You will find a detailed background to the deal here.
Since then a Commission of Investigation, led by High Court judge Brian Cregan, has been tasked with investigating the sale of Siteserv to Denis O’Brien, and other matters.
Earlier this year Catherine Murphy, of the Soc Dems, submitted a 300-page statement to the Commission detailing her research into the sale.
The commission has since written to Ms Murphy saying, if she doesn’t reveal her sources, “it may not be possible to advance some of the issues raised” by her.
Further to this…
In the Sunday Business Post.
Tom Lyons reported that an anonymous email sent to Taoiseach Enda Kenny and others – including the then Financial Regulator Matthew Elderfield, Fianna Fáil leader Micheal Martin and Maurice Keane, a non-executive director of IBRC – is to be investigated by the commission.
Mr Lyons reported:
A special email set up by an unknown party used an address called email@example.com on April 5, 2012 at 12.20pm to make various allegations about the controversial sale of the business by IBRC to O’Brien a few weeks earlier.
The contents of the “DOB” email were previously posted online in the comments section of the website Broadsheet.ie but its contents received little attention at the time.
Regular entertaining of Anglo senior management by Denis O’Brien has always been a feature, but that has increased significantly since Mike Aynsley, Tom Hunnersen and DOB’s personal friend Richard Woodhouse have joined the Bank.
A few weeks ago DOB and his wife were seen on the town with Mike Anysley, Tom Hunnersen and their wives. Denis while he is in Ireland is driven around by Mike Coughlan (a former Anglo employee) and is a regular visitor to the Anglo offices in Burlington Road, and is down there this morning having a one to one with Mike.
Most worrying is that the management of DOB has been moved under Richard Woodhouse, a close personal friend of Denis. Then the Siteserv account is also moved over to Richard Woodhouse’s management.
Interesting DOB’s initial bid for Siteserve was too low to be included in the 2nd round of bidders and he was initially not included in the 2nd round. DOB was not the highest final bidder, but IBRC asked for a letter to be produced that showed that DOB’s lower bid was the best bid.
Another account that has been moved to Richard is the personal borrowings of Brian Harvey and DOB has promised (in support for supporting the DOB bid) is that he will arrange for Anglo to do a deal on Harvey’s debt. The independent consultant to Siteserv is a long friend of DOB (worked on Boundary – see below) and is a also a heavily indebted borrower of Anglo who DOB has also promised to sort out.
Then the management of the Niall McFadden/Boundary Capital relationship is also moved to Richard Woodhouse. Anglo now looking to sell the debt of Niall McFadden (a close friend of Denis O’Brien) to DOB for a fraction of the original amount to allow Niall McFadden fraustrate National Irish Bank’s bid to secure bankruptcy.
More worryingly, IBRC (when the case was being managed by the Personal Lending team) initially decides that forebearance is the best option in the management of the Tony O’Reilly relationship (a bitter foe of DOB). Then suprisingly, the case management is moved to Richard Woodhouse, and the new team decides to take a more agressive stance on O’Reilly with the case expected to go legal shortly.
Further to this…
Mr Lyons also reported yesterday:
An internal review, however, was carried out at the time by IBRC into the allegations made in the email in a project code-named Rain.
A position paper was prepared to help the bank respond to questions relating to it. This was circulated both inside and outside the bank in response to queries about the email, which was in circulation between senior politicians, civil servants and journalists.
IBRC concluded that allegations in the email were either false or a misinterpretation of events. James Shaw, group operations in IBRC, carried out a review of the bank’s computer systems which failed to find who sent the email.
Kroll, the corporate investigations firm best known for tracking the fortunes of Saddam Hussein and the late Haitian dictator Jean-Claude Duvalier, was then appointed by the bank to investigate.
The bank suspected an employee of the bank was behind the email, as parts of it described the movements of O’Brien and IBRC chief executive Mike Aynsley. Kroll however was unable to determine where the email originated from.
…IBRC produced a paper in response to this allegation which says:
“It is in the public domain that Mr Denis O’Brien is a significant borrower of the bank. It is also in the public domain that his outstanding loans are performing and have been significantly reduced by way of repayments over the past two years. As with any material borrowing relationship in the bank, Mike Aynsley, group chief executive, is closely involved in if, how and when these outstanding loans are repaid. Mr Aynsley has met with Mr O’Brien on a number of occasions in this capacity.”
The O’Brien dinner referred to in the email was not attended by Hunersen – but was attended by Aynsley and Richard Woodhouse (an IBRC executive).
Former minister for justice Michael McDowell later mentioned this dinner in a speech in the Seanad in July 2016.
Aynsley responded to McDowell by saying:
“The anonymous blog that Mr McDowell referred to is just plain wrong on just about everything it raises, except for the fact that there was a dinner,” Aynsley said.
The purpose of the dinner was to mark Aynsley defeating O’Brien in a charity weight-loss competition. Alan Dukes, the chairman of IBRC, he said was aware of the matter and had no objection.
Concerning Anglo’s ‘hard-line on Tony O’Reilly, IBRC, in its position paper, stated:
“There is no evidence to show that IBRC took an unnecessarily hard line with O’Reilly. The bank instead pursued a strategy of trying to reach a consensual solution with him.”
Social Democrat TD Catherine Murphy speaking about the sale of Siteserv in the Dáil on May 6, 2015
In the Sunday Business Post.
