With his involvement in various corporate bodies, both here and abroad, the business affairs of Mr Reynolds can seem somewhat complicated, writes Colm Keena
When you click on to the internet homepage of Life Energy Technology Holdings plc (LETH), a US company quoted on the Nasdaq, you are confronted by a quote: "Perhaps the most important legacy we can leave to our children is to have it said that we left this world in a better condition than we found it."
It's not the sort of sentiment most associated with the former Taoiseach, Mr Albert Reynolds, but the quote is his. Mr Reynolds, who will be 70 in November, is the non-executive chairman of LETH and his role in the "sustainable development company" takes up a significant amount of his time these days.
According to filings to the Securities and Exchange Commission (SEC) in the US, he is entitled to $525,000 (€537,400) per annum for his work, the same amount paid to the company's chief executive and the inventor of its main product, Irishman Dr Christopher McCormack.
However, Mr Reynolds told The Irish Times that he is not yet receiving this money. Payment will begin when the company is capable of paying it.
"Meanwhile I think it stays as a credit," he said.
The company's main product is a "biosphere process system" developed by Dr McCormack. The system allows for the consumption of a range of materials, including municipal waste, agricultural waste and oil industry waste, to produce electricity and a number of usable by-products such as potable water.
Unaudited accounts filed for the nine months to February 28th, 2002 record the company's "sales" as $11.99 million, with costs of $9.38 million, making for a gross "profit" of $2.8 million. However, the company did not actually receive all this money for the sales and the true cash situation is a lot more modest.
The reason the accounts are not as positive as they seem at first glance is that the value given to a "sale" is the value of the lease payments to be received for the 25 years after a machine is delivered.
Whether LETH got any money at all during the period to the end of February 2002 from "sales" is not clear. The cash flow statement for the period shows the company got $542,995 "net income from continuing operations". However, it also shows advances from officers of $519,101. Dr McCormack has loaned the company more than $1 million, according to the accounts. Mr Reynolds said he didn't know if the company had received any payment yet for machines delivered.
The company's first sale was in November 2001. If the company does land the sales it says it has in the pipeline - it said it had contracts for more than 50 at the end of February - and the customers pay as promised, LETH looks set to become a very profitable business.
Its main targeted customers are governments in the Middle East and Africa, and it is in securing introductions to these governments that Mr Reynolds is of most value to the company. He has in recent times visited Nigeria, the Cameroon, Algeria, South Africa "and a few more". The company has a machine in place in the Lebanon.
LETH has a head office in Utica, New York, and offices in Washington and Turkey. The Washington office is mainly for Mr Reynolds's use and he uses it when lobbying on behalf of LETH, seeking to marry sales by LETH to US development aid to the governments buying the machines.
He spends a lot of time travelling between the US, the Republic and the company's targeted markets.
"Albert Reynolds has secured orders and high-level negotiations that have been responsible for the company's acceptance by governments in the Middle East and Africa," according to a LETH source.
The company was originally Irish but, in order to launch itself on the Nasdaq, it conducted a reverse takeover of a US public company in December 2000 and changed that company's name to LETH.
There is still a Life Energy Technology Holdings Ltd on the Irish registry, with Mr Reynolds and Dr McCormack as the listed directors. It was incorporated in October 2000 and has not, as yet, lodged an annual return or set of accounts.
According to the LETH website, the company works closely with a number of Russian scientists, including a Dr Valeri Romanov, who was, during the 1960s, the head of the USSR's "Project Designing Control Systems for Nuclear Submarines and Missiles". Since the collapse of the Soviet Union, he has been involved in a number of joint ventures with western European entities.
Dr Romanov and a number of his colleagues are described on the website as personnel in the "Romanov-Reynolds Research Institute".
A research institute was to have been established in the Republic but the Russians apparently opted to remain working at home, close to Moscow.
