that either Brian Cowen doesn’t remember the meeting, or else when it took place. Or he is just spoofing.

In relation to the NTMA, Vincent Browne also raises some interesting questions in relation to Michael Somers’ interview last week:

So now we know the following:

In 2007 the NTMA came under considerable pressure from the Department of Finance to deposit more funds with the banks;

So severe was the pressure that the then head of the NTMA, Michael Somers, sought legal advice on what he should do;

The NTMA did not buckle under the pressure;

The bank, perhaps the only bank that needed funds urgently in 2007, was Anglo Irish Bank;

David Drumm, then CEO of Anglo Irish Bank says Brian Cowen had been asked to help with the NTMA and had expressed annoyance about the obduracy of the NTMA;

Brian Cowen denies he made any representations on behalf of Anglo.

Interesting.

However this document has also been doing the rounds lately, as released to the Public Accounts Committee (worth a detailed look):


And just one more thing. If as early as 2007 Anglo Irish Bank was having liquidity problems, as now seems clear, and if the NTMA refused to increase deposits at the bank, who then, provided liquidity? (most likely around the time of the Northern Rock crisis, a bank with similar issues to Anglo).

Perhaps a clue lies with our own Central Bank. For around that time, the ‘Other Assets; of the Central Bank increased dramatically for a period of three months. Here’s a graph of the those assets from September 2006 (around the property peak) to late 2008 (pre Anglo nationalisation but post guarantee)

Interesting. In July 2007 the other assets stood at €3.8bn. By late September they had almost quadrupled to €12.3bn. Just what was this for? At the time this was a record for the Central Bank, a record that in recent months has long since passed (other assets in December stood at €51bn).

Northern Rock was forced to go to the Bank of England for funding on September 14, 2007. Was Anglo also receiving funding, and was a quiet bank run underway? How aware was the Department of Finance and the government of problems at Anglo in September 2007 and the months that followed?

Cowen's golf trip

July 28, 2008: Druid’s Glen

Taoiseach Brian Cowen
Sean FitzPatrick (Anglo)
Fintan Drury (Anglo)
Gary McGann (Anglo)
Alan Gray (Appointed in 2007 by Cowen as a Director of the Central Bank/Financial Regulator)

Hmm. Gary McGann certainly rings a bell. Remember he resigned from the board of Anglo just prior to nationalisation.

On January 21, 2002, Mr McGann was appointed to the board of Anglo Irish Bank, along with Tom Browne (then head of its wealth management division).

In 2007, Mr McGann was named as a shareholder in ISTC, the group that collapsed that year with debts of €871m. The group was started in 2005 by former Anglo executive Tiernan O’Mahony. Denis O’Brien and Sean Quinn were also said to be shareholders.

Mr McGann, a past president of IBEC, was also involved in a company called Tysan Invesments with John Kerry Keane: A private individual who is active in the media sector, Paul Coulson: Chairman of Ardagh plc and a director of other companies, Denis O’Brien: A private individual who is active in the media sector, Lindat Limited: The owner of this company is the Chairman of Harcourt Holdings which is active in the property sector in Ireland, Britain and overseas, Lar Bradshaw: Chairman of the Dublin Docklands Development Authority and amongst other things, serves as a non-executive director of Anglo Irish Bank Corporation plc, Sean Fitzpatrick: A non-executive chairman of Anglo Irish Bank Corporation plc and serves as a non-executive director of the Dublin Docklands Development Authority, Greencore plc, and Aer Lingus, Paddy Wright: Chairman of the RTE Authority and a non- executive director of Anglo Irish Bank Corporation plc, Sean Melly: An entrepreneur who is active in the media sector, Pat Gunne: Chief Executive of Gunne Group which is active in the property sector in Ireland, Longstone Estates Limited: A property holding company owned by a family Trust, Lochlann Quinn: Deputy Chairman of Glen Dimplex which is active in the manufacture of electric heating and domestic appliances. Additionally, he is a Director of The Merrion Hotel. Tysan was involved in the purchase of the Atrium Microsoft building in Dublin. Mr McGann became the chairman of the DAA upon its creation in 2004.

Of course Fintan Drury was also appointed by Noel Dempsey to the RTE authority. Paddy Wright (deceased) was a former president of the Jefferson Smurfit group and a former chairman of the RTÉ Authority. Mr Wright had also been chairman of Bord Iascaigh Mhara, deputy chairman of Aer Lingus and president of the employer’s body, the CII. He was also director of Anglo-Irish Bank. Lochlainn Quinn is Labour TD Ruairi Quinn’s brother, and a cousin of Superquinn founder Fergal Quinn (who himself declared a registered interested in Anglo related companies, though later said this was a mistake). The list goes on, and on…

So are we to believe that three directors or former directors of Anglo Irish Bank, who between them have connections to Sean Quinn, RTE, the DDDA, the DAA, Aer Lingus and IBEC, and a member of the board of the Financial Regulator, played golf with the leader of the country in July 2008, and that Anglo Irish Bank was never discussed?

2011

I am mapping out plans for this blog for the coming year, and I wanted to ask readers some questions. Comments welcome!

1) What do you want to see more of?
2) What do you want to see less of?
3) Are there any particular issues or areas should be looked at?