News Analysis

Friday 19 September 2014

Shane Ross: If Constitution is an obstacle, we should hold referendum to decide bankers' pay

Published 11/11/2012 | 05:00

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As our lame leaders have thrown in the towel, let the people decide how much plutocrats should earn in future, writes Shane Ross

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LAST week Enda Kenny, Eamon Gilmore and Michael Noonan once again sounded like opposition TDs. The trio of political eunuchs were in defeatist mode. They proclaimed their impotence in the face of bankers' greed.

Tanaiste Gilmore thundered away as only he could do when he sat on the opposition benches. He loudly branded bankers' pensions and pay "unacceptable". Seemingly suddenly realising that he was in charge of the nation, he meekly promised a "review".

Finance Minister Michael Noonan had already thrown in the towel, insisting that there was nothing he could do. Even Taoiseach Enda Kenny weakly pleaded that pensions carried the same rights as property under the Constitution. Then he declared that AIB's former directors had a "moral responsibility" to hand back huge portions of their pension pots.

The Government, reduced to pleading with Ireland's highwaymen to return their ill-gotten gains, was parading its impotence as an excuse.

The political threesome are obviously so conditioned to being treated with contempt in Europe that they now find themselves paralysed in the face of powerful forces at home.

Being steamrolled is becoming a habit .

The news last week that Alan Dukes, chairman of Anglo, had back in April told Michael Noonan to jump in the Liffey when the minister had asked him to reduce top salaries at Anglo, is hardly surprising. Our lame leaders are once again dazzled in the bankers' headlights. Just as the top bankers bullied politicians into giving them a blanket guarantee in 2008, their successors are bulldozing their way back to supremacy over the political forces elected to confront them.

Bankers have brainwashed cabinet ministers into believing that nothing can be done to tackle their pay and pensions.

Enda, Eamon and Michael are hopelessly wrong. There is plenty that they can do.

When Mr Dukes defied him, Michael Noonan should have fired his old Fine Gael colleague on the spot. He bottled it. Not for the first time in their lives Noonan and Dukes eyeballed one another. Noonan blinked.

If pensions are so sacrosanct under the Constitution, there is a solution: consult the people. Admittedly the Government will not be in a rush to seek another plebiscite after the fiasco of its own making in the children's referendum last week. But if it takes a referendum to end the abuses of bankers' pay and pensions, roll on the referendum.

Last year we held a referendum on judges' pay. It was a deeply uncomfortable time for the beaks who were rightly humbled. Their pay and pensions can now be reduced. If we can cut the judges down to size, there is no reason why we, the people, should not vote on bankers' excesses. Both judges and bankers draw fat salaries and pensions from the public purse.

Imagine the two sides in a referendum campaign on bankers. In one corner would be pensioners Brian Goggin ( Bank of Ireland €650,000), Eugene Sheehy (AIB €300,000) and Colm Doherty (AIB €300,000). They would be joined by current incumbents Richie Boucher (Bank of Ireland €620,000 salary), Mike Aynsley (Anglo €866,000 package) and David Duffy (AIB €500,000 salary) plus a few hangers-on. In the other corner would be the entire Irish nation.

The handful of bankers might hold an early edge because they would have more spare cash to fight a campaign than the State, but even their riches could not bully the electorate to approve the legalised robbery that they have inflicted on us for decades. A referendum would allow the Government to end bankers' perks, to tax their pensions and even to cap their pay.

It must gall even the Taoiseach that Bank of Ireland boss Boucher's pay is more than three times his own €200,000 a year. It is nearer four times Mr Noonan's €169,000. It might even puzzle the newly elected US President Obama if he ever finds out that the pension of Brian Goggin, the retired boss of a bust Irish bank is more than twice his annual stipend.

A referendum would sort that out.

But a referendum would not be necessary if politicians had retained an ounce of testosterone. The banks have a direct reporting line to the State. Besides simply owning AIB, Irish Life & Permanent and Anglo outright, the State holds 15 per cent of Bank of Ireland. Its shareholding is represented on all three boards by a minimum of two directors, hand-picked by the last government.

Mr Noonan could summon these well-paid 'public interest' directors to his office and instruct them to reduce chief executive salaries to the level of his own €169,000; all pensions should be cut accordingly. If they baulk at returning to their boards with such an unwelcome message, he should sack them. There is a long queue of citizens gagging to take their places.

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The overwhelming weight of evidence suggests that the public interest directors see nothing wrong with the gigantic rewards being garnered by the bank bosses, possibly because they are overpaid themselves. The 'public interest' director experiment has been a disaster because these political appointees have bought into the banking culture. At any time in the last 18 months, Noonan could have dispatched replacements to kick ass. He didn't.

Pleas of impotence from the Cabinet do not wash in view of this clear chain of command. Either the public interest directors are mute behind the closed doors of directors meetings or, more ominously, they have seen the interests of the public as identical to the top brass in the bank.

Yet while the channels are there, the Government's communications with its own detached chosen directors seem to be virtually non-existent. Is it frightened of giving them the go-ahead to upset the cosy resurgence of the bankers?

The bankers' case for retaining their pensions, pay and perks is laughable. Imagine apologists for the bankers asking the Irish people in a referendum to accept their ludicrous argument -- put forward by Anglo's Mike Aynsley last week that they needed their outrageous salaries to retain their dazzling array of talented staff. Good, then let us hear from Brian Goggin, Eugene Sheehy and Richie Boucher about all the overseas recruiting squads that have come banging down their doors with juicy offers. Imagine, if the three plutocrats had actually been enticed away by such fantasy packages, we might have lost them forever. God forbid. We could have escaped the collapse.

If the Constitution is an obstacle, hold a referendum on the bankers. If legislation is needed to put a levy on bankers super-compensations, introduce it. Have the Government forgotten that they cannot don the mantle of opposition bystanders when it is time to confront the bankers? They are legislators, elected to make the law, not to plead impotence.

Sunday Independent

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