Tom Lyons reported that the Commission of Investigation tasked with investigating the sale of Siteserv to Denis O’Brien, and other matters – which is being led by High Court judge Brian Cregan – has told Social Democrat TD Catherine Murphy that if she doesn’t reveal her sources, “it may not be possible to advance some of the issues raised” by her.
Mr Lyons reported:
The Commission wrote to Murphy earlier this month in relation to her 300-page witness statement, much of which it said appeared to be “dependent upon information and views supplied to you by unidentified persons”.
It said that the allegations in her statement and accompanying documentation appear to be based on confidential banking information about named individuals that “may have serious implications for the good name and reputation of the person or persons mentioned.”
The Commission said it was “of the view that, if such allegations, information and views are to be admitted into evidence, it will be necessary in the interests of fair procedures, and in order to protect the constitutional and person rights of the persons named, that the identity of the sources of such information and views should, in the first instance, be disclosed to the Commission.”
It said it would then consider whether such allegations, information and views should be admitted into evidence, and whether the identity of the source should be disclosed to witnesses or potential witnesses “bearing in mind the right of a witness to confront his or her accuser, where serious allegations are made against him or her.”
The Commission requested Murphy disclose the source or sources of 23 allegations made in her 300-page witness statement to the Commission as well as furnish it with six emails without redacting the name of their sender.
These allegations relate to O’Brien, Brian Harvey, the then chief executive of Siteserv, Mike Aynsley, the chief executive of IBRC and Richard Woodhouse, a senior executive of IBRC, among others.
…“The Commission is appreciative of the assistance you have provided it to date,” it said. “However, if and to the extent that sources are not disclosed and / or unredacted documents are not made available to the Commission, whether based on a claim of parliamentary privilege or otherwise, it may not be possible to advance some of the issues raised by you.”
On Kildare FM, Ms Murphy said:
“Yes, I received a letter from Justice Brian Cregan during the week, I think it was Wednesday. I will be taken, and have taken and will take further advice before responding in detail. Essentially, I’ve given a commitment to people who came to me with information that that would be treated in confidence. I gave them absolute assurance that that would be the case and I’ll respect that. I feel duty-bound to respect that.”
Catherine Murphy, Social Democrats TD at the Newsocracy2 conference
The Writers Museum, Parnell Square, Dublin
At the European Centre for Press and Media Freedom (ECPMF) Newsocracy2 conference.
Catherine Murphy, co-leader of the Social Democrats, said:
It’s a common misconception that my interest in media ownership issues arose because of what has now become the almost infamous weekend of so-called ‘constitutional crisis’ following by a speech in the Dáil regarding the Siteserv controversy
In fact in 2012 one of the first tasks I set my then new assistant was to write a Private Members Motion on media ownership. Now due to arrangements within the Technical Group that Motion never got the chance to be debated in the Dáil, it was a significant piece of work undertaken by my office and one that we have continued to pursue over the years.
Ironically my Siteserv investigations actually had no root whatsoever in the area of media control or ownership. I had started questioning how the Irish water contracts had been awarded and that led me down a rabbit hole within which the two issues overlapped.
I first raised concerns regarding the contracts and the personalities involved back in September 2014 and continued asking questions throughout late 2014, the Irish people had become owners of a bank which cost them upwards of €30bn and the distressed assets were to be sold, I felt my role was to make sure those distressed assets were disposed of for the maximum possible amount, in other words I was acting in the public interest in pursuing those contracts.
In April 2015 the Sunday Times broke the story on the front page. During this time I was confronted with various cease and desist letters from Mr Denis O’Brien’s camp.
Once the Sunday Times story ran it became a snowball and my questions and FOI’s made it clear to me at least that a serious investigation into the sale was warranted.
This led to a ridiculous scenario proposed by Government that KPMG – who had acted as advisers on the sale of Siteserv – would then be charged with reviewing the sales process.
I felt strongly this was not the appropriate measure and so in May 2015 my team and I complied a piece of legislation which would give the C&AG the powers to undertake the investigation. In order to introduce that Bill I had to make a 5 minute speech explaining what the Bill was about and why I was presenting it.
In that speech I outlined my concerns regarding the sales process and why I wanted a thorough investigation.
I could not have predicted the fallout of that speech. All media outlets immediately reported everything I had said but within hours everything had changed. The Irish Times had pulled their report from their website. The Journal.ie had removed it from their site and RTÉ – the National Broadcaster was reporting the fact that they could not report the contents of my speech.
At the same time RTÉ was in court and subject to a case involving an injunction by Mr Denis O’Brien, who is a serial litigant, I was not party to those proceedings and therefore could not have been aware there was crossover between the two. The Judge had issued a blanket ban on reporting the subject matter in this case.
The only media outlet which kept the story live was the small independent online news site Broadsheet.ie. Fundamentally the issue of parliamentary privilege was side-lined by all apart from Broadsheet. A speech, given by an elected representative on the floor of the National Parliament was being erased from the news cycle and the public record was effectively being tampered with.
Citizens who rely on mainstream media were left uniformed on a matter that had been raised in THEIR parliament. It was the ultimate disservice to citizens by the media upon which they are forced to rely. One powerful individual had effectively controlled the media by the mere threat of legal action.
Unbelievably this same individual also happened to be the largest private media owner in this country. (and still is!)
A weekend of confusion ensued when legal departments in newsrooms up and down the country refused to trust Article 15:13 of the Constitution when faced with a threat from this powerful individual.
