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Posts tagged ‘Brian Lenihan Snr’

Has Bank of Ireland really been deceptive over bonus payments?

By Paul Clarke

Bank of Ireland has been paying bonuses. In fact, it may have been paying many millions of euros in bonuses since accepting state aid in 2008, much to the outrage of the Irish taxpayer.

But has the bank been actively hiding this fact, or has the government just been slow in chasing up the details?

Parliamentary questions now seems to be the place where details of Irish banks’ remuneration practices come to light. It is, after all, an easy way for politicians to score some points and create more scathing banker-bashing headlines.

Some new controversy has emerged over the fact that BoI may have been paying some performance-related bonuses since coming under the government bank guarantee scheme, despite telling the Department of Finance in December that nothing had been paid over the course of last year.

Joan Burton TD highlighted this fact during a December parliamentary question, and has since described the payments as “one further act of deceit” by BoI, while Brian Lenihan has assured us that an “urgent investigation” was underway.

But is all this just a matter of semantics? BoI hasn’t revealed any figures about bonus payments, but said in a response to the Department of Finance enquiries on 1 December that no performance-related bonuses were paid “with respect to the financial years to March 2009 and December 2009”.

However, it also added:

“A small number of people at middle management level received payments which reflected either guarantees which were agreed on their joining the Group or deferred payments where the historic performance criteria had been achieved and the payment was deferred over several years. For commercial reasons BoI do not disclose the amount of such payments. The bank advises that it had no legal discretion in these matters.”

In other words, performance related bonuses are not being paid, unless the bank already has contractual arrangements to do so, and it’s suggesting it isn’t necessary to divulge figures. What’s more, it’s made no attempt to see if it is legally bound to pay these, as AIB did over the now well-known deferred 2008 bonus payments for its capital markets division.

Undoubtedly, BoI has been evasive on this matter, having avoided producing any figures on bonus payments, despite the fact that all the other Irish institutions under the guarantee have, but you can hardly accuse it of active deception.

Instead, surely it’s the government’s responsibility to chase this matter up, considering the political sensitivity around banker bonuses in Ireland and the greater influence it now has on the institutions. By failing to do so, it gives yet more ammunition to the opposition parties and fans the flames of public outrage over banker bonuses.

Below is the table submitted to Brian Lenihan by Irish banks (BoI excepted) detailing their bonus payments over the last two years. Most have drastically scaled back both the sums paid out in bonuses and the number of people receiving them:

Irish-bonuses

source: http://news.efinancialcareers.ie/newsandviews_item/newsItemId-30419

MINISTER FOR Finance Brian Lenihan has started an investigation into millions of euro in undisclosed bonus payments paid to staff by Bank of Ireland since the Government’s bank guarantee scheme.

Last year the bank told the Government it had not paid any performance-related bonuses to staff since the guarantee in September 2008.

Following subsequent queries by Department of Finance officials, it has emerged the bank did not disclose millions it paid out as part of contractual bonuses, which also have a performance-related element.

Neither the bank nor the department would comment last night on the scale of the bonus payments or how many staff benefited until investigations are completed. However, one well-placed source said the figure would be at least several million euro.

Other banks covered by the guarantee scheme have paid out a total of almost €46 million in bonuses between 2008 and 2010.

Anglo Irish Bank was responsible for some €20 million in bonus payments in the last months of 2008. AIB also paid out about €20 million, the bulk of which went to overseas staff. The sums recorded for Bank of Ireland were nil.

The latest information on bonus payments has come to light following a parliamentary question by Labour’s finance spokeswoman Joan Burton TD.

She said yesterday that the bank’s failure to disclose the payments was an “act of deceit” and an “astonishing display of arrogance and contempt” for the Government.

Minister for Finance Brian Lenihan said the bank’s chief executive had acknowledged the difficulties caused as a result of the misinformation and apologised unreservedly.

Mr Lenihan said he was undertaking an “urgent investigation” into bonus payments made since the guarantee scheme and of additional payments the banks may have intended making in the future.

