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First Posted: 1/9/12 11:51 AM
ET Updated: 1/9/12 01:38 PM ET
WASHINGTON
-- A bill that would
punish American companies for sending their customer call centers overseas has
caused an uproar in India and the Philippines, where politicians and
corporations fear lost business due to the U.S. bill's protectionist measures.
The
legislation, pushed by Rep. Tim Bishop (D-N.Y.) and the Communications Workers
of America (CWA) union, would make companies that outsource their call center
work ineligible for guaranteed
federal loans and grants for a period of five years. The bill,
entitled "U.S. Call Center Worker and Consumer Protection Act," would
also require those companies to report themselves in advance to the Labor
Department, which would maintain a public list of the companies who outsource.
Home
to the largest call center industries
in the world, India and the Philippines would stand to lose the most
if such a law succeeded in deterring American corporations from taking their
customer operations out of the U.S. in order to save on labor costs.
Last
week, a Filipino parliamentarian publicly urged President Benigno Aquino III to
dispatch "a strong lobby team"
in Washington to stop the bill in its tracks, warning that it would
"kill" the industry in the Philippines. Similarly, India's ambassador
to the United States has suggested that
country also plans to lobby hard on the bill.
When
asked about such reactions, Bishop said that the fears in India and the
Philippines reinforce the argument for the legislation.
"Frankly,
the fact that both the Indian government and the Filipino government are
reacting like this says that our bill is very badly needed," he said. Most
of the call center jobs lost in the U.S. are "sent primarily to India and
the Philippines. So I hope [the bill] does have an impact."
According
to CWA statistics, American call centers account for about three percent of the
country's jobs, although about half a million such jobs have been lost over the
last four years due to off shoring. In a statement released Monday, the CWA
called the legislation "an actual, honest-to-God, bi-partisan bill focused
on U.S. jobs," as well as "a measured step towards helping foster job
growth in the U.S." The CWA represents 700,000 workers in the U.S.,
roughly 150,000 of them call center employees.
In
addition to making them ineligible for federal loans, the call center bill
would place stiff mandates on companies that chose to outsource their call
centers. Customer service reps working in those companies' call centers
overseas would be required to disclose their locations when asked by American
callers, as well as provide callers with the option of being transferred to a
call center in the U.S. -- stipulations likely aimed at pleasing constituents
who are tired of dealing with
customer service reps based in other countries.
While
discussing the call center legislation last month, Bishop said that
"outsourcing is one of the scourges of our economy and one of the reasons
we are struggling to knock down the unemployment rate and reduce the number of
Americans who are out of work ... We can't prohibit it, but we can certainly
discourage it."
So
far, Bishop has found a pair of Republican co-sponsors for the legislation in
Reps. Dave McKinley (R-W.Va.) and Michael Grimm (R-N.Y.). In a statement, Grimm
said, "This bill ensures that companies receiving taxpayer-funded federal
aid or tax incentives don’t use those incentives to move their call centers
abroad." Even so, the bill will probably be a long shot for passage in the
GOP-controlled House, where many Republicans who support free markets and free
trade would bristle at its protectionist flavor.
To
help push the legislation, the CWA released a report last
month documenting higher instances of fraud and security breaches at foreign
call centers, as well as instances of "sub-outsourcing," in which
contractors in India outsource to even cheaper labor markets in other countries.
Carmakers Count On Tech To Transform
Autos Into Companions
Posted: 1/12/12 06:29 PM ET
LAS
VEGAS -- The most striking innovation on display this week at the Consumer
Electronics Show, the world's largest consumer tech tradeshow, came not from
Silicon Valley, but from Detroit.
The
vehicles on display underscored a sea change taking place in the automotive
industry, one driven by carmakers' relentless attempts to distinguish their
wares by incorporating drivers' demand for more convenience and customization
in their cars.
Automobiles
are becoming more like computers than ever before. Carmakers are harnessing
technology that has traditionally been the purview of gadget makers like
Samsung and LG -- touchscreens, software, apps and social media -- to expand
the capabilities of the car, even going so far as to transform it from a
vehicle to a companion and entertainment hub.
