The Vultures have Landed

Vulture funds have swooped on Ireland with a ruthless determination that has hardly ever been seen in other parts of the world. They are buying up vast swathes of Irish property – and the Fine Gael led government is encouraging them.

Socialist Worker

The Vultures have Landed

Kieran Allen

A vulture fund brings together wealthy investors who pool their money to search for quick profits. Typically they move in two ways.

Either they buy up distressed property – houses, apartments or commercial units – whose prices have collapsed after the crash of 2008. Or they buy up the debts.

They approach institutions like Bank of Scotland, which fled Ireland after the crash, and buy their loan book for a fraction of its face value. They only pay about 20 or 30 cent for every €1 of debt and they then get the right to pursue the full debt.

Five or six main vulture funds have bought up €200 billion (!) of Irish property. The funds involved include Cerberus, Apollo, Lone Star, Blackstone and Kennedy Wilson.

They typically operate with an Irish front man who knows the local scene and can point them to where there is real value. The most scandalous case is that of Apollo.

Goggin

Here Brian Goggin, a former CEO of Bank of Ireland, has joined with a fund controlled by Leon Black, one of the richest men in Wall Street. Goggin helped trigger the Irish crash by pushing up property prices with a vast increase in loans. But now he is gaining from the very crash he helped to bring about.

To add insult to injury, he retired on a pension of over €500,000 a year from the bank and is now creaming in more money while he helps a US controlled fund buy up Irish property.

The vast sell off has been made possible as a direct result of government policy. After 2012, Fine Gael pushed through a number of changes in the tax code to ensure these funds paid virtually no tax,

The sheer scale of the rip off is astounding.

Fifteen vulture funds have paid just €250 a year in tax!. This is despite the fact they control €10.3 billion worth of loans and debt in Ireland.

The tax dodge is estimated to have cost the Irish Exchequer up to €500 million in lost taxes.

Fine Gael pretend that this just happened because clever people found some ‘loopholes’. This is simply a lie. The ‘loopholes’ were deliberately written for them by a government that wanted to convey an impression that a quick recovery was underway.

 Officials in the Department of Finance met with vulture fund firms on sixty five different occasions in 2013 – 2014.

Even more astounding, the Finance Minister Mr Noonan attended eight of these meetings. Three of these meetings were with one of the nastiest funds, Lone Star.

Cerberus

In the North, virtually all of NAMA property was sold off to Cerberus at a knock down price. A tight arrangement emerged between DUP politicians like Sammy Wilson and Peter Robinson to push through the deal.

The DUP politicians did a deal with Cerberus to write off the personal guarantees given by Northern builders to secure loans. These often included claims on their personal houses.

Once Cerberus gave that commitment, the DUP contacted Michael Noonan, who turned a blind eye to the loss of money on NAMA.

What emerges from all of this is one simple fact – the Irish political elite on both sides of the border have never had the interest of the majority at heart. They are plugged into the global networks of the rich – and will give them a dig out when asked.

All of this will bring tremendous suffering. Housing campaigner, Peter McVerry, has predicted that about 25,000 people will face evictions as the vultures move in.

The Dail had a chance to stop these eviction this month when an AAA-PBP bill was presented to the house. But Fine Gael and Fianna Fail colluded to vote it down.

The reason? They know exactly whose interests they must serve.

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