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Editorial – Blowing the whistle until it hurts

The Irish media and national politicians are facilitating cover-ups of a range of issues – from the issues missed by feeble tribunals to Sugarman, Ansbacher, CRH and planning in Donegal

Village aims to promote equality, sustainability and accountability/transparency.

Not being so ideological the accountability/transparency agenda is often perceived as dry. The Cinderella.

While many countries have their political weak spots in these fascist-tickling post-truth times, unserious Ireland runs a particularly fragile regime when it comes to impropriety. One of the intended purposes of Village magazine is to get to the bottom of many of the corruptions that other media, lazy, conservative or sometimes beholden, keep from public view.

This magazine considers that the political process has abjured action on the biggest corruption issues of our time. Report after report, inquiry after inquiry has been celebrated by the media though the reports rarely nailed the truth, and even more rarely generated comprehensive remedial action. From Morris to Smithwick to Fennelly to O’Neill to Cregan, investigations of our delinquent Garda if not abortive have uncovered bits and pieces but rarely the whole picture and clearly the follow-ups have been nugatory. From the Beef Tribunal report, which was tailored to advance its judicial author’s career, to the Moriarty Tribunal’s defanged findings on Denis O’Brien, to the vastly discredited Planning Tribunal, our major non-Garda investigations too have been skewed, undefinitive and unreforming.


There are a few minor scandals that Village has highlighted that attracted extraordinarily little interest elsewhere. These issues are mostly of interest for what they symptomise.

  • The mistreatment by the Law Society of complaints against its members, including the unduly zealous undermining of solicitor Colm Murphy. The Phoenix and Sunday Business Post gave some space to Murphy’s case. Nothing elsewhere.
  • Difficulties dating back thirty years at the Irish Red Cross which has been run amateurishly and in the shadow of one dominant volunteer have been suppressed by the national media.
  • The overpayment and conflicts of interests of the former CEO of the Royal Institute of the Architects of Ireland, John Graby, have not troubled the national discourse. The Irish Times and Sunday Business Post gave it a little, unexcited coverage but nothing elsewhere.

What unites these issues is that the media are well disposed to the stalwart institutions complained of, and so underreport the issues.

This also explains why the series of articles published by Village in 2010 about conflicts of interests for then Councillor Oisín Quinn in Dublin City Council were downplayed and distorted in the media. Quinn is a presentable and progressive pro-business Labour Party barrister from a wealthy family with an agenda attuned to those of our conservative media. Quinn had not seen the importance, for ethics and ethics legislation, of absenting yourself from discussions on matters the determination of which affects your material interest. Quinn’s failure was concededly a minor breach and the actions were not in bad faith. What was extraordinary is the absence of interest from the press, some of which went to great lengths to sustain misreports of the findings of the Standards in Public Office in the matter.

A not dissimilar case figured in the last edition of Village where Councillor Fiona O’Loughlin in Kildare County Council voted money for a worthy organisation established in memory of her father and chaired by her brother. The entire Council rallied around the Fianna Fáil Councillor. When another Councillor, Fiona McLoughlin Healy, raised the issue of a conflict of interest she suffered a series of disavowals, including from her own Fine Gael Party, that has resulted in her quite outrageous suspension from the party. The local press can’t see the issue. The national press have taken no interest.

These issues define a certain media laxity. For Village though there are several enormous issues we have covered that have entirely escaped political accountability. They are on a different scale. These are Sugarman, Ansbacher, CRH and planning in Donegal.


Sugarman at a press conference in December

Sugarman and the banks

As long ago as 2010 Village ran a cover story explaining how Jonathan Sugarman, a risk manager in Ireland for Italy’s biggest bank Unicredit, had discovered outrageous breaches of Central Bank liquidity requirements which his bank, and perhaps the Central Bank, suppressed. Since all our major banks had the same requirements and all ran into problems there must have been similar breaches in every case. It is a scandal that none of our several banking inquiries, including the Oireachtas one in 2016, packed full of our political finest, deigned to look into this dysfunctionality – for it led to a national banking liquidity emergency that led to the bank guarantee that will cost this country over €30bn net: over €7000 per head of our population.

What is extraordinary is how, apart from the Sunday Business Post, none of our national media have pursued this story. TV3 and RTE’s ‘Drivetime’ interviewed Sugarman in early December but it was seven years too late and their media peers continue to ignore the story that explains the €30bn.


