John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Before we begin our meeting, I remind members and witnesses to turn off their mobile phones. Interference caused by them affects the sound quality of the transmission of the proceedings.

I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give the committee. If they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence.

They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable. I remind members of the provision within Standing Order 163 that the committee should refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits or the objectives of such policy or policies.

I welcome Mr. Lar Bradshaw, Ms Eileen Quinlivan, acting chief executive officer, Dublin Docklands Development Authority and Mr. John Crawley, financial advisor, Dublin Docklands Development Authority.

The committee and witnesses should be mindful not to mention anything which might jeopardise current criminal proceedings, specifically ongoing matters regarding three named individuals which are before the criminal courts. In the case of Mr. FitzPatrick, so as to ensure there is no such interference, any references to the aforementioned should be confined to the issue dealt with in the Comptroller and Auditor General’s report.

I ask Mr. McCarthy to introduce his report.

Mr. Seamus McCarthy:

At the meeting of 2 May 2013, I outlined the financial difficulties of the Dublin Docklands Development Authority in 2010, which was the first year in respect of which my office carried out an audit of the authority's financial statements. A key factor contributing to the authority's financial position was the ongoing impact of its participation in a joint venture with private developers to buy and develop the Irish Glass Bottle site.

In October 2006, the authority and its partners in a joint venture company, called Becbay Limited, agreed to bid €412 million to acquire the Irish Glass Bottle site in Poolbeg. Other related expenses brought the total acquisition cost to €431 million, of which €291 million was borrowed. The authority provided equity and loan funding for the joint venture upfront, as well as guaranteeing the repayment of a share of the Becbay Limited loans, which were initially provided by Anglo Irish Bank. Following a deal done with the National Asset Management Agency, NAMA, on 27 July 2011, the final cost to the authority of its involvement in the Irish Glass Bottle site venture was around €52 million. Further substantial costs were incurred by the State when losses on the bank loans were realised.

In October 2006, the authority's management presented to the executive board an assessment of the level of investment, benefits and risks of the Irish Glass Bottle site project. There is no evidence, however, that a detailed analysis of those factors, commensurate with the scale of the proposed investment, was carried out. Management advised the board that the property market in 2006 was overheated but nevertheless recommended the investment for strategic reasons.

The information submitted on 12 October 2006 to support the authority's application to the Department of the Environment. Community and Local Government to increase its borrowing capacity stated the value of the site was approximately €220 million. It appears the authority did not update the Department when it decided to bid almost double that amount. Consequently, consent by both the Minister for the Environment, Community and Local Government and the Minister for Public Expenditure and Reform for increased borrowing and for the authority's participation in the joint venture was evidently given on the understanding that an investment to the value of around €220 million was being contemplated.

The authority did not obtain its own independent valuation when it was deciding on the bid that Becbay Limited should make for the site. In the course of the examination, my office reviewed the management by the executive board of conflicts of interest around the decision to invest in the joint venture. In the case of the decision to purchase the Irish Glass Bottle site, a number of board members disclosed their connections as directors of banks that were providing project finance. The authority took steps to assure itself that its decision-making in the provision of finance was in accordance with its code of conduct. The executive board minutes do not record disclosure by board members of any other personal, professional or business interests that could represent a conflict of interest with the decision to acquire the Irish Glass Bottle site.

Apart from its involvement in development activity, the authority has important planning functions in its geographic area of operation. Certain aspects of this function were also examined, and are reported on in chapter 4 of the special report. Difficulties arose with the development of a planning scheme for the Poolbeg area, where the Irish Glass Bottle site is located. Such planning schemes provide the framework within which fast-lane applications for planning approval are decided. These are referred to as section 25 applications.

The Minister granted an order in June 2007 specifying an area in Poolbeg for which the authority could prepare a planning scheme. Drafting of the scheme was completed in December 2008. The authority subsequently commissioned a review of the scheme prior to submitting it to the Minister for final approval. The review found the preparation of the scheme had not been carried out in a fair, equitable and transparent manner consistent with best practice and that the scheme was not robust enough to be submitted to the Minister. The planning scheme for the area has not subsequently been finalised.

The context in which the review of the draft Poolbeg planning scheme was commissioned was the findings of the High Court in October 2008 in a case taken against the authority on a section 25 application in the North Lotts area. The section 25 application in question related to a development company called North Quay Investments Limited and was submitted to the authority in May 2007. The executive board approved the issuing of a section 25 certificate to the company in July 2007. The basis of the adverse High Court finding was that an agreement entered into in May 2007 by the authority with North Quay Investments Limited was ultra vires, in that the authority should not have entered it in advance of determining the application for the section 25 certificate. Furthermore, the agreement could also be construed as either the authority or its executives committing that the executives would make a particular recommendation to the board. The proposed North Quay Investments Limited development was inconsistent with the North Lotts planning scheme. Non-compliant applications cannot be made compliant by the authority imposing conditions requiring modifications, which it had purported to do. The procedures employed by the authority were unfair as they did not allow adjacent landowners an opportunity to make submissions prior to the section 25 application decision being reached.

The authority's section 25 process was amended following the 2008 court decision. A subsequent review of the revised process found that it was satisfactory. However, the special report indicates that the level of section 25 applications since 2008 had been negligible.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I invite Mr. Bradshaw to make his opening statement.

Mr. Lar Bradshaw:

I thank the committee for its invitation to come before the committee. This is the first time that I have spoken publicly about my time in the Dublin Docklands Development Authority and the purchase of the Irish Glass Bottle site.

From previous minutes of this committee, I noted references to "the absence of others being willing to come here to discuss what happened". I wish to put on record that I agreed to come here immediately following receipt of the invitation from the committee.

Moreover, as members may or may not be aware, I have spent the past three years working intensively with the lawyers of the authority as one of the key witnesses in its defence of the case brought against it by Mr. Bernard McNamara and Donatex. This included producing a comprehensive and detailed witness statement.

In the committee’s last meeting on this topic on May 2, Mr. John Tierney, outgoing chairman of the authority, announced that this case was recently dropped by the plaintiffs, removing a potential €100 million exposure for the State. The plaintiff dropped the suit shortly after receiving the key witness statements, including mine. The committee may also know that, at the request of the authority, discussion of these matters by the committee was effectively deferred until the legal case with Donatex was over. As I was a key witness for the authority, it obviously would have been inappropriate for me to speak publicly until that case had been resolved.

I thank the Comptroller and Auditor General for his clarification of one point, a clarification which he made at the two previous committee meetings, and he has done so again today, when he stated "while management advised the board that the property market in 2006 was overheated, it nevertheless recommended the investment for strategic reasons". This is an important clarification for the committee because, as you know, the actual report which is in the public domain states, both in the overview and again in the body of the report: "The executive advised the board of the authority that the joint venture bid for the Irish Glass Bottle site would be made in an over-heated commercial property market" - full stop.

There is no mention in the report of the very significant fact that the executive was clearly and unambiguously recommending that we should proceed with the purchase and that the board acted on that advice.

I will return to this point later but the failure to disclose this point in the report of the Comptroller and Auditor General, may have inadvertently contributed to some committee members, and others, formulating a negative view as to how our board was run and that the board somehow overruled the executive in deciding to pursue the purchase of the Irish Glass Bottle site. This view is incorrect, as has been clarified three times by the current Comptroller and Auditor General. I would appreciate if the original report could be corrected.

In this opening statement I would like to cover three topics. First, I would like to provide the committee with some context about how I became involved in the DDDA and how I thought about my role and the task ahead, after I initially became involved. Second, I wish to highlight three points from the Comptroller and Auditor General's report which have not been discussed to date, but which I think need to be aired publicly because they explain the Irish Glass Bottle transaction in a broader context. Third, I wish to comment, but only briefly, on what was achieved in the docklands during the ten years that I served as chairman of the authority. I am doing this so that the committee has a better understanding of the context in which to evaluate the decision by the authority to participate in the purchase of the Irish Glass Bottle site.

I am aware that none of the committee has ever met me and none of the committee knows me. Therefore, I would like to take a few minutes to explain why I took on the role of chairing the DDDA, initially for five years, and then for a second five-year term, what my motives and ambitions for the docklands were, and how I thought about the task ahead.

When Deputies Brendan Howlin and Ruairí Quinn, as Ministers for the Environment and Finance, respectively, met with me in late April 1997 and asked me to become the first chairman of the authority, I felt extremely honoured and privileged to have the opportunity to serve on this board. Their description of the task ahead, and particularly the difference in remit to its predecessor, the Custom House Docks Development Agency, CHDDA, greatly appealed to me. The new emphasis, not just on physical regeneration but also social and economic regeneration, represented an exciting prospect for the area. I was brought up and lived the first 23 years of my life two miles up the road from the docklands - in Coolatree Road, Beaumont and my wife's family had lived and worked in the docklands for generations. Her grandfather was a docker and her uncle was a labourer in the docks. It was an area she and I knew well. To be given the task of helping to regenerate the area was a once-in-a-lifetime opportunity, an opportunity which I appreciated and was determined not to squander.

During that meeting, the two former Ministers explained that the target was that the whole area would be regenerated in 15 years, which would be the lifetime of the authority. Therefore, it was immediately obvious to me that things would need to move quickly to achieve that timescale. There was a small number of issues to be sorted out with the Ministers but, once they were sorted, I was happy to accept their invitation to chair the authority.

At my first board meeting, I attempted to set out a first draft of a vision for what we might achieve over the life of the project and what would make it a unique and distinctive success. I have with me a copy of the document I circulated on that day. In my opening remarks I proposed for consideration a number of metrics, or key performance indicators, against which we should hold ourselves accountable and that would define the success or failure of our endeavour. These included the following: the increase in population in the area, the number of homes in the area, the number of people working in the area, the increase in employment levels for the local people, the improvement in participation in formal education of the local population, the level of educational achievement of the local population, the reduction in crime, and some measure of the social capital or well-being created.

This last one was a difficult one to articulate, but what I was trying to get at was some sense of well-being for the community, perhaps best captured by the idea that the docklands would be a truly great place to live, work and play. I called it the "happiness-misery index", with which some Members may be familiar.

Once we agreed on those metrics we then set out to set targets against each one. During that process, I got much advice suggesting that we were being too ambitious and were setting ourselves up for a fall. My view was exactly the opposite. My lifelong experience had been that setting ambitious targets and maybe falling short, nearly always led to better outcomes than managing down expectations and then exceeding them. These metrics and targets were worked up by the council and became enshrined in the DDDA Masterplan, 1997, which was our blueprint. They were out there for all to see and that included the board, the council the wider community and anyone who had an interest. We had nowhere to hide and that is how I liked it.

Of all those metrics, the ones I felt most passionate about were those to do with education. In nearly all my speeches over the next ten years I would refer to the enormous return on investment in education. I used to say that education gives everyone the dignity of choice - about where they live, and where they work and at what they work. Suffice to say that every day for the next ten years, all my board colleagues, the staff of the authority and I, devoted ourselves to trying to deliver that blueprint. Unlike developers in those days, who were busy buying up landbanks quickly and releasing them slowly, I knew that time was against us, and every day needed to count.

Before I was officially appointed as chairman, I made it my business to speak with several of the board of the Custom House Docks Development Agency, our predecessor and an organisation that had established the platform on which we needed to build. This obviously included the previous chairperson. I reasoned that I had much to learn from those who went before me.

There were many challenges and issues that we faced over the years. I would like to briefly comment on two particular aspects of my role: that of chairing the board and chairing the council.

As the committee may be aware, the board consisted of eight members. These were all appointed by the Minister for the Environment. The council consisted of 25 members, all appointed by the Minister for the Environment and drawn from local community leaders, local councillors, professional bodies and various State bodies with land interests in the area. It was my responsibility to chair both the board and the council.

If one thinks about the scope of our brief, which was about social, economic and physical regeneration, and if one consider the metrics, which I have already described, one will quickly realise that the nature of the decisions to be made and the process of decision-making had some unique features which were quite different to any other private commercial companies. Unlike most commercial companies, we could not use one simple measure, such as profit maximisation or increasing shareholder value, to inform decision-making. Frequently, decisions required making difficult tradeoffs across multiple dimensions and affecting and involving multiple stakeholders. As people who operate in the public policy area, members of the committee will all be able to readily appreciate this challenge.

As a result, I knew that there was a real premium in bringing the collective judgement and wisdom of all the board and the executive, to bear on these decisions, because it would require all of those attributes to make those trade-offs. Having worked for 20 years in McKinsey, this would have been my natural style anyway. There were many times that I went into board meetings at the authority genuinely unsure of what the right answer was, but always confident that the collective wisdom would come up with the best answer. In that context I worked hard to create a dynamic in the boardroom that facilitated what I used to call the pursuit of truth and the emergence of the best answer. I encouraged both the CEOs with whom I worked over the ten years to ensure that the board had full visibility of all options, not just management's recommended one. That was our standard practice and the records of the board will show that to have been the case.

I encouraged management to understand that it was all right, even preferable to not always have a shared point of view and that sometimes it was a show of strength to be able to say that there were differing viewpoints at executive level and then to look for board guidance on the option to be pursued. I insisted that all relevant data and facts were available to the board and not just data that supported the executive's recommendation. Too often I have seen how people use data and facts to confirm their hypothesis as truth, rather than look at it in a detached and open manner. People should be prepared to change their hypothesis, if the data or facts suggest something different. I borrowed and tried to instill another one of the values of McKinsey, the firm I had worked for. That was the obligation to dissent - not the opportunity to dissent, not the privilege to dissent - but the obligation to dissent.

So, for example, I would always ensure I heard from everyone when it came to difficult decisions. If that necessitated going around the room one by one, that was what would happen. I needed everyone to know their view counted and that they had an obligation to do the preparatory work to ensure that view was informed.

