Exclusive interview with Ireland’s richest man and biggest philanthropist, Denis O'BrienPhotocall

Ireland produces its fair share of global business leaders but none quite like 56-year-old Denis O’Brien, the wealthiest Irishman around.

The Digicel chairman and native Dubliner sits comfortably in the current Forbes 400 list around the $5 billion mark, and his company, with revenues close to $3 billion a year, is expected to continue to launch him upwards.

He also owns the largest Irish media group and is involved in so many other ventures around the world that “Where in the World is Denis” might soon become a popular guessing parlor game.

But accumulation of wealth, which drives so many on the Forbes list, is not O’Brien’s only goal.

His franchise is best described by that new buzz word philanthrocapitalism - giving back in spades to help make his business better and the world better too.

In Haiti, where his company Digicel holds the main telecom license, he has built 100 schools, and his philanthropy has been featured on the front page of The New York Times.

In Papua New Guinea he has given huge commitments to improve schools.

He saw what Bill Gates and others now see before they saw it - that philanthrocapitalism was a far better way to achieve success and make a difference than just building up a bank account.

“We are not robber barons,” he says pointedly.

In New York for the Clinton Global Initiative and UN week, he sat down for a rare interview in a small coffee shop opposite his hotel.

Where is the balance between philanthropy and business for you?

I’m interested in both, you know. I get equal fun out of business and doing things that I hope help people.

I think that comes instinctively to lots of Irish business people, and to be fair to Tony O’Reilly, in combination with Dan Rooney, co-founders of the Ireland Fund, they were at it a long time ago with the Ireland Fund.

In our case we invest very heavily in poor countries and get a very good return on investment. You could easily be a kind of modern day conquistador or a modern day multinational and not do anything -- and there are a lot of big multinationals doing nothing.

However, I think you can do something impactful not in a scatter gun approach, but focus in concise areas where you bring your commercial project management skills to bear to do good projects. That obviously helps your business too. We work too with great organizations like (Irish international aid charity) Concern.

The Digicel Haiti Foundation announced last October that it has built its 100th school in Haiti, allowing thousands of children to learn in a safe environment on a daily basis. We have 30-40 people, surveyors and engineers, our own team that is actually doing the school building.

Papua, New Guinea is a different challenge. There are parts that have never seen a white man, 7 million people with 80 different dialects. This is a frontier and that is the downside of it.

What we are trying to do there is basically ship prefabricated classrooms that you can get there by boat or by other means and drop them into areas where they are needed.

Finally, educating enough schoolteachers in all these places to teach the kids is vital.

Speaking of Tony O’Reilly, what is the truth about your relationship with him?

Some of the commentary on this in Ireland is off the wall when I read about it.

I only met Tony O'Reilly twice in my life. One time, he was very kind to me when I was graduating from Boston College. He kindly met me because I was looking to see what I should do. I met him in the Copley Plaza Hotel and it was very helpful.

Then the second time I met him was when there was a peace pipe when he was ready to step down as CEO of Independent Newspapers (after O’Brien had won a shareholder war), and to be honest with you there was no rancor on his side, zero rancor at all.

I made an investment. It wasn’t a great investment by any stretch of the imagination in Independent Newspapers, but you know I thought it would be a good hedge to the telecoms.

As it turned out it wasn’t a good hedge because the media and newspaper sector worldwide collapsed, but that’s business.

So when I read about what happened to him recently (Allied Irish Bank pursuing O’Reilly for unpaid loans) I would have the utmost of sympathy for him and that is genuine. People say how could you have sympathy for him after the boardroom battle? I totally do because I can relate to difficulties. Everyone has this false impression that everything in business is a staircase you know, always going up. It is never like that. My first business for instance was a big failure, so it is part of every business life.

I would sincerely hope everything will be sorted and okay for him. He is a hugely talented person who has made an impact for Ireland globally and did an incredible amount of work here in the U.S. to do with the Ireland Funds.

Tell me, is the Irish economy turning a corner or are we in danger of declaring victory prematurely?

Well, I think government has learned their lesson. I think if you look at the prudence of (Finance Minister) Michael Noonan, his commentary is always understated. He never says a deal is in the bag, you know. The recent refinancing or agreement with IMF loans, he wasn’t saying that we are going to do this definitely, and he surprised everybody by doing it so quickly.

