Con Lucey letter to Eddie Downey on remuneration

23 Nov 15

Mr Eddie Downey, President IFA 18/8/2014

Dear Eddie,
Further to my letter to you on 11 August and our subsequent discussion on the phone on 13 August, I have decided to stick to my decision to resign as chairman of the IFA Audit Committee. I acknowledge the views expressed by you, and also by the General Secretary, Pat Smith, that my concerns would be addressed and that I should reconsider my decision. However, I think it is preferable to appoint someone with qualifications and experience in Accountancy / Auditing. All that study, qualifications and work experience of people in that profession must account for something! Such a person also has the advantage of being independent from IFA and its personnel, both voluntary and staff.
However, as we discussed, I am happy to pass on my thoughts on some issues which we were starting to examine in the AC, and which the new committee may wish to put on their agenda. I hasten to add that we were not at a stage to make recommendations on these issues, and it would be wrong to conclude that we had identified any problems. This is no more than a work agenda, but may be helpful to a new chairman coming from outside IFA.
First, I wish to comment on two general issues.
I think the operation of the AC to-date should be looked on as a learning experience. I feel that all parties now agree that the AC should have a sufficient degree of operational independence. Thus the clause in the current Terms of Reference regarding the attendance by the General Secretary and Financial Controller should be changed so that their attendance is only by invitation from the AC.
I also wish to state that my decision to resign was not based on any findings by the AC regarding any financial irregularity in IFA. There were no such findings.
My overriding recommendation is that the Audit Committee should continue, with the two changes already referred to, a qualified and independent chairman, and adequate operational independence. I believe the other members should continue to be the Treasurer and immediate past Treasurer. I had not discussed with my two colleagues, Jer and JJ, how decisions would be reached in the AC in the event of disagreement. Based on some experience I have on the Employment Appeals Tribunal which consists of three-person panels, my suggestion is that decisions should be on the basis or either consensus, or majority of any two members. The AC’s recommendations should go to the Executive Board. It should be remembered that they are only recommendations.
The following are the main issues we intended to have a look at in the AC during the remainder of 2014:
• Review the level, timing and method of financial reporting in IFA, taking account in particular of the primacy of the Executive Council.
• Review internal financial controls to ensure that all expenditure is authorised and that the method of authorisation is robust.
• Review IFA’s code of practice and training programmes for Committee Chairmen and Staff in order to minimise the risk of litigation by Regulators and Commercial firms.
• Review the maximum time limits for payment of expenses to ensure that claims can be verified (currently €1.2m of estimated expenses by Committee and County Chairman are unclaimed).
• Examine the issues that may arise from changes to accountancy standards which are to apply from January 2015.
I wish to expand on the final point on the list; these views are my own as the item has not been discussed by the AC, other than a short discussion at a meeting with Deloitte in May. The new accountancy standard (FRS 102) is to apply from 1/1/2015. One significant change is that transactions between IFA and related parties will have to be recorded in the accounts. One such related party is “key management”.
In giving some consideration to the implementation of this change, it is apparent to me that there is a lack of accountability in the setting of levels of financial remuneration for the two most senior office-holders, i.e. the honorarium to the President and the pay and benefits of the General Secretary. I have already mentioned this issue to you informally, as an issue that needs to be addressed by IFA.
I know we both agree that IFA (like Caesar’s wife in the popular quotation) must be above suspicion, because of the responsibilities it bears. It is obvious that the Association needs to maintain the confidence of the very large membership base, and needs to ensure that the Association’s work is not eroded by negative publicity. To maintain confidence, there should be clear accountability for all major decisions in relation to the governance of the Association. Whereas the rules in relation to elections and policy formulation are clear and transparent, the same is not the case in relation to top-level remuneration.
I believe that there is a compelling case for the establishment of a Remuneration Committee in IFA which would have responsibility for setting the levels of financial reward for the top two office-holders at least. The membership should most likely be drawn from senior elected officers, with the possibility of an external expert as well. It should not include the President and General Secretary for obvious reasons.
While the external auditor, Deloitte, can be expected to provide advice on the implementation by IFA of the accountancy rules changes, I believe that this does not remove the need for a Remuneration Committee.
Finally, I overlooked in my earlier letter to acknowledge the cooperation and support for the AC provided by Ken Heade, and I wish to do so now.
I hope this letter is of benefit to you and the Association.
Yours sincerely,

Con Lucey.

Pat Smith, General Secretary
Tim O’Leary, Deputy President
Jer Bergin, Honorary Treasurer and member of the AC
JJ Kavanagh, member of the AC.
Ken Heade, Financial Controller.

