Good Room Gone Bad


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Kevin Nowlan, CEO of Hibernia REIT

Ireland’s Great Wealth Divide was on RTÉ One last night introducing us to some of the colourful characters defending and profiting from Ireland’s unprecedented inequality.

David McWilliams spoke with Kevin Nowlan, CEO Hibernia REIT, a real estate investment trust which has raised over €600million from a variety of investors, including George Soros, by helping them find bargain properties in Ireland.

Kevin Nowlan: “Ireland became an extraordinary place for a moment because virtually everything was for sale. It was a catch 22 in Ireland. If you didn’t have the money, you couldn’t buy the property and if you didn’t have the property, you couldn’t raise the money.”

David McWilliams: “There was no cash in Ireland, no access to cash, so you had to go to where the cash was. When you knocked on the door of Georg Soros’s, what did you say to them?”

Nowlan: “So we basically said that Dublin is a great office market. We said that you can buy office buildings basically in, or below, basement cost.”

McWilliams: “What does that mean?”

Nowlan: “So you can buy them below what they can be built for. What we had to answer was we said we could do off markets.”

McWilliams: “What does that mean?”

Nowlan: “That means, you know, a lot of property ends up in the Irish Times or in the Irish Independent for sale by receivers or whatever. Be basically said we know enough people in Dublin to be able to go and buy the properties, without having to go to auction. Or having to go to the market. And we’ve done 18 deals, and 16 of them we’ve done off market. We’ve bought debt, we’ve, you know, we’ve done quiet deals with people, we’ve done deals with banks, we’ve done them in a variety of different ways. If you buy something in an active vibrant economy, below what it actually costs to replace it, you should be in pretty good shape to make money.”

McWilliams:Who, just in that case, who pays the outstanding debt then?”


McWilliams:Not the taxpayer?

Nowlan:Well yes, I mean it is being factored in now. You move back three years and it’s factored into the bailout. I mean that…”

McWilliams: “So there is a massive transfer of wealth from the average Joe who pays tax to the incredibly wealthy guy who sees the opportunity.”

Nowlan: “He sees the opportunity and he works, you know, let’s say he bought, you know let’s say they bought those loans for 35c in the euro, or 30c in the euro and they sell them for 40c, they make their 10c and they move on. And it’s basically a bulk business model.”

McWilliams: “But the difference is the 35c in the euro means somebody else has paid the 65c, the 65c – and that’s the taxpayer.”

Nowlan: “The 40 to the 80, unfortunately, ends up on our…”

McWilliams: “On the taxpayer.”

Nowlan: “On our national debt.”

McWilliams: “The taxpayer ends up subsidising or financing or, in some way, underwriting the opportunistic move which is totally legal and totally within their rights of the already wealthy.”

Nolwan: “Yeah. Basically.”


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David McWilliams with Professor Richard Murphy, director of Tax Research UK

Mr McWilliams tackled the subject of Ireland’s corporation tax, saying Ireland has made a distinct choice – to tax labour much more than capital. As an example, he spoke about  American corporations based here in Ireland. He said US corporations make $970,000 profit per employee per year in Ireland yet, on those profits, they only pay $25,000 tax per employee per year to the Irish exchequer.

Mr McWilliams spoke to to Prof Richard Murphy, director of Tax Research UK and a campaigner for tax fairness. He said we needed to be braver and raise our corporation tax rates in order to narrow the wealth gap in Ireland.

David McWilliams: “In a way, Ireland it taking a massive bet on the very wealthy.”

Professor Richard Murphy: “Oh yes. Ireland’s role in all of this is to increase the wealth of the wealthiest. That is the position it has chosen for itself. By offering a low tax rate to the world’s major corporations which are, of course, owned by the very wealthiest in the world and of course are also staffed at their top levels by some of the wealthiest of all the world then Ireland is betting that that’s going to carry on. That the wealthiest are going to carry on getting wealthy and those who are at the very top of those corporations are going to want to carry on using Ireland as their launchpad into Europe and beyond Europe, particularly if they’re US corporations.”

