As our lame leaders have thrown in the towel, let the people decide how much plutocrats should earn in future, writes Shane Ross
Archive for the ‘Corporate Ireland’ Category
THE scene: the Aula Maxima in Maynooth College , Kildare on the outskirts of Dublin. A reunion of National University business alumni and other distinguished citizens selected by Maynooth College for special recognition.
Centre stage are Dr Sean Quinn and Professor Bertie Ahern.
CIE is bust. Last week its cheques were on the brink of bouncing. How did it come to this? How could a company with an annual subsidy of €278m find itself on the verge of insolvency?
There is ‘something of the dark’ about CIE. Or at least a very thick fog embracing the murky company. It has always wrapped itself in a blanket of secrecy.
Despite its complete dependence on the taxpayer CIE is not subject to the Freedom of Information Act. Journalists seeking information will readily receive the time of the 44 bus or the trains to Cork — but when they ask what the directors are cooking up, the shutters come down.
Probably for good reason.
To Joe Walsh
‘Public interest’ director
Bank of Ireland,
July 22, 2012
DEAR Joe, Sorry we have not met since you left the Dail back in 2007 but I have followed your career closely. I regret we never had the chance to serve the nation together in the lower chamber. Nevertheless I enjoyed our short time shared as senators before you moved on to the dizzy heights of being a successful Fianna Fail Minister for Agriculture.
Since you left the Dail, you have proved there is life after politics.
IS Michael O’Leary a buyer or a seller? The sudden bid for Aer Lingus from the Ryanair chief has certainly titillated otherwise boring stock markets in recent days.
Most of the usual suspects — the po-faced analysts, the serious commentators and even self-important political experts — have been solemnly pontificating on the value of the bid. Hours of airtime and newsprint have been wasted measuring up the merits of O’Leary’s latest escapade.
Meanwhile, the European Commission is shaping up to kill it dead.
GOD be with the days when Emily O’Reilly was a journalist. The nation’s Information Ombudsman was lost to the noble art many years ago when she crossed the line and headed for the public service.
So after all last week’s hullabaloo, how much do we really know about Greyhound Waste?
Well, for a start, did you know that it is a criminal company? You didn’t? Perhaps you should know a bit more.
Last year Greyhound — the outfit that has won a series of State waste contracts — was prosecuted and found guilty of three charges brought by the Environmental Protection Agency (EPA).
It was fined and costs were awarded against it.
It takes a lot of aggro for the EPA to bring a company to court. Greyhound was served with 10 notices of non-compliance before eventually being forced in front of the beak.
Quite a casual attitude to the law.
Perhaps the errant company learned its lesson? Was it chastened by the experience? Was it a one-time offender?
What do you think? These cowboys of the waste industry seem simply to have carried on as before. Believe it or not, they were visited on the same site in Clondalkin, Dublin, by inspectors nine times in 2011 — after the convictions in court. They were served with a further five non-compliance notices. The court clash seems to have left the lads from Greyhound unfazed.
Last week the EPA told me that even now, once again, there is an active investigation into Greyhound. Amid all the public kerfuffle about Greyhound’s despicable behaviour to its customers on the ground, the EPA had cause to visit them as recently as last Thursday.
The latest EPA report on Greyhound was issued on December 12. It is a damning account of their cavalier attitude to the law. It is clear that they play fast and loose with the rules.
The report found Greyhound was a repeat offender, once again guilty of non-compliance with the conditions of its waste licence. The Agency has threatened it with another court action. The pong around the Clondalkin area has been intensifying in recent months. There were several other health and safety issues on the site in the last few weeks.
This is the company that won the waste contract for CIE, for South Dublin County Council and for Dublin City Council.
All right, they may be a bit cavalier with the courts and immune to the sensitive nostrils of the villagers of Clondalkin — but what else do we know about them?
Well, we know that they are hell-bent on cash upfront. Apparently they have insisted on upfront payments from their targeted 140,000 Dublin City Council customers. That means (subtracting waivers and refusals) that they have probably already trousered well over €4m in cash for the gig. Greyhound has banked this little nest egg.
What sort of a company demands such massive amounts of cash upfront?
And where is this mountain of cash? Does Greyhound really need it badly? Is it in Ireland or stuffed offshore?
Difficult to say. Greyhound is a silent company. It refuses to communicate with the media. It has cutely opted for the road of unlimited liability. That means that neither its employers nor its customers can inspect its accounts. Worse still, its owners have relocated their shareholdings, offshore — to the Isle of Man. As a result, no meaningful post-2009 information about Greyhound is likely to see the light of day.
So we may never get a picture of Greyhound’s financial health. Whether it is solvent, on the pig’s back, or teetering on the brink. Long live the Isle of Man, the guardian of commercial secrets.