"Just
like a smartphone can be so much more than a means of communication, a smart
car can be so much more than just a mode of transportation," Dieter
Zetsche, chairman of automotive company Daimler AG, said during a keynote address.
Though
4,000-pound automobiles might seem out of place at the Consumer Electronics
Show, where most exhibitors display devices that can fit on a desk or in the
palm of your hand, carmakers' increasing emphasis on bringing tech to the
dashboard have made them a growing part of the annual tradeshow. This year's
expo featured a record number of auto exhibitors, more than 400 in total,
according to the show's organizer, the Consumer Electronics Association.
Many
car companies have concentrated on delivering enhanced entertainment systems,
navigation tools and safety features that are controlled from the dashboard by
the driver's voice, much like the virtual personal assistant Siri in Apple's
iPhone 4S. And the sales pitch for a sedan and a smartphone have become more
alike in recent years. Both boast apps, touchscreens, GPS, voice recognition
software, personal assistant capabilities, and the ability to place calls. The
evolution of the vehicle marks manufacturers' efforts to help cars keep up with
their drivers' constantly-connected lifestyles and their expectations that they
can update their Facebook status, check their voice mail, or search the web any
time, any place.
Some
automakers are going even further. Ford, which recently announced plans to open a research lab in Silicon Valley and
has partnered with Microsoft on its in-car Sync software systems, boasts that
it is building a "car that cares." Ford's engineers envision a
vehicle that would assume more responsibility for the well-being of its
passengers and evolve into a caretaker (or, perhaps more accurately, a
"cartaker") that can improve the lifestyle of its driver, both inside
and outside the car.
"The
car that cares is taking shape as an exciting new platform for connectivity,
innovation and transformation every bit as much as smartphones or
tablets," said Gary Strumolo, Ford's global manager of health and wellness
research, while speaking on a panel Wednesday at the Consumer Electronics Show.
"We believe this will fundamentally broaden the way we understand
automotive safety to mean not so much accident avoidance, but an integrated
approach to ensuring the well-being of our customers."
Strumolo
said Ford is researching ways to integrate sensors into the seats of its
vehicles, so that a car could weigh its driver and track his or her body
weight. A diabetic at the wheel could also sync his or her Bluetooth-enabled
glucose monitor with the car, which would alert him or her when blood sugar
levels drop. Strumolo additionally described a car that would track elevations
in a driver's stress levels and react accordingly to cut out distractions, such
as sending all calls to voice mail until a driver is more relaxed.
Strumolo
said he hopes the new technology will not only improve drivers' health, but also
foster a more intimate bond between vehicle and driver.
"The
more that you talk to a car that understands you, understands your needs, and
maybe even anticipates your needs, the more you'll have an emotional bond with
the car," Strumolo said. "You'll think, 'This car is really concerned
with my well-being. I feel it understands me, it's helping me. It's essentially
a personal assistant."
A
Ford engineer at the carmaker's booth echoed the sentiment. "I think it'll
be much more fun to drive cars in the future because the car can be a friend,
in a way," research engineer Johannes Kristinsson said.
In
another attempt to help drivers outsource their concerns to the car, automakers
such as Audi, BMW and Ford are testing mechanisms that would allow vehicles to "talk"
with each other on the road. Using vehicle-to-vehicle communication, cars could
track other cars' locations and anticipate changes in their positions,
potentially reducing the number of collisions.
Dashboards
are also giving way to screens powered by software that endows them with the
capabilities of a tablet or smartphone. Cadillac's CUE system, which will
reportedly be available in cars later this spring, is equipped with a Pandora
app and will be able to support other apps in the future, in addition to
providing directions, hands-free calling and access to a driver's digital music
library.
Mercedes-Benz
is expected to likewise bring apps to its vehicles this spring. A Facebook app
will be one of the first, offering a simplified version of the social
networking site that restricts text input while the car is in motion.
