Anglo Irish tapes are only the tip of the iceberg when it comes to other banks

A woman protesting outside the former Anglo Irish Bank in Dublin

The bravado of it all was shocking and scurrilous, but we should suspend full judgement until the Anglo bankers give us their side of the story, writes Paul Allen.

Their laughter and nonchalance brought the blood of a nation to boiling point. Not surprising given the fact that while former chief executive of Anglo Irish Bank, David Drumm, and his senior executives, Peter FitzGerald and John Bowes, joked, mocked and cursed at the Irish tax payers’ expense, their reckless behaviour was crippling our economy and forcing their financial burden onto us all. A financial burden that today still casts a long shadow.

But even though their behaviour in those now notorious phone conversations has left the Irish public red with rage, there are far bigger issues at hand than the galling behaviour of a bunch of bankers as they dragged the Irish economy down a sinkhole.

Every source has an agenda, so why has the content of these recorded phone calls surfaced now? Every dealing and trading desk in every bank in Ireland has their phone calls recorded as a matter of strict procedure, not just Anglo Irish Bank, and this material has been available to the Irish government and the Gardai for a very long time. So why, as the content of the tapes is drip-fed to the nation by the Irish Independent, are politicians suddenly jumping up and down?

The other fact that needs to be considered is that while everyone seems shocked, the reality is that these tapes reveal little new.

The fact is people are playing politics rather than getting to the bottom of this debacle. This is underlined by the fact the government is planning to launch a banking enquiry on the eve of the next general election.

The Irish people need to know who the source behind these leaks is and what their agenda is. Why did they surface now? Who has to benefit? What is the end game?

Further more, it is not that they laughed while hammering the final nails into the coffin of the Celtic tiger that should cause us concern, but that they were able to dupe the Financial Regulator and Government into believing their lies.

Because while they joked that they were sticking two fingers up to Britain and Germany, they were actually sticking their two fingers up at the people of Ireland.

However, no matter how hard it may be to contemplate at present, every story has two sides. And while the snippets of their recorded sniggers still sting, we need to hear the full story.

The truth is that many bank officials were telling lies, and not just those in Anglo. And it is only when we hear the full and frank details of how Drumm and his fellow cronies felt this was not only possible, but that their lies were believable to the government’s financial ‘experts’, will Ireland Inc be able to ensure such skulduggery never happens again.

Indeed, while such an understanding is critical for both government and regulators, opening up and confessing all is the only option left open to the central protagonists at Anglo if they want to walk the long and lonely road towards redemption.

There is no point hiding like rodents lurking in the gutter. They have more value in helping making sure it never happens again rather than just being national punch bags on which we can relieve our pent up anger.

In fact, their full, open and frank cooperation could not only help solidify banking regulation here, but provide an invaluable service to the Irish people by finally giving them the inside scoop of how such a mockery was made of the Department of Finance and the Financial Regulator.

Regardless of what intrigue is at play here, it is time that we turned the leak to the benefit of the Irish people and found out how Anglo and other banks were able to pull off what is tantamount to the biggest financial fraud in our nation’s history.

Because until we know the full details of this latest scandal, Drumm and Co will not be the last ones to laugh at us for being gullible fools.

Irish are just smarter about multinational tax issues than other countries - U.S. and Europe are being taught a lesson as Ireland reaps the benefits

Rotten Apple?  Ireland simply enviable for their canny tax dealings

While U.S. politicians were eager to take a bite out of Apple’s reputation over its tax affairs, they also seemed only too happy to chew up and spit out Ireland’s.

But with the Irish Government denying the iPhone maker got any preferential tax deal, all this ‘tax haven’ subterfuge simply goes to show Ireland is envied for its ability to have solved the multinational taxation puzzle.

The only reason there is a gnashing of teeth in the US is because poor tax legislation allows major American corporations to file minimum tax returns at home while funneling taxable profits through operations overseas.

British authorities have also being huffing and puffing at foreign multinationals that seem to pay pittance in the UK even though they have substantial business interests there.

But while politicians play to the crowd, the simple fact is that these corporations are not breaking the law, but using the system.

And Ireland is also playing the game to its benefit rather than simply sitting back and watching from the sidelines as money flows elsewhere.

Indeed, this strategy has been a resounding and often remarked upon success. Our 12.5 percent corporate tax rate, not only kick started the Celtic tiger, but is helping propel the Irish economy back to growth after a ruthless recession.

The figures speak for themselves — in a country of just over four million people, over 115,000 work for US companies and countless others are involved in ancillary support operations. While many may argue that these profits will eventually leave our shores, the knowledge transfer to the local economy and boost to the exchequer will have long term payoffs.

However, even in an era of ecommerce and the growing global presence of massive multinationals, Ireland’s approach to attracting overseas business has raised the ire of not only the US but also our EU neighbours.

But as a tiny economy, operating in a tiny country, with a tiny population, situated on the most westerly point of Europe, Ireland needs all the home advantages it can muster.

Our tax rate compares with 35 percent in the US, 33 percent in France and 23 percent in the UK. But our multinational tax regime is open and transparent, unlike many other European countries.

Starbucks, for example, clocked up sales of £400m in the UK last year, but paid no corporation tax. Amazon, which had sales in the UK of £3.35bn in 2011, felt only legally obliged to file a ‘tax expense’ of £1.8m.

But the reason senators in the US were shaking their fists at Ireland is because, at 35 percent, America has the highest corporate tax rate in the world. So companies are effectively ‘encouraged’ to export jobs, investment and intellectual property to foreign soil.

It also discourages the repatriation of profits made on foreign soil back to the US. The most recently available figures show that US companies held $1.7 trillion in unremitted profits.

So rather than bash Ireland or the companies who legally use the tax system to their benefit, maybe the US, UK and our other European neighbours should focus on tax reform rather than moaning at how Ireland is, for the moment, one step ahead of the game.

* Paul Allen is Managing Director of Paul Allen and Associates PR, www.prireland.com.