If the government had acted four years ago on conflict the of interest arising from the membership of former Anglo Irish Bank chairman, Sean FitzPatrick, on the board of the Dublin Docklands Development Authority (DDDA) much of the enormous damage that has been done to the Irish banking sector could have been avoided.
Roche dismissed Gregory complaint
In November 2004, the late Tony Gregory TD asked then environment minister, Dick Roche, about potential conflicts of interest on the board of the DDDA. His question followed the disclosure that Anglo-Irish was to provide £300 million in funding for the Spencer Dock development which Treasury Holdings, the company controlled by Johnny Ronan and Richard Barrett, was building on the north quays.
As a member of the DDDA board FitzPatrick was party to its decision to grant Section 25 planning status for the massive Spencer Dock scheme, incorporating the proposed national conference centre. He was also involved in meetings of the board when it made crucial decisions on the scale of the development, the height, size and density of individual apartments and the location of the social housing in the residential component of the scheme.
Gregory, local Dáil deputy, and community activists in the Docklands area were concerned that the Anglo chairman was involved in making decisions which directly affected the bank’s and, as a major shareholder in Anglo, his personal financial interests.
The minister’s response was, to say the least, dismissive. Roche told Gregory that there had been no breach of the DDDA’s code of conduct.
“The code of conduct is published. In so far as I have any information, there is nothing to say it has been breached,” Roche said. “On appointment, members are expected to furnish details which has been done. When an item for discussion creates a conflict that may be discussed”.
The minister went on to say that state agencies such as the DDDA required the financial expertise and business acumen of people such as FitzPatrick. His answer was prepared by senior officials in the Department of the Environment which is also represented on the board of the DDDA.
It was clearly an inadequate response as subsequent events were to later prove. If more than a cursory investigation had been undertaken by the Minister he would have found far deeper conflicts of interest involving Anglo and the DDDA and arguably might have averted the current financial crisis which has arisen as the result of FitzPatrick’s hidden loans which in turn have forced the government to nationalise the bank at huge cost to the tax-payer.
Anglo Directors’ conflicts of interest
As revealed previously in Village, FitzPatrick attended several board meetings of the DDDA between 2002 and 2004 where issues relating to the Spencer Dock Development were discussed and decisions relating to the size of apartments and the location of the social housing were made. He also attended meetings of the board when it discussed Spencer Dock after the announcement in October 2004 that Anglo was to provide much of the finance for the scheme. At no time, according to minutes of the relevant meetings, did FitzPatrick disclose the potential conflict of interest arising from his position as chairman and previously chief executive of the bank in which he also held a significant personal stake.
Another conflict arose in relation to the then chairman of the DDDA, Lar Bradshaw, who was appointed a director of Anglo-Irish Bank in late 2004 just after the announcement of the funding package for Treasury Holding’s subsidiary, the Spencer Dock Development Co Ltd. He served as chairman of the DDDA from 1997 and was re-appointed along with FitzPatrick for a second term in 2002. At the time Anglo’s funding for Spencer Dock was confirmed it was also announced that Bradshaw had purchased a large shareholding in the bank. There is no evidence in the minutes of DDDA meetings when Spencer Dock was discussed, and which he chaired, to show that Bradshaw declared any potential conflict of interest, or absented himself, as required under the DDA’s code of conduct.
Dónall Curtin also sat on the board of the DDDA during the period although there is a record that he declared ownership of an apartment in the Spencer Dock scheme at one meeting.
The links between Anglo and Treasury holdings in the Docklands go even deeper and raise serious questions about the failure of the various regulators to oversee the multi-billion euro property dealings in the State’s single largest commercial property development.
For Treasury Holdings, the Docklands Authority has been, for most of its existence, a vista of very familiar faces. Their employees and agents and their bank were well represented at several levels, including in force on the Board.
