Anglo Irish Bank and Fianna Fail, a Reply from Brian Lenihan

national | anti-capitalism | news report Tuesday November 17, 2009 11:57 by LD

10 Months Later and it Looks Like €5.7bn More

On Feb 16th 2009, using contact.ie, I sent an e-mail to all public reps re: Anglo Irish Bank and members of the gov.
As far as I can remember the mail I sent was a cut up of a comment/ letter written by someone on some blog I read at the time and the article I mention in the mail from the Irish Examiner. Today, going through my unopened mail I discovered the minister decided to reply by including me in his list of contacts to recieve waffle ten months later via Niall Blaney T.D. Below is the correspondance.

Dear Public Representative, Feb 16th 2009

An article in Feb 7th's Irish Examiner stated that 6 members of the governments cabinet have refused to answer a recent enquiry as to whether they had received loans from Anglo Irish Bank.
http://www.examiner.ie/irishexaminer/pages/story.aspx-q...1.asp

These very people have made the decision to guarantee Anglo Irish Bank which will end up costing the tax payer billions of euro against the direct advice of the central bank and the Dept.of Finance and many other independent economists.

By refusing to answer such a simple question I have no choice but to let my suspicions run wild. Has Seanie been giving "dig outs" to nearly half the cabinet, past and present? Have loans to members of the government/Dail/Senate been written off, or have they at any time held CFDs on Anglo's shares. Or indeed have they been giving Seanie their "winnings on the gee-gees" for safe keeping?

Was the decision to guarantee Anglo Irish Bank guided by personal considerations rather than by the greater good of the country as a whole?

As a public representative are you prepared to stand by and let the possibility of such criminal activity to go unpunished? I sincerely hope not.

I also hope that you will bring this matter before the Dail /Senate /Gardai /C.A.B as a matter of urgency.

I would implore you to disrupt Dail proceedings until such time as Brian Cowen gives an undertaking that all Cabinet ministers/T.D.'s/Senators/M.E.P’s will make a full public disclosure as to whether or not they have received loans from or held shares in Anglo Irish Bank.

Yours Sincerely,
Leah Doherty

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13 November 2009

Dear Niall,

Thank you for your email of 26 February forwarding correspondence from Ms. Leah Doherty, regarding her concerns on the introduction
of the bank guarantee Scheme and the taking into public ownership of Anglo Irish Bank. You will appreciate that the financial crisis has had
significant resource implications for the Department and I apologise for the delay in responding.

As you will be aware, the bank guarantee Scheme was announced in September 2008, at a time of unprecedented dislocation on international
financial markets. The introduction of the guarantee achieved the crucial objective of stabilising the funding base of Ireland’s financial system, and
has enabled our main financial institutions to continue to access the liquidity needed to undertake their day-to-day operations through the financial
crisis.

I would note that the Government’s introduction of the guarantee Scheme was consistent with the advice of my Department, and with the advice of
the Central Bank and the Financial Regulator, who were formally consulted in the process of introducing the guarantee, as I stated in bringing
the relevant legislation, the Credit Institutions (Financial Support) Act, before the Dáil on 30 September 2008.

The financial institutions covered by the Scheme pay an advance quarterly charge, proportional to the cover provided by the guarantee, which has to
date yielded €437.5m to the Exchequer up to the end of 2009. In the context of the of the six-month review of the Scheme, the charge factor levied
on each institution has been amended and new, higher rates are being applied for the remainder of the Scheme.

With regard to Anglo Irish Bank, I would note that Anglo is a major financial institution, with a current balance sheet in excess of €88bn and a
substantial deposit base, whose viability is of systemic importance to the economy. Anglo’s systemic importance has been confirmed by the
Governor of the Central Bank of Ireland, and accepted by the European Commission in its approval of the Government’s measures to address
the economic issues presented by Anglo.

Following consultation with the Central Bank and the Financial Regulator, the Government took the decision to take Anglo into public ownership last
January, as this represented an appropriate and effective means for maintaining the viability of the bank and safeguarding its substantial deposit base,
on foot of funding pressures and the disclosure of serious corporate governance issues at Anglo. As I noted at the time of the decision, the Government
moved to the final and decisive step of nationalising Anglo, only after the alternatives for stabilising the institution had been exhausted.

In response to the concerns raised by Ms. Doherty regarding potential other reasons for the nationalisation of Anglo, including the fact that Oireachtas
members could be debtors of Anglo, I wish firstly to confirm that I do not have a loan from Anglo Irish Bank. While I cannot speak on the personal
finances of other members of the Oireachtas, I can assure Ms. Doherty that there is no question of Anglo Irish Bank ‘writing off’ loans to anybody.
As with all financial institutions, the bank makes accounting impairment provisions to cover potential loan losses, but the Government has been clear
that Anglo will pursue all loans to all customers to the full extent possible, with recourse to the courts as necessary.

With regard to former Anglo shareholders, I would note that the Anglo Irish Bank Act 2009 provides that I will appoint an independent
assessor at an appropriate time having regard to the public interest, to determine the fair and reasonable aggregate value of the transferred shares
and the consequent amount of compensation, if any, that may be payable to persons in respect of Anglo shares transferred.

I trust that it is evident, from the formal consultation that was undertaken in relation to the nationalisation of Anglo and other major banking
sector policy decisions, from the Government’s position that Anglo will fully pursue all of its debts, and from the independent assessor process that
is in place in relation to former Anglo shareholders, that there is simply no question that personal considerations entered into the decision to take
Anglo Irish Bank into public ownership.

I would certainly share Ms. Doherty’s concern at the corporate governance issues at Anglo prior to the bank being nationalised. Investigations
into these issues are currently ongoing, including by the Financial Regulator, the Office of the Director of Corporate Enforcement and the Garda
Fraud Office. As I have stated previously, any wrongdoing identified on foot of the investigations will be fully pursued in accordance with the law.

Finally, with regard to the future for Anglo, I would note that following the Government’s recent provision of capital to Anglo, the Board of the Bank
is currently finalising a restructuring plan which will set out the future strategy for the bank. The restructuring plan will consider all options for
the future of the bank, will be submitted for my approval, and will also be submitted to the European Commission for approval under EU State Aid
rules by end-November.

I trust that this letter will address Ms. Doherty’s concerns, and I would therefore be grateful if you would communicate its contents to her directly.

Yours sincerely,

Brian Lenihan, T.D.
Minister for Finance