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Analysis/Comment Last Updated: Jul 26, 2011 - 9:10 AM

Ireland Post-Bubble: RTÉ and conflict of interest; When the past is inoperative
By Michael Hennigan, Founder and Editor of Finfacts
Jul 24, 2011 - 8:21 AM

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Karl Whelan, a professor of economics at UCD (University College Dublin) Source: UCD

Ireland Post-Bubble: RTÉ, Ireland's State broadcaster, is in good company in regarding conflict of interest a strange concept. Meanwhile, we had more evidence this week that the inconvenient past may have become inoperative.

The Irish Independent reported that in its annual report for 2010, RTÉ said it bought commissioned programmes worth €2.7m from companies that were owned or controlled by board members or their close family members.

RTÉ has said that decisions on individual commissions are not made by the board but by executive management.

The newspaper said a spokesman responded: "It would not be in the interest of any public broadcaster, nor the public, for independent producers of experience and skill . . . to be either barred from board service or, if appointed to a board, to be barred from seeking to maintain their business and livelihood by being disallowed from competing for programme commissions."

"RTÉ's board operation on the one hand, and its executive process for programme commissioning on the other, are separately drawn up, operated and supervised."

In recent years, in response to reports that its highest earners were in receipt of free BMW cars, a spokesperson made a distinction between the high-paid contractors and the non-management staff: “As Pat Kenny, Gráinne Seoige and Diarmuid Gavin are freelance contractors, it is the RTÉ policy not to comment on their personal matters,” she said. “We would consider the matter of transport a personal matter.”

RTÉ itself reported in 2007, that local  councils with up 45% of the membership with commercial property interests, participated in rezoning of land for development. In addition, the lobbying of planners that was common in Ireland, would be a criminal offence in Scandinavian countries.

The Catholic Church will in time realise the cost of its reliance on the morality of individuals compared with having transparent governance rules that are strictly enforced.

There may be no question to answer on any of the 2010 contracts but only a fool or someone with a self interest would claim that there is no potential for a conflict of interest.

The board is presumably supplied with information on forward plans and it would be ridiculous to deny that contacts between friends and former work colleagues, would not impact decisions and the chances of having a project proposal considered.

RTÉ itself provides many examples of how the boom was blown and as Taoiseach Enda Kenny's seminal speech this week illustrates the disastrous failure of Rome's efforts to protect its brand, the journalists at the broadcaster could also break a mould by shining the sunlight on itself.

That of course is unlikely to happen as public spending cuts will provide ample material to pull the emotional strings of the public and portray politicians as heartless.

In 2009, the broadcaster's hugely overpaid agony aunt, Joe Duffy, warned in The Sunday Mail about a "head of steam building up from the commentariat blaming those who work for the State for our financial woes," adding: "There's no benefit to be gained from advocating equality of suffering for workers."

Finfacts Reports:

RTÉ paying price of reckless mismanagement during boom; 65% of combined surplus of €47 million in 2006/2007 was from pension fund windfalls

Irish Economy 2009: Talk to Joe! - - the asymmetric national agony aunt for confusing times - - and Cowen's €2 billion Budget

The past is inoperative

Time magazine reported in April 1973 that the Nixon Administration had developed a new language - -  a kind of Nix-speak. Government officials were entitled to make flat statements one day, and the next day reverse field with the simple phrase, "I misspoke myself." White House Press Secretary Ronald Ziegler enlarged the vocabulary in that month, declaring that all of Nixon's previous statements on Watergate were "inoperative." Not incorrect, not misinformed, not untrue - - simply inoperative, like batteries gone dead.

In today's Ireland, it's not uncommon to find that individuals who went with the flow during the bubble years or had like the politician, Shane Ross, praised the most reckless of the bankers, are now pushing for the most risky economic solutions, such as unilateral default.

It helps of course that in Ireland the forensic broadcast interview is rare, because either the interviewer does not have the facts available or avoids inconvenient truths.

The past is simply inoperative.

It is a legitimate question to ask an individual such as Karl Whelan, a professor of economics at UCD (University College Dublin), who has been an active commentator on public policy since the crash, in both the broadcast and print media, about his five years working at the Central Bank during the most reckless years of the boom.

On an Irish Economy blog thread, I commented:

"Seeing that you were a senior member of the staff of the Central Bank during the most reckless period of the bubble, at a time when Patrick Honohan [current governor who was then a professor of economics at Trinity College] was highlighting the big surge in foreign borrowings by the domestic banks, it’s a reasonable question to ask of a critic of policy, what arguments/warnings or not, were you giving to colleagues?

Did you ever consider resigning as a matter of principle or did you go with the flow like the rest?"

Whelan replied and shut off the comment feature, preventing any response:

@ Hennigan

"Perhaps you missed it but I did resign. And my position wasn’t a senior one by anyone’s stretch of the imagination.

Anyway this thread isn’t about me and what I did or didn’t do in the past. Time to wrap it up I think."

Whelan did resign in July 2007 and took up his present position in August 2007. In October 2007, he became a part-time adviser to the Central Bank.

His CV (pdf) reads: May 2002 - July 2007: Central Bank and Financial Services Authority of Ireland

Held positions as Economist, Senior Economist, and Deputy Head in the Economic Analysis and Research Department

Advisory Positions
October 2007 to Present Consultant, Central Bank of Ireland.

The deputy head of the economics research department in a central bank is just another clerk with no influence even on the focus of research?

The learned and thin-skinned professor appears to have developed back teeth and cojones in respect of public policy - - after he had moved to the sidelines.

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