I never went crazy, or flew around the place
Despite the visceral boom to bust Celtic experience, Wallace still lives by his motto of ‘work hard, play hard’
EVERY MORNING Mick Wallace takes The Irish Times, the Financial Times and the Guardian and pores through each newspaper searching for solutions to the global economic crisis.
He doesn’t need much encouragement to rail against German chancellor Angela Merkel’s fiscal policies or the “crazy” behaviour of the banks. Closer to home, though, the roots of his personal financial calamity are equally complex.
The latest stage in the slow collapse of his business empire comes later this month with the publication of the Revenue Commissioners’ list of tax defaulters. The name of MJ Wallace Ltd, the independent TD’s building firm, is likely to figure near the top of the list, with a massive settlement of more than €2.1 million.
Wallace knows how it looks. Here is a TD who is telling others how they should live their lives with egg on his face. He knows ordinary people won’t distinguish between MJ Wallace, the company against which the settlement has been made, and the individual, Mick Wallace. They won’t understand how the company, which is liable, has no money while the TD, who is on a handsome salary, has.
There is “no hope” of the money being paid, he admits, so he can expect another round of thundering denunciations from the opinion writers. Not to mention more media intrusions on his privacy, the most recent of which occurred when a Sunday newspaper named his teenage son after he was expelled from a south Dublin school.
Sitting on a bench in one of his wine bars in the Quartiere Bloom by the Dublin quays, Wallace is surprisingly calm as he explains where it all went wrong.
Back in the days of the boom, the flaxen-haired builder was celebrated as much for his unconventional views as for his high-quality developments in inner-city locations. The former teacher, who studied history and philosophy before switching careers, unfurled banners on his buildings in support of the Palestinians, founded a soccer club in his native Wexford and set up cafes and wine-bars to enhance the quality of his developments.
Despite the publicity, Wallace was never a big developer. He focused on one large development a year, funded by sales from earlier jobs and growing bank borrowings.
The first signs of change came in 2008, when he was working on a job on the North Circular Road. In April, ACC Bank sanctioned €7.5 million for the project but by July, as the storm clouds gathered in the economy, they asked him to stop work on it.
The following year, his company was finishing off an apartment block on Russell Street, by Croke Park. “The bank was tightening up on the supply of money and wasn’t giving us enough to finish out the project,” he says.
He’d taken in deposits of about €40,000-€50,000 on each apartment sale and used this money to fund other work but when the sales were completed a VAT liability arose on each one.
“The bank was taking all the sale money and we had spent the deposit money and so we couldn’t pay the €1.4 million that was due in VAT,” explains Wallace.
“I remained confident that we could pay the money, but I didn’t think the value of property would sink as much as it did.
“If this had happened earlier [before the crash] they would have worked with us. They used to talk all the time about the relationship with the customer. They used to talk about ‘we’. Then, in 2007, that all stopped and it was ‘us’ and ‘you’.