The Minister said previous information given to his department that indicated that no performance-related bonuses were paid to staff was incorrect, as it did not take into account “contractual bonuses” which were performance related.

A spokesman for Bank of Ireland yesterday said there was never any intention on behalf of the bank to mislead the department.

He said some of these bonuses had not been classified as performance-related and were typically paid because of legal obligations or arrangements which predated the bank guarantee scheme.

Ms Burton, however, said it beggared belief that the bank did not have data on bonuses at their fingertips. “It is money from the taxpayer and a State guarantee that are keeping the Bank of Ireland afloat,” she said.

source :http://www.irishtimes.com/newspaper/ireland/2011/0117/1224287681930.html

What does the IMF/EU Really Really Want?

The International Monetary Fund (Headquarters ...

Image via Wikipedia

Brian Lenihan and Patrick Honohan inform us that the EU/IMF deal is not written in stone, that it can be ‘renegotiated’ (even, it seems, the interest rate). For progressives, the issue of renegotiation is paramount for, as it stands, the bail-out would force us into (a) squandering our assets and cash (Pension Fund, NTMA cash balances) on a futile attempt to bring the deficit into Maastricht compliance by 2014/2015; and (b) piling private bank debt on to sovereign debt. So what is it that we should be demanding in a renegotiation? What are the key points to rally a consensus around?

The first question is: what does the EU/IMF really want? The answer is fairly straightforward.

  • After three years, they want the Irish economy to re-enter the international bond markets.

 

Full stop. That’s the end-game. Anything that brings us closer to that is good, anything that takes us away from that is bad. What are the conditions upon which the Irish economy can re-enter the international markets? Or, put another way, under what conditions would markets begin lending to the economy at a sustainable rate?

  • That the Irish economy is capable of generating revenue to pay off future debts.

That’s it. There’s no debate over the end-game, only means. On this basis we can put Honohan’s comments in perspective:

‘We can be confident that, if a new government were to want to substitute alternative measures which were both economically efficient and of equal fiscal effect, it would receive a sympathetic hearing from the funders.’

That poses no problems for progressives. As has been shown (here and here), an investment programme combined with ‘growth-friendly’ fiscal consolidation policies would not only have ‘equal’ fiscal effect, but better, far better.

Of course, many will – with some justification – claim the IMF / EU are so ideologically blinkered that they will insist on an austerity programme, regardless of how it impacts on our ability to exit the Stabilisation Fund in three years time without a default. Maybe. However, the best argument against any escalation of commitment that the IMF / EU may suffer from in the future is . . . their own projections.

A key metric that will determine our re-entry into international markets will be the ‘debt-sustainability’ measurement. This measures how sustainable our accumulation of debt is. If the interest rate on the debt (as a percentage of GDP) is higher than the nominal GDP plus the ‘primary’ budget balance (the ‘primary’ balance excludes interest payments), then the debt can be considered unsustainable. If the interest rate is lower, then it is sustainable.

This is what market analysts will be examining, among other things. So how does this play out? Let’s compare the projections put forward by the Government, the EU and the IMF for 2012 – the year before we are to exit the Fund. We will use the Government’s projected interest rate of 3.9 percent (as a percentage of GDP).

Debt Sustainability The Government believes that by 2012, considerable progress will be made in both reducing the deficit and promoting growth. The EU doesn’t. The IMF is slightly more optimistic than the EU – but their projections were published in October; since then, all forecasters have revised growth downwards and the deficit higher.

Even with the IMF’s more optimistic projections, though, the Irish economy will still be in negative territory even in 2015.

However, the shrewder in the markets will also be looking at debt sustainability under GNP. They will realise that our GDP suffers from a soufflé effect owing to the impact of a modern multinational sector that is at times only tangential to the Irish economy. What would the numbers look like then?

  • According to the EU projections, debt sustainability would deteriorate to -7.6 percent.

Therefore, the question we can ask the EU is: do you really think, on the basis of your own projetions, that markets would lend to us? The answer is obvious.

