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Gorging on the Property Carcass

Posted on: November 7th, 2010

RTE’s Marian Finucane delivers many of the best interviews in the Irish media. She takes her time while she solicits sometimes sensational replies from innocents sitting at their ease in her Donnybrook studio.

Marian has scored historic hits. Two years ago, she exposed the hubris of Anglo’s Sean FitzPatrick just days after the government guarantee had bailed out his bank and saved his skin. A few years earlier, she made a monkey of former minister of state Joe Jacob when he prattled on about how his magic supply of iodine tablets would save Ireland from the dangers of radioactive fallout. The nation was in stitches.

She is charming, but dangerous. Unlike Jeremy Paxman, she is not aggressive. Unlike Olivia O’Leary, she is not instantly and forensically brilliant. Far from firing questions at her quarry, she takes her time. The friendly voice of Finucane frequently allows her unsuspecting guest to score an own goal.

In last Saturday’s interview she was at her disarming best. She charmed the former property developer Simon Kelly with her sympathetic line of questioning. Simon was selling his book Breakfast with Anglo — a mea culpa paperback — over the airwaves.

Marian has form on Anglo Irish Bank. She knows her way around the banking maze. Simon took the risk. No doubt, in the process, he sold dozens of books.

Yet there is no free lunch on the Marian Finucane Show. After Simon had told the story of Anglo, the developers and himself, the wily presenter slipped in a cushioned exocet.

Marian was curious about how this fallen developer, now destined for the tender mercies of Nama, was putting bread on the table for his wife and children.

Finucane: “Is Nama paying you, or is somebody paying you a salary?”

Kelly: “Nama doesn’t pay a salary. I suppose it’s proposed…”

Finucane: “It’s in your business plan?”

Kelly: “…it’s proposed that we receive a salary. I receive a salary from Nama in the business plan, and at this point I still receive income from the property business, because the business is intact.”

As Simon replied you could hear the listening nation gasp. Marian let the response sink into the audience’s ears. It was another Sean FitzPatrick/ Joe Jacob moment. Vintage Finucane.

Simon is not alone in his good fortune, but he confirmed rumours that Nama has capitulated to developers all over Ireland. The big sinners of the property madness are ekeing a comfortable living out of the Nama industry.

Those who landed the nation in the manure business are about to be richly rewarded by Nama, acting on behalf of the victims, the taxpayer.

So, how much will the reckless developers be paid for continuing to run their bankrupt companies on our behalf?

Last week, a developer casually told me that Nama would not be paying salaries of “more than ¿200,000 a year”.

It was time to take a deep breath. Can Nama really be agreeing six-figure salaries with these cowboys?

Nama’s solution is comical. First, the cowboys must present a business plan. Overheads must be slashed. Each developer will then agree a budget for his moribund company, including a salary for himself. He can probably even decide his own salary if he keeps overheads down.

Last week, a spokesman for Nama defended its indulgence. “Our judgement is that they [the developers] are best placed. They have certain skills, experience and knowledge.”

You bet they have. First, they bankrupt their companies. Next, they bankrupt the banks. And finally they bankrupt the nation. These guys have unique skills all right: they are survivors on a spectacular scale.

They know how to wreak financial anarchy, but hardly how to plot the road to recovery from the destruction they have inflicted.

The most reckless group in Ireland’s financial chaos is being rewarded handsomely by the very taxpayers whom it impoverished.

Better still, they are moving into permanent, pensionable posts. Nama is set to last for 10 years. The developers are facing the juicy prospect of a decade in the safest jobs in Ireland. Perhaps they will now qualify for all the perks of the public service? Will they be covered by the Croke Park Agreement?

Finucane further forced Kelly to admit that, like many other developers, his house was now safely tucked into his spouse’s name.

Meanwhile, thousands of construction workers are on the dole due to the actions of their former employers.

Why are we surprised at this great escape for the culprits of the bubble? The developers’ good fortune is in parallel with the other villains of Ireland’s property inferno, the recently departed bankers. The guys who broke the Bank of Ireland and AIB by lending to developers are sitting on similar goldmines and gold-plated pensions.

Eugene Sheehy of AIB and Brian Goggin of Bank of Ireland “retired” early with their saddlebags stuffed. Sean FitzPatrick and David Drumm are still drawing pensions from Anglo. David Drumm, despite being in hiding in the US, is making a living advising Anglo clients.

Even the new brooms in the banking swamp are cleaning up. Last week, I headed for the Allied Irish Banks’ EGM to take a look at the great white hope, the latest executive chairman, David Hodgkinson.

David hails from the UK. Clean as a whistle, he carries no AIB baggage. He is the foreign undertaker selected to embalm the Irish corpse. He seemed competent, but showed little understanding of AIB’s history. He knew little of whistleblowers Tony Spollen and Eugene McErlean. It is difficult to understand how anyone could accept the hot seat in AIB without first familiarising himself with its shameful past.

Or maybe it is not. David, a retired HSBC boss, is receiving 10 grand a week (plus accommodation) for his pains. Perhaps he spotted the easy pickings in the ashes of Ireland’s property bust.

Undertakers like David are part of the only growth sector in the Irish financial world. Another undertaker, Mike Aynsley — David Drumm’s successor at Anglo — is being paid ¿500,000 to bury Sean FitzPatrick’s baby. Eighteen of his colleagues, employed by the nation’s basket case, are still being paid more than the Taoiseach.

The chairman, Alan Dukes, is eligible for a non-executive salary of ¿250,000 (although he is only accepting ¿150,000 because he draws a ministerial pension). Every penny paid to these guys comes from the taxpayer.

The most bombed-out, indebted, discredited sector of the Irish economy is paying the highest rewards.

Should we tolerate this? Or should we cut these overpaid undertakers down to size?

In an article published last week, Fintan O’Toole suggests that no public salary should exceed ¿100,000 until 2014. An inflexible suggestion, but the old socialist from The Irish Times has a point. How can we possibly justify paying discredited bankers, developers or even top civil servants more than two grand a week?

The road to riches in Ireland is to corpse the country first. If you do, you can be sure you will be among the first to feed off the carcass.