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Dukes has Gone Native at Anglo

Posted on: March 28th, 2010

ONE of the finest appointments in recent years was Brian Lenihan’s decision to put Alan Dukes into the chair at Anglo; but, last week, I wondered if my old friend and hero had gone native.

Alan was out of the traps at high speed, hitting the airwaves. He put up a superb show on Thursday’s Prime Time when he dazzled us all with his knowledge of figures.

The retirement of Anglo chairman Donal O’Connor and the imminent succession of Dukes had signalled a clear break with the past.

Dukes carries no banking baggage. He is as clean as a whistle.

He is not just clever. He is very, very clever. Although an ex-Fine Gael minister for Finance, he is no Fianna Fail patsy. Nor can Fine Gael rely on him to banjax Brian Lenihan’s plans. Indeed a few months ago Dukes got right up the noses of his Fine Gael colleagues when he rubbished the main opposition party’s alternative to Nama.

Fine Gael expected the fallen leader to remember his roots, but he was admirably aloof. The old Blueshirts, bitter about his disloyalty, started spitting blood on the carpets of Leinster House; but Alan owed them nothing. They had shown him the trapdoor back in 1990.

Last week Dukes resigned his vice-presidency of the party but remained a member. With typical integrity, he cleared the decks to ensure that he is an independent board member. Dukes is mandated to act in the interests of the taxpayer.

So it was a bit of a shock to hear him batting for the crazy pay hikes at Anglo on RTE’s Morning Ireland on Wednesday. Instead, he should have hit them for six.

Perhaps Alan is just a little star-struck by his fellow directors. No doubt he is a lightning learner, but he has no previous experience on bank boards. He likes guys who talk figures. So the interaction with other Anglo directors, Maurice Keane, Donal O’Connor and Mike Aynsley, probably stimulates his nest of numerate genes.

Alan would be happy as a pig in the proverbial in a room full of actuaries.

Apart from his fascination for figures, Alan is not from the same school of banking as Keane of Bank of Ireland, Aynsley from National Australia, or O’Connor from Sean FitzPatrick’s Anglo.

His record in politics — one of refreshingly perverse singlemindedness — makes him ideal for today’s task at Anglo.

His Anglo salary is a secret but will probably be known this week when the results are released.

Let us hope it is not embarrassingly high.

High or not, his defence of a hike in the salaries of 70 Anglo employees has the scent of a board of directors circling the wagons. It makes me wonder if he has gone native.

The other three amigos are, like all bankers, oblivious to public opinion. No one could expect Maurice Keane with his pedigree, Donal O’Connor with his Anglo past or Aynsley, to baulk at paying bankers bigger rewards. But Alan should know better . . .

Anglo is bust. This week it will report losses of at least €13bn. The taxpayer has already sunk €4bn into the bank and is set to bury another €9bn in the monster. Normal rules of pay do not apply. The bank is on life support.

Meanwhile, the board wants to dish out largesse to 70 of its staff. The excuses offered for such generosity send out vibes of a board indifferent to the fact that Anglo is in a class of its own.

Alan emerged with all guns blazing. The buck stopped with the chairman-designate. To his credit, he was never a man who funked the unpopular. Nor did he ever lack self-confidence.

Alan was adamant. The 78 lucky staff would be paid extra for taking extra responsibility. Eerily familiar bankspeak from a banker not a wet day as chairman-designate. Even less credibly, he admitted that a small number had been given increases for extra qualifications gained in the past year.

So Anglo is paying staff more money for putting extra letters after their names.

Some rises even exceeded 10 per cent. Apparently the recent voluntary redundancy programme had left gaps in key jobs. It sounds like Anglo let the wrong people go.

Alan should have told insiders like O’Connor and Keane that the days of the conventional response were over. There would be no pay hikes.

Instead, he gave cover to Brian Cowen, who gratefully quoted Dukes in the Dail chamber, insisting that the pay rises were a matter for the management.

Dukes had no doubt pleased Cowen by declaring that the lucky Anglo geniuses were “getting the rate for the job”. And then by adding foolishly: “It’s the kind of thing that happens in the public service and those things do happen.”

Touche.

Alan is hopelessly wrong: there is no correct “rate for the job” in Anglo. The employees are lucky to be employed at all, let alone to demand equality with their overpaid global counterparts.

Alan’s second point is spot on. Yes, this is exactly “the kind of thing that happens in the public service”. But is the public service a good model? Especially in the higher echelons?

Highest of the higher echelons is retired Revenue Commissioner chairman Frank Daly.

Frank is today a serial mover and shaker around the senior ranks of the public service. After retiring as Ireland’s top taxman in 2008, he became a director of none other than Anglo. Not a bad gig until he landed an even bigger one, the chairman’s job at Nama, the State’s asset management agency.

His pay for the Nama gig was originally set at a handsome €100,000 a year. Suddenly a few weeks ago it was raised through the roof. For no apparent reason, he will now be paid €170,000, an increase of 70 per cent.

The other part-time Nama directors saw their fees rise from €38,000 to €50,000. No doubt like the public servants in Anglo, the hike is deserved for the “extra responsibility”.

My eye.

But the recent bombshell that 600 elite civil servants actually lobbied successfully to have their pay cuts reversed takes the biscuit. Somebody had whispered in the Taoiseach’s ear.

At the top of the public service there is a golden circle of overpaid insiders.

How did it happen? Have the mandarins in the Department of Finance persuaded the Government that favoured public servants should be immune from the cuts?

Suddenly special employees in the state-owned Anglo are exempt, Frank Daly and his Nama crew are above the cutbacks, while 600 well-heeled civil servants have escaped.

Alan Dukes should pause to ponder before he goes native.