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Bailey Brothers dilemma for NAMA.

While it's already been reported that the absence of support from Nama would see the Baileys' businesses in Ireland and the UK facing the threat of collapse, there's nothing to prevent the agency from continuing to finance Bovale's activities without Tom and Mick at the helm.

RONALD QUINLAN – 15 DECEMBER 2013

"AS CHAIRMAN of the Revenue Commissioners, you presided over the biggest tax settlement in the history of the State with the Bailey brothers of Bovale. Do you find it difficult to deal with people who have a history of cheating the taxpayer?"

That's a question I asked Nama chairman Frank Daly when I interviewed him in July of last year for the Sunday Independent.

To be fair to Frank Daly, he wasn't evasive in his answer. He said: "Of course, I would have met some of the people who are in Nama in my previous life. Again it's back to an assessment, where are they now, in their minds, in their attitudes, their level of cooperation."

Where precisely Tom and Mick Bailey are with Daly's agency today in view of Ms Justice Mary Finlay Geoghegan's ruling last Monday that they should be disqualified as directors for seven years is another question altogether.

Nama may justify its decision to work consensually with, and support the development activities of Bovale and its associated companies in the interests of getting the best return for the taxpayer, but it is now faced with a serious conundrum on the level of involvement the Bailey brothers should be allowed to have in that process in the future, or whether they should be involved at all.

For even though Ms Justice Finlay Geoghegan reduced the Meath-based developers period of disqualification from 14 to seven years, accepting amongst other mitigating factors that their fraud in relation to the Revenue Commissioners had taken place 15 years ago and that they have been tax compliant since 2001, she was positively scathing in her judgment of their misconduct.

In her findings, the judge noted, for instance, how the Baileys had, as officers of Bovale, been: "guilty of fraud ... by reason of the systematic scheme of false accounting and failure to account in its payroll records for remuneration to the respondents and associated PAYE/PRSI liabilities in respect of the two years ended June 30, 1998. The understated gross remuneration in the two years exceeded IR£6m (€7.6m)."

In arriving at her decision, she also noted the conclusions of chartered accountant Peter Lacy, a managing partner in PWC and head of the PWC team appointed by the Director of Corporate Enforcement to carry out an examination of Bovale's affairs for the two years in which the revenue fraud had taken place.

Having conducted that investigation, Lacy said of the Bailey brothers' misconduct: "During my career in public accounting in Ireland over the past 35 years, I have not encountered a failure to maintain proper books of account that compares with the extent and gravity of the failures in respect of Bovale for the two years ended June 30, 1998."

Following disclosures in December 2000, Bovale and the Bailey brothers reached a tax settlement with the Revenue Commissioners, which ultimately resulted in a record settlement in 2006 of €22.17m, of which €12.5m was tax and the remainder interest and penalties.

Potentially, it could have been worse had the Director of Corporate Enforcement been permitted by the courts to consider "wrongdoing covering the entirety of the period from 1998 to 2000" when his office took its original civil law case in 2006 in which it sought to have the Baileys disqualified as directors.

The brothers objected to much of the evidence from that period being considered on the basis that it was hearsay or opinion, which was based in part on the findings of the planning tribunal which could not be used against them in court. The dispute on the matter and the obtaining of a warrant which had been used to search Bovale's offices went all the way to the Supreme Court which ruled in their favour in July 2011.

While there is little point now in dredging up the findings of the planning tribunal against the Bailey brothers, it is, however, worth recalling that in its interim report in 2002, the tribunal found that Mick Bailey had made a corrupt payment to former Fianna Fail minister Ray Burke, and in 2005 that he had made a corrupt payment to Dublin assistant city and county manager George Redmond.

The Baileys' settlement with the Revenue Commissioners in 2006 is a separate matter. When looking at this, it is worth remembering that this settlement -- the largest in the history of the State -- was agreed during Frank Daly's tenure as chairman of the Revenue Commissioners. The decision not to prosecute the Bailey brothers was also taken on Daly's watch.