Article 15:13 enshrines the concept pf parliamentary privilege and the reporting of any utterances made in the Oireachtas. O’Brien’s threat had challenged that concept and newsrooms had been chilled into acquiescence.
There were a few instances of people printing the speech and giving it out on the streets. Social Media was widely used to share it, at all times it remained on the Oireachtas/Parliament Website.
Broadsheet held out and on Sunday, the Sunday times ran the story and my speech in full. Others eventually followed suit but not before an entire weekend of confusion had ensued.
The reverberations of that weekend are still being felt with journalists and politicians acutely aware of how real the threat to our press freedom is and how a gagging order on the national parliament very nearly came to pass.
The following Tuesday the judge in the injunction case against RTE clarified that the injunction could not have applied to a speech made in the Dail.
The incident reinvigorated by interest in what I see as a fundamental pillar of democracy – a free and open media, capable of speaking truth to power and objectively challenging vested interests without fear or deference.
When we are faced with a situation where any powerful individual not only owns the significant majority of our print & broadcast media but also exerts such a severe chilling effect on titles not under his control then it is very clear we have a serious problem.
That is why today the Social Democrats will introduce the Media Ownership Bill 2017 into the Dáil and host a debate in Private Members Time on February 8th. The Bill sets out to retroactively apply the guideline which states that anything above a 20% shareholding in a media business may not be in the public interest.
Change is long overdue and we feel strongly that our Bill is a vital first step in bringing about change in this area.
From top: IBRC logo; Senator Michael McDowell; Tom Hunerson
In the Seanad.
Senators discussed the Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016 which is at its second stage.
This is the Cregan commission which is examining sales of assets by State-owned IBRC, including the sale of Siteserv to Denis O’Brien €45.4million, while Siteserv owed Anglo €150million.
During the Seanad discussion, Senator Michael McDowell said the following:
As Senator Diarmuid Wilson stated, this commission of investigation arises mainly out of the Siteserv controversy. It is notable that on 25 April 2015, the former chairman of IBRC [Alan Dukes] stated that the board had rejected a Department of Finance proposal to appoint a senior civil servant to the board on the basis that such an appointment would be unsuitable.
In the same article in The Irish Times, he stated a Mr Woodhouse had been kept out of discussions regarding Siteserv because he personally handled Mr Denis O’Brien’s relationship with IBRC. He stated a different executive in IBRC, Mr Tom Hunersen, had handled the Siteserv transaction.
This is worrying because, three years earlier, a posting (in comments) appeared on the broadsheet.ie website suggesting Mr Aynsley, Mr Hunersen and Mr O’Brien were socialising together at the time when the transaction in case was taking place.
It is also worrying that Mr O’Brien was reported in 2014 by The Irish Times as having made a major investment in a Massachusetts-based IT firm in which Mr Hunersen was one of the moving parties. The former chairman of the IBRC claimed Mr Woodhouse had stepped aside from this transaction.
He seems to have re-emerged recently in the context of the story in The Irish Times that many Members of this House read last week. Again, the question arises as to whether there is a connection between him and Mr O’Brien.
A more fundamental question arises as to who is organising the campaign of intelligence-gathering of Mr [Mark[ Hollingsworth, the so-called journalist engaged in coming to Members of this House, among others, and passing himself off as one seeking to identify the source of leaks about Mr O’Brien’s dealings with IBRC. These are very serious issues.
This matter is particularly relevant because, according to the story in The Irish Times, a major British security firm was the recipient of the material collected by Mr. Hollingsworth in Dublin.
We heard later, according to evidence given in the High Court, that a USB key appeared on the desk of Mr O’Brien and that he, for the first time, discovered the material that Mr Hollingsworth was privy to in Dublin.
The use of an English security firm in this respect is not a new phenomenon in Ireland. We should remember also that there was elaborate industrial espionage and surveillance in the context of the takeover of the Independent News & Media group at the time between the O’Reilly interests and the O’Brien interests, if I may use that term.
In that case, newspaper reports indicated that 11 operatives operating from a Dublin hotel were engaged in fairly extensive surveillance of the then managing director of Independent News & Media and that it was eventually determined that an English espionage firm or intelligence-gathering firm called Esoteric lay behind that.
Surprisingly, Independent News & Media, which later came under the control of Mr O’Brien, largely speaking, has been unable to work out who commissioned that investigation.
I am also worried in another respect. It was reported in the media that Irish Water had concluded an extensive contract with a company in the Isle of Man [Another 9 or A9 Business Recovery Services] chaired by Mr Leslie Buckley and, in which, Mr Denis O’Brien was a large investor. He is described in its publicity material as a leading Irish entrepreneur.
The function of that company is to advise Irish Water against the hacking of its sites. It appears the main business of this company in the Isle of Man, which is owned by Mr O’Brien and chaired by Mr Buckley, an associate of Mr. O’Brien, concerns computer security and countermeasures against computer hacking.
Although no particular figure was put on the computer security services of Irish Water, it is interesting that it was suggested in the media at the time that, over five years, €1.2 million was spent on this kind of activity on the part of Irish Water.
One must bear in mind also that at least one of the newspapers controlled by Mr O’Brien has, since the emergence of the dispute about water charges and the legislation we considered in this House some days ago, run a fairly heavy campaign, with many editorials and articles, on the subject of Irish Water. This is a serious matter.
I will finish on two points. Last week in a different context, although Mr O’Brien had a walk-on part in it, the Ceann Comhairle, as Chairman of Dáil Éireann, publicly queried whether it would be necessary to introduce a system of fines to strengthen the powers of the Chair to prevent the abuse of Dáil privilege.
