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Dr James Reilly and his unpaid debts

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  • Closed Accounts Posts: 7,563 ✭✭✭leeroybrown


    Happyman42 wrote: »
    Once again, the issue isn't the individual, but the system that allowed this to happen. Consistent with what I said about the others.
    The only question this case raises about the "system" is whether he should have been allowed to become Minister for Health. My own personal view is that he's made sufficient effort to declare his interest and divest himself of it that it's not a problem. If this legal situation didn't exist one of his previous efforts to sell his share would likely have succeeded and removed the conflict. I would speculate that he might not even be able to divest himself of it at a total loss given the legal situation involved and the potential liabilities attached to his share.


  • Registered Users Posts: 4,693 ✭✭✭Laminations


    After watching his statement I think he's cleared it up. More unfortunate than silly to be getting himself in this situation. For people who think he hasn't cleared it up, like SF and there statement on VB, can you tell what is the conflict of interest? And how could he have avoided being named in Stubbs Gazette?


  • Closed Accounts Posts: 18,066 ✭✭✭✭Happyman42


    The only question this case raises about the "system" is whether he should have been allowed to become Minister for Health. My own personal view is that he's made sufficient effort to declare his interest and divest himself of it that it's not a problem. If this legal situation didn't exist one of his previous efforts to sell his share would likely have succeeded and removed the conflict. I would speculate that he might not even be able to divest himself of it at a total loss given the legal situation involved and the potential liabilities attached to his share.

    By his own admission he was involved in a number of investments in private health care, that alone should have excluded him from the Health brief imo. At the very least he should not have been appointed until he divested himself of them completely. My suspicion is that this only presented itself as a 'problem' because the deal went south.
    Noticeable abscence of Labour TDS for the speech, is he a lame duck I wonder?


  • Registered Users Posts: 13,306 ✭✭✭✭ArmaniJeanss


    Happyman42 wrote: »
    By his own admission he was involved in a number of investments in private health care, that alone should have excluded him from the Health brief imo. At the very least he should not have been appointed until he divested himself of them completely.

    Interesting that posters (not necessarily you) and the public in general often complain about the amount of teachers and 2-bit solicitors in the Dail, and suggest we'd be better off with experienced businessmen in the key positions.

    And wondering why instead of some party hack being rewarded with a cabinet portfolio he has little or no expertise in, why can't outsiders with a track record in a relevant industry be encouraged to run for election (or even be given cabinet roles unelected like in other countries).

    With suggestions ranging from Michael O'Leary for Finance or Transport, and various entrepeneurs who've been involved in broadband or mobile phone technology being suggested for the Communications portfolio.

    But now it appears that this isn't actually what the people want after all, because todays buzzwords are 'conflict of interest'.

    Fascinating country really.


  • Registered Users Posts: 3,434 ✭✭✭Jolly Red Giant


    Now let’s be clear about a couple of things –

    Why did Reilly invest in the company that constructed the Greenhills Nursing Home in Carrick-on-Suir ?

    He did so in order to avail of significant tax breaks that were available. Reilly along with 4 others set up a company to build the nursing home and lease it to one of the initial 5 involved, Dr Dilip Jondhale, to operate the nursing home. Another of the 5 people in this group is Anne Devitt, former FG now Ind Cllr and constituency colleague of Reilly and an individual named for accepting money in the Moriarty tribunal.

    Reilly’s group then went on to seek further investors – the group of 8 – to raise sufficient cash to get a bankloan. The original group of 5 were recourse investor meaning they could individually or collectively be held liable for the bank loans taken out. Each of the 13 individuals invested approximately €60,000 and this money was used as collateral to get a loan from the Bank of Ireland to construct a €2.5million nursing home. The company then leased the nursing home with the rent being used to repay the bank loan.

    The 13 individuals involved were then able to avail of the up to €2.5million in tax breaks from the nursing home where they could write off tax de on other rental income. Reilly rents out property in Lusk, rents out his 86 acres of prime farmland in Lusk, plus he rents out 100 acres of his estate at Moneygall where his mansion is. Reilly also has a holiday home in Doonbeg that possibly also has tax breaks available. So Reilly could claim back significant amounts in tax breaks, possibly up to €200K due to his investing €60K in the nursing home project.

