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Paper-thin Walls

Andy Storey

The Globalist: Peter Sutherland: His Life and Legacy, by John Walsh, William Collins, 336 pp, £25, ISBN: 978-0008327613

Peter Sutherland was a wealthy lawyer who became Ireland’s youngest attorney general (in a Fine Gael-led government). He then served as Ireland’s EU commissioner before taking the reins at the organisations responsible for the governance of global trade. Towards the end of his life he became an advocate for the rights of migrants. He mixed that career of public “service” with lucrative commercial positions – for, among others, Allied Irish Bank, Goldman Sachs, Royal Bank of Scotland and British Petroleum.

His biographer, John Walsh, rightly describes Sutherland as “among the most influential powerbrokers of the last thirty years or so”. Unfortunately, Walsh’s inability or unwillingness to seriously grapple with Sutherland’s exercise of that power causes the reader to veer between exasperation and, all too often, frustrated laughter.

My own favourite “joke” is the claim that Sutherland had reservations about a 2003 deal between British Petroleum (BP, of which he was then chairman) and a Moscow consortium on the grounds that “the separation between the public and private realms in Russia was paper thin”. This comes after extensive discussion of why, above all else, Sutherland was courted by the US and European private sector: it was, by the open admission of all concerned, precisely because of his contacts in the world of politics and public policy-making more broadly. A former colleague at Goldman Sachs described Sutherland as having a “golden Rolodex”. In other words, the ability to straddle the public and private realms was precisely what made Sutherland a “catch” for large corporations, and it was also what made him extremely wealthy along the way.

Sutherland was hardly alone in his enthusiasm for the revolving door between business and politics. Hank Paulson, for example, is quoted extensively in Walsh’s book: he headed Goldman Sachs while Sutherland worked there, before he (Paulson) took up the job of US treasury secretary during the presidency of George W Bush, in which capacity he was instrumental in ensuring that the banks (including Goldman Sachs) got bailed out by the government. Paulson himself is quoted as saying that a “good number of former [Goldman Sachs] partners have gone back and forth” between the corporate and public sector worlds. Paper-thin separations, anyone?

Instead of treating such vital issues with the attention they merit, Walsh’s book constantly veers towards the trivial. Appendix 1, for example, is given over to the team sheets for a UCD v Trinity rugby match of 1968, in which Sutherland played. We are similarly informed that Gonzaga (Sutherland’s secondary school alma mater) rugby team won some game in 2019 (Sutherland was dead by then) and that “Henry Godson, who scored three tries, is the son of Rory Godson, a close friend of Sutherland’s”. I am sure that is of interest to the families concerned, but to whom else?

These two examples – the wilful blindness to Sutherland’s exemplification of the intimate links between the public and private spheres of the model of crony capitalism he championed; and the emphasis on irrelevant trivia – characterise much of the book. What Walsh most needed to discuss is underplayed, and much of what is written about extensively is of zero interest to a wider audience.

Sutherland, born into a “prosperous family”, went to Gonzaga College, one of Ireland’s elite secondary schools, run by the Jesuits: Walsh tells us that the experience “profoundly shaped” him. We are regaled with anecdotes about his relationships with teachers, his enthusiasm for rugby, and the lifelong friendships forged with fellow pupils. This is all heartwarming stuff, though there is a slightly alarming story about the young Sutherland defending a priest with a keenness for corporal punishment on the grounds that the man of the cloth was just doing his job.

The main characteristics Walsh feels Gonzaga imbued in Sutherland were a relatively liberal Catholicism and a high degree of self-confidence. The book entirely fails to grapple with (or even consider) the role of such elite schools as Gonzaga in reproducing ruling class privilege, a social hierarchy that Walsh seems to simply take for granted. A perusal of, for example, Aline Courtois’s fascinating Elite Schooling and Social Inequality: Privilege and Power in Ireland’s Top Private Schools (including Gonzaga) would have been very useful for the author.