Yet
regulators are wary of too many high-tech bells and whistles making their way
into cars. The use of smartphones in automobiles has already prompted federal
safety investigators to push for a nationwide ban on texting while
driving. Approximately 3,092 people died in 2010 in distracted driving-related
collisions, according to the National Highway Traffic Safety
Administration.
"We
can't take a backseat and we won't. While new dashboards or handheld
infotainment systems are introduced into commerce, these have too great a
potential to create more and more distraction for the driver," said Ron
Medford, the deputy administrator of the National Highway Traffic Safety
Administration. "As part of our NHTSA driver distraction plan, we are
developing safety guidelines for these systems. We have challenged the auto
industry and cellphone industry to work collaboratively with us to keep the
driver safe and focused on the required task: driving."
Drivers'
unfamiliarity with this evolving breed of automobile can present additional
obstacles for carmakers, which must coach consumers on how to handle the new
vehicles. Switching from AM/FM radio to Pandora is a relatively minor
adjustment. But accepting a car that can track your heart rate, monitor weight
gains, or anticipate the position of other vehicles will come with growing
pains, experts say.
"My
biggest concern in 2015 is the gap that opens up between the psychology of the
consumer being able to accept something and the technology of automobile being
able to provide it," said Leo McCloskey, VP of marketing for Airbiquity,
which helps automakers equip cars with software and wireless services. "I
think people want many of these features today, but I think the psychology is
not where needs to be. The technology is further ahead than the
psychology."
Consumer Credit December 2011:
Consumer Borrowing Surged Last Month
WASHINGTON
-- Americans are feeling confident enough in the economy to go back to a
time-honored tradition – taking on a little extra debt.
Consumer
borrowing surged in November by $20.4 billion, the Federal Reserve said Monday.
It was the third straight increase and the largest monthly gain in a decade.
The
jump in borrowing was largely because people took out more loans to buy cars
and swiped their credit cards frequently to purchase holiday gifts.
In November, total consumer borrowing rose
to seasonally adjusted $2.48 trillion. That's nearly at pre-recession levels
and up from a post-recession low point of $2.39 billion reached in September
2010. Borrowing had tumbled for more than two years during and immediately
after the recession.
Since
then, consumers have increased their borrowing in 13 of the past 14 months.
Americans are taking on more debt after seeing the unemployment rate drop and
the economy improve, albeit modestly. Many are also leaning on their credit
cards and loans to make up for wages that haven't kept pace with inflation this
year.
Holiday sales were solid in November, and
the U.S. auto industry had its two best sales months for the year in November
and December. The Fed's credit report appeared to reflect those sales.
The
category that measures credit card debt rose in November by $5.6 billion, the
most since March 2008. The gauge that tracks auto loans and student loans
increased $14.8 billion, nearly matching July's gain that was the biggest since
February 2005.
Sung
Won Sohn, an economics professor at the Martin Smith School of Business at
California State University, said many consumers were likely persuaded by
incentives that retailers and auto dealers offered to boost sales.
Still,
Paul Edelstein, director of financial economics at IHS Global Insight,
expressed concern that consumers may have relied on their credit cards to
finance holiday purchases.
The
rise in borrowing comes as many consumers are seeing little to no growth in
their paychecks. Inflation-adjusted, after-tax incomes shrank by nearly 2
percent in the July-September period.
To
make up the difference, many consumers have reduced the amount they save. The
savings rate fell in November to 3.5 percent – the lowest level since the
recession began. The savings rate jumped in 2008 to 5 percent and stayed above
that level until early last year.
Sohn
said he expects the savings rate to level off near November's level. He also
said the increase in consumer demand should prompt businesses to hire more
workers. Those gains would allow consumers to finance their spending with
rising incomes.
In
December, employers added 200,000 jobs and the unemployment rate fell to 8.5
percent, the government said Friday. It was the sixth month in a row that the
economy had added at least 100,000 jobs, the longest streak since 2006. And the
unemployment rate dropped to its lowest level in nearly three years.
With
more jobs and better pay, consumers could step up spending even further. That
could lead more companies to add workers, which ultimately drives more spending
and more hiring. Economists call that a virtuous cycle.