Mr Reynolds and Dr McCormack are the registered directors of Life Energy Research and Development Ltd, an Irish company and "an Irish-based 'brains trust' established to bring to LETH the best in-house research and development team available, to allow LETH to meet its aspiration to become a technologies development and holding company", according to the LETH website.
The "Romanov-Reynolds Research Institute, with activities in Ireland, Russia and the USA", is managed by this company, according to the website.
Life Energy Research and Development Ltd is currently listed for strike off by the Companies Registration Office.
An announcement on the LETH website, dated March 2001, stated that the company had opened offices in Dublin, at the executive suites, Harcourt Centre, Block 3, Harcourt Road, Dublin 2. A phone number was given.
A woman who answered the telephone when The Irish Times called said LETH had vacated the offices some time in October of 2001. She had a forwarding post office box address in Turkey.
LETH is said to have only six employees but to make heavy use of a number of consultants and, therefore, employs about 120 people indirectly. Manufacturing of the machines it sells is subcontracted. They are made in Russia and are made to order.
The company informed the SEC at the end of August that it would be late in filing its accounts.
"As part of the auditor's due diligence and audit procedures, it is necessary to confirm the company's assets and inventory in Ireland and Russia. This phase of the audit process has taken longer than expected," the SEC was informed.
It's difficult to know what to make of all of this, though one obvious explanation is that LETH is a company that has great ambition but is very much at an early stage of its development. The company is quoted on the Nasdaq over-the-counter bulletin board, a sort of lesser form of full public quotation. A chart tracking the company's share price over the past three months shoots up and down, from more than $1 to less than 40 US cents.
It is his activities with LETH that led to Mr Reynolds's decision not to put himself forward for re-election as chairman of Bula Resources at that company's annual general meeting on Monday. He made this decision because of what he said was a potential conflict of interest.
Mr Reynolds negotiated a deal with an army general in Bahrain in the middle of last year, which involved Bula putting down a $1.5 million refundable deposit. The deal involved the enhancement of an oil well to increase its production. The well is close to a neighbouring country. It involves "political sensitivities", according to Mr Reynolds.
The Bula secretary, Mr Con Casey, resigned after he learned about the deal for the first time in January of this year. He had not been invited to a board meeting where it was discussed and agreed. It was his resignation that led to the public disclosure of the deal for the first time. Around the same time, Bula's stockbrokers, Davy Stockbrokers, resigned from that role.
The deal is not now going to proceed but Bula has yet to get its deposit back. Mr Reynolds offered to take overBula's interest for $1.5 million for the use of Life Energy but the only other director on the Bula board up to recently, Mr Tom Kelly, refused to accept the offer. He said a conflict of interest was involved. Mr Reynolds disputed this. After Monday's meeting, he said Life Energy would still be interested in taking on the deal.
Monday's meeting also heard of a trip to Libya by Mr Reynolds and a Bula associate, Mr Omar Yazigi, in April. The idea behind the trip was that a $1.2 million investment by two Libyan companies would be finalised, with the money being collected and Bula share certificates being handed over in exchange. One entity was One Nine Investments, a subsidiary of the Ghadafi International Charitable Foundation. The other was a Libyan entity registered in Malta.
Mr Yazigi said that, while in Libya, Mr Reynolds presented representatives of the companies with Life Energy documentation. This, he said, was a conflict of interest. Mr Reynolds said it was not a conflict of interest. He had merely given the people a brochure, he said.
This whole controversy is just the latest in Mr Reynolds's at times colourful business career since he left the office of Taoiseach in November 1994. How profitable the period has been for him is not easy to gauge, although on Monday he seemed to shrug off his $500,000 investment in Bula shares and the $200,000 he is owed personally by the company.
His chances of getting any of that money back are surely slim. Trading in Bula shares has been suspended since April and there are many who feel they are unlikely to ever be reactivated.
Whatever about the earth, it is difficult to say that Mr Reynolds left Bula in better condition than he found it. The jury is still out on Life Energy, and its success or otherwise over the coming 12 months or so will be interesting to watch. As will, as ever, Mr Reynolds.
