SERIOUS FAILINGS at the Dublin Docklands Development Authority and huge financial losses that have to be picked up by the exchequer have been confirmed by three reports published yesterday.
Further investigations are to be carried out by the Comptroller Auditor General (C&AG), John Buckley, whose remit is to be extended to the authority.
Among the reports’ findings is that there was lack of oversight of the DDDA’s former chief executive, Paul Maloney. This finding was rejected by Mr Maloney yesterday.
A financial review by Ray King Associates found loose internal controls, and that authority for salary transactions rested entirely with Mr Maloney. It found the lack of oversight of Mr Maloney was partly because “the chief executive did not bring these matters to the board’s attention”.
Guarantees given to Anglo Irish Bank in 2006 were changed in March 2009 so they increased the authority’s exposure on loans associated with the purchase of the Irish Glass Bottle site in Ringsend, Dublin, at the height of the boom.
A planning review by Declan Brassil Co found the authority made its planning function subservient to its development function, made inappropriate planning decisions, and that senior executives made an agreement with a Liam Carroll company that was building a new headquarters for Anglo Irish Bank, without the knowledge or authority of the board.
The authority is working close to its €127 million borrowing limit, is paying €5 million a year in interest to Anglo Irish Bank arising from its disastrous involvement in the Glass Bottle site, and is being sued for “circa €100 million” by property developer Bernard McNamara, its partner in that deal. Its investment in the site is now valued in its books as nil, while it remains liable for borrowings.
Chairwoman of the authority, Prof Niamh Brennan, who was appointed last year, welcomed the move to involve the C&AG, and predicted that Mr Buckley would find the inquiries already made for the board to be of a high standard.
Asked about huge costs facing the authority as a result of its involvement in property development, Prof Brennan said: “We are in an extremely fragile position. The challenges that remain are huge but we can work through them, though we need a few things to go our way.”
The authority has cut its costs and reduced its workforce by half.
Mr Maloney, who was chief executive of the authority from June 2005 to July 2009, issued a short statement yesterday in which he predicted that he and others would be querying the reports “in another forum”.
He said a finding that had appeared in earlier drafts of the reports, that “key planning information was systematically and deliberately withheld from the board”, had been dropped. This raised issues to do with fair procedures and due process, he said. “I totally reject the findings on salaries and will fully demonstrate to the C&AG that this role was delegated to me by the board,” he said.
Prof Brennan said the authority’s “financial exposure issues improved dramatically” since the Glass Bottle site loans were transferred to the National Asset Management Agency (Nama).
“If we have to pay money, it will be to Nama. One arm of the taxpayer will be paying to another arm of the taxpayer.” She said this did not excuse what had happened.
She did not know how the €5 million per annum interest charge on the loans could be brought to an end.
The case being taken by Mr McNamara involved substantial costs.
She said new information on what happened in the past was coming to light all the time.