Michael Fingleton

I’ve been stewing over Mr Fingleton for some time now, and the page one stories on the Irish Times and the Sunday Independent last week only served to heighten my curiosity.

There are, I think, a number of questions that need to be asked:

1. Why did Mr Fingleton get the €1m bonus, and then give it back?
2. Why did Mr Fingleton get a pension of close to €30m?
3. Why were the media obsessed with the former and not the latter sum?
4. Why did Mr Fingleton deserve a substantially larger pension than RBS chief Fred Goodwin (RBS was once the largest company in the world by asset value, unlike INBS)
5. Why has Mr Fingleton received none of the backlash as a result? Unlike AIG executives in the US, or Goodwin himself?
6. Why did the Sunday Independent run a page one story about what it said was essentially a non-story?
7. Why did the Irish Times run the story in apparent isolation from other interesting elements of the story?

Curious indeed. First things first though, that Irish Times story from last week. It raises more questions than it answers. Emphasis mine:

IRISH NATIONWIDE chief executive Michael Fingleton personally authorised a fast-tracked loan of €40,000 from the building society last year to Celia Larkin, former partner of ex-taoiseach Bertie Ahern. The payment was connected to transactions investigated by the Mahon tribunal as part of its inquiry into Mr Ahern’s personal finances.

Mr Fingleton approved a loan of €40,000 to Ms Larkin on March 4th, 2008 without the standard criteria being fulfilled initially on the loan application. Ms Larkin did not provide documents normally required by customers borrowing such loans when she applied for the money.

The loan was provided to Ms Larkin without showing proof of her income, identification, current account statements or details of other loans she had drawn down. Mr Fingleton personally signed off on the loan and no documentation was received by the lender when Ms Larkin’s loan was approved.

Last year the Mahon tribunal conducted inquiries into an account with the Irish Permanent Building Society in Drumcondra called the B/T account from which Ms Larkin received €30,000 in March 1993, and which was used for the purchase of a house in Phibsborough.

The tribunal was told the account held political contributions donated to Mr Ahern’s political operation in the Dublin Central constituency.

Mr Ahern’s disclosure in the witness box in February 2008, when he was still taoiseach, that money from the B/T account had gone to his former partner, caused a huge political controversy. The tribunal was subsequently told by Ms Larkin that she had repaid the money in early February, using a €40,000 loan she had received from Mr Ahern.

Ms Larkin left a signed blank cheque into Mr Ahern’s constituency office in St Luke’s. He later supplied her with a figure for the repayment of the money with interest, and a secretary in St Luke’s filled in the cheque, completing the transaction. A spokesman for Irish Nationwide said that it did not discuss the affairs of customers.

Interesting, isn’t it? But why did Ms Larkin turn to Mr Fingleton? Why did he personally see to it? Why did Ahern give her the money first? Why did Larkin leave a blank cheque at St Luke’s? The Tribunal too was curious about some of these questions. In June last year it put some of these questions to Ms Larkin.

Now, some history.

Up until 1989, building societies in Ireland were regulated by the Registrar of Friendly Building Societies. Regulation was then handed over to the Central Bank. This was amid allegations that building societies were highly secretive and kept information from their members.

Despite the Central Bank taking over regulation, building societies were not without their scandals, some of which will look familiar to us now.

In March 1993, Dr Edmund Farrell, executive chairman at Irish Permanent Building Society was suspended over an investigation into a property deal. The deal concerned Mr Farrell’s £600,000 home in Foxrock. Essentially it seemed that the house had been transferred to the ownership of the society, which then paid off the mortgage. He then leased the house back from the society from 1987 to 1991. The investigation centred on money spent on the house by the society, including the installation of security cameras.

I digress. Back to Mr Fingleton.

The Mespil loan

Under the Building Societies Act 1989, loans made to directors, the interests of directors, either directly or indirectly in any contracts or proposed contracts with the society, must be registered and made available to society members to inspect.

Also under Section 56 of the Act, a society director may receive a property loan of up to £50,000 at preferential rates, but only where it is for their main residence. Any other loan would have to be at commercial rates. In early 1993 this register was reported and no loans to Mr Fingleton were reported.

Here’s where it starts to get interesting, but we have some way to go yet, so stay with me.

The current editor of the Irish Times, Geraldine Kennedy, then a reporter, wrote a story in May 1993 that Michael Fingleton got a mortgage from Irish Nationwide, the society he was managing director of, towards the purchase of a 1-bedroom flat in the Mespil Estate. In all, Mr Fingleton bought four apartments. with one mortgaged from the society.

But Mr Fingleton was not the only one to buy apartments in the estate, and not the only one to get a mortgage from Irish Nationwide. Solicitor Andrew O’Rourke bought two apartments in trust for two daughters of then Fianna Fail taoiseach Albert Reynolds, Emer and Leonie.

