Ship of Fools

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

SHAKESPEARE IS HARD, BUT SO IS LIFE
A TRAITOR'S KISS
WHITE SAVAGE

I would like to thank Dr Jim Stewart and Professor Justin O'Brien for help and advice with parts of this work, though neither of them is responsible for my use of those gifts. I am also grateful to Geraldine Kennedy, editor of the
Irish Times
, and her predecessor Conor Brady, for allowing me to express many of the ideas that are developed here, even when they were badly out of kilter with the mood of the times. Paddy Smyth and later Peter Murtagh on the opinion pages have been particularly patient and supportive.

This book would not have been undertaken without Neil Belton's support and perhaps misplaced optimism, and would not have been possible without Charles Boyle's acute work on the text. I am also grateful for the work of my agent Derek Johns.

My debt to Clare Connell is, as always, both incalculable and inexpressible.

Dáil
- the lower house of the Irish parliament

 

Fianna Fáil
- the dominant party in Irish politics since 1932

 

Fine Gael
- the largest opposition party

 

IFSRA
- the Irish Financial Regulatory Authority, established in 2003 as the separate supervisory arm of the Central Bank; it was subsequently known as The Financial Regulator

 

Progressive Democrats
- a small but highly influential neo-liberal party formed in 1985 and wound up in 2009

 

Protestant Ascendancy
- the governing and landowning class, adhering to to the Protestant state church, that dominated Irish society from the seventeenth to the nineteenth century

 

Tánaiste
- the deputy prime minister

 

Taoiseach
- the prime minister

 

TD
- member of the lower house of the Irish parliament, Dáil Éireann

Since this book is intended as a polemical, rather than a historical or academic work, it does not have an apparatus of references and footnotes. All of the facts and statistics used here are, however, easily available on line from the relevant Government departments, the Revenue Commissioners, the Comptroller and Auditor General, the Central Statistics Office, the reports and transcripts of the McCracken, Flood and Moriarty tribunals, the DIRT inquiry, the reports of the all-party Oireachtas Committee on the Constitution, the National Competitiveness Council, Eurostat, the OECD and the International Monetary Fund.

References to contemporary events are drawn from the archives of the
Irish Times
, the
Sunday Tribune
, the
Sunday Business Post
, the
Irish Independent
, the
Sunday Independent
and the
Irish Mail on Sunday
.

In July 2004, the property developer Seán Dunne celebrated his second marriage, to the former gossip columnist Gayle Killilea, in a seventeenth-century villa on the Italian Riviera. The guests, as Ms Killilea's newspaper gushed, were ‘a fascinating sample of Irish society: bankers and footballers, designers and theatre directors, not to mention, given the groom's background, political deal-makers'. The only notable absentees were the serving Taoiseach, Bertie Ahern, and his Minister for Finance, Charlie McCreevy.

Ahern had been due to arrive for the wedding, flying straight from the National Day of Commemoration ceremonies to honour Ireland's war dead, and to stay as a guest of the property magnate at the Hotel Splendido in Portofino. When news of his plans to travel to Italy was leaked to the press, he decided not to go. During the speeches, however, a phone call from Ahern was played on speakers to the guests: ‘Dunner, you and I go back a long way. I wish I could be there,' he said. ‘I'm sorry I couldn't come but I would have been more trouble to you than I'd be worth.' The Taoiseach, Killilea explained to the
Sunday Independent
, ‘didn't want our wedding to turn into all being about him. Then Charlie McCreevy said he better not come either.'

The party cost €1.5 million, but it was merely the prelude
to a longer, more lavish nuptial celebration. The couple had hired Aristotle Onassis's old yacht, the
Christina O
, venue for the wedding receptions of Onassis and Jackie Kennedy in 1968 and of Grace Kelly and Prince Rainier in 1956. Forty-four guests were taken on a two-week cruise around the Mediterranean. The cost of chartering the yacht is €65,000 a day, not including food, drink and fuel. The fuel charge was €575 an hour.

But the real cost of the
Christina O
was borne by a couple of million people in Ireland, who probably did not know that they had paid for much of it. The Christina O Partnership Limited is registered in the Cook Islands but owned by a consortium of Irish businessmen, who purchased it in 2000. It cost them €65 million to buy and refit the yacht in lavish style, including a bronze-bordered swimming pool inlaid with mosaic frescos of ancient Crete that, at the push of a button, could be turned into a dance floor.