Ansbacher

Minister Mary Harney first appointed senior civil servant Gerry Ryan as an authorised officer to investigate the tax evasion scheme operated by Guinness & Mahon and its subsidiary, Ansbacher (Cayman) Ltd, in 1998. In July 1999 the High Court, at her request, appointed inspectors to investigate the Irish business of Ansbacher (Cayman) Ltd The investigation was headed by the late Declan Costello, former TD, Attorney General and President of the High Court, until he resigned for health reasons in 2000. It found that Guinness & Mahon (Ireland) Ltd and its former managing director, Des Traynor had promoted a scheme of tax evasion in Ireland through offshore trusts and that Ansbacher (Cayman) Ltd had operated as an unlicensed bank in this country (including from the offices of Cement Roadstone Holdings (CRH) in Fitzwilliam Square in Dublin for many years).

In 2003, Ryan discovered that Costello had held a deposit account in Guinness & Mahon from 1976 to 1978 containing £15,000 which was managed by Traynor. When contacted by Ryan, Costello denied ever having such an account or having dealt with Traynor. Ryan claimed that the High Court investigation was compromised by what he described in the dossier circulated in 2014 as Costello’s “major conflict of interest”.

In June 2004, four months after Ryan informed Minister Harney that he had uncovered evidence that a close associate of hers had an Ansbacher (Cayman) account his investigation was closed down and his request to complete it was refused. Her successor, Micheál Martin, also refused a similar request in early 2005. In July of that year Ryan told Martin that a “huge effort was made by certain persons” to ensure that evidence of the Cayman Island accounts held by senior Fianna Fáil TDs never came to light. Martin directed Ryan to name those persons, provide details of when and how each made a huge effort to ensure that the evidence never came to light and to substantiate this in writing to him.

In November 2007, a 763-page report was delivered to the minister having been approved for release by John Hennessy SC. It was forwarded to the Garda Bureau of Fraud Investigation, the Office of the Director of Corporate Enforcement, the Revenue Commissioners and the Moriarty and Mahon tribunals. Only the Revenue Commissioners met Ryan to discuss its contents. A later report providing details of what happened to the accounts of the Fianna Fáil TDs in 1992 was sent to another minister, Batt O’Keeffe, in November 2010 and he passed it on to the same agencies, again with no result. In March 2011, the new minister, Richard Bruton, also failed to reply to a letter from Ryan requesting a meeting to discuss the Cayman accounts while the Attorney General Maire Whelan also neglected to respond to similar correspondence.

“The fact that this evidence has been with these authorities for at least 8 years and no progress has been made in its investigation amounts to a cover up of the evidence of wrongdoing. It is in the public interest that the wrongdoing associated with the senior Fianna Fáil TDs’ (and at least one Fine Gael minister’s) very secret Ansbacher accounts be properly investigated”, Ryan argued in his submissions.
We have waited 20 months for Ryan’s promised next move given that his attempt to bring his dossier of sensational claims to the PAC was closed down and that the effort by Mary Lou McDonald to reveal some of its spicier details was stifled by her parliamentary colleagues in 2015.

The Taoiseach said that it is up to the Garda fraud unit to decide on the next course of action but this never came to anything. All of the press were diverted into thinking the case was about the names on the list rather than about a conspiracy to ensure those names never came out, or were prosecuted.
And now the issue is dead.


Anti-competitive CRH

The 1969 merger of Irish Cement and Roadstone created Ireland’s biggest company but at the expense of the public and its many SME competitors in Ireland. The merger allowed the new Cement Roadstone Holdings  (CRH) to integrate both vertically and horizontally thus allowing it to gouge artificially high prices for cement and explosives on the one hand whilst using its market power to evict all before it through the use of margin squeeze, banking embargos and other predatory tactics.

Back in 1988, ‘Prime Time’’s precursor ‘Today Tonight’ did an excellent exposé on CRH’s dirty tricks and uncovered prima facie evidence of cartels in several of its markets, together with a host of predatory practices. CRH’s then senior executive Declan Doyle denied the practices on air and CRH was taken to the High Court by two courageous families, the O’Regan s from Cork and the Quirkes from Kerry, amid allegations of defamation. CRH came up with a then record settlement on the steps of the High Court. Despite the RTE revelations, the State took no action. And RTE’s hands have been well and truly tied since then.

In 1994, there was what should have been a defining moment: the European Commission fined 42 European cement-makers ECU250m. The Commission found that Irish Cement played a lead role in fixing prices and dividing European cement markets. At a cartel meeting in January 1983, the Chairman noted that: “Our Irish colleagues have described the threats to their domestic market and have asked for my help”. At a later cartel meeting in March 1984, the Irish Cement delegate Diarmuid Quirke noted of the Irish situation: “As the country which had started these discussions, Ireland had a duty to request that they be continued as they had been extremely useful in calming the situation in Ireland”, i.e. in blocking cement imports into Ireland.

