Saturday, 20 November 2010

Re-Trace The Mess...

We need to re-trace our steps and go over what a complete mess has been made of this country...

IS sovereignty of so little account that two senior cabinet members can consider throwing it away while the rest of the Government don't even know their leaders are doing this? What is being done to our country? Who will buy us, or sell us, next?

What has really been going on since Brian Cowen concluded his disastrous occupation of the Finance Ministry and graduated to his even more disastrous holding of the job of Taoiseach?

We need to re-trace our steps and go over again what a complete mess has been made of this country's governance, bringing us the acute embarrassments of this week.

It began with Anglo, followed by all the other banks. It then proceeded to the Lisbon Treaty vote, enhancing Europe's powers over our sovereignty. Then it floundered into the disaster called NAMA and ended with debts that needed international rescue. It concludes with loss of sovereignty.

Anglo first. The sensational defence, by the court trustee in David Drumm's bankruptcy hearing in Boston last Tuesday, had as its central point the fact that Anglo made €7.65m available to Drumm for fraudulent purposes.

Drumm acted honourably in the face of incorrect loan documentation. The first documents would have released him from paying back the loans. Instead, he signed new documents, in return for the bank agreeing they would not sue him, nor take his family home, and would give him long-term repayment schedules, since the shares and his income had disappeared.

Anglo reneged on this, dragging him into court in November 2009. He fought the case and tried to settle, which Anglo did not want.

The letter to Drumm of January 10, 2008, spelled out that the loan was to buy Anglo shares. It details strict security charges. The recent events in Boston now make it unlikely that Anglo will achieve anything like Drumm's offer to them because of bankruptcy trustee Kathleen Dwyer's claims that these claims undermine the bank.

The original circumstances under which Drumm got money to buy shares soon became apparent as money flowed out of the banks. As I have said in an earlier article, Brian Cowen, the then Finance Minister, was told, and did nothing.

The Boston hearing was widely covered -- two pages in this newspaper. RTE gave the story 18 seconds. Big story, small coverage. Next day, RTE reported that the trustee was counter-suing Anglo, which is seeking to have her dismissed. RTE conceded: "This is rapidly becoming a complex and surprising court case."

On Wednesday, the Government reassured us that taxpayers were the main concern. It came late. On the road to Damascus, our leaders, bent on further persecution of the people, had suddenly been converted to this new aim. It was not there when Anglo collapsed under Cowen's and Lenihan's attempts to conceal their own mismanagement; nor was it part of the brutal follow-up.

NAMA is also a brutal process. It has brought virtually all private-enterprise development to a stop; it has robbed the developers of their assets; and has sold, in circumstances repeatedly shown to be ill-judged and simplistic, hugely important portfolios for short-term public gain.

NAMA is at the root of our troubles and has not operated in taxpayers' interests. NAMA has helped create the enormous black hole Ireland faces. It is responsible for drawing Europe into that hole.

NAMA is run by a well-regarded man, John Mulcahy. It is chaired by former civil servant and Revenue Commissioner Frank Daly. There is an academic, Brendan McDonogh. None of these men is qualified to assess a development appraisal, least of all Frank Daly, the chairman.

NAMA has distorted the property market. It prescribed the write-down without knowing how big the hole they were creating would be. Talk about 'known unknowns'! This is an 'unknown' unknown, due mainly to ignorance. There are instances of prime re-development sites given discounts of 80pc because NAMA says so, and not because the market would have said so.

Here is one example: NAMA acquired from Anglo a toxic loan this year for €40m. This haircut was down from €120m. Recently, NAMA announced its sale for €180m. The valuation was very far off the mark and it was foolishly naive to boast about it. Trumpeting the eventual sale was farce bordering on tragedy.

Did all that smoke and mirrors 'serve the taxpayer'? It beggared a developer and a bank. It created no jobs, did nothing to help the building or development industries, and provided the country with no harvest. It drove values down -- and we, the people, ended up seeing an even bigger cheque being drawn on our resources.

This was not corruption. It was ignorance combined with arrogance. There was a property bubble, no doubt. But the whole sorry mess, if managed properly, would have cost the State far less.

The State should then have sought help from the ECB. Instead, NAMA dug on. The hole got darker.

If Europe cared about us, it would insist on NAMA being reversed and its grossly offensive legal constraints repealed. But Europe does not care about us. Europe is here for Europe's sake. Europe is desperately trying to save a crumbling empire, a shaky currency and a smug bureaucracy; we are mere chaff in the wind, taking the medicine with loss of sovereignty because we foolishly voted for it in the second Lisbon Treaty referendum.

Dear, beloved country, why did you not listen to me then?

Article - Irish Independent

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