THE GOVERNMENT has been provoked finally into taking some action over the increasingly untenable stewardship of Irish Nationwide by Michael Fingleton. But instead of demanding that he step down straight away, Minister for Finance Brian Lenihan has asked the two public interest directors he appointed to the Nationwide to “convey” his view to their fellow directors that the board and management team must be “reviewed”. He will “invite” them to “brief” him on their views next week.
The quaint language and elliptical phrasing of yesterday’s statement from the Minister is entirely in keeping with the inexplicable deference shown by him and the Government to the banks and their management in the six months since the State undertook on behalf of the taxpayer to guarantee their obligations.
None of the banks have shown much gratitude but Irish Nationwide and its chief executive have thumbed their noses at the Government almost from the moment that the taxpayer stepped in to rescue the organisation.Within days, it was hawking the taxpayer guarantee in an effort to drum up deposits in the UK while a few weeks later Mr Fingleton was paying himself a €1 million bonus.
As with the chief executives of all the other banks, Mr Fingleton’s position was untenable from the moment he went cap in hand to Government last September. The irresponsible lending engaged in by the banks, which has brought the sector to its knees, was more than enough justification to seek their removal. That Irish Nationwide – a mutual society set up to help people buy homes – should have become a significant lender to property developers and investors only further undermines Mr Fingleton’s position.
But Mr Fingleton must also be held accountable for the facilitation by Irish Nationwide of the concealment by Sean FitzPatrick of loans from Anglo Irish Bank. Responsibility for Irish Nationwide’s involvement in this affair rests firmly with Mr Fingleton as it has become clear that he ran the society – which is owned and nominally controlled by its members – as his personal fiefdom.
In latter years the society has functioned without a chief operating officer, a chief financial officer and a chief risk officer: a situation of no little, if somewhat belated concern, to the regulator. But despite all this – and the recent resignation of the society’s chairman Michael Walsh with a call for change – Mr Fingleton hangs on grimly. He is determined, it seems, to dictate the manner and timing of his departure. It emerged in recent days that Mr Fingleton has organised a €27.6 million pension for himself and was trying in recent weeks to engineer the appointment of his successor. He was only inadvertently thwarted by the proposed limit on bank executive pay.
The obsequious approach of the Government toward Mr Fingleton is extraordinary and inexplicable when measured against the yardstick of his own behaviour. He should go without further delay.