Hogan lost big in house sale to party colleague
Minister €100,000 out of pocket after deal
Environment Minister Phil Hogan lost €100,000 when he sold his Irish Nationwide-funded Dublin 4 pied-a-terre to party colleague and government chief whip Paul Kehoe, it has emerged.
The minister responsible for the household charge bought the house in 2004 with a mortgage of €453,000 from the toxic building society that was described in the Dail as a "soft loan".
Mr Hogan then sold the house to Mr Kehoe in May 2010 for €355,000, according to the new Property Price Register. If he had held on for another three months, Mr Kehoe could have acquired a similar sized two-bed property in the development for €20,000 less -- or he could have snapped up a smaller one-bed for just €270,000.
Mr Hogan acquired his Dublin 4 property with a mortgage that was interest only for 20 years. The loan was approved by the society's disgraced chief executive Michael Fingleton.
Mr Hogan also took out a second "soft" loan from the society to buy a luxury holiday home in Portugal for €450,000, as revealed by this newspaper in June.
This loan was interest only for a decade and done in the form of an equity release on Mr Hogan's home in Dublin 4 and his family residence in Kilkenny, which also had a Irish Nationwide mortgage.
The society gave Mr Hogan's Dublin 4 property and Kilkenny home a combined bubble valuation of €1.2m in order to allow the equity release.
Mr Hogan's acquisition of his penthouse in Portugal took his total borrowings from the society at their peak to €1.2m -- with almost €900,000 of these borrowings on an interest only basis for at least a decade.
The Sunday Independent understands that staff at the Irish Nationwide could not find the usual loan-to-borrowings assessments that would be demanded by more prudent lenders when advancing individuals more than €1m.
Asked last July about this, Mr Hogan's solicitors said: "Minister Hogan does not currently have sufficient information to answer this question which, in any event, is an entirely private and confidential matter."
During the boom, Mr Hogan's constituency office was located in the same building as a branch of Irish Nationwide which also owned the property.
"Minister Hogan's subletting arrangements for his former constituency office were arm's length commercial arrangements for full market rent with a third party unconnected to INBS," Mr Hogan's lawyers said.
The Sunday Independent also asked Mr Hogan if he was under financial pressure to make his mortgage payments at the time that Mr Kehoe bought his Dublin 4 property.
"The minister is [in] full compliance with his obligations to IBRC," his solicitors said. IBRC is the name of the State bank which has taken over running both Irish Nationwide and Anglo Irish Bank. Mr Kehoe came under fire earlier this year when he failed to declare rental income from a house he bought from cabinet colleague Phil Hogan in his Dail Register of Interests.
He later retrospectively changed his Dail Register of Interests to include the Dublin 4 house. The collapse of Irish Nationwide has cost the taxpayer €5.4bn. Mr Hogan is the latest of a host of politicians from Charlie McCreevy, the Fianna Fail ex-Minister for Finance to Francie O'Brien, the former Fianna Fail senator, and business partner of Fingleton, who availed of the building society boss's loans.
Sunday Indo Business