The humbling of Ireland’s golden boy Tony O’Reilly


And there was his controversial involvement with Eircom, the national telephone company in Ireland, and other businesses as well. It was an extraordinary level of activity.

With O’Reilly’s business success went a high level of philanthropy, the most impressive part of which was his foundation of the Ireland Funds, the international organization designed to help Northern Ireland. In the U.S. it provided a far better alternative to giving money to Sinn Fein and the IRA.

O’Reilly was knighted and was comfortable with recognition from the U.K. long before the Queen's visit to Ireland prompted other people to catch up with the new relationship with “the old enemy.”

In retrospect now, of course, it is possible to see the weaknesses and mistakes once hidden by his patrician style. His hubris saw international figures appointed to the Independent board, among them Ben Bradlee, Baroness Jay, former Canadian Prime Minister Brian Mulroney and other star names. They were all entertained at great expense in Gatsby style by O'Reilly at his estate in Kildare, a sore point these days with Independent staff who have seen their pensions cut in half.

He himself took enormous sums out of the businesses he was involved with, particularly Independent newspapers. This weakened the company, allowing Denis O'Brien (with his mega money from the new mobile phone era) to eventually wrest control away from him. He also extracted as much as he could out of Eircom at a time when that company needed serious investment.

His biggest mistake, however, was Waterford Wedgwood, failing to see that changing tastes were making its products less desirable to the younger generation of well-off homemakers -- cut glass tumblers and expensive china were no longer must have items in a new era of casual dining.

He poured over €400 million of his own and his brother-in-law's money into Waterford Wedgwood, but it was never going to work when similar products could be made far cheaper in Eastern Europe and Asia. His belief that these products had to be made in their traditional places (Waterford and Stoke) was in a way admirable, but it was doomed to failure.

He financed efforts to save Waterford Wedgwood by continuing to suck money out of Independent News & Media (INM). INM was still a successful business but it was very heavily indebted. In spite of this it continued to pay out huge dividends, of which O'Reilly was the largest beneficiary.

When the global crash happened, advertising revenues vanished and the whole deck of cards O'Reilly was holding began to collapse. Even worse than happened later in INM, workers in Waterford saw their pensions vanish as their jobs went elsewhere.

Despite O'Reilly's charm and power and his image as a billionaire of international standing, the reality by then was that he was a busted flush. He had borrowed heavily over the years to keep funding Waterford Wedgwood and much of that was based on personal guarantees.

Which is why his lawyers ended up in the courts here two weeks ago pleading for more time for him to meet the €200 million he owes his various banks. It was a sad end to a once glittering career.