However, reading, in general, does not appear to have constituted a prerequisite for Walsh’s writing: Courtois’s book is not referenced, but then neither, with one single exception, is any other book. Walsh relies almost entirely for his research on interviews with people who are favourably disposed towards Sutherland, which does not make for much in the way of critical appraisal, to put it mildly.

In 2011, Courtois attended a past pupils’ event at Gonzaga, featuring a debate on the motion “A [Gonzaga] education would have saved Ireland from financial disaster”. The debate was chaired by Sutherland, the school’s most famous past pupil, who, Courtois reports, abandoned any pretence at impartiality in his backing of the motion. Given Sutherland’s own deep involvement in banking, including banking scandals in Ireland (see below), there was a certain irony (or perhaps chutzpah) at play here. The event is unreported by Walsh.

One of the themes of Courtois’s book is the way in which some elite schools inculcate a version of noblesse oblige in their students, emphasising the need for the privileged to “give something back”. As the mission statement of Gonzaga College puts it, “We strive to form men of competence, conscience, courage, and compassion”.  Or, as a more cynical observer (like myself) might put it, men who can legitimise and justify their access to a world of inherited, unearned privilege (Sutherland, after all, was hardly a scholarship student) by engaging in supposed “good works” and charitable donations. Such a perspective would have provided a useful framework for analysing some of Sutherland’s activities in later life, but it is not a perspective we are offered here.

Sutherland went on to study law at University College Dublin (UCD) though his time there was, apparently, “mostly taken up with rugby”. Walsh pretty much follows his subject’s example, dwelling in excruciating detail on team sheets (yes, more of them) and lineout formations. At one stage we are informed that one UCD team featured six law students but only two from medicine ‑ be still my beating heart. Doubtless the networks formed through rugby served Sutherland well throughout his life (probably more so than greater application to his studies would have done) but the idea that he was further cultivating access to social networking advantages unavailable to others and which he relied upon for later advancement is not elaborated upon.

In the book’s discussion of Sutherland’s early career in law (during the first part of the 1970s), an unnamed colleague is quoted as follows:

Peter’s father had been involved in the insurance industry. So that gave him a running start, because he would have gotten work in the personal injury area and work from insurance companies. That would have been a good help to him. And then of course he had a wonderful network of friends and people that he knew from school, from rugby and all of that. He was an excellent networker. He identified and made friends easily. [That “identified” is itself intriguing.]

In other words, Sutherland got ahead by virtue of his family and his family-sponsored educational and social connections. I don’t doubt that he was smart and determined (Walsh tells us so often enough), but lots of people are – they just don’t all come from wealthy backgrounds and go to Gonzaga College, or have a father who conveniently works in insurance when you are trying to make a career in law.

Walsh tells us that part of what drew Sutherland to Fine Gael was Declan Costello’s 1965 pamphlet “Towards a Just Society”, which concerned itself with issues of poverty, housing and social protection more generally. But which aspects of the “just society” thesis particularly appealed to the young and ambitious Sutherland? Its call for greater levels of state intervention in the economy? In reality, we don’t know if any of it did: no sources (personal papers, to which Walsh had access, or otherwise) are cited to back up the claim.

Garret FitzGerald (a friend from UCD days) appointed Sutherland as attorney general in 1981: he was the youngest person ever to hold that post. Much of the book here focuses on Sutherland’s advice against the adoption of what would become the eighth amendment to the Constitution, which sought to deny women’s reproductive rights. Certainly this episode illustrates Sutherland’s keen legal mind (he foresaw that the wording could, counterintuitively, open the door to abortion under certain circumstances) but what is less clear is whether his proposed alternative would have led to a more or less restrictive regime (probably the former). Sutherland’s own views on abortion are not recorded.

