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Posts tagged ‘Bernard Allen’

NAMA, the banks and the Gardai

Badge of An Garda Síochána

Image via Wikipedia

 

from  Namawinelake

With reports of a file about to be sent from the Gardai to the Director of Public Prosecutions on Anglo Irish Banks (and how is it that FG leader Enda Kenny claims to have knowledge of the detail of the file – do Gardai brief politicians on investigations?) and talk of there being five people in the frame for criminal prosecution in respect of activities at the failed bank, it brings home to us the criminal dimension of the financial crisis, though it should be said that the two year investigation may not result in any criminal charges whatsoever.
A month ago, NAMA came before the Committee of Public Accounts and the NAMA CEO, the owlish Brendan McDonagh, faced some intense questioning on aspects of the operation of the secretive agency. The transcript of the hearing is now available and it shows that Fianna Fail deputy Michael McGrath had a bee in his bonnet about the banks and whether they had misled NAMA in 2009 by providing loan details which informed the draft NAMA Business Plan in October 2009 (which showed an average discount or haircut of 30% off the par values of the loans that NAMA would pay the banks). Michael’s point was that the haircut now estimated to apply to the banks is 58% (October 15th, 2010 estimates) and this near-doubling in the discount might mean that the banks set out to misrepresent the value of their loans so as to obtain an advantage. The relevant exchange is here (the emphasis is mine and the Chairman was Fine Gael deputy Bernard Allen):
Deputy Michael McGrath: I will be brief. I welcome the delegation from NAMA. I would like to pick up on the point made by Deputy O’Keeffe on the quality of the information it got from the banks in 2009 and which fed into the draft business plan in October 2009. Some of the information must have come from fantasyland because if one considers the reality NAMA found when it went in and did a loan-by-loan analysis and a detailed probe, some serious questions need to be answered about the intentions behind some of the information it was given.
For example, in the draft business plan it was anticipated at that time that €77 billion worth of loans would be acquired and that €62 billion of that would be repaid by borrowers over the lifetime of NAMA, 40% of the loans were performing and the loan-to-value ratio was 77%. We know the reality is entirely different. The level of performing loans is 25% and the loan-to-value ratio, as Mr. McDonagh mentioned, is closer to 100%, something which is a matter of fact and which did not change because of the deterioration in the economic environment. How could they have gotten it so wrong?
In his response to Deputy O’Keeffe, Mr. McDonagh referred to a lack of systems but I would take a far more cynical view, namely, that the banks were concerned with trying to extract the maximum possible price from the taxpayer for the loans which we were acquiring.
Mr. Brendan McDonagh: In terms of that, I do not disagree with the Deputy. The reality of our detailed loan-by-loan analysis showed up what it was. People sitting on the boards and senior management in those companies had responsibilities. I recall that when the Minister went into the Dáil on 16 September 2009 and introduced the NAMA Bill there were Stock Exchange statements by the two major banks into the market telling it that they expected their discount to be even less than 30%. The reality has turned out to be different. The Deputy is completely right. There are questions to be asked and answered.
We went in, found what the situation was and reported on it. The discounts are much higher than what could have been anticipated. Based on the information provided at the time, and given what we have been dealing with in terms of the banks over the past ten months and the due diligence which is coming through, they are finding out things about borrowers and loans that they should have had at their fingertips before. They did not have this and there are huge systems failures on the back of that.
Deputy Michael McGrath: I think it is much more than that. If NAMA had not taken such a rigorous approach in going in and analysing every single loan individually and had taken the information it was given at face value, it would have dramatically overpaid for the loans it was acquiring.
Mr. Brendan McDonagh:  Absolutely.
Deputy Michael McGrath: That would have been at the net expense of the taxpayer. It seems to me that there was a clear pattern of false and misleading information being fed into NAMA by the main banks in Ireland during 2009. That has to be investigated. I do not know who has the function to refer that information to the Garda, the National Bureau of Fraud Investigation or the Office of the Director of Corporate Enforcement, but it needs to be done. Some of the data would have changed with the deteriorating economic environment. I can understand the percentage of performing loans changing, for example, and Mr. McDonagh referred to that in his opening remarks. However, getting the loan-to-value ratio so wrong across the board should have rung alarm bells that there was something more going on. It needs to be investigated by the Garda and the Director of Corporate Enforcement. I do not know whether NAMA can make information available to them but there is a clear, systematic pattern of false and misleading information being fed into NAMA and that cannot go unaccounted for.
Mr. Brendan McDonagh: I do not disagree with anything the Deputy said. The first port of call in terms of looking at that must be the Financial Regulator, who has responsibility for supervising and knowing what goes on within the banks. We will provide whatever assistance we can to anybody. I can assure the Deputy that we have established the facts and will make that information available to any regulatory authority, if appropriate. This is where we are now. Other people have questions to answer on what was done in the past.
Deputy Michael McGrath: Is that process under way? Has the regulator looked for information on all of the details that were provided to NAMA?
Mr. Brendan McDonagh:  Absolutely. The European Commission is working hand in hand with the Financial Regulator on the auditing of every single loan evaluation that is happening. The regulator has access to all that information and what it does with that is a matter for it.
Chairman: In view of Mr. McDonagh’s comments, the committee should write to the regulator now, make it aware of the comments and ask it to inform the committee of the appropriate action it proposes to take.
Deputy Michael McGrath: Absolutely. I recognise that it is a very serious charge to make but the evidence is overwhelming that the information being provided to NAMA was fundamentally false and misleading.
Chairman: We will do that.
Deputy Michael McGrath: The regulatory authority needs to investigate and involve, as appropriate, the Garda and the Director of Corporate Enforcement. I welcome the Chairman’s suggestion.
[exchange ends]
Now it seems that the Committee is unhappy with NAMA for a number of reasons. At the hearing itself NAMA was asked to identify developers being transferred to the agency and it refused – it wouldn’t even name the Top 10 stating that it was NAMA policy to generally accord developers the same level of confidentiality they would have enjoyed at the original financial institutions. I think NAMA would have been on more solid ground if it had put a stop to leaks that characterized its existence in the earlier part of this year. The Committee also wanted details of NAMA’s payscales and NAMA declined to provide the information on the day and subsequently wrote to the Committee to say that, in common with the established practice of the NTMA, it would not be revealing salaries, even to the Committee. The Committee chairman, Deputy Bernard Allen, characterized the letter it received last week as telling it to “get stuffed” but the actual text of the letter is in fact pretty neutrally worded.
But what the Committee is most unhappy about is their impression that they were “misled” by the response of the NAMA CEO to questions about the banks. The Committee is now reported as saying that after Mr McGrath asked Gardaí to investigate the matter, that Mr McGrath was “set up” (Deputy Ned O’Keeffe) and the Irish Times says “the committee is to recall Brendan McDonagh in January 2011 over media reports that he has “backtracked” on comments made to the committee last month”. The Independent reports “Ned O’Keeffe said it had now been reported that NAMA had no evidence to back up these claims — and that Mr McDonagh’s comments had been misinterpreted”
My own impression is that NAMA’s defence of its draft Business Plan produced in October 2009 has been a sorry episode for the agency. It seems that it sought to blame everyone else except itself for the disparity between the estimates then compared with today. The banks in particular have been demonized – perhaps justifiably, but it was NAMA’s business plan and it seems that there was little validation of the figures incorporated into it. And whilst the discount on the banks’ loans has grown from 30% to a 58% estimate, the estimate of NAMA’s operating costs has dropped 40% from €2.6bn to €1.6bn. Surely the infernal banks weren’t responsible for NAMA getting its operating costs so wrong. And the suggestion that banks sought to defraud the taxpayer by over-valuing loans also looks suspect because NAMA was always going to involve an intensive valuation process overseen independently by the EU. The NAMA CEO’s nodding in agreement at Deputy McGrath’s suggestions at the Committee hearing might have portrayed NAMA in a favourable light to the Committee and the general public, but to others it just shows an abnegation of responsibility for NAMA’s own business plan. And indeed it is noteworthy to see the NAMA CEO try to pass the parcel for any misinformation provided by the banks to the Financial Regulator.
In any event, it will be interesting to see the fireworks in the New Year when the NAMA CEO is recalled (and the NAMA Act does confer that right of demanding attendance on the Committee).

