By: Michael O’FarrellÂ
Investigations Editor
A CREDIT union inspector who is under investigation for using loans from branches he oversaw bought apartments in a Spanish golf resort and a Bulgarian ski spa, as well as at least two properties in Ireland.
Matt Heffernan bought an apartment in Murcia’s Roda Golf and Beach Resort in the summer of 2007 – when he was employed as a field officer for the Irish League of Credit Unions, responsible for overseeing a number of credit unions in the south of the country.
A recent job advert for the position, posted on the ILCU website, says the duties of a field officer include ‘monitoring the financial, management, administrative and governance controls of credit unions’ as well as planning and conducting audits.
In one property deal, his coinvestors were the manager and the treasurer of a credit union in Castletownbere, Co. Cork, the Irish Mail on Sunday can reveal.
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The ILCU is examining a potential conflict of interest in loans taken out by Mr Heffernan, who had oversight of the Castletownbere branch since 1987.
It is understood that provision has been made in one other credit union that Mr Heffernan was responsible for overseeing for the full amount of a loan used to fund property purchases.
He was joined in the Spanish investment by the manager of Castletownbere’s Berehaven Credit Union, Yvonne Power, and its treasurer, Tina O’Sullivan.
All of the loans issued to the two women were signed off by the board of the credit union, and not by themselves, and the loans are being repaid.
Mr Heffernan, who has not been a field officer for a number of years, was forced to step down as a director of the ILCU two weeks ago after the league referred an internal report and an independent investigation into his loans by auditors KPMG to gardaÃ.
He has also stepped down as a board member of Limerick’s Caherdavin Credit Union.
The manager of Caherdavin Credit Union, Caroline Long, declined to comment last night, other than to say that Mr Heffernan was ‘no longer a board member’.
To date, the ILCU has also refused to comment other than to say it had responded to its ‘statutory obligations to notify An Garda SÃochána of certain matters under Section 19 of the Criminal Justice Act, 2011.’ Under the Act, failing to report information that may lead to a prosecution for a crime committed is an offence punishable by up to five years in prison.
The ILCU’s internal report found that Mr Heffernan’s loans for properties in Spain and Bulgaria were in breach of credit union regulations because of their size.
Under the Credit Union Act 1997, no member can borrow more than €38,000, or 1.5% of the institution’s total assets, whichever is the greater sum.
It is understood that Mr Heffernan’s loans for properties in Spain and Bulgaria, amounting to €350,000, exceeded that threshold.
The KPMG probe found all of the loans ‘associated with Mr Heffernan required provisioning’ – an indication that they either needed to be written off or renegotiated. Widely known among credit union members in West Cork and Limerick, Mr Heffernan was a routine fixture at AGMs, where he was frequently thanked for his help and support by the boards of credit unions.
Last night, the ILCU again declined to comment about Mr Heffernan’s loans. ‘Because of the investigation, we can’t issue any comment,’ said a spokesman.
Records obtained by the MoS in Spain confirm that Mr Heffernan, Ms Power and Ms O’Sullivan – whose full name is Mary Christina O’Sullivan – purchased the Murcia apartment in June 2007 with a €162,000 mortgage from Banco de Valencia. In October, they borrowed a further €27,770 from the bank.
The MoS has confirmed that Mr Heffernan and Ms O’Sullivan, a respected local businesswoman in Castletownbere, also invested individually in separate apartments in the Bulgarian ski resort of Bansko.
They have also jointly owned two Cork city properties funded by loans from mainstream banks.
Bulgarian property records confirm that in 2008, Mr Heffernan bought an apartment in the Alexander Ski Spa in Bansko. The next year, Ms O’Sullivan bought a fifthfloor apartment in the Aspen Heights development in nearby Razlog.
Ms Power declined to comment when approached by the MoS in Castletownbere this week.
‘My business is my business. We’re a financial institution and I’m not going to make any comment,’ Ms Power said when asked whether her credit union had made loans to Mr Heffernan.
Mr Heffernan did not respond to phone messages or a letter handdelivered to his wife at his home in Limerick.
Ms O’Sullivan said that it was incorrect to suggest that any borrowings relating to Mr Heffernan were in breach of credit-union regulations.
‘The board of the directors passed the loans. There’s nothing hidden about them,’ she said.
Asked about the size of Mr Heffernan’s loans, Ms O’Sullivan said: ‘I don’t think it was a breach at the time because of the assets of the credit union.’ Asked if the board had passed loans for Spain and Bulgaria she replied: ‘Of course they did. At that time they were being bought to be sold straight away as was going on all the time. That was what was happening.
‘It was only that because of the economic climate they didn’t sell.’ Asked whether she ever thought it unwise to invest with Mr Heffernan, she said: ‘In hindsight it’s easy to say. But all our members were buying and selling and everyone was happy.’ She insisted repeatedly that in her view no laws had been broken.
Ms O’Sullivan said the properties she owned with Mr Heffernan in Cork ‘had nothing to do with the credit union’ and one of them was no longer in their ownership.
POSTSCRIPT – Look where Matt Heffernan was working in 2014 despite being investigated by gardai in connection with the credit union loans we first reported on in the above article –Â https://www.newsscoops.org/?p=1624
