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Archive for January 29th, 2013

The trial of the counterparty in the Fred Forsey corruption case is set to commence tomorrow in Waterford Circuit Court. In the dock tomorrow is NAMA developer Michael Ryan (60) who is charged with corruptly giving €80,000 to Fine Gael councilor Fred Forsey in 2006 in return for rezoning of land outside Dungarvan, county Waterford – coincidentally the NAMA chairman, Frank Daly’s home town.

Last June 2012, Fred Forsey was jailed for six years after a colourful trial which heard of bribes, pubs, nods and winks, the wrathful wife, the “other woman” , a car and the holidays in Rome. There was nothing complicated about it – a councilor was judged to have received corrupt payments.

The counterparty – the person now accused of making the corrupt payments – in the case tomorrow is Michael Ryan, against whose company, Dauphin 2 Aviation, NAMA took foreclosure action in March 2012 and had receivers appointed. It was also believed that it was NAMA which was behind the sale of foals of Horse of the Year “Sea the Stars” in November 2011, at least one of which was owned by Michael Ryan, who is himself a former Fine Gael councillor and hails from Dungarvan in Waterford and is credited with developing the Al Eile stud farm.

Conor Kane reporting in the Irish Independent this afternoon says that the trial which starts tomorrow is expected to last a week and a half and will be before a jury of 12 who were selected today.

It is the view on here that one of the greatest failures by this Government was the decision in 2012 not to investigate planning practices across the State, particularly during the construction boom of the early to mid-2000s. The trial tomorrow is a reminder of, at the very least, the suspicions of wrong-doing – wrong-doing which was established in the case of the Mahon Tribunal. Do we really think planning shenanigans were limited to parts of Dublin and in the case of Fred Forsey, Dungarvan?

The decision by Labour’s Jan O’Sullivan acting under the auspices of Minister for the Environment, Community and Local Government, Phil Hogan, to shelve the investigations went largely unchallenged. You will rarely see an attack such as the following, which still appears on a Government website, on democratic life in this State

“The furore over planning investigations is a smokescreen created by the unholy alliance of a thoroughly discredited Fianna Fail party and the man mercifully released by the Irish electorate from his “asylum” into the political wilderness – John Gormley. So said Jan O’Sullivan, Minister for Housing & Planning  today (29 March, 2012)  as she  set the record straight on the matter.”

UPDATE: 5th February, 2013. Drama this morning in Waterford when the jury was discharged by the judge who has ordered a new trial which should take place on 9th April 2013 onwards. We don’t know why the trial was halted on day 5 of what was expected to be an 8-day hearing, but this morning the jury was turfed out of the room whilst lawyers for both sides debated some issue or issues which resulted in the judge calling a new trial. Michael has been remanded on continuing bail pending the hearing. There is additional reporting from the Irish Times but we remain none the wiser about the reason or reasons for the judge’s actions.

UPDATE: 9th April, 2013. There was a hearing this morning, and RTE reports that the judge adjourned the matter for hearing from 2nd July 2013 with a hearing estimate of 5-6 days.

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LordGoldsmith

Next Monday, 4th February 2013, in the Court of Appeal in the Royal Courts of Justice in London, the appeal by Paddy McKillen against the curious judgment by the British High Court last August 2012 will commence. There will be a scene-setting blogpost later in the week, but this morning, it has been announced by Paddy Killen’s spokesperson that Lord Goldsmith QC has joined Paddy’s team. Peter Goldsmith served as the UK’s Attorney General between 2002 and 2007 and his engagement indicates the seriousness of the huge stakes in the case, which at its heart is about control of the Maybourne group of luxury London hotels – Claridge’s, the Connaught and the Berkeley – and the battle between the billionaire Barclay twins and the scrappy developer and businessman, Paddy McKillen.

Paddy’s spokesperson this morning also stated that the current representation includes Philip Marshall QC, Richard Hill QC – QC, or “Queens Counsel” is roughly equivalent to our SC or senior counsel – and barrister Gregory Denton-Cox.