McWilliams: “We’re in Soho [in London] which is traditionally the red light district of this part of the world so are you saying Ireland is a bit like Soho, you can do stuff here you can’t do at home?”

Murphy: “Absolutely. You can do stuff in Ireland that you can’t do at home which you wouldn’t want home to know about either.”

McWilliams: “Precisely.”

Murphy:The 12.5% tax rate, and we actually know of course the real tax rate is less than 12.5%, that is sort of a prop for their insecurity and that is the weakness in the Irish political mentality. That it has to get over this lack of confidence in its own ability to sell the qualities of the Irish people in the international community. If Ireland actually established itself as a better location to exploit its real ability to, and in particular, its people, then Ireland could actually guarantee a tax base which it could tax, not at just 12.5% but at the same rate as the UK and have no problem at all, contribute more to the Irish economy, make a better balance and actually not be seen as the pariah state which, I hate to say it, it is seen as around the world at the moment.”


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Danny McCoy, CEO of IBEC

IBEC doesn’t agree with Prof Murphy, as was evident when Mr McWilliams spoke with the CEO of IBEC, Danny McCoy:

McWilliams: “Do you think that it’s sustainable for us to keep a tax policy which many countries seem to think is ‘beggar my neighbour’?”

Danny McCoy: “No, it’s not ‘beggar my neighbour’ because…”

McWilliams: “But many countries seem to think it.”

McCoy: “Of course they do. And in fact, you know, you lose your reason. There’s nothing, as I think it was JP Morgan said, ‘there’s nothing to make you lose your sense of proportion than seeing your neighbour getting rich.’ To see people on the western seaboard of Europe who have been, by generations poor, suddenly have this huge surge in wealth in a 40-year period, people are saying there must be something wrong there, there must be some factor that’s creating this surge in Irish prosperity. Aw – it must be the corporate tax rate.”

McWilliams: “What effective tax do they pay?”

McCoy: “Well, look, the headline rate is 12.5% but legitimately companies go through losses. So effective tax rates can be lower than 12.5% but that’s the official rate. I wouldn’t get hung up on the rate so much as the money…”

McWilliams: “And the revenue is what?”

McCoy: “The revenue is in the order of about €4billion which, again,for a small open economy is a disproportionate amount of, of actual cash to raise from a  corporate sector.”

McWilliams:The income, the Americans, suggest is close to €100billion. The tax revenue that we get is €4billion. They are supposed to pay, let’s say €12billion – does that mean that there’s €8billion potentially not being paid here?”

McCoy: “If we’re after more revenue, to deal with the wealth distribution. For a small, open economy the logic here is get more activity in here. The way to encourage that is to put up a flare that says the tax rates, their trajectory is actually downwards. We’re, you know, 12.5% is going to be the maximum as we move through time, we get more competitive, corporation rates should go down, it doesn’t mean revenue goes down.”

McWilliams: “So we’re in a situation where into perpetuity we have to accept a 4% effective tax rate.”

McCoy: “Well we certainly have to realise that we are 4.6million people in a 7,000 million world. We don’t get to do demands. What we do get to do is leverage our position which is a gateway into the Europe of 500 million and to be tax efficient, not a tax evasion country, a tax efficient country that gives rise to activity, that gives €4billion from corporations to 4.6million people is off the chart.”

Towards the end of his programme, Mr McWilliams proposed his own theory in relation to the Irish psyche and its seemingly inability to be braver.

He said:

“My granny had a good room. It was so good, I wasn’t good enough to go into it. It was preserved for people who were better than our family, good-er than our family if you will. The core of the good room psychology is a fear of rejection. It’s a fear that what you are is just not good enough so therefore you pretend to be something that you’re not.

