THE FINAL cost of the Anglo Irish Bank bailout could be €34.3bn. That's the worst-case scenario. And if the past two years are anything to go by, the taxpayer could be forgiven for expecting the worst.
There were 4,239,848 people living in Ireland at the time of the last census. So if the worst-case scenario does unfold, every man, woman and child in the country has a bill to the tune of €8,500 to pay for Anglo Irish Bank. On top of the Anglo figures, finance minister Brian Lenihan will also signal details of a four-year budget plan early next month.
Anglo and those four budgets have placed a noose around our necks. But it would be wrong for us to believe we are all in this together. While there are about 450,000 people without jobs, and hundreds of thousands of people crippled by personal debt, there is a layer in society that has carried on regardless throughout the recession.
This group of people and institutions coined it during the economic bubble and they continue to do so two years after that bubble burst.
A lot of them were key players in the boom years. They were the movers and shakers who were embedded in the banks or getting lucrative state contracts.
As the sun shone over Celtic Tiger Ireland, a lot of them made wads of money. Now that the rest of us are in one hell of a storm, they continue to make hay.
After every man, woman and child got their Anglo bill last week, and as they await details of four hairshirt budgets, the Sunday Tribune identifies this group, 'The Untouchables'.
A career public servant, Patrick Neary studied Latin and Greek at university before joining the Central Bank in 1971. He went over to the newly created Financial Regulator's office as prudential director in 2003 before assuming the top job as Financial Regulator in 2006.
Like his colleague John Hurley, he addressed an Oireachtas committee on finance in early 2008 as the banks teetered on the verge of collapse.
"The indicators that we look out for to assess the soundness of an individual bank are arrears and provisions. There are no indicators emerging yet that there is a significant increase in default levels or arrears levels," Neary assured the assembly of TDs and senators.
With two years left on his contract, Neary retired early on a salary of €285,341 in January 2009, leaving with a full pension worth around €140,000 a year, and a pension lump sum of around €430,000. In addition, to compensate Neary for having to leave early and "facilitate organisation change in the Central Bank", Neary was paid an additional €151,000. He was also paid an extra €47,550 for being available to the bank for three months after his retirement and an extra €13,178 for annual leave he had accumulated but not taken.
The former junior minister played his part in inflating the property bubble when, as minister in charge of the OPW, he sold off state property in Dublin 4 to developers for extremely inflated prices.
Parlon then urged the OPW to team up with developers in over-ambitious projects such as Heustongate, near Heuston Station in Dublin.
This became a victim of the crash and is now just another unfinished ghost development – a monument to Parlon's folly pursued with taxpayers' money.
Within weeks of losing his seat in the 2007 general election, Parlon vaulted over the fence and landed the plum job of head of the Construction Industry Federation with a salary of around €250,000 a year.
Few questions were asked about a conflict of interest, even though Parlon now represents the very builders to whom he awarded millions of euros of contracts as minister.
Parlon picks up a state pension of €17,000 a year from his stint as junior minister.
Some people might say it is unfair for the 'meeja' to pillory the spouse of a disgraced banker, Seán FitzPatrick. 'Seánie' does not make it into 'The Untouchables' list as he is a figure of hate and will presumably be dealt with by the courts when due process eventually unfolds. He is facing bankruptcy and criminal proceedings. But Catriona FitzPatrick certainly enjoyed all the trappings of a millionaire lifestyle during the economic bubble and she is not exactly in dire straits since the bubble blew up in her husband's face.
It emerged in recent days that she has more than €1.1m in different bank accounts, according to recently filed court documents. The documents were filed as part of Seánie's bankruptcy proceedings and none of Catriona's money can be touched by her husband's creditors, who are owed almost €146m. It is for this reason – and the fact that she is entitled to another €3.4m, or half her husband's pension pot of €6.8m – that she is included.
The Mallow-born career civil servant took over the top job of secretary-general in the Department of Finance in 2000, having already held the top job in health during the 1990s. Then, as tradition had it, Hurley was automatically moved into the key role of governor of the Central Bank in March 2002 on a package at the time of €290,869 plus company car.
