Category: Comment

Harry McGee has a good piece in this morning’s Irish Times on politcal lobbying and lobbyists, an oft ignored subject in this country.

One quick note on the second to last paragraph:

Since the mid-1990s, stricter ethical requirements have been introduced for those who are lobbied (ie politicians) who now must furnish statements of donations, make declarations of interests and adhere to codes of conduct for office holders.

The ethical standards in this area are still very, very lax.

The “details” of donations made to TDs over 2009 were published last week, just 20 TDs declared they received a donation over the (too high declaration limit) so we know bugger all about how people funded their work. This issue was covered in the first post on this blog. Political parties don’t have to publish accounts. The donations system is easily bypassed, legally (!). SIPO doesn’t have the right powers to investigate off its own back, and is hugely underfunded and understaffed.

Messy stuff in dire need of reform. Fix that and get a lobbyists’ register going, now please.

Footnote: A voluntary one? Fianna Fáil you are winding us up, right?

Some time ago I received a tipoff surrounding details relating to executives at Anglo Irish Bank. I was told that the Anglo chief executive, who is Australian and whose salary is capped by Brian Lenihan at €500k, is having his house accommodation rented out for him at the taxpayers’ expense to the tune of upwards of €90k per year. Apparently this falls under re-location expenses. It was claimed on radio today that the figure is €72k.

I was also told that when the chief executive moved to Ireland, his family stayed in Australia, but that he has flown them here on numerous occasions at taxpayers’ expense, and that he and other executives (who he apparently hired from Australia) had flown there, also at taxpayers’ expense. I wonder what class they flew. However, such procedures might be considered normal in the banking industry, though not so much in the public sector. Since Anglo are not under the FOI act I have little recourse in these circumstances to seek information related to any expense claims.

However back in early February I sent a request for information concerning this to Mr Aynsley directly, by registered post. I have failed to receive a satisfactory reply, and a followup request is currently with the bank.

But at lunchtime today I heard Senator Dan Boyle speaking about the pay rises at Anglo. While he was speaking, I put the following questions to him on Twitter:

@sendboyle can you tell me how much it costs to lease any homes for Anglo executives, including the chief, over and above their salaries?

@sendboyle and can you tell me the number of flights taken by Anglo execs at taxpayer expense, and carbon footprint which resulted?

Dan Boyle replied: Will have to find that out

After lunch on Joe Duffy, a woman claiming to be the wife of an Anglo employee, put specifics on the tipoff I had received two months ago… the house is leased by the taxpayer to the tune of €6,000 a month and that the house is located in Glenageary.

There is more in this story, and I will publish the results in the coming weeks. As it stands I cannot verify the veracity if the above remarks related to properties or flights, since I have not received verification or denial. It is an expression of an opinion and speculation following similar remarks made on radio that I am asking questions as to the substance of these allegations in the public interest, both of Anglo and of a Senator.

Quality piece on political reform by Helena Kennedy on the Opinion pages of today’s Irish Times. It does refer specifically  to UK politics but the vast majority should be applied here also.

The answer to this crisis is to rethink how we do politics. What the UK needs is a parliament committed to systemic reform. The only way this will happen is if MPs are forced to make a commitment to their constituents to support reform – Out with the Lords! Out with first-past-the-post! Out with rich donors corrupting the system! Out with MPs jumping into jobs with the privatised companies they helped create while in office!

Hear, hear.

Cuffe gets a job.

White gets a job.

Killeen gets a job.

Connick gets a job.

Carey gets another something or other. Same with Curran.

Hanafin gets a kick.

Enterprise, Trade and Employment changes to Enterprise, Trade and Innovation, in an innovative move which means the word “employment” gets repeated less often.

Arts, Sport and Tourism becomes Culture, Sports and Tourism, or something.

O’Cuiv moves to Social Welfare, now called Social Protection, which gets some of Fás.

Mary “Young People are Moving Abroad to Have a Great Aul Time and Use Their Skillz, Sure Fair Play to Them” Coughlan, gets Education, which as far I can make-out has been decuppled from Science.

An Bord Snip continues to be an ignored waste of time and money as Gaelteacht remains operational. Hands-up, when waiting on Snip I thought it was going to be historically important.