Sutherland’s support, as attorney general, for facilitating the extradition of Irish republicans for trial in the UK is better attested, and his involvement in one such high-profile case (that of the notorious paramilitary leader Dominic McGlinchey) saw him criticised by senior barrister Adrian Hardiman (later a Supreme Court judge). Walsh dismisses these criticisms on the basis of a rebuttal statement issued by a Fine Gael apparatchik, who may have been right for all I know, though I would have preferred to hear a view from a more neutral and expert source.

At times the absence of desperately called-for follow-up on Walsh’s part actually works to Sutherland’s disadvantage. For example, a lawyer cites Sutherland’s drafting, as attorney general, of the 1984 Criminal Justice Act as a significant advance in upholding the rights of those arrested. But, frustratingly, Walsh leaves it at that. Which rights? How did this differ from previous legislation? Did it reflect some of Sutherland’s own claimed attraction to the ideas of the “just society”? Sadly, answer comes there none.

It is in relation to Sutherland’s tenure as EU commissioner (for competition) that we arrive, for the first time in the book, at something resembling an outline of the man’s economic philosophy: “Ireland’s low corporate tax and business-friendly regulatory regime chimed with his broader vision for Europe.” We needed to hear a lot more about this vision – but we don’t. The former director general of EU Commission legal services is quoted as describing the record of this time at the commission as “a clear victory for Peter and for neoliberal thinking”, but we are left with no idea whether Sutherland accepted (or even thought about) the neoliberal label.

Sutherland’s achievements in the role were real enough. He was crucial to the establishment of the EU Erasmus programme for third-level student mobility. But more typical of his brief was the way he drove deregulation of the aviation market (Michael O’Leary of Ryanair would later pay appropriate respects). Was this an ideologically driven project on Sutherland’s part for economic liberalisation or a pragmatic desire to generate consumer gains and/or boost private sector corporate profits? The question seems hugely important to the consideration of his life and work, but it is one that Walsh seems almost entirely uninterested in.

We are told that “Sutherland had a reputation as a market liberal … [concerned with] the dismantling of state aid and the removal of distortions in competition” and that “his approach was hated by the left”. Why the hate, and who expressed it? Was there any substance to their critique? Did Sutherland ever weigh up the pluses and negatives, in terms of wider social and economic impact, of the policies he was pursuing? These questions go to the heart of the man’s motivations and thought processes, and of how one might draw up a balance sheet of his effect on society at large, but they are glossed over here to an extraordinary degree.

Sutherland was AIB chairman from 1989 to 1993. In respect of this era, Walsh mainly seeks to respond to Fintan O’Toole’s argument that Sutherland did not act decisively when the Deposit Interest Retention Tax (DIRT) scandal at AIB was revealed: indeed, that he chose to downplay, if not wholly ignore, the colossal tax evasion which AIB had facilitated. Unsurprisingly, Walsh argues that Sutherland bore little or no responsibility for the fraud and its cover-up. Equally unsurprisingly, the specific charges levelled by O’Toole and others are not substantively addressed, principally that, in O’Toole’s words, “his [Sutherland’s] own bank had been colluding in a systematic fraud on the State through the organised evasion of Dirt tax”, a charge which is irrefutable. The best that Walsh can rise to is that “as an executive he shares responsibility”, though we are quickly assured that “He was motivated by the best of intentions” and “There was never any evidence of Sutherland’s [personal] culpability or impropriety”.

Sutherland took up the role of director general of the General Agreement on Tariffs and Trade (GATT) in 2003 and helped bring discussions (the so-called Uruguay Round) on global trade liberalisation to a successful (for some) conclusion in 1995, at which stage he had already become the first director general of GATT’s successor, the World Trade Organisation (WTO). Walsh portrays this period as a triumph for Sutherland’s qualities of mastery of detail, determination and personal magnetism, and well it may have been.

It was also a triumph for his willingness to be a bully: when the Japanese ambassador threatened to derail the deal, Sutherland pinned him up against a wall and “there was a lot of screaming and shouting – all coming from Sutherland”. The vignette is disturbing but for those of us (and we have to be the majority of readers) less interested in Sutherland’s personal triumphs or character traits and more in that question of the aforementioned societal balance sheet, there is precious little to go on here.