Months before that fateful night of 28 September 2008, when the banks finally admitted they were broke and needed billions in taxpayers' money to avoid collapse, Hurley told an Oireachtas committee: "Our central expectation is that... the Irish banking system continues to be well placed to withstand adverse economic and sectoral developments in the short to medium term."
Hurley's term in Dame Street was actually extended by nearly six months to September 2009 when the long-standing tradition of appointing the retiring head of finance to the top job in the Central Bank was ended with the appointment of 'outsider' Patrick Honohan.
Though it was hardly the conclusion of a meteoric career that Hurley might have liked, he gets a Central Bank pension based on half his final salary, or €176,000 a year, plus a lump sum of over half a million.
Cardiff joined the Department of Finance in 1984 and steadily worked his way through the corridors of power in Merrion Street including, along the way, a stint on the government bond desk, the forerunner to the NTMA.
Cardiff eventually rose to the position of assistant secretary in Finance with responsibility for taxation and financial services. But as the banking and financial crisis engulfed the finance mandarins, the novice minister, Brian Lenihan, asked Cardiff to concentrate solely on the crisis in financial services.
Though Lenihan has ordered a review of the department's handling of the banking and financial crisis over the past 10 years – a period when Cardiff was at or close to the helm in Merrion Street – Cardiff landed the top job in Finance last January on the retirement of David Doyle.
In keeping with civil service rules, the secretary-general's job in Finance was not publicly advertised, deliberately excluding many banking and financial experts from the top job at a time of national crisis.
Cardiff's promotion last January came with a salary hike from €188,000 as assistant secretary to €228,000 as secretary-general.
Also, as a secretary-general Cardiff, who is in his late 40s, will get an extra seven years' service towards his pension, allowing him to retire in his mid-50s on a full pension of around €115,000 year, plus a special enhanced pay-off of twice his salary or around €450,000.
He also serves on the Central bank Commission.
Most of the of the heat surrounding Anglo Irish Bank's crash has centred on former chairman Seán FitzPatrick, in the belief that chief executive David Drumm was just FitzPatrick's 'gopher'.
But Drumm's salary peaked at €3.3m in 2007, including a €2m bonus, for what in effect was throwing monopoly money at voracious developers. It is estimated that Drumm has earned over €9m from Anglo since he took the top job from Fitzpatrick in 2005.
Drumm quit in late 2008 as the house of cards fell in and he and his family moved over to a luxury house he owns in Cape Cod in Massachusetts, where it is reported he is dabbling in the property business.
The new owner of the bank – the state – is after him for what it claims is close to €8m of loans he owes Anglo, though Drumm counter claims that Anglo owed him over €2.5m in unpaid wages and bonuses and will have to pay him a promised pension when he hits 55.
Gardaí also want to talk to Drumm about the €7.5bn accounting switchover between Anglo and Irish Life & Permanent, as well as a €450m loan to the so-called Maple Ten golden circle to buy Anglo shares. Drumm is still in Cape Cod.
The former chief executive of Irish Life & Permanent, Denis Casey, along with finance director Peter Fitzpatrick and treasurer David Gantly, fell on their swords in early 2009 over the €7.45bn loan to Anglo – an issue the gardaí are still interested in sorting out.
But Casey's 'bad luck' was tempered by a total pay-off in 2009 of €4.6m, which included a salary of €369,000 for his work as CEO until May 2009, payment in lieu of notice totalling €1.2m and a pension pot payment of €2.9m.
The recently published Comptroller and Auditor General's report revealed that €33.76m of taxpayers' money was spent on consultancy fees in respect of the various measures taken to stabilise the banking sector.
The biggest recipient was the law firm Arthur Cox. The firm got €9.66m for advising the government about the banking crisis, even though the firm also works for the same banks and developers whose behaviour was instrumental in the crisis.
