Rambling, shambolic Irish Red Cross stumbles on

Despite admitting to being in what was termed 'uncharted waters', on the groundsthat the Irish Red Cross Society does not fall under its direct remit, the Public Accounts Committee of Dáil Éreann was treated to a mind-numbing account this week of its unfinalised response to dealing with areas of governance, financial control and the management of its headquarters. This session followed a prior session with the Committee last October when the Vote of the Department of Defence was being examined.
It beggars belief that the State is continuing to provide close to €1 million in annual funding to the Irish Red Cross Society. This wretched organisation has been in existence for over 70 years and its primary function is to support the military and tend to prisoners-of-war, but it has never engaged in either function.

Instead, it is a generic charity that had no strategic relationship whatsoever to the nation that could not be adequately and more competently catered for by other charities and Civil Defence.

The sponsor of its State funding is the Department of Defence. The former Secretary-General of this Department from 1995 to 2003, David O’Callaghan told the Public Accounts Committee meeting on 19 January that for nearly ten years he 'had been racking his brain as to how many times the Red Cross appeared on his radar of top-ten issues' and 'could remember no time when we had difficulties with it’.

That is despite the fact that in December 1999 there was major public concern about the conduct of this Society. The Minister of Defence at the time, Michael Smith, told the Dáil that a new secretary-general had been recruited by the Red Cross earlier in 1999 and that ‘one of his first tasks … was a strategic review of the operation of the Society, encompassing the views of all organs of the Society to ‘ensure the strengthening and development of the Society' and that the review will be completed by mid-2000.

Twelve years later and O’Callaghan, as Chairman of the Red Cross, tells the Public Accounts Committee that the Red Cross ‘did not keep pace with standards of best practice in respect of governance and oversight’, but that ‘the Society has recognised that weakness and responded to it in a substantial and convincing manner’.

Their response includes an overhaul of the Constitution which would preclude members of the Executive Committee from serving more than two consecutive three-year terms. However, this will not mean that the current Vice Chairman of the Society, who was one of two cheque signatories of one of 49 undisclosed bank accounts, can continue in the role of Vice Chairman for a further six years. Putin could not devise a more self-serving response to governance.

The existence of the missing bank accounts was exposed in August 2008, but it took until November 2009 before the matter reached the agenda of the 12-member Executive Committee and the member representing the Department of Finance became aware of it, despite it meeting meets each month, except August. The Society's Head of Finance had attemtped to bury the matter as an 'administrative error' until the Fourth Estate made the public aware of the latest of shenanigans which trace their origin as far back as April 1991.

O’Callaghan’s successor as Secretary-General of the Department of Defence since 2004, Michael Howard was asked by the Public Accounts Committee if he had any recollection of a Government appointee to the Executive Committee of the Red Cross resigning in 2009 citing loose financial controls, impropriety or undisclosed bank accounts, but Howard said ‘it does not spring to mind’

It was also disclosed to the Public Accounts Committee that the Red Cross has a portfolio of 17 properties but the accounts it presents that incorporate the State subsidy only include Head Office property and income.

It was confirmed to the Committee that €136,000 was spent on legal fees in 2010 by the Red Cross prosecuting Google so as to identify a blogger who blew the whistle on the undisclosed bank account which contained public voluntary donations amouting to €160,000 and on 'how t manage information that was appearing on a blog'. The cover of the Head of Finance who was apparently trying to keep the undisclosed bank accounts that the Vice Chairman of the Red Cross was a signatory to was blown apart. The €140,000 spent on legal fees was from money collected from members of the public or recevied from the State.

During these controversies the Irish Red Cross retained an acting secretary-general on a consulting basis for a fee of €160,000 per annum, prior to acting on a consulting basis as Head of Finance. Professional fees charged to the Red Cross in 2010 were €211,000 and in 2009 were €288,000 while the Society ran a deficit of €12,000 and €64,000 in these years.

O’Callaghan in his opening contribution to the Public Accounts Committee defined his Society as ‘an independent charitable organisation’ and when Smith spoke in the Dáil in 1999 he stated that a fundament principle of Red Cross societies is that they enjoy freedom from political involvement worldwide. If the Government stopped the State subvention, removed the patronage of the President and its nominees to the Central Council the Red Cross would be free of political oversight and the resources of the Oireachtas could be deployed more prioductively.