The most recent chairman of the DDDA, who replaced Bradshaw as chairman in 2007, was Donal O’Connor, who was also appointed a director of Anglo early into his term. He was appointed chairman of the newly-nationalised bank on the resignation of the disgraced Fitz- Patrick in December and immediately announced his intention to step down from the DDDA in order to avoid what he termed any perception of a conflict of interest. O’Connor is a senior partner of accountancy firm PricewaterhouseCoopers which is constructing its new headquarters in the Spencer Dock development.
Anglo-Irish Bank, which specialises in property investment and corporate treasury services, also provided finance to a number of the other major developers operating in the Docklands. The bank has literally billions invested in schemes being developed by some of the biggest names in the Irish property world including Liam Carroll, Bernard McNamara, Derek Quinlan and, of course, Treasury Holdings. The DDDA is directly investing in McNamara’s €1.4 billion development on the site of the former Irish Glass Bottle company in Ringsend for which it provided fast-track planning permission with the Section 25 certificate it is empowered to grant and which cannot be appealed. Financier, Derek Quinlan, and investment funds raised by Davy Stockbrokers are also involved.
In addition to Mr Bradshaw and Mr Fitz- Patrick, Treasury Holdings has been linked in other ways to the Docklands Authority. A former member of the DDDA Board Ms Joan O’Connor, managed the controversial project to build the Westin Hotel for Treasury through her company, Interactive Project Managers. Ms O’Connor met on behalf of the DDDA’s Planning Sub-Committee with the developers of Spencer Dock on proposed changes to residential development according to board minutes of 13 Nov 2002.
Last year, it was reported that Angela Cavendish, a director of the DDDA was on the board of Chateaubriand Properties which did business with Anglo some years ago..
Gráinne Hollywood, Director of Property for the DDDA until August 2005 had previously worked for Treasury Holdings including in the negotiations leading to the Spencer Dock planning application to the DDDA.
In the wake of Tony Gregory’s Dáil question in late 2004 the now defunct Centre for Public Inquiry (CPI) commenced an investigation into the apparent conflicts of interest involving the DDDA, Anglo and Treasury Holdings.
A number of Freedom of Information requests was submitted to the DDDA and the Department of the Environment which sought, among other matters, to establish the background to Dick Roche’s dismissive reply. An investigation of the minutes of DDDA board meetings between 2000 and 2005 obtained under FOI highlighted the clear conflicts of interest involving the State agency, the private bank and some property developers.
In early 2005 each of the directors of the CPI received a registered letter from solicitors Arthur Cox and Co acting for Treasury Holdings. The letter threatened to personally sue the individual CPI board members if the agency produced any report which was damaging to the commercial interests of Treasury.
In December 2006, Village published a story detailing some of the conflicts outlined above and sought a comment from Sean FitzPatrick. “You are a sad bastard,” he replied when contacted about the apparent conflicts of interest arising from his chairmanship of the bank and membership of the DDDA board.
In early 2007, Michael Smith made a lengthy complaint to the Standards in Public Office commission again raising the perceived conflict of interest involving the two Anglo board members, FitzPatrick and Bradshaw and the DDDA. After several months Sipo concluded that there was no breach of the DDDA’s code of conduct.
In December 2008, it emerged that Fitz- Patrick had hidden loans from Anglo totalling, at one point, €129 million from the banks’ auditors, Ernst and Young. The disclosure forced the government to nationalise the bank and its unknown, but undeniably huge, toxic debt.
The government has been reluctant to send a High Court inspector into Anglo to look at all these issues although it has asked the Office of Director of Corporate Enforcement to examine the loan dealings last year involving businessman, Sean Quinn and his purchase of 15% of the bank’s shares. Quinn and many other lenders from Anglo make up a recognisable who’s who of Fianna Fáil donors who were regularly seen at the party’s annual fundraising bash in the tent at the Galway races. Disparagingly-described in the Dáil in January as a Fianna Fáil bank there is a suspicion that the government’s reluctance to send in properly equipped and tasked forensic investigators to Anglo is yet another attempt to disguise the blatant and costly conflicts of interest that have infected the financial institution over the past two decades.