Harry McGee on political lobbyists and lobbying

Harry McGee has a good piece in this morning’s Irish Times on politcal lobbying and lobbyists, an oft ignored subject in this country.

One quick note on the second to last paragraph:

Since the mid-1990s, stricter ethical requirements have been introduced for those who are lobbied (ie politicians) who now must furnish statements of donations, make declarations of interests and adhere to codes of conduct for office holders.

The ethical standards in this area are still very, very lax.

The “details” of donations made to TDs over 2009 were published last week, just 20 TDs declared they received a donation over the (too high declaration limit) so we know bugger all about how people funded their work. This issue was covered in the first post on this blog. Political parties don’t have to publish accounts. The donations system is easily bypassed, legally (!). SIPO doesn’t have the right powers to investigate off its own back, and is hugely underfunded and understaffed.

Messy stuff in dire need of reform. Fix that and get a lobbyists’ register going, now please.

Footnote: A voluntary one? Fianna Fáil you are winding us up, right?

DDDA Reports

We have obtained a copy of the three DDDA reports by Niamh Brennan from the Fine Gael press office. The reports have been scanned, OCRd and uploaded and can be searched or download from the interface below.

The reports run to 216 pages, this is the only soft copy available it is therefore possible (but unlikely) that some pages are misordered.

The details were first covered by David Murphy, Business Editor with RTE, this morning.

Fine Gael have accused of John Gormley of a cover-up over the reports. As per The Irish Times: “The reports deal with matters to do with finance, planning and the board’s reaction to these matters. [Fine Gael Deputy Phil] Hogan said the planning report raises questions over the status of planning permission for some of the most well known buildings.”

Amongst the main issues detailed in the report are revelations that the Irish Glass Bottle site was never formally valued. It was purchased by the DDDA and a number of developers and financial entities in 2006 for more than €400m but quickly fell drastically in value. Those involved included Bernard McNamara, who has sued the DDDA claiming they didn’t deliver on promises relating the deal. Sean Dunne was also involved and also took the authority to court over the now-near-abandoned Anglo site. He won his case.

Labour says the issues of corporate governance can be put down to, amongst other things, Anglo – which had an interest in the site through its loan portfolio – having two members of its own board, Sean FitzPatrick and Lar Bradshaw, sitting on the board of the DDDA.

Further issues are also covered relating to the DDDA granting planning permission for structures which could be considered non-compliant and the absence of value-for-money audits being carried out.

DDDAreports

Suspension of CIÉ employee remains in place after court finding

Interesting details available in a finding made by the High Court last week.

KEENAN – v – IARNRÓD ÉIREANN

Mr John Keenan is the plaintiff, he has taken a case against CIÉ/Iaranrod Eireann (hereafter referred to as CIÉ), at present he remains suspended with pay. He is a long standing Labour member, friend of Emmet Stagg and is being represented by Alex White. In the above case he sought “interlocutory injunctions directing Iarnród Éireann to allow the plaintiff to perform his duties… without interference; and restraining the defendant from taking any steps to remove him from his position”. In short, he asked the court to tell CIÉ to lift the suspension with immediate effect.

Mr Keenan was head of human resources when the incidents which give context to the judgement are alleged to have taken place. It should be noted that this judgement has not considered the allegations made by either side in the case, only whether or not the suspension should be lifted.

In October 2007 Mr Keenan was asked by CIÉ’s CEO, Dr John Lynch, to compile a report for the company’s Audit Committee. The report set out the progress made in respect of disciplinary charges issued in the case of an Iarnród Éireann employee, one of the subjects of the then on-going Baker Tilly investigation.

In the last sentence of his report Mr Keenan stated that the losses expected to be detailed by Baker Tilly would “be seven or eight digit sum”. This, he says, triggered “a very adverse reaction” from some in senior management.

[Mr Keenan] says that Dr. Lynch and Mr. Paul Kiely, the chairman of the Audit Committee believed that this aspect of the report jeopardised their positions and that he was told that he was stupid and should have known better than to suggest such high losses in writing to a Board sub-committee.

Mr Keenan continued directing the Cost Audit committee but says in December 2007 there was a direction given that no minutes be kept of meetings of a “steering group” on these matters and that nothing should be kept in writing.

He claimed to the court that at one point he told other members  of CIÉ senior management that Baker Tilly estimated losses could have been 12% of the CIÉ’s annual spend. He said the Chief Executive, Dr Lynch, argued that this estimate was outside Baker Tilly’s terms of reference and wanted it removed. Mr Keenan attempted to argue the relevance of the figure but, he says, Dr Lynch was unmoved. According to Mr Keenan the figure was then reduced to €2.5 million. That was around September of last year.

