It was a cameo worthy of Jay Gatsby the night the white-haired builder danced with the charismatic university president, and then wrote her a cheque for €250,000. The setting was Patrick Guilbaud's two-Michelin-star restaurant opposite government buildings. The occasion was a fundraising dinner for the construction of the National College of Ireland's new campus in Dublin's IFSC, the jewel in Bertie Ahern's constituency. Laois-born property developer 'Nice' Paddy Kelly, as he is admiringly known, invited the college's president to dance with him. But there's no music, protested Professor Joyce O'Connor. They executed a twirl anyway. Then Kelly donated a quarter of a million euro to his dance partner's project.
As it turned out, his company went on to build the college, in partnership with Alanis and Pierse Contracting. Kelly, who was a heavyweight client of Anglo Irish Bank, recently told the High Court he is contemplating bankruptcy. In 2002, the college moved from its old home in Ranelagh to its new home in Mayor Street in the IFSC, built on a two acre site donated free of charge by the Dublin Docklands Development Authority (DDDA). Most of the €25m cost was raised in highly complex financing arrangements as the college was a charitable trust and there were generous tax breaks available for investment in education. One of the chief lenders was Anglo Irish Bank, whose chairman, Seán FitzPatrick, was a director of the DDDA and happened to be the only sibling of Professor O'Connor, now the NCI's president emeritus and chairman of the Digital Hub Development Agency.
"Everybody knew Joyce and Seán were brother and sister," says the DDDA's first chief executive, Peter Coyne, dismissing any insinuation that the deal was inappropriate. "Joyce was president of the only college that fitted the bill for what we wanted to do in the docklands in that it would be very proactive in bringing in the local community. The college was going to relocate anyway because it was on a short lease in Ranelagh. Joyce managed to get the money in. High net worth individuals had their arms twisted for donations. The Department of Education also put money in," adds Coyne, who left the DDDA in January 2005.
Concerns were raised about business ethics in the authority after last year's revelations that Seán FitzPatrick had concealed Anglo loans to himself worth more than €100m and that his fellow Anglo director, Lar Bradshaw, who was the DDDA chairman while FitzPatrick was a director, had similar loans. Those concerns were heightened as the recession crystallised Anglo's status as 'the builders' bank' while the DDDA was responsible for the biggest development project in Ireland. When businessman Gerry McCaughey resigned as the new DDDA chairman (having replaced Donal O'Connor after he was made chairman of Anglo Irish Bank) at the end of March for personal tax reasons, he claimed his removal had been brought about because his mission had been to clean up the authority.
The value of the lands controlled by the authority and its neighbour, Dublin Port Company, where Bertie Ahern twice appointed his friend Joe Burke as chairman, is estimated to have reached €10bn at the height of the boom. At the last count, 40,000 people were employed in the designated 520-acre docklands and there were 22,000 residents.
Coyne is adamant that everything was done properly. "There was never even a hint of any kind of corruption, nothing at all," says the Glaswegian, now working in Dublin as a consultant. "It was something the board was quite conscious of. No disrespect, but we used to ask ourselves what could a journalist who wants to have a pop at the board say about what we're doing now. We used to actively ask ourselves that question. Regularly at board meetings, somebody would step out and stand in the corridor."
When questions were asked in 2006 about the DDDA's 26% partnership with the consortium that bought the former Irish Glass Bottle site in Ringsend for €411m – €41m above the valuation ceiling at the time – the authority consistently replied to journalists' questions that FitzPatrick and Bradshaw had declared their potential conflicts of interest and had absented themselves from the decision. That was not quite the case, as became clear when the present chief executive, Paul Maloney, appeared before the Oireachtas committee on the environment on 10 February.
Previous business relationships
Committee chairman Phil Hogan said that, according to the minutes of a board meeting conducted by conference call at 8am on 24 October 2006, following circulation of the agenda featuring the sole item as the IGB site acquisition, Bradshaw – the chairman of the DDDA which was putting €37.6m into the project – did not absent himself. Maloney confirmed that neither had Bradshaw declared he was a client of Quinlan Private, a partner in Becbay, the consortium that bought the IGB site. Furthermore, he did not declare, Maloney agreed, that he had a business relationship with the vendor of the site, Paul Coulson, as part of a syndicate that bought two blocks in the Atrium Building in Sandyford. (FitzPatrick and a third Anglo director, Gary McGann, the boss of Smurfit Kappa, were among the other members of that syndicate).
It also emerged during the committee hearing that FitzPatrick, who chaired the DDDA board's finance sub-committee, informed his fellow DDDA directors during that 8am conference call that he and the chief executive had been told at 8.30 the previous evening that the builder, Bernard McNamara, another partner in the IGB project, was in discussions with Bank of Ireland and Anglo Irish Bank to secure financing. Both FitzPatrick and Bradshaw said they would not be involved in any of Anglo Irish Bank's executive decisions on funding. That DDDA board meeting concluded with an agreement that the authority would enter into a joint venture with McNamara to buy the site.
'Conflicts of interest'
"I am not satisfied at the fact that the authority, at the height of the property market boom, became involved in a joint venture with a private property developer who was intent on buying a site," Phil Hogan opined. "There are huge conflicts of interest. The DDDA became embroiled with Anglo Irish Bank, which was an unhealthy relationship."
The DDDA was set up by the Oireachtas in 1997, the year Bertie Ahern was first elected Taoiseach, and given statutory autonomy for development planning, exempting it from the national planning process. In addition to the nine-member board of directors, a community council was established, all of its 25 members appointed by the government. The flow of good-news announcements and openings in the docklands supplied Ahern with plenty of photo opportunities in the heart of his constituency for over a decade. When Maloney, a former army captain who went on to manage the central area for Dublin City Council, appeared at the Oireachtas committee, he was given a laudatory welcome by Ahern's constituency running mate, Cyprian Brady.
"There's no doubt about it, it had an awful lot of clout," says a political source. "Anyone on the council could get trips abroad and get invited to canapés and champagne in the docklands. There were pots of money to be thrown at communities to keep them happy. Every summer and every Christmas, those people in the docklands were guests at Bertie's cheese-'n'-wine parties in St Lukes. It was run as a separate city down by the water."
On 29 April 2007, barrister-turned Village magazine publisher Michael Smith made a formal complaint to the Standards in Public Office (SIPO) Commission, citing several instances of perceived conflicts of interest in the DDDA, particularly in the cases of FitzPatrick and Bradshaw. Smith requested the commission to carry out a thorough investigation of decisions taken by the authority. No such investigation was conducted. "While it may be that both [Seán FitzPatrick and Lar Bradshaw] held substantial shareholdings in the bank," SIPO explained, "there was no evidence that either held 'control' of the bank."
Following the successful court challenge by developer Seán Dunne to Liam Carroll's building of Anglo Irish Bank's putative HQ in the docklands, environment minister John Gormley is anxious to restore public trust in the DDDA. Questions persist and grow about various projects signed off on during the boom. But Peter Coyne, who was head-hunted from London as the inaugural chief executive, insists that the authority's directors came with impeccable pedigree.
"They were a strong board," he says. "They were well-connected, powerful, intelligent, articulate and they were big in business. When applications came in, someone was inevitably going to know someone. The only way to counteract that is to have a weak board not really involved in the life of the city. Or you have people deeply involved with it who regularly step outside the door during meetings."