Arthur Cox is a reputable firm but it is certainly unpalatable for the taxpayer that the C&AG report shows them getting such a large slice of taxpayers' money when there is not much cake to go around.
From September 2008 to June 2009, €3.9m was paid to Arthur Cox for consultancy work on the state bank guarantee, the nationalisation of Anglo Irish Bank and the recapitalisation of AIB and Bank of Ireland.
It is particularly unpalatable that the firm is also legal adviser to Bank of Ireland. And it advised Anglo Irish and AIB on major property deals during the boom. It was reported after Bank of Ireland's EGM in May this year that disgruntled shareholders asked questions about the bank's lawyer's, Arthur Cox, and conflicts of interest.
"We get an excellent service from Arthur Cox," replied the governor. When he was asked if he could state the fees paid to Arthur Cox last year, he replied: "That's not a disclosable item."
That figure may not be disclosable but the €9.66m figure in the C&AG report certainly suggests that the sun has kept shining on the Arthur Cox firm.
The canny Scot quit the hot seat at EBS with impeccable timing and a €1,869,866 pay-off "as part of his early retirement arrangements", according to the mutual building society.
McGovern's decision to quit the €760,000-a-year job in September 2007 – just months before the subprime lending crisis hit Europe – was over a row within the building society over the re-election to the board of Ethna Tinney. Tinney remains on the board of the now part-state-owned building society, which is struggling with billions of bad debt lent when McGovern was in charge.
But McGovern was not the only one to walk away from EBS with an 18-carat handshake. Last year, two executives, Alan Merriman and Tony Moroney, who were on total remuneration packages of €480,000 and €308,000 respectively, left with a year's salary each.
In addition, Merriman received a "contractual termination payment", as EBS put it, of €851,400, and Moroney received a €208,600 contractual payment.
This means EBS paid out close to €4m in golden handshakes to three well-paid directors who presided over the near collapse of the society.
Current EBS chief executive Fergus Murphy, who took over from McGovern in January 2008, is one of the few CEOs to survive the financial bloodbath. Last year, he was paid €505,800 for his efforts – a 3% cut on his 2008 package of €522,000.
The tough Isle of Wight native brought cheap holidays to Ireland when she set up Budget Travel. As chairman of Irish Life & Permanent, Gillian Bowler is one of the few to brazen out the meltdown.
Though IL&P did not require a bailout in February 2009, it became embroiled in the mess when it emerged it had transferred €7.45bn into Anglo Irish to temporarily boost the bank's balance sheet.
Bowler said as chair of the board she was unaware of the transaction, and had she been aware of it, she would not have allowed it. This did nothing to dispel shareholders' anger but Bowler batted away the abuse and is still in the chair today.
Paid €288,000 in 2008 for what is very much a part-time job, she took a cut to €200,000 in 2009.
While blithely dismissing speculation that AIB was in serious trouble and recoiling at the very prospect of support from the government, in 2007 former chief executive Eugene Sheehy was earning a total package of €2.1m a year including a bonus of €850,000.
By 2008, after the banks had crawled on their hands and knees to the finance minister asking for forgiveness and cash, Sheehy's salary had been slashed and he was now forced to get by on a 'bonusless' package of €1.15m.
Sheehy, who is estimated to have pulled in over €11m since taking the top job at AIB in 2005, managed another 11 months at the top; in 2009 he received a package of €892,000 before he finally let go in November that year.
But while Sheehy, who is in his mid-50s, may be cast out into the banking wilderness, a pension of €458,000 a year will ease his burden.
Globally renowned accountancy firms KPMG and PricewaterhouseCoopers (PWC) did well out of the taxpayer during the boom as they secured a lot of government work. When the banking crisis erupted two years ago, the government sought out the help of PWC.
PWC has cost the taxpayer €4.95m for advice and professional services in relation to the banking crisis. After the state bank guarantee was implemented in September 2008, PWC was commissioned to assess the balance sheets of the covered banks. Major question marks surround the findings of the now infamous PWC report that followed as the situation in Anglo proved to be worse than anybody's "worst-case scenario".
