You probably won’t be impressed by this. Four months ago, confidence in the Irish Taoiseach or Prime Minister Brian Cowen suffered a serious blow as he appeared to be drunk on an early morning radio interview. The night before, Mr. Cowen had been drinking with fellow Fianna Fáil party members (pun intended), and had amused the company with humorous impersonations of celebrities, among them a Ryder Cup-winning golfer. The party continued till past 3:00 AM. However, Cowen insisted the accusations of him being drunk during the infamous interview marked “a new low in Irish politics” and that they were “ridiculous and un-called for.” Nasal congestion and opportunistic scheming by the opposition were behind Cowen’s woes, we were told.
Poor Brian Cowen. Can’t a leader of a nation in deep crisis enjoy a night of heaving drinking until 3:00 AM without being attacked by the scheming forces of opposition? The times we live in…!
In light of Cowen’s abuse of the poor golfer, perhaps there is an element of poetic justice in the latest scandal facing the besieged Taoiseach.
It has now emerged that the Taoiseach had hitherto undisclosed contacts with the chairman of the disgraced Anglo-Irish Bank, Sean FitzPatrick. Watching FitzPatrick’s career as a banker is rather like watching the Hindenburg – soaring to great heights on invisible wings of optimism, only then to crash and burn spectacularly, bringing horror and grief to untold numbers of people.
As chairman of Anglo-Irish Bank, the now bankrupt FitzPatrick steered the doomed institution through the minefield of insanely reckless lending to speculators and property developers, helping to fuel the Irish property price bubble which has been termed the largest in the history of the world. In September 2008, the Irish Government made the unprecedented decision to issue a full banking guarantee to all the Irish banks, effectively joining the Irish State to the Irish banks at the hip. This decision has had monumental consequences for the Irish people, leading to the IMF/ECB bailout of December 2010 and the harshest austerity measures in living memory. Fears are now being voiced that the costly IMF/ECB bailout of Ireland might threaten the entire Eurozone.
Now growing concerns are being raised as to what exactly the Taoiseach Brian Cowen and Minister for Finance Brian Lenihan knew about the true state of the failed Irish banks in the months and weeks leading up to the bank guarantee of September 2008.
According to new revelations, Anglo-Irish chairman Sean FitzPatrick telephoned Brian Cowen on St. Patrick’s Day 2008 to voice concerns over the state of Anglo-Irish finances. On that day, Anglo-Irish share prices had plummeted by 15% and more problems were to follow. The bank was bleeding deposits and struggled to attract foreign investors on whom it was dependent. Brian Cowen was Minister for Finance at the time. Then, on July 28th 2008, now Taoiseach Cowen enjoyed a full day’s golfing with Sean FitzPatrick, followed by a leisurely dinner. Also present was Fintan Drury – a close friend of Brian Cowen, Drury had stepped down as chairman of Anglo-Irish one month earlier. Anglo-Irish Bank was already facing disaster as the three men golfed, yet we are expected to believe that during their golf outing, the state of the bank was never brought up in conversation. Anglo-Irish has now collapsed, it has been nationalized and utterly disgraced – and is the focus of an ongoing fraud investigation.
To make matters even worse, it has also emerged that shortly before being made Financial Regulator, Patrick Neary also went on a golf outing with Sean FitzPatrick. Neary resigned from the post a year ago after repeatedly insisting that he was ‘personally unaware’ of the seriousness of the situation in Anglo-Irish Bank. He is now cozily retired with a dazzling golden handshake and a massive state pension.
In a statement released Monday, Cowen said:
“I am quite clear that no discussions regarding Anglo Irish Bank took place. It was a social outing in full public view. There was nothing untoward, no hidden or secret agenda and no concessions, favours or interventions requested or granted. Certain people are drawing inferences for political and other motives, they are malicious, unfounded and have no basis in fact.”
Cowen’s statement is nearly as convincing as someone shouting “I’m really not beating my children! Honestly!” But at least he was sober when saying it.
It is becoming impossible to perform the feats of mental acrobatics required to make Cowen’s statements seem trustworthy. The official story is that the Irish government had no knowledge of the full extent of the crisis within the Irish banks before the bank guarantee. Effectively, they did not know what they were getting into and the Irish financial crisis deepened with more and more revelations about the true state of the bottomless black holes in the Irish banks.
The Taoiseach has some serious explaining to do. Why did it take him this long to admit to his hitherto secret encounters with the chairman of the doomed bank? Bear in mind that all this is taking place on the backdrop of a police fraud investigation into the dealings of that bank. Can Taoiseach Brian Cowen be said to be earnestly and openly cooperating with the police in their investigation? Can we really believe that nothing untoward went on? As one commenter put it, how would the Americans feel if it emerged that Dick Fuld of Lehman Brothers was gallivanting on a golf course with Bush at the height of Lehman’s trouble?
The decision by the Irish government to issue a full banking guarantee of all Irish banks has proved to be complete catastrophe for the Irish people who are faced with increasingly harsh austerity measures, sky-high unemployment and growing emigration figures. The decision was sold to the public on the basis that if the banks failed due to the systemic risks in the financial sector emerging internationally, the result would be a nuclear winter in the words of Minister for Finance Brian Lenihan – a sort of Mad Max scenario complete with cannibalism and bloody mayhem. Deposits of up to 100,000 euros would be safe under the banking guarantee but critically, so would the bondholders of the failed Irish banks to the tune of billions of euros – to be paid by the Irish taxpayer. There were no alternatives, we were told. The current Irish government will continue with this strategy to the bitter end rather than admit that okay, maybe there were other options and right, maybe it’s not too late to start considering them.
At its height, Anglo-Irish Bank boasted the fastest growth rates of any bank in the world. It was growing faster than the Irish economy itself, recklessly throwing borrowed foreign capital at property developers who in turn gambled that the price of Irish property would never stop rising. In Ireland, “light-touch regulation” was a euphemism for effectively no regulation. The repeated excuse of the Taoiseach and his Minister for Finance that they did not realize the full extent of the crisis within the Irish banking industry is not only monumentally unbelievable – whatever went on during that day on the golf course – it is adding insult to injury by asking the Irish public to take solace in the fact that their government is only negligent and incompetent – not corrupt. Some solace indeed.
Labour leader Eamonn Gilmore again accused the Taoiseach of economic treason, stating: “if they proposed an arrangement for the guaranteeing of banks that they knew were in that kind of trouble then yes, it was economic treason.”
Another member of the opposition, Sinn Féin’s Pearse Doherty was equally scathing: “The Taoiseach’s claims that he played a round of golf and had dinner with Mr. Fitzpatrick but that the situation in Anglo-Irish Bank was not discussed is severely lacking in credibility.”
The Irish government’s official line remains unchanged: anything we say is absolutely true, the public is too stupid to understand these complicated matters and must just trust us – honestly, trust us – and any questions posed by the opposition is an opportunistic, morally indefensible attempt to usurp power.
Is it really too much for the Irish people to demand accountability and transparency? The upcoming general election will serve to indicate just how content the Irish public is with having a government that is either corrupt, criminally negligent, lying or deeply incompetent.