When published the Baker Tilly Report, as covered in some depth on this blog, detailed €2.6m in quantifiable losses, with a note that the team was “confident further unidentified losses exist within the company”. At the time Shane Ross estimated the true extent of the losses to be €9m.

It’s important, and I again wish to note, that none of the allegations made by either side are found correct or incorrect by the judgement about which I write in this post. They will be considered in a later case.

Mr Keenan also claims that on November 11 2009 the CEO, Dr Lynch, and Richard Fearns, the chief financial officer, relieved him of responsibility for the Cost Audit Unit. He says they did so as they wanted him “off the pitch”. Mr Fearns categorically denies this to be the case and says there was legitimate reason for the change. Mr Fearns believed the Audit Unit would be better handled by the finance section of CIÉ, not Human Resources, of which Keenan was in charge, as it was covering issues of financial irregularities.

It is accepted by both parties that there was considerable tensions between the two at this point.

On December 3rd Keenan was suspended from CIÉ for dereliction of duty. The reason given related to separate case which is now under judicial review in the Equality Tribunal.

The Equality Officer for that case had delivered findings on November 13th which were “very much averse to Iaranród Eireann”. They stated a female employee in the company had been harassed on gender grounds. There were clear implications made which could have damaged the reputations of both Mr Keenan and Mr Fearns.

Mr. Keenan says that having received it personally on 20th November 2009 (a Friday), he took the determination home with him and returned to work on the following Monday, 23rd November. He says that he then took a number of steps in relation to the determination, involving meeting with the Iarnród Éireann solicitor who had dealt with the matter (with regard to an appeal) and also instructed that counsel be briefed. The plaintiff says that he planned to brief Mr. Fearns on this issue at a meeting arranged for 2nd December, 2009. A full meeting however did not proceed as planned.

Mr Fearns contends Mr Keenan had ample opportunity to inform him of the findings and that by not ensuring he did so he was in dereliction of duty. He said due to Mr Keenan’s inaction there was a possibility that the company would be the subject of bad publicity for which it would be unprepared. Mr Keenan states this not to be the case, saying that the details of the cases are not made public for a month after the Equality Tribunal makes its findings.

Mr. Fearn deposes that he informed the plaintiff that he had a crisis of confidence in him as a H.R. Director as he had failed to tell him about this decision and that he should have known what a big issue this would be for the company. He says that he directed the plaintiff to stand aside from his duties with immediate effect, to go home and not to return to work until further notice. He was to continue to be paid his full salary. He was to collect his personal belongings and to hand him the keys of his office.

That was on December 3. Mr Keenan claims that the decision was disproportionate. He implies that the suspension was an attempt to silence him and that the CIÉ pair have been seeking to suppress information and acting in bad faith in dereliction of their duty to investigate alleged fraud.

However, after the meeting with Mr Fearns, Mr Keenan didn’t go home immediately. He returned to his office and made a number of phone calls. Mr Fearns claimed Mr Keenan indicated that he would return to work the following day despite being told not to. Mr Fearns then decided to seal Mr Keenan’s office, close his access to the internal email system and cut off his internet facilities. Security staff were later told – though Mr Fearns says, not by him – to ensure Mr Keenan didn’t return to CIÉ grounds. I’ve been informed that this included the posting of Wanted-style posters around CIÉ facilities.

The judgement says these decisions were “quite radical”.

The CIÉ representatives say following the December 3 incident Mr Keenan contacted employees who had been reporting to him and told them to access email correspondence and make copies. Mr Keenan said this was not “wrong” and that it was part of his duties. They say he procured access to the email account of the personal assistant of the Chief Medical Officer, Dr Declan Whelan, and that he may have authorised access to employee’s bank accounts. Dr Whelan accessing his assistant’s email account was a breach of trust. Furthermore, the defendent (CIÉ) claim Mr Keenan authorised the placement of a tracking device on an employee’s car. Mr Fearns called for an investigation in the matters and said the suspension should remain in place until complete.

Judge John Mac Menamin found that the suspension should remain in place. He didn’t find against Mr Keenan however. He said that allowing him to return to work would be wholly impractical as the level of trust between the the top brass in CIÉ and Mr Keenan had disintegrated completely.

The allegations which gave context to the case will be assessed at a later date.

The Anglo spin begins

It is extremely important that the events of the past few days, today, and in the near future are watched extremely closely. There are a number of reasons as to why this is the case, and I am going to explore some of them.

