Friday 24 November 2017

Happy Christmas Anglo, from all at the Department

Finance officials were supposed to represent the taxpayer, not roll over for the bust bank, writes Daniel McConnell

ALL SMILES AND STILL AT THE TOP: Ann Nolan, with Finance Minister Michael Noonan.
ALL SMILES AND STILL AT THE TOP: Ann Nolan, with Finance Minister Michael Noonan.
Daniel McConnell

Daniel McConnell

The extraordinary revelations contained in the Anglo Tapes continue to emerge and we are now beginning to get a much greater understanding of the colossal failures by the State institutions that were charged with protecting the Irish taxpaper.

Before the publication of the tapes, we may have been aware of the broad narrative of State ineptitude and incompetence. But when confronted with the details of how those failures exhibited themselves, one can only be left in a state of shock and disbelief.

Today, we reveal a conversation between Ann Nolan, then a senior public servant in the Department of Finance, and John Bowe of Anglo Irish Bank, which took place on December 23, 2008, two months after the introduction of the bank guarantee, just four days after David Drumm had resigned and three weeks before Anglo was nationalised in disgrace.

The conversation is a telling snapshot, indeed a damning example of how cosy the relationship was between the Department of Finance and the bank that ultimately bankrupted this country.

A well-known face to political journalists, Nolan has for many years been pushed out in public to speak on behalf of the department alongside the minister of the day. She played a key role in the State's handling of the banking crisis and was instrumental in the formation of Nama in 2009.

But back in late December 2008, Nolan was the official responsible for dealing with Anglo Irish Bank and was a central player in Brian Lenihan's 'war cabinet' within the department.

With Drumm having gone in disgrace just days before and Anglo's rating having been downgraded by Standard & Poor's, Nolan and Bowe enjoyed a friendly conversation, littered with bouts of laughter, warm Christmas greetings, mutual sympathising and indeed camaraderie – despite the betrayal that was being perpetrated.

All that was missing from the conversation was the mistletoe and eggnog.

Nolan repeatedly made sympathetic noises to Bowe, who complained about being "beat" and having "hit a wall", in a manner which illustrates a colossal failure on behalf of State employees to grasp the stark reality of the situation.

"You have my sympathy. I understand exactly where you are coming from," she told Bowe.

Nolan displayed a cosiness and familiarity with Bowe that betrayed any sense of the rigour and clinical detachment that she and other key State officials were supposed to be displaying.

It is disgraceful and surely places grave questions over both her competence and her suitability for the job as Regulator.

Rather than handling Anglo with derision, hostility or even caution, the Nolan tape and other tapes published today suggest the true attitude of Nolan and others at the heart of the Anglo talks was one of meek acceptance.

This was not a troubled semi-state company which had been a bit bold in how it spent some of its budget. This was a bank that had systematically lied to the State in order to ensure its own survival, no matter what the cost to the taxpayer.

Indeed, we know that Lenihan himself had reservations about the abilities of some of his officials around the time of the banking crash, and he sought outside advice from many quarters. He found a cadre of his officials too conservative in their attitude and he also questioned their competence, given their role in overseeing the boom between 2004 and 2007.

Another taped conversation, between Bowe and Con Horan of the Regulator's Office, from October 2008, came about because of allegations that Anglo was exploiting the guarantee in order to salvage its wrecked financial position.

But even after Anglo had forced the country into a guarantee, Horan's attitude toward Bowe is almost apologetic for inconveniencing this banking shark in asking him to a meeting later that day.

It is pathetic.

There is no sign of him bawling the Anglo man out of it, no sign of him getting tough, no sign of him being anything other than a captured animal who allowed himself to be at the mercy of Bowe.

What chance did we have as taxpayers when those acting on our behalf were apparently so weak, so accepting and so unwilling to challenge the arrogant Anglo orthodoxy. We played by their rules rather than them playing by the State's rules.

They had nothing but contempt for those who they were dealing with and that, seemingly, was okay for our State officials.

Today, Ann Nolan is one of Michael Noonan's top officials within Merrion Street, having played the lead role in the Promissory Note deal in February.

However, it was Nolan herself who admitted to the Public Accounts Committee (PAC) recently that the department had conducted no independent analysis of the Anglo (IBRC) loan book before it was liquidated by Noonan, saying the department had instead relied on "internal unaudited IBRC figures" – raising fears that the taxpayer may yet be hit with a further bill.

Yet so high is her stock at present that she is considered to be the frontrunner to succeed Matthew Elderfield as Financial Regulator when he departs later this year.

As for Horan, in 2011 he took a senior job as a 'national expert' at the European Banking Authority (EBA), the new body in charge of supervising European financial institutions, based in London. There he works on 'oversight and supervision'.

While their careers have flourished since the banking crash, today's tapes give us an insight into their relaxed interaction with Anglo at a most critical time for the taxpayer.

But today, Nolan and Horan now have serious questions to answer.

Irish Independent

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