100% mortgages were advances to 51 customers to buy 93 apartments. These included the then Attorney General Harry Whelehan, Marian Finucane, AIB’s Anthony Spollen, former publican Dessie Hynes and the then Comptroller and Auditor General Patrick McDonnell.

Of course Mr Fingleton had not declared the purchased of the apartment, as he was obliged to do under the Building Societies Act. He later corrected the record. The following year, further details emerged. Central Bank filings in 1994 showed that seven loans totalling £342,000 were made to people and a company connected with society chairman Peter O’Connor. Five loans totalling £163,000 were made to people connected to director John Murphy.

Four loans with a total value of £125,500 were made to people connected to Mr Fingleton, including the £110,000 loan to himself. Three loans were advanced to Peter O’Connor, son of the chairman. Mr Fingleton’s brother also took out loans.

As long ago as 1994, Mr Fingleton’s salary, then an enormous £249,000 a year, was questioned by shareholders.

In 1999, Mr Fingleton was threatened with imprisonment by a High Court judge over the employment and treatment of a branch manager in Cavan town.

All very interesting. But how does it relate back to our current questions?

Fast forward to 2000, and the Flood Tribunal is in full swing. On April 19, 2000, Frank Dunlop stopped stonewalling and after reflecting overnight, said he had participated in wholescale corruption. I myself was at the Flood Tribunal that day.

Someone else was giving evidence that day though, Michael Fingleton.

The “Starry” O’Brien case

The weekend after Dunlop admitted his involvement, The Sunday Independent and the Sunday Business Post ran with a front page story detailing an alleged £50,000 payment, made to two senior Fianna Fail figures, one of them a Cabinet member. As it turned out this was a story put forward by Denis “Starry” O’Brien, and it later turned out to be false.

Mr O’Brien told the Sunday Business Post he delivered two cheques for £50,000 each to Fianna Fail politicians in 1989. He said he was given a cheque for £100,000 by Owen O’Callaghan which he lodged to a Cork branch of the Irish Nationwide Building Society.

He then withdrew two cheques for £50,000, which he said were passed on to the politicians. One was allegedly handed over to Bertie Ahern in the carpark of the Burlington Hotel in Dublin and the other at the Silver Springs Hotel in Cork. This money was allegedly given in relation to planning at Quarryvale.

Mr Ahern initiated legal action for defamation against Mr O’Brien. On July 10, 2001, Mr Ahern was awarded the maximum £30,000 damages.

But at the end of June, before the case started, Mr O’Brien instructed his lawyers to withdraw his entire defence. Mr O’Brien told The Irish Times that he had decided to “walk away from the case”. He said: “There is nothing in it for me. I was sucked into this. And I am now unsucking myself. I never mentioned Mr Ahern by name.”

An affidavit by Mr Michael Fingleton given to the Flood Tribunal stated that INBS documents produced by Mr O’Brien had been forgeries.

Mr Connolly resigned from the newspaper as a results of its apology over the affair, and Tom Gilmartin, who was totally unrelated to the story, later said he believed the entire affair was a “setup”. Indeed, Mr O’Brien only made the payment of the award to Mr Ahern in 2006, just prior to the deadline, and prompted by media queries. Mr Connolly apparently believes the entire Starry saga to have been a ruse, fabricated by Starry to create allegations similar to the ones Gilmartin was making in relation to bribes given to Ahern.

Fingleton and Flood

In February 2000, the Flood Tribunal wrote to Michael Fingleton seeking all documents and records relating to deposits and withdrawals made at the Patrick Street branch of Irish Nationwide in Cork between June 1, 1989 and September 30, 1989. It also wanted similar records for March 15, 1987 to April 15, 1989. It appeared to be related to the “Starry” O’Brien allegation.

Mr Fingleton was summoned to appear before the tribunal, after undertaking to produce the specific documentation. He was called after the society failed to produce it. He said a search of the society had failed to produce the details of lodgments and withdrawals, as well as cheque journals and other journals for the period between March 15, 1987 and September 30, 1989.

On April 19, 2000, he again appeared before the tribunal, where SC for the tribunal Patrick Hanratty told Mr Fingleton he was in breach of the tribunal’s order. Justice Flood complained that it had taken the society too long to come to that point and did it was not appropriate.

Mr Fingleton said a flood at the Grafton Street branch, where he said some INBS documents were centrally stored had led to the loss of documents.

At one stage, Mr Fingleton said documents had been placed in central storage. Asked where that was, he replied: “Everywhere”. Justice Flood accused him of having a “cavalier” attitude.

More soon.

12 thoughts on “Michael Fingleton”

  1. Hi Gav,thought crossed my mind that you are very lucky your not drowning in
    the above mentioned peoples gravy,as in jackie healy rae.Keep up the good work as i know it is a thankless job.slan

  2. Good to see someone digging into this and making the comparison with Fred Goodwin.Unpublished letter to the Irish Times below-they rang to check address and it was “being considered for publication” but never appeared .Their analysis on Friday was notable for missing out all of Fingleton’s previous form.