This despite the fact that Walsh includes a chapter entitled “Globalisation and its Discontents” (the debt to Joseph Stiglitz’s book of the same name is not acknowledged). The chapter might have made some sort of stab at constructing that balance sheet, but instead it repeats ad nauseam one theme only: globalisation (essentially defined here as global trade liberalisation) lifted millions of people in the Global South out of poverty but the losers (mainly the “traditional” white working class in the US, Europe and elsewhere) were not properly looked after (through no fault of Sutherland’s), which is allegedly what set the scene for the rise of Trump, Brexit, etc.

I do not expect Walsh to have produced a work of detailed economic analysis (any more than to have written a work of serious sociology à la Aline Courtois) but even a cursory reading of some of the most popular and accessible literature in the field would have raised two immediate objections to this simplistic narrative: first, most people who have been lifted out of poverty in recent decades have been Chinese, and their government did not wholeheartedly embrace economic liberalisation as promoted by Sutherland et al; second, measures introduced in the Uruguay Round and enshrined in the WTO – especially tightened protection of intellectual property (patents and copyrights) – have since worked to delimit, rather than boost, the development prospects of most poor countries.

Those who were critical of capitalist globalisation at this time are given short shrift by Walsh – G8 summits were allegedly “hijacked by anti-globalisation protestors, and the protests were often violent”. In fact, the violence was more typically perpetrated by the state, as a judgement from the European Court of Human Rights (ECHR) established vis-à-vis the policing by the Italian authorities of the protests against the G8 summit in Genoa in 2001. The ECHR found the Italian police guilty of “gratuitous violence” and “torture”.

Sutherland joined Goldman Sachs in 1995 (as chairman of its international wing). The firm’s fraudulent role in the US sub-prime mortgage crisis (for which it was fined €550 million) and its manipulation of Greece’s national accounts are mentioned by Walsh, but quickly glossed over on the grounds that all investment banks were doing dodgy stuff and “Goldman Sachs was far from the worst offender”. He quotes another Goldman Sachs executive as saying that Sutherland saw criticism of Goldman Sachs as “a cheap shot at the leading institution in … an unpopular industry”, as if that was all there was to it.

But it gets worse, and this is the most disgraceful part of Walsh’s book. He links criticism of Goldman Sachs to the (much later) charges of antisemitism made against the British Labour Party, cites a claimed left-wing tendency to “equate … Jews with finance and secret plots to rule the world”, and effectively gives Goldman Sachs a pass on the grounds that it “has become a convenient shorthand for this narrative”. These are weasel words: those who have legitimate criticisms of Goldman Sachs are (implicitly at least) being equated with antisemites.

But, as always, Walsh’s sins are of omission as well as of commission. We get alarmingly little detail on what it is that Sutherland did for Goldman Sachs, the only real exception being this quote from a former colleague:

There was tremendous focus on about a dozen countries, mostly in Eastern Europe, but the dynamic was also changing in Russia and Turkey … This was low-hanging fruit for Peter. Through the WTO he understood these countries ... He was also very important in terms of privatisation mandates in India.

But what was it that Peter did here exactly? What dynamics, precisely, did he link into in Eastern Europe, Turkey and Russia? What low-hanging fruit did he pick? What was being privatised in India, and to whose benefit? Apart from the utterly meaningless quote “Being Irish was very important because he understood empathy”, what it was that Sutherland brought to the table (and took from it) for Goldman Sachs is left unspecified. It is a startling lacuna. Anyway, whatever it was, it worked out well for Peter: he made €120 million from the sale of his Goldman Sachs shares.