NTMA defy Public Accounts Committee

I have been observing the relationship between the National Treasury Management Agency and the National Assets Management Agency with the Public Accounts Committee with increasing concern.

NTMA and NAMA Remuneration

The activities of the NTMA and NAMA have been examined on several occasions by the Public Accounts Committee in 2010, most recently on 18 November when the Committee sought a breakdown of the remuneration paid to NAMA employees – all seconded to NAMA from NTMA. The Chief Executive of NAMA, Mr Brendan McDonagh in a letter to the PAC dated 7 December 2010 defied the Committee and advised:

That he discussed the Committee request with Mr John Corrigan, Chief Executive of NTMA – but not, curiously, with the Secretary General of the Department of Finance,  an ex officio member of the statutory  NTMA Advisory Committee and principal advisor to the Minister for Finance to whom both agencies are accountable.

• That the pay structures in NTMA are outside of public service pay structures (as authorised by the National Treasury Management Act 1990).
  
• That the NTMA recruit mid-career specialists in banking, property, corporate finance and law for NAMA on what he termed a ‘fixed purpose’ contracts.
  
• The contract and remuneration arrangements of each employee are unique  to a particular individual and are treated as confidential.
  
• The NTMA/NAMA staffing ‘operating model’ is shrouded in so much secrecy and opacity that colleagues do not know how much each other is paid and that NAMA would apparently be seriously compromised in the conduct of its mandate were it to be exposed – (presumably, to the rigours of public and media scrutiny and that of the marketplace  from which NAMA seeks to determine  ’ market competitive’ salaries). 
  
• ‘Operational freedom to negotiate’, authorised by legislation, in NTMA has apparently become seamlessly synonymous with clandestine secrecy by the Chief Executive of a State agency which does not have a conventional board of directors and where the same chief executive, rather than an independent chairman, corresponds with the Minister for Finance on the performance of the entity that he manages on a day-to-day basis.

McDonagh’s letter and Corrigan’s patrician perspective on the Committee’s request is such an appalling indictment of these State agencies that a citizen would wonder about its capacity to fulfil its core objectives in a culture clearly devoid candour, accountability and transparency.  NTMA and NAMA need to be advised in blunt and uncompromising terms  by the PAC  that the principles of transparency and accountability expected of the Irish public sector are not those of the nod, wink and handshake that prevail, for example,  in the dictatorships of North Korea and Burma. The standards espoused by NTMA also directly contravene the policy of the Department of Finance with respect to the governance of commercial State entities.

Furthermore, this is precisely the self-righteous, conniving, corporate attitude which champions generic, non-itemised accounting that prevailed in FÁS, the HSE SKILL Programme, the Health Services National Partnership Forum and other grossly dysfunctional State entities which have shattered public confidence after the wanton squandering of hundreds of millions of euro with abandon.

Transparency has not compromised the ‘operating model ‘or the efficiency and effectiveness of any the debt management agencies in any other OECD country.  The transparency of these agencies would also suggest that the NTMA is an excessively costly agency compared to its counterparts.

NTMA Costs and Operating Efficiency

The activities of NTMA remained substantially the same in scope between 2000 and 2008 with the exception of the establishment of the National Development Finance Agency in 2003.  Between 2000 and 2007 Ireland’s national debt ranged from €36.5 billion to €37.5 billion.  It increased to €50.3 billion in 2008, an overall increase of 38% since 2000.

But the operating costs of NTMA in that period increased by 314% and remuneration, including superannuation, by 365%.

NTMA held nine bond auctions in 2009 and raised €35.4 billion which brought the National Debt to €75.1 billion.  Salary and pension costs were €22.86 million, or an average of €135,384 per person.  Total expenses in 2009 at €39.4 million were significantly ahead of other OECD government debt management offices.  Debt servicing costs as a percentage of year-end national debt, excluding sinking fund payments, in this period were:

 

2000	5.74%
2001	5.25%
2002	4.66%
2003	4.78%
2004	4.53%
2005	4.61%
2006	5.31%
2007	4.29%
2008	5.24%

Australian Office of Financial Management

The Australian counterpart of NTMA is the Australian Office of Financial Management (AOFM). It raised €38.9 billion by approximately 100 competitive tender in the year to 30 June 2010. Apart from managing the Australian national debt AOFM invested €12 billion in residential mortgage-backed securities to provide funding for small mortgage lenders.  Total expenses for the year amounted to €11.5 million – less than ⅓ of what it costs to run NTMA.  The salary, pension and fringe benefits of Neil Hyden, the recently retired chief executive of AOFM, cost €250,000.  The remuneration, superannuation and fringe benefits of the 36 staff of AOFM amounted to €3.94 million in the year to 30 June 2010, or an average of €109,502 per person.   Approximately 60% of Australia’s government bonds are held by non-Australian residents - compared to 84% foreign ownership in the case of Ireland’s Government bonds.

