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The Return of the Dragon – Sunday Business Post by Tom Lyons

The Return of the Dragon – Sunday Business Post by Tom Lyons

He was almost the president of Ireland, but fell at the last hurdle. Now Sean Gallagher is back. He wants to bring thousands of jobs to Ireland by creating space for business in a new €500m venture.

Sean Gallagher bounds across the double-height reception area of Clyde House, a glass-fronted, modern office building located in the Blanchardstown Business and Technology Park. He is instantly recognisable: the blocky frame, the shaven head, the dark eyes. He has a broad smile and a firm handshake – he has, after all, shaken a lot of hands in his time. He seems confident yet unpretentious. The building we are in dwarfs us both: 330,000 square foot of office space, surrounded by 650 car park spaces. Formerly known only as the Alcatel Lucent building, it has been renamed after Clyde Real Estate, a new venture established by Gallagher and his business partner, the telecoms magnate Colm Piercy. They bought the building in early 2015, around the same time they bought the old Braun factory in Carlow. They rebranded Braun, a 225,000 square foot complex on 30 acres, as the Carlow Business Park. In total, Gallagher and Piercy’s Clyde has raised €25 million in the last year to buy up large offices and industrial units. They want strategic locations in the regions or on the edges of Dublin. It is on its way to being the biggest player in its space.

“We are planning to raise and invest a further €100 million in 2016,” Gallagher tells me. “We plan to have a total of €500 million of commercial assets acquired and under management over the next three years.” As we tour Clyde House, Gallagher is positive, upbeat and bursting with ideas. It is the can-do spirit which has kept him going in hard times, this social worker, double black belt, motivational speaker, entrepreneur, angel investor, Dragon . . . and almost a president.

 

‘A development which I want to put to Sean Gallagher . . .’

Before meeting Gallagher, I watched again the moment when his chances of being the ninth president of Ireland slipped away. Until that moment, he had led a grassroots campaign. In an Ireland reeling from the crash, he was relentlessly positive. His themes were jobs, young people and recovery. Going into the final live televised presidential debate on October 24, 2011 on RTE’s Frontline television show, Gallagher was in front in the polls. Against the odds, he had become the man to beat. Then the roof fell in.

The footage is there, forever preserved in the archives of YouTube. Martin McGuinness, the Sinn Féin candidate, accuses Gallagher of being part of a “rotten culture” associated with Fianna Fáil at the time Ireland went bust. He tells a tale of Gallagher collecting a cheque for €5,000 in 2008 for a party fundraiser. Phrases such as “brown envelope culture”, “cronyism” and “very murky waters” are hurled at Gallagher, who denies collecting any €5,000. He struggles a bit. He doesn’t want to respond to muck by throwing more. The debate moves on. Then Pat Kenny returns to the topic. “A development which I want to put to Sean Gallagher on the Martin McGuinness for president Twitter account. Sinn Féin are saying they are going to produce the man who gave you the cheque €5,000. Do you want to change what you said . . .” Gallagher stumbles. “I don’t want to get involved in this . . . I have no recollection of getting a cheque . . .” Elements of the crowd audibly hiss their disapproval. “If he gave me the cheque, it was made out to Fianna Fáil headquarters and it was delivered, and that was that. It was nothing to do with me.”

Later, the tweet turns out to have come from a fake account. McGuinness’s allegations are based on the claims of a convicted fuel smuggler. But he does not disclose this on air. The former IRA leader’s assertions of rottenness and murkiness against Gallagher are allowed to go unchallenged. Maybe that’s live television for you. Maybe that’s politics. Maybe it was very unfair. Certainly it was damaging. Five hundred and four thousand, nine hundred and sixty-four people still voted for him. But there is no second prize in the race to be president of Ireland.