    Now this is where it gets interesting – the group of 8 agreed a put/call option deal with the group of 5 for the nursing home. This meant that after 10 years (when the tax breaks ran out) the group of 8 could ‘put’ or compel the group of 5 to purchase the nursing home for €1.9million plus vat. Alternatively the group of 5 could ‘call’ or compel the group of 8 to sell the nursing home for €1.9million plus vat. In either case the group of 5 would also take over the financial liabilities with the Bank of Ireland based on the terms of the loan agreement.

    So what happened – it appears that in 2010 the group of 8 decided to exercise their ‘put’ option and compel the group of 5 to purchase the nursing home for €1.9million plus vat. However, given the collapse in property prices the group of 5 baulked at the idea of paying €1.9million plus vat for the property and attempted to either get out of the contract or negotiate the price downward. The group of 8 were having none of it and went to court to enforce the contract.

    According to the Register of Members Interests, Reilly claims one quarter ownership share in the nursing home. The operators claim that the nursing home is operating profitably, however there have been disputes between the operator and the owners over the cost of rent and the failure by the owners to carry out repairs ended up in court. As a result of this the operator refused to sign a new lease agreement and as a result the group of 5, including Reilly could not get bank loans to cover the cost of the €1.9million plus vat purchase price. The bank would not lend the money unless the nursing home had a guaranteed income stream from a signed lease agreement. The new lease agreement has recently been signed. However, it now appears that the bank are reconsidering lending the group of 5 the required money despite the fact that Jondhale is paying a six-figure sum annually in rent. Clearly Jondhale has a conflict here in that he is the operator of the nursing home and is one of the group of 5. If the bank decide not to provide the group of 5 with the money then the non-recourse group of 8 could take legal action against the group of 5 individually. Given that Reilly and Jondhale are by far the richest of the group of 5 then they are likely to be hit hardest financially.

    Now – what are the issues for Reilly –

    Well – firstly he has (legally) screwed the taxpayer for possibly up to €200K over a ten year period and he has done this as a result of an investment of just €60K (approx) of his own money and a generous bank manager.

    Secondly – it appears that he (and the others in the group of 5) attempted to get out of a legally binding contract or at least negotiate down the price. Nothing wrong or illegal in that either – but one must ask what would Reilly’s attitude be if the property bubble hadn’t collapsed and the group of 8 wanted to renegotiate his ‘call’ option.

    Thirdly – it also appears that Reilly has alienated all his close friends who were involved in this scheme, not just in the group of 8, but the likes of Jondhale and Devitt as well. Nothing wrong with that either – but it does show how people with money don’t like parting with it.

    Next point – is there a conflict of interest with his political position? Absolutely – the nonsense of a blind solicitor acting in his interest does not take away from the fact that he has a beneficial financial interest in the nursing home to the amount of one quarter ownership. Is he consciously engaging in cutting public sector nursing home beds in order to gain financially from it? Who knows? Reilly himself claims that because he is not the operator he has no financial benefit from the operation of the nursing home – but he certainly has a financial interest in the operator being able to pay his six-figure rent each year. But the reality is as follows, whether he likes it or not, Reilly is implementing policies that will result in a financial benefit (or at least greater financial security) for his investment in the nursing home. Reilly claims he is trying to sell his interest in the nursing home – but he hasn’t and it could be argued that his policies could benefit him financially in securing a higher price for his ownership share if he does manage to sell.

    There are some other issues involved in this.

    What are the VAT implications for Reilly and how much has his failure to abide by the legal ruling to complete the purchase of nursing home cost the state (if anything)?

    What responsibility does Reilly take for the actions of HIQA in shutting down another private nursing home in Carrick-on-Suir that led local FG councillors demanding answers from Reilly on HIQA’s role? This is an important question as a HIQA report indicated that necessary repairs and alterations to the Greenhills Nursing Home were not carried out in a timely fashion (leading ultimately to a court case between Jondhale and the group of 5) yet HIQA, unlike in the other case in Carrick, did not revoke the nursing home’s licence.

