What happened at Anglo was no defence for Quinns’ actions
Why compare one to the other? Well, there are people — such as Sinn Féin’s Cavan/Monaghan TD Caoimhgín Ó Caoláin — who have tried to use the Anglo revelations to provide support for the Quinn family, to bolster the argument that all of its woes were the result of the wrongdoing at Anglo. And I suspect that others are biding their time. Quinn was at it again yesterday in an interview with his sympathetic local newspaper, the wonderfully named Impartial Reporter.
Ó Caoláin told his local radio station that: “I do believe that the disclosure of the full facts and all the information will indeed vindicate his (Sean Quinn’s) position and his family’s in the bigger picture in terms of the unfolding episode of the story of Anglo Irish Bank”.
He may not end up any wiser but he should try to inform himself a little better.
Nothing can vindicate the behaviour of the Quinn family. The employment it created in the border region cannot provide vindication, nor can the atrocious behaviour of Anglo executives in its dealings with the State and even with Quinn.
Anyone who has followed the Quinn saga will know that most of their problems were caused by their own actions, by things that had nothing to do with Anglo, and that they have no-one to blame but themselves for their seeming poverty.
It is true that Quinn received loans from Anglo that it should never have received — and the legality of these is the subject of pending court action. The Quinns are arguing that the loans do not need to be repaid because they were made for an illegal purpose. These loans amount to €2.3bn.
But what is clear that those loans were advanced and taken for mutual purpose, intended to be beneficial to both.
Quinn was already heavily borrowed when he gambled further by assembling a secret shareholding in Anglo that he could not afford. He did so by means of a gambling mechanism called “contracts for difference”. His timing was rubbish, buying shares at the peak of Anglo’s valuation before they started to fall. His reaction was to chase his losses, buying even more shares.
And here is the key: he took money from Quinn Insurance without the necessary permission or authority to fund his bets on Anglo (and other companies). He ended up with the economic right to 28% of the shares in the bank, in contravention of a Central Bank rule that prevents any shareholder amassing more than 10% of the bank without receiving permission. That had nothing to do with anyone at Anglo. It was when the you know what hit the fan that he went to Anglo looking for money to help bail him, and it, out.
I’ve argued before that a full criminal investigation into the provision of those loans, one that holds both the old Anglo management of 2008 and the Quinns accountable for their mutual complicity, and which also includes the Department of Finance and the Central Bank in its ambit, should have started years ago.
Official documents filed back in 2008, months before the bank guarantee, told us that the Quinns were being supplied with massive loans for “general corporate purposes”, in other words the normal stuff of business. Instead, it was known to all parties that it was to help him meet payments due on his failed CFD gambles. Both sides were complicit in constructing a lie and they both knew exactly why they were doing it.
And the other big question is who in official circles, including politicians, knew?
Questions should have been asked then and action taken.
Anglo should never have lent the money, even if it was for “legitimate” reasons.
It gave Quinn the money although bondholders and Barclays Bank were owed €1.3bn already by his company and were due for repayment first. Anglo allowed itself to go to the back of the queue for repayment.
That the former Financial Regulator allowed a loan of that size, on those terms, in those circumstances, is a huge scandal, given too what he knew about the conduct of the insurance business and the facts that he had fined Quinn heavily personally and corporately for improper use of its funds.
It has always appeared to me that if the Quinn children and Sean’s wife Patricia had grounds for legal action over the loans from Anglo then they should take those cases against the patriarch Sean too for landing them in it by agreeing those loans with Anglo. It was he, after all, who organised the loans and who pledged “their” assets as security in the event of non-repayment. Those were not just to save Anglo, as he has claimed, but to save Quinn.
Quinn has long claimed that he ran a perfectly good business until Anglo came along and ruined him. He has claimed that he was forced unlawfully to take loans from Anglo and to offer his assets as collateral for these illegal loans, making him vulnerable to what eventually happened.
He has argued too that there are many others who were worse than him, who seem to be escaping scot-free. The behaviour of the Anglo executives on these tapes, none of whom are facing trial, would seem to back him up on that.
But Sean Quinn should remember that he is not facing any criminal charges either.
He cannot blame anyone else for his over-expansion of his business empire and his effort to prop it up by using cash improperly from an insurance business that had been run disastrously and incurred massive losses, way more than €1bn.
WHILE Quinn is entitled to argue the legality of the €2.3bn loan used to cover his insane share gamble at Anglo, he has admitted previously that the €455m or so borrowed for his property speculation outside of Ireland is a legitimate debt. The bank was entitled to seize control of those assets when the debts could not be repaid. Therefore, by disobeying court orders and by putting those assets “beyond the reach” of the bank (and the State as the bank’s owner), Quinn has potentially cost all of us that money. The Quinns did not just transfer assets after a court order in the summer of 2011 not to do so, but deliberately altered and forged documents to make it appear that the transfers had occurred prior to that date.
Justice Elizabeth Dunne nailed in the High Court when she said in response to Quinn’s claim in evidence that he ran his empire with honour that his behaviour was “as far removed from the concept of honour and respectability as can be”.
Documents presented to the court were found to have been “fabricated or falsified”.
Sean Quinn lost his bets but couldn’t pay his debts. He and his family sought to keep money and assets that are not his, or to do so on behalf of his family. Quinn’s running of his insurance empire that has led to the situation where every person who buys insurance over the next 20 years is going to pay an additional 2% levy on its price.
So remember that if people use the scandal of what happened at Anglo as a means to try to launch a defence of Quinn. Anglo was only part of a far greater web of deceit.
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