While away in Mayo I was reading Nick Shaxson’s Treasure Islands, which is an excellent guide to everything you would like to know about tax havens, how they developed and how they operate now. Once back curiosity lead me to an old post on the Treasure Island blog that I have linked to before, one which vilifies the official Irish stance on corporation tax. But it also brought me back to the Tax Justice Network’s Secrecy Jurisdiction report for Ireland and I re-read the section on the history of the IFSC, which I clearly just glanced over before, no doubt thinking that it was old news…
Reading it again I realised that I hadn’t paid any attention to the sources.
The biggest early driver of the project was the (now billionaire) financier Dermot Desmond, who put an initial proposal for a financial services centre to the government in 1985, and whose stockbroking firm part-financed the full-scale feasibility study by PWC. Desmond (who also owned some of the original buildings that would become designated to the IFSC project) put this proposal to his friend, the politician Charles Haughey, which led to a policy document launched by Haughey’s party, Fianna Fáil, during the 1987 election campaign, with a promise of 7,500 full-time jobs within five years. Desmond and a business partner
were the anonymous authors of the document. Although the document asserted (p318) that it was “not oriented in any way towards the creation of a tax haven,” reality would demonstrate the exact opposite.
The “voraciously corrupt” Haughey was returned as Taoiseach in March 1987, and by May of that year the government had already chosen the Custom House Dock site in Dublin to host the IFSC. The project was bulldozered forwards by a fixer named Padraic O’hUiginn, Haughey’s right hand man who, according to one official, had Haughey’s authority to “persuade, bully…whatever needed to be done to get the other government departments on board.” Padraic White, then head of the Industrial Development Authority, wrote in his co-authored book Celtic Tiger: the Inside Story of Ireland’s Boom Economy:
“Within the public service, new initiatives tend to develop slowly. These are advanced, after much consultation, and refined, usually by committees. So before a policy proposal finally emerges as government policy, it must survive a high degree
of scrutiny via checks and balances.
. . .
In this instance, the composition of the IFSC committee made the vital difference. So when O’hUiginn turned to any departmental secretary and gently enquired, ‘I presume this is possible,’ there was no place to hide.
I must put my hands up now at this point and admit I had no idea who Padraic O’hUiginn was, or is, until I read this. It shows how little attention I pay to personalities, I guess because O’hUiginn is not shy either about publicising his ‘legacy’ – in fact, he’s quite boastful. Looking around the net I quickly came across this 2008 article by Brendan O’Connor who tells his story based on a RTE One to One interview with O’hUiginn, written it seems to fullfilling his obligation to provide an “attack the public sector” boiler-plate article every week:
Padraig O hUiginn, as he will happily tell you himself, was Secretary General of the Taoiseach’s office for 11 years, serving under three Taoisigh. Columbo Cunningham reminded O hUiginn that Sir Anthony O’Reilly had once put it differently, saying that three Taoisigh served under O hUiginn. Padraig dismissed this as a joke but, as we were to see, it was a comment that summed up a lot of what is wrong with the civil service. (…)
While he denied at the beginning that he had any power, preferring the word “influence”, he went on to claim responsibility for a whole raft of variously successful or unsuccessful initiatives. The unsuccessful ones, obviously, weren’t as unsuccessful as people might think (decentralisation, Section 23), and the successful ones were variously, “the most successful economic plan ever”, “masterstrokes” and “triumphal”.
I apologise for quoting O’Connor, but it shows he’s not completely useless as he has at least saved me having to type stuff out myself.
Despite his bragging O’hUiginn has a modest and colourless website which seems to have been created to host a couple of extracts from books which discuss his ‘administrative’ and private sector achievements. The ultimate objective was to provide the raw material for some young gun writing about him further, I suspect.
The extracts come from the McSharry and White book mentioned above and The Irish Financial Services Centre - An international success by Fiona Reddin (2008)
Known as Haugheys ‘favourite civil servant’, O hUiginn ‘had unique levels of say-so’, says Buckley ‘with more of a mandate in the Taoiseach’s Department than anyone since T.K Whitaker’.
Dermot Desmond charicterises O hUiginn’s involvement in the IFSC project as being ‘critical’. No one could out-fox, out-manoeuver or de-stabilise him. When he made a commitment to get something done - you could take it that it would be done’, he says.
A story illustrating O hUiginn’s level of influence, which did the rounds at the time in the Department of the Taoiseach, has O hUiginn ringing a civil servant asking him to do something, to which the civil servant responded, ‘Who’s this speaking, the Taoiseach?’. O hUiginn was said to have responded. ‘No, but if you don’t do it by this afternoon it will be the Taoiseach who’ll be calling you’.
Just the sort of go-getter this country needs, say those who are frightened of democratic accountability and who wish to push through projects at the behest of top flight financiers, local wheeler-dealers and personal friends without having to deal with others who might consider it an egregious conflict of interest or an abuse of power.
Again, I am adding these long quotes as I found them quite illuminating, so hopefully whoever reads this will too.
