A grand day for 'Crocodile Dick', the grand-a-day man
Published 20/12/2015 | 02:30
'Tea or coffee?" asked the waiter behind the boilers at the AIB shareholders' funeral on Wednesday.
"Coffee, please." I replied, reaching for the china cups to help myself.
" No, you must use the cardboard cups" - he gestured briskly - "over here."
I wondered who the china cups were for. I guessed, but I was obedient. I pressed the tap marked "coffee" to fill my piece of cardboard.
The boiler was empty. Caffeine was in short supply at the AIB EGM.
So was everything else. Except condescension, insincere apologies, greed, spin and spinners galore.
I had come to the AIB EGM to listen to the "grand-a-day" man.
AIB chairman Richard Pym, the British plutocrat, took the stage at 11 o'clock. Richard earns €365,000 a year, exactly a grand-a-day for this part-time job. He showed no evidence on Wednesday of being worth a tenth of that. His task was to pacify the losers in the room and put AIB firmly on the way to privatisation. He was going to sell the Irish bank to the highest bidder. He would have to put up with a bit of flak from the poor souls who had lost their life savings, but his discomfort would only take a few hours. And he was earning a grand-a-day.
The poor punters who had sipped caffeine out of the cardboard cups were mostly destitute, collateral damage in the war to save AIB and its directors. On Wednesday, we were witnessing much higher things, way above our humble heads. The little people were being sacrificed for the greater good.
AIB was spinning a different story: it was a mighty day. They were repaying their debt to the Irish State. They were deeply grateful to the Irish Government for rescuing them, apologising ad nauseam to the smaller shareholders for the little matter of bankrupting them. But the market was the market. There were winners and losers.
The platform of five, sitting like a Soviet politburo looking down on the rabble from the Kremlin wall, were the biggest winners. The losers were seated beneath the stage, drinking coffee from cardboard cups. One of them sighed and muttered to me that the tears being wept by Richard Pym should earn him the nickname 'Crocodile Dick'.
The 'grand a day' man apologised once again for the pain that shareholders had suffered, and got on with the business of selling them further down the river. Everybody in the room knew that all the lip service paid to the victims was irrelevant. 'Crocodile Dick' held 99.8pc of the voting shares in his pocket. The Government's stake in AIB was being cast in favour of the resolutions steering AIB back into the hands of global predators. The shareholders in the room were toast. Michael Noonan wants to be able to tell the electorate that he will use the proceeds of the sale to reduce the national debt. 'Crocodile Dick' Pym is playing ball.
And what are the spinners saying? The message is going out loud and clear: AIB will repay every penny it owes. The bank has been cleansed of its baggage. Big investors will be queuing up to buy the shares. Wednesday was an historic day for Ireland. The villains of the property frenzy are repentant sinners - reformed, redeemed - and restored .
The media has swallowed the AIB/Noonan spin. On Thursday, The Irish Times led its front page with the headline 'AIB to repay €1.6 billion to State as first return of bailout funds'. Its subhead read: 'Initial repayment for taxpayer assistance will balance exchequer books for 2015'. The piece was triumphant. The story greeted the twin beneficiaries of Wednesday's financial manipulations as heroes. Hail, hero number one AIB chief 'Crocodile Dick'. Hail hero number two, Michael Noonan. Together they have saved the nation. Pravda would have been proud of the way the media greeted the beauty of the deal that had supposedly rescued Ireland out of the mire.
It was certainly beautiful for some. For the Government's electoral timetable. For the AIB fat cats. For Goldman Sachs (AIB's overpaid advisors), for the accountants, consultants and lawyers. 'Crocodile Dick' refused to answer any questions about the advisers' fees. The media mostly missed the hidden agenda and the suffering of the masses at the hands of AIB.
Buried on page 3 of the Business section, The Irish Times carried a brief account of the event that had made it all possible. The tragic anecdotes related by ordinary shareholders were downplayed. The real human cost of the privatisation wheeze was not covered.
Brendan Burgess, the financial adviser, put his finger on a raw nerve and merited a mention, but Burgess' point was hugely important. He described AIB's variable mortgage rates not only as a rip- off , but also - far more seriously - as unsustainable. He pointed out that the improved 'profits' gained from this source would only last as long as competition kept away from the market. The moment a competitor landed from overseas, this source of profiteering would tank.
Standard Variable Rate borrowers are paying a heavy price for bigging-up AIB profits. Their plight may be bad, but the fate of the small savers who have held AIB shares all the way down from €22 to their present level of below 4 cents is worse. Yet it has been dismissed by the authorities as a consequence of market forces.
The 'grand-a-day' man was terribly, terribly sorry, not only for those who had suffered over the long term but also for those who had been misguidedly buying AIB shares in an irregular market at massively inflated levels.
He protested that both he and his ally, Michael Noonan, had issued warnings about the recent anomaly in the share price. Indeed, he noted that there had been numerous newspaper articles about the dangers. Punters still bought the shares, mainly because small investors rarely read the small print in AIB or Department of Finance press releases. They have been badly burned.
Last week, they were finally vapourised by the resolutions and ignored by the media. 'Crocodile Dick' refused to ask the stock exchange to suspend the shares to protect the innocent. It was tough, or, as Pravda would say, 'tough**itsky.'
AIB is heading for a sale. It will soon be back to its old ways. Today, it is protected by the State. It is one of two pillar banks - the Government's euphemism for a duopoly. While in rehab it has destroyed over a hundred thousand small savers' lives.
It has exploited variable-rate mortgagors with the Government's connivance. Just the job for potential buyers, clients of such pleasant snake oil salesmen as Goldman Sachs. Even today, on a Sunday morning, overseas predators are eyeing the bank with a view to squeezing even more out of its customers - provided the Irish regime is sympathetic.
They need have no fears on that score. All Irish governments have been agreeable collaborators with bankers. The present regime has facilitated the rehabilitation of our home-grown villains and bowed to overseas opportunists. It was Michael Noonan who sold the bulk of Ireland's stake in Bank of Ireland to a vulture fund owned by Wilbur Ross. The US tycoon took him and the Irish people to the cleaners.
Today, Bank of Ireland, having escaped State control, is charging Standard Variable borrowers 0.75pc above AIB, itself imposing crippling levels on customers. Once AIB is back in the jungle, it can run a good old- fashioned cartel with Bank of Ireland and take the customers apart.
A buyer of AIB need not even replace the directors with its own puppets. During the period in disgrace AIB retained the old remuneration culture. While 'Crocodile Dick' may be pocketing a grand-a-day, several of his part-time AIB colleagues are not only members of the old school, but have trousered six-figure sums in good times and bad. Bank directors had a great recession.
They were never forced to drink coffee out of cardboard cups.
Why should they? Remember, last week they saved the nation.