A handful of winners and a lot of losers populated Ireland's bleak landscape this year

Fri, Dec 31, 2010, 00:00

THEY HAD cars big as bars, they had rivers of gold – but by 2010, Ireland’s weary wave-riders had crashed, taking down with them the wheeler-dealers, the planning manipulators, the subsidy receivers, the would-be princes of high (and low) finance and the men with Anglo-branded golfing umbrellas resting forlornly at the back of their wardrobes.

It was time to get on with the dirty business of going under. Some drowned in champagne, of course, notwithstanding the fact that their net assets had been reduced to volcanic ash.

Economics professor Morgan Kelly saw in 2010 by noting that by 2015, Iceland would “almost certainly” be a lot better off than Ireland – as Christmas approached, there were many who argued it already was.

In May, Kelly wrote that it was no longer a question of if, but when, we would go bust. The high-interest EU-IMF loans were agreed six months later. Kelly is now predicting that sustained high unemployment and the accompanying tide in mortgage defaults will put Ireland “on the cusp of a social conflict on the scale of the Land War” – something to dwell on while you’re trying to remember the second line of Auld Lang Syne.

For upholding his position as Ireland’s official soothsayer, Kelly is one of Business This Year’s eclectic smattering of winners, which indeed makes losers of us all. It is to the losers, keeping Kelly’s ominous vision of a hardened, enraged and despair-filled nation in mind, to whom we turn first.

And what better place to find some candidates than the hotbed of social privilege that is the private members’ club – specifically, Dublin’s Residence club, which fell into receivership during that cold, cruel January. Restaurateur brothers Christian and Simon Stokes were the Irish business world’s answer to Jedward, only less commercially viable.

One by one, their companies fell and it was not long before the new owner of Residence, Olivia Gaynor Long, terminated their management contracts. Before their exit, the socialite haunt had been effectively subsidised by taxpayers when employees’ tax deductions were not passed on to the Revenue Commissioners – “a form of thieving”, according to the commercial court’s Mr Justice Peter Kelly.

Speaking of Mr Justice Kelly, the closest thing the Irish legal system has to a scene- stealer managed to temporarily silence the one-liner machine that is Michael O’Leary.

In March, the Ryanair chief executive was forced to apologise unreservedly over a “lie” in a letter to Minister for Transport Noel Dempsey, alleging the judge had publicly criticised the Minister over “inexcusable” delays in setting up an appeal panel against much-resisted new charges at Dublin airport.

O’Leary was lucky that the matter was not treated as contempt of court, the judge noted. No doubt his €20 million share of the Ryanair dividend payout helped him shake off the embarrassment. “I might bugger off and spend it on fast women and slow horses,” said O’Leary.

There were more high-profile bruising courtroom encounters when property investor Paddy McKillen – not to be confused with a property developer, his legal representation understandably stressed – objected to becoming a customer of the National Asset Management Agency (Nama).

High-profile is probably the wrong word to use for McKillen, given that the most recent picture of the media- shy man was a grainy black-and-white number taken some years before all the trouble began. However, the case was important, as a win for McKillen, erstwhile member of the Anglo “golden circle”, would have led to the immediate unravelling of the Nama project, which was conveniently yielding hourly rates of up to €485 for politically connected professional services firms. Happily for them, McKillen lost.

Today, “loser” and its entirely optional accompanying L-sign is an insult synonymous with “failure”, but once it was a more neutral word for someone who simply misplaced some of their property - such as a car, for example, or some specially commissioned sporting equipment.

Maureen Kelly became such a loser in August when ACCBank seized her 7-series BMW from her Donnybrook home. It was all just a terrible misunderstanding.

ACC had laboured under the bizarre impression that the saloon car belonged to Maureen’s husband, the bust developer Paddy Kelly, who had run up bank debts of €350 million. Really, it was all the fault of The Irish Times. A month earlier, Kelly had posed dangling the keys of the car that he said he had bought in 2003 for €139,000, before using it to drive journalist Fintan O’Toole around on a tour of his developments.

After what was surely a stressful 24 hours, the Dublin City Sheriff returned the BMW and Mr Kelly promised he and Maureen would not “hold a grudge”. Mrs Kelly’s other car is a Mercedes.

In December, though, there was a twist: citing an interview given by Mr Kelly to the International Herald Tribune, the sheriff said he was the beneficial owner and re-repossessed it.

The former management team at Anglo Irish Bank – led by Yankophile bankrupt David Drumm – was also revealed to be a careless cohort of losers. We knew about the billions of toxic property loans, but in March it emerged that its executives and clients had also managed to shed 124,000 of 125,000 branded golf balls. That’s a lot of penalty strokes.

Over a three-year period, Anglo had spent €1.38 million on promotional items, including €208,000 on the balls, €218,000 on golf umbrellas and €100,000 on golf rain clothing (you can never be too careful).

It was an outlay immortalised by the dedicated Dáil protester Joe McNamara, who in October drove a concrete mixer emblazoned with the slogans “Toxic Bank Anglo”, “€1,000,000 on golf balls” and “500K for golf” into the gates of Leinster House.

