There are degrees of what is incredibly unjust
The no-loans-for-bank-shares rule is something bankers like Whelan and McAteer should know, writes Gene Kerrigan
Published 04/05/2014 | 02:30
It's hard to know which is more silly – some of the remarks made by the judge in the Anglo trial, or the widespread gasps of surprise when he declined to jail the guilty bankers. The silly remarks were extremely silly, and the surprise was unwarranted for two reasons.
One: it was always at most 50-50 on whether Pat Whelan and Willie McAteer, alone of all involved, would be sent to jail. And, two: in your heart, knowing what we know about the Irish legal system, did you really expect a banker to go to jail?
The Anglo case in one short paragraph: bloody fool gambles billions on buying bank shares, destabilises bank; bunch of rich men are invited to borrow hundreds of millions from Anglo to stabilise the bank by buying Anglo shares. It's illegal for a bank to lend money to anyone specifically to buy shares in that bank.
Now, the judge's silly remarks – well, where to start?
Try this one: "A State agency led them into error and illegality." The regulator, the forgetful Mr Neary, gave the "green light" to the deal, said the judge. And Pat Whelan and Willie McAteer – well, it seems they were easily led astray.
Fair enough, if Pat Whelan was a filing clerk, in Anglo on work experience. And if Willie McAteer's job was to count the bank's daily intake of coins, making sure no
one slipped in the odd washer or button.
Whelan is in his 50s, he was Anglo's head of lending. McAteer is in his 60s, he was Anglo's finance director. High-power jobs, with big banker salaries. These two men had years of experience of banking before they took positions of huge responsibility.
The rule against lending to buy the bank's own shares is not some obscure regulation tucked away in the small print. It's a basic rule of banking. Without it, banks could manipulate share price at will. Anyone at that level shouldn't take the job if they're unable to remember such a major no-no. That's supposedly why you get the big bucks.
A taxi driver knows you shouldn't close your eyes and yawn while driving down the on-ramp to the M50. Surgeons know better than to pick their nose while waiting for the patient to count backwards from 100. And bankers know you don't lend money expressly for the purchase of the bank's shares.
Judge Martin Nolan: "I cannot be certain that Whelan or McAteer knew they were in breach of S60", of the Companies Act. Well, judge, there's a phrase that you may have come across previously in legal matters – it is this: "They knew or ought to have known."
The no-loans-for-bank-shares rule is something a banker at a certain level should know. The law has to presume he or she does know – or ought to know – otherwise the law may as well not exist.
"A State agency led them into error and illegality." Who led whom?
Neary and the other "regulators" didn't come to Whelan and McAteer with a dodgy plan. It was the other way around. The illegal plan originated within the bank and – presumably in order to stabilise Anglo – the "regulators" went along with it.
The judge said that Whelan and McAteer were not guided by "avarice or greed or the pursuit of profit".
Their motive was "a genuine if misguided attempt to save the bank".
The second sentence there is undoubtedly true. So, the judge decides they can't have been motivated by avarice, greed or profit. Judge, old chap, one thing being true doesn't necessarily make another thing untrue. Didn't you learn that at the judging school?
It comes across as though Whelan and McAteer were motivated by sheer idealism. Good God, that bank is in trouble – perhaps I can save it!
Whelan and McAteer were fighting to save the bank – and their lucrative jobs and positions. They, and others, had a personal interest in the success of the illegal plan.
The judge said: "It would be incredibly unjust to impose custodial sentences."
Come on, judge, come on. It's perfectly legitimate to take a view that, given the number of those involved in the Anglo debacle, it would be unjust if Whelan and McAteer went to jail for this one aspect of the Anglo scandal.
It is equally legitimate to take the view that they broke a serious law, one with a penalty of up to five years in jail – and they should have served some time behind bars. Some of us feel sorry for anyone faced with a jail sentence, and aren't screaming for one here – but to describe a jail sentence for either man as "incredibly unjust" is judicial silliness.
The jailing of Nicky Kelly, all those years ago, that was incredibly unjust. The framing and jailing of Frank Shortt, falsely convicted of allowing drugs to be sold in his club, was incredibly unjust. The treatment of the McBrearty family following the death of Richie Barron was incredibly unjust. The hounding of Ian Bailey continues to be incredibly unjust.
Jailing a couple of bankers who broke the law – well, the judge is entitled to his point of view.
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