By Fintan O’Toole (for the Irish Times)
There are two things we now know for certain. One is that the rationale for Nama is collapsing even before it has begun to operate: the real value of the properties it is taking over is far less than the Government believed. The other is that Nama will go ahead regardless. The only real policy the Government has is to shovel money into the banks, whatever the financial or social cost.
Let’s recapitulate for a moment, shall we? A little over a decade ago, the Dail’s Public Accounts Committee (the PAC), in its report on the scandal of organised criminal evasion of deposit interest retention tax (Dirt) by almost all Irish financial institutions, concluded that “there was a particularly close and inappropriate relationship between banking and the State and its agencies . . . [who] were perhaps too mindful of the concerns of the banks, and too attentive to their pleas and lobbying”.
The PAC showed us that the entire apparatus of the State - governments, the Department of Finance and the Central Bank - did pretty much whatever the banks wanted it to do. It knew very well that those banks were engaged in a huge racket to defraud the honest taxpayer. But its entire policy was shaped around the simple formula expressed by Maurice O’Connell, a senior finance official who became governor of the Central Bank: “For God’s sake, whatever you do, don’t rock the boat.”
We know very well what happened as a result of the Dirt scandal - absolutely nothing. We know that there was no response of any kind by the Department of Finance, by the banking regulators or by the Government (aka Fianna Fail) to the revelation of a “particularly close and inappropriate relationship between banking and the State and its agencies”.
The otherwise astonishing notion that that closeness amounted to collusion in organised crime was simply shrugged off. In the idiotic phrase that characterises the mentality that has brought our country to its knees, we put the past behind us. (Where is the past supposed to be? In front of us?)
And no better man at drawing that line in the sand than the bold Sean FitzPatrick, chief wizard of the Anglo Irish Bank magic circle and darling of Fianna Fail. Seanie told the nation in 2005: “My own industry of banking had the issue of Dirt to deal with and, as an industry, our actions were clearly wrong in the past.
“We failed to deal with the issues appropriately; we were wrong, and we have paid the price for our misjudgement. However, what’s important in this context is that the issue of Dirt was capable of being dealt with under existing legislation and under existing procedures. We did not need any new [regulatory] powers.”
This was self-serving guff. The Dirt scandal was not a misjudgement, it was a criminal conspiracy. The bankers had not “paid the price”.
The issue was indeed “dealt with” under existing procedures, which involved some handy manoeuvres with a brush and a carpet.
Why drag all this up again? For two reasons. One is that if we had actually dealt with the implications of the Dirt report - that our banks were involved in organised crime and that the State and its agencies had an inappropriately close relationship with them - we would not be where we are now.
The culture of “moving on” and “putting the past behind us” had catastrophic consequences.
The second reason for dragging this up again is even more pertinent. We have rediscovered, in the most painful way, the truth that our banking system was at best recklessly amoral and at worst plainly criminal. And we are again in the process of “moving on”.
The “particularly close and inappropriate relationship between banking and the State and its agencies” has not diminished. On the contrary, it has been powerfully intensified. Previously, the State let the banks get away with murder.
Now, it not only helps them hide the bodies, it supplies the getaway car.
We have indeed “moved on” - from a situation in which the State and its agencies listened too carefully to the special pleadings of the banks to one in which the State identifies the national interest entirely with that of those same banks. Fianna Fail has moved on from Charlie Haughey’s motto of l’etat, c’est moi. Its new motto is l’etat, c’est les banques.
Every single aspect of State policy, every red cent of available cash and of discretionary borrowing, is shaped by a demented, obsessive drive to save banks, at least two of which are beyond saving.
And we, alas, are going along with this. We are allowing the fatal follies of 10 years ago, when we shrugged our shoulders at the revelation of the incestuous union between Fianna Fail and the banks, not merely to be repeated but to be vastly amplified. By the end of this month, when the first of the junk properties are handed over to Nama, it will be a done deal.
But we are too scared, too stunned, too lost to shout stop.