What do people here think might have transpired at Anglo?
Is it not true that we need meaningful speculations (hypotheses) to guide the investigations?
What I mean is that investigations should take the following outline form.
*1. Articulate an initial hypothesis of what might have taken place
Design the investigation that is needed to prove or disprove the hypothesis
Gather the data needed for the investigation
Interpret the results (prove or disprove the hypothesis)*
So, what kind of hypotheses are our investigative forces working off? I think we should demand to be told. If they are working off fairly irrelevant ones, then their findings will be fairly irrelevant.
Personally, the hypothesis I want investigated is as follows:
“That the route to becoming a client of Anglo was through the ‘right’ connections. Particularly, through political connections. For example, if you were a ‘friend’ of Bertie Ahern, then Bertie Ahern would indicate somehow to Sean Fitzpatrick a ‘recommendation’, leading to funding by Anglo etc.” - In my view this kind of thing is corruption at its essence - an abuse of a position of trust in order to gain an undue advantage.
So, what other hypotheses would people like to see investigated with regards Anglo? Or, any improvements on my own?
I don’t actually think political connections had much to do with it, beyond some pressure to turn a regulatory blind eye, not that much of one was required. Light touch, boys, stand well back.
I do think we’ll find with all the banks that a lot of the ‘equity’ in the assets (used as collateral) was mythical and this was done with the connivance of management. “If you revalue this by as much as the market has risen, we can loan you this extra amount” sort of thing.
I think we’ll find there were conflicts of interest everywhere. Whether it be Anglo (or other bank) officers on state bodies responsible for zoning decisions. Whether it be politicians owning land at local level and their colleagues rezoning it for them (why do you think there was so much outcry at the ending of the dual mandate?).
I think we’ll find that there was gross lending of money for speculative share and other equity (e.g. equity in land deals) purposes.
But this is all the usual common or garden fraud. What makes it different this time is that it was writ large. The facilitating crony government was in power for ten years. Interest rates were low through the period, so individual leverage (the pyramid) could grow exceptionally large before it collapsed under its own weight.
It’s not so much a case of “nothing to see here” as “we’ve been here before, yet we still elect these fuckers” (and I don’t use the word lightly, unlike deputy Gogarty…).
However, at the end, you’re also saying that in all of the above three hypotheses that a cronyistic government facilitated everything (and was complicit). So, in the investigations of the above - what is also needed is firm evidence to be collected on how the government facilitated and was complicit in these activities.
But do you think the Anglo investigation in train will systematically collect the evidence and properly structure it to show this government complicity and faciltation? Or will they fudge it and instead sacrifice only Anglo heads.
Management didn’t inflate the values - the market did (although all banks’ management helped inflate the market by offering unlimited money to several of their clients to buy the same asset - too much money chasing too few assets). Anglo made so-called “equity releases” against these inflated values to most of their clients. It was a way of lending further money and was used in a “pyramid” manner to provide equity for future deals or even for lending to clients to do whatever they wanted with it.
Your point regarding systemic corruption between Anglo officers, their clients and conflicts of interest is one that needs investigating. If you refer to possible sweetheart deals to buy shares - we all know that money was lent, but fraud is very difficult to prove. I am not sure that EU rules were followed in relation to the sale to Green, where IMO there is already a massive inbuilt profit. You need to be more specific if you want to open it for discussion. The forces of darkness always fear light.
There was a culture of massive bonuses for the bank’s officers that led to reckless lending and was the cause of much of the losses because of a lack of due diligence. There was no assessment of the loans, just a culture of “get the money out- NOW, so that I can collect my bonus!”
There is no question that “extremely irresponsible lending was facilitated”. That’s the understatement of the century! Why that happened and whether or not it was reckless based on a culture of providing incentives to lend without responsibility or a duty of care to their shareholders and their customers is what needs to be investigated. If I had been a shareholder I would be suing all and sundry for reckless trading and claiming under their D&O policies.
I don’t think that the short planks in government, the Central Bank or in the Department of Finance had a clue what was going on. Anglo had just been awarded European Bank of the Year and every other bank in the country was trying to emulate them.
I can’t remember who said “when you see everyone trying to get on the bandwagon, it’s time to get off”, but he could not have been more right, whether it’s shares, commodities, banks, property … gold?