This House has its own Standing Orders, its independence and its own Committee on Procedure and Privileges.
As a member of that committee, I do not believe Members of this House are disposed to abusing their privilege at all, nor do I believe the use of financial penalties to preserve the privacy of important people the Irish political and economic environment should be permitted by this House. I do not believe we should go down that road. It is for the other House to make up its own mind on fines for its Members.
We must remember that these Houses are the defendants in a court action brought by Mr O’Brien. He has sued the institutions of this State. He has also sued individual Members of these Houses on occasion and has threatened to do so on many more occasions.
Free speech is very important. As far as I am concerned, the Cregan commission is dealing with just one set of issues, the activities of the IBRC, only some of which involve Mr O’Brien or companies connected with him.
However, there are other major issues to be borne in mind arising from the Moriarty report, which found Mr O’Brien had indirectly channelled the guts of €1 million to former [Fine Gael] Minister, Deputy [Michael] Lowry, after the awarding of a telecommunications licence to him.
It found that elaborate efforts to deceive the Moriarty tribunal had been made, including the falsification of letters to cover up the involvement of the relevant parties. I wish all speed and every success to the Cregan commission.
I welcome this legislation. Members have an obligation to be fair but not to be entirely impartial but it is important that these issues be dealt with in a process that is fair and impartial and, above all, has the means of establishing the truth, because the Irish people do deserve the truth.
The Irish Stock Exchange referred a memo last year to the Office of the Director of Corporate Enforcement (ODCE) about the “suspicious nature” of shares traded in Siteserv prior to the company’s sale in 2012.
An annual report by the Irish Stock Exchange (ISE) on its activities for 2015 — sent last week to Mary Mitchell-O’Connor, the minister for jobs, enterprise and innovation — notes that the memo was sent to the ODCE “given the suspicious nature of certain dealings” that emerged last year.
It is understood that this is a reference to a sharp rise in share activity in Siteserv in the month before the state-owned bank IBRC received the first bids for the firm in what was supposed to be a confidential sales process.
Last year The Sunday Times revealed how 6.4m shares in Siteserv changed hands in November 2011, despite the shares being worth only between 2c and 3.5c each. Between January and October 2011, only 121,000 shares had changed hands.
The first media report that Siteserv was for sale was published in January 2012
…A commission of investigation into IBRC, which has been asked to investigate the share activity, has also been frustrated in its attempts to uncover the owners of the nominee accounts that bought shares prior to the sale of Siteserv.
It has said legislation must be enacted to let it investigate the share activity in advance of the sale to Millington.
Soc Dem founder Catherine Murphy made fresh claims about Denis O’Brien’s involvement with IBRC this morning during a debate on the second stage of the Commission of Investigation (IBRC) Bill 2016.
This is the Cregan investigation into certain transactions within IBRC, including the sale of Siteserv to Denis O’Brien.
Ms Murphy told the Dáil:
“I am relieved that we are finally at a place where we can begin the process by introducing this legislation. The thought crossed my mind this morning when it took so long to get a quorum that it had been stymied at every opportunity, and I wondered. I am not prone to conspiracy theories and I can tell the Minister of State how relieved I am that we ended up getting a quorum when it arrived after 11.10.
The commission had been fraught with problems. The majority arose because this, in reality, is the first investigation that has dealt with financial and banking matters under the 2004 legislation and it has been different from inquiries that have happened under that legislation to date. Given the turmoil of recent years, I doubt it is likely to be the last of this kind of inquiry.
It is bespoke legislation but at least it is charting a way. Upon reading the legislation, it is not quite clear to whom the final report will be made available. I note in the comments of the Minister of State, Deputy Stanton, that persons will have sight of it if they are mentioned in it, but whom will it be delivered to at the end of the day? Maybe that could be clarified because we need some degree of certainty on that at this stage.
It is just over a year since I stood in this Chamber and raised issues that I still believe were in the public interest – a complex web of cosy relationships, outrageous financial dealings and convenient transactions that benefited some far more than others, all at the expense of ordinary citizens.
The public interest element of the investigation is without question. IBRC was a bank that the people never wanted and yet well in excess of €30 billion of citizens’ money was pumped into the institutions formerly known as Anglo Irish Bank and Irish Nationwide Building Society that then combined to become IBRC.
Citizens have a right to understand why they are shouldering the burden of bank debts while some individuals appear to be doing very well from the purchase of distressed assets from IBRC. It became even more worrying when it transpired that Siteserv, a distressed asset that went on to win some lucrative water meter contracts, was purchased in highly irregular circumstances from IBRC.
The information I got from a freedom of information request was that the Department of Finance had deep concerns about that. From the bits that are not redacted, it indicates that the reputation of IBRC and, by extension, the State is vulnerable due to the approach taken by the bank on these matters, and that the processes of IBRC should be beyond challenge in order to protect it. There was clear concern in the Department about it.
AIB, which is 99% State-owned, lent the individual the money to buy Siteserv. That is our bank, which would not lend to businesses, yet it provided the money to buy Siteserv, an asset owned by the State. When the loan was granted to that person, he owed the State significant sums of money already. We sold Siteserv to that person for less than it appears to have been worth. Why would we not ask questions about that?
