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    The strong centre

    Paschal Donohoe is a decent man: modest, cultured, the cleverest man in the room, according to a senior Fianna Fáil figure who spoke to Fiach Kelly in the Irish Times recently: the man other politicians envy, and a safe pair of hands. At 43, he has graduated with first-class honours from Trinity college, lived abroad, pursued a career in the private sector and risen without obstacle from local politics in Dublin city council to the heights of government, and the Ministry of Finance. Unlike his even younger boss Leo Varadkar he doesn’t have the sheen of a cultivated image. he has never attracted any suspicion of impropriety, never been excoriated, even in the unpleasant role of frugal Minister for Public expenditure (which he sure-footedly merged with the Finance brief when he took it over). When Village interviewed him he was open, generous with his time, eloquent. He reads progressive Irish fiction, has some quirky tastes, knows what is going on in his constituency about whose substandard welfare he remains committed. He even says he reads Village. Village’s agenda is equality, sustainability, accountability and it is wide and all-embracing enough that any political force, as Mr Donohoe certainly is, can be assessed against its imperatives. He is certainly in relative terms a model of accountability and openness. But what of equality and sustainability? Paschal Donohoe serves the politics of Fine Gael faithfully. He implies that Fianna Fáil is economically fickle, not always pro-european or outward looking and, increasingly implausibly now, that its attitude to ethics is demonstrably inferior to that of Fine Gael. He believes in Europe, the Open Society of Declan Costello, in an embracing attitude to outsiders. He believes in a balance between the markets and the state and, creditably from the perspective of this magazine, thinks the momentum has moved too far to the markets and needs to move back to the state, globally at least. He takes a robust attitude, as did his hero Declan Costello, to the obligations of the state. It will intervene to incentivise or nudge those who do the right thing, it will not perpetrate evil itself. He was passionate in defending the coherence of this attitude, in his interview. Mr Donohoe believes in the rights of property but will interfere at the edges, as with site-value and sugary drinks taxes. The state needs to plan systematically for development of its own lands. On national planning he was reluctant to stay how he would stop unsustainable development – such as the sprawl of Dublin into counties Meath, Wicklow, Kildare and beyond, as opposed to merely incentivise and encourage sustainable development – for example of cities and towns outside Leinster. He does not seem engaged by the environmental and climate-change agendas, though he knows its rhetoric. He rarely acknowledges, in policy, that Ireland is the laggard in Europe on climate, plastic waste and many other environmental performances. He does not seem zealous to revive the across-the-board indicators of social and environmental success, not just economics, that even the Fianna Fáil and Fianna Fáil-Green governments toyed with a decade ago. Failing them, it is likely we will continue to be a model of unsustainable, joyless growth, a paradigm of how to nearly get it right. As to equality, Mr Donohoe is exercised by the plight of those who cannot put themselves in a position to benefit from the equality of opportunity that those with strength crave. He knows from his Dublin central constituency that intergenerational inequality is difficult to mitigate. But his credo is equality of opportunity and he and his party are never going to be forces for radical redistribution, for equality of outcome. He is a decent man of the “strong centre”. He and his party have done some service bringing back elusive economic success to this country bankrupted by the now shiny principal opposition party. It has been argued that Fine Gael, with its visceral fetish for the rights of property, so well-enjoyed by its protagonists and indeed its voters, is ill-equipped to deal with the crises of housing and homelessness that do much to undermine the fabric of society in 2018. It is ideologically too wedded to the private sector to provide homes on the scale required on public lands. Mr Donohoe, in fairness, claims that he has far-reaching proposals to do just that. We’ll see. Ireland is lucky to have such an open, decent, youthful and thoughtful politician in the Department of Finance as the risen fiscal pendulum suggests we can once again explore a national Vision. But it is impossible to be radical from the centre, however strong, and – for Village, Mr Donohoe would do well to address the social and environmental agendas as stringently and competently as he continues to promote and foster the purely economic agenda.