And while otherwise fiscally healthy economies can survive a couple of years in negative territory, especially during a recession, an economy with a debt of 114 percent of GDP (the EU’s estimate for 2012) is not healthy.

Even though this will be an important measurement for debt analysts, it will not feature in the economic debate here. After all, we were told by domestic commentators that all throughout 2009 and 2010 (until it became untenable) that international markets were ‘impressed’ with out austerity budgets and that we were not like Italy, Spain or Portugal.  This despite the fact that since early 2009 Irish borrowing costs were the highest in the EU-15, save for Greece.

So what does the IMF/EU want? For Ireland to be able to exit the Stabilisation Fund and return to borrowing on international markets by the end of 2013. On their own projections this is not likely to happen.

This opens the door to renegotiation – using their own data. This opens the door to an alternative economic programme, one that prioritises growth because that is a key element in the debt sustainability measurement; one that emphasises deficit reduction through employment, in order to raise revenue and cut unemployment costs.

There is much to have a chat about.

source: http://www.irishleftreview.org/2011/01/13/imfeu/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+irishleftreview%2Ffeed+%28Irish+Left+Review%29

MaX Keiser report 112

Greenspan total denial  just like Brian Lenihan and Cowen in Ireland it seems that people in power think that they have an inbuilt right  never to be wrong !what arrogance !

Irish consumer confidence falls

Irish consumer confidence fell in December to its lowest level in almost two years as the government prepared to raise taxes and cut spending after accepting an international aid package.

The consumer sentiment index declined to 44.4 from 48.4 in November, KBC Ireland and the Economic & Social Research Institute in Dublin said today in an e-mailed statement. That’s the lowest level since March 2009.

Last month, the government accepted an 85 billion euro ($110.3 billion) aid package from the International Monetary Fund and European Union as it struggles with the cost of rescuing its banking system. Finance Minister Brian Lenihan will raise taxes and cut spending by a combined 6 billion euros to narrow the deficit.

“The surprise is that the decline wasn’t larger,” Austin Hughes, chief economist at KBC Ireland, said in the statement. The index points “toward a tough year ahead for domestic spending in the Irish economy.”

A measure of households’ expectations slipped to 28.1 from 29.4 in November. KBC’s gauge of how consumers viewed their current situation slipped to 68.5 in December from 76.6 the previous month.

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.

Michael D drops in

Michael D Higgins to bcc: me
show details 5:06 PM (1 hour ago)

Dear Friends

As we come to the close of another year, I have been as busy as ever over the last month speaking out against the inequities perpetuated by the current government and preparing for the next phase.

Last week I spoke out against the cut in the minimum wage where I tried to explode with force some of the self-serving myths which are being fed to the public. Brian Lenihan claims any tax on bonuses would have to be phased in whereas cuts to social welfare are due New Year‘s Day.
http://www.youtube.com/watch?v=s-vCJQ5lLPk

I also spoke on the Budget where I highlighted the real divisions between the view of the economy between that of the Left and that of the Right; how we find ourselves amid the consequences of irresponsible gambling, a failure of governance and moral irresponsibility; and how the tax system should be reformed to make it fairer for all.
http://www.youtube.com/watch?v=Told6XL–ZM

In my speech on the social welfare bill, I put Eamon O Cuiv’s proposals in historical context and contrasted them against what is required of a real Republic. There should be a floor below which no one is allowed to sink.
http://www.labour.ie/press/listing/129121910027483719.html

In foreign affairs, we have learnt or confirmed much from the publications from Wikileaks over the last weeks including on our State’s role in extraordinary rendition which the current government seems shy to legislate against. See more here http://www.labour.ie/press/listing/129267970826742312.html

Finally, I did a piece for The Week in Politics reflecting on the time I have spent  in the Dail. I thought it went well, I’m about ten minutes from the end.
http://www.rte.ie/player/#v=1087417

Feel free to look me up on www.labour.ie, on twitter or on facebook.

Best wishes for Christmas and the New Year!