Con Lucey letter of resignation to Eddie Downey

23 Nov 15

Mr Eddie Downey
President IFA


Dear Eddie,
I wish to inform you that I am resigning forthwith as Chairman of the IFA Audit Committee.
The immediate reason for this decision is what I consider as unacceptable interference by the General Secretary, Pat Smith, in the work of the Committee. The first significant working meeting of the Audit Committee (AC) was fixed for the 22nd July to deal with three items. On 18th July I received a phone call from IFA at the direction of Pat Smith requiring that the meeting be deferred until he had the opportunity to review the material prepared by the Financial Controller for the meeting. The relevant item was to “check that all expenditure is authorised and the method of authorisation is robust”. The normal checking procedure involves reviewing transactions over a randomly chosen recent period. In my view, it would be a waste of the AC’s time and a charade if documentation were first to be sanitized before being considered by the AC.
There are also some general reasons for my decision, based on my experience during the short life of the AC to-date.
First, the condition that the General Secretary attends the meetings of the AC, while not a member, is an anomaly. It is apparent that his presence is intended to influence the meetings; if the purpose is solely to provide information then it should be by invitation of the Committee. This condition is undesirable, as it is likely to stifle open discussion at the Committee. It is unnecessary, as recommendations from the AC go to the Executive Board, and there is adequate scope at that point for the General Secretary to influence the outcome. And it is in conflict with the very purpose of the Audit Committee.
Second, it is now clear to me that I should not have accepted the position of Chairman of the AC. The Chairman should have qualifications and experience in Accountancy / Auditing (which I have not), and should be “emotionally detached” from IFA (which also I am not). My parting advice is that the AC should be continued and that an appropriate person should be found for the Chair.
I hope that you find these comments of assistance and, as I already indicated, I see a valuable role for the Audit Committee in the more demanding times we now live in. Also, I hope that Jer Bergin and JJ Kavanagh will continue to participate in the AC.
For my part, I have no wish to conclude my relationship with yourself or IFA on a discordant note. However, in the circumstances which I have outlined here, I now see that continuing as Chairman of the AC would not be the best outcome for either IFA or myself.
I wish you and the Association well.
Yours sincerely,

Con Lucey.

Pat Smith, General Secretary
Tim O’Leary, Deputy President
Jer Bergin, Honorary Treasurer and member of AC
JJ Kavanagh, member of AC
Ken Heade, Financial Controller.

The Golden Law

19 Oct 15

First published in the Sunday Business Post 18 October 2015

A friend once told me a story. The man next door used to beat his wife, usually in the early hours of Saturday morning.

He heard everything. His deliberate footsteps as he walked toward her and those ugly pitched pleading cries in anticipation of what was to come. Him dragging her across the wooden floor by her hair. The blows. The begging. The things he said to her. The screams reduced to muffled cries as she desperately tried to appease him.

When he called the Guards it made things worse.They would come and knock on his door, enter the house, check on her and try talk to him. She never made a complaint. The Guards would park outside the house for a while and every now and again drive slowly by.

He would hit her harder when the Guards were gone. He knew who had called them and he let him know by shouting through the walls in between his kicks and punches. My friend could tell the difference by the sound of the impact. He was a vicious bastard who relished in the idea that he had an audience.

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Government must not block access to justice

29 Sep 15

First published in the Sunday Business Post 20 September 2015

Why is the government once again attempting to deny Irish citizens access to justice?

A government source confirmed to Pat Leahy in last week’s Sunday Business Post that it would introduce legislation to copperfasten Ireland’s ban on third party litigation funding.

This obscure doctrine of champerty was introduced in Ireland during centuries ago under the Maintenance and Embracery Act 1634. The support of someone else’s legal claim in exchange for a share of the potential damages is a criminal offence in Ireland. Champerty was abolished in England and Wales in 1967. Third party litigation funding is standard practice in Australia and the US.

Ireland is an outlier within common law jurisdictions. Why does the government want to buck this international trend of making the justice system accessible to all, regardless of access to financial resources? For now it is not said. But it would essentially undermine one high profile case that is imminent.

The Persona/Sigma consortium was a runner-up in the 1996 competition for the mobile phone licence, which was awarded to Esat Digifone. In a long running High Court case, Persona/Sigma is challenging the decision, arguing it should have been the winner.

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Rent controls will make things worse

23 Sep 15

First published in the Sunday Business Post 23 August 2015

Peter McVerry is wrong. Rent controls are not the answer to Ireland’s homelessness crisis.

McVerry called for new legislation to freeze rents on RTÉ’s Morning Ireland last Wednesday. The situation was “beyond crisis” he said, noting that the number of families in emergency accommodation had risen from 410 in January to 659 in July. Threshold, Focus Ireland and Simon Community have also made the clarion call for rent caps.

You’d have to be a hard bastard not to empathise with mothers staying up all night keeping watch over her children as they slept under a tree in the Phoenix Park. But tragic stories allow emotional rhetoric to cloud rational policy making. So why is McVerry wrong?