I tried to instill an environment in the boardroom which was challenging and collegial. When someone asked me recently why a board is required to be collegial, my response was that, ultimately, the board has to make decisions. If a board is challenging and if its members are bringing all of themselves to the discussion, inevitably there will be occasions when, to reach a decision, people have to move from their position and either compromise or maybe completely give up on their preferred way forward.

My experience has taught me that to ensure the long term effectiveness of the board and that everyone is in pursuit of truth and never in pursuit of ego, it is important to create an appropriate level of collegiality to be the glue that keeps the board together. It is a combination of both characteristics, namely, being challenging and being collegial, that is essential for a board to operate effectively.

Before it became fashionable I introduced board evaluation. This included an overall evaluation of the board and peer reviews of each board member and of me, as chairman. I did this in order that we could keep improving and upping our game. I have brought along a copy of the documents that formed the basis of those evaluations. Perhaps after this meeting the committee can get a sense of the kind of behaviours and dynamic we were seeking to inculcate.

Another key task for me was chairing the council and it might be helpful if I told the committee a little about that. If education was going to be one of the distinctive characteristics of this project, the other was going to be the unique governance model. I stand to be corrected, but I believe that no other docklands regeneration project in the world has had the level of local community involvement we have had. While other docklands regeneration projects may have had spin-off benefits for local communities, nowhere else have local communities played such a participative role in planning the regeneration programme. I take no credit for that idea; rather it is to the credit of the legislators who had the vision to design the governance model as they did. However, along with the executive, the board and the council, I did try, with complete commitment and integrity, to honour that intent.

As I mentioned, the council was composed of 25 people representing all key stakeholders. I was absolutely committed to the effective involvement of the council, in particular local community leaders. Even though we worked successfully on many issues over the years, I should point out that it was not without its arguments and, at times, heated discussions. While we would have had different views on many issues, including the nature of leadership for a community leader, I always appreciated the fact that they were happy to roll up their sleeves with me, do the work and bring all of themselves to every discussion.

When we had our first council meeting it became clear that everyone expected it would take a couple of years to work through a master plan that would govern the evolution of the docklands over the next 15 years. My view, which I expressed at the time, was that we needed to complete the exercise in six months. That was simply because, after two years, all the available land would be bought up by developers and the inevitable value that would be created by the master plan and planning schemes would accrue to them and not the communities. In other words, we had what is called a burning platform.

In the event, the council got very involved from the start and, along with the board, everyone worked twice as hard and twice as long, and we completed the master plan within six months. This was really important to me as it was the authority, comprising the executive, board and council, setting out its stall. Every day needed to count for the ambitious plans of the authority to be realised within its 15 year lifespan.

While the legislation allowed for voting at council, it was my fervent wish that we would never resort to it, and I do not think we ever did. The trouble with using votes is that it allows everyone to maintain their position without having to listen to other views and, in the process, maybe fail to explore new and better options that might emerge if everyone realises that consensus has to be reached. I have described these aspects of my role to give the committee a flavour of how I thought about things. No doubt over the coming hours as I answer all its questions, it will get a fuller picture.

The second topic I wish to cover is to outline three important points which are contained in the report of the Comptroller and Auditor General but have not really been discussed publicly to date. I believe they are very important. They are: first, that the State did not lose money as a result of the Dublin Docklands Development Authority's purchase of the Irish Glass Bottle site - in fact it made money; second, the State could have made substantially more money; and, third, a previous decision by the authority in 1998 to acquire the Bord Gáis site had many similar characteristics of the IGB decision and was fundamental to the successful regeneration of the docklands. I would like to elaborate on each point.

On the first point, contrary to popular belief, the State and the taxpayer did not lose money as a result of the DDDA's decision to purchase a share of the IGB site in 2006. In fact, the State made money. The Dublin Port Company, a wholly State-owned enterprise, got 33% of consideration of the IGB site. The DDDA, another wholly State owned enterprise, purchased 26% of the IGB site. As a result, the State manifestly could not lose money. Indeed, the higher the price paid by the joint venture, which included the DDDA and its partner, the more the State would make because the stake the State was selling though the Dublin Port Company was more than the stake the State was buying through the DDDA.

As the Comptroller and Auditor General made clear in his report, the DDDA lost €52 million, which I regret and will discuss later. The report also makes clear that the Dublin Port Company received 33.6% of the proceeds or just over €138 million. This means the State netted just over €85 million net profit from this transaction before any consideration of stamp duty or capital gains tax which also accrued to the State. I want to assure taxpayers that they did not lose out of this deal. The authority did, a point to which I will return.

On the second point, the State could have made considerably more money from this transaction. As outlined in the report of the Comptroller and Auditor General, South Wharf plc, which was the tenant on the IGB site, moved to exploit a legal loophole which would have allowed it to buy out the freehold title from the Dublin Port Company for a tiny fraction of its true value. In the report, under his first conclusion, entitled Protection of the State Interest, the Comptroller and Auditor General states:

The exposure of the State caused by the provision of the 1978 Act had been highlighted by the Land Law Working Group of the Law Reform Commission in 1992 when a recommendation was made that the loophole should be closed off. The continuation of the loophole resulted in losses to the State ... Further losses arose in early 2007 when the Dublin Port Company only managed to secure one third of the sales proceeds from land to which it originally had freehold title.

The Comptroller and Auditor General suggests that the loss was 17% of €412 million, or approximately €70 million, on the basis of advice received from the Department of Transport which indicated that the normal split between landlord and tenant on such a site would be 50-50. Many would suggest that the actual loss was substantially higher, in that a landlord would expect, in similar circumstances, to end up with significantly more than 50% of the consideration for an asset for which he or she holds freehold title. I am no expert, but I am sure the experts can comment.

On the third point, the authority's decision to purchase the Bord Gáis Éireann site in 1998 had many similarities to the decision about the IGB site. It was a similar size site, there were issues of contamination, the project carried significant risk, it was a big decision and the State was on both sides of the transaction. In 1998, there were many naysayers who criticised the authority for exposing the State to unknown liability, namely the decontamination issues associated with the site. However, the authority reasoned it could not leave a contaminated site of huge strategic importance to the master plan to lie festering in the middle of the area. We reasoned that the State was on both sides of the transaction and that this was what we were set up to do, so we purchased the site.

Pages 62 and 63 of the report of the Comptroller and Auditor General outline the financial return of that particular decision. It is in the appendix of the report. Simply put, we spent around €70 million purchasing and decontaminating the site and made more than €200 million between cash receipts of €170 million and social and affordable housing and commercial units delivered to the authority at zero cost. The committee will now know from the metrics I described, against which we measured ourselves that for the board, the financial gain from the transaction in 1998 was not the end but merely the means to the end.

I highlight these three points, which have not been mentioned to date by this committee, to try to ensure there is a balanced approach to the evaluation in hindsight of our decision to participate in the acquisition of the IGB site.

Finally, I would like to briefly mention what was achieved during the first ten years of the authority's life. Many people have contacted me, since hearing that I was coming in here today, to urge me to set out in full detail what was achieved in the docklands during that period. I do not think it is for me to do that today, but I do think that someone independent should do that, in a comprehensive and objective way, and I might return to that in my closing statement.

I am conscious that many members present may not be aware of what the docklands was like in 1997. Let me just say, that it is my personal belief that the docklands has been transformed, and the most important transformation is that which cannot be seen.

There are a number of concerns about the purchase of the IGB site that have been brought up in the report of the Comptroller. I thought it would be more appropriate that members should have the opportunity to question me on each of them rather than for me to deal with them in what I now recognise is a rather long opening statement. I am now ready to assist the committee in any way I can and I would be pleased to answer members' questions. When members have finished questioning me I will make a closing statement.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw. Could we publish his statement?

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw for attending this afternoon's meeting. Is it correct that he was chairman of the board for ten years?

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How much time did Mr. Bradshaw invest in the role during the period?

Mr. Lar Bradshaw:

In the first year I spent roughly half my time because we had inherited the Custom House Docks Development Authority, CHDDA, organisation but we needed to set up an organisation that was fit for purpose. As members are aware, CHDDA was in charge of 25 acres and involved physical redevelopment whereas we had 1,300 acres and our remit involved social and economic redevelopment as well as physical redevelopment. In my first year I spent roughly half my time getting a management team together.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How much time did Mr. Bradshaw spend as chairman in the latter part of his tenure?

Mr. Lar Bradshaw:

It would have been a lot less. I attended monthly board meetings and prepared for that. I spent time with the chief executive before all board meetings. We had six council meetings a year and I prepared for them. I was available for any ad hoc meetings with management but the time required was considerably less.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did Mr. Bradshaw enjoy the work?

Mr. Lar Bradshaw:

Absolutely.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How much time per month did Mr. Bradshaw spend with the chief executive of the Dublin Docklands Development Authority, DDDA?

Mr. Lar Bradshaw:

Traditionally, I would meet him a week before the board meeting and we would go through all the issues. We would shape the agenda and include all the items we wanted to put on it. If I felt work needed to be done to carry out the proper analysis behind options, we would discuss all of that. That was the key meeting before the board meeting. I might be needed for other meetings but it would have been the equivalent of no more than a couple of days a month.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I wish to focus on the subject of meetings. The particular sequence of meetings I wish to examine are the meetings of the board that began with the sub-committee board meeting on 5 October 2005, and the three subsequent full board meetings that took place on 3, 20 and 24 October. I will base my questions on the minutes that were supplied to us and to any reference made by the Comptroller and Auditor General in his report.

First, at the board sub-committee meeting on 5 October, 2005 it is my understanding that Mr. Bradshaw, Mr. Seán FitzPatrick, Ms Mary Moylan were listed as being present and Mr. Paul Maloney and Mr. Neil Mulcahy were listed as being in attendance. Am I correct in that regard?

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Am I also correct that the meeting took place on 5 October 2005?

Mr. Lar Bradshaw:

I assume so. It is a long time ago but I have no reason to doubt it.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was the purpose of the meeting?

Mr. Lar Bradshaw:

To answer that question I will have to go back a little bit. I will give the committee so much information and I would like everyone to pay attention to what I say.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I assure Mr. Bradshaw of our attention.

Mr. Lar Bradshaw:

I thank Deputy Donohoe. I already mentioned the issue of the legal loophole and how it came to pass that the Dublin Port Company ended up, despite the fact that it owned the land, with a third of the consideration. I want to share with the committee some very important facts. Paul Coulson, who was the chairman of South Wharf-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Could I interrupt Mr. Bradshaw for a moment? Is Paul Coulson the PC referred to in Next Steps 5.(c)?

Mr. Lar Bradshaw:

Yes. I know the Comptroller and Auditor General has said it is worrying that there are initials. Deputy Donohoe is probably referring to that. I do not have it in front of me but I understood there would be a screen and information would come up. I do not want to be searching for lots of material. Deputy Donohoe is welcome to give me any other initials contained in the minutes and I will give the names. For example, there is a reference to EC.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is. We have an EC.

Mr. Lar Bradshaw:

That is Enda Connellan, chief executive of the Dublin Port Company.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have a PM.

Mr. Lar Bradshaw:

Paul Maloney, chief executive of the authority.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I assume that MM is Mary Moylan.

Mr. Lar Bradshaw:

Yes. I do not have the date because I am working off exactly the same material Deputy Donohoe has. I asked the secretariat to provide me with everything members have so we are working off the same data. In late summer 2005 Paul Coulson rang me in the authority and he explained to me that all trust had broken down between South Wharf and the Dublin Port Company.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When Mr. Bradshaw says Mr. Coulson rang him in the authority, could he just explain who he was please?

Mr. Lar Bradshaw:

I am sorry. Paul Coulson was the chairman of Ardagh, a company involved in glass manufacturing. At some point – do not ask me when, but I am sure people can check it – the company was split into two companies; one a glass company and the other effectively a company called South Wharf and all it had was this asset, its tenancy in this asset.

He rang me in late summer 2005 and said to me that all trust had broken down between South Wharf and the Dublin Port & Docks Board. He asked me, as chairman of the authority and someone who would clearly have a desire that the impasse would be broken between the two parties and the land would be developed, if I would mediate between both parties as the chairman of the authority. During the telephone call he also informed me of the legal loophole. Is everyone familiar with it?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to check that the legal loophole to which Mr. Bradshaw is referring is the one he referenced in one of the latter points in his submission.

Mr. Lar Bradshaw:

Yes, that is correct. He informed me of that and that he could effectively set up a subsidiary company – I think he had already done that – to buy out the freehold, in other words what the Dublin Port Company owned, for a multiple of what effectively was a peppercorn rent that the Dublin Port Company was charging at the time. I assume it was charging that peppercorn rent when South Wharf had hundreds of employees down there producing glass.

He also told me during the call that as long as he produced three bottles a day he would not be in breach of his lease and therefore he could buy the freehold. When he asked whether I would be prepared to mediate I responded that I would be happy to help if both sides wanted me to do it, but that I did not believe it was right for him to do it. I think the expression I used to him on the call was something like – please do not take it literally, I was speaking metaphorically – that he effectively had a bullet in a gun and he was pointing it at the State, that is, the threat that he could exercise this legal loophole. I told him that I did not think it was right for him to do that, and what was more, that I felt that my view would be shared by the business community at large. I said that I would be prepared to mediate but only if he put the gun down, metaphorically speaking of course.

He replied that he had a duty to his shareholders to maximise the value of South Wharf. I replied that I would not be willing to mediate unless he desisted from the threat because I really did not believe he would exercise that threat. The conversation ended. I cannot swear to it but I think there was a board meeting because for some reason I have it in my head that he actually rang me on my telephone number in the docklands. At the earliest opportunity I informed the board fully of the phone call. Sometime later – I think it was maybe about a month later – I received another call from Paul Coulson. This time he had a different suggestion. He proposed that the authority should purchase the Dublin Port & Docks Board interest in the site and then we could sit down together and negotiate a deal because trust had broken down.