Nor will we be able to compare its solvency with its competitors. Yet we do have some indication of how it rates against them in their relative respect for the law. Very tellingly, last week, the EPA made a damning comparison of Greyhound with its peers.
An EPA spokesman told me that the “number of visits [to Greyhound] and non-compliance is high — for any company”.
Competitor waste companies are obviously not so dismissive of the law as Greyhound, but it does not seem to count when contracts are being dished out. Other more law-abiding waste operators were in the frame, but Greyhound was selected.
How in the name of God did they win the contract?
Especially, as they had previous form. Their experience when they were forced to return €1.3m to Iarnrod Eireann for overcharging, as revealed in 2009, should be sufficient to eliminate them from any future State contracts — local or national.
If that alone was not enough, the devastating words of Dick Fearn, chief executive of Iarnrod Eireann, that “basically the money charged [by Greyhound] did not tally with the actual work done” should have sealed its fate for future contracts.
Not at all. These are State contracts, Irish-style.
South Dublin County Council say they did not know about the CIE scam! Dublin City Council say that they did, but awarded the contract to Greyhound anyway!
Which council was worse?
We also know that there was no competitive tender in either case.
We also know that it was Ernst & Young, the disgraced auditors of Anglo Irish fame, who were awarded the job of finding a waste collector; it chose Greyhound for both councils. We also know Ernst & Young received around €250,000 in both cases.
Nor was there any competitive tender for the Ernst & Young task to find a waste operator. E&Y are on a “panel”.
Consultants like E&Y have had a good week. Last week the Department of Finance agreed, under pressure from AIB, not to tell the Irish people how much they had paid another old favourite — PricewaterhouseCoopers — for work done for the State- owned bank. The usual bull of “customer commerciality” was offered as the excuse.
In Ireland insiders protect insiders. The wagons are being circled. AIB and the Department are re-establishing the old culture of secrecy. Keep the gigs in the family. PwC has milked the bankrupt banking sector. E&Y have been faithful servants of the councils.
Greyhound has responded to its favoured status by seeking blood from its new victims. Hard-pressed citizens claim that its behaviour merited it being renamed “Bloodhound Waste”. It initially refused to empty the bins of 18,000 customers who had not paid the €100 upfront fee and registered with it for collection.
Eventually, as Greyhound began to feel the heat from the Dail, it conceded ground. It began collecting waste from everyone — but by that time it had already extracted the cash upfront from the vast majority of customers.
So there we have it : an outfit with convictions for law breaking; whose latest accounts are not available; owned offshore in the Isle of Man; which has been forced to cough up €1.3m for overcharging; whose charges “did not tally with the work done”; which demands payment upfront.
What an ideal company to sweep the boards in Ireland’s mysterious world of waste.
With qualities like that there is no need for such an outrageous indulgence as a competitive tender.
In the Dail last week, the Taoiseach, Enda Kenny, declined to respond to suggestions that there was anything unusual in giving the contract to such a company.
Nothing has changed.
Maybe the Taoiseach was right. No rivals could possibly compete with Greyhound and offer all these unique ingredients for a State contract, Irish-style.
Concoct a good story. Among your cast of characters include the late lamented auditors of Anglo Irish Bank, a dodgy semi-state transport company, a collection of Dublin city councillors, and an outfit owned by an offshore Isle of Man business.
What would you expect?
Hardly the tale of the 12 apostles? Something a little murkier?
Somehow, that unseemly bunch has regrouped in mysterious business dealings. The unlikely heroes are a collection of Dublin city councillors.
At the centre of the story is a waste outfit called Greyhound. It makes oodles of money. So much that it has decided to hide its accounts from public inspection.
In December 2010, Greyhound adopted unlimited liability status. As a result, Greyhound will not be obliged to reveal its figures. At the same time Greyhound’s owners — Buckley brothers Brian and Michael — transferred their shares to limited liability companies in the Isle of Man.
The Buckley brothers — one a former investment banker, the other an accountant — know their way around. Happily for them, the Isle of Man does not require such entities to publish accounts.
So the wily brethren do not have to publish their accounts while still reaping the benefits of limited liability. Now we will never know how much loot they are making. Rather a pity, because rather a lot of the loot is our loot.
Greyhound is in the news because last month it took over Dublin City Council’s waste collection. Last year it won a gold-plated contract to handle South Dublin County Council’s waste collection service. The Buckley brothers, Michael and Brian, must have thought they had won the lotto.
They had. For the second time.
And how did they win it?
Apparently, this versatile company was selected by a well-known firm of buccaneers in suits, a company that disgraced itself as auditor to Anglo Irish Bank.
