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  • irishtimes.com - Posted: March 25, 2009 @ 7:59 pm

    A stitch-up pure and simple

    Harry McGee

    The oppositon was quite right to point out the bizarre tax arrangement that saw Gerry McCaughey dispatching his wife to Italy for six months (out of a calendar year) to save himself €4.7 million in capital gains tax.

    But Labour leader Eamon Gilmore was wrong to describe him as a “green crony”. He wasn’t that. McCaughey was a PD who stood for the party in 2002. He was even mentioned as a possible Moses figure to lead the PDs out of the desert it found itself in after 2007.

    But it’s true that McCaughey is a green enterpeneur. He has been a forceful and articulate campaigner for timber-frame homes and has shown himself to be a brilliant all-round communicator on a host of issues.

    He’s an impressive guy, a self-made man, and one who has made a positive contribution to society.

    And becoming the chair of the Dublin Docklands Development Authority was no cake walk. Some of the land deals that have been struck (and, more importantly, have not been struck) in the brownfield docklands area have been problematic (especially with property going into freefall). There are more disputes along that stretch of the Liffey than there are bridges. By agreeing to become chairman the straight-talking McCaughey knew he was taking on something of a poisoned chalice. And in that regard, he was performing a service to the State.

    But somebody out there clearlyt wanted him gone. It was as simple as that. The KPMG document outlining the tax avoidance scheme that he and two other directors of Century Homes availed of was leaked to RTE (which must be congratulated for its scoop). By parties unknown. That person or persons obviously did not want McCaughey’s brand of straight-talking in the DDDA. And you feel sorry for him that he was outed by that kind of scheming and sabotage and chicanery. By people whom you suspect were spurred on by less than honorable motives.

    In fairness to him, once it became public, he knew he would have to fall on his sword. John Gormley said he didn’t know of this arrangement when he appointed McCaughey to the positon (even though Revenue objected to the arrangment and it’s apparently still going through the Courts). For that Gormley can be accused of naivety, nothing more.

    But it leaves Gerry McCaughey in a slightly ambivalent position, the revelation about his taxes sullying his public profile as one of the “good guys” of Irish business.

    The arrangement was perfectly legal. But there is no mood in Irish society for all the burden and pain being carried by PAYE workers  and little guys while the rich get tax consultants like KPMG to concoct outlandishly elaborate schemes so they can avoid paying tax. Shane Ryan, a son of the late aviation tycoon Tony Ryan, availed of exactly the same Italian job. It’s so artificial and so ridiculous but was still perfectly legal until the loophole was closed off in 2006. Legally right. Morally? Not right.

    Not that McCaughey is alone. Ireland’s greatest living divinity, Bono, and his colleagues in U2 have also got their advisers to perform acrobatics to avoid paying tax  in Ireland. All perfectly legal of course. As did Denis O’Brien when he decamped to Portugal to minimise tax on his profits fater selling off his mobile phone company.

    In my opinion, paying your fair share of taxes is one of the great public services performed by ordinary citizens in our society.  The corollary, I believe, is that those who go to such lenghts to avoid the obligation are shorn of any of the moral authority the claim when giving their views on the rights and wrongs of our society. Why should we be preached to by people who don’t pay their taxes in Ireland?

    • Harry Leech says:

      A stitch up perhaps, but I’m glad that the information is in the public domain. Would we be better off if he was still there and the public didn’t know that he was using loopholes to pay less tax? I don’t believe so.

    • barratree says:

      Well put. I think what this really highlights is the need for ALL government appointees to have to undergo scrutiny in front of relevant Oireachtas committee with powers to investigate financial assets etc. Dept of Environment doesn’t have resources or authority to go into background (particularly financial) of all its appointees. The Broadcasting Bill’s provisions have something like that in for the RTE authority as far as I’m aware.

      If anything comes from the current mess maybe it will be substantial political reform. But I doubt (a) the government will last long enough to make any reforms under pressure from Greens, (b) the opposition (particularly FG) will have any appetite to do so when elected.

    • Ray D says:

      This really is a withchhunt for someone who did no wrong. Indeed he showed a remarkable knowledge of the law – something very few others have – and would be ideally suited as a Chairman of DDDA with that sort of ability.

      As one with 43 years’ experience of public service, I am fully aware of how widespread and endemic corruption is in Ireland – probably the most secretly corrupt society in the world and the one with the lowest standards – all nod and winks stuff that crumbles under any scrutiny. I would therefore feel that there may be no one without any skeletons or original sin to be found.

      The criterion should be – if one has been found to break the law, then one should not be appointed to such posts. If the law, as most of that in our corrupt society is, is either weak (despite the vast quatity of nonsensical and useless primary and secondary legislation that our Governmnet gets through each year) or absent, then the lesson is to change it.

      And pigs will fly.

    • Dan Sullivan says:

      So it sounds to me like some dishonourable people did a honourable thing for dishonourable reasons in order to bring down an honourable man who did an dishonourable thing for reasons unknown but they’re likely dishonourable too.

    • DesJay says:

      Wasn’t he the right huer altogether. Maybe he should be taoiseach.

    • Marjorie says:

      What about a rich businessman now widower receiving wife’s huge Govt. pension that she had added loads to as well as having huge assets in property now collecting his personal pension whilst having 10 million spread between housing in Dublin and, offshore property; now taking a mistress who lives with him. If he married the mistress would he lose the $900 euro per week from his deceased wife’s pension. Wow if not this is certainly the country for the rich businessmen and frauds to live. How can your country afford this?
      Frequent visitor to Eire. Marjorie

    • Pat Donnelly says:

      So we know he was not playing ball with TPTB “the powers that be”. And a leak was facilitated by a state organisation. Are we surprised that we are finding the economy falling week by week? Without trust there can be no business. Without business there can be no profit and no tax will be paid except by those who lack the means to find the loopholes some of which are deliberately introduced by TPTB. Enjoy the depression, suckers! When exposing a tip of bank and tptb corruption before the PAC, I received the help of only two people. Now I live abroad, where the house values decline by 1% pa, at the moment. The interest rate is 3.45% and a mortgage costs 5%. And labour is always scarce as we must bring infrastructure to a continent. Ireland had 8 million in 1840. England had 10 million. What happened? Where did the snakes come from?

    • Dan Sullivan says:

      Marjorie, strictly speaking if you’re a widower and are involved romantically with a lady then she’s not your mistress. You can only have a mistress if your wife is still living.

    • Siobhan says:

      Harry, you’ve been awfully quiet on this blog of late. This may well have been a stitch up, thanks for alerting us – and possibly getting into trouble? Now will you get back to meta-journalism sometime soon? So we can be the wiser?

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