Michael D

what’s new on Bonuses ?

By Shane Phelan and Fionnan Sheahan

Wednesday December 15 2010

DOZENS of civil servants and State officials have been paid bonuses — including one totalling €200,000 — over the past 12 months, the Irish Independent has learned.

The sums included almost 100 extra payments made to officials within the Department of Finance, while additional payments were also made to staff linked to four other Government departments.

The disclosure will come as a major embarrassment to Finance Minister Brian Lenihan, who just two days ago forced taxpayer-supported AIB to back down on plans to pay €40m in staff bonuses.

Clash

It also came as Mr Lenihan last night clashed with union leaders as he blamed social partnership for damaging the economy.

The largest bonus was paid to former National Treasury Management Agency (NTMA) chief executive Dr Michael Somers.

He was paid €200,000 earlier this year as a performance-related bonus for 2009.

Figures released following parliamentary questions from Fine Gael TD Fergus O’Dowd also revealed how other staff at the NTMA got performance-related bonuses this year for 2009. However, officials last night refused to disclose the amounts involved.

Other bonuses paid in the past 12 months included:

  • €31,395 paid to Patricia Byron, chief executive of the Personal Injuries Assessment Board (PIAB) as a reward for performance in 2009;
  • €40,539 paid to the chief executive of Horse Racing Ireland, Brian Kavanagh, in respect of 2009;
  • €9,628 paid to John Martin, chief executive of Waterways Ireland, for performance in 2007.

 

The payment to Ms Byron was not referred to Enterprise Minister Batt O’Keeffe for approval and was approved solely by the PIAB board.

However, the payments to Mr Kavanagh and Mr Martin were sanctioned by the departments of Agriculture and Community, Equality and Gaeltacht Affairs respectively.

The Department of Finance also admitted a series of extra payments were made to some of its staff in the past year.

These included “special service payments” to 19 staff at principal and assistant principal grades totalling €53,394 in respect of 2008.

Some 27 staff in the same grades received similar payments totalling €55,670 for 2009, while another 52 department staff received “seniority allowances” above their basic pay during 2010 totalling €115,395.

A small bonus of €500 was paid to another staff member under a “staff suggestion scheme”, while ex-gratia payments of €1,000 and €500 were also made to other officials in recognition of extra work.

The Department of Defence also made an “exceptional performance award” of €1,500 to one employee for work on two projects, while the Department of Foreign Affairs said it made once off payments of €500 each to 29 retiring staff.

The opposition reacted with fury to the revelations last night.

“There must be a complete end to the bonus culture across the public service,” said Mr O’Dowd, a Fine Gael frontbencher.

“It is astounding to learn these bonuses are being paid out, sometimes without the knowledge of ministers, when the country is in the state it is.”

The Department of Finance last night defended the additional payments to its staff.

It said the payments dated back to agreements reached in 1994 and reflected staff members’ contribution, the special demands of their jobs and their level of experience.

Meanwhile, Mr Lenihan was in a war of words with union officials after blaming social partnership for damaging the economy.

Citing the findings of a report on the role of the Department of Finance in the economic crisis, Mr Lenihan said the document was highly critical of social partnership deals and “uncosted undertakings which are financially unsustainable being made”. The minister said the political programmes introduced by parties on forming a government after a general election also “did enormous damage to the financial system”.

“There is no doubt the Department of Finance lost its influence in the administrative machine,” he said.

But the Irish Congress of Trade Unions and the country’s largest union, SIPTU, hit back.

ICTU general secretary David Begg said all finance ministers until Mr Lenihan were “well disposed” to social partnership.

SIPTU president Jack O’Connor said Mr Lenihan was attempting to divert attention “from the responsibility he bears for the present mess”.

– Shane Phelan and Fionnan Sheahan

Irish Independent

source http://www.independent.ie/national-news/dozens-of-public-service-officials-get-big-bonuses-2461174.html

Just two days after finance minister Brian Lenihan blocked the €40m (£33m) in bonuses being paid out to AIB staff, it emerges that dozens of civil servants and heads of quangos been paid bonuses.

