December 19, 2008

Part Two: DDDA, Anglo Irish Bank & Revolving Doors

Recommended by Professor Garelli: An awesome piece of perception management for international investors. It solves the corporate governance issue for Anglo Irish Bank and the DDDA. Why have two interlocked heads as chairmen of Anglo and of DDDA when you can economise with just one! Garelli's next World Competitiveness Survey will perhaps quantitise the damage done to Ireland Inc by one of his former MBA students, with patriotic parallels to George Bush MBA.
  • Anglo Irish Bank has appointed director Donal O'Connor as the new chairman of the bank.
  • Donal O'Connor is also chairman of the Dublin Docklands Development Authority.
No doubt this fixes the potential conflicts of interest and the revolving doors between the Dublin Developers Digout Autocracy and Anglo Irish. Perception is reality.

These potential conflicts will of course have nothing to do with honourable gentlemen recently resigning from both Anglo Irish Bank and also resigning from the obviously above-board DDDA. And the fact that Anglo's logo includes a pyramid has nothing whatsoever to do with Mr Ponzi and his schemes. And nothing to do with the Galway Tent's Great Celtic Tiger Pyramid Scheme of 2000 to 2008.

And nothing whatsoever to do with the huge hole DDDA-Becbay-Anglo is literally digging at the former IGB site in Ringsend where the added-value is now a negative €200 million to €300 million.

A year ago before the resignations, Senator Shane Ross reported:
April 29 2007
* Anglo Irish Bank chairman Sean FitzPatrick is on the board of the DDDA.
* DDDA chairman Lar Bradshaw is a board member of Anglo Irish Bank.
* DDDA owns 26 per cent of a company called Becbay.
* DDDA director Niamh O'Sullivan's day job is as a director of Arup Consulting.
* Mary Finan ... Bank of Ireland ... member of the DDDA council ... consultant to the DDDA

More: Part 1, ddda-anglo-irish-banks-revolving-doors.html

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B) Shane Ross: Sunday Independent, Wheels Within Wheels article.
Dublin Docklands Authority, Anglo Irish Bank, Revolving Doors,


Anonymous said...

Independent Sunday April 22 2007
Whistleblower queries roles of Dock directors

THE man credited with starting the Mahon tribunal, Michael Smith, has made a formal complaint to the Standards in Public Office Commission, about two members of the board of the Dublin Docklands Development Authority (DDDA).

Outgoing DDDA chairman Lar Bradshaw and senior independent director Sean FitzPatrick face an examination by the commission on possible conflicts of interest as a result of cross-directorships.

Anonymous said...

Bradshaw quits as joint loan with FitzPatrick revealed

CIARÁN HANCOCK, Business Affairs Correspondent

Sat, Dec 20, 2008

SEÁN FITZPATRICK’S resignation from Anglo Irish Bank on Thursday grabbed all the headlines, but he wasn’t the only director to fall on his sword.

Former McKinsey Ireland chief Lar Bradshaw also took his leave after it emerged that he had taken out a joint loan with Mr FitzPatrick, which was temporarily transferred to Irish Nationwide Building Society before its September 30th year-end.

This had the effect of hiding the loan from shareholders in the bank’s annual report.

The size of this joint loan was not revealed and Mr FitzPatrick said Mr Bradshaw had “no knowledge” of the temporary transfer of the funds.

Born in Dublin in 1960, Bradshaw spent 20 years with the blue chip management consulting firm McKinsey, working overseas and latterly as managing director of its Irish operation, which he founded.

He holds a Master’s in Business Administration degree from IMD in Switzerland.

Records at the Companies Registration Office show that he holds 12 directorships here, although that included Anglo.

He is listed as executive chairman of Cove Capital.

Bradshaw and FitzPatrick not only served together on the board of Anglo, which Bradshaw joined in 2004 – they were also both board members of the Dublin Docklands Development Authority, which had a multi-billion budget to redevelop 1,300 acres in the faded docks area.

The pair were also co-investors in a number of projects, including Fresh Mortgages, the Irish sub-prime lender that suspended its new loans in November. Most of their investments have not been publicised.

It did emerge, however, that Bradshaw invested in the Derek Quinlan-led group that backed the Four Seasons Hotel in Dublin.

On May 3rd, 1997, Bradshaw was appointed as chairman of the fledgling DDDA by John Bruton’s coalition government, a position he held for 10 years. He was said at the time to have no political affiliations.

At the time of his appointment, The Irish Times quoted a source as saying that Bradshaw was chosen to head the DDDA because of his “relative youth, expertise and incredible vision”.

