Bankers and Developers

Irish banks have been criticised for being too close to some developers and property investors. I don't know if any banker was as intimately involved with a project as a certain Declan Maher, the manager of AIB's Clifden branch in Co Galway. We covered this story last week.

In 2005 Maher and Kevin Barry, an accountant, were busy looking for investors for a land deal in which the BMB Partnership had invested in near Disney World in Florida. BMB was a partnership involving Barry and Maher.

BMB teamed up with with Buena Vista Corp, an American firm for this project. As well as raising $15m from Irish investors BMB had to ensure it had a bank ready to roll in with another $60m to fund the building of 100 villas known as Gables on the Green.

Which bank did BMB get its $60m letter of guarantee from? Well it was none other than AIB. And AIB Clifden to boot. Maher kindly authored a letter of guarantee for his business partner. See it here.

Maher wouldn't return calls last week. Barry did. He said BMB were not serious about using AIB and there was no conflict of interest for Maher in writing this letter.

I've asked AIB whether it approves of bank managers issuing such letters to their business partners. No answer so far.

Meanwhile the Irish Emerald Gables consortium, which consists of a few of these Philadelphia registered companies, is trying to secure its $15m investment through the Florida courts. The Buena Vista Corp hasn't built any of the promised 100 villas due to a number of issues. Both sides are blaming the other for this. Members of the $15m Irish syndicate include Josie Conneely, a former Fianna Fail councillor, and the late John Cusack, of Cusack Homes.