    Finally there is a question mark over the fact that Reilly (and the others) have failed to comply with a high court order. Is it appropriate for a government minister to fail to comply with a high court order relating to his personal financial arrangements? Now some might raise the fact that I am a member of the Socialist Party and the Socialist Party advocates breaking the law in the household charge boycott – fair point – but Reilly is a member of a government who are attacking left-wing representatives for advocating breaking the law when in his private life and for his own personal financial gain, Reilly has not complied with a high court order.

    Last point – Reilly’s statement was waffle and doesn’t answer any of the relevant points. He did not disclose any information that was not already in the public arena and his statement was a waste of time. His suggestion that he is operating in ‘the best interests of older persons and patients under our health services’ is utter bullsh*t given that he is engaged in the biggest ever hatchet job on an already dilapidated health service, one he plans on privatising for the benefit of his buddies in the health insurance and pharmaceutical companies.


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  • Closed Accounts Posts: 18,066 ✭✭✭✭Happyman42


    Interesting that posters (not necessarily you) and the public in general often complain about the amount of teachers and 2-bit solicitors in the Dail, and suggest we'd be better off with experienced businessmen in the key positions.

    And wondering why instead of some party hack being rewarded with a cabinet portfolio he has little or no expertise in, why can't outsiders with a track record in a relevant industry be encouraged to run for election (or even be given cabinet roles unelected like in other countries).

    With suggestions ranging from Michael O'Leary for Finance or Transport, and various entrepeneurs who've been involved in broadband or mobile phone technology being suggested for the Communications portfolio.

    But now it appears that this isn't actually what the people want after all, because todays buzzwords are 'conflict of interest'.

    Fascinating country really.
    Have never been an advocate of the above, but this is somebody who is more than a GP, he is somebody with an interest in investing in Private Health Care. I would have the same issue with Michael O'Leary as Minister for Transport. We have a members interest register for a reason. I don't think the safeguards where implemented in Reilly's case at all. I can't see this being the end of it, as his statement was fudged and I suspect Labour see an opportunity here.


  • Registered Users Posts: 3,003 ✭✭✭bijapos


    Excellent post Jolly Red Giant. This needs proper investigation especially the running of his nursing home and the shutting of the other local one in Carrick.


  • Registered Users Posts: 1,897 ✭✭✭Means Of Escape


    Let's bow our heads and pray for Gods blessing.


  • Registered Users Posts: 5,622 ✭✭✭creedp


    Well – firstly he has (legally) screwed the taxpayer for possibly up to €200K over a ten year period and he has done this as a result of an investment of just €60K (approx) of his own money and a generous bank manager.

    I find this to be particularly difficult to swallow given where we are in this country. On the one hand nieve home owners are being berated for buying property in the boom time and saddling themselves with debt and expecting the taxpayer to bail them out. On the other hand we have seasoned entrepreneurs taking advantage of McCreevey styled tax breaks for the wealthy to not only make a 'killing' on investing in property/business but also screwing the taxpayer for €100's thousand in lost tax revenue. What's the difference. In each case the taxpayer is bailing out these guys. What's worse even though the taxpayer has already bailed out this guy he won't make good on his contractual debt even though he has more than enough wealth to do so. These seasoned investors took a gamble, thetaxpayer massively subsidised this investment and then then when the investment goes south they all run for cover. Its bloody sick but of course its OK as the system is set up to gild the gilded.


  • Registered Users Posts: 301 ✭✭galway2007


    What is clear to me is that a lot of FG Td's in this government are up to their ass deep in property investments
    Then we have to listen to them going on about the last government and developers when they were fuelling the bubble
    Give them 10 year is power and they well make FF look like angles
    Kenny get you act together and run the country and stop doing the Presidents job


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  • Registered Users Posts: 301 ✭✭galway2007


    djpbarry wrote: »
    It’s unethical for ministers to own land now?
    Really? Would you refuse treatment from a doctor whom you suspected did not exercise enough?.
    Who is the public face of our Health system?
    Reilly is and he looks like he could turns his toes up at anytime
    We keep hearing about obesity in Ireland and the health effects and yet look at him


  • Closed Accounts Posts: 18,066 ✭✭✭✭Happyman42


    galway2007 wrote: »
    s
    Kenny get you act together and run the country and stop doing the Presidents job

    Ain't that the truth! :(

    I think it's time to see Reilly as a property developer invested in Private Heath Care first and then as a GP.


