Wednesday 24 July 2019

In focus: Mick Wallace - the boomtime builder whose fortunes were battered by economic crash

New MEP has reinvented himself - but his debts followed him

Mick Wallace pictured on the campaign trail in Mallow, Co Cork
Mick Wallace pictured on the campaign trail in Mallow, Co Cork
Cormac McQuinn

Cormac McQuinn

He was the boom-time builder who owned an Italian vineyard and a chain of restaurants before being battered by the economic crash and reinventing himself as a crusading politician.

Now, as Mick Wallace brings his signature pink T-shirt to the European Parliament, the fall-out from the end of the Celtic Tiger era continues to haunt him amid AIB Mortgage Bank's ongoing bid to repossess his Dublin home.

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Mick Wallace has bid farewell to the Dáil
Mick Wallace has bid farewell to the Dáil

The house on the Clontarf Road is his last remaining property in the wake of his bankruptcy, with much of his income from his former salary as a TD going to help pay down debts.

As he put it in an interview shortly before the European Elections: "I get €250 a week to live on… I haven't a f*****g bean."

His finances will get a boost from his new €105,000 salary as an MEP - around €10,000 more than what TDs are paid - but it's all a far cry from his building heyday before the economic crisis. Mr Wallace famously built Dublin's Italian Quarter on the north banks of the Liffey where he opened wine bars and restaurants, and was a director of construction and property-related companies. However, his fortunes had already changed by the time he was first elected to the Dáil as a Wexford TD in 2011.

Two years earlier he sold that vineyard in the wine-making region of Piedmont in Italy to his brother Joseph by way of settlement of a debt of €550,000 he owed him for building supplies.

But it was much larger debts from his years as a developer that would continue to plague him during his new political career. In 2012 there was controversy when Mr Wallace's construction business M&J Wallace Ltd made a €2.1m settlement with Revenue after it was found to have under-declared VAT to the tune of €1.4m. And he still had borrowings from his building years hanging over his head.

Mr Wallace's declarations to the Dáil Register of Members' Interests in the years since he entered Leinster House show how his assets melted away after he entered politics.

In 2011, even as his empire crumbled, he listed directorships in eight companies and shares in three - a 99pc ownership of M&J Wallace Ltd; 40pc of the shares in Wallace Calcio Ltd, the company behind the wine bars; and 99pc of Wexford Youths, the soccer club he founded.

He also listed two three-bedroom houses in Wexford. Fast-forward to the 2018 Register of Members' Interests and Mr Wallace has listed "Nil" in every category including shares, directorships and land.

What happened in the meantime was Mr Wallace was declared bankrupt with debts of more than €30m in 2016. The bankruptcy petition was filed by Promontoria (Aran) Ltd, a subsidiary of vulture fund Cerberus.

In 2014 it acquired loans Mr Wallace's construction company M&J Wallace Ltd had with Ulster Bank as part of a wider Irish portfolio.

The loans were backed by personal guarantees, leaving Mr Wallace liable for payment.

The application from the Cerberus subsidiary came after the fund secured a €2m judgment against the then-Independents4Change TD. Mr Wallace claimed that Cerberus was seeking to "settle a score" with him after his Dáil criticism of the fund's purchase of Nama's Northern Ireland loan portfolio, the controversial €1.6bn Project Eagle deal.

Cerberus did not comment on the accusation at the time.

Prior to a change in the law in 2014, TDs would automatically lose their seat if they were declared bankrupt. But as this is no longer the case, Mr Wallace was able to continue his often outspoken Dáil contributions.

He and his Independents4Change Dáil colleague Clare Daly have now both been elected to the European Parliament. The pair have campaigned on various issues, including concerns raised by Garda whistleblowers, the US military use of Shannon Airport and repealing the Eighth Amendment.

They are now bringing their brand of politics to Europe.

Mr Wallace and Ms Daly arrived at the first meeting of newly elected MEPs in Strasbourg European Parliament wearing matching 'Free Assange' T-shirts. The controversial WikiLeaks founder Julian Assange is currently fighting extradition to the United States where he faces computer hacking charges after he was arrested in Britain in April.

Mr Wallace took to Twitter to give his assessment of his impressions on his first week as an MEP. He wrote: "Top jobs in EU get carved up between big boys behind closed doors, followed by the fig leaf of votes. Three elected Catalan MEPs are not allowed into the European Parliament because EU allowed the right-wing Government in Spain to block them. A bad week for democracy."

Back home, AIB Mortgage Bank's application to repossess his Dublin home was back in court yesterday. Mr Wallace was last month granted an adjournment in the case after a judge was told there had been "a change in his financial circumstances" after his election as an MEP. The case was further adjourned yesterday after the court heard a fresh proposal submitted by Mr Wallace had been rejected by the bank. The court was also told the bank was now seeking information on the value of the MEP's pension.

Days before taking his seat Mr Wallace was asked on RTÉ's 'Your Politics' podcast if becoming an MEP means he can say goodbye to his financial woes.

He replied: "Have a chat with the bankruptcy assignee and see what he tells you. I'm still bankrupt for another while, another nine months to go."

Mr Wallace added: "I didn't go to Brussels for the money.

"I haven't forgotten about construction and I can assure you if you look at how well I did in construction over 30 years I'd make a lot more money in construction than I'd ever make in Brussels."

Irish Independent

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