Promissory notes illegal, IMHO?

Scofflaw

David Hall of the Irish Mortgage Holders Organisation is taking a constitutional case against the Anglo promissory notes, arguing that they're illegal. The basis of the case is that any charge on public expenditure must be laid before the Dáil, and that this was not done in the case of the promissory notes, which may never have had an explicit Dáil vote in their favour.

The case is due to be heard starting today (Jan 22nd) in the High Court, and a successful challenge would obviously create an enormous headache for the government, who would be faced, presumably, with allowing IBRC to collapse outright or a vote to retrospectively legalise the notes.

http://www.rte.ie/news/2013/0122/363897-promissory-note-court/

cordially,
Scofflaw

seamus

A successful challenge would be a headache, but could also be something of a blessing if the government decide to play the popularity game - blame the previous administration for their failure to govern correctly and then celebrate the chance to "undo" Fianna Fail's Anglo mistake.

Scofflaw

seamus wrote: »

A successful challenge would be a headache, but could also be something of a blessing if the government decide to play the popularity game - blame the previous administration for their failure to govern correctly and then celebrate the chance to "undo" Fianna Fail's Anglo mistake.

And people are of course suggesting that one could turn round to the ECB and say "oh noes! we shall not be paying those back because they are illegal". To which I suspect the ECB says "fair enough, now you just have to decide whether to pay external creditors in IBRC or your own Central Bank, and then if you choose the former, work out how to fill the large hole on your central bank's balance sheet".

cordially,
Scofflaw

antoobrien

Scofflaw wrote: »

David Hall of the Irish Mortgage Holders Organisation is taking a constitutional case against the Anglo promissory notes, arguing that they're illegal. The basis of the case is that any charge on public expenditure must be laid before the Dáil, and that this was not done in the case of the promissory notes, which may never have had an explicit Dáil vote in their favour.

There being voted and unvoted expenditures in the government accounts I think this is going to fail.

Scofflaw

antoobrien wrote: »

There being voted and unvoted expenditures in the government accounts I think this is going to fail.

Non-voted expenditure is pre-authorised, though, and kind of specific:

Non-voted expenditure represents expenditure which the Oireachtas has declared by law is to be paid from the Central Fund without annual reference to the Dáil and consists of:

1. Central Fund Charges: These are a permanent charge on the State revenues and represent those services which are charged on and payable out of the Central Fund by continuing authority of statutes and are not therefore subject to annual or periodic review. The largest item is the service of the National Debt (i.e. interest and sinking fund payments on the debt, expenses of issues of debt, NTMA administrative expenses, etc). Other items include Ireland’s contribution to the EU budget; the salaries, pensions and allowances of the President, Judiciary and Comptroller and Auditor General; and the expenses of Returning Officers. In these cases, the relevant legislation does not impose a limit on the aggregate amount that may be issued out of the Central Fund in respect of the service. The running costs of the Houses of the Oireachtas, as administered by the Houses of the Oireachtas Commission, are also a charge on the Central Fund. However, the Houses of the Oireachtas Commission Acts 2003 and 2006 set down 3-yearly limits on the amounts that can be charged.

2. Other Central Fund Issues: These are generally repayable advances to State bodies in respect of State development projects making up part of what is known as the Public Capital Programme and are made from the Central Fund under specific statutes. The legislation normally imposes an upper limit on the advances that can be made. This is usually equivalent to the issues that would be made over a 3 to 5-year period, and gives the Oireachtas the opportunity of reviewing the project or the body concerned at reasonably regular intervals.

Not sure either of those are applicable here.

cordially,
Scofflaw

Godge

If they are declared illegal, could we not just ask the ESM or whatever it is called to step in instead as it should be in place by the time of the Supreme Court appeal?

Scofflaw

Godge wrote: »

If they are declared illegal, could we not just ask the ESM or whatever it is called to step in instead as it should be in place by the time of the Supreme Court appeal?

Unfortunately, that one would be a non-runner as far as I know, because the ESM will only invest in viable banks. IBRC is a wind-up vehicle - probably the biggest wind-up in Irish history...

cordially,
Scofflaw

juan.kerr

Will we get our money back?

antoobrien

Godge wrote: »

If they are declared illegal, could we not just ask the ESM or whatever it is called to step in instead as it should be in place by the time of the Supreme Court appeal?

The PNs are in place because of the EU competition law, so in that case they'd have to be replaced with something. I wouldn't want to see a rush job put in place to try to replace the PNs because it could lead to a worse deal.

Scofflaw

juan.kerr wrote: »

Will we get our money back?