Their dual memberships of the Anglo and DDDA boards drew criticism from various quarters, given the bank’s involvement in funding projects in the area.

In particular, the DDDA was a large investor along with Bernard McNamara and others in a vehicle called Becbay that paid €412 million to buy the former Irish Glass site in Ringsend.

That transaction was funded by Anglo.

Small in stature, Bradshaw was described by one senior financier as a “good man for building relationships and making introductions, but not one for detailed negotiations”.

One source said he successfully built relationships with the existing local communities in the Docklands, who found their daily lives disrupted enormously by the major construction work that has taken place over the past decade.

“He was able to play the role of the ‘real Dub’ even though he was groomed by McKinsey,” said one source. “It was a neat trick.”

Following his resignation from Anglo, and the questions that remain about the circumstances of his joint loan, Bradshaw will need all of his skills of persuasion if he is to rebuild his reputation.

© 2008 The Irish Times

email: said...

The freshly appointed head of Anglo-Irish Bank seems to have come from Price Waterhouse Coopers. He is also head of DDDA; DDDA is the Developers Autocracy which co-invests with others in a hole in the ground in Ringsend using Anglo-Irish loans of €288,000,000.

PWC did not reveal or perhaps did not discover the €87,000,000 loan to Anglo director Fitzpatrick being concealed from shareholder investors, apparently.

According to all reliable reports, staff at the Regulator had known about these mega-loans since January. According to the same reports, Mr FitzPatrick had been concealing his €87m loans for eight years.

The loans only surfaced when staff at the Regulator accidentally stumbled upon the FitzPatrick €87m loan in the books of the Irish Nationwide. No one told the minister.

Nobody else seems to have spotted it. Not the auditors, not even the board.

Apparently, not even PwC, the auditors who dissected all the banks' books recently.

Anonymous said...

[JAN 2007] According to the annual report, 12 out of the 13 directors have borrowed €25m in total from the bank - an average debt of €2m each.

Who is the odd man out?

That means all of them are heavily in debt to Anglo. What are they borrowing money for?

Has any director ever been refused a loan by a plucky member of the management?

Has Anglo grown too big for its boots?

By Shane Ross

Sunday January 28 2007

SO you've already made a mint out of Anglo Irish Banks shares? There could be even more riches in the pipeline.

News that billionaire Sean Quinn is buying up stock has prompted speculation. Does the insurance magnate want to add a bank to his empire? If he does, he'll have to pay well above the current €16 level.

There is one way of finding out. Turn up at the first AGM of the new year this Friday, February 2, when Anglo moves to the historic Round Room in the Mansion House in Dawson Street, Dublin.

Anglo is moving to a new HQ this year, normally a bear signal for investors. If it also proposes a fountain for the foyer, it will - by tradition - be getting too big for its boots. Is the successful outsider losing the mean, lean cost-cutting culture in its pursuit of becoming part of the banking establishment?

Sean FitzPatrick - almost a demigod in the business world - will be in the chair fielding the plaudits from satisfied shareholders. But even Anglo, with its stellar share performance, has questions to answer. First ask Sean Fitz about Sean Quinn's mysterious 5 per cent purchase.

1. Is the purchase welcome? Does he see Quinn as an investor or a predator? And if he suggests that this is a vote of confidence, ask if he is going to invite the Fermanagh tycoon or one of his representatives on earth to join the Anglo board. If he demurs, it might suggest a touch of unease.

2. Speaking of board membership, take a hard look at Anglo's cosy coterie of non-executive directors. The cross-directorships are startling. Sean is chair at Anglo, where he welcomes Lar Bradshaw - also chairman of the Dublin Docks Development Authority (DDDA) - as an ordinary director. In turn, Lar welcomes Sean to board meetings of his DDDA.

Sean also welcomes Greencore chairman Ned O'Sullivan as a fellow Anglo director. Ned chairs Greencore, where Sean is, just coincidentally, an ordinary director.

Spot the other happy couple on the board? Yes, Paddy Wright and Gary McGann have bumped into each other in an awful lot of boardrooms. Paddy was on the board of Smurfit when Gary succeeded him as the boss. He was on the board of Aer Lingus when Gary was chief executive. He chairs Aon McDonagh, where Gary is an ordinary director. The Paddy/Gary gig is the oldest show in town.

And ask if they all play golf.

3. Congratulate Sean on appointing Ann Heraty of super-successful CPL to the board last year. Ask him does he, in return, expect Ann to offer him the CPL directorship gig.