“This good room mentality, I think, permeates a lot of the ways in which the Irish Government, for example, negotiates abroad, for example, this discussion we’re having now about the tax system: rather than say, ‘it would be in our interests to revisit this’, we say, ‘don’t rock the boat. Will the multinationals reject me if I have that conversation about tax? Will, for example, the European Union reject us if we have that conversation about bank debt?’ It’s all of a certain similarity and it’s down to a national insecurity.”

Watch back in full here

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66 thoughts on “Good Room Gone Bad

    1. Clampers Outside!

      Yes, but it’s not about knowing, it’s about repeating the message until you are blue in the face because our politicians couldn’t good give a tuppeny fupp about poor people…. Joan celebrating her failure taking photo-ops at food banks being one deluded example of not giving a fupp / …being out of touch / …self delusion – take your pick.

  1. Clampers Outside!

    Good doc, now if only we could sit down all the TDs and Senators and ask them what they intend to do about it.

    That Hibernia REIT CEO guy struggled on occasion to maintain a straight face and hide his smirking…. or was that just me.
    I like McFlurry’s ‘good room’ analogy. And the use of the clip of Enda twisting on the chair awkwardly at that meeting of world leaders (what for again?) was well placed in the programme.

    Good job Davy boy!

  2. Kolmo

    Greasy gombeens. Speculators hoovering up properties at the expense of the gobshite taxpayer, contributing absolutely nothing to the country, cancerous bastards, 100% facilitated by the well-connected gombeen paddy. – meanwhile I and many others are stuck in a rent-trap – high-rents increasing, piss poor buildings, high cost of living – impossible to save for a house, now in my/our late thirties, working as a professionals, not a hot-shot, no-tie internet guy, just working in engineering field and nursing – proper pain in hoop with the whole thing.

    1. Anne

      “contributing absolutely nothing to the country, cancerous bastards, 100% facilitated by the well-connected gombeen paddy.”

      Yep.. the well connected gombeen being the likes of Kevin Nowlan, CEO of Hibernia REIT

      1. elmoisarat

        What a smug little sleeveen. His appearance on the programme was simply to gloat & fuel his ego. He should really keep his mouth shut in the light of this : “Kevin Nowlan worked as managing director of his family property advisory firm WK Nowlan until 2010 when he joined Nama. The chartered surveyor transferred his 30 per cent shareholding in WK Nowlan into a trust before moving to Nama. WK Nowlan worked as one of Nama’s key consultants. During his time at Nama, Nowlan became one of the key players within the State agency, serving as busted tycoon Sean Dunne’s portfolio manager in Nama. Last February, Nowlan upped sticks and returned to WK Nowlan. More recently, he raised €365m on the stock market through Hibernian REIT — a fund set up to buy property.”

        1. Kolmo

          For the love of god – surely there is some kind of conflict of interest there, how can there not be? ….in the words of Gordon Gecko “very hard to prove”..

          These anti-social grease-swine have the whole thing wrapped up.

        2. Anne

          Oh right, I see… Yuck is all I can say.

          “And we’ve done 18 deals, and 16 of them we’ve done off market. We’ve bought debt, we’ve, you know, we’ve done quiet deals with people, we’ve done deals with banks, we’ve done them in a variety of different ways”

          How quiet we talking? What kind of variety is he on about?

  3. Optimus Grime

    Great doc on how the rich used their position to create even more wealth for themselves and how it was pretty much funded by the tax payer.
    The segment on Monaghan town seemed a bit lost though what was that meant to do?
    What the doc did do was throw up some serious questions about NAMA.

    1. Medium Sized C

      More serious questions about NAMA or just some of the very-much-been-up-for-some-time questions about NAMA?

    2. Clampers Outside!

      The Monaghan bit was to show that ordinary folk have been left behind by the recovery, and that small towns have lost all their young people to emigration…. seemed pretty straight forward to meself hi !

