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  • Dark forces in the departure lounge: a seven-point guide to resignation

    July 22, 2011 @ 8:30 am | by Laura Slattery

    With institutional corruption in the British media / police / parliament becoming increasingly difficult to veil in shabby apologia, the personnel involved are falling over each other to fall on their sword – well it’s better than falling into custody. Rebekah Brooks, Les Hinton, Sir Paul Stephenson, John Yates… all of them have clocked out with varying degrees of haste, style and dignity. But getting your resignation right is about more than securing a golden goodbye sealed with a loving confidentiality clause.

    You can resign to spend more time with your family, like a 1990s Tory minister, or to spend less time with your family, like David Miliband. You can be the first out of a revolving door, like Siobhán Donaghy, the first popstar to claim the title “ex-Sugababe”. You can cite principles, like crisp salesman Gary Lineker, who quit his column at the Mail on Sunday after it secretly recorded the head of the FA – only to sign up for the, er, News of the World instead.

    You can declare that there are “dark forces” at work, like one of 2011′s leading sexists, the ex-Sky Sports presenter Richard Keys. Or you can attempt a temporary blaze of glory like Steven Slater, the Jet Blue air steward who upon landing announced his resignation via the plane intercom, grabbed a couple of beers from the trolley and activated the emergency inflatable slide – only to later change his mind about wanting to quit.

    For those who have the opportunity to figure out the best way to shuffle off the official payroll, there’s a menu of eclectic exit strategies to choose from:

    1. A distraction, not a disgrace.

    Classic PR manoeuvre: Attribute your resignation not to your alleged mistake/offence, but to the public outcry about that mistake/offence, then follow this up with a bold claim to selflessness. In a spot of medal-winning rationale, Met commissioner Stephenson felt it best to go now rather than get stuck into the security preparation for the London 2012 Olympics with a Murdoch-shaped cloud hanging over him – that just wouldn’t be fair to Londoners. Similarly, Anthony Weiner, the former US Representative obliged to resign after sending what we will politely call a graphic tweet, regretted that “the distraction” had made it impossible to continue “to fight for the middle class and those struggling to make it”. He was abandoning the cause, he said, “so my colleagues can get back to work”.

    2. Stylistic flourish 101

    While the Twitter monster has doubtless not yet claimed its last scalp from office, a tweet can also be the medium by which you announce your sacking departure. Jonathan Schwartz, the chief executive of Sun Microsystems edged out last year when Oracle bought Sun, decided to merge social media platform with historic cultural artform when he tweeted his resignation with a haiku. “Today’s my last day at Sun. I’ll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/CEO no more.” The poetry must have sapped his inspiration, however, as @openjonathan hasn’t tweeted in quite some time.

    3. Stylistic flourish (Honours)

    It’s always a good idea if you can combine your resignation letter with a de facto application for your next career. This, essentially, is what ex-Daily Star reporter Richard Peppiatt did when he decided he’d had enough of reporting fantasy as news. “I see a cascade of shit pirouetting from your penthouse office, caking each layer of management, splattering all in between,” he wrote to proprietor Richard Desmond. Nice. If you’re a man who wants to write for a living, rather than spend your days impersonating Muslim women for the sake of an inflammatory headline, it’s a smart move to make sure everyone knows you can master such basics as a) rational argument, b) sentence rhythm, c) dry, cutting humour and d) the personal touch. Peppiatt’s letter was published by more than one “quality” newspaper and he is now found frequenting television studios providing an insider’s commentary on all things dodgily tabloid – thanks to News International, he is a pundit much in demand.

    Former News International chief executive Rebekah Brooks appears before a parliamentary committee on phone hacking on Tuesday. But was it her tardy resignation that did the most PR damage? Photo: REUTERS/Parbul TV

    4. Scorched earth policy

    Sarcasm and contempt are cheap if you’re so rich you never have to pretend to work again. Hedge fund trader Andrew Lahde made an 866 per cent return in 2007 by betting that the US subprime market would collapse. His farewell open letter on quitting the industry in 2008 was withering about “the low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA”. They were “there for the taking”, he said. “These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behaviour… only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.”

    5. Exit, pursued by Ant and Dec

    With so many household villains seeking opportunities for redemption, the contestant wishlist of the producers of I’m a Celebrity, Get Me Out of Here must be getting longer by the day – and if you think it’s unlikely that, say, an ex-head of the Metropolitan police would venture into the jungle in order to be dowsed in kangaroo saliva, then consider that former deputy assistant commissioner of the Met, Brian Paddick, did almost exactly that three years ago. Paddick, whose resignation from the Met falls into the “jumped after being pushed” category, survived the Queensland cameras with minimum humiliation and was last seen making a return to the more serious endeavour of being a London mayoral candidate for the Liberal Democrats.

    6. Leverage your experience

    As Bank of Ireland governor, Richard Burrows must have learned a thing or two about toxic industries. So upon leaving the bank in 2009, what better career move than to take up residency as chairman of British American Tobacco? Former Halifax Bank of Scotland chief executive Andy Hornby swapped mortgages for moisturisers when he joined Boots, only to resign from that job less than two years later, saying he needed a break. This week, he was appointed the boss of bookmakers Coral, making him the ultimate casino banker. In a corporate culture where the former head of risk management at Lehman Brothers can get a job as treasurer of the World Bank, it’s hard to sneer whenever someone whose career seems in the toilet talks about “pursuing new opportunities” round the other side of the U-bend. The chances are they will. 