HM Debt Management Office

The British counterpart of NTMA is the Debt Management Office.  Employing a staff of 112 persons, it raised €267 billion on the bond market in the year ended 31 December 2009 in 58 major and 13 minor auctions – a scale of borrowing 7.6 times greater than that of NTMA.  The activities of the DMO also include the administration of the UK Credit Guarantee Scheme in respect of debt issued by banks and building societies and the Emissions Trading System in the UK.  The salary, pension and fringe benefits of Robert Stheeman, Chief Executive of the DMO was €188,000 – some €12,000 less than the 2009 bonus of Dr Somers.  The net operating cost of DMO operating in the City of London in 2009 was €18.5 million – less than 50% of the overhead to run the NTMA in Grand Canal Street Dublin.

Chief Executive’s Bonus

It was officially disclosed last week that Dr Michael Somers, the founding chief executive of NTMA received a bonus of €200,000 in respect of 2009.  It was reported in the media last September that Dr Somers received a bonus of €400,000 apparently bringing his total remuneration to €1 million.

Ireland enjoyed the considerable advantage of lower level government debt relative to GDP for much of the decade to 2008.  Investor perception of Ireland was positive and reflected in excellent credit ratings; an economy that was perceived to be robust; a positive fiscal outlook and attractive yields on Irish debt.  Irish debt was adopted enthusiastically by investors.  There is no withholding tax on Irish bonds thus removing a barrier to investment for foreign investors unwilling, or unable to invest in assets subject to withholding tax.  Was this bonus merely based on surfing these positive circumstances or what precisely was Dr Somer’s contribution to making a distinctive difference which benefited taxpayers?  The citizen is left scavenging the internet for clues because the agency conveys no information whatsoever  on this issue.  The public are treated with the same bland contempt that occurred days before the recent arrival of the IMF and ECB to take economic control by the scruff of Ireland’s emaciated neck.

It would be helpful  if this key agency of the Department of Finance were to publish the fullest details of all executive remuneration for each of the last 10 years.  This, in the case of bonus payments should identify achievements against particular objectives and confirmation of who approved objectives, achievement and bonus payments. 

Department of Finance Code, 2 October 2001

State bodies, including the subsidiaries of such bodies, are required in the conduct of their operations to adopt this Code of Practice promulgated by the Department of Finance and advocated by the Director of Corporate Enforcement.

The Code of Conduct for the Governance of State Bodies states that the remuneration of a chief executive of a State agency and the remuneration of the chief executive of any subsidiary should be subject to audit and set out in the entities annual report which should state:

• The basic salary
• Payments made under a performance-related pay scheme
• The total value of the chief executives superannuation benefits, with a breakdown between standard entity superannuation benefits and any additional benefits  being provided for the chief executive

NTMA has consistently disregarded this guidance.  S6.(3) of the National treasury Management Act 1990 provides that the terms and conditions relating to the remuneration of the Chief Executive of NTMA are determined by the Minister for Finance after consultation with the Advisory Committee – on which the Secretary General of the Department of Finance is an ex officio member.  State agencies are required to implement Government pay policy, as expressed from time to time, in relation to other staff, including the chief executive and other staff of any subsidiary.

The Department of Finance, in the case of NTMA, is expected to be consulted, according to this guidance,  in good time on any pay proposal, or likely development, that could have significant implications for (i) general Government pay policy (ii) NTMA finances (iii) charges for goods and services provided and / or (iv) other areas of the public sector.  Compliance with Government pay policy, or with any particular Government decision, should not be effected in ways which cut across public service standards of integrity or conduct or involve unacceptable practices which result in a loss of tax revenue to the Exchequer.

