Civic pride for at-home tax exile

Last Friday Limerick City Council awarded its highest honour, the Freedom of the City, to the well-known and much-loved racehorse owner and gambler John McMahon. He is better known by his real name, J.P. McManus, under which title he joined Charles Stewart Parnell, John F. Kennedy, Pope John Paul II and Bill Clinton as persons who, in the words of the official regulation governing these matters, "have brought credit to Limerick by their contribution to the common good."

The proposal to honour him, principally for his work in raising large sums for charity through the J.P. McManus golf classic, was passed unanimously by the city council's protocol committee, on which the major political parties are represented.

Although J.P. McManus is not shy about his many positive achievements and his charitable generosity, at least two of his particular contributions to the common good have been made pseudonymously or anonymously.

The pseudonym J. or John McMahon came to public notice in the reports of the inspector appointed by the minister for industry and commerce, Des O'Malley, to investigate the purchase by Telecom Eireann of the old Johnston, Mooney and O'Brien site in Ballsbridge, Dublin. By a nice irony, the Freedom of Limerick City was awarded to Mr McManus during the 10th anniversary of the emergence of the Telecom scandal.

As far as the common good is concerned, all that needs to be remembered is that the owners of Telecom, the Irish public, ended up paying £9.4 million for a site which had been bought less than a year earlier for £4 million.

At a time of desperate austerity and savage cutbacks in essential public services, a small group of people made a huge killing at the public's expense. Finding out who these lucky people were was, for the inspector, John Glackin, a tedious and thankless task.

FOLLOWING the money trail, John Glackin came across a key transaction in December 1989, when $1.5 million was paid to the company at the heart of the whole complex operation, Chestvale. This money came from an account in the name J. and N. (John and Noreen) McMahon held by Allied Irish Banks (Channel Islands) Ltd in Jersey. In April 1992, when the inspector asked a key figure in the whole affair, Dermot Desmond, who J. and N. McMahon were, he was told "that he didn't know, that it was just another name, not of real people."

AIB (Channel Islands) wouldn't tell the inspector who the McMahons were either, because "their client would not authorise them to do so". However, John Glackin discovered that AIB in England also held accounts in the same name.

"AIB identified three accounts in the UK which were in the name of John and Noreen McMahon and in a written document stated that the sole signatory authorised to operate these accounts was John P. McManus." Further documents showed the holder of these accounts was also the holder of the Jersey account.

J.P. McManus told the inspector he never made "any loan that was directly or even indirectly related to the JMOB site." In subsequent correspondence with J.P. McManus's solicitors, however, in which the inspector revealed the documentation he had uncovered from AIB in London, there was "no denial of an interest in the account referred to."

The inspector therefore decided that "despite the denials of Mr McManus and the submissions made on his behalf I find that Mr McManus invested US$1.5 million by way of advance to Chestvale." He also found that, in return for this investment, Mr McManus received a profit of half-a-million pounds that was withdrawn in cash from a bank in Dublin and initially kept in a tennis holdall.

THE other example of J.P. McManus hiding his contribution to the common good behind a bushel of secret bank accounts is his involvement with the Taoiseach's pet project, Sports Campus Ireland.

It was, of course, his promise of a £50 million donation that kick-started the epic voyage towards the Bertie Bowl. Oddly, however, the only legal document backing up this promise is a letter of assignation from Swiss bankers Pictet et Cie of Geneva, on behalf of an unknown client, whom the bank, citing confidentiality, refuses to name.

All the public has to go on is Jim McDaid's rhetorical question in the Dail: "Who else could it possibly be? Santa Claus?" And we all know that when it comes to the Bertie Bowl, there ain't no sanity clause.

The one thing we know about McManus's finances is his contributions to the common good include minimal tax revenues to the Exchequer. Thanks to generous changes in the residency laws, he is able to live in Switzerland while, according to the Limerick Leader, spending "most weekends" at his Irish home on "the magnificent Martinstown Stud."

Receiving the honour last week, J.P. McManus remarked that according to friends its advantages included "Not taxing your car, parking it where you like, staying in the pub as long as you like and not paying service charges." In a self-respecting democracy, someone at the ceremony might have asked whether, since so few rules seem to apply to members of the golden circle, they really need the freedom of the city at all.