Can we get to grips with our financial past? And if we do will it help us deal with the present? Does knowledge help or just make us more annoyed? As we go back to Ansbacher and on to the banking inquiry, what will be the impact on the national debate?
After the crisis large numbers of voters are caught up in a fury that the political system is only coming to recognise.
As we learn more about what happened, annoyance has seemed to harden despite signs of a recovering economy.
The inquiry into the bank crisis, which is about to swing into life with the first public hearing in mid-December, has the potential to deepen our knowledge of the banking crash. It is important to understand what the inquiry can – and can’t – do.
It is an exercise in trying to tell a story. It is about examining incompetence, not searching for a “smoking gun”, although who knows if a few such weapons might yet be found.
It is also about hearing the story from the viewpoint of the bankers, regulators and politicians at the centre of affairs, looking at their answers and making findings of fact.
It is not about sanctioning people or searching for anything criminal.
If chairman Ciarán Lynch can marshall his troops – and if the Government can hold together long enough – the inquiry could, like the Dirt hearings of the early 1990s, make a mark.
The reports which have been published have given a high-level account of the crisis, but we know very little of the detail of what happened in the bank boardrooms and between the banks and regulators. We have read the movie plot but we have never seen how the scenes come together.
The inquiry will surely confirm one thing. It is the close-knit nature of the banking, regulatory and political community which fought under the banner of the “green jersey agenda”, only to see it overwhelmed.
Of course many walked away with little or no sanction and a nice pension. Meanwhile, the accountants and advisers who did not spot anything wrong have been happily re-engaged, at high fees, to work on bank clean-ups and advice to Nama or IBRC or whoever.
Many did pay a price – to their reputation, to their pockets if they were bank shareholders or by losing their seats if they were a Fianna Fáil TD.
But the bank boardrooms took way too long to clear out, and the inquiries too long to swing into action.
Some big questions remain to be answered. We await an explanation of how it took so long to work out that the banks were bust, as opposed to just finding it hard to raise cash. Or was it that we weren’t told? This key gap in knowledge, both before and after the guarantee, is surely fertile ground for the inquiry.
Final curtain
The bank collapse was the final curtain for an old bank management and regulatory regime which had already brought us many joys over the years. Remarkably, 17 years after the Ansbacher accounts were first uncovered, a new generation is now getting a lesson on how old-style Ireland operated as the story of the accounts comes back into the news.
Here was an extraordinary tax scam, run over 20 years from the early 1970s, in which more than 200 wealthy Irish people had money offshore in the Cayman Islands but could access it via Guinness & Mahon bank in Dublin.
The High Court inspector’s report on the scandal showed that the Central Bank saw the money going out via the Dublin bank but failed to “test, appraise and gather the information available to it”. Sounds familiar?
Around €113 million in tax was collected from 138 Ansbacher account holders, with €250 million collected when two spin-off inquiries into offshore trusts were counted in. No criminal prosecutions were ever taken due, we are told, to a 10-year statute of limitations and the impossibility of getting documentary evidence from the Cayman Islands. And the State helped by allowing 20 account holders to get off via the 1992 tax amnesty.
Whatever happens about the fresh Ansbacher allegations made by civil servant Gerard Ryan, for many Ansbacher is just further proof that, as US businesswoman Leona Helmsley famously said, “only the little people pay tax”. And that, in the main, tax evaders never go to jail.
Ansbacher did exist in a different era. It was a time of endemic tax evasion when thousands of people paid no Dirt tax thanks to their friendly banker putting a foreign address on a bank account.
Now, with taxes high again, we face a different issue, with the threat of a boycott on water charges and the latest Irish Times/Ipsos MRBI opinion poll showing less than half are committed to paying.
Consent
As Revenue chairwoman Josephine Feehily has said, taxes are, at a basic level, based on consent from the people. But this consent is being tested and the people’s faith in the old-style political system has been severely hit.
The feeling that this old cronyism perpetuates – from Ansbacher, through the banking crisis to the way the country is run today – is corrosive.
Whether the rising economy, the work of the bank inquiry in trying to finally explain what happened and whatever response the Government comes up with next will gradually lower the political temperature is impossible to call.
For the moment the public mood is to shoot first and ask questions later.