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THIS WEEK YOU’VE probably once again been reading and hearing about the investigation into the sale of certain loans held by IBRC, the former Anglo Irish Bank, including the controversial Siteserv deal.
The story itself is a complex one involving many characters, multiple companies and even more unanswered questions. It caused considerable controversy over the summer and has reared its head again this week.
But what on earth is it all about and why is it back in the news? Let’s start from the beginning…
What is IBRC?
The Irish Bank Resolution Corporation is an amalgamation of the Anglo Irish Bank and Irish Nationwide. As you probably know, these two banks, primarily Anglo, cost the taxpayer billions of euro as a result of their reckless lending behaviour during the boom and both had to be nationalised.
IBRC was established in 2011 to wind-down both banks by selling off distressed assets and ensuring the maximum return for the taxpayer. IBRC itself was liquidated in February 2013 as part of efforts to abolish the promissory note arrangement (you can read about that whole other story here).
What is Siteserv?
Siteserv provides a wide range of services to public and private companies, such as scaffolding for construction projects and the installation of satellite TV boxes.
Heavily indebted to IBRC, Siteserv was sold to the Denis O’Brien-owned Millington for €45 million in 2012. As part of the deal, IBRC gave Siteserv a total loan write down of €119 million (out of €150 million it was owed by the company) with €5 million also paid out to shareholders.
A subsidiary of Siteserv, GMC/Sierra, went on to be awarded a large water metering contract in July 2013.
Why did this deal cause controversy?
At the time of the sale three years ago, the Department of Finance had considerable concerns about the Siteserv deal, including, among other issues, the handling of other bidders and the payment of €5 million to shareholders.
However these issues did not come to light until April this year when, after much probing, Social Democrat TD Catherine Murphy released documents she obtained under Freedom of Information that exposed the significant tensions between the Department and the state-owned bank.
Was it just the Siteserv deal causing problems?
No. Following Murphy’s disclosures the Department of Finance released documents showing that Micheal Noonan was so concerned about the “constant stream of issues” arising at IBRC that he was not confident about accounting for the bank’s actions in the Dáil.
In short, the documents laid bare serious problems in the relationship between IBRC and the Department of Finance in 2012. But only now, three years on, were these concerns coming to light.
The revelations about this troubled relationship are particularly interesting as IBRC was wound-up in February 2013. The government maintains this was solely for the purposes of abolishing the promissory note. Murphy and others have started to doubt this.
What have people at IBRC said?
Alan Dukes, the ex-chair of IBRC and a former finance minister, has consistently rejected suggestions of impropriety in relation to Siteserv deal and indeed any other deal the bank undertook:
I am extremely angry at any reference to criminality or malpractice. There’s absolutely no grounds for suggesting that.
Although Dukes did acknowledge tensions in the relationship between IBRC and the Department of Finance when he gave a lengthy press conference in April.
Where does Denis O’Brien come into all this?
In late May, Murphy used a Dáil speech to make claims about what she called “extremely favourable interest rates” O’Brien received from IBRC when repaying loans. The businessman had already secured an injunction against RTÉ from broadcasting similar claims.
As a result the media were temporarily restricted from reporting on Murphy’s claims despite them being made under Dáil privilege. Eventually, the High Court clarified that the injunction was not intended to prevent Murphy from making the claim under privilege.
O’Brien is currently taking legal action against the Oireachtas, the State and an Oireachtas committee that did not find Murphy had abused Dáil privilege.
In short, he isn’t happy with how his private financial affairs have been made public and disputes the portrayal of them, as well as the accuracy of some information. He wrote in the Irish Times in June:
For me this was an intrusion too far. Over the past several years, some of the media in Ireland has become more and more vicious and invasive and this was a deliberate attempt to misrepresent my personal banking relationship.
What did the government do?
In response to the considerable controversy caused by the disclosure of an uneasy relationship between the Department of Finance and the now-liquidated bank, Noonan asked IBRC’s special liquidators, KPMG, to carry out a review.
Opposition parties and TDs were not satisfied that a review was sufficient given those liquidating the bank were essentially tasked with reviewing their own work.
Over the course of May and June further – as yet unproven – allegations emerged in relation to transactions and deals carried out by IBRC. It was suggested as much as €1.2 billion was written off for 40 customers – both businesses and individuals, while Murphy claimed some clients were afforded special low interest rates and debt write downs.