4. According to the directors' report, the non-executive directors rigorously evaluate each others' performance every year. How did Paddy rate Gary? Did Sean give Ned 10 out of 10? What marks did Ned award Sean? How did Lar's evaluation of Sean on Anglo compare with Sean's evaluation of Lar on the board of DDDA?

5. Michael Jacob, director, has been on the Anglo board for nearly 20 years. Who is Michael Jacob and how has he survived on the board since 1988 when others have retired earlier in line with the combined code rules?

6. According to the annual report, 12 out of the 13 directors have borrowed €25m in total from the bank - an average debt of €2m each. Who is the odd man out? That means all of them are heavily in debt to Anglo. What are they borrowing money for? Has any director ever been refused a loan by a plucky member of the management?

7. Late last year Anglo sold its Isle of Man trust company for €35m. Why? Apparently it was doing a bomb. Was the operation attracting anyattention from the Revenue? How much of the bank's deposit base in the Isle of Man was coming from Irish residents?

8. Earlier this month, it was reported that Anglo had lost millions in its exposure to the ailing Little Chef group in the UK. How many other doubtful debtors of this sort is it nursing?

9. Ask Sean's successor, David Drumm, to comment on the Irish property market. Is Anglo, as is widely rumoured, deeply exposed to bricks and mortar and developers - not only here but in the US? What would the effect of a 20 per cent fall in Irish property prices have on its lending book? Does David anticipate any bad debts in this division?

10. Corporate Social Responsibility is the current business buzz. What is Anglo doing to help the environment, encourage social inclusion, aid the Third World and promote the arts? Is its activity in this area adding to profits?

- Shane Ross

Anonymous said...

[February 6, 2000]
Jim Lacey NIB
* 1997: Jim Lacey placed on board of the Dublin Docklands Development Authority.

* 1998: Jim Lacey resigned from his position as chairman of Forum 2000, the Fianna Fail fund-raising committee.

In March 1998 Jim Lacey resigned from several positions after revelations about NIB's banking practices.

[February 6, 2000]
After a spell out of the public eye, Jim Lacey was back on view last autumn testifying before the Dirt inquiry. Lacey quit as chief executive of NIB in April 1994; it was widely speculated that his departure was a consequence of NIB's failure to take over TSB.

That year, he was invited by government to become chairman of the Irish Aviation Authority and in 1997, he was asked to join the board of the Dublin Docklands Development Authority. In March 1998 he resigned from those positions after revelations about NIB's banking practices.

He also resigned from his position as chairman of Forum 2000, the Fianna Fail fund-raising committee.
He was for a period chairman of Lafferty Publications and is listed as a director of CTC Global Fund, CTC Global Trading Company, Helicon Securities and Lafferty Publications.
February 6, 2000

Anonymous said...

Anglo Irish, their property developer clients and political sponsors in Fianna Fail almost certainly do not want us to know too much about how exactly this bank failed.

With the same government people who oversaw the collapse now still firmly in charge, how convenient that they too should be in charge of its nationalisation.

This [commercial privacy] clause is an outrageous provision - potentially an open cheque book but a let out for any uncomfortable questions?

Where are the opposition parties? Where are they ever.

email: said...

McNamara-backed firm got $8m loan for NY flat

By John Mulligan
Tuesday January 20 2009

ANGLO Irish Bank signed off on a mortgage of close to $8m to a company backed by the owners of Dublin's Shelbourne Hotel, including developer Bernard McNamara, just days after the bank's chairman and chief executive resigned last month.

The money was used to buy a luxury apartment beside New York's Central Park, the Irish Independent has learned.

Anglo advanced or renegotiated loans of more than $300m (€227.6m) to property customers in New York within the past number of weeks, including one collateral mortgage of $230m (€174.5m).

A New York entity, Shelbourne Partnership finalised the $7.9m (€6.03m) mortgage agreement with Anglo Irish just two days before Christmas, and within a week of the bank's chairman Sean FitzPatrick and its chief executive David Drumm resigning over the institution's loan scandal. It is believed the Shelbourne Partnership agreed with the developers of the exclusive Plaza Residential project, El-Ad, to acquire a unit back in 2006. Anglo Irish Bank had agreed the loan in principle last June.

El-Ad paid $675m (€515m) for the famous Manhattan hotel in 2004.

Mr McNamara's fellow investors in the Shelbourne Hotel, and guarantors of the Shelbourne Partnership's mortgage, include developer Jerry O'Reilly, John Sweeney, and estate agents David Courtney and Bernard Doyle.

