Thursday, September 27, 2007

Found objects

It's fascinating where a little open ended weblink following can lead. A few weeks back we noticed a reference to a UK expatriate, Joe Lewis, now living in the Bahamas, who bought a big stake in the investment bank Bear Stearns. Bear Stearns has been under pressure since hedge funds it was running had big losses over the summer and it's probably a good takeover candidate so Lewis could have a nice speculative gain if that happened.

So anyway, the description of Lewis -- tax exile and currency trader -- is surely a familiar job description to followers of Irish politics. Because it's the same job description as Geneva-based J.P. McManus. Lo and behold, from a 9 year old profile of Lewis --

Traders have linked Mr. Lewis to a trading cabal made up of Kerry Packer (RIP), the Australian media giant; Sir James Goldsmith, the late corporate raider, and an Irish trio comprised of Dermot Desmond, a property magnate and stockbroker; J. P. McManus, a kingpin of the legal bookmaking business, and John Magnier, a horse breeder. But Mr. Lewis said that he had traded only for his own account. He acknowledges, though, that Messrs. Desmond, McManus, and Magnier are his friends.

But wait, there's more:

In 1991, investigators for the Irish Government began looking into the circumstances surrounding the sale of land to Telecomm (sic) Eireann, the state-owned telecommunications concern. The investigation was prompted by concerns that the land -- jointly owned by Mr. Lewis, the three Irishmen and others -- was sold at a vastly inflated price, a result of the group's influence with the administration of Charles Haughey, then the Prime Minister.

None of the men was ever charged with any wrongdoing in the matter, although a report issued in 1993 by John Glackin, a special investigator for the Irish Government, was highly critical of almost all those involved. The report included a series of rancorous letters between Mr. Glackin and Mr. Lewis's lawyer, regarding Mr. Lewis's unwillingness to provide information about his role in the affair. Mr. Lewis declined to comment about his involvement in the land deal.

This was the infamous Ballsbridge site that Dermot Desmond bought and then acted as an intermediary on its sale to the then state-owned phone company, and it was one of the seemingly endless series of financial scandals -- many linked to offshore entities -- that buffeted the late stages of Charlie Haughey's government in 1991.

All the principals from these scandals except Haughey (RIP) are still around.1 Private Eye has documented Dermot Desmond's increasing influence in the Labour Party via some large donations, and as they explain he's been linked to some poor quality government contractors (Venson) as well. So this is something that has radiated outwards from Ireland.

Of course just because it radiated out from Ireland doesn't mean that it left Ireland. The nexus, Fianna Fail, is still there. And if there's a lot of head-scratching as to why exactly Bertie Ahern might have been dealing in large amounts of foreign currency in the early 1990s, or might have had grateful friends so doing -- it's less mysterious when you look at Bertie's job description during that period and the not very hard to find links between him and the Lewis circle.

UPDATE 14 MARCH 2008: Given recent events at Bear Stearns, Lewis risks losing his entire investment.

1Magnier, McManus, and Desmond trade together, inter alia, as private equity group Lydian Capital Partners.

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