There were legal cases flying back and forth and he reiterated the trust was gone and so on. I told him that I thought the board of the authority would be happy to consider such an approach but I would only be prepared to discuss it with the board after he had given me his word that he was dropping his threat of using this legal loophole. Let me just say we had a fairly heated discussion.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why?

Mr. Lar Bradshaw:

Without getting into too much detail, he was telling me reasonably forcefully how I should think about the situation. I cut him off and told him that I was a busy guy with a full-time day job, a pretty busy part-time job and two small children and a wife, who I did not see very often. I asked him why would I put the authority in a position in which we would buy out the port for the interest - for obviously a significant amount of money - and then were sitting with the gun pointing at us. I did not want anyone to tell me how I thought about it as that is how I thought about it and so the conversation ended. As is my wont, I reported that conversation to the board at the very first opportunity. I do not have the minutes of those meetings but I am sure the authority can get those minutes and I am sure that when all the rest of the board members appear before the committee, they will be able to confirm this. I did not expect that we would have any change of mind on that but in the second conversation with the board, the board actually said that perhaps there is a role for the authority and perhaps there are some options for the authority that could be in the interests of the authority in terms of its remit. Deputy, this is the genesis of-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This meeting?

Mr. Lar Bradshaw:

Correct.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Lar Bradshaw:

What we then did was we agreed to set up a sub-committee to explore whether there were options that could be in the interests of the authority.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

May I ask Mr. Bradshaw a number of questions in light of what he has just said to members about the minutes of the meeting? A sentence in the middle of section 3 of the notes of that meeting states that "following a full discussion, it was agreed that the Authority should offer itself as an arbitrator/negotiator to broker a deal between the two parties". The two parties to which the minutes refer are Dublin Port and the company that was run by Mr. Coulson.

Mr. Lar Bradshaw:

Correct.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was that company's name again?

Mr. Lar Bradshaw:

South Wharf.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw. The sentence then goes on to state one "would see the development potential being unlocked for development by PC [that is Mr. Coulson] with the Port either receiving a capital payment or a percentage of the profits representing the value of its interest".

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw is referring to the role this site could have played in unlocking both the site itself and the land around it from a development point of view. The minutes go on to state, "it would be better if it could be orchestrated so that the Port requested the Authority to undertake this role". Mr. Bradshaw should explain what that sentence means.

Mr. Lar Bradshaw:

I think it is a very poorly worded sentence. The minutes were written by Neil Mulcahy. I also am racking my brains to remember exactly what that meant but I think what was important to us was that we were not foisting ourselves on anyone. It was important that both South Wharf and Dublin Port would request us to mediate. I had no interest in any mediation for anyone who did not want to be mediated. Consequently, I think what it is referring to is that given South Wharf had earlier indicated it would like us to do it, that the port should do the same thing

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If I could restate it briefly, just to make sure I understand him, Mr. Bradshaw is saying he wanted the board to play a role if it was with the joint agreement of the other two parties. Is that correct?

Mr. Lar Bradshaw:

That is fair enough but just to be very precise about it, when I went back to the board in the second meeting, I had had a very fractious discussion and frankly, I thought that was the end of it. It was the board in discussion, as some people were saying there could be, so when the Deputy says "Mr. Bradshaw", I think he is referring to the board and the authority.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is correct. Thereafter, in this meeting, which took place after the fractious discussion to which Mr. Bradshaw referred, on 5 October, in the second sentence of section 2 it states "the potential development profit varied from €358 million to €1.1 billion." For whom was that profit?

Mr. Lar Bradshaw:

I guess they would have been estimates at the time. It would have been for the owners of the site. As far as I was concerned, I thought the Dublin Port Company should own it all because it had the freehold. However, we are all aware of what happened with hindsight, in that South Wharf ended up with two thirds of it and the Dublin Port Company with one third. They were the two stakeholders, to use that word, of the site. We were there thinking about whether we could mediate and part of that was trying to figure out if there was going to be room for a mediation.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The development profit there is referring to the then current owners of the site, as opposed to the potential owners of the site in the role of the Dublin Docklands Development Authority.

Mr. Lar Bradshaw:

Yes. In other words, if the two parties suddenly made up and, in a hypothetical situation, developed it together, based on whatever estimates the chief executive had made on looking at various assumptions, this was what they could have expected according to the chief executive's analysis at the time, ranging between those two figures. I think that higher figure was something that Enda Connellan had suggested and I think it goes on to state that independent valuation might suggest that the lower figure was closer to the mark.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I wish to probe this figure and its provenance again. Its origin is on a sheet that was circulated by Mr. Paul Maloney, who was the chief executive of the authority at that time, entitled, Issues and Options. Can Mr. Bradshaw confirm to whom that profit figure on the sheet referred?

Mr. Lar Bradshaw:

I do not have that sheet; I have precisely the same as the Deputy. However, my understanding is Paul Maloney is suggesting that were the current owners to go ahead and develop the site, based on certain assumptions regarding plot density and the mix between commercial and residential and what price everything would sell for in the end-use market, the development profit would be somewhere between those numbers.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw for the background he has given in this regard. I will move on to a meeting in the following year on Tuesday, 3 October 2006. It was the 139th meeting and took place in San Sebastian. Can Mr. Bradshaw indicate to me what happened in the interim? As a year had elapsed, he should inform the committee what had happened during that period.

Mr. Lar Bradshaw:

If members look at the Next Steps section, at the bottom there is the sub-committee. Obviously, we set up a sub-committee and met to discuss. My recollection, which the committee can confirm if and when the chief executive appears or Neil Mulcahy or whoever, is that Paul Maloney and I met Enda - I think at the end of a council meeting.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Who is Enda?

Mr. Lar Bradshaw:

Enda Connellan was the chief executive of the Dublin Port Company and he sat on the council of the authority. My recollection is that we had a meeting with him to discuss whether the port would be interested, where were they at, what was the situation and would they be interested in us mediating. The other thing that is clear from this is we gave up any hope of ever buying the site, given this discussion here, and we felt the key role we could play at this point was to mediate.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Lar Bradshaw:

Members will see the minutes state "contact EC and the port to agree position (PM)", that is, Paul Maloney. I think Paul and I met Enda at the end of a council meeting to discuss what the port wanted to do. I am fairly sure that I rang Paul Coulson - that is the bit at the bottom "LB to contact PC", that is, Paul Coulson. I never met him. I think he was then abroad but I do recollect that Paul and I met their advisers, who were Jones LaSalle.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just want to double-check this. Apart from the dialogue Mr. Bradshaw had with Mr. Paul Coulson in respect of this site, did he have any other relationship with him?

Mr. Lar Bradshaw:

I note this has come up in the media and I will tell the Deputy exactly every interaction I had with him.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am just referring to the comment Mr. Bradshaw made that he never met him and did not know him.

Mr. Lar Bradshaw:

I am sorry?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am referring to an earlier comment by Mr. Bradshaw regarding his relationship with him. Could he clarify what his relationship with him was?

Mr. Lar Bradshaw:

When I said I never met him? I do not think I said I never met him. I met him once physically at an Anglo Irish Bank annual golf outing. I think it was in the summer of 2005 but I do not know. I was introduced to him and he sat at the same table. There were maybe 200 people at it. I do not know. I had just joined the board of Anglo Irish Bank and he was at the same table. That is the one time I met him in a social situation. It is the only time I physically met him.

I then refer to the two phone calls about which I have told the Deputy. Looking at the same notes the Deputy has, I think I rang him as a follow-up because that is one of the next steps here and if I was asked to do it, I would do it. He was not available but he suggested we meet his advisers, which we did. I want to put on the table that mention has been made of the fact I had a business relationship with Paul Coulson. I did not. I was an investor in a syndicate put together by CBRE and Anglo Irish Bank in a property investment. This was a passive investment. There were many investors in it. I have tried to discover whether by the time the IGB purchase came up, I actually knew that he was one of the investors. I cannot say with certainty but I would like the committee to assume I did. I think that investment was originally made around May 2005.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is Mr. Bradshaw asking us to assume?

Mr. Lar Bradshaw:

I think the committee should assume and I want to assume that I knew he was an investor. I am not sure and cannot honestly say that I knew at that time but I want to take the worst case scenario and for the committee to assume that I did know. At the time when we get on to the October meetings and the purchase of the IGB site a year later, I would like the committee to assume that. Am I confusing members?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw is not confusing me at all.

Mr. Lar Bradshaw:

Please assume that I was fully aware that he was an investor in that syndicate, as was I. I just cannot say with certainty that I knew at that time. I clearly know now and could have read it in the newspapers or maybe I did know. Let us all assume that I knew.

I was a passive investor in that investment. This was a property syndicate, I was one of the investors and it turns out he was one as well. It was a passive investment. Once a year, CBRE would send us an update on what was happening. I never met Mr. Coulson, never discussed it with him and had absolutely no role in it. I assume he had no role in it.

When we come to the IGB purchase, with all due respect, if anyone would like to suggest that I had a conflict of interest because of that passive investment, my view - members are all welcome to their views - is that I most certainly did not have a conflict of interest. I had nothing to gain by any actions I took around the purchase of the IGB site. I hope it is pretty clear from the two conversations I have described to the committee exactly what my position was.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am just asking questions to establish everything and Mr. Bradshaw is answering them clearly. I want to restate for the record that the totality of the contact that Mr. Bradshaw had with Mr. Coulson consisted of meeting him at one social event organised by Anglo Irish Bank and the dialogue relating to the purchase of this site.

Mr. Lar Bradshaw:

To be very precise, the two telephone calls he made to me about mediation and my follow-up phone call to him as a result of this meeting when he was not available constituted every interaction I had with him.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

So we have everything that happened between Mr. Bradshaw and Mr. Coulson?

Mr. Lar Bradshaw:

Yes. Deputy Donohoe asked a question about what happened. My recollection is that Paul Maloney and I met the chief executive of Dublin Port Company, Enda Connellan, and also met the advisers to South Wharf. The upshot of those two conversations was nothing. I will be perfectly honest with the committee. I was not too excited about this because I had quite a fractious discussion with Mr. Coulson and subsequently heard from a number of different sources that he found me very difficult to deal with. I was not particularly excited about spending my time trying to mediate unless people wanted to be mediated. My feeling was that the minute we suggested the discussion and mediation with the Dublin Port Company, Enda Connellan as CEO said, and I can understand why he would do so, that this was worth a huge amount of money. When we met Mr. Coulson's advisers, they were very friendly but did not seem particularly interested so that was the end of it. That is why there was only one meeting of that sub-committee. It went nowhere.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Things had changed then but when we get to the meeting of 3 October, what had changed was that the board had made an assessment that it would be worth being involved in the purchase of this site and a discussion ensued in respect of that. Could Mr. Bradshaw briefly tell me what caused that change?

Mr. Lar Bradshaw:

That was October 2005, so it was a year later.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It was 3 October so it was just under a year.

Mr. Lar Bradshaw:

A few things happened. The first is that I think there was an announcement in June 2006 that Dublin Port Company and South Wharf had reached an agreement whereby it turned out that South Wharf would have two thirds of any consideration and would sell this asset. I am sure people have the record of all of this. I have done a good deal of research in preparation for this meeting since I was invited to it. I think it is in the public domain that there was an agreement that it would sell it provided it exceeded a reserve price of €250 million. That is the first thing that happened. We now knew the site was up for sale. A council meeting was then held in July when this topic came up for discussion and it was agreed that the executive should explore options for whether we should participate in some way in the purchase of the site. My personal view was that it would be a really good idea if the authority could get into some ownership. We clearly were not going to be able to afford it on our own. We can get into all the reasons why we might have wanted to participate but one of the things that really mattered to me was that we had been the underbidder to the Fabrizia site next door to it in 1997 or 1998. It was a ten-acre site with the AIB sports complex and was next door to the IGB site. In 1997 or 1998, we had been the underbidder on that site and it had been purchased by a developer around the same time as we purchased the Bord Gáis site, which is the site on Sir John Rogerson's Quay. Ten years later, which brings us to July 2006, it was fairly clear what had been achieved on the Bord Gáis site we purchased but nothing had happened on the site for which we had been the underbidder in 1997 or 1998.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To sum it all up, agreement had been reached between the two parties regarding the IGB site, which was the dispute we discussed earlier on, and Mr. Bradshaw's experience with a previous piece of land in the area made him committed to seeing what role the board could play in the acquisition of this site in the future.

Mr. Lar Bradshaw:

I know the Deputy would probably like to move me on but I really want to get all this out. The nightmare scenario was that the site would be purchased by the same company which owned the other site on which nothing had happened and that we could be facing another ten years of nothing happening.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We move to this board meeting that took place in the DDDA office at 4 p.m. on 3 October. Section 3.1 of the notes of the meeting contains two sentences stating that the chief executive briefed the board on the confidential negotiations which he had undertaken with a developer who had indicated an intention to bid for the site and that the developer confirmed that he would welcome the involvement of the authority jointly in tender. Could Mr. Bradshaw confirm who that developer was?

Mr. Lar Bradshaw:

On 3 October - I could be wrong here and the Deputy will have to check this with the chief executive; the Deputy is asking me a straight question and here is a straight answer - I think that was Sean Mulryan. I do not think it was Bernard McNamara.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did Mr.-----

Mr. Lar Bradshaw:

I could be wrong.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just want to check. The chief executive we are referring to at this stage was Mr. Paul Maloney.

Mr. Lar Bradshaw:

Correct.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the meeting did he not reveal who the developer was?

Mr. Lar Bradshaw:

I just cannot recollect. I can tell the Deputy the situation that the first developer - by the way we approached them, which is another question that I notice has come up before - was Sean Mulryan, not Bernard McNamara.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the board meeting, was no inquiry made as to who the developer was? To be specific, it states that the chief executive had "confidential negotiations which he had undertaken with a developer".

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did the board not ask who that developer was?

