Bríd Smith (Dublin South Central, People Before Profit Alliance) | Oireachtas source

I will start unusually by quoting a tweet from the renowned Mr. Vincent Browne:

Isn’t it unfortunate for Denis O’Brien that so many of his involvements result in controversy: the award of the Irish mobile phone licence; INM; Digicel; Beacon hospital over vaccines; and now Siteserve. Perhaps it has all to do just with poor communications.

We have to look at the bare facts of this report, however. They are pretty astonishing, as is the fact that it seems the commission will not investigate the other 37 transactions in which the State-owned IBRC wrote off €1.88 billion in aggregate between 2009 and 2013, the special liquidation.

There is no ambiguity in the case of Siteserv, however. The heavily-indebted company debt manoeuvred the State via the IBRC to not only write off €118 million of a €162 million debt it had accumulated but it manoeuvred the sale of Siteserv to benefit its own shareholders and directors. It did this by giving one bidder, Mr. Denis O'Brien, preferential and exclusive status in the bidding, not because it was the best offer for the company or, indeed, for the State, but because it was the best offer for them and their own self-interest. Members should remember this was a company near collapse and likely to be unable to repay its loans. Despite the 1,500-page length this report, it is careful to state that Mr. O'Brien was not guilty of any misdoing, nor it seems was the IBRC. It just appears again, as so often has done in the history of this State, that Mr. O'Brien was unfortunate - it was a series of unfortunate events for him, which, oddly, yet again, while unfortunate, seems to have left him with an even larger fortune.

Mr. O'Brien's adventures in his interactions with this State would make a wonderful and entertaining movie; one in which our hero, despite the odds, always seems to come out on top. This recent farrago must be set beside the good fortune, which sees another associated company doing very well from the national broadband contract. Indeed, few here will have forgotten that while the water charges campaign delivered a major blow to the Fine Gael and Labour Party Government in its plan to charge for water and, undoubtedly, eventually privatise it, the national turmoil did at least provide a lot of contracts for Mr. O'Brien's companies in attempting to install meters on ordinary people's properties.

This report is fascinating and chapter 8, which is entitled The Trip to Bootcamp and the Role of Mr. Dix, is worth a read. I urge everybody to read it; it is immensely entertaining. I will read a portion of it for the record:

On Saturday, 28 January 2012, the Chairman of the Sale Sub-Committee, Mr Robert Dix, ... travelled to St Moritz in Switzerland with Mr Denis O’Brien and Mr Niall McFadden to spend a week on a skiing and fitness holiday, which they called “bootcamp”. This was at a crucial stage in the Siteserv sale process, when second round bids were due to be submitted.

Mr. McFadden, we are told was "a highly experienced and sophisticated corporate financier". The chapter continues:

Mr McFadden had, over the years, organised a number of bootcamps ... [and he] and Mr O’Brien had attended at least three such bootcamps together in Kenya and in Crete. ... On both of these occasions [they] had flown home on Mr O’Brien’s private jet. ... If Mr O’Brien’s bid were successful, Mr McFadden hoped to get a finder’s fee from Mr O’Brien for his introduction. ... [A]pparently, the exercise regime was [extremely] arduous ... participants rose at about 6.30 am to do an early morning run before breakfast and [after breakfast all of them] went out cross-country skiing.

The chapter continues by noting that keen to go to dinner to another restaurant in the local village:

Mr Dix and Mr McFadden went to their rooms to change before ... dinner. Whilst in his room, Mr Dix participated in an important telephone conference call at approximately [six o'clock] with the Company’s corporate finance advisers (i.e. KPMG and Davy) during which he was updated on the second round bids.

