Siteserv was a company that was the very epitome of the Celtic Tiger years. It was founded in 2004 by Brian Harvey with financial backing from a capital investment firm owned by Niall McFadden, who learned his trade at the knee of Morgan Stanley and Larry Goodman. Harvey and McFadden had been friends since their days at UCD in the 1980’s. The company expanded expeditiously, acquiring a series of companies and a network of influential friends and CEO’s, expanding revenue and likewise a mountain of debt amounting ultimately to the tune €150m.

By the beginning of 2009 The Sunday Times, reported that “Siteserv is now proportionately one of the most heavily indebted companies on the Iseq”. The background of the financial collapse and the collapse in the building industry was catching up with the financial gamblers at Siteserv, by the middle of the year the profits had fallen by 24% and the debt was almost at its ultimate peak. The corporate good times had ended.

Decline

By the end of the year, despite having a Bord Gais contract for installing boilers thrown at it, profits were down 66% and its revenue down by 36%. Despite gaining further contracts worth €130m to refurbish the Mater Hospital and a series of smaller but substantial contracts with Colaiste Bhride in Wicklow, and a deal to build the largest noise barrier in the UK at Glasgow the company was in deep crisis. By the middle of 2010 the stock price began to decline ending up at 1 cent by January 2012, just before it was announced that a new owner was being sought.

In mid-January 2012 Davy Stockbrokers and KPMG announced that the company would be sold at a significant discount to its debt of €150m. This apparently flippant attitude to the debt was of course due to the fact that it was owed to the former Anglo Irish Bank, now the Irish Banking Resolution Corporation [IBRC] and was the property of the taxpaying Irish public. Never one to miss a good thing, by early March Denis O‘Brien was in with a bid totalling €50m.

Rich club

This was hardly surprising as the largest debtors to Anglo were leading members of the rich club who maintained a close relationship with the executive layers of the IBRC. Mike Ansyley, the CEO of IRBC dined regularly with Denis O’Brien who at that stage owed the bank around €500m. A key member of the Irish ruling class, O’Brien had became notorious when the Moriarty Tribunal found that in the 1990’s he had won the licence for the establishment of a mobile phone network by passing sums to the tune of almost €600,000 and financing further loans of 500,000 to Michael Lowry, who controlled the government department issuing the licences. Following the sale of Siteserv, despite this notoriety, he was pictured with Enda Kenny ringing the start bell on Wall Street. It was a relationship well-oiled by generous donations to Fine Gael.

The findings of the Moriarty Tribunal cast not the slightest shadow on Mr O’Brien and the interests of working people, who were responsible now for repaying the debts of the IBRC were very far below the interests of the major shareholders in Siteserv and their powerful crony. The normal procedure of appointing a receiver to gain the maximum advantage for the debtors didn’t happen. Instead, Siteserv was allowed to handle the sale themselves.

"Chinese walls”

Arthur Cox solicitors represented both sides in the sale but this has been arrogantly explained away by Sean Corkery, the CEO of Siteserv, as being acceptable because “Chinese walls” existed within Cox’s to prevent the “professionals” within the firm passing information between each other. Therefore the interests of the publicly owned IBRC was protected by the “professionalism” of the Irish capitalist class.

This corrupt incestuous practice was common during the ‘Tiger’ years and has been explained away as a being a feature of a small country with a small Capital city where professionals and companies paths cross all the time. This blarney does nothing whatsoever to refute the charge of corruption but it may in part however explain the particular nature of the corruption prevalent among the Irish bourgeoisie.

Despite the fact that ten companies expressed interest including a bid of €52m from Anchorage Capital and a starting bid of €60m from Altrad, which “had a cash mountain to do deals”, Siteserv, with the IBRC’s over-sight, accepted O’Brien’s offer. Walter Hobbs, the corporate adviser responsible for getting the best deal for the taxpayer, took a hands off approach and didn’t even attend the shareholders meeting where Altrad raised strong objections, complaining that David Harvey had repeatedly told them that the company was not for sale and this obstructed their ability to bid.

The sale to O’Brien was agreed; €105m was written off, O’Brien paid €45.5m and €5m was made available to buy off the major shareholders who received €3.92 per share for stock that was worth 1 cent on Jan 16 2012, two days prior to the announcement of strategic debt discussions with IBRC, a premium of around 292%. A nice bonus for the reckless gamblers who walked away wealthy leaving the debt on the laps of the Irish working masses.

Write down

Having completed the heist the benefits of belonging to the elite of the Irish capitalist class continued for O’Brien. In 2013 as a consortium of banks including the state owned AIB and the Bank of Ireland agreed to write off almost €140m in debt owed by his Independent News and Media, and with the purchase of a controlling share in Topaz and the subsequent appointment of his friend Brian Cowan, this time a former Fianna Fail Taoiseach, he achieved another generous write down of its €305m in debt to the IRBC and the Irish taxpayer.

The supposed cream on the cake was the awarding of lucrative contracts to a subsidiary of Siteserv, Sierra, designed to aid the ‘recovery’ by bleeding the Irish working class dry by the privatisation of and the selling back of the water services that already had been paid for. As part of this plan, Sierra had been granted the multi million contract for the installation of pre-pay electricity meters and later of water meters in every Irish home.

As with the sale of the company itself O’Brien’s acquisition of the water meter contract was assured by the familiar activities of the old boys network. Just as David Harvey had ignored advances by Altrad the offers by Siemens to fit the meters free and “gain a return from savings made in the cost of providing water services” were ignored by environment minister Phil Hogan who granted the contract to Sierra following discussions with “the stakeholders”. Free installation of water meters would be cold comfort to the working masses who were to be robbed by the privatisation of water services but it is another indication of how the Irish gombeen ruling class demands that they benefit from our exploitation.

Mobilisations

The entire issue would have gone the way of similar scandals and been buried deep under the carpet but what made this tale of corruption resurface was the dogged determination of the anti-water charges campaign. The local campaigns against installation of the meters has resulted in the programme, which was supposed to be completed by the end of 2014 being far behind schedule.

The large mass mobilisations and the spontaneous beginnings of an anti-austerity movement has shone an unrelenting spotlight on Sierra and caused the origins of the hated company to be continuously investigated by campaigning communities and groups. This struggle has been reflected in the repeated requests under the freedom of information act by independent TD Catherine Murphy to reveal the detail surrounding the sale which has revealed the affair in all its disgrace.

The State’s favourite insurance method is now kicking off in the form of an inquiry, a handy vehicle for telling us less than we already know, dragging conclusions out for as long as possible, reinforcing a resigned cynicism and lining the pockets of the investigating bodies.

Another inquiry

In this case it’s even worse than usual in that it is being conducted by “two professionals” from KPMG, the very company that had advised on the sale of Siteserv in the first place with the added “reassurance” of a retired Judge who will be on the lookout for “conflicts of interest”. Most people can spot one already but if we can be convinced to ignore the elephant in the room the same methodology which was applied to the corrupt sale of Siteserv will produce the required cover up.

Justice will not come through any inquiry. As the exposure of the Siteserv scandal shows it will only come through action in communities and on the streets. It is that revolt that has created the conditions that allowed the whole thing to be revisited. The truth is already out there and the overarching question is whether the Irish working masses are prepared to take it lying down or whether they will continue with the anti-water charges revolt and build an independent democratic anti austerity movement that can challenge not only the corruption surrounding Siteserv and the water privatisation issue but all aspects of the power and control of the corrupt Irish ruling class.