Author Archives: Tony Groves

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From top: Newstalk and INM logo; Tony Groves

You have to ask yourself that if I wanted to sell something to myself, for more than it’s worth, in order to pay myself from the over-inflated price, would that be okay with the Companies Act?

Tony Groves writes:

Back in the Halcyon Days of the Celtic Tiger, I remember coming across a particularly complex (and not a little brilliant) version of the common practise of Cheque Kiting.

Cheque Kiting, for those of you unfamiliar, is where an individual has two (or more) accounts in different banks. He writes a cheque to himself (this first cheque is called the kite) from Bank A and lodges it into Bank B.

The following day (taking advantage of Bank B’s lax clearing system) writes a cheque to himself from Bank B and lodges it to Bank A.

These artificial funds are then lodged; allowing the first cheque to clear. The cycle then repeats, typically escalating the amounts until he is either caught, cleans out the accounts and runs, or lodges legitimate funds to cover the Kite.

The case I came across was based on the circular kite model, but due to the involvement of several individuals (over 10) and spread across every retail bank in the country at that time it was not easily discovered.

The seemingly reasonable monies involved in the cheques, the various clearing cycles of the banks and the fact that there was several people involved made detection next to impossible for any one bank. It really was well constructed and went on for months.

When the fraud was eventually spotted (due to address irregularities) and the kites crashed to earth, the Banks had been taken for several thousand euro. It really was a significant amount of money and I’m not sure any of the participants were ever brought to justice.

I recall seeing the last transactions on one accounts involved; it was a Laser Card purchase in Dublin Airport. So long, farewell, auf Wiedersehen, adieu…

When I read earlier how Independent News and Media Chief Executive Robert Pitt had made a Protected Disclosure regarding Denis O’Brien’s attempts to sell a company he owns (Newstalk, part of his Communicorp empire) to a Company (Independent News & Media) where he is the major shareholder, I had a flashback.

We know very little about the deal. But I suspect a Protected Disclosure wasn’t made lightly.

Whatever was in the Disclosure seems to have triggered the Office of the Director of Corporate Enforcement’s involvement.

It is also well known that the two parties could not agree on the price, with INM wanting to pay less than Communicorp are asking for.

We also understand from reports that if the higher price had been be agreed, Denis O’Brien stood to receive a “significant payout”.

I don’t want to go into the individuals involved and their links with Mr O’Brien, they are available here.

But I do wonder about company law, specifically the laws around conflicts of interest and the Fitness & Probity Standards.

You have to ask yourself that if I wanted to sell something to myself, for more than it’s worth, in order to pay myself from the over-inflated price, would that be okay with the Companies Act?

Even if it is legal, are the conflicts of interest not such that it would call into question individual’s fitness to operate public broadcasting licences?  I don’t know. Nobody is really saying what did or did not nearly happen.

We know there was a falling out. We hear rumours of resignations. None of it looks good from a Corporate Responsibility viewpoint. Particularly given Denis O’Brien’s ability to have a “chilling effect” on democracy.

There are many kites floating out in the air here. Like all complex kites the cords become tangled and it’s difficult to know who caused the entire thing to crash to earth. I still laugh at the audacity of the Cheque Kite I was caught out by.

I look regularly agog at the audacity of Denis O’Brien, none more so than in his attempt to sell his company to his other company. What has all this got to do with Cheque Kiting? Maybe nothing; it just makes you think, doesn’t it…

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

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From top: Enda Kenny with Donald Trump in The White House on March 16; Tony Groves

Once upon a time…

…the boy king realised he need never have to tell the truth again.

Tony Groves writes:

A long time ago, in a village far, far away a boy was creating havoc. He was lashing out at the villagers, calling them All Ireland Champion Whingers and telling fantastical tales of adventures that never happened. The villagers, fed up of the Boy Who Cried 2 Pints, sent the lad to bed with no supper.

But the boy was not to be stopped. Deciding to run away, he put on his father’s suit and climbed aboard a small boat to the mysterious island known as Dáiland. As well as people similar to those in the village the island of Dáiland was filled with malicious Beasts known as Politicians. The boy, trying to find his place, spent years ducking and dodging them.

Slowly, he grew more confident. He recalled the tale of the Man With 2 Pints and how he’d tricked some of the villagers. So he began to tell even taller tales.

Extravagant stories and preposterous claims were told to the Beasts over and over. He spoke to them of a place where everything was wonderful that he called Retrospective Recapitalisation Land.

He spun fables of his feats of daring-do; including one about how he faced down the Evil Hordes looking to carry away all the ATMs in Dáiland. The boy convinced the Politicians to make him their king with promises of things he called Allowances and Unvouched Expenses.