"AS CHAIRMAN of the Revenue Commissioners, you presided over the biggest tax settlement in the history of the State with the Bailey brothers of Bovale. Do you find it difficult to deal with people who have a history of cheating the taxpayer?"

That's a question I asked Nama chairman Frank Daly when I interviewed him in July of last year for the Sunday Independent.

Defending his and the Revenue's actions in the matter before the Dail's Public Accounts Committee on November 9, 2006, Daly said: "In general, it is our policy in a case of this scale to prosecute. Nobody should doubt this. We would collect the money after prosecution or at the same time if possible. While I cannot talk in detail about a particular case, cases of that scale, even in the past, would always have been examined with a view to prosecution. However, one would have regard to when the evasion took place, the timeframe, the length of time that has elapsed, the evidence available and the likelihood of getting people to co-operate in the prosecution process."

Given the obstacles in the way of any prosecution cited by Daly then, the Revenue's reluctance to pursue the Baileys through the courts may well be understood, or even excused by some.

In his latest incarnation as chairman of Nama, Frank Daly is now faced with a fresh -- though not unrelated -- dilemma when it comes to the Bailey brothers.

While Ms Justice Finlay Geoghegan accepted in her judgment last Monday that one of the unusual features of the application from the Director of Corporate Enforcement to have the Baileys disqualified was the delay in having it heard, that delay did not make it any less serious a matter in her eyes.

Notwithstanding the Baileys' compliance with Revenue for the past 12 years, she noted the primary purpose of an order for disqualification was "not to punish the individual but to protect the public against future conduct of companies by persons whose past record has shown them to be a danger to creditors and others".

Daly and his colleagues at Nama should give that statement careful consideration before deciding whether or not they should row in behind the Bailey brothers' application on January 20 to limit the court's orders against them so they can continue to deal with the State-owned agency.

While it's already been reported that the absence of support from Nama would see the Baileys' businesses in Ireland and the UK facing the threat of collapse, there's nothing to prevent the agency from continuing to finance Bovale's activities without Tom and Mick at the helm.

Irish Independent

Chairmen of the local Fianna Fail Cumann look forward to arrival of Metro North.

Bailey Brothers sitting on a pot of Metro gold in north Dublin

Developers Michael and Tom Bailey, whose corrupt land dealings led to the establishment of the Flood Tribunal, are poised to reap

 massive rewards from the proposed Metro North line if it goes ahead, writes John Downes, News Investigations Correspondent


'The Lissenhall lands will be developed in tandem with the required infrastructure in order to maximise the development potential of the

 site… It is proposed that the density of housing will increase closer to the Metro Station with all categories of potential residents catered

 for and to ensure the viability of Metro North."

If proof were needed of the importance of the proposed Metro North project to brothers Michael and Tom Bailey, then the above

 quote, taken from their submission on Lissenhall to a Bord Pleanála hearing which opens tomorrow at Croke Park, helps to provide it.

As the Sunday Tribune reveals today, the Railway Procurement Agency (RPA) has identified at least a dozen separate plots of land with

 ties to the Bailey Brothers, which may be acquired by it if Metro North goes ahead. 

According to a book of reference for a draft railway order compiled by the RPA, these include lands in Lissenhall, which is the location of

 one of the proposed stops for Metro North. 

Similarly, a submission in relation to lands at Lissenhall was made to An Bord Pleanála by ILTP Consulting last October on behalf of

 Michael and Tom Bailey of Bovale Developments, and Balheary Properties Ltd. 

Both companies have registered addresses with a solicitors' firm located at 59 Fitzwilliam square in Dublin. 

A search of the land registry reveals that the Bailey brothers

, Bovale and Balheary are the owners of several separate plots of land at Lissenhall Little, west Swords.

The dates attached to the lands on the registry range from January 2004 in the case of lands owned by Balheary, to as recently as

 October 2007, in relation to some two and a half hectares of lands owned by the brothers themselves.