Indeed it lost the Anglo audit after its failure to spot the sudden transfer of chairman Sean FitzPatrick’s multi-million loans out of Anglo’s books into the books of Irish Nationwide — every year-end for eight years.
Quite a faux pas from Ernst & Young. They should be in the State’s doghouse. Instead, the same blue-blood auditors are creaming off State work.
For some unknown reason, the former Anglo auditors were employed by the council to choose a new waste firm for its juicy waste contract. For some even less obvious reason E&Y were given an outrageous €250,000 for coming up with the name of Greyhound.
It is far from clear why the council could not pick the waste operators themselves. They have a waste department, presumably with a more specialist knowledge than Ernst & Young. Instead, they lashed out €250,000 of taxpayer’s money to Ernst & Young, the villains of the Anglo fiasco.
What more, in the name of God, does a company have to do to find itself struck off the State’s list of favourites?
If Ernst & Young cannot be blacklisted for their Anglo howler, they should surely have been given the cold shoulder for State or local government work for several years? If they had waved the red flag on Anglo we might never have been left in our financial pickle. They didn’t. Every year for eight years they missed their chance to rumble Anglo.
So the council’s award of a contract to Ernst & Young, and then to Greyhound, demands public explanation. The big question is: how much did Ernst & Young or Dublin City Council know about Greyhound?
Not much. Or so it seems.
Last year, after I became aware of the earlier award of South Dublin Co Council’s gig to Greyhound, I wrote to the council protesting that they were unfit to handle the contract. I had a good reason. Greyhound had already won the lotto — for the first time — a few years ago. They had already milked a semi-state body of lashings of taxpayers’ loot. It emerged in an Oireachtas Transport Committee enquiry that Greyhound’s behaviour over an earlier contract with CIE’s Iarnrod Eireann was disgraceful.
Greyhound had overcharged Iarnrod Eireann. Under questioning, Iarnrod Eireann boss Dick Fearn admitted that: “Basically the money charged [by Greyhound] did not tally with the actual work done.” Ouch.
He went on to say that there were “discrepancies between the amount invoiced and the actual work done”. Ouch, ouch.
As a result of its “dissatisfaction”, Iarnrod Eireann re-tendered the contract. Greyhound lost the gig.
Not only did Greyhound lose the gig, but it was forced to settle with Iarnrod Eireann for a massive €1.3m in compensation for the “discrepancies”. Probably small potatoes for a waste outfit.
It is a puzzle why Greyhound agreed to pony up such a vast amount. The “discrepancies” must have been serious. Luckily for them, Iarnrod Eireann protested that they saw no sign of fraud. The compensation deal was kept under wraps until it was exposed at the Transport Committee.
Nevertheless when the council came to award the waste contract, they would surely have raised their eyebrows on hearing the name “Greyhound”. The alarm bells must have rung as they realised that a fellow State- subsidised outfit had earlier run into a massive spot of bother with Greyhound. Perhaps their chosen consultants, Ernst & Young, had noticed? Well perhaps not. Ernst & Young are not very good at noticing things. They did not even notice when an Anglo bank director transferred millions from his own loan accounts to another bank — eight times in eight years.
There was not even a single eyebrow raised. When I asked the council why they had given Greyhound the contract in the light of the waste company’s explosive blow-up with Iarnrod Eireann, an astonishing reply shot back from a deputy manager.
“Until I received your email no person from the council who was involved in the sale of the council’s refuse service to Greyhound Recycling and Recovery Limited was aware of any previous difficulties between CIE and Greyhound.”
So that was it. The council knew nothing about it. No one in the council had bothered to do a bit of googling. The CIE/Greyhound story had been in the newspapers. It had been publicly debated by the Oireachtas Transport Committee. Yet no one in the council knew a damn thing about it.
Who did they expect to tell them? Greyhound to incriminate themselves? Or the slumbering victims at CIE?
What a tough process the selection of Greyhound must have been! The council says it did not even know of the very public black mark on Greyhound’s record. According to the deputy manager, the contract did not “involve a competitive tender under procurement rules, but instead involved a competitive bid process with interested parties, carried out on behalf of the council by Ernst & Young.”
After I told the council of Greyhound’s history, the deputy manager asked Greyhound for their comments.
Their managing director replied that “an accounting issue was brought to the attention of Greyhound… it was rectified immediately to the satisfaction of both parties”.
An “accounting issue”? Perhaps they should have called in Ernst & Young.
The only opposition has come from much-maligned city councillors whose constituents are now victims of an appalling service from Greyhound. The councillors, led by a long-time adversary of Bertie Ahern — the plucky Mary Fitzpatrick — have challenged Greyhound at every turn. At all stages they have been steamrolled into submission.
Greyhound, CIE and Ernst & Young — all damaged goods — are the clear winners.