The annual report of a State entity should include a schedule of the fees and aggregate expenses paid to each of the directors – or, presumably, in the case of NTMA, to each member of the Advisory Committee

There is, therefore, an obligation on the Secretary General of the Department of Finance to explain the remuneration trends at NTMA and very particularly, the remuneration arrangements between the chief executive and the Minister for Finance to the Public Accounts Committee.  How can he sit on the Advisory Committee and observe long-standing policies of his own department ignored?  That slipshod attitude to supervision allowed FÁS function as a ceded territory dominated and unilaterally controlled and dominated by the chief executive who, in practice was accountable to nobody.

Consultancy & Legal Expenses

NTMA has become a large-scale purchaser of legal and consultancy services.  Details should be provided of the number and value of contracts in each financial year, differentiating between new and existing contracts. 

The annual report should, in the case of consultancy contracts with a value of €10,000, or more, identify the consultant concerned; describe the service provides; confirm the price of that service; details of the selections process and the justification for using the services – to demonstrate transparency and compliance with relevant regulations and directives.  Taxpayers should not have to scavenge internet search sites or surveys of the highest revenue earning professional firms in Europe to distil how much revenue Irish professional firms are obtaining from public sources.

Irish TD’s salaries over £30,000 higher than British MP’s

THE Irish Independent revealed details of Irish politicians’ expenses this week.  The Irish political enterprise comes at a hefty price. The Oireachtas typically passes 42 pieces of legislation each year at an average cost €3.25 million each.

Irish and British Parliamentary Salaries

The 2009 tab for 166 members of Dáil Éireann is €18.248 million.  A further €4.5 million is required to pay 60 senators and €1.9 million to pay 12 MEP’s.

It was not always so costly.  The 1918 general election elected 100 MP’s to the British Parliament.  Each was paid £400 per annum and that rate held until 1931.

The average pay of an Irish TD is just shy of €110,000 (£95,700)when long-service increments are factored in.  This figure does not include the plethora of allowances that are claimable, including pensions accrued when formerly a minister while continuing to serve as a TD.

Members of Parliament in London are paid £64,766 since 1 April 2009.  They are also eligible to claim the following allowances:

Staffing	£103,812 max	‘in respect of qualified staff actually doing the job’
Administrative and Office Expenditure	£22,393	Constituency clinic / office
Personal Additional Accommodation Expenditure	£24,222	Away from home overnight costs incurred to perform parliamentary duties
London cost allowance	£7,500	for inner London MP’s
Winding-up allowance	£42,068	ceases to be an MP
Communications	£10,400 max	web site, publicity
Mileage	40P 25P 24P 20P	first 10,000 miles after 10,000 miles motorcycle bicycle
Subsistence	£25	per day

 

UK Dual Mandate

An MP who is a member of the Northern Ireland Assembly receive a full parliamentary allowance but a reduced salary of one-third of the full rate in respect of the other assembly.  This works out at £10,606 in the case of Northern Ireland.

Sinn Féin Conundrum

There are 5 Sinn Féin MP’s in the current Westminster Parliament but they do not participate in parliamentary proceedings. But they do claim the allowances, a total of £662,600 in 2007-08 notwithstanding that they have not taken the oath of allegiance, or affirmed.

This figure includes:

• £105,131 for the cost of staying away from their main home for the purpose of performing duties in a parliament. But they do not attend sittings in the House (in the chamber) or its committees, or sub committees at Westminster
• £106,248 for running their five offices
• £442,744 for staff
• £461 for stationary and £1,529 for postage associated with this stationary
• £6,547 for the cost of equipment supplied on loan to MP’s.
• £7,672 for mileage
• £4,631 for air tickets to Westminster
• £1,549 for 10 spouse journeys to London
• £4,743 for 22 staff journey’s to London

The Robinson Duo

The Northern Ireland First Minister, Peter Robinson and his wife Iris are MP’s. Peter collected £114,163 and Iris £113,500 in allowances in 2007-08.  This sum included £40,342 in respect of alternative accommodation.  MP’s who are married to each other must nominate the same main home and a limited to claiming one person’s alternative accommodation allowance between them – according to the latest edition of The House of Commons Green Book.

The Robinsons’ also incurred £19,898 on air travel between Belfast and London.