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Fennelly and Irish governance

22 Sep 15

First published by the Sunday Business Post 6 September 2015

The interim report of the Fennelly Commission is a contemporaneous account of how Irish political power really works.

This is the first time in the history of the state that official sanction has been given to reveal the internal apparatus of the state when the administration under investigation is still in government. The Taoiseach’s decision to give the Garda Commissioner no other option but to retire happened just eighteen months ago.

In the normal course of events, the Irish public is only granted this insight every Christmas when National Archives release Departmental and Cabinet files after the statutory thirty year period. The Mahon and Moriarty Tribunals reported decades after matters under investigation had happened.

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My first Ironman

15 Sep 15

Published in the Sunday Business Post 13 September 2015

Ironman 70.3 Dublin  1.9k swim : 90k cycle : 21k run

“The zip is from the top down.” Ok, yeah, no problem. He was the third guy to get me to lock him into his wetsuit.

I was smearing myself in Vaseline to prevent my wetsuit chaffing at the neck. Triathlons have that tendency for the intimate. The gear changes in the open mean inevitable nakedness. You get over that pretty quickly. The real intimacy is exposing the fight against yourself in public. Admitting to strangers your personal struggles.



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Why can’t Renua and the Social Democrats make the breakthrough?

14 Sep 15

Published in the Sunday Business Post 13 September 2015

Why can’t the new political parties make the breakthrough?

What do we want? A new political party! When do we want it? Now! So went the refrain in Irish public life since the troika took control of Irish decision making in 2010. It was assumed that the answer to the failure of establishment politics was the establishment of new political parties.

Political polls have consistently shown that almost a third of the electorate are prepared to vote for Independents or Others. Yet, the formation of Renua and the Social Democrats has failed to make any indelible impact. Both parties will justifiably argue it is still early days and that they are on a steep organisational curve without the same access to state funding as Fine Gael, Sinn Fein, Fianna Fail or Labour. Nonetheless, Renua and the Social Democrats have only managed to capture less than five per cent of a vote which is actively seeking an alternative. Why?

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What is Michael D. Higgins’ presidency for?

27 Aug 15

Published in the Sunday Business Post 26 July 2015

What is Michael D. Higgins’ presidency for?

With four years of a seven year term almost served, future historians may struggle to identify what impact Higgins made as President.

No one is allowed say this out loud. Michael D., as he is affectionately known, is a nice man. His popularity is measured by his 1,007,104 votes received on the last count of the 2011 Presidential election, making him Ireland’s first ever ‘political millionaire.’

His raw passion and absolute certainty in his ideological viewpoint took no prisoners. American tea party advocate Michael Graham discovered this to his cost in a Newstalk radio debate which has amassed over two million YouTube views.



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The biggest property transaction in the history of Northern Ireland and the former US Vice President

13 Jul 15

Ireland would not have a Peace Process but for America. The island of Ireland owes a debt of gratitude to Senators Edward Kennedy, Christopher Dodd, Daniel Patrick Moynihan, Alfonse D’Amato, George Mitchell and President Bill Clinton.

Enter Dan Quayle.

The former US Vice-President is embroiled in a controversy which has uncharacteristically united both sides of the Irish border in outrage. Quayle’s US investment firm, Cerberus Global Investments, won the NAMA tender to buy the €1.6 billion Northern Ireland property portfolio last year. Prior to Cerberus’ successful bid, Quayle met the Northern Ireland First Minister. The timing of this meeting those who attended are curious.

The questions surrounding the biggest property transaction – €1.6 billion – in the history of Northern Ireland has rocked the Dublin and Belfast parliaments. Politicians across the border and the political divide have called for an inquiry after evidence has emerged which alleges that those close to the property deal failed to exercise probity in their dealings. The circumstances surrounding an alleged fee of €9.8 million is now the subject of a criminal investigation by the UK National Crime Agency. 

I also made a complaint to the FBI. The same provision the FBI relied on with regard to the recent FIFA allegations may apply in this instance. Specifically, the Travel Act, 18 U.S.C. § 1952 which form part of the guidelines of the Foreign Corrupt Practices Act (FCPA) 1977.

Why did I do that?

It’s my job. I am a governance consultant for the European Commission. My PhD on the history of Irish corruption was published as a best selling book by Manchester University Press in 2012. I worked as a governance consultant for the United Nations and the World Bank. I held academic appointments at the University of New South Wales and Trinity College Dublin. I’m lucky enough to write for a super newspaper

By the way Dan Quayle, we spell it potato in Ireland.

Dr Elaine Byrne


Timeline of the biggest property transaction in the history of Northern Ireland and the role of the former US Vice President

December 2009
The National Asset Management Agency (NAMA) was established in December 2009 as one of a number of initiatives taken by the Government of the Republic of Ireland to address the serious problems which arose in Ireland’s banking sector as the result of excessive property lending. NAMA was to function as a so-called “bad bank”, acquiring property development loans from Irish banks in return for Irish government bonds, with a view to improving the availability of credit.

