Yesterday, I read with keen interest that the Chartered Accountants Regulatory Board (CARB) is to extend the scope of its Anglo Irish Bank investigation to encompass the €7.45 billion deposited by Irish Life & Permanent Plc in Anglo, a gesture that had the potential of irrationally inflating the latter’s equity price at fiscal year-end, last September, just as the Irish Government guarantee of bank deposits became effective.
Mr Purcell, the former Comptroller & Auditor General is universally respected as a thorough and impartial investigator. I don’t personally know the Chairman of CARB, Liam O’Reilly, but I would be astonished if anybody were to infer that he is other than a man of the utmost integrity and probity. The comments I am about to make concern the juxtaposition of his circumstances and not his character.
Dr O’Reilly was appointed the first chief executive of the Financial Regulator on 1 May 2003 having previously been and assistant director general at the Central Bank. He was appointed the first chairman of CARB when it was established in 2007. He was appointed a director of Irish Life & Permanent Plc on 3 September 2008 and was therefore a director when the issue under investigation took place; when the board IL & P met for 7 hours late on Thursday, 12 February, but failed to fire the chief executive and chairman – presumably relying on the oft-spoken defence of “I’m a fighter, not a quitter”, in the case of the latter.
How can CARB credibly conduct this investigation when its own chairman is a director of the company being investigated and the subject of the investigation is of such a grave order of magnitude that it is tantamount to national economic treason? How, for that matter, could any member of the board of CARB be concurrently a director of any business where a chartered accountant’s professional behaviour is the subject of a special investigation? The eyes of society and not just the profession, the shareholders, those whose pensions funds comprise shares in Irish Life & Permanent and its customers will be scrutinising the findings of Mr Purcell in refined granular detail - if they are published by CARB.
Ireland has wilted under the tyranny of crony capitalism. Germans’ refer to Ireland’s financial services industry a ‘the unregulated wild west frontier’. Who can blame them when it appears that the financial services industry is ungoverned and ungovernable and the Government almost appear to be crawling on their hands and knees in deference to the banks?
Concealed directors’ loans, involving hundreds of million of € over many years without the interception of the Regulator, or its CEO being properly informed by his own staff; the facilitation of tax evasion, of epidemic proportions, by thousands; DIRT evasion on an enormous scale; illicit overseas retail deposit accounts; widespread insidious random overcharging of bank customers and, in the case of AIB, less than €1 million of an estimated €75 million overcharged actually refunded 8 years later; bank development funding of such a magnitude that it imploded the Irish economy after the unsustainable inflation of property prices; a Regulator accused this week at an Oireachtas committee hearing of not acting promptly on the findings of a bank’s group internal auditor, internal auditors demobbed by bank chiefs who, in at least one instance, was subsequently cited by the Revenue Commissioners in March 2006 for six-figure personal tax evasion, obscene levels of remuneration, in some instances without the evident sanction of a properly constituted remuneration committee, personal pension fund aggrandizement by senior executives, 'know-nothing' boards of directors, a Central Bank whose 2007 warnings of economic doom are ignored, the absence of corporate governance standards in a building society, loan approvals personally fast tracked at a high level, without normal documentation, to facilitate compromised politicians, – to mention just a few.
These ‘unforced errors’ have resulted in derisory equity values, no dividends, collapsing personal wealth and the urgent need for the State to confiscate what’s left of personal wealth to compensate for billions of tax revenue, unavailable from previous sources.
To cap it all, citizens are affronted by a recently appointed bank chief executive, an insider crony-appointment, who not just lent excessively for potentially hideous commercial development but then personally advocated with the planning authorities, that the skyline of Ballsbridge should emulate that of Dubai, in order to inflate his grotesque bonus - even further. Perhaps this person is domiciled in a wigwam in Wicklow and, hence, perhaps his perspective of the sky is one that is not shared by 99.9% of the civic minded.
If CARB wishes to be recognised as a pillar of society it needs the profile, stability and independence of an ancient pantheon. If it fails to assert this it will become just another conspirator, in the well established tradition seen so frequently in Ireland that emulates the extravagant imperiousness adopted by the heads of minor African nations.
CARB has a solemn obligation to the 17,000 members of the Institute of Chartered Accountants in Ireland and especially to the young professionals who are being flung from, what was to be their promising careers, at KPMG, PricewaterhouseCoopers, Deloitte and other firms - as a direct consequence of crony capitalism and many have no prospect of imminent alternative employment outside the fast-food retail sector. Dr O’Reilly does should therefore be prevailed upon not to multi-task with the seamless facility of the late Jimmy O’Dea at the Gaiety Theatre Christmas pantomimes in the early 1960’s.
If society percevies that the 'game warden' is also a 'poacher', the efforts of Mr Purcell may well take on the enduring significance of an episode of The Jerry Springer Show or The Dukes of Hazard!
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