Mr. Lar Bradshaw:

I can only tell the Deputy what I recollect. At some point Bernard McNamara became the joint venture party and I do not have the exact timeline of when we moved from Sean Mulryan to Bernard McNamara. I just honestly cannot tell the Deputy whether by 3 October that transition had happened. I am wondering whether it is germane to where the Deputy wants to go, but I can tell him, and it is information he may not have been aware of, that the first developer we spoke to was Sean Mulryan. The second developer we spoke to, after Sean Mulryan had decided he did not want to continue, was Bernard McNamara. I do not know the date of when that transition happened. So there are-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to be very clear on this. Is Mr. Bradshaw telling me that the information was not shared with the board in this meeting or is he telling me the information was shared but he cannot remember?

Mr. Lar Bradshaw:

I note from one of the previous meetings, I think it was when the committee had Mary Moylan in here, she said she could infer who it was and I just cannot remember. I do not know. If I knew that he had said it was Bernard McNamara or Sean Mulryan, I just cannot remember that.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to be very clear on this point. Is Mr. Bradshaw saying he cannot remember if he said it or that he said it but Mr. Bradshaw cannot remember what he said?

Mr. Lar Bradshaw:

I cannot remember what he said. I have to be honest with the Deputy. I cannot remember. He clearly made some statements that some people - Mary Moylan, clearly, from the committee's last meeting - could infer who it was. Maybe he said it because the developer obviously wanted some confidentiality. I am now telling the Deputy, many years later that we originally spoke to Sean Mulryan and at some point Paul moved to Bernard McNamara. That was the sequence. I just do not know whether by then-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At some point Mr. Paul Maloney moved to him.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is Mr. Bradshaw saying that it was the chief executive who made that decision?

Mr. Lar Bradshaw:

No. What happened was-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw said: "Paul moved to Bernard McNamara".

Mr. Lar Bradshaw:

Yes, I did because as I recollect it at some point, Sean Mulryan decided he was no longer interested in being joint venture partner with us, having initially indicated that he was potentially interested. Then we moved on. Paul approached Bernard McNamara. That is the sequence.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I wish to move on to paragraph 3.2 of this document, which I will read into the record.

After a careful consideration of the proposal and subject to being satisfied that the proposed involvement of the authority in the tender process and that the future development of the site would not breach public procurement rules, the board agreed that the executive would open negotiations with a potential tender partner with a view to formulating a joint bid.

Mr. Lar Bradshaw:

It was after this meeting.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

So the advice on public procurement was gained after this meeting.

Mr. Lar Bradshaw:

I think it says there "and subject to being satisfied that the proposed involvement would not breach public procurement". It is a long time ago but I think it is pretty clear that we would have got the advice afterwards.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is that not putting the cart before the horse? The board was having a meeting regarding a bidder and Mr. Bradshaw is telling me he cannot remember who the bidder was. However, it is fair to assume there was a single bidder. Then he is saying they went to get advice on public procurement after this meeting.

Mr. Lar Bradshaw:

Yes. Just to explain the reality, it is a relatively short period of time from 3 October to whatever. I think the deadline for the bid or to put in the tender was 25 October. One has to start somewhere. One could ask after all this time, should we not have gone and got public procurement advice, but if we had started hiring lawyers to give us that advice and we were spending money, found it was okay and then went and found out that no one was interested in being a joint venture partner with us, we would have just spent more money with lawyers to find out something that was irrelevant. One has to sequence things somewhere and I think it is, frankly, quite logical that one might say, "Let's see if this is even going to be in the realms of the doable", before one would start going and getting legal advice. I hear the Deputy's question, but-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This is a fundamental point. A year had elapsed between the sub-committee meeting and this meeting. The sequence is as we just discussed. The chief executive, Mr. Maloney, walked in and referred to a single bidder and the board subsequently got advice on procurement policy. Should it not be the other way around?

Mr. Lar Bradshaw:

I will just say it again. I think in a kind of a practical way one is there saying: "God, it'd be great if we could have some involvement in this site." I can get into all the reasons having ownership is a good idea. One is saying: "But how realistic is that going to be? Are we going to be able to have joint venture partners?" So one has to start somewhere. I hear the Deputy's criticism. Personally, I think it was a pretty pragmatic approach to say: "Let's find out if this is even going to be doable before we get legal advice." We had not committed ourselves to anything. The Deputy can say we should have done it the other way and should have paid for legal advice. I respect his view but I do not agree with it. I think the way we went at it was a pretty pragmatic approach, to be honest. The other point about it is there were a lot of developers and there were a few developers whom I think the authority would have been comfortable trying to enter into a joint venture with around something like this. There were some developers whom I do not think we would have been comfortable with.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Would that not have been all the more reason to get advice on procurement policy? This was a vast project.

Mr. Lar Bradshaw:

I hear what the Deputy is saying and I am just going to have to tell him that I think the sequencing we did, that is what we did anyway. The Deputy can come to a view that says that was an inappropriate approach and we should have spent the money on legal advice, even if after spending the money on the legal advice - and as the Deputy now knows there were no public procurement issues - we then found that no one wanted to be a joint venture partner. I am just telling the Deputy what we did.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I stress I am not making any conclusions at this stage because we want to talk to everyone.

Mr. Lar Bradshaw:

Sure.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am just asking Mr. Bradshaw questions to get everything out in the open.

Mr. Lar Bradshaw:

Fair enough.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He is answering all my questions and I thank him for it. I wish to reconfirm something. Regarding the confirmation of who the developer was, it is Mr. Bradshaw's recollection that the board was not informed at that meeting. Is that correct? Is he unsure on this?

Mr. Lar Bradshaw:

The Deputy can correct me if I am wrong, but I think in the previous minutes, which I have read, Mary Moylan said she could infer. That makes me feel that Paul may have said it is so-and-so. I am just telling the Deputy that I cannot be clear. I am telling him new information here. I want to tell him everything that he might want to know.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to find out everything.

Mr. Lar Bradshaw:

I can tell the Deputy that I know the first person was Sean Mulryan and at some point he was no longer interested and we moved on to Bernard McNamara. I just do not know the date. I think the Deputy should ask Paul Maloney that and all the others. They may be clearer on who it was. I just cannot, with my hand on my heart, tell the Deputy that I can say with certainty that at that point on 3 October it was Bernard McNamara and not Sean Mulryan. I just cannot tell him that with certainty.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I move on to the next meeting that took place at 8 a.m. on 20 October.

Section 1.2 of the meeting's minutes confirms that the authority was in negotiations with Mr. Bernard McNamara regarding a joint venture agreement to purchase the Irish Glass Bottle, IGB, site. At some point between 3 and 20 October, the board was presumably informed that it was Mr. McNamara.

Mr. Lar Bradshaw:

I am not sure if the board was informed. If it was, it would have been by either Mr. Maloney or me. I certainly knew; Mr. Maloney would have informed me.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Between 3 and 20 October.

Mr. Lar Bradshaw:

Yes. I would definitely have known. I do not believe that Mr. Maloney would have done that without telling me that Mr. Sean Mulryan was no longer interested and proposing a move. He would not have done that without checking with me. I would have said that it sounded good. I cannot remember whether I communicated that individually to the board members. Therefore, I cannot say whether they all knew before. We did not have a board meeting between 3 and 20 October.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is fair for me to say that, at that meeting, the collective board was informed that it was Mr. McNamara.

Mr. Lar Bradshaw:

Correct.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is also significant about the minutes of the meeting is that the figures for how much the site was worth began to come into play. According to a sentence in section 2.1, the board agreed to an upper limit of €375 million. From where did this figure come?

Mr. Lar Bradshaw:

Many valuations were flying around. Consider the minutes of the board meeting on 3 October where a paper was presented. I do not have the minutes in front of me, but I have noted some of the key points. I believe I am right in saying that, according to the paper, a 2005 valuation suggested a value of more than €300 million on a 3:1 plot ratio, but that prices would have increased substantially in the year and a bit since then. Based on recent transactions, the paper suggested a probable value of more than €350 million. According to a sentence in the paper, advice had been given informally suggesting that tenders would reach €400 million. All of this happened before 20 October. These statements were made in the paper to the board on 3 October. These were the numbers that were floating around.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To ensure that we are discussing the same figures, Mr. Bradshaw is referring to paragraph 4 of the document entitled, "Development site at Poolbeg".

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Was independent verification of these figures sought at any point?

Mr. Lar Bradshaw:

This question has arisen. My recollection is that the authority never got a formal independent valuation in the October period.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why not?

Mr. Lar Bradshaw:

We should have. After reading the minutes of previous meetings and the Comptroller and Auditor General's report, I racked my brains trying to figure out why we did not.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did no one on the board suggest it?

Mr. Lar Bradshaw:

I do not recollect. I can only be honest - we probably assumed that there was going to be one. Valuation is down to the assumptions that one makes. There are approximately five key assumptions when one values a site, those being, density and plot ratio, the split between commercial and residential, end use prices, that is, the amount that someone will pay for a house, construction costs and preferred profit margins on the development. Many valuations were flying around.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the midst of all of those valuations flying around, no one on the board recommended getting an independent valuation to arbitrate between the-----

Mr. Lar Bradshaw:

I want to be sure that I do not do a disservice to any other board member, but I did not. I am pretty sure that I never asked for a formal independent valuation.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why did Mr. Bradshaw not do so?

Mr. Lar Bradshaw:

I probably should have. Reverting to the paper on 3 October, we had received informal advice to the effect that the tenders would exceed €400 million. Never for a minute did I consider that, if this was what agents were advising informally, they would advise differently if we paid them €50,000 to write it down on a bit of paper.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw has answered the question for me. I want to knit together earlier testimony to the committee, including that of Ms Mary Moylan, regarding the nature of the relationship between the board and the then Department of the Environment, Heritage and Local Government. A letter supplied to the committee by Ms Moylan at one of our previous meetings is dated 12 October 2012. It is from Mr. Paul Maloney to Ms Moylan. Could we provide Mr. Bradshaw with a copy of the letter?

In the section on the proposed bid, found on the second page, the first sentence states that the extent of the capital commitment necessary to be paid by the authority and its development partner in the event of a bid being made for the joint site was estimated to be in the region of €220 million. The chief executive wrote to the Department on 12 October and cited a figure of €220 million, but reference was made to €375 million at a meeting on 20 October, a variance of €155 million. Will Mr. Bradshaw explain the gap?

Mr. Lar Bradshaw:

The Deputy does not need to wait for 20 October. By 3 October, it should be clear from the paper to the board that the numbers under discussion were substantially higher than €220 million. I hear the Deputy's question, but I do not know why the chief executive wrote the letter like that. I do not doubt that Mr. Maloney will be able to explain to the committee why he wrote it that way. I do not think that was a correct approach. He should have said that, for the avoidance of doubt, the number under discussion was considerably higher. My personal view is that the letter should not have included the number, as we were in a sealed tender bid situation, but that sentence in the letter is misleading.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. McCarthy would like to contribute.

Mr. Seamus McCarthy:

I wish to raise a point on the valuations and quote paragraph 3.27 from the report:

In June 2005, the Authority had obtained an independent valuation of the property which placed a value of €240 million (exclusive of VAT) on the site. This was reported to the Board on 20 October 2006 as being based on an assumed plot ratio of 2:1. Two internal appraisals were carried out by the Authority in 2005 and 2006, which valued the site at €303 million (based on a plot ratio of 3:1) and €264 million (based on a ratio of 2.5:1) respectively. However, the Authority did not obtain any further independent valuations of the site prior to the bid being placed...

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My question still stands. As the Comptroller and Auditor General has elaborated, a number of internal valuations placed the site's value at approximately €300 million. However, a communication to the Department of the Environment, Heritage and Local Government cited a figure of €220 million. Even though the letter is named from Mr. Maloney, he mentioned what was necessary to be bade by the authority. According to him, the authority was asking that the enclosed be taken to represent official notification to the Minister under the code so that the authority could proceed. Mr. Bradshaw was chairman of the authority.

Mr. Lar Bradshaw:

That is true. I did not see that letter before it went. That letter is addressed to Mary Moylan.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Lar Bradshaw:

I will be honest with the Deputy, and I can get into the details of why. Mr. Paul Maloney was writing to Ms Mary Moylan, who was number two in the Department and was the assistant secretary-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

She was also a member of the board.

Mr. Lar Bradshaw:

Yes. She is a person of the highest integrity and the highest capability. She was sitting at the board table on 3 October when we were discussing a higher number than was mentioned in the letter. That letter is poorly phrased, but you will have to ask the chief executive. You may say I should have seen it before it went. I have to be frank: I do not think it is my responsibility to edit a letter from the CEO to another member of the board in his or her capacity in the Department. If there had been any issues between Ms Mary Moylan and Mr. Paul Maloney I would be confident that one or other of them would have brought it to my attention.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This is the most fundamental aspect of it, though, as the letter was looking for ministerial consent to go ahead and borrow.

Mr. Lar Bradshaw:

To increase our debt capacity, yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To increase the debt capacity. I thank Mr. Bradshaw for the prompt. It sought a green light to go ahead with the proposal.

Mr. Lar Bradshaw:

Yes. Ms Moylan explained this in great detail when the committee asked her about this at the last meeting at which this was discussed. The letter was sent. I am saying to you honestly that I do not think that letter is well phrased. I think what it should have said is that the capital outlay would be significantly higher than the valuation we had done a year ago at €240 million or whatever. That is what I think should have been in the letter. I did not see the letter before it went. I think - I am extrapolating a little bit, so help me with this - that at the board meeting on the 20th, as can be seen near the end of the minutes - I do not have them in front of me - there was a reference to the letter and to the number. There was a discussion about the fact that the plot ratio was different. Do you see that under the 20th? I think what happened is that the letter was sent and it was included in our pack. It went on 12 October from Mr. Paul Maloney to Ms Mary Moylan. On 20 October, in the board pack that we received, there would have been-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What does Mr. Bradshaw mean by a board pack?