As well as securing state work, PWC and its competitors, such as KPMG, Ernst & Young and others, are also embedded in the banking industry. For example, between 2000 and 2009 the 'big three' accountancy firms (PWC, KPMG and Ernst & Young) were paid about €165m to audit Anglo Irish Bank, Bank of Ireland, AIB, Irish Nationwide and EBS. So some of the same firms that were advisers and auditors to the banks and developers who were instrumental in causing the crisis were later paid massive amounts of state cash to investigate the problems in the banks.
It is galling for the taxpayer that these firms appear to have had their cake, eaten it and returned to Merrion Street for more. The Department of Finance has claimed that the banks themselves will eventually foot the bill for the services of these firms. But it is hard not to hold with the view that there will be no free lunch for the taxpayer, who seems to foot all bills in the current climate.
In the days before the September 2008 state bank guarantee, the government called on US investment bank Merrill Lynch for its expert external advice. Part of its brief was to look at the various options for repairing what was at first perceived to be a liquidity problem in the Irish banking system. Merrill Lynch was a key adviser in the days leading up to the decision to provide the state guarantee.
A total of €7.3m in fees was paid to Merrill Lynch for providing financial advice during the crisis between September 2008 and June 2009. When documents relating to the crisis were released to the Oireachtas Public Accounts Committee in July, they showed the advice was certainly not definitive and merely laid out a menu of obvious options for the government without coming down strongly in favour on any side.
Such was the pace of the financial crisis that Merrill Lynch was hired by the government without the contract going out to public tender. Although the firm no longer hasthe contract, it still earns fees from the government through its role as market maker for the NTMA.
Investment bank NM Rothschild replaced Merrill Lynch as the government's adviser on the banking crisis in August 2009. According to recently released figures from the Department of Finance, some €1.4m was paid to NM Rothschild up to June 2010 for its financial advice.
Taoiseach Brian Cowen earns a salary of €232,572 a year and is frequently criticised for it on the grounds that the leader of the free world, US president Barack Obama, earns about €276,038 a year.
But what about Michael Somers? The former head of the National Treasury Management Agency earnedclose to €1m, over four times the Taoiseach's salary.
Only in the past few weeks did Somers actually reveal that he received a €1m pay packet as chief executive of the NTMA. His pay had been a closely-guarded secret during the 19 years that he ran the NTMA.
It could be argued that it is unfair to single out Somers as one of 'The Untouchables' as numerous other people on the civil service payroll also earned lavish salaries. But the fact that he received a salary of €565,000 and a bonus of €403,000 (because he was entitled to a bonus of 75% of his salary) shows how extravagant bubble-time salaries had become.
Somers left the NTMA with a healthy pension and he has since been appointed as a non-executive director of AIB.
Barrister Dermot Gleeson (62) was already a wealthy man in his own right when he took over as chair of AIB towards the end of 2003, replacing businessman Lochlann Quinn.
The former attorney general, who became a senior counsel at the tender age of 30, won the trust of AIB when he represented the bank at the Dáil Public Accounts Committee hearing into AIB's role in the Dirt tax scandal.
As chairman, which is effectively a part-time position involving monthly meetings of the board, Gleeson was paid €475,000 a year. This is well over twice the salary of the more than full-time finance minister, Brian Lenihan, whom Gleeson had to beg forgiveness for presenting the exchequer with such a large bill to clean up the mess made during his and his fellow directors' term in charge.
But Gleeson managed to hold on to his role for another nine months. Then, ahead of a threatened revolt by shareholders at the 2009 AGM, Gleeson quit in June 2009, though he was still paid €203,000 for the first six months of that year.
Having served as attorney general between 1994 and 1997, Gleeson also receives a state pension of close to €51,000 a year.
Soden, the former chief executive of Bank of Ireland, has reinvented himself as a banking-pundit of sorts. He resigned from Bank of Ireland in 2004 after an internal investigation found out he had accessed inappropriate internet sites on his work computer, and he was succeeded by Brian Goggin.
