The chairwoman of Dublin Docklands Development Authority has insisted all efforts are being made to stabilise the organisation’s finances.
Three reports published yesterday revealed serious failings at the DDDA and huge financial losses that have to be picked up by the exchequer.
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.
One report found 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 Irish Glass Bottle site in Ringsend, 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.
Prof Niamh Brennan, who was appointed last year, yesterday welcomed the move to involve the C&AG in the investigation. She predicted that the Mr Buckley would find the inquiries already made for the board to be of a high standard.
However, she admitted the authority was in a “fragile position” due to the huge costs facing it as a result of its involvement in property development.
She said the authority’s “financial exposure issues improved dramatically” since the loans associated with Glass Bottle site 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.
Prof Brennan said new information on what happened in the past was coming to light all the time.
Speaking on RTÉ's Morning Ireland today, Prof Brennan said the two reviews contained a large number of recommendations, the majority of which have been implemented or are being implemented.
"We are tidying up the way in which the authority conducts its business and is seen to conduct its business to the highest possible standards, she said. "Our objectives are to stabilise the organisation financially."
The authority has cut its costs and reduced its workforce by half.
She also said the public liability of the Glass Bottle site would be less than the €412 million it had cost.
“When you take into account the fact that one third of the proceeds went to a State company - Dublin port, when you take into account that stamp duty was paid on the transaction, when you take into account capital gains was paid on the transaction, when you take into account that the value given by Nama on the site was, I understand, similar to value on our books, when you put all that together the exposure to the taxpayer is a lot less than people have been talking about,” she said. It certainly is no where near the €412 million that was paid for the site."
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 Glass Bottle site, 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
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.