It seems that a new chapter is about to be written with respect to the banking crisis as the cosy relationship between the banks and Fianna Fail politicians starts to come to light. As reported on Prime Time’s Monday night programme (watch it here), several Fianna Fail senators and TDs were in receipt of bank loans that avoided due process in their granting. The one catching the media attention (see here, here, here and here) is the €1.6m loan given to former Minister for Finance (and now EU Commissioner), Charlie McCreevy, by Irish Nationwide in 2006 in order to purchase a luxury apartment in the K Club (an exclusive golf resort). The loan was seemingly given on short notice, avoided the credit committee (which was required for loans worth more than €1m), was processed without the required minimum paperwork, and was approved for a sum €100,000 greater than the price of the property despite the company’s policy of not granting mortgages of 100% or more. The property is now thought to be worth less than half its original value.
It seems that neither the bankers nor politicians can be trusted when it comes to money. It’s little wonder then that the government were reluctant to allow full and transparent regulation of the banks in the lead up to the crisis given that they were some of the main beneficiaries of lax controls. And it’s also unsurprising that they are now equally reluctant to have a full and open inquiry into the dodgy and fraudulent banking practices that have execarated the crisis. And heaven knows what would come out if whistleblowers are given the appropriate protection to allow them to speak freely. As Morgan Kelly noted on Monday night’s programme, perhaps it’s also time that politicians had to declare more than their assets, but also their full personal loan book (as well as their expenses, etc). If Simon Carswell is updating his 2006 book, Something Rotten: Irish Banking Scandals, he must be pulling his hair out trying to keep up with what’s been coming to light over the last 18 months or so.
Rob Kitchin
Ireland after NAMA 
December 24, 2009 at 12:23 pm
It hard not to think that the politicians mentioned in the Prime Time show are alone in getting such loans from banks.
That in itself complicates the idea that we can have, as suggested by some, an Oireachtas enquiry into the Banking Crisis.
Looking for instance at the membership of The Public Accounts Committee, I would hazard that there may be a few there with a potential conflict of interest.
Which all in a way goes back to the NAMA vote, in that we were not fully aware of deputies financial interests when taking that vote.
January 1, 2010 at 5:52 am
I worked in Taxes Investigation Branch and was responsible, with SO’C, for the first prosecution of a serious VAT fraud offence.
We in IB were anxious as we reviewed the mounting evidence in a series of large cases where one bank had assisted its depositors to evade tax through a scheme to repatriate evaded sums sent abroad by that bank for its customers. We were told that we would be unable to prosecute that bank for these clear breaches of the tax code. The job of collecting that evidence would be “someone else’s responsibility”. Despite the fact that we were going to prosecute the depositors!
The DPP representative present was contradicted and silenced by the Assistant Secretary present.
That AS had dealt with tax files for a very prominent politician who was subsequently revealed to be involved with a major bank and yo have had tax problems. Clearly just a coincidence.
Banks are a licence to print money and depend upon the CB for their licence. A successful prosecution of a bank would probably mean the loss of the licence. But that is the law. But if it is unenforced? Banks therefore know to toe the line!
September 5, 2010 at 3:38 am
In the case of our own Fannie Mae and Freddie Mac institutions for loans on homes and education, the chief executives not only “cooked the books” faking a profit for the purpose of gleaning bonus monies for reaching certain monetary thresholds, but rather than being prosecuted were instead rewarded with positions of financial advisorship on our now presidents, then campaign staff. Now they are at the root of the very looting of our country we so ridiculously called stimulus.