  • Closed Accounts Posts: 6,684 ✭✭✭JustinDee


    galway2007 wrote: »
    Who is the public face of our Health system?
    Reilly is and he looks like he could turns his toes up at anytime
    We keep hearing about obesity in Ireland and the health effects and yet look at him
    Oh dear. Really grasping at straws with this.
    He's a qualified practising doctor and is obviously well versed in what the health sector entails.


  • Closed Accounts Posts: 18,066 ✭✭✭✭Happyman42


    JustinDee wrote: »
    Oh dear. Really grasping at straws with this.
    He's a qualified practising doctor and is obviously well versed in what the health sector entails.

    Do you believe him when he says 'I am passionate about putting the patient first'? Are private nursing homes putting the optimum way of putting the patient first?


  • Registered Users Posts: 2,567 ✭✭✭mloc


    Happyman42 wrote: »
    Do you believe him when he says 'I am passionate about putting the patient first'? Are private nursing homes putting the optimum way of putting the patient first?


    Aside from the fact he's been trying to rid himself of it for years, and has disclosed openly since the beginning all his involvement with it...


    What's wrong with the concept of a private nursing home?


  • Registered Users Posts: 2,909 ✭✭✭sarumite


    galway2007 wrote: »
    Who is the public face of our Health system?
    Reilly is and he looks like he could turns his toes up at anytime
    We keep hearing about obesity in Ireland and the health effects and yet look at him

    I have been working very hard lately myself. Putting in excess of 70 hour weeks. As a result I don't have time to go to the gym and have put on weight. When I was unemployed I used to go 4 times a week and was really fit. I am actually more qualified now to do my job (though slightly overweight) than I was a few years back when I was much fitter.


  • Registered Users Posts: 337 ✭✭flatbackfour


    Happyman42 wrote: »
    By his own admission he was involved in a number of investments in private health care, that alone should have excluded him from the Health brief imo. At the very least he should not have been appointed until he divested himself of them completely.

    Interesting that posters (not necessarily you) and the public in general often complain about the amount of teachers and 2-bit solicitors in the Dail, and suggest we'd be better off with experienced businessmen in the key positions.

    And wondering why instead of some party hack being rewarded with a cabinet portfolio he has little or no expertise in, why can't outsiders with a track record in a relevant industry be encouraged to run for election (or even be given cabinet roles unelected like in other countries).

    With suggestions ranging from Michael O'Leary for Finance or Transport, and various entrepeneurs who've been involved in broadband or mobile phone technology being suggested for the Communications portfolio.

    But now it appears that this isn't actually what the people want after all, because todays buzzwords are 'conflict of interest'.

    Fascinating country really.


    Only in Ireland could a health minister be up to his neck in private nursing home scheme, be responsible for the direction of health policy and you and others fail to see the blindingly obvious conflict of interest.

    Its part of what I call the "jackie Healy Rae, michael lowery cutehoorism syndrome" which is endemic in this banana republic of ours.

    Keep supporting your man folks.


  • Closed Accounts Posts: 18,066 ✭✭✭✭Happyman42


    mloc wrote: »


    What's wrong with the concept of a private nursing home?

    Absolutely nothing if it is regulated and run properly. However I have an issue with the Minister for Health being involved in any way in profitting from one. I actually have an issue with a GP being involved in an investment like this, in his own catchment area, but that's another topic. Add to that, the new (to me) info that he was also involved in investing in a Private Health Care facility in Nevinstown and you have somebody who has an ongoing interest in profitting from the sector. Poacher turned gamekeeper?
    This has only become contentious because a deal went pearshaped. As far as I can find out, had he successfully salvaged this deal he could have continued to profit from it while satisfying regulations by having it in a 'trust', which is fundamentally wrong imo.The system needs changing if we want vested interests kept away from the honey pot that being a TD seems to be.