Anglo Irish Bank signed off on a $230m collateral mortgage to associate firms of New York-based property corporation Gama Holdings in November.

The bank also inked a so-called mortgage spreader agreement with a US-registered firm Wellington Plaza. The $15.3m (€11.7m) agreement is guaranteed by a number of Irish business people, including telecoms entrepreneur and restaurateur Emmet Memery.

- John Mulligan


Anonymous said...

Lenihan should tell O'Connor and Keane to take an early bath.


Old guard back at Anglo

By Shane Ross
January 25 2009

BRAVO. There was blood on the carpet. The old Anglo board retired with a whimper.

Giants of the Irish corporate world were toppled. Gary McGann, chairman of the troubled DAA was gone; Ned Sullivan, chairman of Greencore was gone; Michael Jacob, a 20-year veteran of the Anglo adventure, was gone.

Finance Minister Brian Lenihan's claim to be putting "clear blue water" between the "old" and "new" Anglo Irish Banks was gaining credibility. Bankers were finally falling on their swords.

Lenihan was steadying the ship. Bank of Ireland and Allied Irish were rightly being put in a different bracket to the wayward Anglo. Whispers that Lenihan was the only minister on top of the economic crisis were circulating in Leinster House. Favourable comparisons with his Cabinet colleagues -- and the Taoiseach in particular -- were being widely made.

The Anglo board suddenly began to look fresh. Former finance minister Alan Dukes remained a director, as did retired tax chief Frank Daly.

Admittedly, chairman Donal O'Connor, the sole survivor of the purge, was a minus. He had protected the Anglo auditors Ernst & Young at the EGM and he had refused to allow questions to the directors -- but hopefully he will in future take advice from Dukes, Daly and other credible directors.

One step forward.

Then the Government blew it. Two steps back.

As the old board departed to the sounds of trumpets, Lenihan stumbled into an old trap. A new director was announced.

The old guard was back in town.

Perhaps Lenihan had been advised by O'Connor? Perhaps the Department of Finance had filleted the files and found a fossil?

Out of the cupboard popped the skeleton of Maurice Keane.

Maurice, 68, is a member of the golden circle. He has directorships galore. As a former Bank of Ireland boss, he ticks the banking box. He was chairman of health insurer Bupa. He is a director of Axis Insurance. He is rich as Croesus. A beneficiary of government gigs, he is on the board of the National Pension Reserve Commission.

The perfect candidate.

Not quite. Maurice is a director of another company. The press release was strangely coy about this item.

It never mentioned the most interesting episode in Maurice's career.

Maurice is a director of DCC, possibly the most notorious company on the Irish Stock Exchange.

DCC is being investigated by the Director of Corporate Enforcement, Paul Appleby. The first report on DCC is due in court this week. Following the Supreme Court's findings of insider dealing by DCC's Jim Flavin in Fyffes shares, Appleby's inspector -- barrister Bill Shipsey -- is poring over DCC's grubby history.

A series of reports about the behaviour of DCC boss Jim Flavin during the insider dealing saga are threatened.

Maurice does not emerge from the recent DCC story covered in glory. And it is only beginning.

Although Maurice was not a director of DCC when the insider dealing offence took place, ever since his appointment in 2002 he has stood four-square behind Flavin.

Maurice even headed to the Four Courts to stand shoulder to shoulder with Flavin in his hour of need. After the Supreme Court's dramatic finding against DCC and Flavin in 2008, Maurice was one of the board cabal which still refused to remove the boss.

Maurice was on the DCC nomination committee which -- amazingly -- made Flavin executive chairman of DCC in 2007. The executive chair job offends corporate governance conventions because it puts too much power in the hands of one man.

Jim Flavin was King of the Castle down at DCC. The board was so impressed with him that they allowed him to breach corporate governance orthodoxy.

Just like Sean FitzPatrick down at Anglo. Corporate governance conventions were waived for Sean, too, when he ascended to the Anglo chair after holding the chief executive's post for donkey's years. Close parallels with Jim.

All those directors who were under Sean's spell are now gone. Most of those who were under Jim's spell are still in place at DCC.

Including Maurice.

Maurice was impressed by Flavin. He must have been. He was a member of the DCC remuneration committee that gave Flavin a special €150,000 bonus for his extra work fighting the DCC vs Fyffes insider dealing case! This bonus was awarded soon after the High Court had found in Flavin's favour, but before the Supreme Court had unanimously reversed the decision.