Enter Frank Daly, the family man. On Friday morning Nama chief Frank Daly proudly introduced us to his new family. In his interview with RTE’s Morning Ireland he referred to Nama’s membership of the “NTMA (National Treasury Management Agency’s) family”.
Frank was, maybe, a little too euphoric after his warm reception at the Dublin Chamber of Commerce dinner on Thursday night. If the NTMA is Nama’s parent, Frank should head for the nearest orphanage.
Frank has not ‘gone native’ since he joined Nama. He is a born native. But he has taken to the culture of the inside business track with an alarming zeal since he retired as our top taxman. First stop, he took the chair at Anglo. His performance there so pleased the insiders that he was offered the top job at Nama. Now Frank has been embraced into the dreaded ‘NTMA family’.
Frank’s happy family is not quite what it seems to be. It has escaped scrutiny for its role during the banking collapse and our economic armageddon. It is the insider’s new refuge.
Perhaps Frank should look at the powerful “advisory committee” — the guys who head up his NTMA “family”. Did he know that it is chaired by Bertie Ahern’s former Attorney General David Byrne at a fee of €50,000 a year? Mr Byrne was appointed when Bertie was Taoiseach. Did Frank know that Mr Byrne only attended three board meetings in 2010? That makes seventeen grand a board meeting.
Did he know that another member of the advisory committee is none other than Hugh Cooney, who just happened to be a donor to Brian Cowen’s campaign, coincidentally appointed by Cowen when he was Minister for Finance?
Poor Hugh only receives twenty five grand a year. Rather unfair, as he attended all four meetings, more than the chairman who earns double the money. Plenty of room for a family row.
Another member of Frank’s happy family — until last month — was the controversial, but now departed, civil servant Kevin Cardiff.
Nama’s brothers and sisters in the NTMA refuge include mini-quangos like the National Development Finance Agency, the National Pensions Reserve Fund, the State Claims Agency and New Era. Frank’s family is an empire of insiders. Each NTMA family member has its own board, most with political nominees, including of course, Frank’s very own Nama.
So it is entirely appropriate that Frank should be the star speaker at such an august gathering as the Dublin Chamber of Commerce’s dinner last Thursday. His audience was packed with overpaid solicitors, bankers, NTMA posers, estate agents and accountants.
They cheered his words. Why not? Since Frank joined the NTMA family he is looking after most of them very well indeed. Nama’s largesse is keeping bread on the table of plutocrats.
A few weeks ago I stood and stared in wonder at the reception area of a leading Dublin solicitor’s firm. It had marble floors, its welcoming gallery was a vast open space with enough room to fill half a football pitch; the armchairs were heavenly; the view of the Dublin mountains was glorious. All was peace, quiet and prosperity. Outside in the street I could see stress and poverty. When I queried the senior partner about how he managed to pay the rent with the plunge in conveyancing work and the lack of corporate activity he put his finger to his lips and whispered triumphantly the single word “Nama”.
Top accountants, lawyers, re-employed developers and above all, estate agents, are toasting Nama every day of their lives. All the usual suspects are being kept on life support machines by the project headed by Frank.
Nama is feeding the mouths that bit the nation’s prosperity. Its willingness to employ developers, big players in the destruction of Ireland, back in their old job would drive sane men and women to trade union leader Jack O’Connor for inspiration.
The astonishing news, broken last week, that all- time favourites Arthur Cox solicitors has already earned €3.07m from Nama would be staggering if we did not live in the most incestuous commercial country in Europe.
What was Frank’s reaction to the presence at his tour de force last Thursday of Bank of Ireland boss Richie Boucher and former Ulster Bank chief Cormac McCarthy? How can the Nama chairman welcome Boucher, who was a powerful force on the board of the Bank of Ireland, when it fuelled the property frenzy? What on earth had he to say to Cormac, the man who left Ulster Bank while they were reeling with unpaid property debt?
Despite their responsibility for bringing Ireland to its knees neither man is starving. Boucher has a €500,000-a-year salary. McCarthy is already back in business on the board of Paddy Power.
When he shared a drink beforehand with the two bankers Frank Daly probably muttered “thank you”. If there had not been bankers like Boucher or McCarthy there would be no need for Nama. And then Frank would be out of a job.
Frank has joined the insiders. Mutual supporters have regrouped. All one happy family. God help the rest of us.
GO on. Genuflect. The boys and girls from the National Treasury Management Agency (NTMA) are coming to tea.
Go on. Bow and scrape.
These guys are rocket scientists. They are the immortals of the Irish financial world. They have doctorates in derivatives, medals in management and degrees in debt. They salivate at the difference between GGD, GNP and GDP. Bores to beat the band, they float high above the radar, almost immune from financial flak.