Mr. Lar Bradshaw:

We were going to have a board meeting on the 20th. It was our normal practice to provide to members the minutes of the previous board meeting and any papers that we were going to discuss, so that the board members would have a chance to read through their board packs before the meeting happened.

At the end of the minutes there is a reference to the fact that we were now not talking about taking 49% of the asset but were talking about taking 26% of the asset.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where is that?

Mr. Lar Bradshaw:

Please bear with me for a second as I search for the minutes of the meeting of 20 October.

Mr. Seamus McCarthy:

Is Mr. Bradshaw talking about a reference at point 4 to do with ministerial consent?

Mr. Lar Bradshaw:

I ask the Comptroller and Auditor General to read it out because I do not have it in front of me.

Mr. Seamus McCarthy:

Perhaps this is the item:

4. Ministerial consent
While the authority is a body corporate with perpetual succession and power to sue and be sued in its corporate name and to acquire hold and dispose of land ... nevertheless the Authority has undertaken to abide by the Code of Practice for the Governance of State bodies which requires the consent of the Minister in respect of the involvement of the Authority in the acquisition of a company. A copy of the application for consent is attached.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

So the phrase "A copy of the application for consent is attached" refers to this letter?

Mr. John Crawley:

We are actually talking about the following meeting, the meeting of 24 October.

Mr. Lar Bradshaw:

Which would have had the minutes of the meeting of 20 October?

Mr. John Crawley:

Yes.

Mr. Lar Bradshaw:

I am trying to get to the minutes of the 20th.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Before I move on to 24 October, in the paper that was submitted at the meeting of Friday, 20 October, under the section entitled "Ministerial consent", the last sentence is "A copy of the application for consent is attached." Was that this letter?

Mr. Lar Bradshaw:

I need to clarify that, if you do not mind, because we have just had a discussion. I am sorry I did not have the material in front of me, but this point is really important. The correct point you are making is that the letter of 12 October refers to a number which is substantially less than the number that we were already contemplating. That is what is in the report. The relevant piece is section 8.2, on ministerial sanction, and we are talking about the minutes of the board meeting of 20 October, which would have been discussed on the 24th.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Hold on. Just slow down a bit-----

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----because I want to make sure everybody, including myself, is following this. What document are you referring to?

Mr. Lar Bradshaw:

I am referring to the minutes of the board meeting of the 20th, which would have been tabled in the pack for the meeting of 24 October.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Lar Bradshaw:

Under section 8.2-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Lar Bradshaw:

Let me read it out. Section 8.2 of the minutes of the meeting of 24 October states:

The Board noted that Ministerial sanction to increase borrowing and to the acquisition of shares in a company was expected to be received during the day. In relation to the book valuation of some €250m which had been included in the Authority's submission to the Minister, it was noted that this figure was based on a plot ratio of 2:1 [not 2.5:1 or 3:1, as the Comptroller and Auditor General pointed out] and on the basis that the authority would be acquiring some 49% of the shareholding of the company (as opposed to the 26% in the current transaction).

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

You say "what I think happened", but you were present at all of this.

Mr. Lar Bradshaw:

Yes, but, with the greatest of respect, this was seven years ago.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate that.

Mr. Lar Bradshaw:

I am trying to be honest and totally transparent-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Lar Bradshaw:

-----so let me make the point. It is almost certain that a discussion took place around the submission that had been made by the chief executive on 12 October, because it referred to it.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And that submission is this document here.

Mr. Lar Bradshaw:

Yes, the one that you are talking about.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you.

Mr. Lar Bradshaw:

The minutes state: "In relation to the book valuation of some €250m which had been included..." This means that somebody on the board said, correctly, "Hang on - in our board pack is the submission that we made on the 12th, and the number it refers to is lower than what we are talking about." That is exactly your point. A discussion obviously took place, because the minutes say that it was noted that this figure, the €250 million, was based on a lower plot ratio than we were then contemplating, which was going to lead to a higher bid price, and second - more importantly - it was on the basis that we were now talking about procuring only a 26% share rather than a 49% share. The significance of both of those statements is that the exposure for the authority was not going to change because, as everybody around this table will know, 26% of the big number - €400 million - is more or less the same as 49% of €220 million.

I absolutely am going to suggest that when the committee brings in all the board members and the executive, it will be able to clarify this matter. However, what I think happened is that somebody said that we had sent a letter to the Department - by the way, Ms Mary Moylan was sitting at the table, which I shall come back to in a moment - and asked whether there was a danger that somebody could be misled. The discussion ensued with Ms Mary Moylan at the table and she was comfortable that she did not need to go back because the approval that we needed from the Minister was an approval that constrained or limited, if you like, our exposure. Our exposure would not have changed if we were purchasing 26% of something that cost €375 million - in fact, it would be less - instead of 49% of something that cost €220 million. I apologise for the numbers, but this is the real world.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I live in the real world too, and I understand these figures, but what you are saying to me is that because the net figure had not changed it was considered that there was no need to re-communicate that the gross figure that had been communicated to the Department was inaccurate.

Mr. Lar Bradshaw:

What I am saying is that it looks pretty clear to me that Ms Moylan, who is the number two in the Department, had concluded on this. The committee discussed all of this with Ms Moylan last month and she explained that the key issue for the Department had been to limit the downside exposure, which is clear on the basis of the discussion.

I am trying to make two points to the Deputy. One is that it was pretty clear to me - the Deputy will be able to get proof of this when he discusses it with all the other board members when they come in - that when somebody on the board saw the letter, which we only received after it went, with which I have no problem as my job was not to edit the chief executive's letters on a matter he was sending to another board member, they clearly brought it up and asked if there was any danger here that we were misleading and then we discussed it. Ms Mary Moylan concluded there was no need to go back because the decision we were looking for from the Department was about limiting the downside. The decision we were not looking for from the Department was to tell us what was an appropriate commercial amount. I realise even as I say that, I am sitting opposite the Deputy having to acknowledge that the authority lost money on this, about which I will talk, but it does not change the probity of the board's approach at this moment in time.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw will see why I am asking this question-----

Mr. Lar Bradshaw:

Absolutely.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----because this means the Minister of the day was looking at a proposal and he thought the purchase figure was €220 million when, in fact, it was in the region of €370 million.

Mr. Lar Bradshaw:

Correct. Now here is an interesting question as we proceed with that. The report states that there was no documentation on audit to suggest that the authority formally notified the Department of its intention to bid a number that was twice that. That is a true statement. However, here is another true statement - the No. 2 in the Department was fully aware from 3 October of exactly what the intentions of the authority were. With the greatest respect, I think it is reasonable of a board to assume that the Department knows when the representative from the Department - the No. 2 in the Department - is fully aware of everything it intends to do.

To put it another way, a week later when everybody knew exactly what it was that we bid and what percentage we got, I do not think there is any formal evidence that the Minister for the Environment or the Minister for Finance, or the Department of the Environment or the Department of Finance - there is no documentation - that they formally or informally came back to the authority to say it had misled them because a week later, that information would have been available.

With the greatest respect - the Comptroller and Auditor General's report which I think is a very fair one and that all of these are concerns which absolutely need to be discussed - I have to say that I think as a summary of this discussion a sentence which says, "There is no documentary evidence that the authority formally notified the Department", is a true statement, but it is an incomplete statement of the full events. I think there should have been two other statements in the Comptroller and Auditor General's report. The second one should have been, "There is a tonne of documentary evidence that the No. 2 in the Department was fully aware from the beginning of absolutely all our intentions." There should also be a statement that, "A week later when everybody knew what we had bid, there is no evidence that anybody had any issue."

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is no formal evidence that the DDDA communicated, in writing, to the Department of the Environment the correct figure.

Mr. Lar Bradshaw:

That is a correct statement and what I am saying very clearly today is that I think there should have been two other statements that would have created a much more reasonable, balanced and full picture of what happened. The reason this is really important is that, as we know, when this report was done, the authority had become politicised and there were people who were-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What does Mr. Bradshaw mean that the authority had become politicised?

Mr. Lar Bradshaw:

As I understand it, there were a number of discussions among politicians to give the Comptroller and Auditor General the ability to audit, with which I completely agree and I am delighted it happened. That is what I mean by politicised.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Lar Bradshaw:

The authority was vulnerable because in hindsight it transpired that we had made a decision which lost the authority a significant amount of money, which is a true statement. So it was vulnerable and it had been politicised and the Comptroller and Auditor General went in to do a report and the problem with the one sentence which is in it versus the three sentences which should be in there is that it creates the impression - it is why the Deputy is pressing this the way he is, which I fully accept - that there was some attempt on the part of at least the executive, if not the authority, to conceal some information from the Department of the Environment. That, unfortunately, is an incorrect conclusion to draw from this. If the three sentences were in there, we would have a much more complete picture in the Comptroller and Auditor General's report and I think this committee might have gone off on a slightly different tack in understanding the probity. The only issue which matters here - there are other issues, which we will get on to - is the probity and integrity of the authority.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is Mr. Bradshaw telling us that it was his view, and that of the other board members, that Ms Moylan, who is not here to defend herself, was reporting everything back to the Department and the Department of Finance? Did he assume that or has he evidence that was going on?

Mr. Lar Bradshaw:

I thank the Chairman for that question. I want to be really clear that I am not saying anything on which Ms Moylan would need to defend herself. I am saying that Ms Moylan is a woman of the highest integrity and the highest capability but that I do not think it is unreasonable of the board to have assumed the Department knew what it needed to know. I know the committee had a full discussion on conflicts of interest for Ms Moylan. My view, in a practical sense, is - and the way it worked in reality - I assumed anything the Department needed to know, it knew-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Would the other members of the board share that point of view? It is important for us to understand.

Mr. Lar Bradshaw:

The Chairman would have to ask them but my view is that they did.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As far as Mr. Bradshaw and the board were concerned, all of the information relative to this, the numbers he spoke about and so on, was reported back to her Department and the Department of Finance.

Mr. Lar Bradshaw:

It is pretty clear from Ms Moylan's meeting with the committee that she did not communicate that to the Minister.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No, I am just asking Mr. Bradshaw, who was a member of the board at that time, was it the assumption of all members that Ms Moylan was reporting everything back to the Department, verbally or by way of letter, report or whatever? Is that the assumption? We need to know that.

Mr. Lar Bradshaw:

I will speak for myself. Let me be very careful what I say. I did not assume that after every board meeting Ms Moylan reported everything back to the Department but my ongoing assumption was that if there were things that needed to be discussed or known by the Department about what the authority was doing, she was the Department's representative on our board. That had been the custom and practice from the very beginning and that if there were things that needed to be discussed or the Department needed to know, she would tell it.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does Mr. Bradshaw believe the Minister knew?

Mr. Lar Bradshaw:

I think it is fairly clear from what Ms Moylan said the last time - I believe Ms Moylan - she did not tell the Minister what the number was. She explained last month why she did not.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Apart from the number, does Mr. Bradshaw believe any other issues were shared generally in the Department or does he believe they were shared politically as well in the Department?

Mr. Lar Bradshaw:

I do not know how things work in the Department.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw is making assumptions which-----

Mr. Lar Bradshaw:

The assumption I would have made on this is that the Department knew what we were planning to bid. I do not know how Government works. That was not my skill set. I just wanted to get on and get this thing done but a question I would have to ask any reasonable person is, how high does one need to go in the Department because Ms Moylan was the Assistant Secretary General? How high does one need to go in the Department before the Department knows? That is a reasonable question for a layman like me, who is just focused on trying to get something done which has a 15-year time horizon and I am doing it-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw's assumption is that it went to the highest level.

Mr. Lar Bradshaw:

I am assuming it went to the level to which it need to go for any relevant decision.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will move to the latter part of this narrative which is the meeting of Tuesday, 24 October at 8 a.m. This meeting was specifically instigated to give agreement to go ahead with the tender for the purchase of the site.

Out of all the people present - Mr. Bradshaw, Ms Cavendish, Mr Curtin, Mr. FitzPatrick, Mr. McCourt, Ms Moylan, Ms Sullivan and Ms O'Connor, the board members, and in attendance, Mr. Maloney, Mr. David Higgins, Mr. Kelly and Mr. Neil Mulcahy, of those seven were on the phone, including Mr. Bradshaw.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Would it have been customary to hold board meetings via telephone conference?

Mr. Lar Bradshaw:

No, we had monthly planned board meetings and they were always in person. The issue was that we were having multiple board meetings in a short space of time because we were working to a deadline, 25 October, when the bid had to be in. It was a fast moving situation and we had to have a number of board meetings. Because this was an unscheduled board meeting, we had to do it wherever we could.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate that. In this meeting, there is a reference to the fact of declaration of interest. It goes on to say that Mr. Bradshaw drew attention to the fact that he and the chief executive met Mr. McNamara at 8.30 p.m. the previous night. What was the nature of that meeting?

Mr. Lar Bradshaw:

Mr. Maloney rang me, either that day or a few days before, and said I should meet him and Bernard McNamara. My recollection is that Bernard McNamara was going in to meet with Paul to go through a lot of stuff because there were a lot of issues. Mr. Maloney asked if I could meet them both later that evening.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where did you meet?

Mr. Lar Bradshaw:

In the Radisson Hotel in Stillorgan. We met and the purpose of the meeting, and this became very important in the court case, was to agree the final bid. On 20 October, we had discussed that our upper limit, which was what the executive recommended, should not go beyond €375 million. That was the information in my head and we were now to meet to discuss the final bid.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Are you referring to the board meeting or the meeting with Mr. Maloney and Mr. McNamara?