    7. Why not get your life back?

    After the Gulf of Mexico oil spill, BP chief executive Tony Hayward’s entire lexicon, his entire demeanour, seemed like one big long resignation monologue staged to attract maximum levels of transatlantic opprobrium. The man dubbed “Big Oil’s Mr Bean” notoriously declared he would “like his life back” not long after the explosion at the Deepwater Horizon oil rig killed 11 workers. The leak from its rig was still pumping thick black crude oil into the gulf at a rate of up to 60,000 barrels a day when Hayward decided to spend a day watching his yacht compete in an Isle of Wight boat race. His inevitable resignation statement contained a peerless mea non-culpa: “I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.”

  • The National Pensions Reserve Fund: an obituary

    November 30, 2010 @ 12:30 am | by Laura Slattery

    The National Pensions Reserve Fund (NPRF), which has died aged nine from infanticide caused by multiple stab wounds, was born under the premise that it would prepare the Irish State for a pensions “time-bomb” due to explode in the decades ahead as Ireland’s population ages inexorably into an impoverished abyss.

    It was the best of what would prove to be a series of generally good times for its creator, then Minister for Finance Charlie McCreevy, who legislated that at least 1 per cent of gross national product would be committed to its coffers each year, on top of the proceeds from the flotation of the much-loved Eircom. This, he said, would pre-fund a rising public sector and State pension bill from 2025 and beyond. There were to be no drawdowns until that date.

    From its official launch in April 2001, when the fund had £5 billion (€6.35 billion) in good old Irish punts to play with, McCreevy proudly declared that he had “no power to give directions to it or to seek to influence its investment mandate in any way”. The academic Patrick Honohan, who would later become governor of the Central Bank, called it “the most important initiative in economic policy for the past decade”. From its birth, however, there were fears that the fund would flirt with potentially disastrous investments, such as dotcoms, which were fashionable at that time. Indeed, the decision to require the fund’s managers to engage in stock-picking rather than simply acting as a passive “index fund” tracking the whole investment market served to push up costs (while making a lot of market types a lot of money).

    Recommendations by Honohan and others that the fund be precluded by law from holding Irish assets in order to prevent “pressure from promoters for the fund to finance worthy-sounding but unviable projects” were not followed. Critics of the fund’s overseers, the National Treasury Management Agency (NTMA), would later point to potential conflicts of interest. One branch of the NTMA, the National Development Finance Agency, was in the business of advising public-private partnerships (PPPs) on how to secure the lowest-cost financing, while the other branch, the NPRF, was figuring out how to maximise the commercial returns.

    The rationale for the “rainy day” fund was consistently questioned. Economists from across the ideological spectrum wondered why McCreevy was intent on setting aside money for the pension fund while at the same time cutting back on infrastructure spending. Its surplus evaporated, the Government was borrowing in order to both save and spend – an economic strategy described as “unique”. In a 2002 election pledge, the Labour Party advocated using billions from the fund to build schools, hospitals and roads, for which it was accused of not taking public and State pensions seriously. But it lost the election and Ireland’s sovereign wealth fund was instead kept for a higher purpose.

    As far as investment performance was concerned, the fund enjoyed some early luck. The time devoted to the recruitment of fund managers in 2001 meant the initial investment was held safely on deposit during that disastrous year for equities. Entirely coincidentally, once the fund managers got their mitts on the money, the fund’s value began to slip back and it lost €763 million by the end of 2002. The State’s distinct lack of an ethical investment policy also proved controversial – tobacco vendors Philip Morris, Imperial Tobacco and British American Tobacco; cluster bomb makers such as Lockheed Martin, Raytheon and Thales; and Iraq war profiteer Halliburton were among its hottest stock picks.

    In 2003, the NPRF pulled itself back into the black. A year later, the fund value crossed the €10 billion mark, while 2005 was stellar all round as it pocketed returns of almost 20 per cent. By 2006, it was busy getting stuck into the burgeoning bubble in private equity. In July 2006, then Minister for Finance Brian Cowen denied suggestions that the Irish economy was a “headless chicken”, citing the NPRF as one of “the hallmarks of an economy which is prudentially and well managed”. All had changed utterly by 2008, when Minister for Finance Brian Lenihan signalled that he was reviewing payments to the fund due to the State’s mounting deficit. But the fund would not be “raided” to prop up public finances, he pledged. “I don’t succumb to temptations like that.” Michael Somers, the NTMA chief executive at that time, added “future generations will thank us” for the foresight of maintaining “a big kitty”.

    As Ireland’s banks lurched from crisis to crisis, the NPRF’s status as the sole evidence of Irish economic prudence began to look in even greater jeopardy. In March 2009, the Government used emergency legislation to give €3.5 billion each to AIB and Bank of Ireland from the fund in exchange for preference shares. The bank recapitalisation project was in full, cash-devouring swing. In 2010, an additional State investment of €3.7 billion was assigned to AIB, while on November 28th, in a fatal blow, the fund was further drained of “approximately” €10 billion in order to prop up Ireland’s ”black hole” banks. There would be no schools, hospitals and roads, no NPRF-funded stimulus and pretty much no pre-funding of State pensions. The liquidation was set to begin.

    From a total fund of almost €25 billion, just €4.2 billion remained in the “discretionary” part of the pension pot, with no new influx of money on the heavily indebted horizon. The fund’s passing was nevertheless marred by the insistence in official quarters that the monies invested in the banks would one day secure an investment return for the fund and maybe even allow it to fulfil its original purpose. The demographic pensions “time-bomb”, which will see the ratio of workers to pensioners shift from five-to-one to two-to-one by the middle of the century, continues to tick down as before.

    National Pensions Reserve Fund, born April 2001, died November 28th, 2010; survived by a sister, Nama.


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