Can Anyone Top Seán FitzPatrick's Record?
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"Can anyone top Seán FitzPatrick's record?"
We'll get to Seán in a minute. First, for my many non-Irish readers, who trust me as their number-one source of highly biased information on the state of Irish banking... as I predicted a while back, the Irish Government is finally going to recapitalise the Irish banks. Orwell would wet himself laughing at the language the government are using to describe this flip-flop. The Irish Government plan to pour 10,000,000,000 euro (that's not a misprint - and yes, there's only four million people in Ireland) into the black hole of Irish banking, and the Minister calls it "a demonstration of confidence in the banks."
Er, no. It's a demonstration that the government thinks the Irish banks are insolvent. Bust. Bank-rupt.
How will a government with an exploding deficit fund this? Apparently they're going to throw the national Pension Scheme down the hole. And as to terms, well, we just have to trust them. Here's the official description, from the Irish Times this Monday, if you can stomach it:
Minister for Finance Brian Lenihan is expected to meet the chiefs of AIB, Bank of Ireland, Irish Life Permanent and Anglo Irish Bank over the coming days to discuss specific proposals for an injection of new capital into the system via a new fund in which the Government will participate.
"What I'm mainly concerned about is that the banks are in a position to extend credit," the Minister for Finance said on RTÉ radio.
"That's why we want to make this gesture, a demonstration of confidence in the banks, by upping their capital to show that their buffers are so strong, they are indestructible."
The Minister said there would be "tough discussions" with banks on the details of any State injection of funds. "We'll spell out the realities as we see them to the relevant institutions."
Mr Lenihan added there was "no question" of fresh public expenditure being incurred in the recapitalisation as there were was a substantial amount of money amassed in the National Pension Reserve Fund.
He refused to be drawn on whether there would be changes in the management of the banks as part of the Government plan.
Well, changes in management are happening already. Anglo Irish Bank, whose shares have lost 95% of their value this year, lost their chairman Seán FitzPatrick today. It turns out he'd been hiding 87,000,000 euro in personal loans with his own bank. Every September for the past eight years, as Anglo Irish Bank's year-end accounts were about to be done up, he'd lob 87,000,000 over the back wall and hide it in another bank (probably Irish Nationwide Building Society, whose books aren't done up till December, but noone is saying officially). Then, once Anglo-Irish had their figures all officially audited ("Vast loans? To the Chairman? Heavens no!"), he'd lob his loans back over the wall again. So they didn't turn up on the books of either bank.
What was his quote on this matter?
"...it is clear to me, on reflection, that it was inappropriate and unacceptable from a transparency point of view."
On reflection? ON REFLECTION? He thought it was absolutely spiffing from a transparency point of view, while for eight years he played hurling over the back fence with 87,000,000 euro, but earlier this week he finally had a spare moment to reflect (busy man), and was shocked, SHOCKED! to discover he wasn't totally transparent?
I love the way the traditional Irish cover-it-up language is being stretched to its limit by the size of the stuff it is now being asked to cover.
If this was one of my novels I'd give you an exquisitely crafted gag to finish up, that played with transparency and reflection, invisible men and vanishing money, but this is a blog and I'm knackered so that's all you get.
No, actually I'd like to end with Business Plus magazine, from November 2004. It has Seán FitzPatrick on the front cover, under the admiring headline, "Can Anybody Top Seán's Record?"
Well, Seán was the CEO of Anglo-Irish Bank from 1986-2005, then Chairman till today. He ran it right through the boom years. It's lost 95% of its value this year, and his secret loans from the bank now add up to a full third of its entire market cap.
Yes, we'll see can anyone top that in the coming year.
(Ah, he's probably a lovely man, and only wanted the 87,000,000 euro to help sick children, and hedgehogs who'd been hit by combine harvesters. And his modesty made him hide the loans. Still, though, if anyone out there can find a bigger image than this 7k gif, send it on to me and I'll put it up here...)