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ONE of the top members of President Donald Trump’s government profited from the bailout of European banks.
And an official report commissioned by MEPs says that Trump’s man profited unfairly out of the taxpayer-funded bailout, through what the US media says could amount to insider trading.
Wilbur Ross is Trump’s secretary of state for commerce. Before that he was a big money investor who specialised in making profit from “restructuring” failed companies.
His involvement with the Bank of Ireland was investigated in a report by financial analysts commissioned by Luke “Ming” Flanagan, an Irish member of the European Parliament.
Flanagan is a colourful left-wing independent MEP — he’s stood successfully stood for the Irish Parliament on a “legalise cannabis” ticket.
He can be a bit of a joker, but he’s also taken some impressive stands, like giving half of his salary as a member of the Irish parliament away to social projects.
Flanagan commissioned two serious Irish financial analysts to look at the 2008 financial crisis. Their report, which included a section on Ross’s involvement with the Bank of Ireland, is pretty striking but underreported in Britain.
US magazine Mother Jones gives a good description of their findings if you want more detail than I am giving here.
Ross’s hedge fund took a 34 per cent stake in the Bank of Ireland in 2011. This was shortly after the Bank of Ireland got a €3.5 billion bailout from Irish taxpayers to stop it collapsing under bad debts.
The Irish government owned a big chunk of the Bank of Ireland thanks to the bailout. It then allowed a load of these shares to be sold cheaply to Ross’s fund.
Ross joined the board of directors of the Bank of Ireland in 2012. In 2014, he started selling those shares.
He bought them for 10 euro cents a share and sold them at between 26 and 33 euro cents a share. It was a big price rise, so he made a €500 million profit. That’s very big money.
However, in May 2015, the bank’s lead auditor testified to the Irish parliament that the bank had been miscalculating its losses.
Even after the massive bailout, the bank was in terrible trouble. The share price dropped.
So Trump’s top official Ross made €500 million buying and selling shares in the Bank of Ireland. Only the bailout by Irish taxpayers made his shares valuable and, after he sold, their value crashed, leaving everybody else in the lurch.
The EU report suggests Ross may have known that the bank was in a worse condition than it was pretending when he profited by selling the shares, that he “had access to the loss details that Bank of Ireland kept hidden from retail shareholders” because he was on the bank’s board.
Ross hasn’t commented on the report, but it looks like Trump’s government includes a man who personally profited from the European taxpayer bank bailouts, taking the money while leaving everyone else high and dry.
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