The Billionaire Who Wasn't (45 page)

“There is agreement between Tara (Atlantic Philanthropies) and the government for £150-million research fund,” Thornhill told him. “We want you to tell your university colleagues and nobody else.” Danny O'Hare responded in awe. “Shit!” he said. As he left he wondered, “My God, did I hear right?”

“This was real cloak-and-dagger stuff,” recalled Thornhill. “We were so concerned about secrecy that we wouldn't even use the telephone.” When they wanted to talk about Chuck and Atlantic among themselves, they didn't dare say the names aloud. They referred to “our friends,” or “our mutual friends.” People in the know in education had become practiced at making sly references to Feeney. “They would say, ‘I was talking to the person we are not supposed to talk about,'” said Danny O'Hare. When university presidents requested government funding, the civil servants would ask, “Do you think that secret crowd will come up with half of it?” O'Hare told Healy once, “For God's sake, John, will you break this anonymous thing because it is becoming a farce really!”

At a press conference the following Thursday in Dublin, Bertie Ahern announced a IR£150-million research program that would involve new laboratories, computer and study facilities, and research library development, to be called the Program for Research in Third Level Institutions (PRTLI). He made no mention of Atlantic, saying only that half would come from “matching private spending to be raised by the universities and institutes of technology.”

Harvey Dale's worries about the danger of the government reneging on its promise proved justified. The program of funding was to be in three cycles
over a number of years. After a general election in May 2002, Micheál Martin was replaced as education minister by Noel Dempsey. The collapse of the technology bubble in the United States threatened to curb economic growth, and Dempsey came under pressure to cut back. His priorities were with the disadvantaged. He was more inclined to see universities as bastions of privilege. Atlantic sought urgent reassurances that the third cycle of the PRTLI program would not be cut. They weren't forthcoming. Don Thornhill appealed to Dempsey not to take drastic action. But on November 14, 2002, the new minister announced a “pause” in all capital funding for research. For Thornhill, it was “one of the most miserable moments in my official career,” though he took some comfort in the knowledge that a “pause” was not a “cancellation.”

No one bothered to tell Atlantic Philanthropies. “To say I was upset about this was an understatement,” recalled John Healy, who had moved to New York as chief executive of the foundation. Large-scale research programs around the country faced collapse, university contracts were threatened, and the confidence of the research community was shattered. “As far as I was concerned we had a partnership with the government, and this is not a way to deal with partners, and we immediately told the universities and the Higher Education Authority that if the money is not flowing from the government it is not flowing from us,” said John Healy. “So we had a pause, too.”

As the months went by and the pause lengthened, it was evident that only the intervention of the prime minister could end the impasse. The Atlantic directors came to Dublin. On October 1, 2003, Chuck Feeney, Frank Rhodes, John Healy, and Colin McCrea, who had succeeded Healy as head of the Dublin operation, set off for Bertie Ahern's office in the imposing Government Buildings complex on Upper Merrion Street. In the car, Feeney put on a tie, while they figured out who was to play the “hard man.” The task fell to Healy.

Feeney, whose glasses were held together by a paper clip that stuck up like an aerial, sat quietly in Ahern's office as Healy laid it on the line. “I didn't make any friends in the Taoiseach's [prime minister's] office that day,” recalled Healy. “I was quite direct. We told the Taoiseach we were pretty upset. We expressed disappointment that as partners we hadn't been informed. I said we didn't have to spend our money in Ireland, and ‘if you're not going to continue in a serious way, then we'll pull out.'” Ahern replied, “This is something we can resolve.”

The session was private and there was no announcement to the media. “But then something very interesting happened,” recalled Healy. “The following day we read about the meeting in
The Irish Times.
” The newspaper's education correspondent, Sean Flynn, wrote that “the reclusive Irish American billionaire, Mr. Charles (Chuck) Feeney,” had met Bertie Ahern and warned him that private funding for the universities was in jeopardy “unless the government eases cutbacks in third-level research.”