I don't know what would happen to the two payments already met - given they went from the government through IBRC to the CBI it's possible they would simply be adjusted back.

antoobrien wrote:

The PNs are in place because of the EU competition law, so in that case they'd have to be replaced with something. I wouldn't want to see a rush job put in place to try to replace the PNs because it could lead to a worse deal.

It certainly offers scope for new and interesting cock-ups. Certainly the state aid rules mean that whatever replaced them - and it seems highly improbable they wouldn't be replaced if they weren't simply made retrospectively legal - is going to have to be 'clever' again.

cordially,
Scofflaw

antoobrien

Scofflaw wrote: »

Non-voted expenditure is pre-authorised, though, and kind of specific

I see plenty of scope for wheeling and dealing in there - e.g. hand them over to the NTMA to manage.

antoobrien

juan.kerr wrote: »

Will we get our money back?

They're paying back loans that are due to the central bank, so we already lost it. The PNs are a mechanism to make sure that there's no "state aid" involvement (even though that's what investing the NPRF looks like - go figure) in the rescue.

Scofflaw

antoobrien wrote: »

I see plenty of scope for wheeling and dealing in there - e.g. hand them over to the NTMA to manage.

I suppose one could argue that they're part of the National Debt, since they've already been put on the books.

The main argument, though, is likely to be that the Minister had the necessary authority through something like the Credit Institutions (Stabilisation) Bill 2010, which, if we remember, gave the Minister very sweeping powers.

cordially,
Scofflaw

BornToKill

Scofflaw wrote: »

I suppose one could argue that they're part of the National Debt, since they've already been put on the books.

The main argument, though, is likely to be that the Minister had the necessary authority through something like the Credit Institutions (Stabilisation) Bill 2010, which, if we remember, gave the Minister very sweeping powers.

cordially,
Scofflaw

Though it is likely that the argument will be made that the Minister had authority, the Credit Institutions (Stabilisation) Act 2010 is unlikly to provide a basis for such authority given that it was enacted only at the end of 2010 and after the promissory notes were issued.

Scofflaw

BornToKill wrote: »

Though it is likely that the argument will be made that the Minister had authority, the Credit Institutions (Stabilisation) Act 2010 is unlikly to provide a basis for such authority given that it was enacted only at the end of 2010 and after the promissory notes were issued.

True - hence the 'something like', which I admit to inserting as a safety clause because I couldn't remember offhand the exact timeline! There are quite large powers in the guarantee acts, too.

cordially,
Scofflaw

4.legs.good

Scofflaw (if these are found to be illegal) then it seems to anyone read this thread that you are trying to justify illegal behaviour by politicians and blackmail from europe. Why?

Should politicians be allowed to undertake shady steps under blackmail from external entities?

4.legs.good

To further add:

The constitution is there to establish fundamental principles according to which the state is governed

Fairplay to this group and man for raising this in court. If the politicians who run the state have overstepped their bounds then they should be slapped for it and these "notes" declared null and void.

Reading Scofflaw's posts here one gets a feeling that its ok for politicians to commit illegal acts if that means external entities (europe in this case) get what they want at the expense of the state and its citizens. If these are found to be illegal and Europe gets into a huff and puff then that says alot about what Europe has become.

The duty of our elected politicians should be to the state and its citizens first and foremost, not banks and/or any extranational entities.

seamus

4.legs.good wrote: »

Scofflaw (if these are found to be illegal) then it seems to anyone read this thread that you are trying to justify illegal behaviour by politicians and blackmail from europe. Why?

That's not how it reads to me.

Scofflaw is pointing out (quite correctly), that even if the process for issuing these notes was originally illegal, scrapping them and rolling back to 2010 would be a far more painful task than simply finding legal ways of retrospectively replacing the promissory notes with an equivalent that will operate in exactly the same way, but without breaching the law.

4.legs.good

seamus wrote: »

That's not how it reads to me.

Scofflaw is pointing out (quite correctly), that even if the process for issuing these notes was originally illegal, scrapping them and rolling back to 2010 would be a far more painful task than simply finding legal ways of retrospectively replacing the promissory notes with an equivalent that will operate in exactly the same way, but without breaching the law.

Let me get this straight,

So because politicians and civil servants might have to do some work (god forbid!), or worse might come under pressure from an entity outside of this state, it is ok for them to break the laws of the land?

No if these are (found to be) illegal then they are illegal, only in a banana republic is it ok to take shortcuts when it comes to laws of the land. A republic without checks and balances and where politicans are allowed to take illegal shortcuts is a sham.

seamus

I think you're reading different posts than have been written. If something is legal, then it's legal. If it's not legal, then it's not legal.