We did it when others told us they were prepared to pay more for the asset from their own resources rather than a loan from one of our banks. We know trade buyers were excluded, so we did not properly test what could have come in. As we know, there was a write-off of €119 million, with €5 million going to the directors of what was essentially a failed company in terms of the amount of money available.
My pursuit of the questions surrounding such an irregular transaction culminated in my making a speech in this House approximately a year ago that created a furore I could not really have envisaged.
I was attacked by powerful interests using media outlets that were afraid of the power wielded by this individual.
On one occasion my reputation was rescued by Deputy Micheál Martin because a presenter did not intervene. It took me by surprise; the legal issue is thrown over news stories very often when they involve very wealthy individuals, but it is not done in the same way for other people. I noted that at the time.
I have since discovered a whole other world that I did not know existed. A journalist contacted me on the false premise that he was writing an article and I took him at face value. He made an appointment to come to the Oireachtas for a meeting, but the sole purpose of it was to try to find out the sources of my information.
He did not get the sources but it appeared to be more of an inquisition than an interview. That kind of world, which I did not know existed, is there bubbling under the surface. We must be conscious of that.
My staff and I were put under immense pressure, but at all times I felt the support of the public, and people went out of their way to e-mail me, call me, stop me in the street and encourage me to continue to ask the questions that they wanted to be asked. They were obvious to very many people. I continue to have people on a constant basis saying it to me, even at this stage.
There can be no denying there is a disconnect between citizens and politics. Mistrust and the impression of “them and us” has damaged the relationship, exposing issues of concern. There should be an insistence on transparency and accountability, along with a pledge to uphold both. That is the only way we can restore trust in both the political and public life in Ireland.
Legislation being introduced today is a significant part of the process, but it is only one element. The Minister of State mentioned terms of reference and I hope we will see them in the next week, as they are important. It is essential to put in a modular fashion how this will proceed. Looking at the first, second and third interim reports, substantial work has been done by the judge in preparing for the inquiry, narrowing the issue and concentrating on Siteserv as the first element in the modular approach. This should be in place by the time the Dáil goes into recess.
The terms of reference have shifted substantially already, focusing on transactions initially above €100 million and, subsequently, transactions of over €10 million. Considering the amount of material that the judge has gone through at this stage with one transaction, I agree that in hindsight we underestimated the task involved.
It is important that we narrow it and do one good piece of work before going back to see what else is needed. The Dáil will manage that. It is important to investigate the transactions accounting for substantial sums of money.
There are also instances where the sum involved may be relatively insignificant overall but the context would provide an understanding of key relationships, which would be a vital component of the larger investigation. For example, in 2012, the then heavily indebted developer Paddy McKillen sought a bridging loan of just €5 million from IBRC when he had a cashflow problem following his unsuccessful litigation against the Barclay brothers.
As part of that process, Richard Woodhouse, a man connected with the Siteserv sale, and Mr. O’Brien advised members of the IBRC, including Mr. Aynsley and Tom Hunerson – people connected directly with the Siteserv deal – that Mr. O’Brien would provide IBRC with a guarantee of €5 million to support the loan for Mr. McKillen.
Astoundingly, despite serious concerns from some about Mr. McKillen’s ability to repay the amounts he owed IBRC – far in excess of €5 million – the bridging facility was granted. Essentially, a man with huge debts to IBRC was granted a loan from the IBRC on the guarantee of another man who owed significant sums to IBRC while there were questions over both men’s financial ability to fulfil original loan agreements with IBRC.
Those making the decision were directly connected with the Siteserv deal and other transactions. Some of the larger transactions, such as those in excess of €10 million or €100 million, may be more straightforward than some of the smaller transactions that could give us some sort of better understanding of the relationships in the bank.
I also have a question on the provision of the loan by AIB, the bank that is 99% owned by the State, when the business sector in the country was screaming that it could not get credit just to get staff paid.
The loan was paid to Mr. O’Brien to help facilitate the purchase of Siteserv. It is interesting to note that the AIB group chief credit officer at the time the loan was advanced went on after leaving AIB to join the boards of Siteserv, Topaz and the Beacon Hospital, all owned by Mr. Denis O’Brien. Why was that? My point has always been that, while there may be perfectly legitimate answers to these questions, they stand out as very obvious questions to ask.
An element of this legislation that I called for and which appears to be absent is a section dealing with the Irish Stock Exchange. There is one aspect of the stock exchange that I want to mention. In the course of trying to untangle some of the curious share dealings surround the sale of Siteserv, it proved wholly ineffective in maintaining any form of watchdog capacity or general oversight. The Minister of State referred to a portion of the Bill dealing with confidentiality with respect to the provision of information by the stock exchange. Deputy Calleary and I have made this point.
There was a big spike in the share dealings before it was publicly known that this company was going to be sold. I wrote to the Irish Stock Exchange and it stated it does not possess details of individual dealings regarding nominee accounts, so it did not have the information.
Then I wrote to the Office of the Director of Corporate Enforcement and it stated there was no indication at the time of reply that any issues arose that came within the remit of that office.
I wrote back to the Office of the Director of Corporate Enforcement and then I wrote to the Central Bank, which stated it does not hold details of the beneficial owners of the nominee accounts holding shares.
We wonder why prosecutions are not taken in relation to insider trading but if nobody is holding anybody to account or has the function to do that, how can it happen? We should not have legislation if we have not got the means of enforcing it and we need to do far more in respect of the stock exchange and of share dealings.