Such was the unfolding controversy, the government decided to establish a statutory Commission of Investigation in order to carry out an independent inquiry into all loan sales and activities of the IBRC that resulted in a loss of €10 million to the taxpayer. It would also examine any special interest rates which resulted in IBRC borrowers saving more than €4 million.
The inquiry was originally to be chaired by retired High Court judge Daniel O’Keeffe but he was later replaced by serving High Court judge Brian Cregan. With a budget of €4 million, the commission got underway in June, and began the process of examining nearly 40 separate deals.
Why is it back in the news now?
Last Friday, Judge Cregan wrote to the Taoiseach telling him he has insufficient powers to handle sensitive financial documents, running to thousands of pages, handed over to the commission by the Department of Finance and IBRC’s special liquidators, KPMG.
Why doesn’t he have the powers?
The Department of Finance said that its assertion of confidentiality over IBRC documents is based on a matter of law principally the “banker-customer duty of confidentiality”. In a statement, the Department explained:
As a witness to the investigation, for the Department not to assert confidentiality would have been incorrect as a matter of law and could have opened the Department to legal action from customers of IBRC or indeed IBRC itself for not respecting and protecting their rights.
Essentially, it had to tell the commission about the confidentiality issue. However, the Department believed that Cregan would have sufficient powers under a public interest provision in the 2004 Act Commission of Inquiries Act to override this confidentiality issue and enter the documents into formal evidence.
Michael Noonan said he believed this provision was “robust enough” to override any confidentiality assertions made by either the Department or by KPMG.
But the judge felt otherwise. He felt that even though he had received the documents he could not do anything further with them. This has effectively stalled the inquiry.
Somebody should have spotted this before now though, right?
Opposition TDs have been quick to say the same thing, but the government has pointed out that during all the Dáil debates on this issue there was no reference from anyone to the possibility that this might happen.
However, a 76-page determination from Cregan has disclosed that the Department of Finance raised concerns about its duty of confidentiality in August. However Noonan maintains he always believed the commission had sufficient powers through the public interest provision to override these concerns.
Questions have also arisen as to why the Attorney General Máire Whelan, the government’s legal advisor, didn’t raise this as an issue when the terms of reference for the Commission were being drafted.
The government has argued that several commissions of investigations have taken place in the last decade. They have dealt with a whole range of sensitive issues and this problem has never arisen. The AG’s advice to government is privileged so we will likely never know what concerns, if any, she raised.
So what’s the government going to do now?
On the advice of Cregan himself, the government is currently awaiting his interim report before deciding how to proceed. It’s been suggested that emergency legislation could give Cregan the powers he needs but this could still mean a court challenge by those parties at the centre of the deals being examined.
In his determination, the judge said that the 2004 Act had not provided any mechanism whereby he could seek a High Court direction on the confidentiality of documents. He pointed out that a previous commission of inquiry, on child abuse, had been provided with specific powers to go to the courts. This may now be considered by the government as the way forward.
Any chance of this being done before the election?
Probably not given the delays so far. Noonan said this week he didn’t know how much of a delay the latest issue would cause.
Why is this important?
All of us paid a heavy price for the bank guarantee of 2008 and subsequent EU/IMF bailout in the form of increased taxes on our salaries and savage cuts to everyday services. The economy is recovering again, but how a taxpayer-owned bank disposed of distressed assets and whether they got the best value for money is important given it’s essentially our money at issue here.
In this instance the question has been asked as to whether IBRC got the best deals possible or did special arrangements with wealthy business types to the detriment of the taxpayer. While the bank’s former executives wholly dispute the latter, it’s up to the judge to determine the full story.
Indications are that it could take him years to do so.
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Is it fair to call Catherine Murphy “obsessive” just because she is determined to get to the truth ?
It’s a pity more of our public representives weren’t as ‘obsessive ‘ as Catherine Murphy.
“On the advice of Cregan himself, the government is currently awaiting his interim report before deciding how to proceed.”
Can anyone confirm -
1) Is this the interim report originally due by 31 December?
2) If so, what is the time-frame for delivery to the Gov now? is it due shortly?
3) Will this be published by the Gov thereafter? I believe there is an intention to publish the report.
I’ve read Judge Cregan’s letter. He is looking for direction on whether he can admit over 200,000 pages received so far into evidence. The legal arguments are complex but look solvable, either by amendment to existing legislation or amendment to terms of reference, allowing a HC ruling.
But I have to say I’m at a loss as to how an interim report could be completed if the 200,000 pages are not yet allowable.
