It has been clear for some time now that the ideal of equality before the law has been buried.
The US. Department of Justice made it clear a few months ago, after it had declined to press criminal charges against a string of banks (Citi, Wachovia and HSBC), that ‘Too Big To Fail’ meant while such institutions could be investigated and fined, they could not ever be found criminally guilty, because that would endanger their continued survival. Thus TBTF equals TBTP.
The list of G-SIFI’s (Globally Systemically Important Financial Institutions – both banks and Insurers) is therefore a list of those financial institutions that are now above the law. If it profits those institutions, and those who own and run them, to disregard the law, they can and will because all they face is a fine. A fine is just another marginal cost of doing business. A tax. And a small, discretionary one at that.
In Europe we have had no similarly outright admission by the State that TBTF means TBTP. Instead the G-SIFI lists of banks and insurers have been published without anyone in government caring to make it clear that the State has taken it upon itself to raise the golden financial class above the law.
Of course there is one loophole – just a tiny one and one that is easily ignored – but one nevertheless. And that is that if no Public Prosecutor will take a Bank to court then it is still possible for an ordinary citizen to do so (Of course how easy or impossible it is depends on the country). But In Ireland it is possible and one man, Michael Smith, has decided to try.
Michael Smith is a former barrister and the owner and editor of The Village magazine in Dubiln. He, like me and many others, has had a long interest in the on-going case of the UniCredit whistleblower, Jonathan Sugarman, AKA WhisteblowerIRL. It was Mr Smith who accompanied Mr Sugarman when he went to to talk to the Irish authorities about what he knew. It was at that meeting that Mr Sugarman was told by the authorities that they might well prosecute him if he told them about the crime over which he had resigned from UniCredit, whereas they could not promise to prosecute the bank.
For those of you who don’t know, the crime in question is actually very straightforward. Mr Sugarman’s job as Risk Managere at UniCredit, was to make sure the Bank was solvent at the end of each day – to check its liquidity. Mr Sugarman became alarmed when he found, at the height of the Bubble, that UniCredit was in breach of its requirements. Not by just a little but by huge sums, and not on one rogue day but regularly. The Irish Law is very clear. It was Mr Sugarman’s job to tell his bank and the regulator of the breach. This he did.
The bank told him to shut up. The regulator ignored him. Of the very few concrete actions taken by the authorities perhaps the most symbolic was that they removed from the Central bank’s web site the document in which the law can be seen. You can however still see the law for yourself, here in sections 9.4 and 10.
Sickened by this attitude Mr Smith, in consultation with Mr Sugarman, has decided if the Irish DPP will not insitute an investigation/prosecution against UniCredit Ireland and several other Irish based banks such as Anglo, then The Village will.
You can read the editorial here. The whole article is only available in the latest print issue. You can read the two previous articles he has written about the Sugarman/UniCredit affair here and here.
It comes to somthing when ordinary people have to uphold the laws because their government refuse to. But that is where we are, not just in Ireland but in all of our nations.
It remains to be seen what measures the banks and their friends in government will be willing to take to close off from the people from any hope of legal and peaceful redress.
I sincerely hope Mr Smith does file suit against Unicredit, Anglo and the others. I hope people are able to support him. Perhaps we, in other countries, can hope to do the same. Most fervently I hope the government in Ireland and the Trioka in Bruselles do not close down this hope of redress.