I will look at this chronologically, and some of what I am writing is based on things I have been told by a source in the past few months (yes fellow hacks, one source who has proved reliablity in the past, but no second source – add your own provisos). I am publishing now because of the main story in today’s Irish Times – an interview with the current chief executive at Anglo.

According to a source, on the night of January 25, 2010, exactly two months ago, there was an urgent meeting of the board of Anglo, where I am led to believe senior Department of Finance officials may have been present. At this meeting the likely figure for the recapitalisation of the bank was discussed. The recap figure was put in the region of “double figures”: i.e. €10bn or more. Originally we had been told in 2009 that Anglo would likely only need another €3bn-€6bn on top of the €4bn already given to the bank. So remember this, Anglo Irish Bank, and its board, have known about the need for over €10bn in taxpayer monies for two months – at least.

February 4: I write this lengthy blog post. Some of it is based on the information outlined above, while other parts are based on the impending closure of ECB emergency lending. As I said in early February, emphasising myself:

In November the ECB announced it would begin the process of winding down the emergency funding. In December the last 12-month repos were sold. We are now approaching the next phase. Next month, the ECB will close the 6-month window. The 3-month and 1-month repos will close after that.

In June, Anglo received a €3.5bn recapitalisation from the State. At the time it said it might need a further €3.5bn. This is money to rebuild the bank’s capital base due to bad loans.

However, these figures are likely much higher. Anglo will likely need up to three times that figure. Combine that with AIB, INBS and Bank of Ireland’s funding needs, and the taxpayer will likely be handing over more than €22bn to our banks over 2010.

When you combine the shutting of the discount window, with the delays in NAMA transfers and ultimately our own State borrowing (indeed we have already borrowed €6.5bn so far this year – 33% of our bond issuance for this year was done in January) and with the likely writedowns of not 30% but 50% on the loanbooks, we are facing a serious crisis. And of course the other factor is the ECB raising interest rates at a time we need them to stay low.

March 18: Former Anglo chief executive Sean FitzPatrick is arrested. Lots of headlines, but a reasonable person might ask why press releases were issued, why Mr FitzPatrick was arrested at all. Is it not normal practice to schedule an interview, before any arrest?

March 24: Former Anglo executive Willie McAteer is also arrested. Again the headlines say something is being done. But is that the case?

March 25: The chief executive of Anglo gives an interview to the Irish Times. In the interview he makes a number of claims:

A liquidation would cost the State between €27 billion and €35 billion, he said, while running it down over 10 years would cost between €18 billion and €22 billion.

Anglo has asked the EU for approval to split the bank into a good bank and a bad bank and to restructure the good operation as a commercial lender.

Mr Aynsley said this would cost between €10 billion and €13 billion, including the €4 billion invested by the State last year.

Reinventing Anglo would minimise further State bailouts and create “exit options for the Government”, such as a future sale of the bank, a merger with another bank or refloating on the stock market.

He confirmed that Anglo would report the biggest loss in Irish corporate history when it publishes its results for the 15 months to the end of 2009 next week. The bank will post losses of almost €12 billion after writing off bad loans.

Anglo would transfer €35.6 billion of loans to the National Asset Management Agency – about half of Anglo’s loans, said Mr Aynsley.

He defended Anglo’s decision to pay salary increases to 70 of its 1,240 employees. As staff left, other employees had taken on increased workloads, he said.

“I am appalled and outraged at a lot of the stuff that had gone on in here but there are some facts of life in terms of running a bank – you can’t do it without appropriate people,” said Mr Aynsley.

Back in December I blogged, along with some writing in the media, about the rumoured “New Anglo Irish Bank”. The plan being to split the bank into two, to create a new commercial lending arm and rename and rebrand the new part. For short this is known as “New Anglo”.

I believe the chronology outlined above (but perhaps excluding the arrests, but you never know in this country), shows a careful PR strategy by the Bank against the public. The affects of the arrests is to lead us to believe that something is being done in terms of accountability. The timing of Mr Aynsley’s interview is very interesting – just after arrests and just before we hear about the full extent of losses at the Bank, and preparing the ground for the coming recapitalisation – another €10bn – while offering us hope about the future potential of the bank. The timing and method of events over the coming weeks will certainly be very interesting.

And remember: the Bank needs such a massive recapitalisation because of reckless lending that led to the losses in the first place. We are paying for the massive failures of the Bank and the Regulator, and possibly the collusion of the two.

I will be writing in more detail about Anglo over the coming days.