Nothing changes bar the stationary. Life goes on. For every time you hear the words “deck-chairs” and “titanic” within moments of each other in the next week, please take a drink.

Nama still like a dark cloud.

As those who follow me on Twitter know, I believe the Mail on Sunday, like the Irish Daily Mail, is an under-appreciated newspaper (wow, wow, lower those rifles, dear readers, I’ll explain).

People ignore it because oftentimes the substance of the stories they unearth get lost in the style in which they report. Of course the Mail does have some poor journalists but there are some seriously sharp hacks in there (it was no surprise that the Mail was the first national to pick up on the O’Dea libel story). Their work is often criminally slept on by the wider media.

People seem to think “ah, it’s just the Mail, can’t believe that”, where as if the same set of facts at the nub of the Mail stories were reported in the The Irish Times and written in the Times editorial style, they’d be discussed on every national radio show through-out the day. That’s a pity, but only the fault of the Mail publishers and top-level editors for setting the editorial line and agreeing the writing style.

Also, they don’t have a website, so they’re kinda lost on the whole Twitter/Blogs/Forum discussion which some editors/producers seem to use as a barometer of public interest in stories these days.

ANYWAY, GETTING to the point. On page 31 of yesterday’s Mail on Sunday is a piece about Frank Fahey. Brian Carroll reports that the Fianna Fáil TD and property developer failed to declare his 50% stake in construction firm Sage on the Register of Members’ Interests published earlier this month. Not alone that, but he had failed to mention it in last year’s Register too.

When Carroll asked Fahey why he didn’t declare the interest Fahey claimed it was a “clerical oversight”, i.e. he forgot about it. He forgot about holding a 50% share in company in which he has invested over €1m during the last five years? A company which still owes his wife more than €900,000?… Seriously? Upon receipt of Carroll’s enquiries Fahey rushed to the the clerk of the Dáil and asked for the record to be amended show he had an interest in Sage.

The fact Fahey admitted he had the stake in the firm and claimed he had forgotten about it kinda burned the story on Carroll, hence, page 31 (below a picture-driven piece about Angelina Jolie). Oddly, it would probably have been more newsworthy if Carroll had not gone to Fahey but instead got someone like Fergus O’Dowd of Fine Gael to give a comment. Or maybe asked someone like John Devitt of Transparency Ireland for a quote about the damage undeclared conflicts of interest can have on democracy, or the dangers of influence purchasing. But it’s always right to give a right-of-reply, even if you know it’ll ruin the story. It’s also possible Carroll did not have had space for alternative quotes.

Well, questionable stuff from Fahey, great to see him get a scare, no real surprise though. Might have to look closer at his declarations now.

Nice work from the MoS, and Brian Carroll particularly, in fact-checking the register and making sure things are how they should be. Credit where it’s due, no matter what else, or who else (and no matter their level of nakedness) appears on the page.

Quickly-written post after seeing the off-lede in the Business section of today’s Irish Times; “Nama may have to keep ‘zombie’ hotels open“. Excuse poor prose and missing conjunctions (and over-use of parentheses).

I find it quite bizarre that the following will have been the process which will have been gone through if Nama keeps developers’ hotels open;

1996: Government incentivises non-hoteliers – property developers – to enter hotel industry by offering large tax incentives and massive grants. The incentive amounted to 15% of the capital costs for the first six years and 10% for the seventh.

1996-2002: Developers, often without any consideration for whether a hotel is needed in the area, are granted planning permission to build by local authorities. They invest minimum equity and borrow as much as possible from the banks. They write-off capital allowances (furniture, domestic appliances, fittings) for the hotel against rental incomes from their other properties – thus reducing the State’s tax income for the developments yet further – and watch the value of the hotel increase.

2002: Minister for Finance Charlie McCreevy proposes that the tax scheme be closed. He is lobbied by property developers and decides the scheme will continue for another two years.

Late 2003: 217 applications for hotel developments are lodged, proposing the introduction of 15,000 extra hotel rooms country-wide. Context: in the previous ten years 16,000 hotel rooms were added to the national stock.

Early 2004 to mid-2008: Almost €100m annually is being lost to the State due to the tax scheme, though Fianna Fáil say it has been recouped through VAT and jobs. A massive oversupply of hotel stock is created. The profit margin in the hotel industry falls dramatically.