The leak could only have come from the prime minister himself, realized Healy. He figured this was Ahern's way of putting pressure on Dempsey. Five weeks later, the “pause” was ended.

The program Atlantic inspired brought about a massive step-change in research funding in Ireland, and the Irish research sector was truly transformed, reflected Thornhill later. Danny O'Hare said it had a “brilliant effect on the research support system in Ireland and blew everything else off the map.” The president of University College Dublin, Hugh Brady, said Atlantic was a catalyst in transforming the Irish research landscape.

The Program for Research in Third Level Institutions “is the single most successful thing that Atlantic has done anywhere in the world,” said Colin McCrea. “Chuck had this idea that a good higher education system would lift most boats in the country. We transformed the government support for research in universities. The amount of money the government has given has increased manyfold as a result of it.”

All told, Atlantic put up 178 million euros of the 605 million euros ($800 million) that the first three cycles of the program cost, before easing itself out. (The euro replaced the Irish pound in 1999.) Forty-six research institutes or programs were created, the capacity for world-class research in Ireland was substantially increased, and the brain drain of the best research talent in Ireland was reversed. In 2006, Minister for Finance Brian Cowan announced a 1.25-billion-euro investment in postgraduate education over the following five years. It wasn't Ireland's low-tax policy that was the key driver of the Celtic Tiger, he said, but the education system and its ability to turn out high-quality people.

“It was Chuck's biggest legacy,” reflected Tom Mitchell, who joined the board of Atlantic Philanthropies at Feeney's invitation in 2002, after stepping down as head of Trinity College Dublin. “It revolutionized research in Ireland. It was the perfect example of leverage. They put money on the table and said to the government—you have got to perform. It was a model of
how a foundation can combine with government and use its leverage with government to change policy. This was social change in a very significant way.” Frank Rhodes said Feeney “brought Irish universities into conversation with one another; he enabled them to dream greater dreams; he lifted research to a new level.”

The model was replicated in Northern Ireland, where Atlantic Philanthropies and the Northern Ireland government each provided £47 million for a £94 million (approximately $150 million) program called the Support Program for University Research (SPUR).

Yet Atlantic's greatest triumph was followed in Ireland by its most embarrassing misstep. This resulted from a controversial effort to establish an organization in Ireland modeled on the Center for Public Integrity in Washington, D.C., a highly reputable nonprofit organization run by former TV producer Charles Lewis. With the help of grants from Atlantic and other major U.S. foundations, the Center for Public Integrity in the United States had, since 1990, issued scores of investigative reports and successfully exposed political and corporate corruption in the United States.

Ireland was one of the few advanced democracies that did not have such an independent watchdog. Feeney was concerned about the level of corruption being reported in the Irish media among politicians and businessmen. He had been granted Irish citizenship some fifteen years previously—he qualified by having one grandparent born in Ireland—and held dual Irish-U.S. nationality. He had reason to feel he had a stake in civil governance in Ireland.

In June 2004, he invited Frank Connolly, a forty-nine-year-old investigative journalist whom he had gotten to know personally through his involvement in the Irish peace process, to draw up a proposal for a similar center in Ireland. Two months later, the journalist produced a five-year plan for an agency to be called the Centre for Public Inquiry (CPI), of which he would be chief executive. He showed it to Chuck Feeney, John Healy, and Colin McCrea at a meeting at Castletroy Park Hotel in Limerick in September 2004.

Connolly, a serious, methodical investigator, seemed an ideal choice. Seven years earlier, his reporting had been largely responsible for forcing the government to set up a tribunal of inquiry under High Court Judge Feargus Flood into corruption in high places. He had found evidence that Ray Burke, a minister from the majority Fianna Fail Party, had taken bribes from a real estate developer to have land rezoned for development. Burke was eventually found to be corrupt and sentenced to six months in jail.

Feeney and Connolly shared a left-of-center view on Irish and international politics and had dined together a few times. Connolly claimed that political corruption in Ireland went far deeper than most people were aware, and he recalled that Feeney was “quite mystified” at the way some Irish politicians had escaped proper scrutiny over the years.