Fred Goodwin, former chief executive of RBS, is today widely (and rightly) vilified as being the author of a catastrophic speculation spree and banking collapse that cost the UK over €50 billion when RBS was bailed out by the state. Peter Sutherland sat on the board of RBS during this spree – from 2001 to 2009 – and took no meaningful measures to prevent it. He may have had some doubts about some of Goodwin’s initiatives but, in the words of the banking editor of The Times newspaper:

Sutherland was among those opposed to Goodwin but they took no action … there were misgivings about the crisis but nothing was done about it … nobody can find much evidence that the board challenged Fred …

Remarkably, these quotes are drawn from Walsh’s book, but he stubbornly refuses to draw the obvious conclusion from them, namely that Sutherland broadly facilitated Goodwin’s rapacious and ultimately disastrous (for others) corporate strategy. Yes, Sutherland may have objected to specific aspects of Goodwin’s approach but, for example, when push came to shove, he approved the RBS acquisition of Dutch bank ABN Amro in 2007, with what proved especially costly consequences (though not for Peter himself of course). The title of this chapter, “Clipping Goodwin’s Wings”, is risible.

BP, we are told by Walsh, faced “a Schrodinger-style dilemma”: they had to be seen to reduce the threat of climate change by reducing fossil fuel usage, and yet they made their money by digging up and selling fossil fuels. Well, poor Schrodinger’s cat can only have hoped it was living on the sales and profit side of the business because it would have been very dead if it was trying to exist on the “ethical” side of it. Sutherland became chair of BP in 1997 and would remain in that position while the company’s operations were hit by a barrage of environmental scandals all over the world, including multiple oil spills and contaminations of drinking water.

Again, we are told, Sutherland clashed with the chief executive (John Browne in this case) but the clashes do not seem to have involved any issues of principle around ethics (or lack of them) when it came to the extraction and sale of fossil fuels. They were, rather, disputes rooted in disagreements about corporate strategy. Walsh claims that Sutherland later sought to highlight the plight of “climate refugees”, people forced to leave their homes as a result of rising sea levels or some other climatic factor. Did he connect that back to his role in the fossil fuel industry and its critical contribution to climate change? Maybe, but this book won’t tell you.

What the book does tell you about (in considerable and appropriate detail) is Sutherland’s later-life advocacy for a managed and rules-based global migration system. A useful service this performs is to emphasise that Sutherland was far from an advocate of “open borders”, never mind the crackpot theories fostered by the Far Right of supposed plots to replace the white, Christian population of Europe with non-white Muslims and others. Sutherland favoured a less restrictive (than present) and more equitably managed (between rich countries) approach to migration but he never argued for a wholesale liberalisation of the movement of people. In that regard, he was like many neoliberals – free movement was for goods, services and capital, not for people.

The centerpiece of Sutherland’s work in this area was the Global Compact for Migration, initially agreed by all UN countries (except the US) in 2018. But this was far from the liberal imposition denounced by the Far Right; it was simply a voluntary and wholly non-compulsory agreement (a nominal one) to improve co-operation on migration issues. To conclude from this, as Walsh does, that “It was Sutherland, possibly more than any other individual, who improved the lives of migrants and fought tirelessly to alleviate their plight” is quite a leap. What, in concrete terms, did Sutherland actually achieve to make migrants’ lives better? He may well (and I am quite happy to give him the benefit of the doubt here) have wished he could have achieved more, but the reality is that the record is very limited.

Walsh is correct to note that Sutherland’s prominent role in two forums (Trilateral and Bilderberg) was also a lightning rod for far-right criticism of him – in the wilder reaches of neo-fascist discourse, the two organisations are part of a “globalist” Jewish-led conspiracy. They are not, of course, but this is not the same as saying that they play progressive roles – they do not do that either. The fact that Sutherland was, for example, on the steering committee of the Bilderberg Group (“an annual meeting, held in private, for top business people, politicians, academics and the media”, as Walsh accurately describes it) for many years does not reflect well on him, because it speaks to his endorsement of an elitist (profoundly anti-democratic) vision of how global governance should be conducted.