Mid-2008 to mid-2009; Banks verge on collapse because they’ve loaned developers too much (many of these loans are for hotel developments – €80 billion in loans sold to Nama will be for hotels). Government guarantees the banks. Term National Asset Management Agency enters national consciousness.

Today: We’re now in the last year of the tax scheme. Developers with a toe in the hotel industry (most of them) see the light of Nama on the horizon. In contrast many long-term hoteliers, without Namability, are considering the viability of their business.

At present developers are keeping their hotels open, often simply ticking-over day-to-day without profitability (hence ‘Zombie’) as to close them would be accepting that they are not viable; which they don’t want to admit to Nama. They’re doing this by offering loss-leader deals and cut-price rates which are financially not possible to maintain in the long term.

By doing so they’re undermining the profitability of nearby hotels run by locals and small-time business people which could be profitable (and support jobs etc). But hey, that’s capitalism, isn’t it?… No? What? No? Whaddaya mean “no”?

Now, according to today’s paper, it appears the developers’ hotels which continue to benefit from the tax breaks will be kept open by Nama as closing them could “lead to widespread ‘tax contamination’ across the wider businesses of property developers”.

Basically, developers who became hoteliers are pushing hoteliers out of business. Nama, say the Times will in some cases, continue this. At the very least Nama will continue providing competition against struggling small-scale hoteliers.

Strangely, the developers only became hoteliers because of an ill-thought-through Government incentive (the tax scheme) and can only remain so because of another Government incentive (Nama). Again, capitalism?

Definition of ‘tax contamination’ gratefully accepted below.

Hotel industry tax policy and Nama previously covered here.

It’s not a good sign when the former Chief Economist of the IMF, current professor of entreprenuership at MIT and writer with the NYT and WSJ, poses the question in this headline.

The [Irish] government responded to this with what is now regarded – rather disconcertingly – as “standard” policies.  They guaranteed all the liabilities of banks and then began injecting government funds.  The government is now starting a new phase – it is planning to buy the most worthless assets from banks and pay them government bonds in return.  Ministers have also promised to recapitalize banks than need more capital.  The ultimate result of this exercise is obvious:  one way or another, the government will have converted the liabilities of private banks into debts of the sovereign (i.e., Irish taxpayers).

…

The government is gambling that GDP growth will recover to over 4% per year starting 2012 — and they still plan further major expenditure cutting and revenue increasing measures each year until 2013, in order to bring the deficit back to 3% of GDP by that date.  The latest round of bank bailouts (swapping bad debts for government bonds) dramatically exacerbates the fiscal problem.  The government will in essence be issuing 1/3 of GDP in government debts for distressed bank assets which may have no intrinsic value.  The government debt/GDP ratio of Ireland will be over 100% by end 2011 once we include this debt.

Ireland had more prudent choices.  They could have avoided taking on private bank debts by forcing the creditors of these banks to share the burden – and this is now what some sensible voices within the main opposition party have called for.  However, a strong lobby of real estate developers, the investors who bought the bank bonds, and politicians with links to the failed developments (and their bankers), have managed to ensure that taxpayers rather than creditors will pay.  The government plan is – with good reason – highly unpopular, but the coalition of interests in its favor it strong enough to ensure that it will proceed.

Baseline Scenario, Kwak and Johnson, definitely one to subscribe to.

I hope to attend Farmsubsidy.org‘s datafest in Brussels in May. I am also in the process of appealing a decision by the Department of Agriculture to refuse a request I made for details of all CAP payments made to Irish farmers from 1999 to 2009. This is a video about what farmsubsidy.org is doing:

Next up is the campaign by the Sunlight Foundation for the POIA (Public Online Information Act)

Ireland, and indeed Europe, needs this.

Tim Berners-Lee‘s TEDTalk on open data was Youtubed this week. 6 minutes worth watching. He’s the man known for inventing the dubilya-dubilya-dubilya.

I made a similar argument to the one made in the first three minutes of the clip at Ignite Dublin on Thursday. In my tirade waffle talk I encouraged people to submit FOI requests and publish them online no matter the perceived importance of the contents due to the potential contexts through which those official documents could be viewed at a future date. Of course my talk was poorly constructed and laden with tangents by comparison to the one below, but let’s not dwell on that…