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    Paschal Donohoe: Minister for Finance, Public Expenditure and Reform

    I interview the charming, chatty and firm Minister for Finance in the Department of Finance on a bright Wednesday in late April. He has just benefited from a profile in the Irish Times which of course likes his supposed toughness, especially when public-sector-pay talks loom, and which quotes a senior Fianna Fáiler praising him as “the cleverest man in the room” (even when Varadkar is in it). It also notes that despite his “Hello, Everybody” manner, “Business and interest groups that come into contact with him leave impressed with his knowledge and command of his brief. These are the traits that other politicians note and envy”. Donohoe is, then, an Irish Times sort of guy. Arranging the interview was straightforward, and his handlers, particularly Deb Sweeney, efficient and unstuffy. He gave me more time than had been allocated, and a book, ‘The Value of Everything, Making and Taking in the Global Economy’ by Mariana Mazzucato (2018), as I was leaving. He was still engaging about his favourite works of literature as I was in the end ushered down a corridor and out into the sunlight. Mazzucato, in her book, claims that many advanced western countries, in particular the US and Britain, now confuse those who create value for those who extract it or destroy it, leading to impoverished and unhappy societies, soaring inequality and declining growth. I conclude the gift was well-judged. On his Political Philosophy… “My political philosophy is a politics of the very strong centre. I look at the opportunities and chances that I’ve had in life by virtue of the school that I went to and the upbringing that I’ve had. I believe that should be available to everybody in our country. I believe that, in order to make that happen, we need to have an open society and a diverse economy. I want to see an Ireland that is inclusive, that can welcome people and make them feel at home, and I strongly believe in a mixed economy. I believe we need both strong governments and strong markets and I think either on its own cannot achieve what citizens need”. On his Economic Philosophy… “My economic philosophy then springs from that. I believe in a resilient and mixed economy. I believe that markets can do some things well and I believe government can do many things well. If you look at the kinds of new economies that are being developed and the new challenges that are developing, we can only respond to them if both the State and markets play their role. We have seen, to the great cost of our citizens in particular, what can happen if markets become unbridled; and we have seen at other times in history what can happen if the State is expected to do everything; and I don’t believe either work. I believe the global balance needs further shifting at the moment – in favour of the State. I believe that we get the balance about right here in Ireland but I believe that we are going to need to continue to support supranational organisations like the European Union, like the WTO, like the OECD, to help nation states respond back to new challenges like artificial intelligence and to the de-globalisation agenda that is now beginning to develop. I believe very strongly in equality of opportunity but I’m very conscious at the moment that that credo is being challenged by developments within the market economy – if we keep on encouraging our citizens to believe they have equality of opportunity and then, generation by generation, that equality of opportunity is not realised, it poses very serious questions for citizens regarding how they feel about the State. Because if, from generation to generation, that opportunity is not realised or even offered the prospect of citizens either blaming themselves or the system and the State for not offering that agenda poses really grave challenges for how we organise our liberal democracies. I unfortunately believe some of those risks are beginning to materialise elsewhere at the moment”. On equality of outcome… “I think equality of outcome is something that is very, very difficult to achieve because I think it runs against the grain of initiative and individuality that I ultimately believe has a very important role to play in our society as well”. As to whether equality of opportunity is desirable… “I think equality of opportunity is more desirable than equality of outcome and certainly in the policies I try to follow and implement in the two jobs I do at the moment it is about trying to realise opportunity. But I’m conscious of the fact that an equality of opportunity agenda doesn’t speak to, or doesn’t help, citizens who are at the margins of our society; and for those citizens a more interventionist approach is necessary on behalf of the State I should say”. As to whether equality of opportunity can be unfair to the extent that people’s capacity for grasping opportunity is sometimes determined by luck and not entirely a product of effort or initiative… “And this is why I accompany my support of equality of opportunity with a strong support for the necessary role for an enabling and strong State. The difficulty that the equality of opportunity agenda has is when it runs into the chance of birth or runs into intergenerational inequality, and this is why I believe we need an active and enabling State alongside regulated and flourishing markets. I would be supporting the interventions that we have at the moment. I do not think that the agenda of positive discrimination is one that can command ongoing support here in Ireland and so this is why I support the State playing a more active role in the management of land, why I support for example property taxes. It’s why I support a a progressive tax code. Because without having those things in place you can’t offer the support that is needed to deliver the funding for an active State”. On difference in emphasis from Michael Noonan’s… “As

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    Cerberus conflicts are biggest financial and political issue facing NI Executive

