Emails, ‘lies’, robots and pencils: inside IDA Ireland’s bitter dispute with Terry Clune’s Connect Ireland

When the Government sought ideas to rebuild the economy after the Celtic Tiger crash, tech entrepreneur Terry Clune responded. The Kilkenny-based millionaire, whose successful ventures included Taxback.com, funded the set-up of Connect Ireland, a networking initiative to harvest jobs leads from foreign companies that may want to invest in the Republic.

The Government liked his idea and, in 2012, Connect Ireland entered a contract with IDA Ireland, the State agency responsible for wooing foreign investment. Mr Clune’s group was to provide the IDA with leads from up-and-coming companies. In return, it would be paid €4,000 for each new job created, so long as the IDA wasn’t already chasing the investment.

Within a year, the two supposed partners were at loggerheads over which should get the credit for a slew of jobs prospects. Connect Ireland accused IDA of falsely “red lighting” its involvement in leads where Mr Clune’s company says it instigated first contact. Connect Ireland claims it helped create more than 7,000 new jobs but was paid for fewer than 600.

[ IDA colluded in ‘lie’ to get credit for jobs leads ]

The fallout has led to a bitter, six-year legal dispute, which earlier this year culminated in an arbitrator finding that certain IDA executives had manipulated aspects of the agreement with Connect Ireland, although he did not make this finding against the IDA as a whole. He awarded costs against the State agency, which Connect Ireland estimates could be as high as €7 million to date.

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Meanwhile, the IDA is counterclaiming against Connect Ireland for €1.2 million of fees it alleges should be clawed back because, it says, some new jobs did not last. The legal row has moved on to a new phase in which the arbitrator will now determine who is financially liable for what.

Ministerial appeals

A cache of legal letters, emails and transcripts obtained by The Irish Times illustrates how the bitter row unfolded.

Letters between ministers and Mr Clune’s outfit show the allegations against the IDA – that it had wrongly “red lighted” Connect Ireland from receiving credit for thousands of new jobs – had been brought to the highest levels of government over several years. The documents suggest the government repeatedly declined to intervene in the row.

In October 2017, for example, Connect Ireland wrote to the then minister for enterprise, Frances Fitzgerald, following a meeting with her, complaining about the IDA’s “conduct” and requesting an official investigation into the situation, which it claimed was costing jobs and investment.

She responded weeks later urging Connect Ireland to enter dispute resolution with the IDA and said the government could not ascertain the full cost of Succeed in Ireland until the costs of the row between both sides were known.

Connect Ireland wrote to then taoiseach Leo Varadkar, weeks later, urging him to step into the row with the State agency, which it said had seen the State’s standing with diaspora “severely damaged”. It referenced meetings with several ministers “on numerous occasions over the years”.

Ms Fitzgerald’s successor, Heather Humphreys, responded shortly before Christmas that year, saying a formal investigation “is not merited”. Mr Varadkar, who is the current Minister for Enterprise, was again contacted by Connect Ireland in recent months following the arbitrator’s findings this year of liability against the IDA, but again declined to intervene.

Connect Ireland also sent details of its complaint, as well as evidence uncovered during the arbitration, to the IDA’s board.

Internal emails

Meanwhile, years of emails between IDA executives that were pored over in arbitration appear to show certain executives in the State agency colluded over false claims to have already met potential foreign investors, so as to scoop the credit for new jobs from Mr Clune’s venture. In one email exchange over a potential investor, digital marketer Silverpop, one IDA executive asked another if she should pretend to have already met it when, in fact, she had not. He told her to proceed. A third IDA executive agreed with a Connect Ireland lawyer at arbitration that this was a “lie”.

Another chain of emails was produced by the IDA over a disputed potential jobs lead from Canadian tech firm Robots and Pencils. Connect Ireland and its lawyers claimed at arbitration that time stamps and metatags show the dates of correspondence were retrospectively doctored to make it appear as if the IDA had contacted the company about new jobs earlier than it had done, which would have allowed it to “red light” Connect Ireland for any subsequent credit.

“It is the worst example of any of the hundreds and hundreds of examples that we’re looking at,” said Joanna Murphy, Connect Ireland’s chief executive, in the arbitration transcripts. She alleged that entries had been “backdated”. In subsequent legal correspondence, IDA insisted that the arbitrator had not found this to be “made out”.

Other emails from 2016 showed senior IDA executives “red lighting” Connect Ireland’s request for credit for a potential jobs lead from Texan online security firm, AllClear ID, on the supposed basis that it was already on to the company.

The next day, the same IDA executive who had “red lighted” this deal for Connect Ireland made contact with AllClear via LinkedIn, claiming to have “come across your company in an article” and looking to make contact for the first time. Connect Ireland’s lawyers alleged this was a “trick” by IDA to cut out Connect Ireland. The red light was later reversed after, Connect Ireland said, the IDA executive got “nervous” that he would be “caught out”.

Following the arbitration findings on liability, which mostly went against IDA, Connect Ireland now wants the Government to intervene to force IDA to finally settle the row, which could allow Succeed in Ireland’s activities to resume. So far, Mr Varadkar has refused.

For its part, IDA Ireland says it is “highly inappropriate” to publicise ongoing arbitration proceedings: “IDA Ireland rejects the narrative now put forward by Connect Ireland, which ignores the fact that the arbitrator’s ‘overall conclusion from the documents and the evidence was that the IDA was acting honestly’.”

IDA denies any financial liability and vows to pursue its €1.2 million counterclaim. The legal row continues.