Members’ of House of Lords

Members’ do not, in genera, receive a salary in respect of parliamentary duties. But they are reimbursed actual expenses incurred arising from these duties. Those who claim expenses must have already taken the oath of allegiance or affirmed.  Expenses are only claimable in respect of attendance in the chamber, or at committee or sub-committees of Westminster.

There are some special regulations.  If a member of the Lords resides outside the UK, travel costs are only recoverable from the point of entry in the UK.  Double journeys are claimable if a Member’s car takes him or her from home to an airport or railway station.  Travels costs to Westminster for a Member’s spouse or civil partner maybe claimed six times each year.  There is a maximum limit of £174 for Members whose home is outside London.  The daily subsistence limit in the House of Lords in £86.50, somewhat more generous than in the Other House.

The peril of NAMA and the blind faith of the taxpayer

Scope and role of NAMA

IRELAND’s National Assets Management Agency (NAMA) is being set up to buy the most dodgy loans to property developers’ on the balance sheets of Irish banks. The existence of these loans is said to be preventing the banks from lending to the authentic, productive segment of the economy and enabling that segment to stimulate economic recovery.  They lent too much to too few property developers and speculators but it acted as steroids would for bankers’ bonus enhancement.  Many a good Sunday afternoon in the corporate boxes at Croke Park, Punchestown and the Curragh was enjoyed on the strength of it!

These loans are to be valued on the basis of a prescribed methodology, as defined in the Bill. Their valuation will be lower than that recorded in the balance sheet of the lending bank. Valuation is not to be determined by the inflated assumptions and price structure on which they loans were first approved. The assets which were provided as security for the loans will be valued on the basis of a price is realistically achievable in the medium to longer term in term. NAMA will be the largest property owner in the country and will have the bargaining power that goes with this status. This means that it should be able to choose when to put property on the market without depressing market prices unduly.

It is intended that the elimination of uncertainty and the cleaning up of bank balance sheets to more truly reflect the genuine underlying values of their assets and liabilities will revive our financial system and provide credit to businesses that need it and the interests of depositors will also be more secure. 

The recent court case involving ACC Bank could put a spanner in works of NAMA if emulated.  Not all banks will entertain the NAMA agenda as evidenced by the approach of its parent since 2002, the Dutch AAA rated Rabobank,

 

Can Irish banks be trusted?

All of the foregoing is predicated on the Government having no role in the commercial conduct of Irish banks.

The Government has rejected, at least for now, the option of nationalisation, arguing that it is better that the banks’ maintain a presence on the stock market and conduct themselves within the constraints and disciplines of that marketplace. But is this great act of faith not a bridge too far for the Irish banks? It sends a shiver through my spine that almost frightens the living daylights out of me to see these morons’ self-policing.  Some of them are not fit to be the janitors removing cigarette butts from the latrines in the staff toilets, even with the protection of plastic gloves and goggles!

Were these banks not supposedly operating within the constraints and disciplines of the investment market for decades only to end up as the basket cases that they now are? The same disciplines that allowed them foster a nationwide culture of tax evasion (including personal tax evasion by themselves), offshore accounts for indigenous residents, scam charges on customer accounts and the cute-whore approach did not seem to conflict with their notion of discipline.

When one peruses the annual and interim reports of these awful banks it is abundantly clear that their all-consuming love affair with the property sector was intense, passionate, titivating and, of premier importance,  bonus yielding. But have these dysfunctional gobshites any understanding of the needs and dynamics of authentic economy?

I frankly fear they do not and are incapable of learning and the more I see of their Windsor Tie Knots, their grimaces of injured innocence and the ugly oversized cuff-links perched on their starched white shirts, the less convinced I become.

As the nation awaits the debate of the NAMA Bill in the Oireachtas next month many of us are utterly mesmerised by the complexity and scale of the proposed NAMA project and the level of risk that it involves is beyond the comprehension of the average person. The value of the assets concerned, around €90 billion, is equivalent to the total personal expenditure of all the citizens of the State in an entire year in good times. It is three times the amount of tax the Revenue Commissioners will collect in 2009 and it is over 50% of the likely GDP in 2009. 

 

Impact of lower credit ratings’

Many are being hurt by mortgage interest rate and cost increases.  But the Government see these as reflecting commercial marker realities.  They are careful not to spell out what these realities are.  But could they have anything to do with degraded ratings and subversive transactions for which no one has been held accountable in a court of law?