In a November 2008 interview after the banking crisis erupted, Soden lambasted his former banking colleagues, saying: "Who should take responsibility for what has happened? Who should be accountable? Are the leaders of the banks in such a state of denial that they don't believe there are many consequences to be faced with the destruction of 90%-plus of the market capitalisation of the banks? Should those who were in charge when the crisis arose be given a chance to reverse these dreadful circumstances? Can we trust those who were in charge over the past five years to make informed decisions on the future of banking in Ireland? This is the time when we should address openly the tenure of the boards and the executives who had been on the scene since the demise of the Irish banks. Hopefully, someone will do the honourable thing."
By asking his former colleagues to do the honourable thing he seems to have lost sight of the fact that he headed Bank of Ireland until 2004, when the bubble was inflating at an extraordinary rate.
Soden's comeback continues apace: he was appointed by finance minister Brian Lenihan to the new Central Bank Commission in recent days.
Though Irish Nationwide is one of the smallest financial institutions to be bailed out by the taxpayer, former chief executive 'Fingers' Fingleton received a package worth €2.3m in 2007. As the society went into meltdown the following year, Fingleton's overall package actually increased to over €2.4m.
This 2008 payout included a €1m bonus which Fingleton received within weeks of the introduction of the banking guarantee in September 2008, even though the society's annual report stated that the reputation of Irish Nationwide had been "hugely damaged" and its lending strategy was "significantly flawed".
The new regime which had been put in place by then said the €1m bonus had been paid for "contractual reasons". But it added that it had contacted Fingleton seeking the return of the €1m bonus. "It has not been repaid" said the Irish Nationwide board in its latest annual report.
Fingleton eventually stepped down in April 2009 though he was paid €220,000 for his four months' work. But his fall from grace was broken by the estimated €26.7m pension pot he brought with him.
During the bubble, the government-funded economic think-tank, the Economic and Social Research Institute (ESRI), was undoubtedly successful in identifying problems with the housing market and repeatedly drew attention to the state's fiscal weaknesses. But it did not predict the financial crisis and the collapse in the property market, instead claiming we would experience a "soft landing".
Professor Frances Ruane, who has headed the ESRI since 2006, recently alluded to the institute's failure to predict the crisis and claimed it could have foreseen the crisis if its resources had been more robust and it had an in-house banking specialist.
That said, the 50-year-old ESRI has carried on regardless, with some of the senior staff still drawing extremely generous salaries.
For the CEO of a bank that holds not AGMs but 'court', in the building that housed the country's first parliament, the inner circle of College Green bankers felt a remuneration package of almost €4m, including a €2m bonus, for the year ending March 2007 was apt reward.
Then, as the wheels began to come off the following year, Goggin explained on TV how he suffered a 25% pay cut, leaving him with a package just a few thousand short of €3m, including a reduced performance bonus of €323,000. The following year, and after years of reckless lending, Goggin decided it was time for some new blood at Bank of Ireland, which by then was up on breeze blocks.
Goggin has made an estimated €23m, including over €11m in pay, since he took the top job in 2004. He also received a pay-off of almost €1.5m when he departed in February 2009, which brought his earnings in his final year at the helm to just over €3m.
And he has a pension too.
An unlikely inclusion in 'The Untouchables'? Speaking at the MacGill Summer School in July, the NUI Maynooth economist and former non-executive director of AIB admitted it was a matter of "profound personal regret" that he did not speak out during the property boom to warn that the bubble could burst. He said that, during the property boom, the dominant belief among senior bankers was that the economy would achieve a "soft landing" in which values would "plateau or fall modestly" rather than crash.
"During the boom years, banks performed spectacularly well in terms of profits and share price growth. It is now clear of course that this performance was bought at the price of greatly excessive risk-taking," he said.
O'Leary is by no means culpable for the crisis and his remorse is rare in this world. But while he expressed personal regret for failing to shout stop while he was attached to AIB, he was recently appointed an expert adviser to the Department of Finance.