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FG grabs turn on bank quango

Posted on: June 11th, 2013

 

QUESTION One: why is former MEP Eoin Ryan not being reappointed to the board of the European Bank of Reconstruction and Development (the EBRD)

Answer: because he is a Fianna Fail loyalist. Worse still, he is a member of a FF dynasty.

Eoin Ryan’s term in this lucrative European banking gig ends on June 30.

Question Two: why has the Government’s nominee for the post, Sean Donlon, been selected to replace him?

Answer: because he is a Fine Gael loyalist.

No doubt both men have admirable talents, but no credential is more important for this banking sinecure than a party pedigree.

The EBRD board has been forced to put up with a pile of Irish party-political appointees since its formation in 1991.

Fianna Fail appointed ex-TD and Senator Brian Hillery, nephew of former FF president Paddy Hillery, in 1994.

Charlie McCreevy slotted a soulmate, the retired Progressive Democrat leader Des O’Malley, into the job in 2003 and Brian Cowen put his pal Eoin Ryan into a director’s chair when Ryan lost his European Parliament seat in 2010.

Ryan even sought a bigger plum, the European commissioner’s job, before that was claimed by another FF loyalist, Maire Geoghegan Quinn. Like him, she has as much chance of being reappointed next year as Coco the clown.

Fine Gael will either donate this gift to Enda’s anointed, or to another cabinet minister incurring unpopularity for the party at home. Expertise in European affairs will scarcely count.

The sinecure at the EBRD is used by Irish political leaders as a below-the-radar consolation prize for political casualties or as a reward for party loyalty. When I asked a mandarin at the Department of Finance last week whether there had been a selection process, an advertisement for the Donlon job, you could have heard a pin drop. The idea that Donlon might have been interviewed about his qualifications or his banking experience had never arisen. No, that was not how this appointment was done.

The press release announcing Donlon’s arrival in the post was modest. Very modest. It listed his achievements as a diplomat, mentioned his “non-executive” directorships and, of course, his stirring “sacrifice” in declining to take any of his civil service pensions with him into the new job.

It omitted lots of interesting details about him. Not only was Donlon special adviser to Fine Gael Taoiseach John Bruton from 1994-97, he had a close relationship with another Fine Gael powerhouse – none other than the man appointing him, current Minister for Finance Michael Noonan. Donlon served as special adviser to Noonan from 2001 to 2002 when he was party leader – and in all kinds of trouble.

The release did not mention that Donlon has close Limerick connections, specifically as ex-chancellor of the University of Limerick, Noonan’s home patch. Nor does it declare his seven-year vice-presidency of the nearby Shannon-based GPA Group, a company that provided a home after politics for such other Fine Gael luminaries as Peter Sutherland, Michael Lillis and Garret FitzGerald himself.

Indeed, so deeply embedded was Donlon in FG’s inner circle that he acted as master of ceremonies at Garret FitzGerald’s 75th birthday party. Not the sort of bundle of fun you would expect from a FF hoolie, but it was, by all accounts, a tribal gathering. At the birthday bash, his patron Michael Noonan made the keynote speech.

Not mentioned in the press release and not mentioned today in polite FG circles was another service Donlon did for the party. In 2004, he told the Moriarty Tribunal inquiring into the award of the second mobile-phone licence by Minister Michael Lowry that at John Bruton’s request he had “looked at the process through which the decision had been reached” and that he “went back to John Bruton and said I believed that the decision, that the process was such that it could not have been subverted”. Wow.

Fine Gael was temporarily off the hook. Donlon, a distinguished former diplomat, had found nothing untoward.

Strangely enough, the press release failed to reveal any details about the job itself and very little about the virtually unknown EBRD.

So I decided to ring the mysterious EBRD headquarters in London to find out.

Its press office is no champion of transparency. When I asked the press officer how much Donlon would be paid, she first suggested that I ring the Irish office. When, mildly irritated, I repeated the request, she replied: “I don’t know – it’s on the website.”

After a bit of persistence, she disclosed: “According to the Financial Report, it would be €172,000.”

“And what are the tax arrangements?” I asked.

“Don’t know,” came the tight reply, indiscreetly volunteering the fact that the Sunday Times had already been enquiring.

As my blood pressure rose about the lack of information, she asked me to hold on.

The pause lasted nearly 10 minutes. It was worth it. She returned with a bombshell.

Donlon’s pay is subject to an “internal” tax she muttered.

And what in the name of God, I wondered, is this unique creature?

“It is a tax which is applied according to people’s personal circumstances,” she said. “Salaries and emoluments at the EBRD are exempt from income tax in the UK.” Ahem.

“What are the rates of internal tax?” I queried.

“That is not public information.”

“Why do you not disclose it?”

“Because we don’t,” shot out the reply, slamming the door.

And that was that. But it was enlightening in one way. I now know why it might be relatively easy for Donlon to “sacrifice” his public service pensions. His “personal circumstances” will now tumble to an income of only €172,000 a year (plus unspecified expenses)!

The rate of “internal tax” will presumably be adjusted down to rock bottom, probably zero. His great “sacrifice” blazoned in the press release suddenly looks less virtuous.

Now I am beginning to understand why a 72-year-old man with a civil service pension is prepared to relocate in London to a virtually unknown bank with a dubious record.

Furthermore, he is unlikely to be accountable to the media in Dublin or London for his stewardship of this low-profile Euroquango. Has anyone ever read a word in the media of the hours of toil (or otherwise) put in by Eoin Ryan, Des O’Malley or Brian Hillery while working in this outfit?

Instead, the media has tended to highlight the multitude of scandals and extravagance that have haunted the EBRD since its infancy. It was set up to help rebuild the devastated economies of Central Europe.

It made a bad start when it was exposed as spending over €300m on flash offices, high living and jet travel in its first two years. Italian marble floors and lift frames in its London building cost €1m. Gold-plated door handles decorated the corridors.

As recently as 2011, this bank – with such a noble mission – was rocked by corruption allegations. According to Reuters, immunity given to four of the bank’s officials was lifted to enable criminal investigations. Elsewhere, companies aided by its funds have been involved in money-laundering scandals.

What a cosy, little convalescent home for political protégées or politicians nurturing the wounds of defeat.

Nothing has changed.

Irish Independent