Wednesday 26 June 2019

Martina Devlin: Cowen saw no evil in sticky-fingered society

Martina Devlin

Martina Devlin

THAT prince among men, Michael Fingleton, has made a monkey out of the taxpayer. And now Brian Cowen is presenting himself as a monkey too. But the Taoiseach is using it as a defence: he wants us to believe he was a 'hear no evil, see no evil, speak no evil' monkey of a finance minister.

This week, he assured the Dail he was unaware of substandard banking practices in Irish Nationwide when he held the finance brief. I find that unconvincing, unless we are prepared to see Cowen as a feeble, hapless bumbler.

Tempting though that is, a more persuasive explanation suggests the governing class was in cahoots with Fingleton and his grubby little piggy bank. No wonder he was allowed to keep that €1m bonus. As he said himself, he knows where the bodies are buried.

Fingleton's building society was focused on lending to developers, and Fianna Fail was the political wing of the developer class. Four-fifths of Irish Nationwide's business was with developers.

Such a lopsided and risk-weighted lending book should have set off warning bells, but Fingleton worked assiduously at building political contacts -- many in Fianna Fail. He was always ready to fast-track a mortgage to those connected with the party, waiving paperwork to protect loans with a regal flick of his hand.

Such an attitude certainly explains why some €2.7bn of public money had to be pumped into the building society, and why the NAMA discount for its properties is running at 58pc.

But Cowen, when taxed as to whether he had any inkling about shoddy practices at Irish Nationwide, said limply: "I don't think it was ever brought to my attention that that sort of problem existed. Certainly not."

How odd, because he was finance minister for four years, between 2004 and 2008. And in 2006, opposition politicians expressed grave misgivings about the direction in which the building society was headed. Yesterday, I read Dail records for July 5, 2006 when a debate on the bill (now law) to demutualise building societies was ongoing. Opposition and independent TDs queued up to denounce Irish Nationwide. Terms such as "scandalously" in relation to its practices were used.

Eamon Gilmore raised concerns about Irish Nationwide becoming a personal enrichment vehicle for Fingleton, and he and other TDs complained about the way the bill was rushed through the Daill; Irish Nationwide has been lobbying intensely.

The bill's second reading was held at night on the penultimate day before the Dail rose for the summer recess, hampering discussion.

There was no doubting what class of buccaneer steered the tiller at this institution.

Here's the Labour leader: "Irish Nationwide and its management have been the subject for years of accusations -- some substantiated -- of bad business practices, lack of accountability and failing to pass on interest rate cuts.

"Late last year, the Ombudsman ruled against the building society for its practice of charging early repayment penalties that were higher than a fair measure of the loss of the account ... Other issues that borrowers were unhappy about were the very high penalties charged to borrowers in arrears, the failure to pass on interest rates cuts to non-home loan borrowers and the general lack of information provided."

Now, Taoiseach, how can you have missed that Fingleton was a law unto himself? If you were still blissfully unaware, Caoimhghin O Caolain, during the same debate, should have removed the scales from your eyes.

He referred to customers being overcharged, and Fingleton's having "to be compelled to come before the Flood Tribunal to explain why his society had not complied with a tribunal order".

Building societies first emerged as savings co-operatives. Their members, usually working men, pooled resources to build their homes -- and when the last house was built, the society was dissolved. This model illustrates how far Irish Nationwide drifted from its roots under Fingleton's 37-year dictatorship.

He lent out millions to leading politicians including a €1.6m loan to former finance minister Charlie McCreevy in 2006 to buy an apartment in the K Club then worth only €1.5m.

Fingleton granted the loan even though the society's guidelines did not allow 100pc mortgages, let alone anything in excess.

In 2008 he personally authorised a fast-tracked loan of €40,000 to Celia Larkin, the former partner of Bertie Ahern.

It was passed without the standard criteria being fulfilled, such as documentation about proof of income or other loans.

Meanwhile, Fingleton was a fixture at sporting events and on the social circuit, where business is discreetly conducted. He was a guest on Sean Dunne's wedding cruise aboard the Christina O -- Dunne was a client of Fingleton's.

And his blazer was steam-pressed again to join Michael Smurfit on a cruise celebrating the tycoon's 70th birthday -- Fingleton financed the K Club's purchase by Smurfit and property developer Gerry Gannon.

Just to recap: Irish Nationwide lost more last year than it made in profits in its entire history, yet he exited the building society with a €27.6m pension. What a Sticky Fingers he proved himself to be.

Our resentment, while justified, is impotent. The Government lacks the power to retrieve anything from that enormous pension pot. But it could have stopped another financier from monkeying around with the taxpayer. Richie Boucher's €1.5m pension top-up was always indefensible. That didn't deter Brian Cowen from a mumbling defence of it, however. Later he was shamed into admitting it would be in the public interest if the Bank of Ireland chief executive surrendered the top-up.

If the public hadn't made a song and dance about it, what's the betting the Government would have looked the other way?

Irish Independent

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