If something is deemed to be illegal, but a legal alternative is discovered, then the alternative is legal. It's not deemed to be illegal just because of its similarity to an illegal action.

4.legs.good

I am reading the same thread, the guy who brought the case to court is being slammed for doing so

Because:
1. It might make our "european overlords" unhappy
2. It might make politicians do more work

That is wrong!

He has every right to voice his concerns and have the courts look at the legality or illegality of these "notes",
slamming a person or group for exercising their rights because it might make someone else unhappy or cause more work for politicians is insane.

28064212

4.legs.good wrote: »

I am reading the same thread, the guy who brought the case to court is being slammed for doing so

I'm not sure you are. Where has the guy been criticised in any way, never mind "slammed"? Scofflaw merely said it would create a headache for the government, not that the case shouldn't have been brought

seamus

4.legs.good wrote: »

I am reading the same thread, the guy who brought the case to court is being slammed for doing so

Because:
1. It might make our "european overlords" unhappy
2. It might make politicians do more work

Can you please link me to the thread that you're reading?

I don't think anyone in this thread has once said that this guy is wrong to take this action. Successful or not, I support this guy's right to make such a challenge and will thank him for his diligence if he turns out to be correct.

4.legs.good

Scofflaw wrote: »

And people are of course suggesting that one could turn round to the ECB and say "oh noes! we shall not be paying those back because they are illegal". To which I suspect the ECB says "fair enough, now you just have to decide whether to pay external creditors in IBRC or your own Central Bank, and then if you choose the former, work out how to fill the large hole on your central bank's balance sheet".

cordially,
Scofflaw

The underlying tone of his posts is that he disagrees with this court challenge since it would cause the ECB to throw the toys out of the pram and cause "difficulties".

28064212

4.legs.good wrote: »

The underlying tone of his posts is that he disagrees with this court challenge since it would cause the ECB to throw the toys out of the pram and cause "difficulties".

The overt tone of his post is that people who believe this court case is some magic bullet that could solve all our financial woes in one swoop are mistaken. I don't think you're so much "reading between the lines" as you are reading a totally different book

antoobrien

It seems that from the article in the o.p. and today's indo the grounds for the case can be summarised as:

1. There was no Dail vote - there is a claim that the 2010 act requires one
2. The Dail did not specifically approved them "as was required by the Constitution" (similar to the above but not as specific)
3. If there was no requirement for a vote, the act itself is unconstitutional
4. The deal made was in breach of the constitution because the Irish people were not consulted (not sure if this menas no dail vote or no referendum)
5. The deal is in breach of TEFU

Scofflaw

4.legs.good wrote: »

The underlying tone of his posts is that he disagrees with this court challenge since it would cause the ECB to throw the toys out of the pram and cause "difficulties".

I don't disagree with the court case at all - all I've done is review the possible defences and consequences. I see nothing wrong at all with defending the Constitution - you appear, as people have said, to be reading something entirely different from what I've written.

The ECB won't "throw the toys out of the pram", and it's not them who would cause difficulties as such - the government will have the problem, in the absence of the promissory notes, that IBRC will be insolvent, and unable to pay either (a) its external creditors, or (b) the Central Bank. These would be problems in an entirely EU-free Ireland - the former would impact on the market perception of the other banks (although perhaps not that badly at this stage), while the latter would impact on the currency.

As 28064212 said, there are likely to be people who think that if the promissory notes are declared illegal, it will simply make a problem go away. The world doesn't work like that, however much people might object to someone pointing that out.

regards,
Scofflaw

Godge

4.legs.good wrote: »

I am reading the same thread, the guy who brought the case to court is being slammed for doing so

.

4.legs.good wrote: »

The underlying tone of his posts is that he disagrees with this court challenge since it would cause the ECB to throw the toys out of the pram and cause "difficulties".

Which is it?

"slammed" means - "4. Slang To criticize harshly; censure forcefully" http://www.thefreedictionary.com/slammed

"underlying tone" - "In the nature of something though not readily apparent", "implicit" http://www.audioenglish.net/dictionary/underlying.htm


Is it possible to censure forcefully and criticise someone harshly in a way that is implicit? Possibly through an excellent use of satire and sarcasm (at the level of George Orwell perhaps) but I don't see it in Scofflaw's posts.

tonyclifton

Only in Ireland would one of the key architects in the ruination of our country be rolled out as a defense solicitor for the state ... Surely a conflict of interest ... Michael mc dowel should be keep well away from this case... as former attorney general and minister for justice altough a P.D it was his party propped up a fiana fail government whose failed economic policies led us into the mess that required the bail out!!

