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Stench as Rubbish Firm Wins

Posted on: March 8th, 2012

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.