Dáil debates

Thursday, 22 April 2010

3:00 pm

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 1: To ask the Minister for the Environment, Heritage and Local Government if he will order a detailed look-back investigation into the failure of corporate governance at board level in the Dublin Docklands Development Authority; and if he will make a statement on the matter. [16231/10]

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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In appointing Professor Niamh Brennan, a recognised expert in corporate governance, as chairperson of the Dublin Docklands Development Authority in March 2009, I have demonstrated my commitment to ensuring that the authority conducts its business and is managed in a transparent and appropriate manner.

I wrote to the authority's chairperson last year, requesting that a comprehensive review of corporate governance arrangements within the authority be undertaken. Consequently, the authority commissioned two independent consultants' reports to assess its planning and financial procedures. While the reports highlighted some deficiencies in the authority's governance and administrative procedures, they also reviewed improvements introduced to DDDA processes since Professor Brennan's appointment, and identified that many of the deficiencies have since been addressed.

At my request and on foot of advice from the Attorney General, the authority has been engaged in a third-party consultation process about these reports and a related report prepared by the executive board of the authority itself. The purpose of this process has been to give relevant former and current board members and DDDA employees an opportunity to comment on the contents of these reports. I expect that the authority will be submitting the final reports within the next day or so, taking into account the outcome of the consultation process. Once received, I will complete my consideration of the matters involved, in consultation with the Office of the Attorney General.

I expect to be in a position to conclude this process, including consideration of such further examination of issues as may be required, and I will revert to the Government on the matter early next month. In the meantime, it would be premature for me to comment further on the issues involved.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I asked the Minister if he was prepared to ensure that there was a look-back investigation into the manner in which decisions were made at the DDDA. I did not receive an answer to that. The authority initially was liable for €35 million out of a €288 million given by Anglo Irish Bank, which ultimately led to the purchase of the Irish Glass Bottle site in 2006 for €412 million. There were senior officials from Anglo Irish Bank, namely, Mr. Fitzpatrick and Mr. Bradshaw, sitting on the board of the DDDA at the time the authority was making those decisions. The annual report for 2008, which was published without the financial report for 2009, announced a €27 million operating loss and a deficit of €213 million. We now know that then chief executive of the authority, Mr. Paul Maloney, approached the Department of the Environment, Heritage and Local Government seeking approval of borrowing limits for this purchase before it was submitted to the board of the authority.

What is the estimated liability for the DDDA if Anglo Irish Bank calls in its loan? We also know that the assets of the authority were put up as security for this loan. Will the Minister give an undertaking that there will be a proper look-back investigation into the failure of corporate governance at the authority? We need to get to the truth of the matter about the major conflicts of interest that took place in this organisation, which is under the stewardship of his Department.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I will leave no stone unturned on this matter. This is precisely why I appointed Professor Niamh Brennan as chairperson of the authority, who has done an outstanding job so far in looking at these matters and is an expert in corporate governance. The Deputy must remember that I commissioned these reports. Professor Brennan has been quite assiduous in looking at all of these matters. Since coming into office, planning procedures have been tightened up and one will not find a more rigorous planning authority at this stage. The corporate governance structures have also been tightened up.

I have noticed some of the Deputy's statements in the media, and we need to be extremely careful in what we say when we talk about the invalidity of planning permission and so on. We are playing around with taxpayers' money and we need to be extremely careful. I want to see a Dublin Docklands Development Authority that functions. It has been acknowledged by all sides of the House that the authority has done great work for social regeneration and cultural activities, for which we only have to look at the new theatre that has opened. There is a vibrancy in that area which is something we simply cannot afford to throw away. Let us deal with this in a responsible way and let us get to the truth. We both share that ambition.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I am delighted that the Minister has said that we want to take this matter seriously because, on 17 August 2009, he wrote to Professor Brennan and asked that certain matters in respect of corporate governance be brought to his attention no later than October 2009. I did not hear in his reply whether he received that report.