As king, the boy ordered the Politicians do to all sorts of wild and crazy things. He told them the more they break things the better the Recovery will be.

The Political Beasts, so excited by the freedom of not having to tell the truth anymore, went stomping all over the island. Kicking Austerity Dust into the faces of the inhabitants and telling them it’s part of Keeping the Recovery Going.

The people, once they’d spat the Austerity Dust out of their mouths, weren’t pleased. They set about organising and challenging the Political Beasts. The Beasts, worried that their party might be cut short, turned on the boy king. But he was ready for them, he knew the best way to cover up a lie was to tell an even bigger lie.

So the boy king told the Beasts that he was following orders from a higher power, which he called “The Troika”. He said he’d gladly step aside and let one of the Beasts take over, but he warned them that The Troika eat Beasts for breakfast! Needless to say, the Beasts scurried back all over Dáiland and told the inhabitants of The Troika and how they’d better not make any more trouble, for all their sake’s.

The boy king, so happy that his lies had gone unchallenged went back to partying. He even came up with a way to handle the occasional misstep. Whenever a Beast or an Islander would step out of line, the boy king would simply have them locked up in an Inquiry. And yet…

And yet the boy king felt incomplete. No amount of records set, achievements or accomplishments could fill the hollow in his heart.

The boy king, if he had the ability to tell the truth, would have admitted that he would never truly be happy in the knowledge that a village far, far away is still missing its idiot.

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

Rollingnews

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From top: Glossary: Tony Groves

Seek Stability?

Hate Populism?

Read on.

Tony Groves writes:

When The Irish Times published a glossary of Alt-Right terms my echo chamber lost its mind. When I spewed my badly punctuated thoughts on NAMA on these pages I was grammatically held bang to rights.

Words, even in this text speak era, still hold value. Words still have power and given the Alt-Right got its own glossary; I thought I’d try my hand at doing a Chumocracy Glossary. I should probably start with Chumocracy.

Chumocracy: A system of governance run by and for the Arms of the State and their Chums. I’d love to say I created this phrase, but I stole it from someone referring to the Tory Toff Infighting around the time of the Brexit campaign. Eamon Dunphy refers to it as Official Ireland, but I think Chumocracy has a more onomatopoeic flow.

Accountability: A situation where a Chumocracy member is forced to issue a statement of deep regret, or a statement refuting findings against them. Once complete the contrite individual can return their snout to the trough, or pull the chord on a massive golden parachute pension.

Pronespeak: A series of phrases that are seemingly benign, but are actually malignant tumours on the body politic .For example: “not aware of, or privy to” and the old chestnut “let me just be clear”. These phrases rarely mean what they say and quite often they mean the exact opposite.

Populism: A smear used by Chumocracy members to describe anybody outside their groupthink bubble. Frequently thrown at an individual who has the temerity to question the morality of putting free (rigged) market ideology ahead of social crises.

Complex Issue: A term used to explain away the fact that those in power have failed to do anything about a particular issue right up until six hours before it becomes an RTÉ Prime Time Special. Usually the nodding heads, not wanting to be seen to be stupid, nod along and accept this explanation. Sure haven’t the government agreed to set up a…

Commission of Inquiry: A method of placating public outcry against injustices that are (more often than not) within the remit of the State to address, but might result in embarrassment for a Chumocracy member; see Accountability.

Stability: The state of being out of your depth and screwing up at your job, while simultaneously claiming that you are a safe pair of hands. For example  Alan Kelly and Simon Coveney brought Stability to the homelessness crisis.

Political Correspondent: A name used for many Journalists who allow politicians to make false or misleading claims (like “I refute” and “I was unaware of”) and often use their own type of Pronespeak, like “a source close to X said” or “a senior party member told me”, thus removing Accountability (see above).

Advice of the Attorney General: A phrase which gives the user a form of diplomatic immunity against charges of idiocy; particularly useful when trying to turn a simple matter into a Complex Issue.

Speaking Truth to Power: A Leadership Skill of standing up to the EU Commission when defending the Apple Tax decision, while at the same time prostrating oneself in front of the EU Commission when talking about Irish Water.

Independent News & Media: see Pronespeak.

Communicorp: See above.

Mea Culpa: It means No Worries For The Rest Of Your Days.

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

31/1/2017 Mmid-term review of Capital Plan. Pictured are Minister for Finance, Michael Noonan, TD and Minister for Public Expenditure, Paschal Donohoe, TD as they arrive at the media briefing about the approach that will be taken to the mid-term review of the Capital Plan, ‘Building on Recovery: Infrastructure and Capital Investment 2016-2021’, which was published in September 2015. Photograph: Sam Boal / RollingNews.ie

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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

Rollingnews

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Swedish design icon, the Billy Bookcase; Tony Groves

 

IKEA and Irish democracy.