So he is probably an example of someone who is totally understated if he can stay in that job and keep a lid. To be fair he along with (Public Expenditure Minister) Brendan Howlin work like a tandem on spending and are doing a superb job keeping expectations down.

Everyone should just not be getting euphoric again, because when you really boil the numbers down you have 400-600 million euro extra, and that is not a lot of money when you have health going over by 520 million euro this year. They have a lot of challenges so we are not out of the woods.

The best thing, obviously, is we are borrowing money at a very, very low rate, which is way ahead of what we ever thought in terms of the recovery plan. That is going to help us a lot, particularly in getting rid of the capital side of the debt in terms of reducing the deficit.

What are your main concerns?

I have a concern about a lot of the funds that have bought bank loans in Ireland. I think that is a big blemish that we have out of the whole situation where people’s loans were sold to major funds. Those loans were not rolled over, so you could be a very good borrower and then somebody buys your loans, and then the next thing you get a tap on the shoulder to say, “We want our money.”

Now that was very careless in my mind that there wasn’t a mechanism there to stop that, because you know there were people who borrowed money who were only meeting their interest payments and performing 100 percent, and next thing they are in a situation where they are dealing with someone who just wants their money.

I think a lot of the hedge funds that have come into Ireland have bought loans at probably a higher price than they should have, so they have to get more and more aggressive at the borrowers and that’s not good.

Are you worried about excess spending again?

I don’t think so. I think people will have a far longer memory than they ever had because most people had never been through a recession.

I remember as a kid my father grappling with the 1973 oil price crisis and its impact. Then there was the property crash of 1981, and then the crash caused by the Iraq war -- all lessons to be learned about over-optimism.

Now I think people in their 20s and 30s will have a long memory of what happened to them in terms of negative equity and people losing their jobs or getting lower pay.

I mean, pay in the private sector has gone down 20 percent in the last 6-7 years, so there has been a real impact and people have become conservative in the way they make financial decisions.

Now we are seeing the start of a little bit of momentum in things like new car sales, and we can see the start of young people buying houses, but you know there was a generation aged 30-45 that bought houses that are still in negative equity, so it’s going be very challenging for them for the next 5-10 years. So I don’t see too much excess ahead.

Do you worry about say the rise of Sinn Fein and the left in Ireland, that polls show there is a real leftwards trend?

No. Ultimately I think Sinn Fein will work more to the center over a period of time. At the moment they are obviously on the left. I think recovery for Fianna Fail is much slower than expected in the polls, so you have to look really closely at that and ask why?

And if you take Fine Gael, I think they need to market their successes more, because when I meet business people in New York or around the world they all say, “Wow, what a job your government has done. It has been extraordinary.”

The recent editorial in The Financial Times was fantastic. (The government) achieved it; they just need to communicate it and a lot of people really don’t know about it.

Obviously many lower paid are still suffering. The taxes for lower paid workers need to come down, and the social charges need to cease soon for the lower paid because that is really where the pain is.

What is going to be the growth area in Ireland in the next 3-5 years?

You know, I spent a day last week listening to 24 entrepreneurs talking about their businesses as a judge in the Ernst and Young Entrepreneur of the Year Youth Program. It went on from 7:30 a.m. until 6:30 p.m., and we all said at the end, I feel so positive about the country because all these people were coming in every 20 minutes saying I’m doing this that and the other and developing this market outside of Ireland.

Much of it was basic manufacturing business, not fancy businesses, but there were also tech and services business, and by the end you were reeling from the enthusiasm of it all.

it wasn’t a false hope. Up to 90 percent of these businesses we looked at were making money, were making real cash. There were some women, but not enough women. That is one issue we need to work on.

One of the biggest issues we have in the Irish economy is Irish companies becoming successful, and then selling instead of floating on NASDAQ or going to Wall Street, expanding there and becoming a much more multinational company. That’s the challenge, but a lot of people get offered 30 million or so for their company and take it because they can’t believe how lucky they are.

What sector in Ireland do you think is under pressure now that the property market is coming back?

Retail in rural Ireland finds it very difficult, and there should be no more big shopping centers.