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“Sometimes those advices fall short of what they should be and therefore there may not be the courage needed to bring the case more strongly” Fine Gael TD, Peter Mathews speaking in Charleville on 26th January, 2013

YoureInTrouble

On Saturday night last, the Ballyhea/Charleville bank-bailout protesters held an evening event where a number of well-known economists, activists and politicians delivered speeches about the single greatest economic challenge facing the State – dealing with the burden of saving our banks. There speakers were Declan Ganley, Michael Taft, Luke “Ming” Flanagan, Senator Sean Barrett, some pressure groups and the Fine Gael TD for Dublin South, Peter Mathews. You can hear the 100-minute recording of the evening here. The running order is

Declan Ganley 0-7 mins
Peter Mathews 8-25 mins
Luke “Ming” Flanagan 26-38 mins
Michael Taft 39-48 mins
Pressure groups  49-64 mins

People’s Convention
Awaken Ireland
Direct Democracy Ireland
Debt Options
The Enterprise Party

Senator Sean Barrett 65-72 mins
Group discussion and questions & answers 73-100 mins

The Fine Gael deputy’s presence at the event has drawn praise from many quarters, and Deputy Mathews prefaced his comments with a statement that “I want to give 400% to the efforts of the Taoiseach and Minister for Finance” in getting a debt deal, but that Peter would be more forceful.

It is always fascinating to see a politician that is at heart a conservative, advocating, what is dismissed as a radical solution to our debts.

On last night’s Tonight with Vincent Brown (with Sam Smyth in the chair), it was stated from about 25:00 onwards that the Fine Gael chief whip Paul Kehoe has said he “had not been able to confirm if you [Peter Mathews] had attended the meeting but they keep a tenacious argument going [sic] but that they would be speaking [to Peter Mathews], in that threatening tone”

You can listen to Deputy Mathews’s speech here from 8 minutes in for about 17 minutes. No-one will be surprised to hear the Deputy for Dublin South (a) supporting his colleagues in their efforts and (b) demanding more attention-grabbing efforts to secure a debt write-down.

His attendance has been deeply praised by the organizers and attendees on Saturday. Last night on Vincent Browne, the Fianna Fail senator gave his support which could be a bit of a poison chalice but the support from Mick Clifford of the Sunday Times would be more neutrally intentioned.

Deputy Mathews’s attendance might have garnered national headlines, but the other speakers delivered worthwhile speeches, Declan Ganley donned an unashamedly capitalist approach in stating the simple fact that investors in failed enterprises make losses, Luke “Ming” Flanagan the Independent TD from Roscommon roused the room in a  language that deeply resonated with people, Michael Taft the union economist talked about his recent research based on figures supplied by Eurostat, which show that Irish people are shouldering a bank debt which is many magnitudes greater than our partners in Europe, the pressure groups had two minutes apiece and the commonsense spoken was astounding with calls to organize and Awake Ireland referred to their case to have the debt declared odious and non-payable under international law,  and Independent senator Sean Barrett advocated learning from a history of Irish bailouts and provided an overview of the cost and effects of the banking collapse. Worth a listen.

So maybe Paul Kehoe will “give a talking” to Deputy Mathews but the talking might be along the lines of thanking the Deputy. The speakers weren’t insulting the Government, they were shoulder to shoulder with the Government in supporting efforts to deal with the bank debt, but want a more forceful approach that delivers results from negotiations that have been ongoing for at least 18 months. And all Deputy Mathews did, was to bring to a local community, the admirable message that the Government isn’t aloof and that the Government is engaged in dealing with the problem, just it could do with a bit more steel in its rod. Deputy Mathews took some flak from the people present during the Q&A, for sticking by the Government, and in response why he didn’t cross the floor, he responded that he crossed Europe to bring the message to the Bundestag.