Mr. Lar Bradshaw:

I am sorry, I may have confused you. At the meeting on 20 October, the board agreed an upper limit of €375 million. This was now 23 October and I am referring to the meeting with Bernard McNamara. I went along to the meeting to agree with Bernard McNamara, the majority shareholder, with 74% of shares. It was to agree the final bid because we had to have the same number. That was the purpose of that meeting. During that meeting, it was not a very long meeting, but the two most significant things I recall are we got Bernard McNamara to agree. He was of the view that it would take more than €400 million to succeed. We are all worried about the company next door who bought the other site and there is marriage value so he could maybe bid more. Bernard McNamara was of the view that it would take more than €400 million and we pointed out that we were not mandated to go beyond €375 million. There was a discussion of that where Bernard McNamara agreed that any amount north of €375 million we bid would be for his account and at his risk only and that our shareholding would not dilute. That is a very significant negotiation point for us to have secured. In fairness to Mr. McNamara, it was not that we were brilliant negotiators, he reasonably readily agreed to that. We discussed a bid of €411 million.

That was one item that was discussed that night. The other item that was discussed was that at one point Mr. McNamara told us he was switching horses. We were under the impression, and it was the case, that Royal Bank of Scotland, ie Ulster Bank, was the bank he was talking to. Ulster Bank was becoming much more active in funding significant property and development deals. He told us he had switched horses to Anglo Irish Bank and Bank of Ireland. That was news to me and I was a little surprised.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why?

Mr. Lar Bradshaw:

Let us just say I did not expect that. I need to be careful here but I did not expect that Anglo Irish would be offering. I did not expect that this transaction would be within the mandate of Anglo Irish Bank to lend at that point.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am mindful of the chairman's instruction at the start of the meeting.

Mr. Lar Bradshaw:

I was surprised.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will note that. The substantive outcome from that meeting was that Mr. McNamara had indicated that the site could go for more than €400 million but that you indicated back to him that the board at that stage only had agreement to go up to €375 million.

Mr. Lar Bradshaw:

What is more, I did not see us going beyond that.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He also indicated a change in the funding mechanism behind the bid from him.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the meeting on 24 October, you indicated that for his own part, the chairman advised he was a non-executive director of Anglo Irish Bank and would not be involved in the executive decisions relating to funding with the bank. Could you explain what you mean by that?

Mr. Lar Bradshaw:

At 8.30 p.m. the night before I found out that Anglo Irish Bank was potentially involved in the funding of the senior debt. I am on the board of Anglo Irish Bank so now I have a perceived conflict. The following morning at the start of the meeting I declared I had a perceived conflict. I am going to say something that will probably drive you all mad but the truth of the matter is that I did not feel, and to this day I do not feel, that I had any actual conflict. A conflict of interest is where your judgment can be affected, that you come to the wrong conclusion because you have two different objectives. The truth of the matter, and I know you must get inside my head to figure what was going on, and I cannot prove that, but it is a statement that is 100% true, there is no way I would ever do anything to influence a decision in the authority because I had either some other interest or some other involvement. I just would not do it. I accept absolutely, however, that there was a perception and I announced that conflict because I am on the board of Anglo Irish Bank. I am non-executive director of the bank, there are eight meetings a year and I would never, nor did any board member, get involved in individual decisions. I did not pay any attention to who the clients of the bank were, that was not my role as a non-executive director. That is not what it was about but I declared it. The way I thought about it, and I can only tell you the way I thought about it, we had a big discussion about it.

There were three issues in that meeting. As I thought about the potential perception of a conflict of interest, the first issue was would we do a joint venture and would we bid for this site. The second issue was what the final bid price would be that we would agree to. The third issue was how we would fund it, the bank that would fund it, the terms, the margin, the duration and the security and so. Those are the three issues.

On the first issue, we had already decided we were going to pursue this joint venture for many good reasons you are very familiar with. That decision had already been made.

On the third issue, the bank that will fund it, I would obviously exclude myself from any such discussion.

That leaves the other issue, the final bid price that all will agree to. We had held that discussion on the 20th and had agreed that we would go to €375 million but we needed to revisit it and make ourselves comfortable with it. We than had a conversation with Bernard McNamara on the 23rd and he agreed that anything over €375 would be at his risk, which was fantastic to have achieved on our part, with no dilution of our 26% shareholding. Then I started thinking whether we would raise our bid price, leave it as it is or how we would feel about it. My view was that for a big decision - which I know with hindsight we got wrong - for the authority it would not be right for three board members to leave that to the other board members. I never shirk from taking decisions and I felt it would be a dereliction of duty.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw mentioned the three board members, to whom is he referring?

Mr. Lar Bradshaw:

Myself, Mr. Seán FitzPatrick, who was the then Chairman of Anglo Irish Bank and Mr. Declan McCourt, who was on the board of Bank of Ireland.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw has indicated the relationship of those three members with the bank. Did all three leave the room? Did they not participate in this discussion?

Mr. Lar Bradshaw:

Let me make it clear. I opened the meeting by saying that we found out some information the previous night from Bernard McNamara, which was that Anglo Irish Bank and Bank of Ireland were in the frame. That created a situation for three members of the authority. We discussed that issue. We were not going to discuss funding or financing at that meeting. There was only one item on the agenda, whether we were happy with the figure of €375 million that we had agreed. We discussed whether it was appropriate or not for us to stay in the room for that discussion.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When Mr. Bradshaw says "stay in the room" does he mean stay on the line?

Mr. Lar Bradshaw:

Exactly, stay in the meeting. We discussed that and it was agreed that it was okay and if anybody ever asked - I do not think we ever imagined a situation like this - we would just have to explain the facts that it was a big decision and there could be a perception of a conflict around - how could it be that we could make a decision around the bid price that would create for me a material conflict of interest.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How was Mr. Bradshaw compensated for his role as a non-executive director?

Mr. Lar Bradshaw:

It was a flat fee.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw got a flat fee. Did Mr. Bradshaw have any shares or options within Anglo Irish Bank?

Mr. Lar Bradshaw:

I had shares, I bought shares. Deputy Donohoe asked a similar question at the last meeting when he wondered whether we were on performance fees. We were on flat fees, which is normal for board members. One would never have non-executive directors on performance fees.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw had shares in the bank.

Mr. Lar Bradshaw:

I did have shares. Let us work our way through that. The issue was not whether we were going to do this, the issue was whether we would increase our exposure beyond the bid price that had been agreed on the 20th.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Before we go on to that point, I want to focus on the issue of conflict of interest. I have been very careful and the Chairman has been very generous in allowing me lattiude but I am trying to establish the flow of meetings. Let me put it to Mr. Bradshaw that he owned shares in this bank. He had on the telephone line two other gentlemen who had shares in the bank, and shares in two different banks.

Mr. Lar Bradshaw:

I think it was on public record that Seán FitzPatrick had significant shares in Anglo Irish Bank but I cannot speak for Mr. Declan McCourt.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you for that clarification. Let me restate the question. Mr. Bradshaw had shares in one bank that was involved in funding this deal. There were two other individuals involved in it, one of whom was the chief executive of the other bank, Anglo Irish Bank. No, not at that stage. He was the chairman of the bank, excuse me. Each of the three individuals were closely involved with the two banks that were funding this acquisition.

Mr. Lar Bradshaw:

That was discovered at 8.30 p.m. the night before. Up until that point, we thought it was Ulster Bank or Royal Bank of Scotland who were funding it. Let us be real about this conversation.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are being real, this is the reason I am asking all these questions.

Mr. Lar Bradshaw:

Thank you. We were well down the road to a transaction that I believed in my heart was absolutely the right thing for the authority in delivering the metrics that I wanted us to be measured against. They are out there for everybody to see. We were well down the line on that. As it happened we did not change our exposure in the meeting. Literally, the night before we were due to finalise, we discovered that Anglo Irish Bank and Bank of Ireland were in the frame. Now the question was what should we do? I know members will not suggest that we should say we should not do this transaction because of a piece of information we discovered the night before. The only issue was should I have said that I should leave this meeting for this discussion on the final bid price we were committing to. That is the only issue. We discussed that at length and concluded that it is a tricky one but if we ever had to discuss it, we would tell people what was going through our heads. Members will be aware that we subsequently got legal advice to see whether that was right or wrong. The legal advise was that not alone had we acted prudently but we erred on the side of caution. My belief was that we did not act on the side of caution, we had got it just right.

I am explaining to members what was going through our heads. As it happened, we did not change our position on the authority's exposure. I know there has been much discussion about this - I have seen it in previous minutes of a PAC meeting that we delegated the final decision - and I know that Ms Loretta Lambkin has read out at a meeting that in recognising Bernard McNamara's expertise we would delegate a decision up to €430 million. Let us be clear, it was not difficult for us to do that when Bernard McNamara had accepted that anything over €375 million would be at his risk. In my opinion that was not some dereliction of duty on our behalf.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to return to the conflict of interest point again because it is clear that some members of the board did have a concern about it.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In section 2.3 it states that members were concerned that for some people there might be a perception of conflict. Other members of the board were concerned about this.

Mr. Lar Bradshaw:

And I was concerned about it.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did Mr. Bradshaw seek legal advice in this meeting?

Mr. Lar Bradshaw:

No.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did the board itself decide there was no conflict of interest?

Mr. Lar Bradshaw:

Yes, and said that we would need to get a legal audit done to see whether we had acted appropriately or not but yes, we went on.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Was it decided in that meeting there was no conflict of interest?

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What I should also say, because I am trying to establish what happened and draw conclusions at another point, that it does actually minute that the chief executive confirmed that all of the negotiation and preparation of the document by the executive had been virtually completed before the issue arose, which is a point that Mr. Bradshaw made earlier.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The board then decided that the issue was not a conflict of interest and subsequent to that, legal advice was sought to confirm if that was the case.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just want to establish what happened. To return to the latter part of the discussion, on the tender bid, the line in the minutes states that the board agreed that the tender bid should be in the sum of €411 million. We have gone from approximately €300 million up to €375 million and now up to €411 million, but the board has delegated the authority to Mr. McNamara to bid up to €437 million. Is that correct?

Mr. Lar Bradshaw:

That is correct and to reiterate, as I have said a couple of times now, that was on the basis that Mr. McNamara had conceded that any bid over €375 million would be at his risk and that the authority's shareholding - this was most unusual and this would not normally happen - would not be diluted. That was a pretty good situation to arrive at for the authority. That is what allowed us say that Mr. McNamara could go higher, because it was at his sole risk as the 76% shareholder and not at the risk of the authority.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

All of this is in the context of €437 million from Mr. McNamara and the only sheet of paper we have to the Department of the Environment is €220 million.

Mr. Lar Bradshaw:

The Deputy understands the points we have made, therefore I will not go through them all again.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have gone through the entire analysis of what has happened and I have just tried to establish what happened. I want to go back to one point Mr. Bradshaw made and will end on this.

Mr. Lar Bradshaw:

Would it be possible for me to say something about the conflict of interest?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If the Chairman is agreeable.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is fine.

Mr. Lar Bradshaw:

I want to go back to April 1997 when the then Minister for the Environment, Deputy Brendan Howlin, and the then Minister for Finance, Deputy Ruairí Quinn, met me and asked me to do this. Members will recall that I mentioned in my opening statement that there were a few issues that needed to be sorted out. The first issue, and my immediate response at the time was, "That sounds like a fantastic project but I cannot do it because I have got a conflict of interest." They asked what it was. I said that I had two minor shareholdings in two property syndicates in the docklands, a 4% interest and an 8% interest. I said I had clearly got a perception of a conflict so I could not do this. The Minister, Deputy Ruairí Quinn, said, "No, that is not the way it works." He said that to get the people of the right calibre, willing to do a project like this, it would be a case that there would be lots of conflicts for lots of people and that the thing to do was just manage them in a transparent way.

I have to say I was very impressed with both Ministers, for a very particular reason, not alone for the way they set out the vision of what they were trying to achieve but that they also said they were not interested in making appointments based on political affiliation. One of the reasons they were talking to me was that I was completely apolitical. There had been much talk down through the years of how appointments were made to boards such as this. I was impressed with the integrity of the way they spoke about how they saw the vision of the area and what they were trying to achieve with the social and economic situation. I took both Ministers at their word and that the issue was to manage everything in a transparent fashion.

I went along to the first board meeting in 1997 and told that story and announced my conflict of interest. I wanted it written into the record. If one goes back and gets the minutes of the first board meeting one will see it as it is there for all to see. I expected everybody else to behave in exactly the same way. We worked hard at how to deal with conflicts of interest. Many years later, in 2009, one can imagine my shock when I read an article by a journalist, Nick Webb, who said he had discovered this secret that I had these two interests, as if it was some poorly kept secret. I was completely shocked. I had announced it at my first board meeting. I was doing exactly what the then Minister for Finance, Deputy Ruairí Quinn, and the then Minister for the Environment, Deputy Brendan Howlin, had suggested I do. We spent much time over the years talking, discussing, getting advice as to how to manage conflicts of interest, upgrading our advice and thinking it through in great detail. I want to give the context of how we thought. I took it extremely seriously.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate that Mr. Bradshaw but alongside that, a point we have just discussed, is that the board itself - I am making this statement back to you because it is the discussion we have just had - I am not drawing any inference from it - decided that there was no conflict of interest and sought legal advice after that.

Mr. Lar Bradshaw:

Correct. We were up against a deadline but that is exactly what happened.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is exactly what happened. That is fine. I want to conclude all of this with a statement Mr. Bradshaw made in his opening statement in which he said the State did not lose any money on all of this. It is correct to say, from the figures he presented, that the Dublin Docklands Development Authority did not lose any money on it.

Mr. Lar Bradshaw:

Dublin Docklands Development Authority did.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It did, excuse me. The point Mr. Bradshaw made is that the State did not lose money as a result of the DDDA's purchase of the Irish Glass Bottle site, in fact it made money. The point he referred to here is that the Dublin Docklands Development Authority did lose money but on the other side of the ledger is the money the Dublin Port Company made. Based on that, he is concluding that the State did make money out of it.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The other part was the involvement of NAMA in all of this and the fact that it ended up being involved in the purchase of the site that was bought for €411 million which is now valued at massively less than that.

