From top: Minister for Finance Michael Noonan; Tony Groves
In the financial world, there are rules – lots of them.
Many of them are arbitrary, some are helpful and then there are a handful of ones that are plain old common sense.
Tony Groves writes:
There’s a famous (or should that be infamous) episode of barbarity carried out against the Roman Empire in 88BC, known as the Asiatic Vespers.
The people of Asia Minor, fed up of Roman rules, Roman taxes and Roman hegemony, rose up violently. In just one day, the Roman population across Asia Minor was slaughtered; it’s estimated between 80,000 – 150,000 people were killed. This was a scrupulously prepared and viciously executed plan.
The fallout of which led to a series of wars that would last decades and pile countless more bodies on to the fire. Nonetheless, the Asiatic Vespers stand as a ruthless warning from history. A government (Rome was still a Republic) that has lost its legitimacy has lost its mandate to govern.
This week we’ve seen, for the first time in its history, the Public Accounts Committee have submitted findings supported by the majority and not unanimously.
This is a significant break of protocol and not just because the disagreement was over the wording about the Minister for Finance Michael Noonan and his handling (or alleged mishandling) of the Project Eagle case.
It was significant because it was part of another underlying trend at the hypocritical heart of Irish politics. A secret 11th commandment not included in the Bible; Thou shalt do as we say, but thou shalt not do as we do.
You see, we’ve been lectured for weeks, whether by Pat Kenny calling us thick, or Alan Kelly calling us populists, or Simon Coveney saying something. I can never remember what Simon says…
Anyway, apparently we have to pay water charges or we risk EU fines. We had to have austerity because we all partied. We have to have accept families in hotels because the banks’ balance sheets are still vulnerable. So on and so forth.
In the financial world, there are rules, lots of them and, contrary to popular opinion, these rules are overseen by a regulator. Many of these rules are arbitrary, some are helpful and then there are a handful of ones that are plain old common sense.
One such common sense rule relates to financial dealings with Politically Exposed Persons, or PEP’s.
In dealing with the EU Anti-Money Laundering Directive there are different criteria, based on the individual/entity and the service provided.
They roughly fall under three headings: Simplified Due Diligence, Standard Due Diligence and Enhanced Due Diligence. A voucher for a Macari’s Snack Box to the first person who correctly guesses which category politicians fall into.
Michael Noonan made a bad judgement call in meeting Cerberus the day before the sale of Project Eagle. This sale has resulted in a loss to the State in the range of €220 million. I’m not going to rake over the coals of this toxic fire sale. You can do that here and here.
I am going to point out that a Department of Finance, that is doing its job, might look into the EU Anti-Money Laundering Act. I’m going to guess that they’d discover that a meeting with the Minister for Finance is a meeting with a Politically Exposed Person.
I’d then be fairly certain that they would see this same meeting is covered under the Enhanced Due Diligence Regulations.
Finally, I’d hope they might realise that breaches (if discovered) of these regulations can be punished with sanctions and or fines. The fines can be of “up to €5 million in the case of natural persons, and fines of up to twice the amount of any profits gained or losses avoided”.
I’m a banker, so my sums aren’t great, but I reckon fines of up to twice the loss (as confirmed by the Comptroller & Auditor General) could amount to €440 million.
Do I think a Department of Finance that has it’s head buried in the sand is looking into this? Probably not.
Do I believe a Government that is busy trying to delegitimise even the wording of a mildly critical report into this debacle, is going to look for our money back? I’m not holding my breath.
It does make me think of the Asiatic Vespers and how fed up people were of hearing “Do as we say, don’t do as we do”. I’m fed up, too – are you?
Tony Groves is a full-time financial consultant and part-time commentator. With over 18 years experience in the financial industry and a keen interest in politics, history and “being ornery”, he has published one book and writes regularly at Trickstersworld