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McCreevy used €1.6m loan for a luxury K Club home

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A MAJOR investigation has been launched into how former Finance Minister Charlie McCreevy obtained a massive €1.6m Irish Nationwide loan to buy a luxury apartment in the K Club.

The Irish Independent has learned the EU Commissioner purchased the property in 2006, at the height of the boom, after borrowing funds that exceeded the value of the property.

The property is now worth only around half the price he paid for it.

The revelation of the financial transaction came after Mr McCreevy was named in an RTE 'Prime Time Investigates' programme as being one of several high-profile Fianna Fail politicians who were given huge mortgages from Nationwide with minimum paperwork involved. The €1.6m loan was granted to Mr McCreevy even though the trophy home was worth €100,000 less than that at the time.

The loan was granted by then-chief executive Michael Fingleton, even though the building society's own guidelines did not allow it to grant 100pc mortgages.

The Financial Regulator's office last night confirmed it would be carrying out an investigation into lending practices at the building society.

"While we cannot comment in relation to ongoing supervisory matters related to regulated institutions, the Financial Regulator continues to actively investigate any new matters that come to its attention," a statement said.

Mr McCreevy's spokesperson refused to comment on the loan or say where the EU Commissioner currently is.

The 20-year mortgage for the K Club property was drawn down in September 2006 by Mr McCreevy and his wife, Noeleen.

The properties were among the most highly sought-after homes sold during the Celtic Tiger boom, and the EU Commissioner bought it in the same month the prestigious Ryder Cup took place at the course.

The apartment, which is located in the Ladycastle development on the grounds of the exclusive golf club, has not yet been registered with the Registry of Deeds, where Mr McCreevy has two other properties registered.

The first is his home, Blundell House in Sallins, which was registered in 2002 and is mortgage free. The second is a commercial property of which he is part owner and which is subject to a mortgage. It is located in Kilcullen Road in Naas.

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Despite falling property prices at the 550-acre golf club -- which is owned by businessmen Michael Smurfit and Gerry Gannon -- planning permission was lodged earlier this year to extend the five-star property.

In 2006, when the Ryder Cup took place, the joining fee for the golf club was €80,000.

The latest revelations about close dealings between banks and politicians sparked a furious political row last night.

Revelations

Fine Gael's Leo Varadkar said the revelations surrounding loans to Fianna Fail politicians had exposed a "21st century golden circle of banks, speculators and Fianna Fail politicians that dragged our economy to the brink of bankruptcy for the second time in 30 years".

Labour finance spokesman Joan Burton said taxpayers needed answers about the "cosy relationship" as €8bn of Irish Nationwide loans are to be covered under the National Asset Management Agency.

Irish Nationwide said it would carry out a probe into issues raised on the 'Prime Time' programme, including an investigation into how details about loans got into the public domain. Fergus Murphy, chief executive of EBS Building Society, which will merge with Irish Nationwide next year, said all lending in the new merged entity would be in line with regulations.

Dissident

Dissident Irish Nationwide shareholder Brendan Burgess, who tried in the past to have Mr Fingleton removed from his position, accused the regulator of being soft on the society.

He said the regulator did not understand its own rules on the fitness and probity of people who are in senior positions in banks and building societies.

Three other Fianna Fail politicians were named in the 'Prime Time' programme as having received loans from Irish Nationwide. Councillor Sean McCarthy -- who borrowed more than €300,000 with minimum paperwork -- is in Australia and unavailable for comment. Senator Francie O'Brien received more than €7m, and did not return calls for comment last night.

Senator Don Lydon, who got a €3m loan, said: "I've nothing to say on these things at all."

Mr Fingleton was not available for comment.

Mr McCreevy's spokesperson would not confirm if the commissioner had left Brussels for the Christmas break. His cabinet office in the Belgian capital could give no further details on his whereabouts, although a Commission spokesperson said only "two or three" of the EU executive's chiefs were still working last night. A person at his home in Co Kildare said he and his wife were in Brussels and would not be back in the country until early January.


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