Corporate scandals rock Ireland, United States

There are striking similarities between the recent financial scandals in Ireland and the United States which have made such a deep impact on both sides of the Atlantic.

In Ireland, a group close to former Taoiseach (Prime Minister) Charles Haughey that came to be known as the “golden circle” helped themselves to tax-free offshore accounts in the Cayman Islands looked after by a bagman of Haughey’s, Des Traynor. Traynor himself moved far beyond the Haughey circle, and obtained funds from leading business and society figures for illegally stashing money in the offshore accounts.

The Ansbacher affair, as it has come to be known in Ireland, has severely dented consumer confidence there, and may indeed be only the tip of the iceberg. In the last year alone, we have seen huge financial scandals engulf such major Irish companies as Allied Irish Bank and the drug maker Elan. There may well be more shoes to drop in the future.

At a time when average Irish taxpayers were burdened by the highest income taxes in Europe, the elite were finding a way to satisfy their greed and desire to beat the system.

Something similar has happened in the United States, where once again ordinary individuals have been shortchanged by the greed and power lust of many in corporate America. When one reads that the Oracle CEO made $780 million in 2001 alone, it becomes evident that the system is out of control and badly needs fixing.

It is safe to say that on both sides of the Atlantic, far stricter rules are needed to restore the confidence of average investors and, indeed, the ordinary taxpaying public. The Ansbacher affair is just the latest in a series of financial scandals which have clearly proved that there is one law for the rich and another for ordinary Irish citizens.

What would clearly work in both Ireland and the United States would be the sternest possible jail sentences for many of those caught up in these Ponzi pyramid schemes. It is only when such sentences are meted out that these high-flyers will finally stand up and pay attention.

While no one doubts that the vast majority of businessmen and women in Ireland and the United States are honest and hard-working, there is little doubt that the explosion in the stock market over the last decades had allowed a highly unscrupulous group of operators to function almost without detection.

The end result has been a major falling off in confidence in both countries, and harm to the business climate which, if it continues, will have dire consequences.

Both Irish Taoiseach Bertie Ahern and U.S. President George W. Bush have now made it clear that they believe those caught up in these scams should go to jail. For too long in both countries, white collar crime has somehow seen viewed as lesser than other types of criminal activity and jail sentences have been very rare. That must now change if confidence is to return to the system.

This week, the two top officers of Irish drug company Elan, which has been caught up in the accounting scandals, resigned their positions. It is perhaps the first sign that these issues are finally being taken seriously by those in power.

With the stock market in Ireland and the United States reeling from the weekly scandals, it can only be hoped that they will not be the last to lose their jobs.

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