A theory.

Tony Groves writes:

You often see them on a Monday morning between July and September. Mindless zombies pushing trollies filled with cushions they don’t need and more candles than a Vampire Movie.

Dry mouthed and bleary eyed, they seem to sway under the fluorescent lights. Poor lost souls desperately searching for the way out.

I refer to the GAA supporter, who after spending his Sunday at Croke Park, is made complete his act contrition in the aisles and pallet bays of IKEA.

They’re a bit hungover and remorseful, wondering if anyone can ever beat Dublin (they can’t) and their defences are as easily breached as the Boys in Blue hand-passing their way to goal.

These fallen heroes, when they’d done their Cost Benefit Analysis of the trip to Dublin, hadn’t factored in the cost per square foot of car boot capacity.

Rookie mistake.

“Sure doesn’t everything in IKEA come flat-pack and couldn’t our Una do with a new desk and aren’t those Billy Bookcases great value altogether. Look it, the more you spend the more you save.”

The Billy Bookcase really should be an Irish invention, rather than a Swedish icon. I mean, its original design was sketched on the back of a napkin, it’s inventors were obsessed with making things easier and more transportable. The secret of their success was making the hard labour an issue for the purchaser.

Today there’s over 60 million Billy Bookcases in the world, that’s nearly 1 for every 100 people on the planet. Every 3 seconds a new Billy Bookcase is born. Staff that work in the plant in Southern Sweden never touch a piece of furniture. The machines are in charge.

Now consider the Irish Inquiry Conveyor-belt for a moment. The terms of reference are often sketched on the back of cigarette packets and later fleshed out in politically advantageous ways. The “inventors” are obsessed with making their lives easier and transporting out of the way any difficult issue or potential blockage in the path of the gravy train machine.

Today there are more Inquiries, Investigations by Retired Judges, Citizens Assemblies, Expert Review Panels, Public Tribunals, Water Committees, Consultants Reports, Task Forces of Investigation and Public Consultation Processes than pieces of Legislation passed in the Dáil.

Are these instruments of obfuscation more ubiquitous than the Billy Bookcase? Probably not, but it certainly feels like there’s one born every 3 seconds and not unlike the Billy Bookcase, these “inquiries” are delivered unmade and it is left up to the public to put the pieces together.

Flat Pack Democracy, Irish Style. Thank you for shopping at IKEA.

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

Pic: Wikipedia

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From top: Irish Times/Ipsos Poll from Martch 2, 2017; Tony Groves

Opinion polls are no longer a weather vane of the electorate but a a tool of manipulation.

So what has this got to do with the American buffalo?

Tony Groves writes:

Lies, Damn Lies and Statistics; unoriginal and cliche, but so often true. None more so than when we forensically autopsy Opinion Polls.

Despite predicting Brexit, Trump and our own 2016 General Election incorrectly, Polls are still afforded a undeserved gravitas.

People who like to be seen as “Centrist” are led into the arms of the Poll topping Party. The warm embrace of the herd is an attractive lure to people who are generally too busy to give the talent pool of politics much thought.

The consensus of a Poll can take the hassle out of voting. For supporters of smaller parties or independents, Polls can act as a disincentive to vote. They’re reported in such a way as to tell an already disillusioned citizen that their views are in such a small minority that the very exercise of voting is futile.

Pollsters constantly tell people, who are already on the fringes of society, that they don’t vote in enough numbers to change their lot in life. It’s a self-fulfilling prophecy of political stagnation.

Nervous politicians can cynically use Polls to gauge which manifesto promises they should make (only to break later) in the seat retention race. Polls can bring on Leadership Heaves against a Political Corpse, or they can placate restless backbenchers. Maybe it’s better the Cadaver you know?

Take this Irish Times poll for example. It shows Fine Gael and Fianna Fail, at 28% and 29% respectively, are electorally viewed as Fianna Gael.

When Pat Leahy went on Newstalk Breakfast, with the Chuckle Brothers (Messrs Coleman & Williams) to explain how Fianna Gael’s support plummets when you poll people aged between 18-35, the lads were aghast.

Really? Imagine scratching your head in disbelief at the idea that the generation hammered by the 2008 Crash and the Age of Austerity would have an aversion to the Parties that oversaw the entire period? The mind boggles that their minds were boggled.

However, it was in the (whisper it) rise in the poll of Sinn Féin, that things took a more sinister turn and subtle biases surfaced.