Five institutions (and their subsidiaries) were designated as participating institutions in February 2010: Allied Irish Banks; Bank of Ireland; Anglo Irish Bank; Irish Nationwide Building Society; and EBS Building Society. NAMA’s Northern Ireland customer base was considerable, with approximately 50 per cent of the collateral value underlying the loans lying in Northern Ireland, 40 per cent in Great Britain and 10 per cent in the Republic of Ireland.


24 June 2013
The Northern Ireland Minister for Finance, Sammy Wilson MP MLA, sent a letter to the Irish Minister for Finance Michael Noonan, stating that law firm Brown Rudnick were interested in acquiring the Northern Ireland loan portfolio. Noonan responded that any potential bidder should contact NAMA directly.


September 2013
Brown Rudnick made an unsolicited approach to NAMA and indicated that its client, PIMCO, was interested in acquiring NAMA’s Northern Ireland loan portfolio. Frank Daly, NAMA Chair, told the Irish Parliament, “PIMCO indicated a preference for a closed transaction, which did not involve open marketing of the portfolio.”


January 2014
NAMA launched an open-market auction of €5.7 billion Project Eagle, its entire Northern Ireland based loan book. This 850-property portfolio is the biggest property transaction in the history of Northern Ireland.


January 2014

Peter Robinson sent a debtors’ charter” to NAMA. Frank Daly, NAMA Chair, described the document as that which “appeared to summarise an agreement between PIMCO and the NI Executive”.


10 March 2014
PIMCO informed NAMA that its compliance staff had discovered that PIMCO’s proposed fee arrangement with Brown Rudnick included the payment of fees to Tughans, a Belfast law firm, and to a former external member of NAMA’s Northern Ireland advisory committee, Frank Cushnahan. A fee of £15 million which was to be split three ways among Brown Rudnick, the managing partner of Tughans Ian Coulter and Cushnahan.

  • Coulter was then the managing partner of Tughans. He resigned in January 2015.


13 March 2014
PIMCO withdrew from the Project Eagle process following pressure by NAMA.


US investment firm Cerberus hired US based Brown Rudnick and Belfast based Tughans as strategic advisers. Both law firms had worked for PIMCO.


25 March 2014

Peter Robinson MLA (DUP), Northern Ireland First Minister, met with Dan Quayle, Simon Hamilton and Ian Coulter.

  • Quayle is the former US vice president and now chair of Cerberus Global Investments, the international division of US-based Cerberus Capital Management.
  • Hamilton (DUP) was then the Finance Minister but was appointed as Health Minister in a reshuffle on 11th May 2015.


June 2014
NAMA completes the sale of its Project Eagle €5.7 billion loan book for €1.6 billion to Cerberus Capital Management, at a 72 per cent write down. The “sale represents the largest single transaction by NAMA to date.”


16 March 2015
The UK House of Commons Northern Ireland Affairs Committee published a report which was critical of Cerberus and NAMA. The report recommended: “… we have heard disquieting stories from some businesses in NI that they were being treated by Cerberus in a less than sympathetic manner. We find it strange that no Memorandum of Understanding was agreed between the NI Executive and Cerberus, and therefore recommend that the NI Executive keeps a close eye on this situation.”

The report also stated: “The Northern Ireland Executive should keep a close eye on the relationship between Cerberus, the partial successor to NAMA, and businesses in Northern Ireland.”


2 July 2015
Irish MP Mick Wallace (Independent) claimed under parliamentary privilege that €9.8 million was discovered in an offshore Isle of Man account following an independent audit of Tughans. Wallace said that some of this money was “reportedly earmarked for a Northern Ireland politician or political party” associated with the €1.6 billion Project Eagle auction. The Isle of Man account where the €9.8 million fee was lodged was controlled by Ian Coulter, who has since left the firm. Tughans said the money has been recovered.


9 July 2015
The UK’s National Crime Agency (NCA) confirmed that it is to lead the criminal investigation into the sale of Northern Ireland assets owned by NAMA. The NCA did so following a request from Police Service Northern Ireland.


10 July 2015
The Public Accounts Committee of the Irish Parliament heard evidence from Frank Daly, NAMA Chair. He testified that NAMA forced PIMCO to abandon its bid for Project Eagle. He also revealed that if PIMCO’s bid was successful, a fee of £15 million was to be split three ways among Brown Rudnick, Ian Coulter and Frank Cushnahan.


15 July 2015
Mick Wallace MP (Independent) will disclose further information in the Irish parliament.


15 July 2015
Northern Ireland Affairs Committee will meet. Theresa Villiers MP, Secretary of State for Northern Ireland will attend.