Docklands disaster serves as warning on Nama


BUSINESS OPINION:Having two Anglo Irish directors on the docklands authority board was a big mistake, writes JOHN McMANUS

IT’S A measure of how conditioned we’ve become to failure and incompetence in public life that the revelation by the Dublin Docklands Development Authority (DDDA) that it has blown €213 million of taxpayers’ money is met in the most part by weary shrugs and eye-rolling.

The decision to publish the DDDA accounts on the same day as the Murphy report into the Catholic Church’s cover-up of child abuse in Dublin was released only adds to the cynicism.

Some might argue it is the only clever thing the Government has done with respect to the authority in years. But of course it’s not really clever, it’s just nauseating.

When confronted with the enormity of the disaster that is the authority, the impulse is to start calling for a public inquiry and to send in the Director of Corporate Enforcement.

There would doubtless be much for the director or any other investigator to ponder at the authority.

First and foremost is the way in which the organisation became involved in the Glass Bottle Site deal and is now being set up to be the patsy for the whole thing. It has gone from being some sort of junior partner to the prime target of the raft of litigation surrounding the collapse of the billion-euro project.

This leads of course to what is arguably the bigger scandal: how the authority was granted and allowed to exercise draconian planning powers without anyone bothering to check if they were legal or at least bullet-proofing them against legal challenge.

Instead, following a successful challenge to one of its rulings, the docklands authority has been found to have been acting outside its powers and facing all sorts of litigation. The only saving grace is that presumably the rights to the litigation will pass to the National Asset Management Agency (Nama), along with the bankrupt developments in question.

But in truth, we probably don’t need an inquiry to tell us what went wrong at the authority, although it would be nice to see the perpetrators of this piece of financial and social vandalism held to account.

We already have an explanation and it’s to be found in the Chinese proverb about the inevitability of getting up with fleas if you lie down with dogs.

With hindsight, what else might you have expected if you put people like Seán FitzPatrick and Lar Bradshaw on the board of a State company with carte blanche to develop some of the State’s most valuable real estate?

It was a gamble to appoint FitzPatrick in particular. He brought with him drive, dealmaking, contacts and, above all, ambition. These are not qualities usually associated with State agencies and held out the prospect of something special happening in the docks.

It is now apparent that the same blind spots and personal failings that caused so much damage to Anglo Irish Bank wreaked havoc at the docklands authority.

If you follow this chain of argument, the real question is, who appointed him and his fellow board members and why?

Step forward the Minister for the Environment and the Government. For the record, Bradshaw was appointed in May 1997 by Brendan Howlin, while FitzPatrick was appointed the following year by Noel Dempsey. FitzPatrick replaced Jim Lacey, who resigned over the scandal at National Irish Bank.

Howlin and Dempsey can argue that it was unreasonable to expect them to see the danger inherent in appointing FitzPatrick.

It’s a fair point, although the truth is that FitzPatrick had the whiff of sulphur about him back then too, but nobody cared because he was so successful.

But even if you cut Howlin and Dempsey some slack over the initial appointments, there is nowhere for Dempsey or his successors – Martin Cullen, Dick Roche and John Gormley – to hide over the appointment by FitzPatrick of Bradshaw to the board of Anglo in 2004 (on Roche’s watch).

The failure of successive Ministers to question the sense of having two Anglo directors on the board of the docklands authority is the crucial mistake. It was the equivalent of handing over the keys to a toyshop to a couple of children.

The error appears to have been compounded by not appointing other directors with the judgment or stature to rein in Bradshaw and FitzPatrick. The failure to address this problem put the authority in a different league from most other State agencies and boards, populated as they are with unqualified placemen and other beneficiaries of political patronage.

There are two broad explanations that can be put on this, neither very palatable. The first is that the Ministers were so incompetent, naive or whatever that they did not see the danger.

The other is that they were alive to the problem, but did nothing for some reason, political expediency being the most likely.

The Government is shortly to announce the membership of the board of Nama. If they are not up to the job, the consequences for Ireland are potentially cataclysmic. They had better do it right this time.