O’hUiginn also gives an account of his role in the setting up of social partnership, although the account is given to the US Treasury Secretary John Snow when he visited Ireland in 2004 to find out the “secret of Ireland’s celtic tiger success”. His version was revealed in the wikileak cables in December 2010:
3. (C) Although the concepts behind Ireland,s reforms had been simple, the political will to carry out the reforms had only come in the context of the mid-1980s, economic meltdown, said Padraig O,hUiginn, former Secretary General in the Office of the Taoiseach (Prime Minister). O’hUiginn recalled drafting a proposal for economic recovery during that era, using ideas that were “apparent to any first-year economics graduate student” ) cut the fiscal deficit, spur competition, lower corporate taxes, etc. The ruling party at the time, Fine Gael, did not act on the proposal, but the Fianna Fail government elected in 1987 made the document the basis for the Program of National Recovery (PNR), which set forth the policies that underpinned Ireland’s economic turnaround. Fianna Fail,s “great advantage” at the time, said O’hUiginn, was Ireland’s economic crisis; with 18 percent unemployment and government debt at 130 percent of GDP, the political opposition, industry, and labor could not afford politically to impede solutions.
There are some details on this too in the McSharry/White book:
”During the interregnum, after the February 1987 election and before the formation of the new government, Charles Haughey as Fianna Fail leader had been fully briefed by O hUiginn, as NESC Chairman. O hUiginn assured Haughey the trade union endorsement of NESC was a real commitment and not just empty rhetoric. And he told the Taoiseach he was confident he could deliver the essence of the NESC report, recast as a comprehensive new centralised agreement negotiated between the social partners. However, Padraig O hUiginn set one condition. He wanted greater operational freedom in that role. He was willing to become involved in negotiations on the proposed new programme only if he could report directly to the Taoiseach and myself as Finance Minister and take instructions from us.”
Another thrawl with a search engine provides a more recent Sunday Independent article written by John Paul McCarthy who “holds a doctorate in history from Oxford”. This one points to O’hUiginn’s involvement in the Beef Tribunal.
O’hUiginn’s self-confidence certainly irritated Chief Justice Hamilton during the Beef Tribunal.
He found cause to criticise both Haughey and O hUiginn for making an ex-post facto amendment to the notorious IDA development plan for Goodman International.
Larry Goodman asked Haughey to change the original terms under which the IDA would release funds. O hUiginn advised Haughey that Goodman’s petition was reasonable.
Haughey then directed the IDA to drop its previous insistence that Goodman’s company would only receive government funds after it had created jobs.
Chief Justice Hamilton concluded: “There is no doubt whatsoever that the Government . . . wrongfully and in excess of its powers . . . directed the [IDA] to remove the performance clause from the grant agreement . . . and that this direction was made either at the instigation of the then Taoiseach or the Secretary to his Department.”
McCarthy continues that “O’hUiginn’s naked derision when confronted with the Moriarty report brought this resonant passage to mind again.”
Woah, wait, wait, wait, what has O’hUiginn got to do with the Moriarty report? (Sorry I know all this stuff is widely known – or at least its in public domain, either in published books or on the internet, so my question here is rethorical obviously…)
Well, after leaving the Civil Service, and being accused of conflicts of interests as chairman of Bord Failte because he was also running some tourist based businesses he became a director of Denis O’Brien’s Esat Telecom in 2000.
According to the O’Connor piece:
In 2000 it was reported that O hUiginn’s stake in Esat following its takeover by British Telecom was worth Ir£3.5m.
And of course his role in that business became the subject of the Moriarty tribunal. This is from a March 2011 article, again in the Irish Independent about the invitation to the All-Ireland final that led to a now-famous meeting in the hospitality area:
On the Thursday after the presentation (September 14), Mr O’Brien shared concerns that the financial aspects of the Esat Digifone bid were weak with fellow director Mr O hUiginn and possibly with a consultant who was working with him at the time, PJ Mara, the former Government press secretary and a close friend and associate of Dermot Desmond for many years.
Getting Desmond on board was a good outcome for O’Brien, who by then had no cash and was getting increasingly tetchy with his Norwegian partners because they wanted him to put up his share of the money. He had certainly pulled off a coup, according to Mr O hUiginn.
“My view was you would be far better to have Dermot Desmond, who is a committed Irishman and is a committed investor, and he would be a much better partner,” he said later. Dermot Desmond was to acquire the 20 per cent of the consortium originally supposed to go to a syndicate of banks, plus 5 per cent each from O’Brien and Telenor.
“This was the first and last time that Mr O hUiginn ever asked Mr O’Brien to the All- Ireland final, and the invitation was issued in the context of Mr O’Brien’s deliberations on the Project Group’s assessment of his finance, and the prospect of involving Mr Desmond, and the Tribunal considers it unlikely that Mr O hUiginn’s invitation was otherwise than part of a carefully considered strategy to place Mr O’Brien and Mr Lowry in proximity to each other,” says the report of Judge Michael Moriarty, issued last week.
So the Charlie Haughey, Dermot Desmond, Denis O’Brien, Michael Lowry, Larry Goodman and Padraic O’hUiginn, a cavalcade of compradors I think you’ll agree.