EDITORIAL : THE INDEPENDENT, IRELAND

Many to blame for new €600m levy

THE Quinn family, headed by Sean Quinn, is entitled to the view expressed in its statement yesterday that a profitable insurance company was taken from it by the banks and Financial Regulator and turned into a loss-making one, for which all insurance customers will now pay.

The facts seem to speak otherwise.

Nevertheless, the Quinn view may well receive a sympathetic hearing, as everyone with a non-life policy faces the prospect of paying for at least €600m in losses at Quinn Insurance. There will be even more of a sympathetic disposition among the many hundreds whose jobs and incomes depended on the Quinn operations.

That is understandable, but it is hard to understand how anyone could say that Quinn Insurance was managed well when the family was in control. Quinn's selection of investments for its customers' premiums was anything but prudent. The reduction in the value of those investments means they will not be able to cover expected claims; hence the large losses.

The giving of guarantees -- backed in effect by customer premiums -- for other Quinn ventures was inexcusable and knocked another hole in the insurance company's finances. Mr Quinn has admitted that was an error and apologised. But it was an error of such magnitude as to cast doubt on his fitness to be in charge of other people's money.

That these things were allowed to happen was another blatant failure of regulation for which ordinary people will pay. Levies were first applied almost 30 years ago, to protect customers of two failed insurance companies. But the small consolation rapidly evaporates when one realises the money was then used as a form of taxation to cover government spending. Almost a billion euro was collected in the last decade when there were no insurance losses to cover.

Failed regulation, failed government control of spending, and deliberately obscure government accounting are a sorry tale stretching back all those years. We cannot agree with the defence mounted by Mr Quinn and his family, but it is the case that he is not the only one to blame.

Ministers cannot forget why they were elected

EVEN by the standards of civil service flummery, the reply received by this newspaper from Ruairi Quinn's Department of Education about public relations contract for the training agency FAS fair takes the breath away.

It bears little or no relation to the 15 questions asked by the Irish Independent about the awarding of the six-figure contract to the agency Fleishman Hillard, whose head of consulting, Mark Mortell, is close to Taoiseach Enda Kenny and an architect of Fine Gael's election campaign.

Mr Quinn did not award the contract, which was made by the outgoing Government on election day. Some will see that as odd in itself, but the real oddity is why FAS was held to need an outside PR consultant at all.

The Coalition programme for government says the disgraced training agency will be abolished. The curt answer from the department is not nearly as specific, saying that Mr Quinn is "reviewing options" an answer which will raise suspicions about another policy U-turn.

Frank replies about how the contract was awarded would help deal with both the puzzle over the purposes behind it, as well as the growing fear that, after just two months, coalition ministers are being captured by departments whose main purpose will be to preserve the swollen empires they built up in the bubble years.

A greater fear is that ministers have already forgotten -- if they ever fully understood -- the reasons for their landslide victory. That was the desperate yearning for the country to be governed in a radically different way from the grubby subterfuges of Fianna Fail and Irish officialdom.