A small storm has begun to form in Belgium this morning. The centre of the storm is a comment made on a Belgian television documentary (begins 26 minutes in) by none other than Jonathan Sugarman, AKA WhistleblowerIRL, whom the Village Magazine called the most significant whistleblower in Ireland.
You have to hand it to Sugarman. He has a knack for giving the authorities heartburn. I wrote an update about his case at the time of the Village Magazine piece which filled in a couple of interesting details.
This time he happened to mention as an example of the total lack of financial regulatory oversight in Ireland during the bubble years the Belgian Bank KBC. As Sugarman said, just this month KBC Belgium had to give KBC Ireland another €100 million in order to bail it out. To illustrate how KBC had got itself into the state where it is still being bailed out by the Belgian tax payer via its parent company, he told how he himself had been given a mortgage by KBC in Ireland. As he said in the interview,
“When I looked at the forms I had to fill in for KBC Ireland, it was a joke. I could have said I was Mickey Mouse and I work in La la land and I would still have a million euro to buy a house with maybe was woth 200 000 euro. Did anybody ask questions. No. The bank is growing. Where’s the problem.”
Where indeed? What he didn’t say in the interview is that the bank did not actually bother to value the property he was buying before it gave him the mortgage. It looked at the house next door and guessed.
So now given the continued bleeding and rotting going on inside KBC as well as the epic implosion of Dexia and the fact that, as in Ireland, no one has been held responsible, there are questions being asked in Belgium that powerful people don’t want asked.
Back in 2010 I wrote an article about the way German banks used Ireland as a dark pit for doing deals they could not do elsewhere. It was called Ireland was Germany’s Off-shore Tart. It seems she was Belgium’s tart too.
What Sugarman’s story reveals above all is how no one in power, whether that be financial, political or media power, wants any questions asked or truths exposed. Sugarman has been ignored by everyone in the Irish establishment: his bank, the banks regulator, all the Irish political parties, all the newspapers and I was there when he told his story to one of Ireland’s top TV journalists only to never hear from him again.
Sugarman was the risk manager who resigned from Unicredit when his warnings to senior management, that the bank was routinely failing to hold enough capital to protect depositors from a bank run, were being ignored.
Irish law says clearly a breach of the minimum holdings of even 1% must be notified to the regulator immediately. He was finding UniCredit being routinely 19% short. When he asked an independent company to check his figures they told him the breaches were as high as 40%. This means the bank was short billions. Such a shortfall means if there was run on the bank it would not have a hope of surviving.
Sugarman was ignored and told to stop complaining. He resigned.
A month later Northern Rock collapsed when a run on the bank exhausted its cash reserves. A year later the Irish banks collapsed.
You might have thought the Irish Bank regulator would want to know what Sugarman had to say. You’d be wrong. The Irish regulator has gone out of his way to ignore him. I have been privy to all the emails and correspondence and it is a shameful and tawdry story of obfuscation, lying and threats. Meetings where he was told he could come and tell the regulator what he knew, but that if he revealed any wrong doing by the bank that occurred during the time he was there, the regulator would have to report him to the police. Despite the fact he had been the one trying to raise the alarm.
And so it is that Sugarman has been interviewded by Australian television, Belgian television, Greek television, interviewed by the major Greek newspaper Kathemarini (which is affiliated with the NY Times) which was picked up, written about and made available to an English speaking audience by the noted and respected British financial journalist Ian Fraser on his blog,
And all the while there has been nothing in Ireland.
If it were just the banks who we had to fight for truth and justice life would be easy. But we are fighting our own political class and our media as well.
We are not all in this together. They are all in it together, against us. We are on our own.