To explain I digress, your patience please…

Between 1872-1874 over 3,700,000 Buffalo were killed. Of this gargantuan slaughter only 150,000 were killed by Native American Indians, that’s a little over 4%. The rest were butchered by the White Man; so bad was it that “the stench of rotting carcasses fouled the very winds of the Plains.” The stench of death, 96% due to the White Man, was 100% attached to the Indians. The Indian savage narrative was a convenient shroud to hide the brutality of our civilised Whites.

In much the same way Polls are used to civilise our electorate. In a brilliant piece of analysis Padraig O’Mara, showed how in the run up to General Election 2016, with polls showing Sinn Féin trending up, media biases became more pronounced.

A total of 1,150 articles were processed and fed through a sentiment analysis engine one by one to reveal that Sinn Fein received 200% more negative coverage than the other parties. 200%!

For every 100 articles on Sinn Féin, 61 were negative, 21 were neutral and 18 were positive. For combined Fianna Gael it was 28.5 negative, 22.5 neutral and 49 were positive.

Remember, the Indians did 4% of the killing and got 100% of the blame. 4% is coincidentally the same number Sinn Fein were up in the Irish Times Poll.

But rather than focus on the growth of a party of opposition, Pat Leahy quickly changed the narrative, saying Sinn Féin “tends to underperform the polls in elections”.

Neither Pat, Shane nor Paul dared acknowledge that Sinn Fein’s under-performance is part driven by media biases. That inconvenient truth doesn’t suit the cosy narrative of a civilised Fianna Gael versus a savage Opposition.

Discussing Polls exposes commentators’ (conscious or unconscious) biases. Media bubble world views explain away the trend of electorate polarisation, in trendy journalistic ways. In much the same way as the White Man explained away the extermination of the Buffalo as “the only way…to allow civilisation advance”, the Pollsters explain away large swaths of the electorate as stray Buffalo, which will be corralled back into the fold in time for Election Day.

Polls can be inaccurate, culturally biased and financially driven to deliver results more favourable to whomever is paying the bill. And yet so much importance is given to Polls that I’d hazard a guess they are given more airtime and ink than the Homelessness and Hospital Trolley Crisis combined.

In fact, forget guessing. Can I get a show of hands?

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

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From top: Simon Coveney; Tony Groves

The shield of “advice of the attorney general” is more a badge of convenience to those who have already lost the war on water charges.

Tony Groves writes:

We are a grand old species all the same. A hominid filled with self importance and sophisticated concepts of our place in the universe.

We have a great way of recording our achievements as shrines to our greatness. We’ve had the Renaissance, the Enlightenment, the Industrial Revolution and the Information Age to name but a few. All of them linear paths for linear thinkers.

Civilisation we are thought runs thus: the Greeks beget the Romans, the Romans beget the British and the British beget the United States of America. One glorious leap forward after another. This is of course complete bunkum. Point out the gaps in this chronological history of convenience and someone might tell you you’re living in the Dark Ages.

When Morning Ireland presenter Cathal MacCoille yesterday pointed out that “we’ve been here before” regarding the Grace Child Abuse case, I replied that “the one thing we learn from history, is that we never learn from history”. How can we hope to learn from history when the very history we a taught is as limited as a 140 character tweet.

Everyday new evidence emerges showing that, rather than the enlightened creatures we believe ourselves to be, most of us are like Bill Murray in Groundhog Day. Destined to live the same mundane existence day in and day out. Drifting along in a lazy river of the unremarkable. Round and round we go.

It is on this fetid water that we watch our politicians bobbing along on again. The noxious creature that is the Irish Water Groundhog has waited inline, gotten his inflatable tube and is back for another ride.

We are told that Fine Gael will not eliminate charges that risk the ire of the EU Commission; never mind that we are separately prodding the EU Commission over the Apple Tax ruling.

Whatever you do, do not mention that when both Spain and Portugal were to be fined €2bn and €300m respectively, for breaches of the EU Commissions Budgetary Rules (rules more sacred than water charges) that the fines were reduced to €0.

The shield of “advice of the attorney general” is more a badge of convenience to those who have already lost the war on water charges.

All Minister Coveney is doing, one might argue, is delaying the inevitable in order to support his Fine Gael leadership candidacy.

Irish Water is a lame duck utility. People who paid previously will not re-register. Those who never paid, never will.

Throwing shapes at each other for marginal political gains stinks almost as bad as the commentariat deriding the public for seeing through this entire charade form its conception.

The Minority Government and the Faux Opposition are pretend-arguing over what is or is not excessive water use. Really? All you are doing is excessively trying the public’s patience.

The Half-Dead Irish Water Groundhog needs to be put out of its misery. The use of excessive force won’t be necessary.

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

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