Cabinet Agendas April, May 1998

As previously mentioned, I am continuing the process of sharing agendas for all Cabinet meetings for 1998 and 1999. I am adding several agendas together for each set of documents, so I am now including all agendas for April and May 1998. These documents were released as a result of the expiry of the 10 year exemption on Section 19 of the FOI Act, and I believe this is the first time they have been made available publicly, in any form.

Cabinet a Gen Ads Apr May

Anglo leases and flights

Some time ago I received a tipoff surrounding details relating to executives at Anglo Irish Bank. I was told that the Anglo chief executive, who is Australian and whose salary is capped by Brian Lenihan at €500k, is having his house accommodation rented out for him at the taxpayers’ expense to the tune of upwards of €90k per year. Apparently this falls under re-location expenses. It was claimed on radio today that the figure is €72k.

I was also told that when the chief executive moved to Ireland, his family stayed in Australia, but that he has flown them here on numerous occasions at taxpayers’ expense, and that he and other executives (who he apparently hired from Australia) had flown there, also at taxpayers’ expense. I wonder what class they flew. However, such procedures might be considered normal in the banking industry, though not so much in the public sector. Since Anglo are not under the FOI act I have little recourse in these circumstances to seek information related to any expense claims.

However back in early February I sent a request for information concerning this to Mr Aynsley directly, by registered post. I have failed to receive a satisfactory reply, and a followup request is currently with the bank.

But at lunchtime today I heard Senator Dan Boyle speaking about the pay rises at Anglo. While he was speaking, I put the following questions to him on Twitter:

@sendboyle can you tell me how much it costs to lease any homes for Anglo executives, including the chief, over and above their salaries?

@sendboyle and can you tell me the number of flights taken by Anglo execs at taxpayer expense, and carbon footprint which resulted?

Dan Boyle replied: Will have to find that out

After lunch on Joe Duffy, a woman claiming to be the wife of an Anglo employee, put specifics on the tipoff I had received two months ago… the house is leased by the taxpayer to the tune of €6,000 a month and that the house is located in Glenageary.

There is more in this story, and I will publish the results in the coming weeks. As it stands I cannot verify the veracity if the above remarks related to properties or flights, since I have not received verification or denial. It is an expression of an opinion and speculation following similar remarks made on radio that I am asking questions as to the substance of these allegations in the public interest, both of Anglo and of a Senator.

Anglo shareholders December 2008

A commenter on my previous Anglo post asked a question surrounding who the shareholders in Anglo were pre nationalisation in January 2009. I have explored this issue previously, but am returning to it now to examine in more detail.

I am going to take December 2008 as the measure, since Anglo was nationalised in January 2009 (but not the entire month had passed). But I may update with January names. Here are the 41 major shareholders as at December 2008, where percentages are given they are known, where they are not simple N/A applies, since the total shareholding is not known.

Name, country of origin/base, shareholding

Janus Capital Group Inc via its funds (US) 7.47%
Invesco Limited (Ireland) 7.14%
Janus Capital Corporation (US) 7.12% direct ownership)
Invesco Perpetual (UK) 6.89% direct
Allianz SE and Dresdener Kleinwort Securities Limited 5.96% total
Invesco Ltd via its funds (Bermuda) 5.83% total
Janus Capital Management LLC (US) 5.44% direct
Lehman Brothers International Europe (UK) 4.81% total
Barclays Global Investors UK Holdings Limited (UK) 3.02% direct
Invesco PLC via its funds (UK) 2.22% total
Credit Suisse Securities (Europe) Limited & Credit Suisse International <3% direct ownership Dresdner Kleinwort Securities Limited (UK) <3% direct Sun Life Financial Inc via its funds (Canada) 1.59% total FMR LLC via its funds (US) 1.27% total Schroders PLC via its funds (UK) 1.21% total UMB Financial Corporation via its funds 1.16% total Carmignac Gestion via its funds (France) 1.06% total Skandinaviska Enskilda Banken AB via its funds (Sweden) 1.05% Government of Norway via its funds 0.92% total Alpine Woods Investments via its funds (US) 0.88% total Barclays PLC via its funds 0.88% total Nordea Bank AB (PUBL) via its funds (Sweden) 0.82% total Massachusetts Mutual Life Insurance Company via its funds (US) 0.72% total Fitzpatrick, Sean 0.65% direct ING Groep NV via its funds (Netherlands) 0.65% total Dekabank Deutsche Girozentrale via its funds (Germany) 0.64% total Allianz SE via its funds (Germany) 0.63% total Deutsche Bank AG via its funds (Germany) 0.63% total JP Morgan Chase & Co via its funds (US) 0.62% total AXA via its funds (France) 0.60% total New Star Asset Management Group plc via its funds (UK) 0.52% total Vanguard Group Inc via its funds (US) 0.52% Fortis via its funds (Belgium) 0.50% total Jupiter Investment Management Holdings Limited via its funds (UK) 0.50% total Bradshaw, Lar 0.03% direct Aurora Investment Trust PLC (UK) Drumm, David, McAteer, William Mercer, Natasha The Premier Money Market Fund (UK) Whelan, Pat