  • Closed Accounts Posts: 6,684 ✭✭✭JustinDee


    Happyman42 wrote: »
    Do you believe him when he says 'I am passionate about putting the patient first'?
    Its just rhetoric. I'd prefer to judge someone by their actions. He inherited a fairly messy health service when taking office and in a time when cuts are unavoidably necessary. The Minister for Health job is akin to a British Minister being given Northern Ireland office during the 80s.
    Happyman42 wrote: »
    Are private nursing homes putting the optimum way of putting the patient first?
    You seem to be alluding to people in nursing homes being patients. Is James Reilly referring to nursing home residents when apparently saying this? Nursing home that my grandmother lives in is actually brilliant. She has definitely been "put first".


  • Registered Users Posts: 990 ✭✭✭LostinKildare


    I'm sure he was aware there were difficulties but what can he actually do in a situation where he appears to have been left in breach of a High Court order by other parties. Short of stumping up all the money himself which would be ridiculous how can he extract himself from the problem until his business partners sort out their affairs?

    Why would that be ridiculous?

    The five partners are jointly and severally responsible for the debt. By court order, Reilly was legally individually responsible for payment of that debt by 30th April -- even if he had to pay the whole amount himself. What is ridiculous about that? He entered into that contract freely.

    Why didn't he -- or why doesn't he now -- pay it? The full amount, if necessary? He probably has the means. When talking about ordinary citizens swamped by mortgage debt, we distinguish the "can't pays" from the evil "won't pays." Reilly looks like a "won't pay."

    A few days ago Mr Shatter told us that it's reasonable to force a penniless small-time debtor to hock her engagement ring to avail of debt relief.

    Why is unreasonable to expect a very wealthy debtor to liquidate some of his many valuable assets to comply with a court order?

    (Of course, if the sale of his many, many properties still wouldn't raise 1.9 million, then Reilly is not a "won't pay," but a "can't pay," -- a bankrupt who must leave the Dail.)


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  • Registered Users Posts: 2,567 ✭✭✭mloc


    Why would that be ridiculous?

    The five partners are jointly and severally responsible for the debt. By court order, Reilly was legally individually responsible for payment of that debt by 30th April -- even if he had to pay the whole amount himself. What is ridiculous about that? He entered into that contract freely.

    Why didn't he -- or why doesn't he now -- pay it? The full amount, if necessary? He probably has the means. When talking about ordinary citizens swamped by mortgage debt, we distinguish the "can't pays" from the evil "won't pays." Reilly looks like a "won't pay."

    A few days ago Mr Shatter told us that it's reasonable to force a penniless small-time debtor to hock her engagement ring to avail of debt relief.

    Why is unreasonable to expect a very wealthy debtor to liquidate some of his many valuable assets to comply with a court order?

    (Of course, if the sale of his many, many properties still wouldn't raise 1.9 million, then Reilly is not a "won't pay," but a "can't pay," -- a bankrupt who must leave the Dail.)

    I gather from this post your understanding of commercial litigation is limited?

    The court order is against a group of five individuals. Reilly cannot compel others to pay, or compel them to complete the leasing process. The delay is due to ongoing litigation which has itself delayed a re-mortgaging. Until the litigation issue is cleared, there can be no re-mortgaging, and thus the payment cannot be made. It's quite simply not possible for Reilly to unilaterally act on behalf of four others in a litigation context, doubly so due to his appointment of an attorney.


  • Registered Users Posts: 2,567 ✭✭✭mloc


    Only in Ireland could a health minister be up to his neck in private nursing home scheme, be responsible for the direction of health policy and you and others fail to see the blindingly obvious conflict of interest.

    Its part of what I call the "jackie Healy Rae, michael lowery cutehoorism syndrome" which is endemic in this banana republic of ours.

    Keep supporting your man folks.

    He has been trying to get rid of the thing for years, and never had any part in the running of the business; he simply has a 9% share in the building. I'd hardly call that up to my neck in a private nursing home scheme.