Have to
Hugh is calling her “obsessive” means nothing coming from Mr FG himself , that right Hugh?
Reading this article is like binge watching a box set of governmental ineptitude
Great little country to do corruption in.
No connection between Siteserv and what’s been happening in installation of meters for Irish Water ?
The cash cow that it has become, for a well known overseas based Irish entrepreneur, who has always had a brilliant aptitude, to utilise the help of Politicians , in realising his massive money making ambitions !
Sense of entitlement from super rich is sicking !!!
Yet, we are constantly told by super rich media owned outlets, it is sense of entitlement of the poor that destroying our country. WTF !!!
Fight back has begun on all levels, IW & corruption..
FairPlay to you Catherine Murphy, might I say I am also very fond of Roisin Shorthall, she stood up to millionaire TD James O’Reilly, walked away from labour long before IW disaster.
Social Democrats have good honest, strong foundation for new party, also have Councillor Gary Gannon North Inner City, us locals love him, we ain’t easy bunch to please after the late Tony Gregory !!!
I’m just amazed we can comment on a story involving [redacted]!!!
Don DojiFone and his hoards of hackers will be rabidly shite-serving the writs and squits to all concerned at its earliest convenience!!
It’s a pity not all TD’s are like her. We would have a great government.
It’s about producing further evidence of corruption by FG throwing uncontested contracts to O’Brien and Co.
The first incidence was the awarding of the first independent mobile phone license ( esat Digicell) to O’Brien.
All because he supports FG..
That’s what the siteserve flare up is all about.
Also…….when DoB got the special reduced interest rate on his loans from IBRC(which BTW were not passed by the board as per rules)…he used the money saved to turn around and buy Siteserv, which effectively means he got it for nothing and the taxpayer lost that €45 million which we could have got anyway in his repayments for his other debts.
Why was his request for a special interest rate given to him by the word of one man who did not have the authority to do so without putting before the board of IBRC for a vote?
There are many questions that have to be answered.
Catherine Murphy is a breath of Fresh air in the Dail. She is exactly who we need as Taoiseach. Would it be too crazy of an idea that the people elect the Taoiseach instead of the party. She should Run for President.
I didn’t read the above. As regards Denis O’ Brien i would be like a dog with a bone, i would not trust him with a piece of toilet paper, he has one thing on his mind that is to get what he can for half of nothing , people like him have no conscience no soul he wants to own the World and if it was with honesty and fairness i would congratulate him and wish him luck.
How come he is allowed stay in Ireland for so long, maybe I’m wrong but from what i hear his jet is in the airport most days, if he wants to be Irish let him pay tax like the rest of us and not hide behind Kenny.
Denis O’Brien thinks he is running the country, the cheek of this character thinking he can muzzle the Dail from mentioning him. This is unhealthy for a wealthy individual to try and manipulate the business of government.
After the Esat debacle, it’s outrageous that “selling” Siteserv and Topaz to DOB and his offshore tax haven companies was even contemplated. I don’t think there is one person in the country who is in any way surprised in the slightest by these revelations – or the rumours. Cowen has his nice directorship, I’m sure the current crop will show up in various positions in the future.
Its back in the news because of the leak to Pearse Dohertys office last Wednesday and the exclusive in the SBP last Sunday. All the government had to do was keep the fact that the enquiry was set up to fail under wraps until after the election, which was supposed to be happening around now remember.
It didn’t work and now they will go to the people with an even bigger stink of Siteserv off of them.
Amazing how quiet Dane/tc/Abbey et are are NOT
Danes busy securing the recovery with some tent pegs and a ball of twine.
“However these issues did not come to light until April this year when, after much probing, Social Democrat TD Catherine Murphy released documents she obtained under Freedom of Information that exposed the significant tensions between the Department and the state-owned bank”.
Hugh, you forgot to mention that Michael Noonan effectively stonewalled Catherine Murphy’s 19 parliamentary questions. Until some of the truth emerged through her FOI requests. Then he could stonewall her no more.
Public enemy number 1.
In other news David Drumm’s mammy wrote him a letter for the judge and she’s 80. You couldn’t make this up.
Even if a dozen witnesses testify that they saw Redacted (and others) bunging any politicians or bankers a wad of cash,the whole charade of investigating the transactions will end up like the recent decision of the Mahon Tribunal to wipe clean the findings of corruption against Ray Burke.!!