In every situation there must be a system of checks and balances and a significant one must be the ability of the media to report news. It became increasingly obvious during all of this that we had a major problem with both the ownership of our media and our defamation laws.
Not having a functioning media may well be a contributory factor in future inquiries, where that role should properly be played by the media in scrutinising and holding to account in the same way as we in the Opposition are expected to hold the Government to account. It is the checks and balances in the system.
There can be no doubt that the chilling effect of powerful individuals is a problem in this country and certainly it has appeared to be the case that the thicker the wallet the thinner the skin. Our defamation laws, as they stand, allow that to be the case. Aside from the chilling effect, there is also very real concern regarding media ownership.
When an individual is able, as Fintan O’Toole wrote, to accumulate “excessive private power” which has “an impact on the public realm of democracy” one knows there is a problem with the system controls that are in place.
We saw the work, for example, that was done quite recently by the “Prime Time” investigations unit regarding Console. That was a very good piece of work, but even an adverse or a satirical comment will invariably produce a writ to RTE.
Then we wonder why we do not see programmes by the likes of “Prime Time” about particular individuals, whether or not about this particular topic. That definitely has to be questioned. This is why the National Union of Journalists is calling for the establishment of a commission on the future of the media in Ireland. We should not just heed that call, we must commit to providing for that to happen as a matter of urgency. We have to get those checks and balances back into the system and the media are one element of that.
We also need a discussion regarding why the media mergers guidelines are not retrospective. Where there have been similar concerns about other sectors that have an over-dominance in the market, steps were taken. The one I am thinking of, which was very obvious, was the situation regarding Ryanair and Aer Lingus, where Ryanair was told it was over-dominant in a particular market – between Stansted and Dublin, I think. It was ordered to sell some of that, if not all of it.
Why is it that one sector is looked at and another sector that is just as important, if not more so, is not considered in the same way? While I am pleased to welcome the Bill and I look forward to the work finally progressing in a meaningful way, I regret that it is necessary to use legislation to force some of the parties involved to make the relevant documents and information available to Mr. Justice Brian Cregan in a way that overcomes the privilege and confidentiality issues asserted by some of those involved.
I am pleased that Siteserv will be prioritised as I believe it to be the issue of primary concern to the public and I believe it will act as a bellwether for other transactions that require serious questioning and analysis, including the controversial Topaz deal and the worrying circumstances surrounding the Blackstone transaction.
Much of this has taken me to places I would not look at. Blackstone would not normally be on my radar, but I had a look at their website. There is a section within the company that deals with tactical opportunities, which they call “Tac Opps”. It is a bit eye-opening.
This section is, by its own description:
“an opportunistic investing platform seeking to capitalize on global investment opportunities that are time-sensitive, complex, or in dislocated markets where we believe risk is fundamentally mispriced”.
We have a situation where one of the leading investment companies in the world, with the proud objective of capitalising on distress, was employed to advise IBRC, without any procurement or any competition from others, on the sale price of the assets.
It went on to be allowed, astonishingly, to buy some of the assets it had priced itself. That is one of the issues the Department of Finance officials were concerned about and it is one of the major transactions they highlighted in the FOI information.
The internal documents from the Department of Finance discuss concern about the ‘poor quality of decisions’ taken.
That language is terribly tame, but I suppose it is the kind of thing one puts into official documents that will be read at some point.
I would have said something a little more extreme, but I will not say it in here. This was stated in respect of transactions such as Siteserv and Blackstone. The officials themselves seem to be extremely unhappy.
Situations such as these raise questions for any right-minded person looking at them. It is my job, and the job of those in the Opposition, to hold the Government to account, as a representative of the citizens, to look at these things and to ask questions.
The public expects and deserves that those questions are asked. In respect of the point that was made about the Irish Nationwide mortgage-holders, what has gone on there is an absolute disgrace.
The web that was outlined by my colleague, Deputy Donnelly, yesterday in respect of even the avoidance of tax is unbelievable, but the real concern should be those people who took out a mortgage in good faith with Irish Nationwide Building Society.
Some of the mortgages were performing and some of them were distressed, but some of the distressed mortgages could have been serviced if there had been even a small discount.
We are not just going to end up with this company running big profits out of all of this but the State will end up having to house some of the people who will, inevitably, lose their homes as well.
The whole thing does not make sense.
I listened to Deputy [Joan] Burton talking this morning about the great work that had been done in dealing with the promissory notes that were turned into sovereign debt on the night IBRC was liquidated.
It was as if we should be thankful to them for doing all this hard work, that they sorted it all out.
The promise the Labour Party actually made was that it would be dealt with. It was “Frankfurt’s way or Labour’s way” and the impression was given that the debt would be written off. That was a legitimate expectation that people had.
We should continue to challenge the very idea that this debt is still there. The promissory notes were turned into sovereign debt and there was a restructuring of the repayment schedule but not one solitary penny of it was written off.
Some €2 billion was borrowed and extinguished in the Central Bank to take it out of the economy. This was last year but there is a schedule of payments up to 2030 to repay an odious debt, with which we should never have been lumbered. We should not lose any opportunity to restate that point.
I wish Mr. Justice Brian Cregan well on the work ahead. I know he has done a lot of work in preparing for this and I have read each of his interim reports with great interest. It is right to narrow this down and it is critically important that we have the terms of reference before the Dáil goes into recess.
Both these things are required for the judge to proceed with his inquiry in the fullest way possible.”