Generous entitlements for state bodies top staff

Generous entitlements do more than soften the blow  

POLITICIANS

are entitled to a myriad of payments which depend on their position upon retirement and their length of service. Their termination lump sum and payment is calculated on their current salary, which also includes any extra allowances for whips and committee chairmen. However, their pension is calculated on their salary prior to the pay cut announced last year. Previous positions held, such as that of a committee chairman, also boost their pension payments. Ministerial pensions are paid in addition to the TDs pension. All pension entitlements are payable from the age of 55 and increase in line with salary increases. The following are the various entitlements TDs can expect on losing their seat or retiring. Termination lump sum: Calculated as a portion of their current TDs salary, about two months’ worth. Generally non-taxable. Termination payment: A taxable sum paid each month for the first year of retirement. Pension: Calculated as 1/40 of their salary prior to the pay cut, multiplied by their years for service, up to a maximum of 20 years. Pension lump sum: Calculated at three times their annual pension up to a maximum of 1.5 times the annual salary. Non-taxable. Ministerial pension: Applicable to all ministers, ministers of State, Ceann Comhairles and Cathaoirleachs, both sitting and those who previously held positions. It is a percentage of their salary, based on the number of years service. Ministerial severance: Payable to sitting ministers for a maximum of two years. It is calculated as a percentage of salary and length of service. It cannot be claimed at the same time as the ministerial pension. As it is generally worth more to recipients, those eligible usually opt to begin their pension straightaway.

Edel Kennedy Irish Independent

But it’s not only the politicians that are fleecing the taxpayers of this country the states  quangoes  are stuffed to the gill with rip off merchants looking out for themselves read the following

By Katherine Donnelly

Saturday December 04 2010

TAXPAYERS picked up half the tab for home entertaining by internationally renowned pianist John O’Conor, as well as an annual salary worth €225,000 in his role as Director of the Royal Irish Academy of Music (RIAM).