In their submission to the planning board, the prominent Fianna Fáil supporters and well known Flood (later Mahon) tribunal figures,

 state unequivocally that it is proposed that "the development of these lands would take place in conjunction with the development of

 the Metro station."

They note that the development of Metro North and the Lissenhall lands has been the subject of meetings involving the RPA, Fingal

 County Council and the "Lissenhall Team".

Due to the proposed Metro North alignment running through the Lissenhall lands it would be unsustainable and impractical to continue

 to use the lands in their current status," the submission continues.

It outlines how the main aim of the development strategy for Lissenhall is the construction of a "varied and comprehensive mix" of

 residential units, including apartments, semi-detached houses and executive housing. 

Elsewhere, the submission notes plans for a neighbourhood centre, a mini business park, cultural and other educational initiatives.

But the Lissenhall lands are not the only part of the Metro North line which the brothers have their eyes on.

In fact, their company Bovale already owns a very significant chunk of land near the Airside retail park in Swords, a site known as

 Barrysparks, which is also close to the Pavilions Shopping Centre.

The Dublin Transportation Office first outlined plans for a Dublin Metro in its Autumn 2000 document 'Platform for Change', although the

 idea for a Metro was mooted as far back as 1994.


In January 2002, then minister for public enterprise, Mary O'Rourke TD, announced the start of the procurement process for phase one

 of the new Metro, which at the time included plans for a link to Swords and Shanganagh near Bray. It remains unclear exactly when

 Bovale bought the Barrysparks land.


But a search of the registry of deeds at King's Inns reveals that it was granted a mortgage with Bank of Ireland for "lands of

 Barrysparks". The date of this filing is September 2001 – or shortly before O'Rourke's announcement.

"The client is in ownership of Barrysparks Land along the proposed Metro line, which is strategically located adjacent to the Swords

 stop," the submission to An Bord Pleanála also states.


In the Barrysparks submission, the Baileys appear in little doubt as to the potential of the site, and even argue that the "relatively low

 number of passengers that will be carried in the early stages of the operation of the Metro" means there is a need for "substantial

 development to take place in the environs of the Metro line". This would be to ensure that the Metro maximises "patronage and revenue".

Interestingly, there is little mention of the money such large-scale development could potentially generate, even in the current

 economic climate, for Bovale.

The submission also repeatedly exhorts the benefits of developing the Barrysparks site "on a parallel timeline with the Metro line".

Again, plans for the lands are nothing if not ambitious, including a major retail development from the Swords Metro stop towards the

 main square.

Overall, the submission envisages some 730 residential units, a hotel and some 61,000 square metres of retail space.

For its part, the RPA has repeatedly stressed that the final plans for Metro North were the result of extensive public consultation, and

 will lead to a significant economic boost for the area and the creation of 4,000 jobs during construction alone.

It notes that Fingal County Council plans to develop the Lissenhall area as described in its strategic vision document 'Your Swords'

.A study by Indecon Consultants last year also suggested that the development of a Metro North "Economic Corridor" could create an

 extra 37,000 jobs over 20 years and fund half the construction and land acquisition costs of the proposed metro in north county Dublin.

Yet the significance of the Bailey Brothers ties to the Metro project, for a government which is already facing intense criticism for its

 links to property developers, appear self evident.

Back in 2002, the Flood tribunal found that Michael Bailey had made a corrupt payment to former Fianna Fáil minister Ray Burke, and

 ruled that he and his brother had obstructed and hindered the tribunal's work. 

A subsequent tax settlement totalling €22.17m made by the two brothers in 2006 was the largest in the history of the state.

Others have pointed out that Metro North may well be shelved or even abandoned, given the current fiscal problems which the

 government is experiencing.

Be that as it may, clearly the brothers are well placed to capitalise upon any decision to "green light" Metro North.

Whether we ever establish how they found themselves to be in this position is another matter altogether.