This is a glimpse into the world of the other Ireland hidden from most people; an Ireland of corporate dealing facilitated by the State and made possible by the funds of ordinary people. It is an Ireland where a ski trip to a high-end Swiss luxury resort is called a "bootcamp" and in which a deal the report found cost at least €8 million more than perhaps it should have in reality cost us more than €118 million in a write-off. It was a deal that would bestow enormous benefits on all present if it went ahead and which, at a crucial stage, was not discussed by those present in the boot camp. As they were all very sophisticated businessmen, they would not dare to discuss it. The report confirms that our intrepid skiers did not say a word about the deal. The commission found that the trip to boot camp did not have any influence on Mr O’Brien’s second round bid. It found that "Mr Dix and Mr O’Brien did not discuss any Siteserv bids at bootcamp".

So ends the entertaining chapter. It seems that while the lads were quite properly never discussing the deal at the bootcamp, the company co-founder, Mr. Niall McFadden, sent an email with confidential information to Mr. Dermot Hayes, an adviser to Denis O’Brien, who was in the race to buy the troubled building services firm.

Something else was happening at that very moment in a nearby Swiss resort.

The 2012 World Economic Forum at Davos had just ended. It was the famous one where the then Taoiseach, Enda Kenny, told the great and the good of the world of finance that the crash and collapse of the Irish economy was explicable as a result of everyone having gone mad with borrowing. We all partied, as a previous Fianna Fáil Minister for Finance explained. That same week, Mr. O'Brien was boot-camping with friends and TheNew York Timesreported:

Anglo Irish Bank is poised to pay more than a billion euros on Wednesday to unsecured creditors, drawing criticism from Irish taxpayers who are paying the enormous bill for the country's bank bailout. The payment is part of Ireland's effort to shore up Anglo Irish, a state-owned bank now known as the Irish Resolution Bank Corporation, in a rescue that ultimately could top 47 billion euros, or $61 billion.

To be honest, given the sums dispensed by the State and the IBRC at the time, €8 million was hardly likely to be a major issue for those gathered in Davos or St. Moritz.

We all partied, we all went mad borrowing. That was the context of this deal. That was how the great and good explained the crash and the merciless austerity they imposed on people here. I do not believe that Enda Kenny had in mind the reckless borrowing of the great and good when he made his remarks up the road from Denis O'Brien and his mates in St. Moritz, nor the borrowing of Siteserv, which had accumulated other companies like an overenthusiastic collector in previous years, racking up unsustainable debts as it did. No. It was the workings of sophisticated businessmen. Anglo Irish Bank dealt with a large number of sophisticated businessmen. Many of them are back in business as we speak, having recovered fully from, or are even unscathed after, the financial collapse. It is not so for ordinary people, who paid for their sophisticated schemes. Far from St. Moritz and Davos, the bill has ultimately been paid by the people of this State, and it continues to be paid by them.

Let me end by remembering some of the measures from which we are still trying to recover, for example, housing and health, including waiting lists for operations for children crying in pain. Consider the measures that the State, through the budget, forced on people in the very month that our heroes were at boot camp and our Taoiseach described us all as having gone mad borrowing. The State imposed household property charges, it scrapped mortgage interest relief for new homeowners, it reduced the age limit in respect of children whose parents were trying to access the one-parent family payment, it reduced the earnings disregard for this group, who had consistently lived in high levels of poverty, it cut the back to education allowance, it attacked community employment schemes, it cut child benefit payments for families with three children, it cut the back to school clothing and footwear allowance, it cut benefits to carers, it cut fuel allowances, it cut hearing aid grants, and it cut the contributory and widow's pension entitlements. We cannot forget the major cuts to the budget for Traveller education and funding either. It was a war on the famous low-hanging fruit. Beside the previous austerity, it made its mark on ordinary citizens and the public services on which they relied. We have yet to recover from that.

The Siteserv deal and, indeed, Anglo Irish Bank itself were not the causes of that austerity, but these things and events are connected. We should remember that, while some were in St. Moritz manoeuvring the State bank into a deal for their benefit, the ultimate bill was paid in our schools, hospitals, emergency housing centres and vital public services.

I hope that the shareholders and directors of Siteserv and, indeed, the countless other developers and sophisticated businessmen enjoyed their bailout. This country still carries the scar of that as well as the continued servile attitude of our Government to serve their interests.

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