In Ireland, outrage and cynicism

Nation's attention riveted on bank losses

February 08, 2002|By Andrew Ratner | Andrew Ratner,SUN STAFF

DUBLIN, Ireland - At the Horse Show House tavern, next door to the world headquarters of Allied Irish Bank PLC, the range of Irish emotion to news that a trader in Baltimore might have defrauded Ireland's biggest bank of $750 million could be found at opposite ends of the bar. On one side, barkeep Gerry Malone raked through his mashed potatoes and expressed a mixture of disgust and astonishment. "It's unbelievable. I can't see how the people at the top let that go to, what, 860 million euros," he said.

At the other end of the bar, self-described artist Ray Hosty blew smoke rings over a pint of Guinness and expressed what he described as Celtic cynicism. "I think we should applaud the guy for having gotten away with it that long. We're anti the powers-that-be."

This country is captivated by the story of John Michael Rusnak, the Baltimore bank trader who is under FBI investigation for trading losses that have rocked not only the bank's U.S.-based Allfirst unit, but also the larger 31,000- employee institution and the Irish economy along with it.

The news consumed most of the front page of all of Ireland's daily papers. The Irish Independent played a large photograph of Rusnak's home in Baltimore's Mount Washington on its front. The caption implied that Rusnak's "imposing Victorian-style home in the Baltimore suburbs" reflected ill-gotten gain, but Rusnak bought the home for a modest price years ago, before the trading losses are said to have begun.

"I DID NOT STEAL," blared the racier Irish tabloid, the Star, in World War III-sized type beside the Baltimorean's headshot.

On a windswept, sunny day, Dubliners recalled the 1990s bank-trading fraud case that felled Britain's Barings investment bank and the 1985 insurance fraud case that involved Allied Irish and led to higher insurance rates in the country.

"AIB has a habit of making a lot of money off Irish customers to fund these overseas operations," said John Collins, a computer technician. "This hits us because we'll have to pay for the loss."

The Allied board held an emergency session last night at the company's campus of modern, ivy-draped cantilevered buildings. Its neighbors include the venerable Royal Dublin Society equestrian group and a tiered-wedding cake of a building that houses the U.S. Embassy. Most of the board members slipped out a back door while reporters and TV cameramen gathered out front near a 40-foot winged sculpture that fronts the bank headquarters. "Whoever designed that should be the first to go," said one press wag.

George Lee, economics editor for RTE, the state-run broadcaster, said the Allied news was particularly devastating on the heels of losses at Irish drug company Elan. The value of those two companies made up 40 percent of Ireland's stock market at the start of this week.

Lee said the Irish economy, boldly described as Europe's "Celtic tiger" during double-digit growth a few years ago, had been withered by the dot-com bust, a foot-and-mouth livestock disease outbreak and the slowdown in the world economy. Embers of a slow recovery may have been smothered by this week's news, he said.

"Perceptions are really important, and this is coming at a time for the Irish economy that is just not good," Lee said. "Any punter in the street would wonder how the bank could not know what was going on for 12 months."

At the Horse Show House, retiree Raymond McCluskey wasn't feeling terribly charitable about the scandal, toward Allied Irish anyway.

"The jobs these traders have create enormous stress. They get deeper into the hole and then they're afraid to consult other people," said McClusky, dapper in a houndstooth sport coat. "If you ask me, it couldn't have happened to a nicer bank."

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