This comes amid a call on Finance Minister Michael Noonan to seek the assistance of powerful US stock market watchdog, the Securities and Exchange Commission (SEC), to probe the bank’s activities in the period leading up to the 2008 crash. Anglo Irish Bank sought to raise $10bn in fresh funding off the back of a medium-term bond offering in July 2008.
While the bond itself was not made available for purchase by US citizens, it was offered to qualified institutional investors through an investment prospectus filed with the Washington DC-based SEC on July 17, 2008.
In the course of the prospectus, Anglo Irish Bank provided potential investors in the bond with financial information drawn from both its 2007 annual report and unaudited figures for the period leading up to March 31, 2008.
In a note accompanying the numbers, the bank stated specifically that the information contained in its prospectus was “in accordance with the facts” and did “not omit anything likely to affect the import of such information”.
That declaration and the figures provided by the bank are now open to question in light of damning revelations about the bank’s activities contained in the notorious Anglo tapes published by the Irish Independent and Sunday Independent in recent weeks.
Fianna Fail finance spokesman Michael McGrath last night called on Mr Noonan to ask the SEC to investigate the bank’s activities.
“Looking at it in the light of all the information that has come into the public domain, questions do need to be asked about the quality of the information Anglo provided in the investment prospectus it produced in the summer of 2008 as it tried to shore up its position. It is immaterial whether or not the bank actually managed to raise the funding,” Mr McGrath told the Sunday Independent.
And as we now know from last week’s revelations in the Irish Independent, by November 2007, two of the bank’s most senior officers were already talking about finding an international analyst to try to put a positive spin on Anglo’s rapidly declining finances.
Mr McGrath added: “Given that Anglo Irish Bank filed the prospectus for its $10bn bond in the United States in July 2008, I would ask the Finance Minister Michael Noonan to make contact with the SEC to explore the possibility of an investigation now being initiated in the US. If Mr Drumm cannot be compelled to return here, perhaps he can be called to account in his new home. Such an investigation could be facilitated by our own Office of the Director of Corporate Enforcement (ODCE) given the powers it has under the companies acts to work in co-operation with overseas regulatory authorities. The SEC also enjoys this power.”
One of the more substantial achievements of this government has been to burnish the reputation of Fianna Fáil which, we had believed, had been consigned to well-deserved oblivion by the outcome of the 2011 election. By Vincent Browne.
As the coalition resolutely persists in its ineptitude, Fianna Fáil doesn’t seem that bad in retrospect.
A disapproval rating of 73% for the Government is fairly decisive. A rating (voting intentions) of 21% for Fianna Fáil is not at all decisive, but it is a significant improvement on the party’s election showing (17%).
But Fianna Fáil will struggle to improve, not because of the calibre of its Dáil representation, or even the memory of the damage it did in government (although that will be hard to live down for a decade or more), but because it doesn’t have enough credible candidates to win seats. The next local elections won’t rectify that.
Fianna Fáil back in office might be, next time round, a little more competent than the present crowd, but essentially no different – as the present crowd are essentially no different to their predecessors.
Much of the damage to the government is self-inflicted, beginning with reckless election promises when Fine Gael feared that Labour might overtake it, and Labour thought there was a prospect of Eamon Gilmore becoming Taoiseach. Fine Gael promised there would be no increases in income tax. Labour promised it would be “Labour’s way”, not “Frankfurt’s way”, and that social welfare payments and the Croke Park deal would be left untouched.
More harm was self-inflicted by wild claims of success, such as Enda Kenny and Gilmore on the supposed deal on the bank debt in June and both of them, along with Michael Noonan and others, about growth returning to the economy.
It remains in the deep doldrums, with falling employment and, alarmingly, rising emigration. More appalling still have been the cuts seemingly targeted at the worst-off, the most egregious of the pending ones being to home help.
And then, of course, there is the James Reilly debacle.
But there has been nothing like the harm that is about to be inflicted with the introduction of the property tax. There will be outrage, some of it justified (such as in the case of those who paid massive stamp duty when buying property immediately before the collapse, and where it affects poorer people).
Most of this outrage is unjustified, because of the culture of low tax that was engendered – by Fianna Fáil in its 14 years in office, and by Fine Gael and Labour during their 14 years in opposition, during which time they berated Fianna Fáil for not indulging this culture even more.
The primary difficulty faced by this government, and by Labour in particular, is the settled conviction of much of the electorate, which Fine Gael would not wish to disturb, but Labour should want to disturb.
That conviction is manifest in part by the “certainties” that we already pay too much tax; that a large part of public expenditure is squandered on extensive social welfare fraud; that significant savings can be achieved through cutting back the number of public representatives, abolishing the Senate and slashing the pay of overpaid public servants; and that an equal society is effectively unworkable.
Nobody in politics challenges these “certainties”. In particular, nobody argues for a radical redistribution of wealth and income, bar the left, which presents redistribution in terms of retribution – which, to most people, is just off-putting.
Part of the reason for this settled conviction is that our political system is driven by greed for office.
The political establishment and the media see the attainment of office as the point of politics, even though holding office does not bring the power to change much, because office-holders are constrained by the prevailing mindset of the electorate. It is through challenging and changing mindsets that power is attained, and that change happens.
It is not that politicians are universally venal, for almost all want to act in what they perceive as the national interest. But there is almost always a happy coincidence between their perception of the national interest and what it takes to gain and retain office. Throughout the boom years, nobody was going to gain office by challenging the driving force of the Celtic tiger, as people’s mindsets had bought into a culture of indulgent self-interest. That mindset is now settled. Without a prolonged counter-assault on the prevailing conviction, little can be achieved or changed.
Those impatient for power have little interest in prolonging anything that will keep them from office. But in gaining office, they find that, fatally, they are constrained by that prevailing conviction and forced to do as before. Just as Fianna Fáil did – and would do now, if they were back in office.