Despite incontrovertible evidence of CRH’s cartel activities, no action was taken against CRH even though the State was one the biggest users of cement and other construction materials. The Examiner of Restrictive Practices turned a blind eye to complaints and the Competition Authority has been awash with complaints since it was set up in 1991. In 1999, a Sunday Independent investigation confirmed that CRH operated a web of secretly-controlled downstream companies and named four. There were, indeed are, several more. The British-based Mergers and Monopolies Commission once described secretly owned subsidiaries as: “fighting-companies, that is to say a company which is a member of a group, but whose ownership is concealed from the public; the fighting-company can then be used to attack a competitor’s customers by offering them favourable terms and conditions”.

In fairness to economist Pat Massey who was the Director of Competition Enforcement, he immediately sought funding from Government to instigate an investigation into CRH and the building materials sector but promptly resigned his position in February 2000 when the required funding was not forthcoming.

In December 2001, John Fingleton, then Chairman of the Competition Authority, stated that: “There was no enforcement of Competition Law in Ireland at all until 1996” and “Small concrete producers became proxies for the consumer”. However, in May 2002, Dr Fingleton wrote that the Competition Authority would not be investigating the sector but “will continue to monitor the cement sector generally”.

In February 2000, enterprise minister, Mary Harney, met with members of the ‘The Quarry and Concrete Family Alliance’ which was pursuing complaints over the abuse of its monopoly power by CRH.

She assured them that the Competition Authority and the Director of the Office of Corporate Enforcement, Paul Appleby, would examine CRH and its behaviour. She suggested they also make a submission to the Moriarty Tribunal about the circumstances surrounding the controversial acquisition by CRH of a large quarry at Glen Ding in county Wicklow in 1991.

No investigation by either of the agencies she suggested ensued following the meeting with Harney while the Moriarty tribunal also declined to investigate Glen Ding. In 2004, Harney agreed to meet the Family Alliance again but cancelled the arrangement without explanation.

In 2004, Pat Rabbitte asked that a market study be conducted into the sector. Dr Fingleton responded that there was no funding available until the following year. Again there was no follow through and no study.

The stream of complaints continued. The takeovers continued. Kilsaran bought Tracy Enterprises amid a flurry of objections. Whistleblower Barry Goode’s evidence given in 2011 appears to have been binned. Other potential whistleblowers have been discouraged by the Authority. The Authority stood idly by when CRH, Readymix and Kilsaran mounted the latest predatory assault which involved a sustained campaign of below-cost selling that wiped out minority shareholder value in Readymix [Cemex].

In April 2011, gardaí from the Bureau of Fraud Investigation attached to the Authority informed the Goode family that: “there isn’t a hope of the Authority investigating this behaviour (concrete and cement cartel) because of who you are up against and what’s at stake”.

In October 2011, the Authority told the Goode family and their solicitor: “that if the Authority were to carry out any investigation, the Authority was only going to investigate small companies similar to their own and stated they would not go after the major companies (CRH and Cemex)”.

In 2015 the Competition Authority, now called the CCPC, announced an investigation into, and dawn raid upon, CRH subsidiary, Irish Cement. The investigation continues amid recrimination and litigation which has resulted in the fruits of the dawn raid being deemed inadmissible.

However, the investigation concerns only bagged cement, not CRH’s wider operations.


Planning in Donegal

A senior counsel, Rory Mulcahy, on behalf of the Department of the Environment, is currently conducting a ‘review’ into allegations from former senior planner Gerard Convie of dodgy planning in Donegal.

Convie worked in Donegal County Council as a senior planner for nearly 24 years. He has claimed in an affidavit opened in court, as well as to the Department of the Environment’s review, that during his tenure in the Council there was bullying and intimidation of planners who sought to make decisions based exclusively on the planning merits of particular applications and that planning irregularities were perpetrated by named officials at the highest level in the Council. He claims to have a list of more than 20 “suspect cases” and has also named county councillors and former Manager Michael McLoone. It is not clear if the Mulcahy ‘review’ will address impropriety or just ‘bad practice’. However if it does not address impropriety it is possible that Convie whose allegations have already been actionably pooh-poohed by a Minister, leading to a payment to Convie, may consider he has again to return to court to defend his name as a serious complainant – in view of the fact he has raised allegations that indubitably are about corruption or impropriety.

Meanwhile Michael McLoone is vigorously pursuing a High Court defamation case in front of a jury against the editor of this magazine, personally, for printing the substance of the allegations made by Convie to the Department of the Environment’s review. The enormously expensive case is expected to take a full week in the Spring of 2017.

Why is there no media interest in this?

Why is there no media interest in any of this?