The expense was largely borne by the Irish taxpayer. Under Ireland's beneficent tax regime for the rich, the wealthy businessmen who put up the cash got most of it back from the state. In November 2008, the Revenue failed in a court case in which it had challenged the right of one of the investors, Pino Harris, to claim back most of his outlay on the
Christina O
. Harris had put up €14.3 million and got €9.12 million of it from the state in the form of tax refunds. Assuming that the other investors got back the same proportion of their investment from the tax authorities, the Irish taxpayer lavished about €40 million on the
Christina O
. It was money well spent - a state in the throes of a demented property cult needed somewhere suitable for its new aristocracy to disport itself in style.

Less than a year after his epic epithalamion in the Mediterranean,
Seán Dunne pushed Irish property prices to new heights by buying the Jurys and Berkeley Court hotels in Ballsbridge, Dublin, for €260 million, with the intention of demolishing them to build a new high-rise city quarter to rival London's Knightsbridge. He paid €53.7 million per acre for the land; the previous record was €35 million. He then bought a small adjacent site, Hume House, for the equivalent of €195 million an acre - believed to be one of the highest prices paid for a piece of real estate ever, anywhere. In all, he spent €379 million on his Ballsbridge site.

In August 2009, Ulster Bank, a subsidiary of the Royal Bank of Scotland, moved loans it had given Dunne to buy the Jurys and Berkeley Court site into a new ‘quarantine' division for dodgy assets, a prelude to eventually offloading them to a British or Irish state ‘bad bank' for toxic debts that were unlikely ever to be repaid in full.

The
Christina O
sailed on.

At two o'clock on the morning of 11 September 2008, twelve miles west of the island of Belle-Ile in the Bay of Biscay, the bilge alarm sounded on the Irish national yacht, the
Asgard II
. The brigantine was the successor to and namesake of the original
Asgard
, on which, in 1916, the nationalist revolutionary Erskine Childers and his wife Mary ran a consignment of German guns into Howth harbour and delivered them to the Irish Volunteers. The original ship was enshrined in nationalist mythology and eventually preserved in the national museum. The
Asgard II,
the state's official sail training vessel, inherited some of its aura as a symbol of the
nation. Its masthead was an image of the sixteenth-century ‘pirate queen' Granuaile, who had defied Elizabethan encroachment on her West of Ireland coastal fastness.

The sound of the alarm that morning meant that the
Asgard II
was taking in water. The captain gave the order to abandon ship, the crew was evacuated, and the
Asgard
, her decks awash, sank sadly to the bottom of the bay. There was some hope that she might be raised, but in February 2009 the government decided that there was not much hope of salvage. Nor was there much prospect of building a new boat to symbolise the nation. The government was so broke that it quietly pocketed the €3.8 million in insurance money and left the
Asgard
to its watery fate.

There was something almost too neat about the symbolism. A fortnight later, the Irish banking system, awash with waves of bad debts owed by property developers, collapsed. The great Irish economic miracle of the 1990s and early twenty-first century was over and the global Cinderella was returning to rags and ashes. The
Asgard
had never functioned quite so eloquently as an image of Ireland.

A joke:

‘un “american dream” à l'européenne'

-
Le Monde
on Ireland

 

 

 

In Tegucigalpa, at 7 p.m. on the evening of 19 February 2009, members of the Honduran National Business Council filed into the 700-seater La Concordia ballroom of the Marriott Hotel. They had paid $150 a head to hear a lecture about the Irish economic miracle and how it could be emulated by those still wallowing in the swamps of underdevelopment. Its title was
El Tigre Celta: Modelo Irlandes de Desarrollo
(‘The Celtic Tiger: The Irish Model of Development'). The speaker was the former Taoiseach, Bertie Ahern, described in the promotional literature for the event as the ‘driver of the Irish economic model'.

The speech so impressed the right-wing Honduran National Party that it quickly issued a statement proclaiming its close affinity with Ahern's inspiring leadership: ‘The development model followed by Ireland to become the “Celtic Tiger” coincides with that promoted by the Nationalist candidate Porfirio Lobo Sosa, nationalist leaders said after meeting with former prime minister of that European country, Bertie Ahern . . . The nationalist leadership knew all about the development programs implemented by Ahern when he served in office between 1997 and 2008 which allowed him to place Ireland at the head of the wealthiest nations of Europe at present'.