You just couldn’t make it up. As the poor get hit with an eight euro a week cut in social welfare, as the rank-and-file public and private sector continue to live with pay cuts and lay-offs, the bonus culture in the minister’s own back yard continues unchecked.

Following a written question by Fine Gael, it has been revealed that almost 100 payments were made to officials in the department of finance – the largest bonus, €200,000, was paid to the former National Treasury Management Agency chief executive Dr Michael Somers.

Bosses at other quangos also benefited.

The head of the Horse Racing Board, Brian Kavanagh, was paid over €40,000 for work in 2009 while a bonus of over €31,000 was paid out to Patricia Byron, the head of the Personal Injuries Assessment Board.

Other payments went to staff in Waterways Ireland and a college in Limerick.

Today’s Irish Independent reports that 19 staff in the department of finance at principal and assistant principal grades shared “special service payments” of €53,394. That was for 2008, the year the UK and America was in recession but Ireland was in denial until Lehman came crashing down in September of that year.

In 2009, 27 staff got over €55,000 between them in bonuses while in 2010 another 52 staff getting what is known as “seniority allowances” worth over €115,000.

The list goes on.

Fine Gael’s education spokesman, Fergus O’Dowd, who discovered the bonuses following a written question in the Dail is furious.

He asked: how would ordinary nurses, police, teachers in the public sector, whose bonuses were stopped last year, feel reading this today?

“If you lost your bonus 12 months ago, imagine how you’d feel today. Why is those going on at government. The key thing that must happen here is that the minister for finance Brian Lenihan, must change the bonus culture,” he told RTE’s Morning Ireland.

“Everyone must feel the pain, particular those at the top.”

Some of the payments were related to a civil service scheme designed to promote competitiveness in the workplace going back to 1994.

O’Dowd said he would scrap all bonuses if Fine Gael get into power even where they are contractually bound to pay.

“I believe the bonus culture must end full stop. People are well paid at the top.

“There is no sacred place for a bonus right not, there is only a place for work,” said O’Dowd.

source http://www.guardian.co.uk/business/ireland-business-blog-with-lisa-ocarroll/2010/dec/15/ireland-bonus-row-brian-lenihan

Comment:

what’s new ? fat cats still getting looked after by their political masters in the department of Finance

Will Fine Gael or Labour change anything: answer is No: they won’t!

What we need is total change until the voters decide not to fall for the political spin by the established political parties we will only see a change in personal but no change in this kind of thing. They are all on the gravy train and just because they call themselves Fine Gael or labour does not mean that real change will take place no for that you need new people not part of the established incestuous political system that we have in Ireland currently

It’s up to you the ordinary people to decide to make the change this time round do not vote for any of the existing TD’s Time for this gravy train to stop !

 

The Budget 2011

 

The Budget 2011

On the7th of December we will see how far our democracy has been eroded when a corrupt government with the help of the so called opposition will enforce a budget on the Irish People that is largely dictated by the very bondholders that we the taxpayers are bailing out .The biggest lie the Fianna Fail party is spreading is that this bailout is for Ireland. It is most definitely not: It is a bailout for the elite and their masters the foreign bondholders. We the Irish people are been saddled with private debts and we must resist this unconstitutional move by the totally discredited government who have long lost their mandate  Brian Lenihan has been named the worst finance minister in Europe in an annual ranking by a leading financial newspaper. The Financial Times said Mr. Lenihan was overcome by the scale of Ireland’s crisis and failed to rescue the banks despite the massive taxpayer bailout.”Some countries’ problems simply proved too great to handle,” said the newspaper. “Brian Lenihan was overwhelmed by the crisis in Ireland’s banking system and the implosion of the country’s economic growth.” Well we don’t need foreign newspapers to tell us this we the oppressed taxpayers of Ireland know this and the question really is why have the powers that be allowed him to continue in that job? It probably has something to do with the Fianna Fail leadership.Dammaged Goods and all that stuff!

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