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The DDDA cabal

Posted: 23 Dec 2008 02:30 PM CST (from Gavins blog)

I see new Anglo Irish chairman Donal O’Connor has seen fit to resign from his position at the Dublin Docklands Development Authority. John Gormley accepted his resignation today. Mr O’Connor served as Chairman of the DDDA since the middle of 2007. In a statement the DDDA said:

He has made this decision in light of his very significant commitment to his role in Anglo Irish Bank. His resignation also ensures that there can be no suggestion of a potential for conflict of interest, either perceived or real, with his new role as Chairman of the Bank.

Mr O’Connor himself said:

“As the new Chairman of Anglo Irish Bank, I am very conscious of the level of commitment required of me and, in addition, and I wish to ensure that there can be no suggestion of conflict of interest in the various roles I have. Accordingly, I have advised the relevant Ministers and the Chief Executive of the Dublin Docklands Development Authority of my intention to step down as Chairman of the Executive Board of the Authority.”

Hmm. No perceived conflict of interest? How did Mr O’Connor feel about Messrs Fitzpatrick and Bradshaw being on the board of the DDDA while at the same time being on the board of Anglo Irish? Of course the much vaunted SIPO commission looked into that whole relationship and found nothing untoward, prompted by a complaint from Michael Smith.

Furthermore, what is Mr O’Connor’s relationship with those two individuals? How did Mr O’Connor do while he headed the DDDA? Well, while he was chairman, he entered into a secret deal with Liam Carroll, which led to legal action. The secret deal could cost taxpayers millions. And who does Mr Lenihan choose to head Anglo? Mr O’Connor. In October, the Phoenix was on the story:

Having last year entered into a secret arrangement with developer Liam Carroll – which was challenged by Seán Dunne – the DDDA has now been exposed in the High Court to huge compensation claims. The Seán Dunne/Liam Carroll debacle looks set to cost the taxpayer hundreds of millions. As Carroll’s €200m north quay scheme has been rendered null and void and could be pulled down, the developer is bound to look to the DDDA, which greenlighted the project, to bail him out. To date, approximately €83m has been spent on the development. Seán Dunne, too, will be looking for massive compensation.

Then there’s the litigation from Johnny Ronan and Richard Barrett at Treasury Holdings, whose Spencer Dock Development Company also challenged the Authority’s links with Carroll described as “a direct relationship” by Justice Geoghegan – claiming that there was a covert contract between the DDDA and Carroll’s company relating to the development of the north quays, where the Spencer Dock company controls 29 acres. Ronan and Barrett have claimed that the DDDA “seriously compromised itself” with its commitments to Carroll and, given the High Court finding that the agreement gave rise to “a reasonable apprehension of bias”, the case already looks like game, set and match. Again, the claims for compensation here will run into millions.

However, the cock-ups with Seán Dunne and Treasury Holdings are only the tip of the iceberg in the docklands, where controversy is the order of the day. For example, it is far from clear what has been going on in relation to the building of the proposed iconic ‘U2 Tower’ but, given that the original architectural competition stretches back to 2003, it is obvious that something has gone badly wrong. That original competition was marked by controversy when the winning scheme could not be identified as relevant details had been lost and, as a result, the runner-up – Burdon Craig Dunne Henry architects, a firm associated with U2 manager Paul McGuinness’s brother-in-law, Felim Dunne – was deemed to be the winning
designers.

Of more concern to the taxpayer, however, must be the DDDA’s involvement in the Irish Glass Bottle site consortium. At the very top of the property market, this land in Ringsend was sold off by Paul Coulson and Dublin Port for a whopping €424m. What makes this deal so worrying is the huge level of debt inside the winning Becbay consortium. For example, Bernard McNamara put in €57.5m for a 41% stake but only €5m in cash. The balance came from Davy clients who subscribed for loan stock. In return they are to get a hefty 17% per annum return – which reflects the perceived level of risk in the project. This is not surprising given that the original purchase was backed by a €288m loan from Anglo Irish Bank, which also promised to provide a further €900m in development finance.

The DDDA itself has put up over €32m cash – presumably borrowed – while the latest annual report for the Authority also reveals loans to joint venture undertakings of €37.6m, €32.8m of which is accounted for by “unsecured interest-free” loans to Becbay. The notes to the accounts state “the executive board is satisfied that Becbay Ltd will not be required to repay this debt in the short-term and therefore these loans have been classified as financial assets”.