Now they have to do something with the main street in Ireland. It is getting destroyed. Ironically the small retailers -- butchers, fresh fruit produce stores -- in Dublin are doing well in the suburbs, but that hasn’t happened around the country.

You know, I was cycling through Rathdrum (in Wicklow) at the weekend and I was looking at this butcher shop that was full, and I was like hip, hip hooray, and that was local produce which is very big here too.

People need to support their own local stores, and it’s a network effort. If people don’t buy locally the whole fabric of the town is going to change.

It’s already changed with droves of people emigrating, but you know, economically, unless people buy from each other, there is going to be no retail in middle and rural Ireland.

Do you ever resent the coverage you get in some media?

No. You know the problem is there is always going to be negative people in Ireland. I don’t mind being a target. That’s the price of success.

Do you ever think of moving here to the U.S.?

No. I think have the best of both worlds to be honest with you. You can invest here, you can do things here, but bringing my kids up in Ireland is important to me.

Do you see yourself moving towards investing here?

It would be certainly part of the plan to do something bigger in the U.S. We already have a business in Miami that is selling Diaspora phone top-ups and 30 or so working on that, so instead of someone here from the Caribbean or Asia sending money via Western Union, they can top their parents’ or brother and sister’s phone up with no commissions.

Western Union clip people of 15 percent off the top, so it’s a way of bypassing that, and that has become a big part of our business. We see money transfers as another opportunity because the cost of money transferring is horrendous.

What do you think of the Irish Diaspora potential?

What I like is if I go to an Ireland Fund dinner here, or if I am in any investment bank, the young Irish are all on the rise, even fellas I knew as interns going in, and then they got a job in Barclays, say they are all rising through the ranks.

Those who leave Ireland are fantastic because the ones that came over here are the worker bees. They know when they come over here there is no easy job, no slacking.

I do think of the Irish people that came here, about half of all the Irish in corporate America will go back which is great for Ireland. The rest will stay which is good for your website!

Speaking of websites, as the biggest publisher in Ireland how do you see the future of publishing?

Publishing, you know, everyday is different. Some days I’m saying this is flooring out and there will be a base of people who want a paper every day.

But look at kids today. Everything is so fragmented; bits of data from everywhere.

In Ireland there might eventually be only 1 or 2 newspapers. The problem now is there are a lot of management teams in media who don’t see any way of cooperating, and to be honest they are the cows on the line.

People in media and management can’t cooperate, and if you don’t cooperate sending vans, sharing resources, sharing everything, nobody will survive or only one will survive.

You take INM (Independent News and Media), which has stabilized. I think (chairman) Leslie Buckley had a massive impact in doing that and with great difficulty, and the board met nearly every week. It’s a real worker board and not a lot of reward.

It is the digital side where they made the investment, and that is where the real big bet is, and hopefully we can maintain a good solid base of readers who buy the paper every day. It is a huge challenge, complicated by the fact you see all the news about media is written by media, so they are all conflicted.

At the end of the day there has to be pollination between online radio and TV and newspapers. I was up with a business in Canada last week, Rogers, and they have a massive network across all platforms, and whatever business they have is cross promoted across everything else. They are in radio, television, cable TV, mobiles -- they are a mega company.

When I told one of their main guys about the restrictions in Ireland the guy fell off the chair laughing. He said, “You gotta be kidding me, that is stone age stuff. That is completely the antithesis of where the world is moving to.”

Do you think some commentators in Ireland go too far?

Sometimes. I thought some of the commentary after Albert Reynolds’ (former Prime Minister who led the peace process effort) funeral was awful ignorant, especially when you think what he did for peace in Northern Ireland. It was really vile. Commentary I don’t read. And I am not alone. I was talking to my friends and they don’t bother reading commentary anymore. They are sick of the extremist criticism. Albert was human but he got the job done.

Speaking of politicians, you are a big fan of Hillary Clinton. Do you think she is going to run for the White House in 2016?

I’d say she is going to see what the lay of the land is, like any clever politician, to see who’s there on the Democratic side. I think a year out from the primaries last time, not a lot of people had heard of Obama and never saw him as a serious candidate, so obviously she is waiting to see who’s there. And yes, I am a fan.

Thank you, Denis O’Brien.