Ireland’s property crash could have been avoided

2006 report exposing Anglo-Irish behaviour was quashed

By: FRANK CONNOLLY | Published Monday, August 23, 2010, 7:16 AM | Updated Tuesday, August 24, 2010, 9:18 AM

Irish American billionaire Chuck Feeney’s effort to establish the Centre for Public Inquiry to examine corporate and political culture in Ireland was destroyed after political and media pressure was brought to bear.
 
Frank Connolly, executive director of the Centre, recounts how a massive opportunity to disclose the corruption so deeply at the heart of the Celtic Tiger building boom was missed.

 

On Sunday 8th August writer and historian, Tim Pat Coogan, opened the annual Parnell Summer School in Avondale, County Wicklow. During his remarks on the state of the Irish media he recalled the forced closure in late 2005 of the Centre for Public Inquiry (CPI) following a prolonged controversy.
 
He told his audience that the closure prevented the publication of a report into the Dublin Docklands Development Authority and its links to Anglo-Irish Bank whose then chairman, Sean Fitzpatrick, was a board member of both organisations.
 
Coogan said the report, if published, may have helped prevent the massive exposure of the Irish tax payers to the debt, potentially €33 billion, they face following the corporate collapse of the bank.
 
The abrupt closure of the Centre for Public Inquiry (CPI) in Dublin in late 2005 prevented the publication of a detailed report which would have exposed serious conflicts of interest at the heart of a State agency – the Dublin Docklands Development Authority (DDDA) - and might have been instrumental in saving the tax payer billions of Euro.
 
In particular, the report due for publication in March 2006 revealed how the DDDA had been financially, and ultimately fatally, compromised through its relationship with Anglo-Irish Bank whose then chairman, Sean Fitzpatrick, was its most influential board member.
 
It would also have revealed the deeply unethical business behaviour of Fitzpatrick who has since become the chief focus of blame for Ireland’s collapsed banking and financial system, and of its once booming economy.
 
If the CPI had been allowed to continue its work it might, conceivably, have rung alarm bells for those in authority to recognise the improper practices at the heart of the banking system and halt the spiraling, bank lending and property debt fueled boom long before the crash and financial melt down two years later.
 
Fitzpatrick’s close links to the wealthiest and most successful Irish developers – almost all of whom were key donors to  Fianna Fáil  – placed him at the centre of the most powerful golden circle to emerge in the history of the Irish state.
 
Many of them were funded by his bank, Anglo-Irish Bank, and many also were investors in the high rise, real estate, opportunities that flourished from the late 1990’s along both sides of the river Liffey at its estuary into Dublin bay.
 
Set up in 1997 the DDDA enjoyed special planning powers which allowed it to grant lucrative planning permissions (known as Section 25 certificates) on lands it controlled along the city quays without the developers having to go through the transparent, if lengthy, procedures involved in facing objections and appeals from residents or city planners.
 
After 2002, when Fitzpatrick joined the board of the DDDA, the pace of development intensified and the rate of Section 25 certificates issued accelerated to the extent that most of the country’s small, but hugely wealthy and influential, number of developers were taking options on land in the docklands area.å
 
The major investments, most notably the massive Spencer Dock development on the north quay, were funded by Anglo-Irish Bank although the other major banks, Allied Irish, Bank of Ireland and Ulster Bank were also quick to join the queue of lenders to a seemingly ‘no brainer’ investment opportunity with land values leapfrogging year on year. Dozens of huge cranes stretching along both sides of the river, lighting the night sky, became the lasting image of the Celtic Tiger years in the capital city.
 
It became an obvious area of investigation for the newly formed CPI set up with five year funding by Chuck Feeney’s Atlantic Philanthropies in late 2004. Feeney had first suggested to me that such an agency might help expose some of the obvious corporate and political wrong doing in Irish public life.
 
As an investigative journalist, I had a long track record of exposing political, police and corporate corruption in Ireland. Feeney knew me over several years when I reported on the emerging peace process in Northern Ireland for the Sunday Business Post and dramatically exposed high level political sleaze surrounding the former foreign minister, Ray Burke, who was forced to resign just months into the first Bertie Ahern led government in late 1997.
 
The CPI board, headed by former High Court Judge Feargus Flood, had a detailed programme of investigations when it received five year funding from Atlantic in December 2004 and its first two reports published the following year - on the development of a hotel within the curtilege of the historic Anglo Norman Trim Castle in county Meath and on the controversial Corrib Gas pipe line in county Mayo - established the quality and intent of its investigative and journalistic endeavors.

The report on the Corrib Gas controversy raised fundamental questions about the safety of the high pressure gas line through a small north Mayo community which contributed to a reassessment of the project, a process which is still underway.
 
Our next report was even more ambitious – to identify the ownership of every site in the DDDA area, the developers involved, their banking arrangements and their links to the political establishment. The reason was simple – it was the single biggest commercial development in the history of the State, the area where property prices were rising at the fastest rate and where a substantial number of the country’s first crop of billionaires were investing and profiting with the aid of a Government agency.
 
The CPI got early guidance from well placed sources within the DDDA machine, public servants who were concerned at the way in which a State body was easing the path for the wealthiest business interests at the direction of one the country’s most powerful bankers. Fitzpatrick sat on the board and on the key finance committee of the DDDA while the chairman of the agency, Larry Bradshaw, was appointed to the board of Anglo Irish Bank in late 2004.
 
This coincided with the information that Anglo-Irish was to back the Spencer Dock scheme on the north quays, involving a ‘national conference centre’, residential and commercial space and developed by Treasury Holdings, by advancing 50% of the then €300 million construction cost.
 