Anti-Austerity Alliance-People Before Profit TD Richard Boyd Barrett
Anti-Austerity Alliance-People Before Profit TD Richard Boyd Barrett TD spoke during the debate.
Mr Boyd Barrett began by admitting he hadn’t heard Social Democrats TD Stephen Donnelly’s speech about US investment firm, Mars Capital yesterday, and the pending eviction of a family from their home in Kilkenny.
However, Mr Boyd Barrett said:
“A woman emailed me previously about her engagement with the financial institution that used to be Irish Nationwide and then became IBRC and the mortgage, the mortgage they had. And I think it’s sort of telling, in a way, what’s at stake in all of this. I’ll just read out a little of what the person says. She says:
I am an IBRC mortgage holder with a performing, just about so far, loan, that has just been sold to Mars Capital No.3 Limited, an unregulated fund. I stood outside the Dáil with other mortgage holders, trying to get this government to see sense but no, Michael Noonan had no regard for me or any ordinary person caught up in its liquidation of IBRC. So I wanted to know: who will I be dealing with. Who is Mars Capital No.3 Limited?
I did some research on cro.ie and discovered that Mars Capital No. 3 Limited had, until January the 15th, two directors – one of whom had the same name as a person who held a senior position in IBRC in the past. And was also, in the past, an employee of KPMG, the firm of liquidators. That surprised me. But I am an ordinary person who isn’t used to looking at company documents.
In recent days, that director stood down and another is appointed per new documents, lodged with the CRO. The other fact I discovered is that that company has three shareholders, all of them charitable trusts. Which I Googled and are associated, I think, with a Dublin legal firm. They are named Badb – I don’t even know how to pronounce this – Medb and Eurydice. What in the name of god has a charity to do with it? Who would use charitable trusts? Why use charitable trusts? Who owns my loan? I am still none the wiser. I believe this has to be examined.
Why hide behind charitable trusts? I took out my loan with a building society, not a charity. I stand to be corrected but the charitable trusts concerned may have been in the news in the past. I think I am at least entitled to know who owns my loan, considering my Government has done the selling.”
“And just to inform people, if they don’t know, the charitable trusts were owned by Ireland’s biggest, corporate tax firm, Matheson, who indeed have been in the news. Because Matheson were using these three companies to essentially help international hedge funds avoid tax.”
“Something that the Central Bank has reported on, the use of these charitable trusts which are, apparently, registered to relieve poverty and distress. But they what they actually do is help hedge funds and banks pay billions less in tax on, in the area of high-risk assets. The Central Bank has warned, has done some reporting, saying these structures are potentially extremely dangerous because we don’t really know anything about them.”
“Now to me this just say everything about the web of connections between corporate accountancy firms, about the financial institutions that we bailed out, handing over the mortgages of ordinary people to these vultures engaged in aggressive tax avoidance. And then, on the other hand, that same institution writes off… This person doesn’t get a write-off, they don’t get a discount, they don’t even know who now owns their loan. We discover that the people who own the loan are a legal firm assisting people in tax evasion, or tax avoidance, sorry, I have to use the technically correct term.”
“But this same institution can write off €119million to the benefit of the richest man in Ireland, Mr Denis O’Brien, who is not tax resident in this country. Apparently, he doesn’t live here, although his kids go to school here and he has a yacht in Roundstone, Co. Galway and so on.”
“And if you say these things, as some of us did, Deputy [Catherine] Murphy, I did myself. I had the privilege of receiving a letter in, I think it was in the middle of 2012, when I made some of these points, and suggested that maybe the mafia would have something to learn from some of the dealings of the rich in this country. I received a letter from Denis O’Brien, castigating me for abusing my Dáil position with a thinly-veiled warning that I better stop doing it. That’s what goes on.”
“So you have ordinary people, like that woman who writes to me, and thousands and thousands of other mortgage holders, some of whom lost their homes, many of whom are certainly screwed to the wall, in terms of unsustainable mortgage payments and so on. And then all the devastating consequences that went beyond that, what was it, €32 or €34billion went into, into Anglo Irish, €64billion in total, all the devastation, wrecked the lives of ordinary people and then you have this stuff going on where tax refugees like Denis O’Brien benefit to this tune.”
“And eh, what was the other write-off company he got? Oh, Independent [News and Media] newspapers, I forgot about them, also got a €100million written off, that he had a major shareholding in. God, he’s done well out of IBRC.”
From top: Social Democrat TD Catherine Murphy and acting Taoiseach Enda Kenny in the Dáil yesterday
You may recall the publication of the Second Interim Report of the Commission of Investigation (Irish Bank Resolution Corporation) at 9pm last Friday evening before the May Bank Holiday weekend began.
This was two weeks after Justice Brian Cregan completed the 29-page report which has been beset by issues of confidentiality.
The report noted that the Commission has so far cost €3,663,998 – including €631,000 for its own salaries, legal costs, rent, building overheads, services and administration costs; €2,786,998 for the special liquidator of IBRC (KPMG); and €246,000 for the Department of Finance for its ‘external legal costs’.
Further to this…
Social Democrat TD Catherine Murphy raised the matter in the Dáil
Catherine Murphy:“… I raised an issue last week at the Whips’ meeting about the Cregan inquiry which reported to the Taoiseach on 15 April. It was published last Friday night and I understand there is an extension of time again. The Taoiseach needs to give some clarity on where this inquiry is going because it requires legislation on both privilege and confidentiality if it is to proceed.The judge could not have been clearer on what is required.
