Dublin Opinion

While clearing out the papers at home over the weekend I found myself looking at the Irish Times’ letters page from the previous Saturday and noticed a couple of familiar enough names under the topic heading Controversy over nama that I hadn’t noticed before. One was by Graham Stull, who comments regularly on Irish Economy, and who I have published on Irish Left Review, and another by Sean O’Riain. I’m not sure if the latter is Professor Sean O’Riain of NUI, Maynooth, but it doesn’t matter, because the letter is worth drawing attention to even if the author is in fact a postman.
What prompted me to mention them now, though, was a comment over on Cedar Lounge, by EamonnCork:

“When the Greens talk about stiff penalties for trying to influence NAMA they seem blissfully unaware of the high bar which is set in this country for proof of corruption.”

Which I thought was a good point. Here’s Sean O’Riain’s letter which suggests that the penalties won’t be that stiff at all:

“A chara, – Section 217 of the National Asset Management Agency Bill 2009 (if passed into law) will make it an offence to communicate with Nama “with the intention of influencing the making of a decision in relation to the performance of the functions of Nama”.

Subsection 217 (7) states that a person who commits an offence under Section 217 “is liable on summary conviction to a fine not exceeding €1,000 or imprisonment for a term not exceeding six months or both”.

Summary conviction? A fine less than €1,000? Six months?

A summary crime is a minor crime tried in the District Court (the Law Reform Commission in its Consultation Paper on Penalties for Minor Offences, 2002, states “as a general rule, summary offences are also minor offences”).

So interfering, or lobbying Nama will be minor offence. This gets more and more ridiculous. Is the Green Party truly expecting a pat on the back for this? – Is mise,

SEÁN Ó RIAIN,
Gort an tSeagail,
Achadh an Iúir,
Contae an Chabháin.”

Currently the section mentioned by Sean O’Riain, who could be either a professor or a postman, is not part of the proposed Bill as published in July, but it is in The Explanatory Memorandum, which were provided to coincide with that Green’s get together. At the top of the Memo it states the it does ‘not form part of the Bill and does not purport to be a legal interpretation’. It’s just a note of what might go into the bill at one of the later stages.

That is, unless there is a version of the proposed Bill knocking around that I haven’t been able to find.
This is taken from PART 13, Miscellaneous on page 30 of the memorandum:

“Section 217 — Offence of lobbying NAMA, etc. provides that, subject to certain exceptions, a person who communicates with, amongst others, NAMA and a NAMA group entity, with the intention of influencing the making of a decision in relation to the performance of the functions of NAMA or the NAMA group entity, commits an offence. This section also provides for related matters.”

In the memorandum there is no reference to Summary convictions. However, in the bill there is a section (171) which talks about offences:

“Offences:
7.—(1) A person on whom an obligation is imposed under section 171(2) and who intentionally does not comply with the obligation commits an offence.

(2) A credit institution that commits an offence under section 171(2) is liable—

(a) on summary conviction, to a fine not exceeding €5,000, or

(b) on conviction on indictment, to a fine not exceeding €1,000,000.

(3) A person other than a person referred to in subsection (2) who commits an offence under section 171(2) is liable—
(a) on summary conviction, to a fine not exceeding €5,000 or imprisonment for a term not exceeding 12 months or both, or

(b) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.

This is all I can find that corresponds to what Sean O’Riain has described. In the version of the Bill I was able to find, 171(2) only relates to the disclosure of confidential information by those who may be working for NAMA or NTMA. This doesn’t mean that things do not correspond to how they are described in Sean O’Riain’s letter. So let’s presume he is correct and that the ‘offence’ of lobbying is one that would result in a summary conviction only.

Going back to EamonnCork’s point about “the high bar which is set in this country for proof of corruption”. The tribunals themselves are an indication of how hard it is to get a clear picture of who paid what to whom, to get what deal etc. Considering the lack of transparency that surrounds the running of NAMA, this deterrent that is the ‘offence of lobbying’ is non-existent.

The other letter, as I mentioned, was from Graham Stull. It also complains about the weak changes that the Greens are demanding:

Madam, – It would be a mistake for the Green Party membership to accept the cosmetic changes made to the Nama Bill, for which their parliamentary party is claiming credit.

In reality, nothing in the legislation has been changed. The Bill remains a mechanism to force the Irish taxpayer to overpay for toxic loans, because the fundamental part of the legislation, the valuation methodology, is the same.

In effect, this dubious methodology allows the Minister to control the price paid for assets, with only the vague concept of “long- term economic value” as a guideline to guard against the risk of overpayment. But the term is sufficiently open to interpretation as to allow the Minister to justify virtually any level of overpayment. And given that he has stated unequivocally that he will keep the banks out of public hands, this means he will push to keep the price high.

While a nod to risk-sharing has certainly been made, it seems almost certain that this will not be sufficient to protect the taxpayer, because of the vague nature of the payment system and the lack of transparency written into the Bill.

Irish people should insist on nothing less than nationalisation, as this is the only clear way to protect against asset overpayment. Anything less will end up being a bailout. – Yours, etc,

GRAHAM STULL,
Chaussée de St Job,
Brussels, Belgium

He also, and I’m guessing it’s the same Graham Stull, tells an interesting story in a recent thread on Irish Economy:

In 2006, I attended an interview for a job as an economist with a leading monetary policy institution in Ireland (that shall remain nameless!) in which I was asked by the board what I thought the main challenges to the Irish economy would be in the years to come.

“The collapse in the housing market,” I noted, quoting the % of the labour force employed in construction as being twice the EU average.

“But what about demographic factors driving demand?” one of the interviewers insisted.

“They are endogenous to supply. It’s all a dangerous house of cards.”

He didn’t seem to like this answer, and so asked me what else I thought was a challenge for the Irish economy, going forward (sic.).

I replied, “that’s it, really.”

He really didn’t like that, so I clarified.

“Other problems are not worth devoting policy attention to, given the scale of the property market problem in this country.”

Needless to say, I didn’t get that job. I bet he still has his.

I mention all this because just as Graham was right about the significance of the collapse of the housing market he is right about NAMA. Also, the anecdote of the deluded board members corresponds nicely with the comments of Robbie Kelleher.

Incidentally, Robbie Kelleher was on Vincent Browne two weeks ago defending NAMA.