  4. donal

    The statement from McCoy “We don’t get to do demands. What we do get to do is leverage our position” is the crux of the matter for me. It is entirely based in an acceptance and belief that the existing system, whereby capital (and thus those who own it) has the right to do anything it pleases in order to get the biggest return for itself, is the RIGHT AND ONLY POSSIBLE ECONOMIC SYSTEM.

    This belief is a social construct. It can be changed if society decides it shall be changed. Convincing the masses to revolt against this construct (and revolt does not automatically mean violently, open democratic politics is a peaceful path) has been the struggle of all political movements who argue for greater fairness in society for generations. It is difficult toconvince the masses because the ones with most persuasive power are also those with the most to lose from the existing system. But I’m hopeful that greater access to information thanks to the internet can change that balance of persuasive power.

  5. Mr. T.

    I have a special hatred for IBEC. I’m a business owner and employer but IBEC don’t speak for me. I actually respect the people I employ.

    1. nellyb

      McCoy’s interview was like Irish Pictorial Weekly. Quotimg JP Morgan, that driver of humanity n civilization… At that point i wamted to send hiim a tokem cheque, since he looked so in love with munay…

  6. Dr. Dreamy

    Tuned in to first half and then tuned out again. Nothing original, no real analysis. Rich are getting richer, granny had a great room. If you like your sandwiches from Spar, then McWilliams is probably as good as it gets. Most insightful, revealing comment was “fear that what you are is just not good enough so therefore you pretend to be something that you’re not. “

    1. Clampers Outside!

      I don’t believe it’s about saying something new, but about shining a light on the stuff we ‘think’ that we know. Which is clearly demonstrated in the ‘Ideal, Think, Actual’ chart of wealth division.

      Just because something is not new, does not make it useless. In a day and age where messages must be repeated until they sink in I for one would love to see that programme repeated every week until everyone has seen it from start to finish at least five times.
      If you understand how basic messages in the media work, ie ‘repetition’, you might actually agree.

  7. Paolo

    If the corporate tax rate goes up, I lose my job along with thousands of other tax payers.

    It is as simple as that.

    1. jc

      That really is complete tripe Paolo, Its not about the rate going up its about implenting the actual rate we have.

      These companies wont do unless asked, Whatever about the tax rate Ireland is in fact a pleasant place to do business in. Its not about being all ‘paddy’ this and ‘paddy that’ the workforce are educated, the workforce speak english. It has direct access to European markets and beyond and the attitude to work is in fact work hard and also play too. Its a sensible choice to do business in Ireland the direct approach and casual nature is why many Irish people have succeeded globally. The people are easy to get on with, and it you may find it strange to believe but our climate is amenable and people want to actually live here.

      We need to start asking business to contribute more and not relying on them to dream it up themselves.

      The only people saying that business will exit the country if we implement the actual current tax system is effectively is OURSELVES.

      1. reality

        None of the Irish in any of the Multinationals can speak a second language. A French friend of mine said they receive loads of CVS from Irish people saying they have fluent French. When it comes to interview time, they flounder and can barely string a word together. IT skills are also pretty poor. Some of the banks are recruiting contractors from Belgium, France , Germany for IT projects. MNC are only here for the favourable tax rate.

      1. reality

        No analysis, merely a comment. Check out the stats yourself. How many of Google staff are foreign? Point is the MNC don’t give a flying fupp about our charm, skills , in it for what they can save. And yep no language skills and lack of quality IT skills here.

    2. J

      Isn’t the real issue though the transfer pricing agreements rather than the actual corporate tax rate? Suggest BS get a tax expert to post thoughts and analysis on this ( an expert please, not some jumped up , deluded me feiner …. I name no names )

      1. J

        Clampers, if a multinational significantly reduces profit ( i.e. writes off a vast amount of expenses against sales, through the use of transfer pricing agreements ) then the profit you tax becomes rather insignificant. No real diff if you tax it at 12.5% or 4% or 20% as end profit is insignificant.
        Get a tax expert on to address this issue and I am sure you will find that the point I raised is not ( to quote you) “bullcrap” .
        @reality : Some Irish people can speak a foreign language. Get a grip.