Mr. Lar Bradshaw:

Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If Mr. Bradshaw includes that in the balance sheet that he has proposed here, the State did lose money.

Mr. Lar Bradshaw:

We need to be really clear on this. I am here today as the former chairman of the Dublin Docklands Development Authority. Is the Deputy suggesting that the board of the authority in 2006 should be held accountable for decisions made by privately owned banks then and for the following two or three years and the decisions of Government and Ministers for Finance both in 2008 and 2009? Is the Deputy suggesting that the board of the authority is responsible or should be held accountable? Would he recognise that at the point at which the authority was making this decision it had an expectation in foresight that the bank that was lending the money was a privately-held institution? This is such an important point because people have said - and have confused this issue - that the taxpayer has lost money. All I want to do is assure the taxpayer, based on the behaviour of the board of the Dublin Docklands Development Authority, not decisions that were made in latter years, the State and the taxpayer did not lose money. In fact the State made a gain as I have described it. That is really important to me.

I acknowledge that the authority lost money. I am happy to hold my hand up and say I was the chairman of a board that made a decision that at this moment in time I cannot escape from the fact that the authority lost money. I am absolutely willing to accept that and I would like to discuss that at some point and how I feel about that. Please, I do not think it is fair of anybody on this committee to suggest that the board of the authority should be held responsible for decisions by banks and Ministers for Finance in years afterwards.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw, in fairness, has responded to an assertion I did not make. I have been at pains in the past two hours to ask nothing but questions.

Mr. Lar Bradshaw:

I accept that.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure Mr. Bradshaw will acknowledge that we will draw our conclusions at the end of all this, once we have talked to everybody.

Mr. Lar Bradshaw:

I have-----

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have been really careful in that regard and I hope Mr. Bradshaw appreciates that.

Mr. Lar Bradshaw:

I do appreciate that.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have done all I can to give a balanced appreciation of this.

Mr. Lar Bradshaw:

The Deputy did say that if one factored in what happened with regard to the bank that lent it and decisions that led to the formation of NAMA and how that all transpired, that surely I would accept that the State ultimately lost money.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Sure, I am just asking Mr. Bradshaw if he believes given everything that has happened that the State did make money overall.

Mr. Lar Bradshaw:

We have to be very careful about how questions are phrased.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have been very careful.

Mr. Lar Bradshaw:

What matters here and what the Deputy should be holding me to account for are the decisions of the authority. I am saying that at the moment when the authority made a decision, as a joint venture partner, to agree to a bid, albeit we are limited at 375 million, but €412 million, on the exact opposite side of that transaction, it is precisely because we were paying so much that the State made so much. I can get into the mathematics of this with anybody who wants it.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I understand the mathematics of this perfectly.

Mr. Lar Bradshaw:

Right.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My question is whether Mr. Bradshaw still stands over the belief that the State made money on this?

Mr. Lar Bradshaw:

Let me try again. This is really important. Based on the decision made by the board of the authority in 2006, when that transaction had been completed with everything that we knew at that time, even acknowledging the €52 million that the authority's loss crystallised at, the State had made money because the Dublin Port Company had received €138 million, the taxpayer did not lose money.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw for answering all my questions.

Mr. Lar Bradshaw:

I thank the Deputy for his questions.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

If I may follow on from Deputy Paschal Donohoe's reference to Mr. Bradshaw's opening statement and the claim in relation to taxpayer's money. In terms of the Authority's decision to acquire the Glass Bottle site he makes a comparison between that decision and the factors that informed that decision and then the factors that informed the purchase of the BGE site in 1998.

Will Mr. Bradshaw accept that there is a fundamental difference between the two sites, in particular between the position of the property market in 1998 and the time when the authority decided to enter the joint venture in the mid-2000s? We have had references in board minutes and the report of the Comptroller and Auditor General to the overheated property market. In the light of these references, does Mr. Bradshaw still claim that it was easy to draw a comparison between the BGE site, a successful development, and the Glass Bottle site?

Mr. Lar Bradshaw:

I completely accept that the property market was in a different place.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

It was overheated.

Mr. Lar Bradshaw:

Was the Deputy here when we discussed the clarification made by the Comptroller and Auditor General?

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

I was.

Mr. Lar Bradshaw:

When he said the executive had advised it was in an overheated property market, there was a further element to this, namely, that the executive had recommended it. Let us not get into that issue.

I will talk about what is the analogy and what is not. I completely accept the Deputy's point that the property market was at a different stage. However, in 1998 we took a very significant risk because no matter what analysis was made, we could not understand the cost of contamination. We could not get to the bottom of that matter. So much so, that at the time many commentators and critics – it is easy to be a critic - said we had exposed the State to unlimited liability. We figured that there was such a strategic case for our acquiring the site------

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

It tried to pull off the 1998 success almost ten years later.

Mr. Lar Bradshaw:

No, that would be unfair. As I said in my opening remarks, I am trying to achieve a balance. The decision was made with all of the facts and imperfect information we had available in 1998, as I said in my opening statement and as is stated in the appendix to the report of the Comptroller and Auditor General. The benefit of the decision was that we spent €70 million and made €200 million. As a result, we were ahead economically, which is what stated is on pages 62 and 63 of the report. We were up by €130 million, not taking into account all of the other things done that mattered most to me and delivered our metrics. When the committee comes to its conclusions about how to describe what we did in those ten years, including the loss of €52 million which I acknowledge, I ask it to try to put it in a broader context. I am not trying to say we did something once and that, therefore, we did it again. I ask the committee to have a balanced view of the overall performance of the authority. In the real world one has to make decisions, often with imperfect information. There are a number of criticisms made in the report. Could we have done more? Yes, we could have. Should we have sought a formal valuation and paid €50,000 for it? Yes, we should have. However, one has to make decisions with imperfect information and one lives or dies on the basis of them. I ask the committee to take all of the decisions made over the ten years into account.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw has done his best to address the point, but I am finding it very difficult to understand why a formal valuation was not secured in October before the final decision on the joint venture was made. He will accept that was far from best practice.

Mr. Lar Bradshaw:

I accept that it is not best practice.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

One would not buy a house without getting an independent valuation.

Mr. Lar Bradshaw:

No, one would not. I suspect some people in this room bought property in 2006 and obtained formal valuations. I presume that in 2006 the OPW obtained formal valuations and explained it had spent €43 million for land that is now worth €500,000. Many purchases were made on the backs of valuations from banks which funded developments not too far from this site in Ballsbridge, which are now worth 10% of their former value. These valuations were made by professional, independent valuers who, I presume, were well paid. I accept the Deputy's point - we should have obtained formal valuations but there is an inconvenient truth about this if we had got that formal valuation and the number we would have got. Guess what, Mr. McNamara obtained a formal valuation, albeit after the bid had been made, and it was €412 million.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

What formal valuation can Mr. Bradshaw recall?

Mr. Lar Bradshaw:

It was by CBRE.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

It had previously valued the site.

Mr. Lar Bradshaw:

I think it had valued it for us a year and a half before then.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

What value did it put on the site?

Mr. Lar Bradshaw:

It is in all the documentation.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Can Mr. Bradshaw recall the valuation?

Mr. Lar Bradshaw:

The board paper of 3 October refers to a valuation made in 2005 which suggested a value of €300 million. The valuation made was more like €240 million.

I want to finish my point. We know the valuations were made professionally on sites now worth 10% of their former valuation. I am not trying to excuse what happened. I acknowledge that we should have obtained a formal valuation. I have no doubt an independent valuation from the same people who had informally told us the value would be in the region of €400 million would have indicated the same thing. Does the Deputy suggest that if we had obtained a formal valuation, it would have come in at €200 million or at a much lower number? Does the Deputy honestly believe this?

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

I suggest Mr. Bradshaw, as chair of a public body, should have deployed best practice in regard to it.

Mr. Lar Bradshaw:

That is correct. I was moving the discussion on to ask a different question. However, I take the Deputy's point.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

At any stage during the authority's interest in the joint venture was there another bid for the site? Was Mr. Bradshaw aware of interest from any other individual or company?

Mr. Lar Bradshaw:

I cannot say I knew of anybody else's interest. At a board meeting the chief executive indicated that it was likely there would be a good bit of interest in it. As I said, our major concern was that the person who could pay most for the site was the owner of the site next door because there would be a marriage value. As the Deputy knows, these situations involve sealed bids and it is very hard to find out who will bid.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw was not aware of any formal approach being made to the owner of the site. As far as he is concerned, his authority was the only show in town and the only operation engaged in buying the site.

Mr. Lar Bradshaw:

I am not saying that at all. I am just saying I was not aware of who was bidding. All of the experts reckoned a number of people would bid and our big fear was that a certain individual would end up buying it. I do not think one could conclude from that statement that we were the only show in town. No, definitely not.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw attributed a statement to the then chief executive officer Mr. Paul Maloney. Is Mr. Bradshaw aware of the reasons Mr. Sean Mulryan did not pursue his interest?

Mr. Lar Bradshaw:

I suspect it was partly to do with the fact that there was an issue around procurement, namely, that it would have to be regulated. I can only speculate that he probably reckoned it would go for a very high price which he might not have been willing to pay.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw has tried to comprehensively address the issue of perceived conflicts of interest. Points 3.50 and 3.51 in the report of the Comptroller and Auditor General refer to the decision made by Mr. Bradshaw and his colleagues on the board to attempt to address the potential conflict of interest in the funding of the project.

Mr. Bradshaw is on record in terms of the actions he took to address that. Paragraph 3.51 refers to subsequent actions Mr. Bradshaw has taken in the board's name. It states: "While both directors of Anglo Irish Bank withdrew from the meetings while the proposed terms of the loan offer from Anglo Irish Bank were discussed, when the guarantee agreements were eventually signed with the Bank in November 2006 and January 2007, the Chairman of the Board [Mr. Bradshaw] and then non-executive director of Anglo Irish Bank signed the agreements on behalf of the Authority." Mr. Bradshaw was concerned that there may be the appearance of a conflict of interest, as it applied to paragraph 3.50, which was the meeting of 2 November 2006. When we get to later in November 2006 and January 2007 and the issue of guarantees, Mr. Bradshaw does not accept that there was a conflict of interest or it is not something that concerns him, to the point that he was happy to sign the agreements on behalf of the authority. Could he elaborate on that, please?

Mr. Lar Bradshaw:

To be honest, I was signing in my titular capacity as chairman of the authority. There was no discussion. There was no meeting. There was no influencing anything. That is the way the real world works in something like that. I was not involved at all with the guarantees or anything like that. There are executives and legal advice among other supports. I hope Deputy Nash will not hold this against me but there were many times that I signed documents in a titular capacity where it would be presented to me to sign, and I would not even read it. That is the real world.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw raised the matter himself at the meeting, which is why I raise it again. As I understand it, he had a minority shareholding in two properties in the Dublin Docklands Development Authority area.

Mr. Lar Bradshaw:

Yes.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Is Mr. Bradshaw in a position to identify those two properties? Is that in order, Chairman?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is if Mr. Bradshaw is willing to do so.

Mr. Lar Bradshaw:

To be honest, I did not want to get into my personal investments or financial matters. If there is a particular issue on which Deputy Nash wishes to ask a question, I am happy to help.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

I am sorry. In fairness, Mr. Bradshaw did make that position known to the Minister who originally appointed him to the board of the Dublin Docklands Development Authority. I accept and understand that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It was recorded at the first board meeting.

Mr. Lar Bradshaw:

I immediately let the then Minister, Deputy Howlin, and the Minister, Deputy Quinn, know when they asked me. In fact, I declined but then I also made reference to it at the first board meeting.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We can get a copy of the minutes of the first board meeting which will confirm the issue.

Mr. Lar Bradshaw:

I am happy to tell the committee but I just do not want to get into personal issues.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

In fairness, Mr. Bradshaw has been very open. He has gone further than he was necessarily obliged to do, but I brought it up again given that he raised the issue himself.

Did any conflicts arise during Mr. Bradshaw’s ten year tenure as chairman as a result of his property investments? He referenced those at various board meetings. Did he absent himself? Could he explain the approach he took in terms of dealing with those conflicts?

Mr. Lar Bradshaw:

To be perfectly frank, at one particular meeting the syndicate decided to apply to the authority for further development on the site. Peter Coyne was the chief executive at the time and I remember him saying to me that there was an application and that I was one of the people named on it. The syndicate did not even tell me that it was going to do it, which I think is probably proper order. At the time I had a 4% shareholding as part of a syndicate. I had no involvement in the application but it then came before the board of the authority.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

The authority was the planning authority for the area and had the duty of examining and sanctioning any planning application.

Mr. Lar Bradshaw:

Yes. To be perfectly frank, that was somewhat embarrassing but all I could do was excuse myself when the discussion came up.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

At the meeting on 23 October at 8.30 p.m., Mr. Bradshaw learned that Anglo Irish Bank and Bank of Ireland would now be funding the project. Was it not known before then? Did no one even suggest that Mr. McNamara was in negotiations with the two banks rather than any other bank or Ulster Bank, as Mr. Bradshaw mentioned? They were all in the banks. Two members of the authority were in the same bank.

Mr. Lar Bradshaw:

To be fair. I would never know individual loan applications the bank might consider. That was the job of the credit committee. That was not the function of-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I understand that, but did the other two not mention about Mr. McNamara and negotiations?

Mr. Lar Bradshaw:

Which other two?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. FitzPatrick and the Bank of Ireland non-executive director. Did they not mention it to Mr. Bradshaw in the process of discussing the funding previously? I just wish to clarify the matter.