Still,
a recession in Europe could dampen demand for U.S. exports and weaken financial
markets.
The
Federal Reserve's borrowing report covers auto loans, student loans and credit
cards. It excludes mortgages, home equity loans and other loans tied to real
estate.
Discrimination Lawsuit Holds
Subprime Lenders Accountable
Posted:
1/16/12 11:08 AM ET
As
we continue to recover from the worst economic downturn since the Great
Depression, it is clear that every American family has been touched in some way
by the recession -- a recession sparked in many ways by the irresponsibility
and recklessness on Wall Street over the last decade.
From
Ponzi schemes to health care scams to mortgage fraud, too many Americans have
experienced the pain of this crisis in one form or another. African-American
and Latino families have been hit especially hard. Between 2005 and 2009, fully
two-thirds of median household wealth in Hispanic families was wiped out. And
from Queens, New York, to Oakland, California, strong, middle class
African-American and Hispanic neighborhoods saw nearly two decades of gains
reversed in a matter of months. Most outrageously, these communities so
devastated by the crisis were also targets of many of the practices that helped
cause it -- including discrimination, predatory lending and fraud.
One of the federal government's most
important tasks is to hold accountable those responsible for such abuses and
that is what this administration has done in achieving the largest fair housing
discrimination settlement in U.S. history -- a $335 million settlement with
Countrywide on behalf of over 200,000 African-American and Latino families across
the country. At the core of this case is a simple story: If you were a
qualified African-American or Hispanic borrower who received a mortgage from
Countrywide, you likely paid more simply because of the color of your skin.
Moreover, if you were African-American or Hispanic, you were far more likely to
be steered into an expensive and risky subprime loan than a white borrower with
equal creditworthiness and financial situation.
As a result of these predatory practices,
the odds of an African-American or Hispanic borrower receiving a subprime loan
instead of a prime loan were more than twice as high as those for non-Hispanic
white borrowers with similar profiles. Indeed, Countrywide forced over 10,000
Hispanic and African-American borrowers into subprime loans -- even though
non-Hispanic white borrowers with similar credit qualifications were able to
obtain prime loans.
As
a result, minority borrowers who were steered into subprime loans paid, on
average, thousands of dollars more for their loans and experienced additional
harm as a result of increased risk of prepayment penalties, credit problems,
default and ultimately foreclosure. Nothing can undo the damage that
hard-working, responsible families suffered as a result of these outrageous
practices.
However,
the $335 million in relief for victims of discrimination will not only address
their financial loss, it will make it abundantly clear that this kind of
behavior will not be tolerated. Since President Obama took office, this
administration has worked to tackle the foreclosures that are harming families
and devastating our communities.
We've pushed the banks hard to keep
responsible families in their homes -- and because we have, foreclosure notices
are down 45 percent since early 2009. The Federal Housing Administration (FHA)
has withdrawn the approval of over 1,600 lenders to participate in FHA programs
-- more than four times the number during the entire tenure of the previous
administration. In 2009, President Obama
formed the Financial Fraud Enforcement Task Force, chaired by the Justice
Department, to wage an aggressive and coordinated effort to investigate and
prosecute devastating financial crimes, like this one. And, through the Wall
Street reform law President Obama signed into law last year, we created a
Consumer Financial Protection Bureau -- the sole mission of which is to protect
ordinary Americans from abuses like these.
With
this fair housing discrimination settlement, we are ensuring that help will go
to some of the families who need it most. We are telling irresponsible banks
and mortgage servicers that the unfair practices of the past will no longer
stand. And most of all, we are reaffirming the basic tenets of who we are as
Americans and what we believe. That this country succeeds when everyone gets a
fair shot, when everyone does their fair share, and when everyone plays by the
same rules.
Eric Holder is the attorney general of the United
States and Shaun Donovan is the secretary of Housing and Urban Development. Originally published at TheGrio.com
Health Care Spending Slowdown Could
Mean New Success In Cost Control
WASHINGTON
— Is health-care relief finally in sight? Health spending stabilized as a share
of the nation's economy in 2010 after two back-to-back years of historically
low growth, the government reported Monday.