The investigation by the Chartered Accountants Regulatory Board was being overseen until recently by the board Chairman who is also a director a bank being investigated.  Can you imagine the bean-counters even allowing such a juxtaposition to materialise for the sake of their own credibility in society?

Apart from being clueless about the authentic economy our friends with the golden cuff links had no difficulty ramping up credit until it surpassed 200% of gross domestic product as though it were competing with Iceland in the financial services Olympics.  The could do this because the vey same Government “had no role in the day-today commercial operation of the Irish Banks” – so they could do what they liked and to hell with the consequences, as long as it did not impair their personal remuneration.

NAMA does not have a mandate now to deal with dodgy residential loans.  The individual mortgage bearer is not as  ‘systemically important’ enough to matter as Anglo Irish Bank, a bank where no fewer than five chartered accountant ran they show.

 

The Alan Greenspan influence on Irish banking

Capitalism in the United States and elsewhere was energised by an approach proselytised by Alan Greenspan the Former Chairman of the US Federal Reserve Board (the Fed) to the effect that the enlightened self-interest of owners and managers of financial institutions would lead them to maintain a sufficient buffer against insolvency by actively monitoring and managing their firms’ capital and risk positions. It was against this background that a plethora of so-called financial instruments, derivatives, sub-prime mortgages and securitised assets.

Greenspan was a passionate advocate of the free market. He was appointed to the chairmanship of the Fed by Ronald Reagan in August 1987 and held this position throughout the presidencies of George H Bush, Bill Clinton and George H W Bush until he was replaced by Ben Bernanke in 2006. The 1987 stock market crash coincidentally occurred the following October. Greenspan used the tools of monetary policy to guide the US economy.

This means controlling the availability and cost of money – so varying the interest rate was a central feature of the Fed’s tool kit throughout his tenure to particularly control the threat of inflation and maintain the value of the US $ at a satisfactory level on foreign exchange markets. The Republican Party, starting with Reagan, was a very strong advocate of reducing government influence and this meant that the Fed avoided the toolkit of fiscal stimulus – government borrowing, spending and taxation, to guide the economy. Their approach was to allow the market determine virtually everything.

The crucial difference between these newer financial products and traditional financial assets, such as stocks and shares, is that cash is directly exchanged for an asset concurrently in the case of a share purchase. Credit problems do not fester like rats in a sewer.  The incidence of risk is minimised so the calculus of a bookmaker are not as necessary. Auditors can audit share transactions.

Derivatives and similar financial products are based on underlying contracts that can remain unsettled for very long periods. Some of the more complex derivatives can involve thousands of contracts and hundreds of contracting parties. Values are determined by an independent index – such as FX rates, interest rates, share prices etc.  If there is an adverse movement in a relevant index of indices there may, or may not be a guarantee in place to trigger a payment.If there is no guarantee, or collateral underpinning a derivative their value is a function of the credit worthiness of the various connected parties but the apparent profits are recorded as earnings before money changes hands. 

What happens in practice is that banks involved with derivatives and similar assets accumulate large quantities of ‘paper assets’, liabilities and counterclaims – an opaque cobweb of mutual dependence and dependence on third parties that are often unidentifiable. This minefield has yet to raise its head in the context of the assets and liabilities of Irish banks and building societies.

This meant that investors are not in a position to understand and analyse banks and financial institutions because these instruments can be underpinned by thousands of contracts and hundreds of counterparties. Their value and the value of their underlying financial assets can therefore be over or understated by a crippling variation, as was demonstrated by the collapse of Bear Sterns.

 

Limitations of transparency

Transparency is a much bandied word especially when it comes to averting future problems. Bu there is no reporting mechanism that can either define the risk of measure the value of a complex set of derivatives. They are not audited and they are not regulated.

I will be interested to observe the level of transparency that applied to NAMA.  The nationalised Anglo Irish Bank has billions of € in impaired loans, including loans to directors and managers,  but it is not possible to ascertain if these include the loans approved for the purchase of the Irish Glass Bottle site at Ringsend, Dublin to which the State’s Dublin Dockland Authority is a joint venture partner, notwithstanding that the current Government appointed Executive Chairman of Anglo Irish Bank was also the Government appointed Chairman of Dublin Docklands Development Authority in succession to Lar Bradshaw, formerly a director of Anglo Irish Bank. The current Chairman of Dublin Docklands Development Authority, Niamh Brennan, is an accomplished UCD professor and the leading academic advocate in Ireland of transparent, credible corporate governance!  Will our patience ever be rewarded?