Mr. Lar Bradshaw:

It is absolutely no problem. I assume that the chairman of Anglo Irish Bank, Mr. FitzPatrick, did not know the bank was getting involved. To explain the way it would work, boards would never get involved. It would not be a good thing to get involved in individual credit decisions. I suspect that even when Mr. FitzPatrick was CEO of the bank, he would never get involved. I do not want to get into that. I would be very surprised if Declan McCourt, who was on the board of Bank of Ireland, knew. You will have to ask him, Chairman. The very first time I had any inkling that Anglo Irish Bank would be lending for the project was at 8.30 p.m. in that meeting and I was surprised.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Do Deputies Donohoe or Nash have any further questions?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No, thank you.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Bradshaw indicated that he wanted to make a closing statement.

Mr. Lar Bradshaw:

I have speaking notes and other handwritten notes. To be honest, I had anticipated that members would ask me certain questions. All the questions were very fair. I was concerned that conclusions would be drawn too early, but that is clearly not the case. I assumed members would ask me whether I have any regrets. I just want to say that I do. I have a regret that the authority lost money on this. To make that real for me, the biggest regret I have is that there are schools in the docklands that we were going to subsidise by giving land and €6 million to the Department of Education to have them built. That was a primary school for girls and a primary school for boys. That is my deepest regret that the project is not going ahead. That is the real damage of the fact that the authority lost money.

I know this is probably quite naive but a little bit of me hoped that maybe the beneficiaries of that transaction would step into the breach. What we now know with hindsight is that, as has been mentioned, this site is now apparently valued at €45 million, and that meant the Dublin Port Company’s stake, had it held onto it, would be €15 million, and it got a cheque for €138 million. It made a windfall gain of €120 million and a little bit of me had hoped – I know this is naive but I am still going to say it – that it might have seen its way to stepping into the breach to provide the €6 million, which would be only a very small percentage of that gain, and that it would step in to allow the schools to proceed, or that the other beneficiaries, the South Wharf shareholders, might do something. I know that is naive but it needs to be said because the thing that is most difficult about this is that there are children in the docklands who are not getting the educational establishment they should, and that is deeply disappointing to me. I know the reason that has happened is because we made a decision in 2006 that has backfired. That is a fact.

There is one other clarification I wish to make before getting to my concluding statement. I have been told by a number of my oldest friends that they believe from their conversations that the public think that I was a full-time chairman of the authority and that I earned large sums from the State for doing this job. I am grateful that the position has been clarified following questions. I wish to set the record straight on that. When I was asked by the Ministers to do this - this is one of the other issues I had at the start - I explained that I had a full-time job as a director of McKinsey globally and I was a managing partner of McKinsey Ireland. I had two very young children aged two and one at the time and I was genuinely worried that if I took this on, I would not have the wherewithal or the time to devote to it.

They told me the key issue was to get things set up right and confirmed to me that I would be able to undertake a search for a chief executive who was fitting for the new remit and mandate of the Dublin Docklands Development Authority, DDDA. As I indicated to members earlier, this is the reason I spent six months, half my time, in that first year, at some considerable personal expense but that is neither here nor there, to build the top management team that would then carry this forward. The truth is that I was part-time once I was over that and I described this to the Deputy earlier. I want to explain that the fees to which I would have been entitled for chairing the authority in 1997 were £16,000 per annum, increasing to £20,000 a couple of years later and then to £24,000. As I already was earning a good salary in my full-time job at McKinsey, I waived those fees and continued to waive them for the next seven and a half years until I retired from my full-time job. I wish to be clear that this in no way changes my accountability to this committee for my actions at the time. This is the reason I did not wish to make this point in my opening statement as I wanted to take questions. However, I wish to put these facts on record to correct a misapprehension that may be abroad among the public.

I wish to conclude with the following comments. I have watched in abject horror and with a feeling of being completely overwhelmed as the narrative of the docklands has evolved over the past five years into a story of a "debacle", a "disaster" and of "dereliction of duty". I have watched in shock as a previous chairman of the authority wrote publicly and spoke publicly about me, my integrity and my motives despite not knowing me and declining the opportunity to meet me. I have watched in disbelief as reports into the docklands overseen by that chairman were written without the authors' interviewing the key individuals involved, including me, and incorrect conclusions being drawn. As for the process in those reports, and I am not referring to the Comptroller and Auditor General, this process defies the most basic tenets of natural justice and was shameful. I have written to the outgoing chairman, John Tierney, at his private e-mail address - he asked me to write to his private e-mail address - requesting that the current board undertake its own independent review of the appropriateness of these reports and the public comments made by that chairman, given the facts, but that request was declined. Despite this, I have spent the past three years giving freely of my time to defend the authority from a lawsuit I considered to be without merit and which, if lost, would have cost the State €100 million. In a previous meeting of this committee a year ago, a member stated everyone knew the authority was going to lose that case but it won the case. I have given freely of my time during those three years and did so unconditionally. Even when I was pleading with John Tierney to get his board to initiate its own independent review, I was making clear that my ongoing assistance over the last few years to the authority for that case, as well as my appearance in court as a key witness for the authority, were unconditional. Even as I was pleading with him to undertake that investigation, I was making the point that whatever he decided to do, I, unconditionally, would continue to do what I was doing and that there was no conditionality in respect of my doing what was right for the State over the past three years.

I have served the State to the absolute best of my ability for ten years between 1997 and 2007, never flinching from trying to achieve the targets we set and never flinching from any difficult decisions. In all that time, I worried every day as to whether we were doing our best and whether we could do better and go faster. While I did not do this to be thanked, in my worst nightmare I never could have imagined the story that is seared into the public consciousness is one that describes the docklands project as a "debacle". On the day we found that our joint bid was successful, everyone thought it was a really good outcome. The State had made a significant profit, the DDDA was going to be able to drive forward regeneration on the last important and strategic site in the docklands and the land was not going to be owned by those who might profit more by doing nothing. I have searched for any parliamentary questions at the time and while I stand to be corrected, there were no dissenting voices and no questions from anyone who was horrified at the price that had been paid by our joint venture. I note media reports and expert opinion at the time suggesting "The site would be the location for one of the last major developments in a string of new city quarters alongside the River Liffey that have had a major impact on Ireland's economic development." It was stated:

Its redevelopment must be seen in terms of creating a new urban quarter in which people can live, work and play... This is a classic brownfield site, whose development would ideally be part of the regeneration of the whole Poolbeg peninsula.

I do not think the description of the DDDA's participation in this transaction as a debacle is fair. I am thankful for the opportunity to offer my evidence to the committee and to answer members' questions to the best of my ability. I absolutely recognise the importance of the committee's role to pursue the truth and to hold people like me accountable for the decisions we made. This is absolutely as it should be in a functioning democracy. I also recognise the importance of the media to rigorously investigate, pursue and communicate the truth. This also is as it should be. I ask all members to consider everything I have said here today with an open mind. I understand the urge to reach conclusions quickly and I thank members for not doing that. I understand the desire to make the truth simple, even when it is complex, and I understand the human difficulty in changing deeply-held opinions when much has been invested in forming them. Finally, I appreciate the enormous hardship that has been visited on this country over the past five years and the desire for retribution.

Before it reaches conclusions, I ask the committee to invite other people before it, namely, all my board colleagues, my council colleagues, including the community representatives. If the committee wishes to corroborate anything I have said here today, I would be delighted if members saw fit to invite the relevant Ministers with whom I interacted, including the current Ministers for Public Expenditure and Reform and Education and Skills, Deputies Howlin and Quinn, who met me in April 1997 to ask me to do this, as well as former Minister Noel Dempsey, who appointed me for a second five-year term and former Minister Dick Roche, who asked me to serve for a third term.

I also ask the committee to consider trying to find the answers to the following questions, which continue to go around in my head and which I personally believe must be answered in order to get the full story. Why did the Dublin Port Company end up with only one third? Why was the legal loophole not closed? Why did Professor Brennan consider it inappropriate to have our board members, including me, interviewed for her review of the planning and finance functions? Why were we given three working days to respond to the draft reports, numbering more than 200 pages, when they were in her possession for almost three months? Who advised and who decided that this period should be extended after our initial responses and why? Why did she ignore my offer to meet her and why did she not respond to my letter and explain why she was declining to meet me? How did it come to pass that those reports ended up in the public domain before the Minister of the day had published them and were then used to set the narrative that the DDDA was a disaster? Whatever became of the report into the DDDA undertaken by Declan Moylan, chairman of Mason Hayes Curran? Who has seen it and why has it not been published? Why did he feel obliged to write a letter to Professor Brennan, chairperson of the authority at the time, accusing her of trying to interfere and of getting him to change his report, which was supposed to be independent? Lastly, what actually was achieved by the authority during those ten years?

I respectfully ask the committee to think about getting someone independent to do a full audit of all the initiatives, programmes and projects undertaken and sponsored by the authority, as well as someone to measure objectively exactly what was achieved against those metrics against which we agreed all those years ago to measure ourselves. Perhaps someone might undertake a proper corporate governance review to include the most basic question that any corporate governance review should do, which is how the board operates. Perhaps this might include interviewing the key people who were involved and perhaps that might include interviewing me.

I note Professor Brennan has suggested that she attend this committee after everyone else and that the committee has agreed to do this. Given that I believe she has questions to answer, I do not think it appropriate that she appear last. I at least ask the committee for the right for me to write a submission to the committee after her appearance.

I will finish by saying that with the benefit of the facts I now know, I wish we had not decided to pursue this joint venture. I now know the most likely situation and scenario would be that the site would have ended up in State ownership one way or the other. I now know the Government has not been able to use the profits that accrued to the Dublin Port Company for the schools in the docklands. I now know all these things but sadly, then I did not and nor did anyone. In the real world, decisions must be made without the benefit of hindsight. As my father used to say, hindsight is the only exact science known to man. Once the bigger picture is ignored, namely, that the State was on the other side of this transaction and therefore, the taxpayer could not lose, I understand the desire of this committee, the media and many experts to trawl over our actions of the time in order that they can spot the mistake that would have saved us from this.

I acknowledge that one can always do better and do more but I feel obliged to say that I do not believe in practice that any of the issues brought up in the Comptroller and Auditor General's report would have led to a different conclusion.

A very difficult challenge for the committee in evaluating decisions made by others is to retain the distinction between hindsight and foresight and not confuse them. Somebody once said that:

Reality looks much more obvious in hindsight than in foresight. People who experience hindsight bias misapply current hindsight to past foresight. They perceive events that occurred to have been more predictable before the fact than was actually the case.

One of the things that has baffled me over the past five years is how all the reports that have been released publicly - the two reports that Professor Brennan oversaw, her overall report and the Comptroller and Auditor General's report - could be written and published without anyone interviewing the former chief executive and board members who were there at the time and how the one report that did interview those people lies unpublished and unseen by anybody. I do not understand that and find it odd. Without question, once conclusions are drawn in reports or, as with today's report, concerns are raised but not immediately addressed, it is easy to see how the story can take off in a certain direction. It is for that reason that I am really thankful to the committee for the opportunity to answer its questions today and to try to address the concerns they have raised. I appreciate the integrity of the way it has questioned me today. I have waited almost five years for this moment. I thank the committee.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Bradshaw. Does the Comptroller and Auditor General have any further information or comments to add?

Mr. Seamus McCarthy:

I wish to respond to points raised by Mr. Bradshaw in his opening statement. In respect of the reference to the need to correct the report on the matter of the recommendation of the executive to the board about proceeding, the phrase I used in my opening statement was that while it pointed to an overheated market, it recommended that the project should proceed for strategic reasons. That is a summarisation of the way the recommendation was presented when it was presented to the board. In paragraph 3.14, we quote exactly what the recommendation was, namely, that "the Executive recommended that the Authority should, if possible, get involved with a partner or partners to develop the site if the DDDA was to achieve its objectives under the Master Plan for the Poolbeg area". That is the way it was phrased in the minutes. I interpreted that in my opening statement as recommending that it go ahead for strategic reasons even though it was in an overheated market. I think that is an accurate representation of the recommendation so I do not feel I need to correct the report in that regard. I do not want to be particularly combative about it but I would like to make that point.

Another point related to my estimation of a 17% loss to Dublin Port. That is the Department of Transport, Tourism and Sport's view. My predecessor and I do not take the view that it was a 17% loss. The failure to close the loophole in the law meant that property the State had full ownership of was sold and the State in the person of Dublin Port only received one third of that value. It is a two thirds loss rather than a 17% loss.

Ms Moylan and the situation in which she found herself was discussed at a previous meeting. We do refer to the situation she was in where she had fiduciary duties to the board and there was the potential for conflict where she had information as a board member which she was not at liberty to transmit back to the Department. That is something that needs to be addressed. The Department has addressed it in an practical way by separating the representational aspect for the Department from the line responsibilities so that should not arise in the future.

The next point probably touches on some of the points made by Mr. Bradshaw at the end. Overall, we had a very significant concern around the quality of the analysis of a very substantial investment. The expectation would be that a public body would not just keep within the control parameters set in terms of borrowing limits but would ensure that there is a very thorough business case commensurate with the scale of the investment. Reference was made earlier to trying to tease out the sequence of events in 2005 and into 2006. Overall, there is a problem with the quality of the records relating to this joint venture. I take the point that individuals can be interviewed but the public record must be comprehensive. It should include everything. It should include complete records of who met who and what decisions were taken and there should be no scope for dispute around them. I realise that this is in an ideal world. Records will be fallible but we must certainly strive for a good quality of record to be kept of all matters pertaining to investment decisions.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. McCarthy. I also thank Deputies Nash and Donohoe for their questions. In particular, I thank Mr. Bradshaw who was asked to come in here and volunteered to do so. During the course of the past three hours, he has endeavoured to answer fully all the questions put to him on which he is to be commended. In his closing remarks and during the course of his contribution to the meeting, he raised a number of questions. Those involved will receive a transcript of the meeting. We have an open mind on this and have not reached any conclusions but we will do so and make recommendations. In the course of doing so, we will seek answers to the questions we raised. Again, I thank Mr. Bradshaw for coming forward. I also thank Ms Quinlivan and Mr. Crawley for attending.