Neither had the approval of the Department of Education, which pays about €4m a year to the academy to cover half its running costs.

The pay and perks package for Dr O’Conor, who retired this year, was uncovered in an audit by the State spending watchdog, the Comptroller and Auditor General (C&AG).

The C&AG also found four staff in another educational organisation had their pensions topped to the combined tune of €800,000 in an early retirement deal. The C&AG reports are now to undergo a probe by the Dail Public Accounts Committee (PAC). Dr O’Conor’s remuneration arose from two separate contracts he had with the RIAM, as well as additional payments for extra services.

In 2008 he received:

  • €138,072 for the part-time post as RIAM director, including an €88,200 payment into a private pension policy.
  • €65,254 as a part-time music teacher.
  • €21,698 for a two-day piano workshop for teachers.
  • €500 for a concert fee.

 

There was no record of formal approval by the Governing body for the arrangements around the piano workshop in September 2008, for which Dr O’Conor received more than half the income of €39,775.

Dr O’Conor also had an expenses budget of €23,000 for 2008, of which he received €22,963, as well as €5,325 in travel costs and €1,322 for other sundries. When he submitted his monthly credit card bill invoices were not attached.

Most of the claims were for restaurant meals for named individuals and “there were also substantial claims in relation to catering costs for hospitality provided in his home” for which guest listings were supplied.

Waste

Meanwhile, the Further Education and Training Awards Council (FETAC) did not have the required approval from either its own council or the Minster for Education for the pension top-ups to the value of €800,000 for four staff who retired as part of the amalgamation process with two other education bodies.

PAC chairman Bernard Allen last night hit out at the “flaw and waste” in bodies that had received substantial State funding. “Last September, a C&AG report highlighted practices in universities whereby some staff were paid unauthorised salaries and bonuses. Regrettably, this report seems to show more of the same.”

– Katherine Donnelly

Irish Independent

If you thought FAS was Bad?

 

Many people might have forgotten that it was our own Mr.Dick Roche, the then Minster for the Environment, Heritage and Local Government who appointed Mr. Donal O’Connor as Chairperson of the Dublin Docklands Development Authority in may 2007

Mr. O’Connor was a Senior Partner of PricewaterhouseCoopers (PwC) in Ireland and was a member of the Global Board of PwC and Chairman of PricewaterhouseCoopers Euro firms Board at the time. He was also a member of the Board of the Irish Auditing and Accounting Supervisory Authority (IAASA) and was Administrator of Icarom Plc – formerly the Insurance Corporation of Ireland.

DONAL O’CONNOR (58)
was appointed Chairman in December 2008 and Executive Chairman in February 2009, having joined the Board of
Anglo Irish Bank in June 2008. He was the Senior Partner of PricewaterhouseCoopers (PwC) in Ireland and was a member of the PwC Global Board and Chairman of the Eurofirms Board. He is a Non-executive Director of Elan Corporation plc and Readymix plc. He is a former Chairman of the Dublin Docklands Development Authority, and a former Director of the Irish Auditing and Accounting Supervisory Authority.

(This is an example of how incestuous Irish business is, and proof that this golden circle is alive and well in Ireland )

One should have known then that this individual was certainly used to the high life at the time and with all the rest of his commitments how was he going to give his full attention to his new posting.

Dick also appointed four other directors to the Executive Board of the Authority. at the same time and they were

* Mr. Donal Curtin, Partner, Byrne, Curtin, Kelly Ltd, Chartered Accountants;
* Mr. Brendan Malone, Partner, Malone Power & Company, Chartered Accountants;
* Ms. Mary Moylan, Assistant Secretary, Department of the Environment Heritage and Local Government – and
* Ms. Niamh O’Sullivan, Partner, Arup Consulting Engineers.
these people are all part of a golden circle that seem to get the plum jobs

For more information on these ladies and gents activities follow link here
http://www.independent.ie/national-news/dockland-chiefs-ran-up-8364600000-travel-bill-2091713.html

Oh Dick, what were you thinking? Was there no control on what there lads were spending?

According to the head of the Oireachtas Public Accounts Committee has described a travel bill of over €600,000 run up by the Dublin Docklands Development Authority (DDDA) as an “orgy of spending”.

Reports in today’s newspapers claim the DDDA splashed the cash on luxury travel, expensive meals and fine wines.

The authority has accumulated losses of over €200m.

Fine Gael TD and PAC chairman Bernard Allen said such a culture of excess has to be curbed.

“I think these people were in a parallel universe,” Deputy Allen said. “At the time they thought that the world was their oyster.”

He said the bill raises major issues regarding the governance of the DDDA, which did not seem to be subject to any accountability.

What are the chances that any of these leaches will ever come before a courthouse?

None what about political accountability, sorry none there neither

We the people of Ireland are left with paying the bill for these high flyers

Who is surprised by this?

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