Chips Lovell

How is it a conflict of interest if he's the defence counsel?

Bearing in mind too, that he's left government long before the prom notes were issued.

antoobrien

tonyclifton wrote: »

Only in Ireland would one of the key architects in the ruination of our country be rolled out as a defense solicitor for the state ... Surely a conflict of interest ... Michael mc dowel should be keep well away from this case... as former attorney general and minister for justice altough a P.D it was his party propped up a fiana fail government whose failed economic policies led us into the mess that required the bail out!!

Supporting the government he served as part of is conflict of interest?

If he had been representing the plaintiff the post would not be a pointless rant.

tonyclifton

Vladimir Kurtains wrote: »

How is it a conflict of interest if he's the defence counsel?

Bearing in mind too, that he's left government long before the prom notes were issued.

Well he is defending the state isn't he?? I know he had no part directly In the prom notes but his party where in government with Finna fail and that pd/ff governments economic policy's are largely to blame for us requiring the bailout and the issuing of the prom notes... Also on a side note the multi pensioned mc dowell has a personal interest in making sure the status quo kept... ClInging on to a ministerial pension Td's pension and I'm sure there is a pension for ex attorney generals ...while also being paid to defend the state in such a high profile case and as senior counsel in sure he hus fee us many thousands of pounds a day ... Surely all these things combined is a conflict of interest

tonyclifton

Actually it's not a case of conflict of interest it's more a case if acting in self interest and That of the government That got us into got us into this mess

Chips Lovell

tonyclifton wrote: »

Well he is defending the state isn't he?? I know he had no part directly In the prom notes but his party where in government with Finna fail and that pd/ff governments economic policy's are largely to blame for us requiring the bailout and the issuing of the prom notes... Also on a side note the multi pensioned mc dowell has a personal interest in making sure the status quo kept... ClInging on to a ministerial pension Td's pension and I'm sure there is a pension for ex attorney generals ...while also being paid to defend the state in such a high profile case and as senior counsel in sure he hus fee us many thousands of pounds a day ... Surely all these things combined is a conflict of interest

Again, how is this a conflict of interest? Are you actually arguing that the state's defence counsel should work against the state in this case?

tonyclifton

Vladimir Kurtains wrote: »

Again, how is this a conflict of interest? Are you actually arguing that the state's defence counsel should work against the state in this case?

Yes sorry I used the wrong term my friend I should have said as a vested interest he should be keep away from this case

Chips Lovell

Again, you've failed really to explain why. Let me put this another way, what is at risk of happening if Michael McDowell serves as the state's defence counsel?

tonyclifton

Vladimir Kurtains wrote: »

Again, you've failed really to explain why. Let me put this another way, what is at risk of happening if Michael McDowell serves as the state's defence counsel?

Well i don't think the Irish people are best served served in such an important case by somebody who was complicit in the states finances requiring a bailout ..in this case we need transparency and not a vested interest ... I don't think anybody invoiced in previous governments should be taking part in thus case...I feel he would be protecting the interests of them previous governments and not the Irish people... I also feel this country is run for the elite and not for the people

Chips Lovell

But his job in this case is to defend that decision. Any counsel, whether they were a previous member of government or not, would be expected to argue that what the state did was legal.

ezra_pound

antoobrien wrote: »

It seems that from the article in the o.p. and today's indo the grounds for the case can be summarised as:

1. There was no Dail vote - there is a claim that the 2010 act requires one
2. The Dail did not specifically approved them "as was required by the Constitution" (similar to the above but not as specific)
3. If there was no requirement for a vote, the act itself is unconstitutional
4. The deal made was in breach of the constitution because the Irish people were not consulted (not sure if this menas no dail vote or no referendum)
5. The deal is in breach of TEFU

All of these assertions are to be determined by the judiciary. Nothing is unconstitutional until they determine that that is the case.

antoobrien

ezra_pound wrote: »

All of these assertions are to be determined by the judiciary. Nothing is unconstitutional until they determine that that is the case.

Probably should have put alleged or something in there, but that seems to be the list of what he's claiming.

carpejugulum

Important thing to mention is that even if they were deemed illegal, no cuts would be reversed.
And more cuts would still need to be done as planned for financial, economic and moral reasons.