        1. Clampers Outside!

          Key word there is ‘significant’. if we can pull in €4bn on an effective rate of 4%, I definitely think we can raise it 25% at least, to 5%…. which is not significant.

          Anyway, the problem is that these loopholes that allow profits to be taxed in different countries, or a country of choice, needs to stop.
          Make money in a country, pay tax there. Anything else is just creative accounting and greed.

          1. Andy

            Wow, no offense but you’ve no idea what you’re talking about.

            Your comments are so far removed from how the tax system works one doesn’t know where to start.

            I’d recommend you spend an hour reading into how ireland taxes it’s companies, what profits are subject to tax here and the US loophole MNCS are actually availing off.

            It’s not that they’re not incurring tax, it’s simply that the US tax liability is being deferred. They reduce their cash taxes by keeping “profits” out of the US while they’re “temporarily reinvested in the foreign subsidiary”. They are expecting an amnesty in the next few years to allow them bring the “profits” back onshore US. I can’t see it happening myself any time soon.

            They reduce their European tax liability by using “cost plus” contracts with subsidiaries. Ireland provides virtually no added value to these companies. It’s simply a cost center or sales office. Ireland doesn’t create any of the really valuable stuff – the IP, the Phone design (shape or system), the headphones, the brand (most important thing), the complex search algorithms, the advertising market, the pharma r&d and related patents. We provide fairly simple services, themselves designed by the US parent company. There’s little that couldn’t be replicated elsewhere. As such, a cost plus approach is very supportable.

            While large amounts of money may wash through irish MNC subsidiaries, very little of that relates to ireland.

            We only tax companies on what they generate inside ireland. If you want to take a US approach and tax companies on their earnings irrespective of where it’s earned, then all those MNCS will be gone within a year.

            Don’t kid yourself there’s anything special about us as a people. The only thing we have an advantage over other countries is our skilled tax professionals (possibly a legacy of dodging HMRC for 800 years). They are only here for the tax rate. Start messing with what that tax rate applies too (i.e. changing it from the world norm – the US is an anomaly) and all that money washing through paper accounts will emigrate to some other country overnight. Along with it any reason to satisfy “the substance” tests and bye bye MNC jobs.

  8. perricrisptayto

    I would hazard a guess that the recession/ depression was’nt too harsh on McFluffy himself, between his books,tv appearances,shows and whatnot. Old Davey boy is not short of a shilling or two. Great man for the questions but never comes up with the solutions.

  9. maisnon

    A yapper and a PR man . The Pope’s Children would just about scrape the “what to read at the beach” list.

  10. realPolithicks

    It’s all about the golden circle, nothing will change in Ireland because the people who could make the changes are the ones who benefit from it the most.

    1. sǝɯǝɯ ʇɐ pɐq

      …nothing will change in Ireland because the people who could make the changes are the ones who benefit from doing NOTHING about it the most…

      Fixed that for you realPolithicks , no charge.

  11. Paul

    Conversation on twitter between the two “Profs”.

    Julien Mercille : So what is the solution to the #wealthdivide @davidmcw ?

    David McWilliams : there are many not just one

    The two boyos battling to be heard. Who shouts loudest wins.

  12. Paul

    Conversation continues

    Julien : Which are? (just asking to clarify from the #WealthDivide documentary) @davidm

    Julien Mercille ‏@JulienMercille · @davidmcw DM me if easier

    David McWilliams ‏@davidmcw @JulienMercille no time now. Later

  13. Paul

    Julien Mercille ‏@JulienMercille · @davidmcw It’s for a potential piece of writing in a few days

    Can’t wait for Monday. BS you have another post. Bill is on the way.

  14. ahjayzis

    D’ya ever think these vermin will step too far out of line one day and end up up against a wall come a bloody uprising by the people they exploit and impoverish?