A premature reward, which backfired spectacularly.

Even after the final verdict, Maurice and the boys never asked Flavin for the money back.

Hardly surprising. The DCC board is not exactly a model of good governance.

In the light of his history at DCC, Maurice is an astonishing choice for Anglo. His backing for Flavin could return to haunt him in the coming years. Not only that, but he is deeply imbued in the "old" banking culture. While at the B of I, he enjoyed a final package of €863,000. He held 350,000 options and over a million shares. His pension is in the stratosphere.

So how was Keane picked? According to the press statement, it was after Lenihan had "consulted with" Donal O'Connor, the Anglo chairman.

Which speaks volumes about O'Connor.

Accountant Donal O'Connor is another member of the golden circle. Funnily enough PWC, the auditors where he was top dog, are also auditors to DCC. Not that such a connection would ever cloud his judgement, but the circle is small. PwC are also auditors to Bank of Ireland where Maurice reigned supreme for years. Ahem.

Maurice Keane's period in charge at the BoI overlapped with O'Connor's reign at PwC. They must have bumped into each other at bunfights by the dozen.

The Bank of Ireland was possibly Donal's biggest client.

Donal O'Connor's choice of Maurice Keane casts a dark cloud over his judgement. The old guard is regrouping around the new bank.

Lenihan can still redeem the situation. He showed sensitivity when he appointed Dukes and Daly. He should now ask Dukes to take the chair, retain taxman Frank Daly after telling Keane and O'Connor to step down. He could then recruit competent external people who enjoy public confidence, not the narcissistic admiration of corporate Ireland. Locally, he could ask David McWilliams to step into the breach. McWilliams is not just a journalist, he has valuable experience as a banker.

Then, the crazy decision hastily taken by O'Connor and the old board -- to install an internal Anglo candidate, Declan Quilligan, as new chief executive -- should be reversed.

Dukes would be an ideal chairman. He is an unsung hero of political Ireland who would fly the corporate flag of independence. If Lenihan is serious about his call for patriotism, he should put Dukes in charge. It was Dukes who sacrificed his chance to be Taoiseach when he ordered the Fine Gael opposition to back a government -- to save the economy. It worked for the economy. Dukes was taken out and shot by his own party for his patriotism.

Time for another u-turn. It should not be difficult. The Government has plenty of practice. Lenihan should tell O'Connor and Keane to take an early bath.

email: said...

Elusive FitzPatrick back at work but silent on €84m loan.

A fit and tanned Mr FitzPatrick attended a lunch-time meeting in a city-centre hotel before returning to the office

By Shane Hickey

Thursday January 29 2009

Sean FitzPatrick was back in the public eye in Dublin city centre yesterday.

Just one month since he resigned in disgrace as chairman of Anglo Irish Bank, the 60-year-old is understood to be using office space in the Upper Mount Street/Merrion Square area to manage his affairs.

It is one of the few occasions that Mr FitzPatrick has been spotted in public since his resignation from the bank in December amid controversy over secret loans that at one stage totalled more than €120m.


Looking fit and tanned, he made a series of phone calls while walking through Upper Mount Street, where the office is based, and Merrion Square areas early in the afternoon.

Following his resignation as chairman, he went on holiday with his family, in turn avoiding the massive wave of publicity which accompanied the bank's emergency general meeting in the Mansion House and subsequent nationalisation.

Although he was keeping a low profile yesterday, the dapper financier was quickly recognised by passersby as he walked around the busy area.

Wearing a navy suit and golden tie, Mr FitzPatrick said that he had "no comment" to make when questioned by the Irish Independent.

When asked whether he would pay back the €84m in loans that he still owes Anglo Irish Bank, he would only say: "I am not going to comment on anything."

The office complex he is working from at present is part of a classic Georgian building on Upper Mount Street and has been used by the former CEOs of other companies in the past as well as by retired EU commissioner Ray MacSharry.

Mr FitzPatrick has been spotted in the area since his return from holidays and parks his black Mercedes CL 500 near the office.

Known for his polite character, he cheerily greeted associates when returning to his office after lunch.

The office in which he is now based is a relatively short distance from the headquarters of Anglo Irish Bank on St Stephen's Green.


It was Mr FitzPatrick who negotiated the acquisition of the new lease on that property over 25 years ago at a time when he was chief executive of the bank.

Last weekend, Mr FitzPatrick described the nationalisation of Anglo Irish Bank as a "very sad day" and told of his sympathy for shareholders of all the banks who have lost money in recent months.

- Shane Hickey