Experts debated whether it's a fleeting
consequence of the sluggish economy, or a real sign that cost controls by
private employers and government at all levels are starting to work.
The
answers will be vital for Medicare's sustainability, as well as for workplace
coverage.
U.S.
health care spending grew by 3.9 percent in 2010, reaching $2.6 trillion,
according to the report by the Health and Human Services department.
That's an average of $8,402 per person –
far more than any other economically advanced country.
Still, the increases for 2010 and 2009 were
the lowest measured in 51 years. And health care as a share of the economy
leveled off at 17.9 percent, the first time in a decade there's been no growth.
The
main reason for the slowdown was that Americans were more frugal in their use
of health care, from postponing elective surgery to using generic drugs and
thinking twice about that late-night visit to the emergency room.
"Although
medical goods and services are generally viewed as necessities, the latest
recession has had a dramatic effect on their utilization," said the report
published in the journal Health Affairs. "Though the recession officially
ended in 2009, its impact on the health care sector appears to have continued
into 2010."
Independent
economists issued conflicting assessments.
"I
think it could signal slower growth in the future," said Ken Thorpe,
professor of health policy at Emory University in Atlanta. "Any discussion
about reducing the deficit is going to focus on how we reduce the growth in
health-care costs. And employers are adopting more effective tools to keep
putting downward pressure on health-care cost increases."
But
his counterpart Len Nichols at George Mason University in Virginia said people
are getting less medical care because too many have lost jobs and insurance,
and they just can't afford to pay.
"The
slowdown is mostly due to postponement of care, due to anticipated inability to
pay," said Nichols. If he's right, that could mean costs will spike once
the economy is on solid footing.
The
report provided relief for a jittery White House facing a 2012 reelection
campaign in which President Barack Obama's health care overhaul is a top target
for Republicans. The nonpartisan number crunchers at HHS found that the health
care law barely contributed to cost increases in 2010 – just one-tenth of 1
percentage point. Major provisions expanding coverage to more than 30 million
uninsured don't take effect until 2014, well after the presidential election.
The federal government's share of the total
health care tab – another issue in this year's political debate – grew to 29
percent in 2010, up from 23 percent as recently as 2007. Counting state and
local spending, the overall government share stood at 45 percent of the total.
Medicare spending grew by 5 percent in
2010. That was slower growth than in 2009, due mainly to reductions in what the
government paid private Medicare Advantage insurance plans. Medicaid spending
increased by 7.2 percent, less than the 2009 rate because of fewer people
covered by the program.
However, the main finding of the report was
a continued slowdown in the use of services across major health-care
categories, one its authors termed "dramatic." Higher copayments for
those with private insurance are part of the reason.
Hospital care, which accounts for just
over 30 percent of what Americans spend, grew more slowly because of a decline
in a key measure of inpatient admissions, and slower growth in emergency room
visits, outpatient appointments, and outpatient surgery.
Spending
on doctor visits and related care – about 20 percent of the total – grew at a
historically low rate of 2.5 percent, due to an overall drop in visits and a
milder 2010 flu season. But spending on dental care increased faster than in
2009.
Prescription
drugs, about 10 percent of overall spending, also saw a slower increase – just
1.2 percent in 2010. That was not only due to the continuing shift to generic
drugs, but also slower growth in the overall volume of medications that
Americans took.
Will
less health care hurt consumers?
That
remains to be seen, but current evidence suggests it won't. Americans are no
healthier than their counterparts in other developed countries, which spend far
less. And research suggests that as much as 30 percent of tests and treatments
for U.S. patients may be of little or no benefit.
The
HHS experts refused to speculate about the implications of the slowdown,
although their report stressed the connection to a weak economy. More may be
known by the summer, when another team in the same HHS unit will update
projections for future health care spending.
Man Marries Dead Girlfriend In Joint
Funeral And Wedding Ceremony In Thailand
First
Posted: 1/18/12 10:23 AM ET Updated: 1/18/12 05:43 PM ET
A man recently married his deceased
girlfriend in a combination funeral and wedding ceremony.
