Francis Donohoe
On Budget Day December 7 Lecturers and students at several third-level colleges staged Budget Day “teach-ins” at campus bank branches in protest at their role in the economic crisis.
Protesters gave short lectures and answered questions about the relationship between banks’ reckless lending during the Celtic Tiger years and the latest Budget austerity measures — including the increase in fees for third-level students.
The actions took place at on-campus banks across Dublin and Leinster, including University College Dublin, Dublin City University,Dublin Institute of Technology, Dun Laoghaire Institute of Art, Design and Technology and St. Patrick’s College, Drumcondra.
“These ‘teach ins’ are intended both to highlight the role of the banks in creating the crisis and to attest that another version of the university is possible,” Colin Coulter, sociology lecturer at NUI Maynooth, said. “We bailed out the banks. We own them. Now let’s use them for something worthwhile for a change.”
The event was organised by the recently formed “All in This Together?” network, a group of activists and academics.
“As the most vicious budget in the history of the State was about to be unveiled, we transformed the banks on campus from places of corruption into places of learning,” Coulter said.
The following members of the St. Patrick’s College Community made statements about the effects that the Budget austerity measures were having on education, and on ordinary people’s lives, while the ‘top dogs,’ who are directly responsible for, or implicated in, the financial crisis, escape unscathed: Audrey Bryan, Philomena Donnelly, Brian Hanley, Peter Melrose, Maeve O’Brien, Andrew O’Shea, and Jones Irwin.
The following narrative was read out at 12:15 p.m. on December 7th at the AIB campus bank at St. Patrick’s College, Drumcondra.
What’s the origin of the current crisis? Well, the Minister of Finance and the Governor of the Central Bank could not be clearer. According to the Memorandum of Understanding between the Irish government and the IMF/EU, the principal cause is a banking system that by the height of the boom was five times larger than the rest of the economy put together.
In the golden days of the Celtic Tiger, AIB was earning €5.4 million in profit every single day. That’s €225 000 an hour. Or €3 750 per second.
Who were the principal beneficiaries of this bonanza? Inevitably those with large shareholdings in the bank. And the senior executives whose business acumen, we were told, had generated such riches in the first place.
In 2006, the year before the first signs of the crisis emerged, the top three executives in AIB received €5.5mn between them in salary and bonuses.
Eugene Sheehy was top dog with €2.4mn, Colm Doherty was struggling along on €1.98mn and John O’Donnell was eking out a living on just over €1mn.
(BoI: Brian Goggin received €2.9mn in 2008; Richard Burrows earned €512 000 in 2008).
While the major shareholders and chief executives were making fortunes, what was happening to the hundreds of thousands of ordinary Irish citizens that AIB likes to call ‘valued customers’? Like most of the other financial institutions, AIB was in fact involved in a series of scams aimed at people with modest deposits in the bank. That AIB would engage in wholesale fraud comes as little surprise, of course. This is a bank, after all, that before the boom facilitated some 80 000 customers in pretending to be non residents of the state in order to avoid DIRT tax (Deposit Interest Retention Tax). That’s 400 customers in every single AIB branch.
That the bank would be involved in defrauding the Revenue is one thing, but to learn that AIB was involved in wholesale fraud directed at its own customers is something of an entirely different order. In September 2006, the bank announced that it had set aside some €65mn to compensate customers that it had deliberately overcharged. To date, not a single employee of AIB has been prosecuted for this massive fraud.
The onset of the financial crisis has occasioned the near collapse of all of the high street banks. Profits have disappeared, share prices have collapsed by more than 90% and evidence has emerged of massive lines of credit extended to property developers who will never be required to clear their debts. And they will never be required to because we are expected to pick up the tab for the crisis created by the banks and property tycoons. To date, the Irish people have bailed out the banks to the tune of €50 billion. And the IMF/EU deal means that another €35 billion will in all probability disappear down the black hole of the Irish banking system.
Most media coverage has fixated upon the enormous amount of our cash swallowed up by the zombie institution that is Anglo Irish Bank. This has tended to distract attention from the fact that AIB has become a major recipient of corporate welfare. To date, the bank has received about AIB €15.6bn of our money, and is now almost entirely owned (96%) by the state. (Bank of Ireland has received €5.7bn, and is 70% owned by the state).
And of what of the high flyers within the banks whose fetish for risk got us into this mess in the first place? During the boom years we were told that the performance of the banks meant that the seven figure salaries enjoyed by ‘the talent’ at the top were entirely justified. Following that logic, we might reasonably assume that the financial gurus of the Celtic Tiger years are facing into a future of penury and unemployment. Is that in fact the case? Not on your life…
In AIB, Eugene Sheehy walked away with a settlement worth about €529 00 a year. As for Colm Doherty, he has seen his annual package halved to a mere €833 000. So not everybody is having a bad recession.
(In BoI, Brian Goggin retired in 2009 on €650 000 a year; Richard Burrows moved to a job in British America Tobacco where he gets £525 000 (€625 000) a year for two days’ work per week).
Looking at the banks, you get a sense of what it is that people mean when they talk about socialism for the rich. When the good times roll, they get to keep the profits. And when the boom turns to bust, we get to bail them out…
