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Brian Brennan: Hard to find any laughs in bungling leaders' conduct

A CHARACTER in 'The Government Inspector' at the Abbey theatre pours scorn on another, saying "you're like an Irishman singing 'The Lakes of Ponchartrain' . . . at three o'clock in the morning". When Roddy Doyle, in adapting Gogol's Russian original, added those modern Irish allusions, he may have hoped the audience would roar with laughter in recognition of the side-splitting antics of a former Taoiseach.

At best, the line draws a tentative chuckle.

Likewise, when someone else roars, "We are where we are", the dreary old meaningless cliche grates on the ear. On some ears, at least.

Could it be that the legacies of the last government and its bungling crew are so extremely depressing that they defy satire? Or is it that the doleful catchphrases of a desperate and inept administration simply remind us that much unfinished business remains to be addressed?

The final report of the Mahon Tribunal into certain planning matters and payments is expected to be published within the next few days and may prove sensational, but it is unlikely to tell us a great deal about why we are where we are. Three years after the calamitous extent of the banking disaster became clear there still has been nothing like a full inquiry into what went wrong and who is to blame.

Documents released by the Dail Public Accounts Committee showed that when the last government made its decision to introduce its €440bn state guarantee, covering the debts and deposits of the entire Irish banking system -- including Anglo Irish Bank -- it was acting on false information.

Having been warned by the US banking giant Merrill Lynch that the radical plan would adversely affect the national rating and allow terminally ill banks to stumble on, the government rejected that and acted on the advice it wanted to hear.

What it did not want to hear was that the guarantee "would almost certainly negatively impact the State's sovereign credit rating and raise issues as to its credibility".

Merrill Lynch was right. The markets and the world at large refused to believe that this small country could afford to give such a vast blanket guarantee. If the guarantee ever had to be exercised, it would be revealed as a gigantic bluff.

So we waved goodbye to our triple-A rating and, not too long afterwards, to our economic sovereignty and proceeded to pour billions into the banks.

When the Cowen government made its choice and rejected the alternatives suggested by Merrill Lynch, it was under the mistaken impression that none of the banks actually faced a funding crisis. It had been told as much by the ex-Central Bank chief John Hurley and by the former Financial Regulator Patrick Neary.

Indeed, the very Merrill Lynch people who advised against a blanket guarantee were themselves apparently unaware of the depth of the banks' crisis.

At most, they believed, the Government might have to pump some €5bn into the banks which, as we now know to our cost, was a gross underestimate.

Less than four months after the guarantee was made, Anglo Irish Bank was nationalised and the taxpayer was handed a bill for €22bn.

So how could the government advisers have got it so wrong? Did bankers lie about the extent of their problems -- about how much assistance they thought they might need? If so, when will they be held accountable?

Today, as hundreds of lower ranking bank workers face losing their jobs -- to be followed in the near future by hundreds more -- senior figures, some of whom must have sleepwalked into the banking crisis, are in situ enjoying massive salaries. It is self-evident that top bankers and financiers are paid sums totally inappropriate to a little country with a population equivalent to that of a smallish city in South Korea. And the same applies to top civil servants and politicians who are (still) paid far too much given the size and state of the economy; not to mention gilt-edged multiple pensions and other entitlements.

Which brings us neatly back to 'The Lakes of Ponchartrain'. Who remembers Golfgate? Exactly a year has passed since the former Anglo chairman Sean FitzPatrick disclosed that he had played golf and had dinner with Brian Cowen, the then newly installed Taoiseach in July 2008, a couple of months before the government introduced the bank guarantee scheme.

In the midst of the raging debate and controversy that followed the guarantee, Brian Cowen kept to himself the fact that he had had contacts with Sean FitzPatrick. Had he been told that there was an issue with bank shares held by Sean Quinn and what was being proposed to deal with it?

The Quinn difficulty led to the so-called Maple Ten transaction, in which 10 of the bank's wealthiest customers bought the huge number of problematic shares on the quiet, with money loaned by the bank. Was this dubious move, designed to protect the bank's share price, legal? And who, apart from the bank's inner circle, knew what was going on?

David Drumm, the former Anglo chief executive, is reported to be engaged in a legal battle with Anglo's successor, Irish Bank Resolution Corporation, for the release of certain documents. He has claimed that the Department of Finance and the Financial Regulator knew all about what was going on at Anglo.

Meanwhile, Sean FitzPatrick stands now at centre stage, caught in the spotlight as other players watch quietly from the shadowy wings. He has expressed regret at what happened at Anglo Irish but also says that he considers himself "an obvious scapegoat".

There are plenty of laughs in 'The Government Inspector' but as the humiliated mayor tells the Abbey audience as the corruption all around him is exposed: "You are laughing at yourselves."

brianbrennan@independent.ie

Irish Independent