Docklands dealings immersed in an incestuous maze
Development authority was rife with potential conflicts of interest propped up by an intense bond with Anglo
IN early July 2009 Nick Webb had an afternoon pint in Davy Byrnes pub with a rather well-known property player, who had been lunching for most of the day. In the course of the discussion about how screwed everything was, they talked about the docklands.
As a throwaway line, the property guy mentioned talk about Lar Bradshaw -- who was on the Anglo Irish board and was also a previous chairman of the DDDA -- being involved in owning a few buildings down in the docks.
The following morning, none the worse for wear, Nick went straight up to the King's Inns and the Registry of Deeds office. After sifting though land records for a while, there was a hit. The documents showed Bradshaw was a member of the Liffey Partnership, which owned a major €70m car park and office development in the heart of the IFSC. The DDDA had approved major changes in the scheme to allow an office block to be built on top of the car park.
Bradshaw's fellow investors in the Liffey Partnership included Derek Quinlan and hotelier Francis Brennan. We obtained documents that showed that the deeds to the land had been transferred from the DDDA's forerunner, the Customs House Development Authority, to Bradshaw and the Liffey Partnership on the day before Bradshaw was appointed chairman of the DDDA. We also discovered that Bradshaw owned a stake in the key retail unit at the entrance to the IFSC, where his fellow shareholders included RTE's Pat Kenny and builder Sean Dunne.
It was an extraordinary situation: the chairman of a state agency had major financial interests in an area that he was tasked with overseeing as part of a €10bn development plan. The DDDA had the power to take decisions affecting businesses that could have competed with Bradshaw's premises. Bradshaw's car park in Manor Street is the only multi-storey car park in the whole of the IFSC.
Other potential conflicts of interest were rife within the authority, which adopted the government-wide ethics policy of asking key members to declare what they owned, and then doing nothing about it. We reported that Sean FitzPatrick's family had bought property in the new developments in the docklands, including a luxury flat in Customs House Square, while he served on the board of the authority.
It emerged that the authority had paid out almost €1m to companies linked to its board of directors over the period 2006-8. Board member Niamh O'Sullivan is a director of Arup Consulting, which pocketed €682,000 in consultancy fees from the body. Donal O'Connor saw his main employer, accountancy group PricewaterhouseCoopers, earn €149,000 in internal audit and consultancy fees in 2007. Sheila O'Donnell's family-owned architectural firm bagged more than €132,000 from the DDDA during the three-year period. Among other docklands board members, Donall Curtin, Catherine Mullarkey and Angela Cavendish all had strong Anglo connections.
PR woman Mary Finan -- a former head of the RTE Authority -- was a member of the DDDA council in 2005 and 2006. From 2003 she was also chairwoman of Wilson Hartnell PR, which had a major contract with the authority, earning €630,000 between 2006 and 2009.
Wilson Hartnell certainly has a history of charging quangos big fees. As recounted elsewhere in Wasters, this was the PR company that had bagged €318,000 from the HSE for the design of a leaflet on pregnancy and sexually transmitted infections.
Despite the obvious overlaps between the authority and its board members' private interests and investments, the DDDA believed that it had the situation under control. It was as clean as the proverbial whistle, according to former DDDA chief executive Peter Coyne, who left in 2005. In February 2009, Lar Bradshaw rejected claims of a conflict of interest between his position on the board and his directorship at Anglo.
But the increasingly intense Anglo connection would cause many of the authority's subsequent problems and lead to its near collapse. The agency had adopted a "pro-developer" stance for planning practice, partially because of the influence of FitzPatrick and Bradshaw, according to Niamh Brennan, who was levered into the organisation as chairman in April 2009 to find out what had gone so horribly wrong.
She said that there had been "a significant influence by the bank on the culture of the authority".
Two independent reports into the running of the organisation had identified significant shortcomings in the DDDA's operations, particularly in relation to planning.
"The planning function of the authority was used to facilitate development and may not have been operated as independently of development as it might have been," Brennan said.
"Planning standards, as a result, were compromised."
The reports also showed that there had been "very loose internal financial controls" in the quango.
Anglo's fingerprints are everywhere. A search of the mortgages and loans borrowed by the major development companies working in the area turns up the same name over and over again: Anglo was bankrolling an extraordinarily large share of the developments.
Anglo Irish Bank was the chief lender in the syndicate that provided Richard Barrett and Johnny Ronan's Treasury Holdings with more than €390m for the development of Spencer Dock. At the time, this was the largest secured property loan in the history of the State. Anglo was also involved in the financing for another Treasury tower project in Grand Canal Quay.
The bank funded much of Paddy Kelly's development in the area, including the Clarion Hotel and apartments, which were once valued at €125m by Kelly's Redquartz Group. Anglo also lent more than €13m for a recent redevelopment of the hotel. Kelly's Haytonvale Developments, which constructed the €75m Ivory Building and Quality Inn (now Maldron Hotel) block, was also backed by Anglo, as were the Kelly-fronted €150m Gallery Quay apartment and office block and the €175m SJQ complex on Sir John Rogerson's Quay.
Paddy Kelly won the contract to build the National College of Ireland in the IFSC with the McCormack family's Alanis company and Ged Pierse's building group Pierse Contracting. The complex was built on a two-acre site provided for free by the DDDA, with Kelly and his partners building a block of apartments at the side. The €25m cost of construction was funded through tax breaks and a big wodge of money from -- guess who? -- Anglo Irish Bank.
Liam Carroll was also an Anglo customer. Before his empire came tumbling down, Carroll was working on a deal to build a new €200m headquarters for Anglo as part of a €1.5bn complex on the north docks. It wasn't just office blocks and apartments that Anglo bankrolled.
In 2002, the DDDA secured one of its key residents when the National College of Ireland (formerly the National College of Industrial Relations) moved from Ranelagh to the IFSC. The college was headed up by Joyce O'Connor, who also sat on the board of another state quango, the Digital Hub Development Agency. She is also Sean FitzPatrick's sister. Paddy Kelly, who won the contract to develop the college, was one of a number of high-net-worth individuals who had their arms twisted for donations: he handed over a cheque for €250,000 after a fundraising dinner in Patrick Guilbaud's restaurant.