Bank highlighted political connections of loan applicant

BANK OF SCOTLAND (Ireland) described Fine Gael politician Brian Walsh from Galway as “an individual for the future both politically and commercially” in internal records pushing for approval for a loan of €475,000 to buy overseas properties in 2006.

The bank said in a loan application for Mr Walsh, who was elected to the Dáil in 2011, that he was “extremely well connected in Galway city” and that there were “ambassadorial factors” in lending money to him “given his political profile” as mayor of Galway city.

The application states that the purpose of the loan was to buy two apartments, in London and Dubai.

Documents seen by The Irish Times reveal the bank cited Mr Walsh’s business partnership with Galway developer Liam Mulryan, a significant borrower at the bank, and Mr Walsh’s small interest in their Briarhill shopping centre, residential and office development at Doughiska on the outskirts of Galway.

“We see Brian Walsh as a good long-term client who has already demonstrated sound commercial nous. His association with Mulryan has been very beneficial both financially and from an experience perspective,” the bank said in an application to the internal credit committee to approve the loan.

Mr Walsh told The Irish Times he did not proceed with the purchase of the overseas apartments or draw down the loans from Bank of Scotland (Ireland).

The reference to his political connections in internal records showed, he said, “the way the banks would have operated at that time”.

“I never suggested that I would get the money from them because I was involved in politics,” he said.

Mr Walsh said he had a small loan with the bank but this was drawn down before he was elected to Galway City Council in 2004. “It was a matter for themselves what they would put in their own internal documentation to get loans over the line.”

UK bank Lloyds, which owned the bank, and Certus, the firm set up by former management of the Irish bank to wind down the loan book, both declined to comment on whether it was common to play up the political connections of potential borrowers when approving loans.

A source close to the bank at the time said it had “a very high-growth trajectory” at that point and would have seen Mr Walsh as a “high-profile client” who could direct other business to the bank.

The bank, which competed strongly with Anglo Irish Bank for new property loans, said in the application that “we fully expect Walsh to become a major Anglo client in the years ahead”.

Mr Walsh worked with Anglo Irish Bank for a year in the late 1990s and later joined Mr Mulryan’s business before selling his property interests with Mr Mulryan to pursue a career in politics. He also ran a financial management business for 12 years.

Mr Walsh was mayor of Galway in 2005 and 2006 before being elected to the Dáil for the Galway West constituency last year.