Helena Kennedy opinion piece

Quality piece on political reform by Helena Kennedy on the Opinion pages of today’s Irish Times. It does refer specifically  to UK politics but the vast majority should be applied here also.

The answer to this crisis is to rethink how we do politics. What the UK needs is a parliament committed to systemic reform. The only way this will happen is if MPs are forced to make a commitment to their constituents to support reform – Out with the Lords! Out with first-past-the-post! Out with rich donors corrupting the system! Out with MPs jumping into jobs with the privatised companies they helped create while in office!

Hear, hear.

What did we buy when we got Anglo?

I have previously blogged about the various subsidiary companies that Anglo Irish Bank involved themselves with, I am going to return to this issue in light of the impending largest loss in Irish history. The Government have yet to publish any details about how Anglo is structured, or just how many companies are under its umbrella. Today we will start a process of trying to uncover the entire structure of the body.

Firstly, Anglo Irish Bank has 39 subsidiaries (mostly wholly owned, some part owned and some appear no longer owned), as follows:

Anglo Irish Bank Corporation Limited.
Stephen Court, 18/21 St Stephen’s Green
Dublin 2

Ultimate owner: Brian Lenihan, Minister of Finance (Definition of ultimate owner: path of min 25.01% of control, known shareholders):

Subsidiaries:

1. Anglo Irish Bank Corporation PLC
2. Anglo Irish Capital Funding Limited (Cayman Islands)
3. Anglo Irish Capital UK (2) LP
4. Anglo Irish Capital UK (3) LP
5. Anglo Irish Capital UK LP
6. Anglo Irish Covered Bonds LLP
7. Proodos Funding Limited
8. Anglo Irish Asset Finance PLC
9. Anglo Irish Property Lending Limited
10. Steenwal B.V. (Netherlands)
11. Anglo Irish Mortgage Bank
12. Anglo Irish Bank ESOP Limited
13. Anglo Irish Bank Limited
14. Anglo Irish Capital Partners Limited
15. Anglo Irish Corporate Bank Limited
16. Anglo Irish Equity Limited
17. Anglo Irish Financial Services Limited
18. Anglo Irish Funding 1 Limited
19. Anglo Irish Funding 2 Limited
20. Anglo Irish Funding 3 Limited
21. Anglo Irish Funding 4 Limited
22. Anglo Irish Funding 5 Limited
23. Anglo Irish Funding 6 Limited
24. Anglo Irish International Finance
25. Anglo Irish International Financial Services Limited
26. Aragone Limited
27. Buyway Group Limited
28. C.D.B Investments Limited
29. CDB (UK) Limited
30. Fitzwilliam Leasing Limited
31. Modify 5 Limited
32. Sparta Financial Services Limited
33. Tincorra Investments Limited
34. Anglo Irish Assurance Co Limited
35. Anglo Aggmore Limited
36. Pagnol Limited
37. The Anglo Aggmore Limited
38. Aggmore Europe I SA
39. Oak Acquisitions Limited

Jobs, jobs jobs and no more Employment

Cuffe gets a job.

White gets a job.

Killeen gets a job.

Connick gets a job.

Carey gets another something or other. Same with Curran.

Hanafin gets a kick.

Enterprise, Trade and Employment changes to Enterprise, Trade and Innovation, in an innovative move which means the word “employment” gets repeated less often.

Arts, Sport and Tourism becomes Culture, Sports and Tourism, or something.

O’Cuiv moves to Social Welfare, now called Social Protection, which gets some of Fás.

Mary “Young People are Moving Abroad to Have a Great Aul Time and Use Their Skillz, Sure Fair Play to Them” Coughlan, gets Education, which as far I can make-out has been decuppled from Science.

An Bord Snip continues to be an ignored waste of time and money as Gaelteacht remains operational. Hands-up, when waiting on Snip I thought it was going to be historically important.

Nothing changes bar the stationary. Life goes on. For every time you hear the words “deck-chairs” and “titanic” within moments of each other in the next week, please take a drink.

Nama still like a dark cloud.