    “Sir Fred Goodwin, ex Head of Royal Bank of Scotland, largest bank in the world, profits of £10 billion in 2007, gets a pension of over £17 million , a fact that has caused outrage in the UK. Mr Fingleton, Head of Irish Nationwide Building Society, a banking minnow in world terms, profits of 391 million euro in 2007, gets a pension of 27.6 million euro.

    Ireland used to stand for something. Now it seems it stands for anything”.

  3. Last week, Vincent Browne wrote about Fingleton’s appearance at the Flood tribunal. Eoghan Harris criticised Browne’s article and claimed that the only reason Fingleton could not produce the documents that the tribunal sought was that they were forgeries and did not exist. However, from reading your post here, it seems that Harris is mistaken because Fingleton was actually asked to provide ALL documents and records of transactions and lodgments for those time periods, and not just the details of a specific account which, as it later emerged, did not exist. What do you think, Gavin?

  4. On the face of it, Harris appears to be dead wrong. The forgeries were a separate issue, as these were the ones produced I think by Starry, not by the bank itself.

  5. Yes, it was Starry O’Brien, not the bank, that produced the forged documents. But Harris’s point was that Fingleton’s difficulty in cooperating fully with the tribunal was that he was being asked to provide details of Starry’s INBS account but that this account was fake and did not exist. I think Harris is wrong because it appears that Fingleton was actually being asked to produce more general records of all deposits and withdrawals for those time periods, not just the details of Starry’s fictitious account. It was shocking that he had such difficulty providing this basic information.

  6. My reading of it Alfie was that the Tribunal sought information on the accounts of O’Callaghan for these dates also, but I could be wrong.

    The reporting I am relying on for that passage “In February 2000…” is from the Irish Times around that time.

  7. Harris is right lads. Vincent Browne is just smearing Michael Fingleton when he’s down. Denis starry O’brien said he had received a £100,000 cheque drawn on an AIB account of Owen O’Callaghan and had lodged it in the Cork branch of the Irish Nationwide. He said he drew £50,000 from that account to pay Bertie Ahern. This account was fake and never existed. If you read the portion of the tribunal transcritp that Browne quotes, it is clear that it was “bank statements” of this fake account that Fingleton was being asked to produce, not general records of every transaction. Fingleton could not find these as they did not exist, but Browne never mentions this. Thus Fingleton was not being cavalier with the tribunal he was a victim of starry’s forgery. Browne’s article is a cheap shot.

  8. Two things are touched on here, neither of which we should ever forget.

    Firstly, the infamous Mespil Flats deal. Where people ‘in the know’ were in a position to snap up apartments that, to the best of my recall, were not being offered on the open market. [It was one of the very few apartment/housing complexes of that type in Dublin (built for long term letting), another was the Adair Flats (houses in many cases) complex in Sandymount]. There were many long-term elderly tenants in these places and some were leveraged out of their tenancies in many cases.

    Secondly, there was the ending of the mutual status of many building societies, a process matched by the contemporaneous mutation of farming co-ops into PLCs. The Trustee Savings Bank also changed its status, mutated, and is now Permanent TSB. There was considerable political pressure for a time too, I recall, for the Credit Unions to be ‘modernised’ or brought more into the private banking sector.

    If the mutual interests of savers and borrowers had been preserved as a core value in the Irish financial services sector, rather than a greedy and inflated profit motive, we might not be at quite the same depth of crisis as we now find ourselves.

  9. Wyseman, Vincent Browne was not smearing Michael Fingleton; his article merely quotes the tribunal transcript without comment. And if you read the article carefully, you will notice that the tribunal is seeking the bank statements of bank accounts (note the plural) as well as several other general banking records. Indeed, according to a report in the Irish Times on 24 April 2000, the tribunal were not seeking the details of a single, specific account only but “all documents and records relating to deposits and withdrawals made at the Patrick Street branch of Irish Nationwide in Cork between June 1st, 1989 and September 30th, 1989. It also wanted similar records for the period March 15th, 1987, and April 15th, 1989.” Fingleton was able to produce some of these records on the second day of his appearance, such as the branch summaries of transactions during these periods, but due to the chaotic storage practices at Irish Nationwide as outlined in Vincent Browne’s article, he could not produce at that time other records the tribunal were seeking such as the cheque journal and lodgment records of the branch. Indeed, it was the subsequent examination of these general records that proved Denis ‘Starry’ O’Brien was relying on forged documents. If it was simply the case that Fingleton had searched but could not find details of Starry’s account, then his testimony at the tribunal would have been much differerent. Thus, it seems that Fingleton’s difficulty in cooperating fully with the tribunal was caused not by the forgery but by poor record-keeping at Irish Nationwide.

  10. Fair play great to see somebody writing about good old Mr Fingletion in such a thorough fashion. Talk about the teflon man!!!

  11. JohnH are you sure that letter was never printed in “the paper of record” or was it printed elsewhere?

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