“The Taoiseach needs to outline what direction this inquiry is taking. Will it be something that is just constantly stretched out? Every week it continues it involves costs to do its work. It is absolutely essential that clarity is given on whether legislation will be produced in those two areas and if there a prospect of a conclusion to it.”
“A debate on the report is also needed in the House. It is the second interim report, which pretty much reinforces the point which was made last November, that legislation is needed if the inquiry is to proceed to a conclusion for public consumption.”
Enda Kenny: “… In regard to Deputy Catherine Murphy’s question on the Cregan interim report, the report was cleared at Cabinet last week. Believe me, there was nothing sinister in the fact that it was published on the Friday of what happened to be a bank holiday weekend.”
“I know that is always the story – that one is trying to ensure it is not seen. Let me put it this way. I can tell Deputy Murphy that I have looked at this and have given it a two-month extension. Mr. Justice Cregan has pointed out a number of challenges. Some of them are legal and some of them are constitutional, but there are a number of options to be considered.”
“I would be happy to accommodate Deputy Murphy with a meeting either today or tomorrow to let her have the up-to-date, accurate range of those opinions, which include the possibility of a full-blown public inquiry.”
“When we consider that the Moriarty tribunal ran for 13 years at a very costly sum to the taxpayer, these are options that need to be considered. I will facilitate Deputy Murphy and anyone else and bring them up to date on where it now stands arising from Mr. Justice Cregan’s interim report.”
A letter sent from former IBRC chairman Alan Dukes to Finance Minister Michael Noonan on February 14, 2013
You may recall how Mr Justice Brian Cregan was appointed to carry out a Commission of Investigation into IBRC on June 16, 2015.
One of the terms of reference is “whether the Minister for Finance or his Department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them.”
The commission’s establishment followed Social Democrat TD Catherine Murphy asking Finance Minister Michael Noonan questions about the sale of Siteserv to a company owned by Denis O’Brien.
Further to this.
The former chairman of IBRC Alan Dukes sent a letter to Finance Minister Michael Noonan on February 14, 2013 – a week after IBRC went into liquidation.
This letter was obtained from the Department of Finance by Ms Murphy, following a Freedom of Information request.
Readers will note there were three sentences redacted in the letter of February 14, 2013.
Following an appeal to the Information Commissioner, the commissioner annulled the decision of the department to redact these sentences.
It found the manner in which the Department had processed the request “most unsatisfactory” and not in keeping with the statutory provisions of the Freedom of Information Act.
Further to this, Justine McCarthy, in yesterday’s Sunday Times, reported:
The Sunday Times has established that the three missing sentences from Dukes’s letter are:
“1. The Department of Finance has at all times been provided with all papers presented to the board;
2. The Department of Finance has been entitled to have an observer at every meeting of the board;
3. The minutes of all committee meetings were systematically provided to the Department of Finance.”
…The ruling by Stephen Rafferty, an investigator in the information commissioner’s office, was made on February 8 but only made public last Thursday. The department has until March 1 to lodge an appeal to the High Court.
…When told what the redacted portion of Dukes’s letter says, Murphy replied: “It’s strange the department would have redacted that. It obviously gives a clue about something. There seems to be a surprisingly small amount of information [available] about the relationship between the department and the bank, given how bad we know that relationship was.
“The information commissioner was quite scathing about the department and the fact they are taking their time about whether they’ll release it or lodge an appeal indicates there is not a culture of openness there.”
An email from Denis O’Brien to Des Carville at the Department of Finance, obtained by journalist Gavin Sheridan, under the Freedom of Information Act
You may recall how the sale of Siteserv to Denis O’Brien’s Isle-of-Man-based acquisition vehicle Millington in March 2012 came after Davy Stockbrokers and KPMG were tasked with finding a buyer by a subcommittee of the Siteserv board.
Des Carville was the Davy adviser to Siteserv during the sale. Mr Carville previously helped Davy to advise Mr O’Brien on deals involving Esat.
Meanwhile, separately, in yesterday’s Sunday Times, Brian Carey wrote:
“For all the world, the inquiry into loan write-offs at IBRC looks like it was built to collapse: the towering edifice, the flimsy foundation, the complex material, the entirely infeasible completion deadline.”
“It ran out of control well before it was due to begin. By estimating a duration of several years, judge Brian Cregan first rendered the whole prospect outrageous. It was the government’s decision to broaden the probe to 38 transactions and losses to the state bank of more than €10m. Now the government claims that an investigation could cost as much as a tribunal.”
“There never were grounds for a probe of that scope, depth, length or expense, nor was one ever demanded. And so the public’s quest for truth runs aground in a legal quagmire of confidentiality , privilege and enormous expenses. How convenient.”
“There were only ever a handful of questions that begged answers in this affair. Did Denis O’Brien, the most powerful businessman in the country, receive preferential treatment in his dealings with IBRC? Was he unduly favoured in his purchase of Siteserv, a utilities service company which was heavily indebted to the bank? Did he get preferential rates of interest on his own personal borrowings?”
“… KPMG could review, as suggested by Cregan, the top 12 write-offs, provided once again there is no conflict of interest. It is the job of a liquidator to investigate the affairs of a bust company. As yet, the evidence is not there to justify a wide-ranging, lengthy and expensive judicial inquiry. Frankly the public should be aghast that one should take place without, at least, establishing a case for such a probe.”
“By the same token, the Siteserv issue should not be buried with this administration. Right now, this looks like a manufactured botch job.”