 

The boy with the keyhole eyes

When Gallagher was four, he had an iridectomy, a serious operation. “What they did was, they cut your pupil into a keyhole shape,” he says. When you look at Gallagher’s eyes closely, you can see his pupils’ unusual shape. “I see around the periphery of the lens, as opposed to through the lens like most people,” he says. “I was born with congenital cataracts, so being able to see a blackboard or being able to see small print or bright light, they would be the challenges . . . so I would have struggled to keep up in school because there was just no way I could read a blackboard. “It made me more determined than ever to find ways to do things, and it made me incredibly grateful for the sight that I did have.” In his mid-30s, Gallagher decided to track down the eye surgeon, a Dr Tompkins, who had operated on him. He was retired and living with his wife in Shankill. “I said to him: ‘You probably don’t remember me, but I remember you every single morning in my life. So I don’t want to let the opportunity go that I might never get the chance to thank you in person for the gift of sight, because it’s an incredible gift.’ “If I was born today with congenital cataracts, I would have a small operation and my sight would be perfect. It’s just a matter of timing.”

Every morning, Gallagher spends ten minutes thinking about what’s good in his life. “I am grateful I can see and hear and walk and talk, for my wife Trish and my son Bobby, my family and friends and my work, all the positive things . . .” He forces himself to imagine losing these things. “It brings me immediately to a place of gratitude, and everything else in the day becomes more to be grateful for.”

 

An on-the-job MBA in property

More than four years on from losing the presidency, Gallagher is now aged 53. He tells me about how he co-founded Clyde with Piercy, who he has known since 1995. Gallagher was on the local enterprise board in Dundalk, while Piercy was running an incubator space for Dundalk Institute of Technology. Later, Piercy founded Digiweb, a broadband company, while Gallagher cofounded Smarthomes, an in-home technology company.

Both men’s companies traded from the same business park in Dundalk. In 2014, Gallagher started to talk with Piercy about working together. “We put a strategy together to set up Clyde Real Estate to focus on primarily the suburbs of Dublin, and then beyond,” he says. “Our strategy was that we would go for large office and production industrial facilities.” Initially, they raised €25 million from

their own funds and from a US fund which Gallagher declines to name. In November 2015, Piercy sold the non-Irish assets of Viatel, which he formed by merging Digiweb with London telecoms operator Viatel, to US cable and data company Zayo Group for €95 million, so he has his own fortune too.

“As rents go up in Dublin city, we feel it will force a lot of people to move to the suburbs where parking is easier and rates are lower, particularly those who were looking for larger space,” Gallagher says. They now have two buildings in Blanchardstown, their main one in Clyde House, as well as a smaller 32,000 square foot office block. They are, he says, in talks to buy a third building in the area. “Our strapline is ‘creating space for business’ and we’re entrepreneurial,” he says. They already have decent tenants such

as Citibank, Alcatel Lucent and Piercy’s communications company Viatel, but they are on the look-out for more, either from Ireland or overseas. Clyde has taken on the old 225,000 sq ft Braun factory in Carlow, a challenge that others have passed on over the years.

Gallagher is, however, excited about the prospect. At its peak, about 1,400 people worked at the Carlow site, and its revival is important for the region. “We could carve up the building and let multiple players in, but then you lose its greatest, unique proposition, which is a very large floor space,” Gallagher says. Last year, he says, an international company looked at taking the entire building. “I don’t think the company came to Ireland in the end, at least not yet – that would have brought a lot of jobs to Carlow,” he says. “So we’re going to hold out in the short term for a large client.”

Clyde is looking at about ten other deals too, he said, especially around Limerick, Cork, Galway and Athlone. Clyde now has about 750,000 square foot in its commercial portfolio. Gallagher hopes to double this, either through acquiring new buildings, or even building from scratch. “Both Colm and I are from outside Dublin, so we’re comfortable in the regions and we have a strong network that we’ll be able to harness,” he said.