  15. Deli

    He should have never appeared on that program. He had nothing to gain. Nolan came across as a clown alright. I guess he is cringing watching the program in his office right now. The upside is a lot of the public have gained on the back of the deals they have done as a lot of the pension funds have invested in his company.

  16. Junkface

    Ugh…Ireland is getting worse. Are we trying to emulate America here? One of the most unjust, uncaring, countries in the world, with a disgusting wealth gap. God I hate Fine Gael!! Destroy, DESTROY!

    (also hate FF)

  17. sendog

    why are people surprised?

    this was exactly the whole point of NAMA. to ride out the public outcry whilst quietly protecting the assets for the usual suspects. Sure a few new players landed in but in reality the same people where able to buy back their assets/loans at a discount.
    The taxpayer was always footing the shortfall. Its the narrative pushed by the media that is the problem. Constantly mentioning the discount on the loans but as usual failing to finish the sentence.
    “NAMA loans and property sold at such and such a discount and then the taxpayer paying the shortfall”

    And if you look back at the programme for gov FF only got green support for NAMA in return for the ban on stag hunting. Broadsheet favorite Dan boyle got the revised programme for gov thru the green convention which created NAMA by getting the crazy animal rights morons onside with the ban on stag hunting.

  18. Peter Dempsey

    I admire Kevin Nowlan. He takes chances and they’ve paid off. His success is reflected in the number of bitter lefties he pisses off.

    1. Anne

      Would you admire him as much if he sold his mother for a few bob?

      It doesn’t seem like he took too many chances to me. Unless you’d consider working with Nama for a period then going back to your family firm, a big risk?

    2. ahjayzis

      I’m going to burgle your house and wait around for you to congratulate me for my entrepreneurial spirit, risk-taking, cojones and success.

      1. sǝɯǝɯ ʇɐ pɐq

        @ ahjayzis;
        I know you’re trying.
        I love that about you
        Until then I’m going to think you’re a weirdo.
        Is that okay?

        Someday, something will come up that you understand and I’ll be behind you.
        We might even become friends.

        Do you have any sisters?.

  19. tomkildare

    McWilliams told us to stop buying gaff’s in 2003, Today the cost more than 2003, rent is at the levels of 2008 if you are lucky enough to get one. instead of telling people its all going bust he has created this wealth divide load of crap to sell to people who feel poor and makes him money. he has created another product to sell. why doesn’t tell people how not to be poor!!!! smoke and mirrors

  20. tomkildare

    McWilliams is a gob sh**e, he told us to stop buying gaff’s in 2003, Today the cost more than 2003, rent is at the levels of 2008 if you are lucky enough to get one. instead of telling people its all going bust he has created this wealth divide load of crap to sell to people who feel poor and makes him money. he has created another product to sell. why doesn’t tell people how not to be poor!!!! smoke and mirrors

    1. sǝɯǝɯ ʇɐ pɐq

      Thank you KevM.
      I couldn’t have said it better.
      -As I’ve said before,there’s beauty in brevity.

      Too many are caught up in their OWN perspective, oblivious to their part in their own destruction and too willing to blame it all on someone else.
      (That IS what you meant, isn’t it?)

  21. sǝɯǝɯ ʇɐ pɐq

    Lookit, as any fool knows…

    If you’re in a mess it’s because you were greedy instead of cautious.
    I listened to you lot ‘advising’ me for years, telling me I was wrong, stupid, slow….
    …telling me that I should act quickly or lose out.
    Property, property, property was the chant.

    Eh, you were wrong.
    Very wrong.

    How do you still maintain that you’re worth listening to?
    Property this, and Property that…
    -Imbeciles, drones and parasites on society is what you are.

    Poor people can’t afford to destroy society.
    They’ll never need to with people like you.

  22. Tadgh

    The Kevin Nowlan interview was shocking. Doing off market deals. 16 out of 18. Previously worked for Nama. Wow.

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