Scofflaw

OK, interesting twist, and perhaps deserving of its own thread, but included here for the sake of completeness. It appears, according to Brian Lucey, that McDowell's (first) defence is that the ordinary citizen has no right to challenge acts of the executive:

Coming towards the end of a long day of argument which saw Anne Nolan of the Department of Finance sprung into the witness box as a surprise additional extra, the argument from Michael McDowell ran as follows….The Promissory Notes are a creation of Dail Eireann. David Hall is a citizen. As a mere citizen the state claims that he has no right to in effect act on behalf of the Oireachtas against the Executive. A citizen qua citizen has no role or right to ensure that the two parts act properly.

http://brianmlucey.wordpress.com/2013/01/24/state-argues-in-high-court-that-a-citizen-has-no-right-to-challenge-parliament/#comment-12228

Prima facie, this is an outrageous claim, and the comments' section on Lucey's blog are duly outraged. Unfortunately, as I've posted there...

Conspiracy theory and proper outrage aside, I suspect McDowell has a good case here. There really is no provision in Bunreacht for the citizen to challenge executive actions of the government, unless we count Article 6.1. On the contrary, there is an explicit statement that the executive is responsible to the Dáil:

“28.4.1° The Government shall be responsible to Dáil Éireann.”

As far as I can see, that’s a very solid foundation for McDowell’s case. In a sense, we should perhaps thank him for highlighting the appalling centralisation of power in the State – we know that the Dáil is, in effect, thanks to the Whip system and the executive’s control of state appointments, subservient to the executive, and McDowell’s case should highlight to the public exactly why this is so incredibly dangerous – we have a situation where the executive is responsible only to a body which it already dominates.

cordially,
Scofflaw

antoobrien

Scofflaw wrote: »

that McDowell's (first) defence is that the ordinary citizen has no right to challenge acts of the executive

For those not following the other thread, this opinion has been confirmed by the high court.

The case has been dismissed, rather than ruled on so it's still open for members of the Dail to challenge it.

Bullseye1

It seems extraordinary that an ordinary citizen can not challenge the acts of the executive. I can see this going to the Supreme Court.

antoobrien

Bullseye1 wrote: »

It seems extraordinary that an ordinary citizen can not challenge the acts of the executive. I can see this going to the Supreme Court.

Not really, there are similar cases throughout the world where citizens can not sue their government. IIRC there were a few cases in the 70s & 80s where the US Air Force were found to be negligent causing/contributing to deaths of pilots but the families of pilots that died were not able to sue and get damages.

squod

Bullseye1 wrote: »

It seems extraordinary that an ordinary citizen can not challenge the acts of the executive. I can see this going to the Supreme Court.

It's absolutely extraordinary. ''Equality before the law'', ''the right to fair procedures'' and all that jazz. Seems as if these were cut out before they could begin.

This lad wasn't even acting as a Judge while he made that decision. Can't just ban someone from having a go at the state in a court.

Sponge Bob

I think it is going to the Supreme court on quite narrow grounds, that a citizen can or cannot 'step in' where the legislature failed to act and should have where some right is in its sole gift.

EG only the Dáil can elect a Taoiseach who then nominates a cabinet. If the Dáil fails to elect a Taoiseach then how can a citizen make them do something that only they can do by law. ???

This is a right mess if you look at it logically, the Attorney general advises Government(Executive) and the Legislature has no legal officer to advise them at all. Frankly the AG should have a SECOND remit as advisor to the legislature .....bit like one of them for and against a referendum advisory roles.

Tecnichally a rather interesting case....but only technically. I think it is quite a tenous case and McDowell was right....and I am not a fan of McDowells.

antoobrien

Sponge Bob wrote: »

I think it is going to the Supreme court on quite narrow grounds, that a citizen can or cannot 'step in' where the legislature failed to act and should have where some right is in its sole gift.

EG only the Dáil can elect a Taoiseach who then nominates a cabinet. If the Dáil fails to elect a Taoiseach then how can a citizen make them do something that only they can do by law. ???

The Taoiseach simply can't do this. If a government cannot be formed then the Dail is dissolved and elections take place.

Sponge Bob wrote: »

This is a right mess if you look at it logically, the Attorney general advises Government(Executive) and the Legislature has no legal officer to advise them at all. Frankly the AG should have a SECOND remit as advisor to the legislature

It'd create a conflict of interest if the AG was to give legal advice to the government that was different to what they gave the Legislature/opposition (which some people will look for). I'd much rather see the Legislature be able to hire/retain its own legal officer.

But then the AG is supposed to give advice based on the law, so in theory the role would be redundant. :rolleyes:

Sponge Bob

Talk of a TD joining this case for the appeal, now they may have a good case to state....as in they were not allowed to vote on something they should have been allowed to vote on.

We shall see.