The lead organizer of the event on Saturday is Diarmuid O’Flynn, and indeed he is the man behind the 100 marches, the bread-and-water fast, taking the protest to the ECB headquarters in Frankfurt, the appearances on Vincent Browne, the cycle/run/walk/crawl to Leinster House, taking the marches through Munster, Leinster, Connacht and Ulster. He was also on the Claire Byrne show on RTE Radio One on Saturday showing a rare display of anger on traditional media towards the scandal of shoveling billions out the door to bondholders in the banks whilst imposing draconian cuts at home today and into the future. He is by no means alone, with support and leadership from others in Ballyhea and Charleville. But he lost his brother, Jack, in America last week, and is spending this week bringing the body home just a month after the protestors highlighted their cause with the a song and video, poignantly showing the destructive effect of the scourge of emigration stemming from the failure to deal with economic collapse.  Ar dheis De go raibh a anam dilis

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This coming Friday 1st February, 2013, there will be an important meeting in Belfast where it is expected that developers and borrowers generally will congregate to discuss what to do about the mis-selling of interest rate insurance products called swaps. There is a meeting/conference taking place on 1st February 2012 at the Belvoir Golf Club, Belfast (tickets £30). Register at mailto:membership@bully-banks.co.ukmembership@bully-banks.co.uk. See website bully-banks.co.uk.

On this side of the Border, you might have expected Property Industry Ireland or even the Construction Industry Federation to show some initiative and organize a similar meeting here, but to date, zilch. If developers or borrowers are waiting for the Central Bank of Ireland to do anything, they might be in for a long wait, as the evidence points to the Central Bank being petrified of further losses in any of our banks.

Meanwhile there is now a trickle of court cases where borrowers are taking the initiative themselves and suing the banks directly. Two weeks ago, we learned of 10 individual applicants suing First Active/Ulster Bank. This comes after the out of court settlement last summer when Cortina-averse developer David Agar reportedly won a €30m settlement against Ulster Bank. And remember in the UK, they believe the mis-selling of interest rate swaps may cost the banks north of €2bn.

Today, we learn via the Irish Examiner that Komady Limited, a company controlled by the Flynn family and Michael O’Reilly, together owners of the Belgard Retail Park in Tallaght, west Dublin are suing Ulster Bank over the alleged mis-selling of swaps, reported by the Examiner at €54m. The application makes clear that the Belgard Retail Park continues to be operated successfully and is not affected by the application.

The case was initiated in Dublin’s High Court last November 2012 – reference 2012/11888 P – and both applicants are represented by Downes solicitors, the same solicitors representing the applicants in the previous two swap mis-selling cases. Ulster Bank is represented by Arthur Cox. Yesterday, the redoubtable Mr Justice Peter Kelly agreed to transfer the case to the Commercial Court division of the High Court which should lead to a fast-tracked hearing, with the case next set for motions on 20th May 2013.

At the heart of the case is the very nature of interest rate swaps – swaps are explained in some detail here. It appears that in this new case, Ulster Bank was in 2005 and 2006 selling insurance against interest rates exceeding 5%, and as we know, EuroZone interest rates have reduced sharply to a record low of 0.75% as the EZ combats the financial crisis and recession. So, the borrowers don’t get any benefit from the swap. But because interest rates have plummeted, the borrowers are on the hook for tens of millions of additional interest payments, because the nature of a swap is that it pays out if rates exceed a certain level but requires YOU to pay out if rates dip below a certain level.

According to Ann O’Loughlin in the Examiner, the borrowers are claiming Ulster Bank didn’t comply with its obligations under Ireland’s investment regulatory rules, and that the swaps were not in the best interest of the borrowers or explained sufficiently to them and that the bank induced the borrowers to buy the swaps.

UPDATE: 29th January, 2013. The case is also reported by the Irish Times – and if you’re reading this folks, above is an example of “the story of why” – and Independent  – which appears to have pooled its reporting with the Irish Examiner – today. It might be worth noting that with the Agar, the Ryan/Colgan/Monaghan/McDonnell and today’s case relate to nearly €150m of swaps. How long before the Central Ban

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