Trial against Jim Kennedy collapsed last year because it took so long to organize it ,that Frank Dunlop was too ill to testify.!
all these tribunals and trials against white collar fraudsters are a complete charade and waste of money.
The question I would love answers to is why was Anglo and Irish nationwide ever nationalised..they had no normal accounts,didn’t have ordinary current acs/atms etc..cowan was advised Not to nationalise them..so that’s the big one..even apart from dodgy deals with redacted…
Even FG knew that Anglo and IN were zombie banks before the election and not worth saving…From their 2011 election manifesto……
“Agreed Procedures for Restructuring the Debts of Troubled Banks: Fine Gael in Government will force
certain classes of bond-holders to share in the cost of recapitalising troubled financial institutions. This will
be done unilaterally for the most junior bondholders (owners of preference shares, sub-ordinated debt
and similar instruments), but could be extended – as part of a European-wide framework – for senior debt,
focusing on insolvent institutions like Anglo Irish and Irish Nationwide that have no systemic importance.”
Why did they change their mind and pay all those bondholders in these two zombie banks?…….and paid them with interest too, not just the return of their money. No bondholder got burned even though many bondholders were fully expecting to take a hit!…..WHY DID WE PAY THEM AND WITH INTEREST, NO OTHER COUNTRY IN THE EU DID THIS…….WHY DID WE?
Its where politicians invest there extravagant salaries while living on un vouched expanses not forgetting big fat envelopes.
Catherine Murphy for Taoiseach.
Kenny back to the classroom
Lowry and DOB go to Hell.
Vote no to corruption sleaze and cronyism.
Dont inflict Kenny on a bunch of innocent schoolchildren he will bore them to death!
Was not that man found to be involved in corrupt payments by a tribunal? Enough said.
Denis O’Brien is an interesting character, just wondered how he keeps getting government contracts while the question of the phone bribery comments of a judge is dismissed? Why was this not followed up? Might have given Mr O’Brien a clean report instead of the continuing to have a shadow over him.Anyone got any ideas?
Hugh now you didn’t leave out the fact siteserv also has the contract with Irish Water on purpose now did you ? F2f will already be angered that this article has finally made it on the site without rubbing salt in the wounds.
Elitist Ireland. Where the rich screw everyone and FF/LAB facilitate fully… Pigs..
I can sleep better tonight knowing all that.
Who gave the water contract to Denis O Brien?
Was the contract advertised?
Who gave Denis O Brien a mobile licence?
Was the contract advertised in advance?
Did the Tribunal establish that Denis O Brien paid money to Lowry?
If so what was the money paid for?
Did Lowry’s company get a contract from Denis O Brien’s company?
If so for what?
Truth will always come out!
The tribunal followed the money and found that a bribe was paid to Lowry from DOB. The big question is why this was not followed up on with a Garda investigation….that’s what is supposed to happen after a successful tribunal.
So why no proper investigation and a court case?
It wasn’t just Lowry that DOB gave heaps of money to. It was FIne Gael. DOB gave mountains of cash to Fine Gael.
Interesting to note that in 2001 Michael Noonan banned corporate donations to Fine Gael because he said that there was always an expectation of something in return.
When elected Fine Gael leader in 2002 Enda Kenny immediately reversed this decision.
Over to you Mr O’Brien….
Al Cal, because Ireland is so corrupt, thats why it was not followed up, might have been interesting to see what other naughty characters this would have brought to light?
Michael Lowery will fix it whatever it’s about. That’s what he does.
If Lowrey was an MP instead of a TD he would have had his sorry arse kicked out years ago, i stead this dodgy, shady character still sits on it in the chamber.No wonder people are sickened by the whole
situation. Can ANYONE tell me why the phone scandal bribery allegations was not followed up by the Gardai as they would surely have if the UK police got a hold of it????????????
Summary of story,corruption is doing well in Ireland with the help of fg,lab.unlike 95% of the country’s citizens.
Hugh that picture of you is scary…. Obrien looks like Trump
Ffs. Thought I had an injunction stopping anyone reporting on this.
Don’t be too hard on Hugh, he really loves you and any possible jobs you might have for him!
Kerry. I’m not suggesting that or indeed that the taxpayer pay for anything related to the enquiry as frankly the taxpayer is ONTHE hook for enough wonga already. I’m merely suggesting that DOB has the resources and he will spin this out as he cannot have the true extent of the commercial largesse doled out to him and his associated companies. Ordinarily business men with clean hands and nothing to hide would simply say “ok on you go release the data I’ve nothing to be concerned about” rather waste millions trying to gag everyone but not here oddly enough which says it all really Kerry.