In its investigation the CPI was assisted by informed whistle blowers and by some less endowed developers watching from outside the loop. It soon emerged that a cosy and politically well connected, cartel was operating in the docklands area.

The CPI identified minutes of specific board meetings of the DDDA where a clear conflict of interest involving Fitzpatrick and Bradshaw was evident. Minutes seen by the CPI researchers showed that both participated in board discussions without declaring their commercial interest or ‘stepping outside’ when issues of potential conflict arose in decisions pertaining to the development of Spencer Dock - the brainchild of controversial property gurus, Johnny Ronan and Richard Barrett.
 
The CPI investigation did not go unnoticed as the questions submitted by its researchers to the DDDA and various Government departments under Freedom of Information legislation triggered political defence warnings at the highest level in cabinet. Not least in the offices of Taoiseach, Bertie Ahern (1997-2008), who was identified through the high visibility annual party fund raiser at the Galway races with many of the dockland developers that patronised the event along with one of their primary lenders, Fitzpatrick.
 
From early 2005, Ahern was hinting to Chuck Feeney that he did not particularly appreciate the Irish American’s funding of the CPI. It was the case that we were about to examine potentially unethical political and corporate behaviour under his watch.

The then Progressive Democrat (PD) leader and Tánaiste (deputy prime minister), Mary Harney, said that “the idea of some group of citizens setting themselves up with absolutely no justification to the wider public is absolutely sinister and inappropriate.” It was noted that she had no problems with the Irish government accepting up to €1 billion of Chuck Feeney’s monies for health and education projects.
 
Harney’s PD colleague and justice minister, Michael McDowell, raised questions about an allegation that I had visited Colombia using a false Irish passport in 2001. This story first surfaced in the Irish media in 2002 and in early 2003 the Irish police said there was no basis for my prosecution on any charge nor has there been any since.
 
In November 2005, McDowell then took the unprecedented step of using (or abusing) Dáil privilege to denounce me, again, with a series of unsubstantiated claims. These otherwise libelous allegations were made in a written reply to a parliamentary question concerning the CPI. The reply was faxed to a board meeting of Atlantic Philanthropies in New York within minutes of its deposit in the library of Parliament in late November 2005. With this intense official pressure the fate of the CPI was sealed and its funding immediately withdrawn.
 
Just weeks later the members of the CPI board were sent a letter issued by prominent solicitors, Arthur Cox, on behalf of Treasury Holdings which threatened that their family homes would be pursued in damages claims if its clients (Johnny Ronan and Richard Barrett) were written about in any report by the CPI that was libelous or defamatory.
 
The first casualties of the CPI closure were the three researchers the administrator and creditors of the CPI along with myself as executive director. The next casualty was the series of reports into official wrong doing which formed its five year programme of investigation including, of course, “Who Owns Dublin?” the working title of the Docklands report.
 
Other investigations underway included the cause of deaths of detainees in State custody; the inaccurate conclusions of the official tribunal of inquiry into the Stardust tragedy of 1981 when 48 young people died in a Dublin disco fire; the need for Whistleblower protection legislation; an enquiry into lax governance in Irish corporate life; an examination of the monopolisation of the Irish media; and the circumstances surrounding the €30 million purchase (authorised by justice minister McDowell) of a hugely over priced piece of agricultural land in north Dublin for a new top security prison. Several other areas of enquiry by the CPI were also detailed in a comprehensive five year programme endorsed by Atlantic executives in 2004.

Had the report into the DDDA been released in March 2006, as planned, it would have exposed the corporate excesses of Anglo-Irish in the docklands and elsewhere. It could have deterred the DDDA from taking its disastrous 26% stake in 2007 in the former Irish Glass Bottle site near Ringsend which cost €450 million (with a €288 million loan from Anglo-Irish Bank) and which is now worth less than €50 million. 

The DDDA also provided fast track, and legally flawed, planning for another building on the north quays which was ear marked for the headquarters of Anglo-Irish Bank and now lies derelict as a lasting image of Ireland’s corporate collapse.

In recent weeks it has been conceded that Anglo will swallow €24 billion, and possibly up to €33.5 billion, of public monies with no hope of their return, the single most expensive Irish bank collapse of modern times. Its former chairman, Sean Fitzpatrick, has been declared bankrupt. The cranes no longer dominate the skyline along the docks once hailed by the (now dissolved) PD’s in a lavish brochure as “Ireland’s Manhattan”. In its recently published annual report the DDDA has said it has a deficit in excess of €71 million.

Following my return to the media in mid 2006 I went on to publish a series of articles, in Village magazine and subsequently the Irish Mail on Sunday, concerning Bertie Ahern’s peculiar personal finances and links to corporate interests which caused severe political discomfort for the ruling Fianna Fáil-PD coalition.
 
While Ahern survived as Fianna Fáil leader and Taoiseach after the 2007 general election his continuing inability to explain the sources of his finances and other matters at the Planning tribunal forced his resignation in the Spring of 2008.The tribunal is due to report its findings into allegations of planning corruption later this year.
 
As with the series of investigations into the banking and financial crisis (including enquiries into the DDDA headed by Niamh Brennan, by coincidence the wife of the former minister, McDowell) it may be a case of doors being closed after horses have bolted.

If the CPI had been left to do its work and expose the close relationship between Fitzpatrick and his developer and political cronies the Irish tax payer might have been saved generations of debt.
 
When I asked Fitzpatrick in 2006 about his apparent conflict of interest on the board of the DDDA he simply replied;
 
“You’re a sad bastard.”
 
Who is the sad one now?