Sutherland also helped bring a Trilateral Commission (similar to Bilderberg in many respects) meeting to Dublin in 2010, attracting the usual mix of politicians and business leaders from the US, Europe and Japan in particular. Walsh notes, in passing, that “Henry Kissinger, the controversial US statesman” attended the Dublin meeting. I suppose “controversial statesman” is one term for him ...

Walsh’s take on the Irish economy is frequently rather odd. For example, as the book moves towards its conclusion he informs us that “Ireland’s economy had been highly protectionist from the inception of the state until the early 1990s”, which bizarrely skates over the very extensive and sustained economic liberalisation that took place between the 1960s and the 1980s. Indeed, by the early 1990s Ireland probably had one of the least protectionist economies in the world. What it did have was the Celtic Tiger, which would fairly soon die a sudden death in a maelstrom of property speculation, reckless bank lending and light-touch regulation. Sutherland would re-enter the Irish political arena in that context, albeit without any official position. Still, the Irish media was happy to offer him numerous opportunities to deliver admonitory sermons.

One such opportunity was an interview with The Irish Times in 2010, cited by Walsh, in which Sutherland attributed the crash to “our” having reduced our competitiveness by “eating it up with waste and wage increases beyond what was possible for us to handle”. No mention of the role of the banks, of course, perhaps too close to home for this most eminent of bankers. No specification either of who exactly was supposed to have been paid these excessive wage increases, though one can assume he was more likely referring to public sector workers (nurses, teachers, etc.) than to the bonus-bloated salary packets of the circles he moved in personally.

Sutherland embraced and supported the Irish government’s austerity drive – forcing ordinary people to pay for the debts of the banks – with phrases (as quoted by Fintan O’Toole, but not by Walsh) such as “We … have to gird our loins to take tough decisions and see it through . .  This is where we show our mettle.” O’Toole rightly challenged the use of “we” here, as if the sacrifices being demanded were being equitably shared, or being levied principally on those who had caused the crisis in the first place.

Walsh acknowledges the critique and expresses sympathy for the victims. Except that, in Walsh’s view, the main victim was … Peter Sutherland. Referring to O’Toole’s “excoriating” profile, and other critiques, Sutherland’s friend Brendan Halligan is quoted as follows:

It hurt him [Sutherland] deeply … he took it very badly. He said he psychologically and physically withdrew from Ireland as a consequence ... He was very hurt by what happened.

He was not, frankly, hurt half-enough. Here was a man whose promotion of corporate rapacity and impunity had helped blow up the Celtic Tiger bubble (and the global financial bubble more broadly) to begin with, and who was then demanding that the most vulnerable sectors of Irish society pick up the tab for its bursting. The self-interest is understandable; it is the self-pity that is nauseating. What are Sutherland’s hurt feelings compared to the pain of an elderly person languishing on a hospital trolley, or that of a parent of a child with intellectual disabilities denied adequate home or respite care? These were the people who really paid for the cutbacks resulting from the socialisation of the debts of the banks, what Walsh euphemistically labels “fiscal consolidation”.

As the reviewer of this book in Phoenix magazine noted, Sutherland’s corporate career mainly consisted of “poisoning the earth and crashing the global economy”. He was absolutely central to a model of capitalism that became ever more environmentally destructive and dangerously speculative in nature. And when the system crashed in Ireland, he led calls for costs to be imposed on those who had benefited least (if at all) from it. It is an unedifying legacy.

Walsh describes Sutherland in his later years as being subjected to “a series of ad hominem attacks”, that is attacks which focused on the person rather than the issues. In fact, it is Walsh’s book that merits the ad hominem label: by focusing, in an unbalanced and celebratory way, on Sutherland as a person, he fails to deal with the vital questions of politics and economics that Sutherland’s life both encapsulates and raises. Sutherland deserves, if nothing else, a more serious treatment than that.

1/1/2020

Andy Storey is an assistant professor in the School of Politics and International Relations, University College Dublin, specialising in issues of European political economy and global development.

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