Nail on the head there……James.
Because DOB was never taken to task over the findings of The Moriarty Tribunal, he feels invincible and that his friends in the establishment will protect him, so much so that he feels he can sue the state with regard to parliamentary privilege and stop any utterance now and in the future that may be the beginnings of an investigation in to his dealings. The sad thing is that everytime someone drives into and fills up in a Topaz garage they assisting DOB to have the financial means to sue the state and kill our freedom of speech. There are too many mugs in Ireland who give DOB their cash because they are to ignorant, stupid or lazy to drive to the next garage.
Excellent and concise article.
No amount of legislative tinkering will deter DOB (perhaps others too) from taking the matter of confidentiality all the way to the Supreme Court and even to the ECJ if needs be as he is obsessed on this point and he has the roubles to fund it all the way and back which is not something you can readily say. Access to justice is what DOB wants and he will have the relevant parties hopping and trotting in and out the 4 gold mines for yonks for sure. Nothing like a man in pursuit of the principle to get my learned friends salivating.
Creggan is well aware of DOB’s powers and his resolve in the matter and can see the Lord Denning’s appalling vista” coming down the tracks at 100 MPH hence his zeal in his79 page report in flagging up the problem . Whilst no expert on the irish constitution I can readily see Siteserve as being an oft quoted case in courts and universities for years to come . Sit back and enjoy it won’t be long before DOB gets his retaliation in first to match his existing action against all and sundry
As a tax payer are you not suggesting I sit back and pay for this farce?
God help the first fine Gael c^nt that canvasses my door!
Al DOB has an army of eager legal
Eagles all tasked with one thing only : keeping all mention of his commercial dealings out of the public domain no matter the cost . He is entitled to his own legal advice for sure but how he expects to overturn centuries of tradition and custom by scrapping elected representative’s right to speak in the chamber on matters of great public interest defeats me. Public interest always trumps individual rights and we are dealing with millions of € here so Murphy must be in her rights as a TD to ventilate such important issues. As ever, it’s a matter for the courts but DOB will ensure a Jarndyce v Jarndyce job all the way. He has to as that is his compulsion
True James……but the finding of Moriarty were conclusive and should have led to a Garda investigation….the file still sits there with nothing done and DOB didn’t even have to deploy his legal eagles to halt it……..it was just never followed through on….why?
What’s the craic with Irish media reporting fair and balanced articles?
PS you could cut to the chase and have a module of Enquiry dealing only with each and every case whereby the purchaser/ new borrower received a substantial haircut on the then loans . Order up the minutes of all meetings including board or executive meetings where the haircuts were discussed and/or decided. This will not involve any privacy or confidentiality issues as strictly speaking you are examining the decision -making policies of the statutory body and not any individual borrowers or purchasers. You are merely confirming that, as a matter of policy,IRBC did or did not take an executive decision to have either an across the board haircut attached to all loans OR crucially whether ONLY CERTAIN LOANS received the red carpet treatment. If no such evidence exists then there MUST have been subsequent representations and approaches made to IRBC by lawyers on behalf of clients which , after the usual commercial niceties,would produce agreed heads of terms followed by the all important but confidential formal legal offers setting out the details of the transaction including purchase price, rate of discounts and interest rates ONTHE fresh loans etc . These would include the usual covenants should the purchaser default of fail to complete ALL WRAPPED UP IN THE TIGHTEST OF CONFIDENTIALITY AGREEMENTS AND CLAUSES TO BEAT THE BAND
Al with the exception of Lawlor (who was his own worst enemy) Ireland just does not do the sort of scrupulous follow up to such clear cut findings and Quinn, like Lawlor, caused his own incarceration by not playing the game. DOB is gifted for sure and is able to walk on water whilst being Teflon coated. In all seriousness Ireland is like Italy and is systemically full of gombeen men and Bengal lancers aided and abetted by a well kept but small clannish political class who know no shame and will deploy any tactic to keep the light from being shone in them
Change of libel laws would be a good start
A good assessment of our main parties. Of course, the FG and FF supporters are too dumb to know their being played by their masters.
Enda Kenny and Dennis o brien in bed together, and the government are so afraid of Dennis o Brien. He must have a lot of hold on Kenny and government
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