1) Let us be under no illusions: Frederick Anderson Goodwin is an awful, awful man who doesn’t deserve anyone’s sympathy – or pity. I say this not just because, as Alex Brummer points out in today’s Mail, “he was he felt able to conduct an extramarital affair with a senior female colleague” and “then hid behind a court injunction until he was found out”, but because, by all accounts, he was a terrible, terrible boss to work for. Have a read of the recent book, Masters of Nothing by Tory MPs Matthew Hancock and Nadhim Zahawi, which paints an, ahem, unflattering portrait, shall we say, of the power-crazy former RBS boss.
From the Evening Standard:
The book claims Sir Fred, 53, could not control his anger if the wrong type of biscuit was put in the boardroom, and even threatened catering staff with disciplinary action in an email titled “Rogue Biscuits” after executives were offered pink wafers.
RBS staff also “went into panic mode” after a window cleaner fell off a ladder in Sir Fred’s office and broke a toy plane, the authors allege.
At dinner functions, an engineer was also kept on standby until the early hours to switch off fire alarms when executives wanted to smoke.
Peter de Vink, managing director of Edinburgh Financial & General Holdings, said bank staff “were absolutely terrified of him”.
2) Having acknowledged how bad a boss Goodwin was, and how odious an individual he is, it is, however, worth noting that he has been made a bit of a convenient scapegoat since the crash in 2008. Remember: Goodwin’s disastrous decision to pay a total of £71billion for debt-laden Dutch bank ABN Amro in the autumn of 2007, just as the credit crunch took hold, was backed by the RBS board and not prevented or questioned by the regulators. Few financial journalists sounded alarm bells; there was not a peep from Downing Street or the Treasury.
Also, it is often forgotten that the then Barclays boss John Varley had been involved in a bidding war with Goodwin for ABN Amro – which helped drive the price up. Had Barclays, rather than RBS, ended up buying the Dutch bank, Varley might be as reviled and ridiculed today as Fred “the Shred” Goodwin. Instead, Varley retired from his post as chief executive of Barclays in 2010 with his reputation – and his windows – intact.
3) Is it unfair and/or disproportionate to strip Goodwin of his knighthood? The government revealed yesterday that Goodwin’s title had been referred to the “forfeiture committee”.
Goodwin is not guilty of any crime. The Guardian points out:
Since 1995, the committee has recommended that 34 people, including the Zimbabwean president, Robert Mugabe, be stripped of their honours. Honours are normally taken away only if someone has been found guilty of a criminal offence or has been reprimanded by their professional regulator, including a professional register.
But the question is: why wasn’t Goodwin investigated or prosecuted? Why weren’t bankers arrested and charged with breaking the law, as they drove the economy off a cliff? Why wasn’t the Serious Fraud Office brought in at the start of the financial crisis? These are questions that are starting to be posed on both sides of the Atlantic.
“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong,” said Charles Ferguson, director of the documentary Inside Job, as he accepted his Oscar last year.
“Why have no bankers been arrested?” Jon Snow asked Treasury minister Mark Hoban on Channel 4 News in September 2011. Snow later noted on his blog:
[I]nvestigators on both sides of the Atlantic have had no doubt that criminality, subterfuge, and downright dishonesty accompanied many of the ingredients that brought about the crash. At the very least there was gross dishonesty in the representation of exposure to the sub-prime mortgage business.
…In one month, hundreds of rioters and looters have been prosecuted and punished by the English courts, often for offences with a value of under fifty pounds. Yet the threat to the wellbeing of UKplc was far greater from the bankers than from any number of more arrestable rioters.
There is a strong impression abroad that the UK doesn’t want to prosecute anyone for the banking crisis, a crisis that has affected every tax payer in the Kingdom.
Soon enough the statute of limitations will kick in to ensure that no-one will ever be prosecuted for their role.
4) If Ed Miliband is looking to apologise for things Labour did wrong in its 13 years of office, in order to win back public trust, he could start by saying sorry for the party’s indulgence of all the top bankers in the City, not just “Fred the Shred”. According to an investigation by the Daily Mail in 2009:
Labour has given 23 bankers honours, brought three into the Government as ministers and involved 37 in commissions and advisory bodies.
In today’s Independent, John Kampfner reminds us of how deferential to, and in awe of, the City, Labour’s leaders were:
It is salutary at moments like these, with David Cameron opining about the miscreant behaviour of Fred Goodwin and his like, to recall a speech given by Gordon Brown. It was delivered in April 2004, as he was trying to oust Tony Blair. “I would like to pay tribute to the contribution you and your company make to the prosperity of Britain,” the then Chancellor declared. He was opening the European headquarters, in London’s Canary Wharf, of Lehman Brothers, the bank that later went down the Swanee, almost taking with it the entire financial system. Talking of “greatness”, Brown added: “During its 150-year history, Lehman Brothers has always been an innovator, financing new ideas and inventions before many others even began to realise their potential.”
5) The shadow business secretary, Chuka Umunna, among others, is right to warn that Cameron and co must not be allowed to use a story about the former RBS chief executive to distract attention from the current RBS chief executive, Stephen Hester, and reports that he is in line to receive a £1.5m bonus – despite the RBS share price having halved over the last year. This is the real test for Cameron – not whether he strips Goodwin of his title but whether he has the power and resolve to deny Hester his ludicrous bonus
Channel 4 News’s Gary Gibbon asks on his blog:
Is going for Sir Fred a decoy for bonus row?
I suspect it is. The real issue is bank bonuses: despite the tough talk, the Conservative-Lib Dem coalition has so far failed to stop massive payouts. So don’t be distracted by Goodwin; keep your eyes on Hester.