Chadil Deffy, also known as Deff Yingyuen,
placed a ring on the finger of Sarinya "Anne" Kamsook, his girlfriend
of 10 years, during the ceremony in Thailand's Surin province. The couple had
planned to get married in the future, but Yingyuen wanted to focus on his
studies before tying the knot, the Thai-Asean News (TAN) Network reported. Unfortunately, Kamsook
unexpectedly died in an accident before the couple could set a date. According
to the Pattaya Daily News, the couple met at Thailand's Eastern Asia University nearly a
decade ago, and wreaths were placed around campus in memory of Kamsook
following her death.
And
while some thought the service a bit strange, others expressed their sympathy
for the groom.
"...I
didn't know her, but in your photos, she looks young and full of life. I can't
image the impact her death has caused in the lives of her loved ones. It was a very moving gesture of
love, very moving. It makes you rethink a lot of things in life, things you
take for granted," Facebook user Alejandra Yanez wrote in Spanish on
Yingyuen's page. Onsiri Pravattiyagul, a friend of the groom, wrote an opinion
column addressing Yingyuen's intentions and the media speculation his story has
prompted. The piece, featured on the Bangkok Times, included the following:
Chadil
wrote matter-of-factly online -- and would later give interviews in the same
vein -- explaining that the motivation for this display was guilt, pure and
simple: He felt he hadn't done enough for his girlfriend of 10 years while she
was alive. Before her sudden death in a road accident, she had suggested that
he marry her. But he had demurred, putting the idea on hold. The
"wedding" was his attempt to right a wrong, however belated the
gesture might have been.
Job Discrimination Claims Hit
All-Time High In 2011
For
those of you who think because we have elected an African American President
discrimination is a thing of the past. Well let me tell you, you would be wrong
it’s alive and well. Please check out this article below.
WASHINGTON:
Federal job discrimination
complaints rose to an all-time high last year, led by an increase in bias
charges based on religion and national origin. The Equal Employment Opportunity
Commission received nearly 100,000 charges of discrimination during the 2011
fiscal year, the most in its 46-year history. That’s a slight increase over the
previous year, which had 25 fewer complaints.
Charges
of religious discrimination jumped by 9.5 percent; the largest increase of any
category. Claims of bias based on ancestry or country of origin rose 5 percent.
Experts say the increase reflects the growing diversity of the nation’s work
force. “We’re seeing a greater diversity among minority groups in America,”
said Ron Cooper, a former general counsel of the EEOC who now works in private
practice. “We’re seeing more workers from India, Pakistan and other countries
that bring additional religious complexity to the work force.”
The commission does not specify which
religious or ethnic groups filed the most charges. As in past years, claims
based on race, sex and retaliation were the charges filed most often, according
to commission data. Charges of racial bias fell by 1 percent, while sexual
discrimination claims fell 2 percent and sexual harassment claims dropped 3
percent. At the same time, claims of disability bias climbed 2 percent and
charges of discrimination based on age rose 1 percent.
Sean Quinn, Once Ireland's Richest
Man, Declares Bankruptcy With Debts Exceeding $2.7 Billion
SHAWN POGATCHNIK 01/16/12
12:55 PM ET 
DUBLIN
— A famed entrepreneur who was once rated Ireland's richest person was declared
bankrupt Monday as a bank pursues him for debts exceeding euro2.1 billion ($2.7
billion).
Lawyers
for tycoon Sean Quinn withdrew his opposition to a Republic of Ireland
bankruptcy order sought by the former Anglo Irish Bank, the reckless lender at
the center of Ireland's calamitous property crash.
The
bankruptcy judgment will force a thorough court investigation of Quinn's
finances, which the bank hopes will reveal capital and assets that it can
reclaim from Quinn, his wife and five children.
Quinn,
64, didn't attend Monday's court hearing. He issued a statement accusing the
bank of pursuing "a personal vendetta" and declaring that the
"judgment in no way improves Anglo's prospects of recovering money for the
taxpayer."