Perhaps the missing golf balls were nestling under bunker sand – which coincidentally is where the heads of several Anglo-related individuals seemed to reside during the year.

Anglo chairman Alan Dukes initially dismissed the idea of winding down Anglo sooner rather than later and enthused about a “good bank/bad bank” split, which he insisted was the least costly option for taxpayers (and indeed for those low-income earners who would be dragged into the tax net by the year’s end).

Instead, there was an altogether different last-ditch plan to see Anglo divided into an asset recovery bank and a funding bank, prompting the Financial Times to accuse the Government of trying to bring the State’s most distressed bank back to life, “Lazarus-like”.

In one of his characteristic hostage-to- fortune statements, Minister for Finance Brian Lenihan declared the Government’s cunning plan put “certainty and finality over the whole Anglo story”.

It didn’t. In November, the idea of a funding bank was described by Dukes as “a bit outdated at this stage”. The bullet had begun its slow-motion trajectory towards its unloved, nation-sinking target.

The collateral damage was already immense. In September, Lenihan said the “maximum” banking system bailout of €50 billion would be the “rock bottom” of the financial crisis. It wasn’t.

In November, hot on the heels of European Union economic and monetary affairs commissioner Olli Rehn, Ajai “the Chopper” Chopra and his mates from the International Monetary Fund came to town with a “memorandum of understanding” for the two Brians to sign.

Beyond the barely dented gates of Leinster House, understanding was in short supply. Welfare payments, the minimum wage and all sense of hope had been brutally cut. It was no surprise when Taoiseach Brian Cowen’s personal poll rating slipped below the perilous yields on 10-year Irish bonds.

Deprived of their democratic right to various byelections and furious with the Government’s double-or-quits approach to national debt, the public took to placard- making with new fervour.

In a country with tax revenues €20 billion lower than the cost of keeping the lights on, it was inevitable that rich, tax-avoiding hypocrites, represented in shorthand by the suddenly quiet professional debt-campaigner Bono, would eventually see their standing in decent society slip.

The U2 frontman may have survived his 2009 assertion that he was “stung” by criticism of his tax affairs, but in a year when the bill for the activities of Seán FitzPatrick, Dermot Gleeson et al started to be talked about not just in terms of billions, but fractions of trillions, there was little patience left with those who pontificated but didn’t pay.

Cowen’s own golden circle of advisers must have longed to achieve the kind of popularity enjoyed by, say, Seán Quinn around Cavan- Fermanagh parts, where loyalty to the employment provider remained high even as details of his empire-threatening contracts- for-difference purchases in Anglo emerged.

It probably helped that redundancies at Quinn Insurance have been strictly voluntary – so far. But 2010 wasn’t such a reassuring time for The Late Late Show sponsor and it ended the year with a trade sale in the offing. Quinn would have been better off saving his millions for the roulette wheel at Michael Lowry’s fantasy casino.

Another of the year’s losers – Arnotts chairman Richard Nesbitt – could also be found within the Venn diagram of disaster that had Anglo at its centre. He and his fellow shareholders had their equity stakes in the 167-year-old retailer wiped out after the combined might of the Irish and British governments, via their banking vessels Anglo and Ulster Bank, seized control of the heavily indebted department store – sadly, not via remote manipulation of the window mannequins.

Suddenly Arnotts’s mezzanines were inundated with vox-popping journalists cornering handbag browsers about what this indirect nationalisation of the bargain basement meant to them. Would Famine- survivor Arnotts be obliterated by the Noughties debt bubble?

A new management team was installed faster than shoppers could say: “So when is John Lewis coming, then?”

Sub-zero temperatures and the shutters of insolvency rendered the act of shopping trickier for those Tiger nostalgists who were still cash-rich. Even more galling was the fact that the retail opportunities offered by overseas junkets were suddenly becoming harder to source.

In February, the new Central Bank governor, Patrick Honohan, was forced to declare that the travel expenses of spouses would no longer be paid for by the bank, after it emerged that between 2007 and 2009 it had shelled out for such expenses to the tune of €67,450. “The practice does not seem appropriate in present circumstances,” observed Honohan.

Indeed, there was bloodlust in the air for anyone still participating in the excesses of the old era. Semi-state chief executives kept their heads down, while the AIB employees who ended the year chasing their 2008 bonuses through the courts were anxious not to be singled out as the next John Foy.

The AIB capital markets trader had the distinction of taking an uncontested test case to the courts in order to be paid his deferred bonus award of €160,000. He got his money, but it came with lashings of opprobrium, all of which proved politically convenient for Lenihan. The best kind of wealth these days would be the anonymous kind.

Despite an obvious lack of any evidence to the contrary, there were those who called for blanket optimism, just in case someone with a large slice of foreign direct investment happened to be peering in on Ireland at that particular second.

It simply wouldn’t do if all they saw were stock photographs of our 2,800 ghost estates, or all they heard were the delightfully panicky tones of panel show staple Paul Sommerville of Delta Index.

