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Humiliated, Not Humbled

Posted on: September 12th, 2010 2 Comments

LAST Tuesday at five o’clock, a private briefing was held for members of the Oireachtas. The location was Anglo Irish Bank’s gleaming new offices.

No journalists were allowed. So may I tell you exactly what happened?

TDs and senators were invited to meet the top brass in the peoples’ bank. We were given an upbeat briefing about Anglo’s future.

There was no brass plate on the door of the peoples’ bank marking the arrival of the Anglo bosses at the new premises — presumably just in case the people found out where their bank had gone.

Situated on Dublin’s quiet Burlington Road, the building that houses Ireland’s cesspit of commercial poison bears the neutral name of Connaught House.

If the people discovered where it was there could be repeats of the incidents at its former headquarters on St Stephen’s Green. Anglo’s chiefs have decamped to a more discreet location, safely tucked away from the mob.

Members of the Oireachtas poured into the premises. Curiosity about the working conditions of the occupants of a bankrupt bank had stimulated the curiosity of TDs, ranging from Cork’s Ned O’Keeffe to Dublin’s Pat Rabbitte.

Their antennae were alerted the moment they stepped into the lift. The buttons showed that Anglo had rented two floors of this spacious building, owned by none other than the Nama-bound Treasury Holdings — poster boys of the property boom.

Treasury, developers par excellence, occupy another floor. A fourth is taken by CB Richard Ellis, the property advisers who remained loyal to the Celtic tiger fantasy.

Anglo has relocated within its comfort zone. Happily, in moments of light relief, the property “experts” in Anglo can pop downstairs to the geniuses in CB Richard Ellis or the buccaneers in Treasury to natter about the good old days of 2007.

The healthy attendance of TDs and senators — on a Tuesday evening during the recess — indicated the high-octane interest. The meeting even stretched beyond the 7.45pm kick-off time of the Ireland vs Andorra soccer game.

Around 25 members from three Oireachtas committees turned up. Some wondered if there would be room for them all in Anglo’s slimmed-down new headquarters.

We should not have worried. We were ushered into the biggest boardroom on God’s earth. We sat at a marble-coated table. There were 25 luxury leather seats, gallons of Ballygowan and coffee, chocolate biscuits and chat.

Roisin Shortall, the feisty Labour TD, had the bottle to point out that this was hardly a demonstration of belt-tightening.

A squad of Anglo staff took their seats on the fringes.

Chairman Alan Dukes welcomed some of us with more enthusiasm than others. The Anglo staff made a frantic fuss of Labour’s Joan Burton, a manoeuvre which one of my less charitable colleagues put down to raw fear of her questions, rather than to affection for Labour’s finance spokes- person. Dukes left it to our “discretion” how we handled commercially sensitive information. (Giving such licence to a politician is a bit like bankrolling a compulsive gambler in a casino.)

Dukes was followed by chief executive Mike Aynsley, who introduced us to the new Anglo team and handed over to Maarten van Eden, the chief financial officer.

Maarten impressed everybody. A Dutchman with a dazzling command of English finance-speak, he made an almost credible case for the doomed good bank/bad bank proposal. A deeply sceptical audience was staggered that Anglo had dug up such a competent operator.

Dukes and Aynsley were happy to allow Maarten to make the running. They were right. When you have a star on your staff, there is little point in competing.

Some of us wondered why the other non-executive directors were absent. Dukes, the non-executive chairman, was there — but where were his coy colleagues, one-time AIB chief Gary Kennedy, Fianna Failer Aidan Eames or Maurice Keane, the veteran from the Bank of Ireland and DCC?

The trio was missing, presumably by choice. Good thinking.

Yet all three must have approved Alan’s, Michael’s and Maarten’s plan for Anglo’s survival. Indeed, it was the board’s baby.

Maarten told us how Ireland needed more, not fewer, banks. The nation must not be allowed to sink into the clutches of the old duopoly. Did we want the Bank of Ireland and AIB to carve us up again? (A line designed to appeal to politicians.)

Ireland, he insisted, needed a corporate bank. Dukes, Aynsley and the Anglo squad looked on approvingly. Maarten explained how no one would bank with Anglo if it announced a wind-down — even over several years. Quite a hostage to fortune.

Anglo’s good bank/bad bank proposal was still in play. Some of us were astonished, convinced that the project had been dumped; but surely the directors would never go ahead with this presentation, warning of the folly of a wind- down, unless they’d received a hint from their political masters that their pet proposal was still alive in the corridors of power?

As they spoke, plunging bond markets were pushing Ireland deeper into crisis.

Lack of certainty about the cost of Anglo was sending the rate on Ireland’s borrowings rocketing.

When Alan Dukes was asked how long we would have to wait for a government statement, he suggested that it would be less than 24 hours.

Alan was right about the timing of the statement. A pity the Department of Finance did not tell him of its contents. He was shafted. His derided “wind-down” was the solution.

On Wednesday morning, the Cabinet rubber-stamped an interim solution dictated by Europe and the markets. The plan had been cooked up in the Department of Finance and Brussels, following Brian Lenihan’s Monday meeting with the Competition Commissioner.

The Anglo directors’ proposal was stone dead.

So while Dukes & Co were waffling away on Burlington Road, they were being finessed by a U-turn down the road in Merrion Street.

The markets desperately needed to be steadied.The Anglo fantasy survival plan was stillborn.

On Wednesday, just after lunch, Dukes and Aynsley were summoned to the department to hear the bad news.

The withering government statement barely disguised the abandonment of the Anglo board’s dreams of survival: “The minister acknowledges the good faith and hard work of the board in producing a credible proposal for the future of the bank.

“However the Government has concluded that this plan in its current form does not now provide the most viable and sustainable solution to ensure the continued stability of the Irish banking system.”

Anglo’s bosses immediately stood on their heads and pledged to promote the dreaded “wind-down” — the solution that they had been bad mouthing less than 24 hours earlier.

On Tuesday their mission was to keep Anglo alive; on Wednesday, to kill it.

Dukes lamely pleaded that the final solution was a “variation” on Anglo’s plan. Which it was not.

Will we now see the resignation of non-executive directors Dukes, Kennedy, Keane and Eames? Their pipe dream is in tatters. Rejected by the markets, the Commission, the Government — and undoubtedly by the people.

Not a chance.

The non-executives are humiliated but not humbled. Nothing has changed. Bankers sit tight, stand on their heads and take the money.

New location, old culture.