Where does Clyde want to go, ultimately? “First you have to build value, and if you build value there will be options for an exit,” Gallagher said. “Whether that’s a Reit or an IPO, or whether it’s somebody who comes in and buys some of our assets.” Gallagher said Clyde was also interested in doing joint ventures, by teaming up with others interested in refinancing their debts. “I’ve had a great 12 months of education in terms of understanding large, commercial buildings, how they work from a physical point of view, from a mechanical and electrical point of view. It’s been an on-the-job MBA in property,” he says.

 

A car crash

Gallagher’s father, John Dan, grew up on a small farm outside Ballybofey in Co Donegal. John Dan emigrated to Scotland. He came back to study agriculture and got a job in the Department of Agriculture. His mother Ann came from William Street in Tullamore, Co Offaly, and her family owned a shop. Gallagher was born in Co Monaghan, where his father was based at the time, and he grew up in Ballyhaise, a village in Cavan. “Cavan and Monaghan gave me a great grounding. I think it’s the heart of a lot of entrepreneurial activity,” Gallagher said. “It has a work ethic. You have to find solutions and play the cards you are dealt with.” Gallagher grew up next to a bar called Brady Brothers. He worked there from the age of eight or nine, and needed an empty mineral crate to serve pints. He helped out at one uncle’s farm and in another’s sweet shop. At 17, he helped set up a youth club and volunteered with Foróige, a youth organisation. With Foróige he learned about personal development. “One of the fundamental things I discovered was that life doesn’t happen to you, it is in fact created by you,” he said.

After school, he went to agricultural college in Ballyhaise. In 1981, he got a job at Bailieboro Co-operative selling meal and fertilisers. Things were going well. Then it all changed, in 1983, when he was 22. “Just literally, one morning, somebody just came down the wrong side of the road and crashed into me,” he recalls. “My neck and my back were injured, and so physical work was out for the year. I slept most of that year on and off on the floor.” His dream was to go to Africa and work in development, but after giving a talk to troubled teenagers he decided to stay. “I thought: ‘I don’t need to go to Africa, there’s enough work in front of me to do here.’ I was shocked and saddened that these young people had fallen through the educational system, not because of ability, but because of the environment they grew up in.” He went back to college in Maynooth to train as a youth worker, and he worked with Travellers and young offenders. He realised finding young people education and meaningful jobs was more important than intervening when it was too late. In 1989, at 27, Gallagher wrote the government’s first national alcohol education programme called Drink Awareness for Youth. He had an interest in the area, as some of his extended family were alcoholics. He had also seen from his volunteer work how drink could damage young people. Dr Rory O’Hanlon, the then Minister for Health, asked Gallagher afterwards to become his political secretary. “So that was my first foray into politics, really, in terms of [being] full time,” he says. But in early 1992, Gallagher lost his job.

Ireland’s new taoiseach Albert Reynolds cleared out a lot of his ministers, including O’Hanlon, in what became known as the St Valentine’s Day Massacre. “I had just bought my first house in Castleknock, and I was now unemployed,” he says. Gallagher describes his time out of work as the darkest period of his life. “The first thing that goes is not just your job and your income, but your confidence,” he says. “You begin to withdraw from the very network that would probably get you your next job.”

Gallagher worked as a fitness instructor to earn some cash, and also spent six months in St Mary’s, a Dominican retreat centre in Tallaght, working with young people on personal development. Eventually, he got a job in Blanchardstown working on training programmes for the unemployed. In 1995, he applied for a job on the enterprise board in Louth, and later he studied for a Master’s in Business. He was on his way.

In the late 1990s, Gallagher was on a trade mission to Chicago and was sitting on a barstool at the city’s Doubletree Hotel when he got talking to Derek Roddy. The idea to create Smarthomes began to emerge.

 

Smart about homes

In its first two years, Smarthomes worked on just 50 houses. It installed everything from phone to internet to broadband and audio systems. It was a one-stop shop for telecoms infrastructure in houses. As the Celtic Tiger roared, so too did demand for its services. “By 2007, we were doing nearly 2,000 houses or apartments a year,” Gallagher says. “We reinvested everything as we went along.”