It is not only the involvement here of the DDA in such a highly-leveraged, costly project undertaken at the top of the market that is of concern. There are also questions about possible conflict of interest given the presence on the board of two Anglo Irish Bank directors, Lar Bradshaw (then DDDA chairman) and Seán Fitzpatrick.

Indeed, a complaint from Michael Smith even led to an embarrassing investigation by the Standards in Public Office Commission (SIPO).

Since then, both Bradshaw and Fitzpatrick have left the board (voluntarily) but, as Goldhawk revealed (see The Phoenix, 27/6/08) the current DDDA board is still closely linked to the bank.

For example, one of the new directors is Catherine Mullarkey, an ex-Anglo Irish executive. Moreover, accountant Donal O’Connor – who replaced Bradshaw as chairman – was subsequently slipped onto the board of, wait for it, Anglo Irish Bank. O’Connor is a partner in PricewaterhouseCoopers, which, the DDDA accounts reveal, earned €150,000 last year for internal audit and consultancy services to the DDDA.

The other members of the board are Niall Coveney, Dónall Curtin, Niamh O’Sullivan, Brendan Malone and Sheila O’Donnell. It is far from clear why this board has allowed the DDA drift into such controversial and potentially costly situations but Minister for the Environment, John Gormley, can hardly sit by and watch the taxpayer stuffed for millions of euro without those responsible being held to
account.

How much further should we dig? How about Treasury Holdings, poster boy of the great and the good of Irish entrepreneurial spirit. As Town Planner noted in May [via the Phoenix]:

IN THE league of politicians renowned for palling around with property bigwigs, Cork SouthWest Blueshirt Jim O’Keeffe is hardly amongst the title contenders. So Goldhawk was intrigued to see him give two-fingers to the ethics legislation recently by receiving €7,500 from Johnny Ronan and Richard Barrett. Jimbo received these donations in three installments, through three Ronan/Barrett companies.
Those pesky ethics laws state that no TD can receive more than €2,539 from one individual or organisation as Jimbo is well aware, considering he was Fine Gael’s justice spokesperson until late last year.

If a TD is unlucky enough to receive more than this from an admirer, he or she must not only swiftly return the dosh to the donor but also report the donation to the Standards in Public Office Commission (SIPO). Moreover, company subsidiaries are also covered in the legislation and are considered one and the same as the parent company.

So, when Treasury Holdings gave O’Keeffe €2,500 last year, he must have presumed that that would be the last he’d be hearing from the moneybags developers. O’Keeffe received another €2,500 from Spencer Dock Development Company Ltd (SDD), the company behind Treasury’s mammoth development in the Dublin Docklands. While Harry ‘Point Depot’ Crosbie is involved here, Treasury Holdings is the principal shareholder and, indeed, SDD’s accounts - which are signed off by Ronan and Barrett - state that “the company is a subsidiary undertaking of Treasury Holdings…”

Jimbo received a third cheque for €2,500 from Treasury’s Burlington Road HQ but in the name of Havenview Investments Ltd. The main shareholder here is Real Estate Opportunities Ltd (REO), the booming property venture run by Ronan and Barrett and controlled by Treasury Holdings. The other shareholders are Brossbar - a whollyowned Treasury subsidiary - and Jermyn Investment Properties Ltd, a UK company also associated with Treasury Holdings. To simplify matters, Havenview’s accounts - also signed off by Ronan and Barrett - list the “ultimate holding companies” as Treasury Holdings and REO.

None of which says much for Jimbo’s statement to Goldhawk that his three donors are completely separate legal entities, something which he says he checked with Treasury Holdings. Happily, O’Keeffe said he contacted SIPO when he received the “entirely unsolicited” donations and he was assured that he was completely in accordance with the rules. This is not strictly true, however, considering SIPO has no role in establishing whether or not a politician’s disclosures are genuine - it merely advises politicians on the guidelines. O’Keeffe would not comment on whether or not he believed the dosh to be ultimately coming from the same source anyway, ie Johnny Ronan and Richard Barrett. His Blueshirt colleague, Leo Varadkar, recently denounced Beverly Flynn, for “breaking the spirit” of the legislation by pulling a similar stunt.

Interestingly, O’Keeffe received a fourth cheque for €2,500 from Ronan and Barrett through Castle Market Holdings Ltd but returned it when the pair told him that this company was a Treasury subsidiary.

Ah yes. Interesting.