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  • irishtimes.com - Posted: February 22, 2011 @ 7:12 pm

    Shane Ross, Alan Shatter, Dublin South and the banks

    Harry McGee

    There will be few attacks on a constituency rival as ferocious as that of Alan Shatter on Shane Ross this week. Of course, Ross is standing in Shatter’s constituency of Dublin South.  There is one view there that Ross poses a direct threat to Shatter’s seat and that the third Fine Gaeler Peter Matthews may have edged ahead and may claim the second of Fine Gael’s seat.

    That explains the context of the statement.

    But what is claimed is interesting. It would take a very comprehensive trawl through the archives going back to 2000 to back up the contention. I do know that Ross almost made David Drumm the young businessman of the year in 2007 after Anglo posted record profits but he was ruled out on age grounds (he was over 40).  In fairness, Ross did say in February of that year that one question to be asked at the bank’s AGM was what would the bank do if commerical property prices fell by 20 per cent.  That was prescient. Unfortunately, nobody else asked it.

    That said, the claims that Shatter makes are more serious: to wit that Ross championed some of the bankers, including Seanie Fitz, who later fell into disgrace.

    I have reproduced his press statement below, with some further observations (from me) further down.

    Shane Ross continues to mislead electorate – Shatter

    It is unfortunate that Senator Shane Ross continues to make misleading and exaggerated claims while campaigning in Dublin South, Fine Gael Spokesperson on Justice and General Election Candidate in Dublin South Alan Shatter stated today (Monday).

    His most recent election leaflet claims that that he has spent ‘15 years in the Seanad and at annual general meetings challenging the banks’. He also states that that he has been an advocate for small shareholders in the face of greed and recklessness in the boardroom.

    “At a time when political integrity should be central to politics Shane Ross shamelessly continues to mislead the electorate and continues to avoid answering questions that require a response.

    “Senator Shane Ross has not yet provided an explanation or an apology as to why, in the period from 2000 to 2007, he was a cheerleader for Sean Fitzpatrick and Michael Fingleton, contending that all bankers should be more like them.   Throughout that period, he criticised Bank of Ireland and AIB for their failure to adopt the catastrophic banking practices of Anglo Irish Bank and Irish Nationwide, and used his position as a journalist to put public pressure on those banks to follow the disastrous banking roadmap constructed by Sean Fitzpatrick and Michael Fingleton.

    “He has also not apologised to the small shareholders whose personal financial security has been destroyed by the banking collapse which resulted from the banks obsessively pursuing short term profit by the application of reckless banking practices Shane encouraged and applauded.

    “I passionately believe that rogue bankers must be made accountable for their actions.  Shane says he is calling for accountability, however there is no credibility in this when,  in the period leading into the banking crisis his judgement failures were no different to the judgement failures of the Fianna Fail led Governments of 2000 to 2007, of whose conduct he now regularly castigates.

    “It is extraordinary that Senator Shane Ross has avoided to such serious questions throughout the campaign.  For someone claiming to seek greater transparency and accountability in politics he has made a very bad start.”

    So that’s Shatter’s attack.

    How much evidence is there to back up this claim?  I did a quick trawl of the archives today. Ross did indeed praise Fingleton and his stewartship of INBS on several occasions,  as is instanced here from 2003.

    “Fingleton’s stewardship can be criticised.
    Sure, he needs more heavyweights on the board. Sure, he has been overzealous in his pursuit of defaulters.
    Sure, he earns an awful lot of money (€835,000). Sure he has been less than transparent.
    But Fingleton, for all his faults, has delivered the only thing that matters in business: profit. “

    He also has slightly obtuse praise for Seanie Fitzpatrick at the time when Richard Burroughs was appointed chairman of Bank of Ireland. Seanie, said Ross, would be far too dynamic for the role.

    By the way, I really like Brian Lucey as a commentator. He is very literate, obviously likes film and literature, and is very good at turning a phrase.And there’s a lot of intellectual ballast there too.

    I have made as many mistakes as the next hack (and I have to admit I was oblivious to the ferocity of the hurricane that was welling up in 2007). But Lucey too has made a couple of spectacularly wrong calls.  He wrote in favour of subprime in the middle of the last decade.

    I came across this when trying to find references to Shane Ross in the Sunday Indo. It’s Brian writing about his favourite shares. I hope that he disposed of them before the edifice came crumbling down.

    “On the one hand . . . my favourite share is Anglo Irish Bank. I bought
    it a number of years ago and have never regretted the purchase.
    Smaller capitalisation shares generally outperform larger. Of course,
    this is because they are generally more risky, but in the case of
    companies such as Anglo, this is also because they are perceived
    internationally as small shares and thus get dragged along with the
    small-cap high-return herd, and because their growth prospects are
    sofantastic.

    Small shares have massive upside; the problem is that their size is
    such that they have a limited potential for downside, being capable of
    going into death spirals very easily (Crean anyone? Anybody for the
    last of the Creans? No, thought not . . . ).

    However, the potential for upside growth is only that – potential. To
    be actualised it requires a talented andvisionary management team. In
    this, Anglo has been fortunate indeed. One of the attractions to me
    when I bought it was the known abilities of the team, and the fact
    that in general, financial stocks tend to do relatively well
    regardless of the economic cycle. So, a small stock, undervalued I
    felt, with talented management, in a defensive sector, aiming for
    growth . . . inshort, ideal.”

    Oops.

    By the way, for what it’s worth, I believe both Shatter and Ross will be elected.

    


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