Name recognition in Irish politics

Research published by the ESRI last week has revealed that individuals whose names do not have a traditional Irish identity are twice as unlikely to be called for a job interview when they respond to a job advertisement, even if their qualities and qualifications match in all other respects those of a native respondent.

Name recognition is also an important consideration in politics. Sometimes it is the very uniqueness of a name that is important. Take the US presidency, for example. How many times have you hear the name Eisenhower, Roosevelt, Obama being borne by anyone other than His Excellency, the President of the United States? Mhoosajee Bhamjee was also a mould breaker when he won a Labour seat in Clare in the 1992 landslide election for that party. He is also the only Muslim elected to the national parliament.

Name differentiation can help to differentiate an incumbent from an aspirant in the voters mind but it can also cause political inbreeding, inertia and all of the infertile appalling consequences that ensue from this. “if there is a problem it is attributable to something far away”

It will cost over €137 million to run the Leinster House enterprise in 2009 – 44% more than it did just five years ago borne by the same headcount of politicians. There is no question of our democracy being run on a shoestring but it is important to maintain a sense of perspective and insight.

There are a total of 226 members in the two Houses. The annual overhead is just shy of €607,000 per member, – excellent value when considered as being merely one quarter of the 2008 remuneration of the abundantly superannuated Mr. Michael Fingleton, whose self-indulged, loss-making, speculators’ enterprise the taxpayer is now expected to bail out!

Apart from their own salaries, which cost €22.7 million, a further €18.7 million will be spent on secretarial support. A sum of €6.4 million is spent on travel which works out as an average of almost €44,000 per Dáil Deputy and €31.500 per Senator.

There are no fewer than 92 members of the 30^th Dáil who bear the same surname since the first Dáil met on 19 January 1919 and the first Seaned met on 11 December 1922.

Many are blood relatives or descendants but some bearing the same surname have no direct relationship to each other. There are others who are related to each other but do not share a similar surname.

The surname among the 20 most popular Irish surnames that has had no bearer in the Houses of the Oireachtas is the name Murray.

There have been 20 Ryans’, 16 Lynches, 16 Byrnes’ and 14 O’Sullivans’ who have represented the nation.

There have also been 11 Kennedys’, 10 O’Reilly’s, 10 O’Briens’, 9 Collins, 9 Doyles’, 9 O’Connors’ and 9 Higgins’.

The presence of Bradys’, Burkes’, Hogans’ and Hayes’ was made 8 clan members.

The remaining surnames with multiple appearances in the Oireachtas are:

2	3	4	5	6	7
Bruton Burton Cowen Cregan Cullen D’Arcy Deasy Dempsey Devins Dooley English Enright Fahey Ferris Flanagan Fleming Gogarty Gormley Killeen Naughton O’Dowd Roche Sheehan Sherlock Timmins Tracey Upton Wallace White Woods	Aylward Brennan Calleary Conlon Flynn Hanafin Haughey Kitt Martin McEllistrim McGinley Mitchell Moloney Mulcahy Noonan O’Dea O’Rourke	Allen Ahern Andrews Breen Browne Carey Coughlan Kenny Lenihan McGuinness McHugh Moynihan Nolan O’Donoghue Power Smith Wall	Barrett Costello Fitzpatrick Kelly O’Keeffe O’Mahony	Ahern Healy Quinn	Gallagher McGrath

Inspiring Political Leadership in Ireland as Recession Edges Towards Depression

Ireland is attempting to undertake public sector expenditure of €54 billion in 2009 to be funded by potential tax revenue of €34 billion. GDP in 2009 may be more than 10% lower causing the current recession to become a depression. The national debt in March was €54.24 billion and is set to rise as Irish banks become paralysed zombies.

There has been much comment about burden sharing as unemployment soars and job prospects are virtually non-existent. The following is a verbatim extract from the budget speech of Brian Lenihan TD, Minister for Finance on Tuesday, April 7 2009.

“Fairness must be the cornerstone of all our efforts to achieve economic renewal. Everyone wants fairness but there is less agreement about what it means. For many, it means the next person should pay. But the reality is everyone must give according to their means. Those who have most must give most. But before we ask anyone else to give, we in this House and in this Government must examine our own costs. Those of us in politics have been entrusted with a great privilege by the people. We must lead by example.