Perhaps the opening of Dublin airport’s Terminal 2 and the Convention Centre Dublin would convince the phantom business tourists of the joys of Irish denial, even if the opening of the former just as the EU-IMF loan was confirmed was officially the worst ever timing for passing around the bubbly.

The launch of the latter, meanwhile, was overshadowed only slightly by some last- minute difficulties with sewage.

The neon lights may have flashed down the sheath of the Docklands dustbin, but it wasn’t the best of years for one man who had long laboured in the corporate shindig game.

In July, Jim Mansfield’s Citywest hotel, conference centre and golf complex, a regular home to the Fianna Fáil Ardfheis, was placed into receivership by the soon-to- depart Bank of Scotland (Ireland). Things were so tight for Mansfield that he reportedly sold both of his helicopters.

Enough of all this gratuitous misery: it is time to shift our short attention span to 2010’s winners.

The Ernst Young entrepreneur of the year gong was given to Co Down businessman Brian Conlon, head of financial software consulting company First Derivatives, which he founded in a spare bedroom 14 years ago.

Conlon capitalised on his success by raising €4.3 million through the sale of shares. Clutching his award, he encouraged aspiring entrepreneurs to have a go. “There’s not much alternative at the moment,” he noted.

There were other, somewhat less bona fide, winners. Take Michael Fingleton (no, take him, please . . .). He ended the year clinging on to the €1 million bonus he won for his performance in overseeing the draining of the State to the tune of €5.4 billion to date through a special purpose vehicle known as Irish Nationwide Building Society.

As of the third week of December, Lenihan was still insisting he was trying to recover the cash – the €1 million bonus, that is, not the €5.4 billion. In 2010, the man known as Fingers proved to be one of life’s tenacious victors – even if his comical efforts to shake off RTÉ’s David Murphy during a surprise interview at Dublin airport was in many ways a reflection of Government ministers’ attempts to stonewall the electorate.

Another man with a big pay-day was founder of investment firm One51, Philip Lynch, who it emerged was paid €1.4 million in 2009 despite the fact that the group recorded a loss of almost €11 million. This time around, it was not taxpayers but Lynch’s rich, paper-rich or once paper-rich friends who were effectively having a whip-round, via their investments, to pay his salary. They included former Bank of Ireland chief executive Mike Soden, financier Paschal Taggart and rebel shareholder Gerry Killen, who at its July agm declared there were people on the One51 board “who still think they’re George Clooney”.

There was a touch of the Hollywood mafia bruiser about Fine Gael’s choice of finance spokesman following the failed leadership heave in the summer. Come December, Michael Noonan gravely demolished what he called the Budget of “a puppet Government” and an ironically “fitting tribute to a failed administration”.

Through his almost sinister solemnity, Noonan reminded us of the overwhelming gravitational pull of the black-hole banks, whose agents had sucked the concept of social justice into nothingness.

It was all in the delivery, too, for supermarket check-out operator Mary Byrne, who performed on The X-Factor with the kind of dignity that had at times eluded both our parliamentary representatives and professional classes.

Her signature song was the apposite It’s a Man’s Man’s Man’s World. Mary proved magical for both her employer, Tesco, which milked the feelgood factor by erecting giant in-store signs of support, and for TV3.

If chief executive David McRedmond set his phone on redial to the “Vote Mary” number, it would be entirely understandable, as the Dubliner helped the television station secure its highest audience, amid the most convincing ratings assault in its 12-year history.

It was, literally, cheap entertainment. With one in two Irish adults glued to this grim spectacle, it seemed the nation’s pubs were repelling drinkers like never before.

As disposable incomes were swept away by Arctic blizzards, only visiting foreign journalists, €10 million libel bonanza recipient Donal Kinsella (left) (of naked sleepwalking fame) and the wives of Nama developers could afford to get plastered in public any more – should they wish to.

One night was the exception that proved the rule: September 23rd, aka Arthur’s Day. The steaming success of the second such promotional event for Diageo could easily be judged by the stench of the vomit on the streets the morning after.

The Guinness vendors may be seeing stout sales slip in an all-too-sober market, but with Arthur’s Day in its marketing arsenal, it is now, rather amazingly, threatening to add a new festival of alcohol to the Irish calendar. Somebody should win an award.

Spirits were also high at bookmaker Paddy Power, which confirmed a few stereotypes of the Irish when it dared to overtake Bank of Ireland as the eighth-largest quoted company in Ireland by market capitalisation.

Paddy Power, led by chief executive Patrick Kennedy, was beating analysts’ forecasts, creating jobs and expanding its gambling empire online. The bookie was simply better than the bank at taking calculated risks.

That was 2010, all over bar the polar hurricane. Where will we be in 12 months time? Will we have emerged triumphant, a phoenix from the flames of a bondholder bonfire, newly unbound by the ties of endemic corruption? Or will we languish, confused and hostile, in Morgan Kelly’s dystopian nation, as the memory of what it was like to have even semi-functioning public services and single-digit unemployment fades?

Or maybe we’ll be somewhere in between these two fates: still glum, still emigrating, still muddling along and still trying – like Fingleton before us – to go up the down escalator.