    An investigation by BBC’s ‘Spotlight’ programme broadcase on, 29th February, into the sale of NAMA’s huge property portfolio in Northern Ireland has revived an embarrassing issue for the outgoing government. Village readers will recall how distressed commercial and residential properties, previously valued at £4.5 billion, were sold to US vulture fund Cerberus, for just £1.2 billion in April 2014. An article in December documented how the sale was now the subject of investigations in the US and the UK and by the Law Society and the Stormont finance committee in Northern Ireland. At the centre of the controversy is former NAMA official, Ronnie Hanna, who resigned as the agency’s Head of Asset Recovery six months after the sale of the portfolio known as ‘Project Eagle’. Hanna was named in the Dáil by independent TD, Mick Wallace, as one of a small group of people who met multi-billion-dollar-backed US investment funds to promote the sale of the portfolio, accompanied by Frank Cushnahan, a former member of NAMA’s Northern Ireland Advisory Committee. It was also sensationally claimed at the Stormont hearings in September last that Cushnahan; Belfast accountant, David Watters; former partner in Tughan’s solicitors, John Coulter; property developer, Andrew Creighton; and former DUP leader, Peter Robinson, were to receive substantial sums from the Project Eagle sale. All denied the allegations. Cushnahan and Coulter, along with US law firm Brown Rudnick, were to take €15 million in fee payments from another US investment fund, Pimco, if its bid for the property portfolio was successful. Pimco withdrew from the process in early 2014 after its compliance officers advised that such payments would be illegal, under US law. In March 2014, NAMA informed finance minister, Michael Noonan, of the dodgy fee arrangements being offered in connection with what is the largest ever disposal of public assets in the history of the state. Instead of calling an immediate halt to the bidding process the finance minister advised NAMA to plough ahead with the sale. Noonan seemed implicitly to consider that the ethical problems were at the other end, in Belfast. And that the Belfast office didn’t really reflect on the Dublin office. The problem for Noonan and NAMA is that if Hanna is involved in wrongdoing that brings the culpability right back into the Dublin office and the remit of the Irish government. Cushnahan and Coulter then encouraged Cerberus to enter the race in the clear expectation that fee payments would be made if its bid was successful. The Spotlight programme revealed that Cushnahan misled his former colleagues in NAMA by continuing secretly to work on the Cerberus deal without their knowledge. Cushnahan confirmed in a clandestinely recorded discussion last year with Belfast property developer, John Miskelly and accountant David Gray, associate of Waters, that he was due to get a “ fixer’s fee” from the Cerberus deal. He said that he and Coulter had done “all the work on the deal” but his role was kept secret because of objections from NAMA to his involvement. Cushnahan said that Coulter moved £6 million into a holding account for him so he could be paid. During the recorded discussion, reference is made to assistance provided by Ronnie Hanna to distressed developers. There is also a description of how Peter Robinson’s son Gareth advised Miskelly to go to Cushnahan about his NAMA-controlled debts. Miskelly confirmed to the BBC that the recordings were an accurate reflection of the lunch meeting with Cushnahan and part of an effort by him to expose the financial misconduct surrounding the sale of the Project Eagle portfolio which is under investigation by the US Securities and Exchange Commission and the National Crime Agency in Britain. Miskelly claims he has handed evidence of wrongdoing to both. Cerberus has denied any wrongdoing in respect of the purchase, while refusing to provide answers to detailed queries due to the ongoing criminal inquiries. Similarly, Cushnahan; Hanna who runs a private consultancy in Belfast; and Robinson, have declined to comment further. Robinson surprised many when he announced his retirement as first minister as hearings into the Project Eagle sale were taking place last Autumn. Village documented in January how Gerry Adams had in effect telegraphed Robinson on his need – in the context of ethical issues relating to the NAMA debacle of which Adams was apprised – to reinstitute the then suspended Northern Executive. Robinson and former finance minister, Sammy Wilson, were involved in discussions with Noonan and NAMA to try to minimise the exposure to personal guarantees of a number of prominent developers in Belfast and across the North in respect of their debts taken on by the agency. Last year, it emerged that Robinson held meetings with former US president Dan Quayle, chairman of Cerberus, and had discussions on the sale with Noonan, without disclosing them to his deputy first minister, Martin McGuinness. It now transpires that Cushnahan was on three sides of the deal having worked for NAMA, some of the bidders as well as for the distressed developers. The latest explosive revelations prompted Sinn Féin leader, Gerry Adams, to repeat a call for a Commission of Investigation into the NAMA sale. Frank Connolly

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