Things were really going well. It had won a big contract in Adamstown, where 10,000 homes were planned. It had an order book of €22 million and 75 staff. It was even looking at Dubai. “Then the downturn came, and we were hit badly with bad debts,” Gallagher said. “Some developers couldn’t pay, and others wouldn’t pay us. “People like Joe O’Reilly of Castlethorn were exemplary in terms of dealing with us. But there were others who weren’t. “There were others who caught us for up to a quarter of a million each. We lost a lot of money, but we paid all our own debts.”

“People attacked me for my business acumen [in the presidential campaign], but we paid all our creditors, even though we were getting burned. I was listening to story after story of plumbers and carpenters and kitchen manufacturers.” And more and more of them were going under because of bad debts.

“A lot of people at the time were underpricing jobs on the basis that they knew they were ultimately going to screw the subcontractors, and that’s just fundamentally wrong,” Gallagher said. “I just thought that was outrageous, so we launched a campaign. Feargal Quinn took it up, and it became the 2010 construction contracts bill which was to provide prompt payment for subcontractors.” The bill, when it was finally passed, was not as strong as Gallagher wanted, but it did improve things. Smarthomes has since morphed into Climote, a smart thermostat maker whose backers include John Mullins, the former head of Bord Gáis. Gallagher has a tiny stake in the company, but no day-to-day involvement. “It is running incredibly successfully,” he says. “Look at Nest in the US. It was sold two and a half years ago for $3.2 billion. It is about connected homes and smart homes. I think we were probably too early, but the Smarthomes model was the right one.”

 

The Fianna Fáil factor

During the presidential campaign, time and again, Gallagher was accused of being a Trojan horse for Fianna Fáil. The party,

having been decimated in the general election earlier that year, did not bother running a candidate; and people put two and two together. Gallagher said this was not true. He did not even have the full support of his party in his home county, when he was seeking to be nominated to run. “The reason that I first joined FF was because the local cumann met in the bar I worked in. These were the people who were the leaders in the local GAA, the local community organisations and the local farming organisations,” he said. “I also want to emphasise that there were, and are, many great, hard-working and honest politicians and supporters in FF, and that I am extremely proud of my time there. I was never trying to distance myself from the party, but merely to say that it was unfair to be holding me responsible for what had happened in government, as I was never elected – even as a councillor.

“Because Fianna Fáil at the time had lost the election so badly and were being blamed for the state of the country, then literally by association that was a way of doing me down. I couldn’t understand it. I’ve never believed you gain anything by trying to knock anybody else.”

 

Going for president

Gallagher ran for president as an independent. He had a public profile thanks to his role on Dragons’ Den, where would-be

entrepreneurs pitched their businesses at him and other seasoned entrepreneurs. Reality television aside, however, he was unknown and an outsider in the race. “In the beginning, I was an afterthought in all the articles,” he says. He first achieved his nomination by

lobbying local councils, before going on a listening tour and finding like-minded people. “I was not advancing a political agenda. I was advancing my agenda for the country, which was about our strengths, about jobs, about positivity, all of that.”

He built a team of 2,500 volunteers, and crept from 2 per cent in the polls to the heights of 40 per cent. Going in front was something Gallagher was ill-prepared for. He was now a target, but this was a concept he did not understand. “You had seven people running for the presidency,” he said. “Every single one of those candidates loved Ireland the same as I did, and wanted to see Ireland doing well.

“That’s where I thought the debate should have been, but it deteriorated into who could create the best drama, who could ask the toughest questions, who could create good TV for entertainment purposes. “Was I naive? I think what got me there was the fact that I wasn’t interested in negativity. It’s not like the US, where the president is like the taoiseach, where you’re in the cut and thrust of attacking the opposition. “A president in Ireland doesn’t need to get down and dirty. I didn’t see one thing presidential about that. It should have been: what can we do individually and collectively for Ireland? I was disgusted.”