  • Registered Users Posts: 43,311 ✭✭✭✭K-9


    He expects to be able to complete the agreement shortly so I don't know where this "wont pay" stuff is coming from.

    Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.



  • Registered Users Posts: 337 ✭✭flatbackfour


    mloc wrote: »
    Only in Ireland could a health minister be up to his neck in private nursing home scheme, be responsible for the direction of health policy and you and others fail to see the blindingly obvious conflict of interest.

    Its part of what I call the "jackie Healy Rae, michael lowery cutehoorism syndrome" which is endemic in this banana republic of ours.

    Keep supporting your man folks.

    He has been trying to get rid of the thing for years, and never had any part in the running of the business; he simply has a 9% share in the building. I'd hardly call that up to my neck in a private nursing home scheme.

    Nice piece of spin. 9% share in the building. That's all.

    Never had any part in running the business. Who are you kidding? There is more than one way to skin a cat. And certainly more than one way to keep your hands clean from business interests but still benefit from them.


  • Registered Users Posts: 13,104 ✭✭✭✭djpbarry


    Happyman42 wrote: »
    Answer the question, without posing another unrelated one, would you be queasy about the scenario outlined or not?
    Nope. Not in the slightest.
    Happyman42 wrote: »
    As Vincent Browne says, 'What more do we need to know'.
    Oh, I don’t know – the facts, maybe?
    galway2007 wrote: »
    Reilly is and he looks like he could turns his toes up at anytime
    I really don’t care.
    Nice piece of spin. 9% share in the building. That's all.

    Never had any part in running the business. Who are you kidding? There is more than one way to skin a cat.
    In other words, you’ve made your mind up that he’s a crook and no argument to the contrary is going to convince you otherwise.

    I note that nobody considers it to be a “conflict of interest” that Dr Reilly is a former employee of the department he is now running? Apparently, a “conflict of interest” only arises through involvement in the dirty private sector.


  • Closed Accounts Posts: 1,258 ✭✭✭Tora Bora


    We need Mary Harney back. It's as simple as that.:cool:


  • Registered Users Posts: 2,909 ✭✭✭sarumite


    Never had any part in running the business. Who are you kidding? There is more than one way to skin a cat. And certainly more than one way to keep your hands clean from business interests but still benefit from them.

    Since becoming a minister, it would appear the answer is no, he never had any part in running the business. Most pension pots keep their 'hands clean from business interests but still benefit from them'. That is the nature of many investments. Private individuals investing in profit making companies is, on the whole, a good thing for an economy.


  • Registered Users Posts: 2,567 ✭✭✭mloc


    Nice piece of spin. 9% share in the building. That's all.

    Never had any part in running the business. Who are you kidding? There is more than one way to skin a cat. And certainly more than one way to keep your hands clean from business interests but still benefit from them.

    Apart from insinuation and cheap cliché, do you have a point? Are you implying that there is some sort of conspiracy at play here, that he is secretly running the whole thing on the sly?


  • Registered Users Posts: 5,336 ✭✭✭Mr.Micro


    Its looks like that is that then? Dr. O'Reilly only has to make sure the debt is settled shortly. With regard to a conflict of interest I do not agree. His business is a private matter so long as it does not impinge on his Ministerial role or vice versa. Private nursing homes were very popular with the last lot and will continue to grow as the public health system declines.


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  • Registered Users Posts: 337 ✭✭flatbackfour


    djpbarry wrote: »
    In other words, you’ve made your mind up that he’s a crook and no argument to the contrary is going to convince you otherwise.

    It looks to me that the those who are making up their mind without looking at the argument are those that wont/cant/don't want to see the blindingly obvious.
    I note that nobody considers it to be a “conflict of interest” that Dr Reilly is a former employee of the department he is now running? Apparently, a “conflict of interest” only arises through involvement in the dirty private sector.

    Try making this an ideological public v private issue. its nothing of the sort. Another attempt at crude spin.

    A conflict of interest happens because he is the minister for health and had interests in private nursing homes at the same time he is minister for health. That is a conflict of interest. Pure and simple.

    Keep spinning.


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