In December 2004, Connolly reported to Atlantic directors in New York that he had been able to recruit Feargus Flood, then seventy-six and retired, as chairman of the board of CPI. The other directors would be theologian Father Enda McDonagh, lawyer Greg O'Neill, former newspaper editor Damien Kiberd, and Alice Leahy, a cofounder of Trust, an organization for the homeless. The Atlantic Philanthropies that same day approved funding of 4 million euros ($5 million) over five years and a launch was set for Dublin in January 2005.

Meanwhile, Connolly invited Charles Lewis of the Center for Public Integrity in Washington to come to Dublin and advise him on how the American model worked. Lewis declined. “What I read and heard about Connolly left me uncomfortable,” he said later in a newspaper interview. “I had serious ethical concerns about him.”

Lewis had been tipped off by another investigative Irish journalist whom he knew, Sam Smyth, about allegations against Connolly. According to Colin McCrea, Atlantic Philanthropies had overlooked these claims. Two years previously, the
Sunday Independent
in Ireland had reported that Connolly was being investigated by the Irish police for allegedly traveling to Colombia on a false passport in April 2001. The implication was that his visit had something to do with the so-called Colombia Three, a trio of Provisional IRA members arrested in Colombia in August 2001 and sentenced to prison terms of seventeen years for allegedly training rebels from FARC (Fuerzas Armadas Revolucionarias de Colombia). One of them was Niall Connolly, Frank Connolly's brother. Frank Connolly had denied any wrongdoing. Feeney knew about Connolly's brother, and that Frank was sympathetic to the aims of the IRA's political wing, Sinn Fein, but had not allowed that to influence his assessment of the journalist.

The Irish Government was also tipped off about Connolly's watchdog body even before it became public. Sam Smyth, who worked for the
Independent
group of newspapers, had told the combative minister for justice, Michael McDowell, with whom he was friendly, about Lewis declining Connolly's invitation to visit Dublin.

There was consternation in the Irish government at the idea of Connolly heading an investigative body. Ministers regarded Feeney, in McDowell's words, as a “philanthropic, decent, good guy” who was doing fantastic things in Ireland, but was being “conned” by Connolly. Prime Minister Bertie Ahern decided to warn Feeney privately at the first opportunity whom he was dealing with. The matter was both personal and political for the prime minister: Connolly had years before publicized a claim by a businessman that he had given a substantial bribe to Ahern, which a judge found to be “utterly, completely and absolutely false and untrue.”

The launch of the Centre for Public Inquiry went ahead in Dublin on January 31, with the declared aim of promoting “the highest standards of integrity, ethics and accountability” in Irish life. Connolly emphasized that it would not target individuals but would look at what was going on “at the interface between politics and business.”

There was a furor from politicians claiming that Connolly's investigations would be politically slanted and would undermine the state. A few days later, the
Sunday Independent
republished its story of July 2002, splashing the claim that Connolly “is being probed by
gardai
[police] about allegations that he traveled to Colombia on a false passport in 2001.” When reporters asked Judge Flood about the allegations against Connolly, he retorted angrily he would have “no hand, act or part in any McCarthyism.”

The affair grew murky. In February an unknown person with an English accent phoned the U.K. office of Atlantic Philanthropies on Albemarle Street, London, to accuse Connolly of IRA links. Shortly afterward, Atlantic directors began receiving copies of an anonymous one-page document in the mail headed “Interim Report,” which appeared to be an intelligence report, also associating Connolly with the IRA. A copy was later found lying around in the Irish parliament building.

Bertie Ahern believed his first opportunity to speak to Feeney privately about Connolly would come during a visit he was to make to the United States in March 2005, but the Irish American philanthropist was not available. McDowell himself then undertook to seek Feeney out when he was visiting the United States in May. “I said to officials in the department, find out where Chuck Feeney is,” he recalled. “I am going around America. And I will go anywhere in America to see him.” Feeney was traveling and again no meeting took place.