At a meeting of the Joint Committee on Environment, Heritage and Local Government last December, Professor Brennan stated that it was "absolutely clear that there were systematic conflicts of interest between the Dublin Docklands Development Authority and Anglo Irish Bank by virtue of those common directors. There are questions about whether, as directors of the authority, the individuals in question owed their duty solely to the good of the authority or were engaging in transactions influenced by their outside interests."

I want those matters investigated. I want the Minister to come back to the House with a full report on these matters. We want to get to the truth of these matters and I am delighted to hear him say that he will leave no stone unturned, but he will be judged on that statement by the manner in which we expose the full rigours of his authority to get to the truth and make sure that the conflicts of interest and the bad decision making processes never happen again.

In view of the fact that the assets of the authority were put up as security for the loan from Anglo Irish Bank, I am sure that the Minister has an estimated liability to the bank by the authority if that loan was called in.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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The Deputy and I have discussed this matter across the Chamber before. On the last occasion here, he stated quite categorically that two members of the board had a conflict of interest. He has used this phrase again today. I wrote to him subsequently and asked him to name the individuals in question. The Deputy then replied to me-----

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister should answer the question he was asked. I will come back to that if he wants me to do so.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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-----and said that he would be in a position to name them when he had possession of the report. He has since come into possession of those reports, and I think it is incumbent on him to name these people.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister should stop distracting us.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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If we want to get to the bottom of this-----

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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A Chathaoirligh, when is the Minister going to answer the question he was asked?

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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The Deputy is very clear about the role of the Chair.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The role of the Chair is to insist that the Minister answer the question.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I am answering the question on conflicts of interest. It is obvious to anybody looking in on this that there were potential conflicts of interest. However, Deputy Hogan was the person-----

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Professor Brennan said it.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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-----who stated categorically that there were members of the board that had conflicts of interest.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Does the Minister think there were no such members?

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I asked him to name them.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister must be happy that there are no such conflicts.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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There is much confusion about the €5 million figure as the cost to the taxpayer, which is something the Deputy quoted in the media. It is very misleading to assert that the DDDA has exposed the taxpayer to the full risk in this venture.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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How much is the liability to Anglo Irish Bank?

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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The authority is a 26% shareholder and is therefore responsible for 26% of the capital guarantee. That is as it is and we must look at that as part of the full report. The figures are there, however, and the Deputy has only to calculate them himself.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Will the Minister guarantee the House to get to the truth of how those decisions were made and how the Dublin Docklands Development Authority is effectively financially broke at this stage? What is the estimated liability to the authority, which will ultimately fall to his Department, for a loan that will have to be paid to Anglo Irish Bank if those loans were called in at this stage? The securities that were put up for the Anglo Irish Bank loan were those of the Dublin Docklands Development Authority, so what is the estimated liability?

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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The Minister has the last word.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I have answered that question, but I will answer the Deputy's first question again.

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)
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He will not answer the question.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I will state it repeatedly that, yes, I want to get to the bottom of this. As Minister, I have taken on board many of the concerns and we are moving in the right direction. The Deputy can be guaranteed that I will get to the bottom of this.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Good.

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)
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When?

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I will get to the bottom of all the financial irregularities that were exposed concerning some of the planning issues as well. The authority's accounts show a write-down on the valuation of the Irish Glass Bottle Company's site from €412 million to €50 million, based on the red-book valuation of the site. A write-down of that scale reflects the distressed property market and the banking system. This matter has been in the public domain and it is clear to most people that this was a case of Celtic-tiger Ireland going overboard.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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No independent valuation was carried out.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I could elaborate on some of the things the Deputy has raised in the media over a period. One of the main points he made was that I was not publishing these two reports because they contained politically embarrassing material. Now that he is in possession of those reports, however, he will see that is not the case.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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We have another one here that the Minister did not publish.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I am anxious to get to the truth of the matter. If the Deputy worked with me we could both do the taxpayer a good service.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister got his chance.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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I understand that we have an adversarial system and the Deputy must try to score points, but it is not helping the taxpayer in any way.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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We just want the truth.