Quinn had a reported 2007 net worth of
euro4.7 billion ($6 billion) but sank much of his fortune into Anglo months
before the bank – the most aggressive lender to Ireland's construction barons –
suffered crippling losses as the country's decade-long property bubble burst.
The
Quinn family secretly built up to a 28 percent stake in Anglo shares using an
ill-regulated financial instrument that hid the scale of their investment from
other stockholders. As Anglo's share price plunged, Quinn says the bank
encouraged his family to borrow hundreds of millions specifically to buy more
Anglo stock, a charge the bank denies.
Ireland nationalized Anglo in 2009 to
prevent its collapse, wiping out a Quinn family investment estimated at euro2.8
billion. The government last year renamed Anglo as the Irish Bank Resolution
Corp., or IBRC. Its bailout is expected to cost taxpayers euro29 billion, a
bill so great it overwhelmed Ireland's finances and forced the government last
year to negotiate a humiliating loan pact with the European Union and
International Monetary Fund.
Dublin
Commercial Court Justice Elizabeth Dunne told Quinn's lawyer Gavin Simons that
Quinn would have to appear in person in coming days to provide documents
showing how much he's worth today.
Last
week Quinn lost a Belfast legal battle to retain bankruptcy protection in the
neighboring British territory of Northern Ireland. The judge there ruled that
Quinn had misled a previous Belfast court that his main base of business was in
Northern Ireland, rather than the Republic of Ireland.
"I
never done a day's work from southern Ireland in my life," Quinn, who has
lived for decades in the Republic of Ireland, insisted to reporters outside the
Belfast court last week. Dublin-based IBRC would have faced greater difficulty
pursuing Quinn for debts in Northern Ireland. Quinn also could have returned to
business within a year under U.K. bankruptcy law, whereas the Irish prevent
bankrupts from holding company directorships for up to 12 years. Quinn said the
tougher Irish rules meant he would be too old – 76 in the year 2024 – to direct
any new companies then. "Anglo achieved their goal of ensuring that I will
never create another job," he said of Monday's judgment.
Quinn boasts one of Ireland's most
celebrated rags-to-riches stories. He grew up on a border farm in Northern
Ireland's County Fermanagh, left school barely literate at 14 and started his
first construction-gravel business with a 100-pound ($150) bank loan. Within
three decades Quinn had transformed his quarry into a nationwide cement
company. He built and bought luxury hotels, pubs, apartment complexes and
commercial properties throughout Ireland, Britain, Eastern Europe and Asia;
founded Ireland's third-largest insurance company; and took interests in
glassworks, packaging and radiators.
In
April 2011, IBRC seized ownership of his Irish-based Quinn Group, forced him
and relatives off the board, and sold a majority stake in his insurance company
to U.S. insurance company Liberty Mutual. In November, shortly after Quinn had
secured a surprise bankruptcy-protection order in Belfast, the bank won Dublin
court judgments totaling euro2.16 billion ($2.7 billion) against Quinn.
A
November affidavit from Quinn recorded he had less than euro11,000 ($15,000) in
cash in three bank accounts.
But
the Quinns and IBRC are locked in several legal battles stretching from the
British Virgin Islands to Cyprus over control of a commercial property empire
spanning Britain, Russia, Ukraine, Turkey and India valued at more than euro700
million.
The
bank accuses Quinn of fraudulently shifting ownership of his foreign
properties, including office blocks and shopping malls, to relatives and shell
companies that remain under the Quinns' surreptitious control. The Quinns deny
these charges.
His
five children have filed a Dublin lawsuit against IBRC seeking to have the bulk
of the family's Anglo borrowing voided on the grounds that the bank should
never have lent them the money in the first place. They also are seeking to
have IBRC return businesses to their ownership that were seized in April 2011.
Their
lawsuit argues that Anglo misled them about the company's imminent danger of
collapse and spurred them to commit market fraud by manipulating Anglo's share
price. IBRC insists Anglo's loans to the Quinns were for much wider business
reasons.
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