The Fate Of Frederick Goodwin

On October 18 2008, I wrote,

"Given that he was knighted for services to banking, and subsequently helped preside over banking's near collapse, is it somehow inappropriate to suggest that Sir Fred Goodwin be stripped of his knighthood?"

It is with some satisfaction one sees that after three months, Michael Meacher has finally caught up with me.

Of course things have gone from bad to worse since then. The news that the Royal Bank of Scotland has posted the largest loss in British corporate history would have made Goodwin a laughing stock, had his arrogance and hubris not placed the British economy in peril and plunged generations of British citizens into natal debt.

Goodwin's name now deserves to be mentioned in the same breath as that of Bruce Ismay. Is there any difference between Goodwin 'earning' inflated bonuses and a pension pot beyond the dreams of avarice while he was driving a bank onto the rocks, and Ismay taking a place in the 'Titanic's' lifeboats while W. T. Stead and Benjamin Guggenheim went down with the ship? I can't really see one; indeed, if anything Goodwin's behaviour may have been worse. At the very least, Ismay might be understood, if not excused, on the basis that he was in a life and death situation, and wanted to survive; Goodwin just seemed to want to get rich.

Trawling through the foam-flecked rants of both the Scottish and English nationalist trolls who spoor their way through Alan Cochrane's combox is a chore at the best of times; yet attached to his most recent column is a comment which draws a very insightful historical analogy, a true glimpse into Scotland then and now.

Commentor 'Phil C', wrote,

"This has a powerful resonance of the Darien scheme which brought the Scots into the Union three hundred years ago; only this time it might turn out to be the financial disaster which keeps them in it."

Whoever he is, he's dead right. They trooped in to invest in Darien, determined to prove that the Scots could enslave primitives and exploit them for gain just as efficiently as the English; they trooped out again, poorer and none the wiser.

However, unlike the saga of the Royal Bank of Scotland, the Darien Scheme produced one of the most glamourous, most chivalrous, most attractive and now least remembered figures in all Scottish history; Captain Alexander Campbell of Fonab.

Actually getting Fonab to go to Darien was something of a coup. When he arrived, he took one look about him, and saw that the colony was being run like a church fete in Blairgowrie - upon reflection, that does a gross disservice to the professionalism of those who run church fetes in Blairgowrie. If memory serves, according to John Prebble the attitudes of the good Revs. Francis Borland and Alexander Stobo were particular cases in point.

So Fonab the loyal soldier set himself to military matters; and on February 15 1700, he became the only Scottish commander ever to lead Scottish troops to a Scottish victory outside the British Isles, when a Highland Charge despatched the forces of Carlos II on the hill of Toubacanti.

Yet within weeks, the colony was effectively lost. Campbell of Fonab returned to Edinburgh a hero, and the Scottish Parliament struck a medal in his honour - as he received it, he called out those who had allowed Darien to fail through bad planning and incompetence as traitors.

The Royal Bank of Scotland was not so lucky as to have a Campbell of Fonab on its board, to call out the bad planning and incompetence of Frederick Goodwin. Instead it had Peter Sutherland, sometime Attorney-General of the Republic of Ireland, European Commissioner, Director-General of the World Trade Organisation, UN Secretary-General's Special Representative on Migration, Consultor of the Extraordinary Section of the Administration of the Patrimony of the Apostolic See, Chairman of BP, Managing Director of Goldman Sachs International and Chairman of the London School of Economics. Sutherland, a lawyer by training, has been connected to the management of two banks on two continents which have both required taxpayer bailouts, yet I have never seem the mainstream press make the connection. I wonder why that is.

The very fact that Sutherland's name is never mentioned in relation to the necessary rescues of either Goldman Sachs or the Royal Bank of Scotland might prove the truth of GK Chesterton's observation on the press, written in 1908 (he was a journalist, and knew its truth) -

"So...we have almost up to the last instant trusted the newspapers as organs of public opinion. Just recently some of us have seen (not slowly, but with a start) that they are obviously nothing of the kind. They are, by the very nature of the case, the hobbies of a few rich men. We have not any need to rebel against antiquity; we have to rebel against novelty. It is the new rulers, the capitalist or the editor, who really hold up the modern world. There is no fear that a modern king will attempt to over-ride the constitution; it is more likely that he will ignore the constitution and work behind its back; he will take no advantage of his kingly power; it is more likely that he will take advantage of his kingly powerlessness, of the fact that he is free from criticism and publicity. For the king is the most private person of our time. It will not be necessary for anyone to fight again against the proposal of a censorship of the press. We do not need a censorship of the press. We have a censorship by the press".

As far as Goodwin's concerned, that tide appears to have turned. This morning, both Philip Johnston and Simon Jenkins are on his case. The knowledge that you can't threaten anyone with a libel suit for comment on your professional life because you have no professional reputation left can't be comfortable. There is even talk of just desserts.

Having managed to preside over the loss of the not inconsiderable sum of £28 billion, £2.5 billion of that apparently pissed away in bad loans to a Russian oligarch, Frederick Goodwin, Peter Sutherland and the rest of the Royal Bank of Scotland's board should be facing the prospect of being frogmarched to The Saltmarket to face disqualification from the management of any British company, if possible preferably for life. Yet unless I have grossly misread it, always a distinct possibility, the Company Directors Disqualification Act 1986 makes no immediate provision for penalising the type of corporate misconduct, whether perpetrated by commission, omission, arrogance, machismo, or ignorance, such as that in which the directors of the Royal Bank of Scotland have now been shown to have been systematically engaged. It's all bloody 'hereinbefores', 'whereintowards' and action only being capable of being taken upon investigation of all relevant parties (including, but not exclusively, the taking of their inside leg measurements) under Section 8, Paragraph 4(9)(c) of the You've Lost 28 Billion Quid, You Must Be A Muppet Act 1783. It's the sort of law that gives lawyers and lawyering a bad name, with good reason.

Years before he pillaged the Mirror Group's pension fund, Robert Maxwell was described as by the Board of Trade as being 'unfit to run a public company'. Yet he was allowed to go on. His companies at least had an excuse for their losses - they were being run by a thief. What's Goodwin's excuse? Was he ever fit to run a public company? Who supervised him? Haven't the inflated bonusses and distended pension pots of the last decade been a wealth transfer, a form of theft? Does transferring value away from shareholders to yourself suddenly become both legitimate and moral because it's been sanctioned by the remuneration committee? Which you might have packed with your mates?

Fred Goodwin is the most well done piece of corporate toast this side of the Great Depression. He should be disqualified from running any company, yet the law seems to make it difficult for this to happen. He should be joined in this state by all his fellow directors, even the powerful and well connected Irish ones. They have managed the staggering accomplishment of turning the Royla Bank of Scotland into the Royal Tank of Scotland. Its customers are now in the invidious position of having the government know not just how much they earn, but to whom they pay their direct debits. Think that customers information won't be ingathered and databased? If you do, you have more faith in the British government than me.

And all the while, the great globalisation project goes on, with Peter Mandelson refusing to contemplate refusing to consider wage subsidies which might save British jobs. Does he hate Britain and the British? I sometimes wonder.

Fred Goodwin made a lot of money by having no compunction about taking peoples' livelihoods away from them in the name of efficiency. He is almost the archetype of the grasping Scot - an image of ourselves that we complain about, but one no less real for that. For a decade, we cited his like as role models - let us hope his exposure as having feet of clay will finally blow that fetid national stereotype into eternity.

However, there's always a bright side. At the very least, we will be spared The Tartanissmo's Darienesque fantasies of how wealthy an independent Scotland would be - for a while. We should be grateful for small mercies.