“I absolutely hate negativity. I hated the way that Ireland had turned in on itself and everybody was blaming everybody. My life had taught me that that’s the time when you go: what can I do to get from where I am to where I need to be? What can Ireland do to get from where it is, to where it needs to be? Let’s start looking at our strengths, let’s start working together, let’s start projecting a different image.”

 

RTE’s duty of care

Gallagher believes he has learned a lot from the night of the final presidential debate. “There is a golden rule in politics. If you want to upset anybody, you attack them, because when you’re defending, you’re losing,” he said. “It was becoming very clear that people were going to start attacking me. What I was trying to do was finish the campaign the way I had started: positively and without attacking anybody else. I didn’t anticipate the tweet, I don’t think anybody would have . . .” Gallagher still doesn’t know who was behind it. “The Mirror tracked down a guy in his mid-30s . . . but I don’t know. I think it’s kind of strange that that didn’t emerge.” What would Gallagher say to the man who sent it? “I have no idea. I would be of the view now that maybe there were things I could have done differently, or maybe there weren’t. But fundamentally, I think RTÉ had a responsibility to deliver a programme which was based on fairness, and it didn’t.

“There’s an ongoing [legal] case against RTE. I didn’t take it out of animosity. I didn’t take it from a negative point of view. I took it because it’s important to stand up. “RTE had a duty of care to make sure that, as the national broadcaster, it was fair to me as a candidate running for the highest office in the land. It failed in that duty of care. “It is now incumbent on me to hold it accountable for its failure, and to ensure that no other candidate who is brave enough to go before the electorate should ever have to endure what I endured during the Frontline presidential debate.”

RTE denies Gallagher’s claims. Did Pat Kenny or any of his team who fed him the false tweet ever apologise? “No,” he replies.

“I was incredibly honoured and humbled that I had so many people supporting me round the country and my vision and my philosophy, not just me, but what I represented. “I’m blessed to be one of probably a handful of people in the history of the state who got more than half a million first preference votes. “I don’t consider that to be a failure. I think a failure would be where you really wanted to do something and make a contribution, but you didn’t have the courage to step forward. “The bit I don’t understand about politics is that the only way I can be right is if I knock you down. I’ve never believed you grow an inch taller by trying to make somebody else smaller. “What’s really important is how you get the country back on its feet, how you have a society that’s mature and sustainable and caring. There’s far more joins us than divides us. That’s the sad part of politics.”

 

‘Grossly offensive’

When I ask Gallagher if there was any part of his presidential campaign and defeat that really hurt, he looks visibly emotional.

“There was really only one,” he says. “When Michael D Higgins pointed to the ‘speculative’ economic model he believed I represented and called it ‘ethically vacuous’. His comments were untrue, unfair and grossly offensive. And I regretted that I did not demand that he apologise immediately.” Would Gallagher ever go into politics again? “I’m always open to how can I contribute to the country, but I think for the foreseeable future for now that’s about building this business.”

After Gallagher lost the election, he still thought he had something to contribute. He wrote to the Fine Gael-Labour government, offering to help in any way he could. “I said: ‘My vision is your vision. I am at your disposal. How can I contribute?’ And nobody came back to me.” For a while, the phone stopped ringing. Gallagher had no choice but to dust himself off. It was time to work on what was next.

 

The next chapter

Gallagher gives me a lift into town afterwards. We talk about journalism. He does a column for the Sunday Independentevery week, which he loves writing. We talk about Sean Quinn. Gallagher feels that while Ireland’s former richest man made mistakes, he also had great achievements building up his business. As we’re chatting, Gallagher mentions how he once started writing his life story.

The first line was about how heavily the rain was coming down on the day of the final presidential debate (huge floods devastated much of Leinster that very night). Gallagher finished only the first chapter of his book. He is not a man to define himself by failure.

He is not our president; nor will he now ever be. It is hard not to feel, however, that he still has a contribution to make.