• The Government has decided to introduce a number of additional changes to the remuneration of Deputies and Senators.
  
• There will be a 10% reduction in all expenses other than mileage rates where a 25% reduction has already taken place.
  
• Deputies will no longer receive long service payments or increments.
  
• The arrangement whereby former Ministers are paid Ministerial pensions while they are still members of the Oireachtas will be discontinued.
  
• Oireachtas members who are on paid leave of absence as teachers may no longer avail of the arrangement whereby they can keep the difference between their teachers’ salary and the cost of employing a replacement.
  

The allowances paid to Oireachtas Committee chairs will be halved and the payments to whips and vice-chairs are to be abolished.

The Oireachtas Commission has put forward its own proposals for a reduction in the number of Committees and I am happy to leave that matter to these Houses.

Some of these changes will require legislation which will be introduced shortly. The members of this Government reduced their salaries by 10% last October. Ministers of State made a similar reduction. The public service pension levy was applied to members of the Government and Ministers of State. As a result, Ministers have seen a reduction of one fifth in their incomes”.

But it has now transpired that none of these arrangements apply to current incumbents, just to newbies! The guys and gals in the Oireachtas didn't share the Minister's vision of asking for cuts to begin in Leinster House.

The Irish Independent canvassed 32 Oireachtas members and asked "will you give up your ministerial pension?" The highest benificiary was Bertie Ahern, who stands to lose €111,235 and he indicated 'yes' with a clarity reminiscent of his vote for Albert Reynolds when Fianna Fail were choosing a candidate to contest the 1997 presidential election. 25 of those canvassed could not be contacted or decliedn to answer

Banking Salaries in Ireland and Elsewhere

When the Governor of the Central Bank, John Hurley, appeared before the Oireachtas Committee on Economic Regulatory Affairs on Tuesday, 10th March, he explained that the public exhortations of the Central Bank that highlighted risks to financial stability in Ireland from August 2007 were “not as effective as they might have been and they did not lead to a sufficient or timely change in behaviour”.

The Central Bank of Ireland's share of the paid up capital of the European Central Bank since January 2009 is 1.1107%. As a member of the European system of central banks it has no direct influence over interest rate determination but maintains responsibility for monetary policy functions and economic analysis - but there seems to be little attention to the latter, judging by the behaviour of the Irish banks and Mr. Hurley's comments.

The Committee were reminded that the Governor is paid an annual salary of €348,000, a figure that reflects the voluntary reduction taken by the Governor last October from the €368,000 that he had hitherto been paid.

It is interesting to compare the salary for this position with those whose influence on global economic affairs is absolutely pivotal and whose utterances and nuances hugely impact the world investment climate and the effectiveness of economic recovery initiatives.

The U.S. Federal Reserve System consists of 12 federal reserve banks located in major cities throughout the United States supported by the Federal Reserve Board based in Washington DC. The System as a whole employs almost 20,000 persons and the Board employs 2,053 persons. The annual salary of the Chairman of the Federal Reserve Board, Mr. Ber Bernanke, is $191,300 (€150,000), and was approved by the US Congress in February 2008.

The President of the European Central Bank, M Jean-Claude Trichet, oversees a staff of 1,499 persons and was paid €351,816 last year. He is also provided with a residence, in lieu of a residential allowance, but his salary is subject to EU tax, pension, medical and accident insurance deductions.

The Oireachtas Committee observed that the Canadian banking system “had operated quite well with prudential supervision of a high standard”. The Bank of Canada Governor, Mr David Dodge, whose 7-year term concluded on 31st January, was paid a salary scale the maximum point of which was CAN$407.900 (€250,000).

The Central Bank was founded in 1943 and Mr. Hurley is the 9th governor. He and seven of his predecessors formerly held the position of Secretary General of the Department of Finance. The exception was Mr. Maurice Moynihan, co-drafter of the 1937 Constitution and formerly Secretary of the Department of the Taoiseach.

The salary of the governor is therefore influenced by the salary of the Secretary General of the Department of Finance. This was set at €303,000 on 14th September 2007 by the Review Body on Higher Remuneration in the Public Sector, in its 7th general review, a figure that may have been reduced voluntarily by the current incumbent.