The Billionaire Who Wasn't

by Conor O'Clery

  As they sipped their coffee, Healy told them, “You should understand our credibility because you know now through the grapevine what we are doing at a number of universities. We now think research capacity in Ireland is pathetically small and should be strengthened. You guys need to invest more. Why don’t we do something together?”

  How would they respond, he asked, if Atlantic put up IR£75 million (US$125 million)? Would the Irish government put up the same amount? There was a shocked silence. “They looked at me as if I were mad,” recalled Healy.

  “Think about it,” Healy went on. “We don’t have to spend our money in Ireland, we are working in lots of places, in the United States, Australia, Vietnam. In fact Colin McCrea, my collaborator, cannot be with me today because as we speak he is on his way to the airport to fly to Australia, where there is a very interesting opportunity in the University of Queensland.”

  Thornhill quickly recovered the initiative. “Right, OK, I’ll do a paper,” he said. Thornhill was naturally eager to get greater funding for research. “The economy was at that point beginning to turn from the situation where we were exporting our university graduates to one where shortages were developing in the information and communications technology area,” he recalled. When a new government had come into office in June 1997, he had persuaded the incoming minister for education, thirty-seven-year-old Micheál Martin, to “have a row” with the minister for finance over his department’s recent veto of IR£50 million for information technology facilities in universities. But the sympathetic minister for education had come back shaken from an encounter with the finance minister. He had asked for IR£50 million and had got IR£5 million. The allocation was even then whittled down to IR£4 million.

  Harvey Dale arrived in Ireland shortly after the high-drama breakfast, and he and Healy set up a formal meeting with officials at the Department of Education and Science headquarters on Marlborough Street. When they detailed their proposal, Dennehy asked them if Atlantic Philanthropies could be trusted to come up with the IR£75 million. “Look at our record,” said Healy, as Dale fixed Dennehy with a cold stare. The foundation president in turn asked the civil servants how Atlantic could trust the Irish government. The foundation had never done a matching grant with a government: What would happen if there were a change of government? What would happen if someone asked the prime minister or minister for education a question about the anonymous donor? What if the Irish government failed to deliver on a pledge? “We can’t sue the government, it is sovereign,” Dale told them. Thornhill retorted, “You, too, are sovereign!” Thornhill understood that Atlantic’s undertaking was just as revocable as the Irish government’s and the foundation could not be sued for failing to deliver on a pledge. Dale came to admire and respect Thornhill. “But for him, we might not have done the deal,” he said.

  Thornhill became the key architect of the plan. It was fraught with problems. There had to be absolute secrecy. The seven universities in the Republic were fiercely independent and guarded their privileges and autonomy. Healy made it clear that the proposal depended on an open, genuine, competitive program for grants, to be reviewed by international experts. University presidents would not be able to rely on across-the-board handouts: The funding would only be for proposals that fit with the overall strategic plan of the institution.

  Thornhill quietly slipped out of his office on a few occasions to meet Healy and his deputy Colin McCrea in the Atlantic Philanthropies office on a leafy Dublin boulevard. “I always made it my business to meet them there,” said Thornhill, who became as secretive about his dealings with Atlantic as any university president. “If people were coming into my office for a meeting there would be a record.” He was also the keeper of the government’s secrets and had to be careful what he told outsiders. Thornhill never kept notes of these meetings, nor did he make entries in his desk diary, as he might be forced one day to make them public under the Freedom of Information Act.

  On a visit to Dublin, Chuck Feeney pushed the proposal along by dropping in to see Micheál Martin and telling him he believed Ireland should be spending more money on research. Thornhill heard about the encounter and mischievously remarked at the next departmental meeting with the seven university presidents, “Oh, by the way, the minister was talking recently to Chuck Feeney.” The temperature in the room dropped by about twelve degrees, he recalled with a delighted laugh. “They were seriously uncomfortable with this notion of politicians and officialdom moving into their zone, and understandably.”

  The proposal was moved along inside the bureaucracy by senior education department official Paddy McDonagh, and the minister’s political adviser, Peter McDonagh (no relation). Faced with an unprecedented, even outlandish, request for IR£75 million in matching funds, Department of Finance officials dragged their heels. As the delay lengthened, Feeney used an encounter with the new prime minister, Bertie Ahern, to get across the message that there was a very exciting proposal being developed but the Atlantic money wasn’t going to sit around forever. “Basically we were unhappy with the fact that the government was not investing the kind of money that they should be investing,” recalled Feeney. “We said, ‘Look, frankly you’ve got to invest in research, and now we’ve put buildings in, you’ve got laboratories and classrooms.’” After this, said Thornhill, the Department of Finance officials became a good deal more amenable.

  Still the interdepartmental negotiations dragged on. “It was excruciating,” said Thornhill. Healy was getting more and more impatient. On Tuesday, November 10, 1998, he issued an ultimatum to the officials. He said he was going to South Africa on Saturday and had to leave for the airport at 1:00 PM. If there was no approval by then, there was no deal.

  Paddy McDonagh informed the Finance Department what was at stake. At 4:30 on Friday, November 13, as people were preparing to leave their offices for the weekend, a document summarizing the proposal that McDonagh had sent to the Finance Department was returned with a scribbled amendment. The addendum turned out to be the authorization they were seeking. Seventy-five million pounds of taxpayers’ money would be put up to match the anonymous IR£75 million from Atlantic. Bertie Ahern would announce the IR£150-million fund the following Thursday and would describe Feeney’s half as private funding.

  The university heads had to be told in confidence that Atlantic Philanthropies would be the source of the private money being put up, so they would not panic about having to raise it themselves. Don Thornhill invited Danny O’Hare, who was chairman of the Conference of Heads of Irish Universities, to meet him at his office in Ballsbridge on Saturday morning, November 14, and to keep quiet about it. When O’Hare saw John Healy with Thornhill, he knew it was something to do with Atlantic.

  “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 Re
search 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 2
004, 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.