Larry Goodman

Larry Goodman
Born	Laurence Goodman 1937 Dundalk, County Louth, Ireland
Nationality	Irish
Alma mater	St. Mary's College (Marist College), Dundalk[1]
Net worth	€745 million (2012)[2]
Spouse(s)	Kitty
Children	Laurence, Mark

Laurence "Larry" Goodman (born 15 September 1937) is an Irish businessman, chiefly involved in the beef industry. His companies attracted controversy in the 1991 Beef Tribunal and the 2013 horse meat contamination scandal.^[3]

Personal life

Goodman was born in County Louth. He left school before finishing his Intermediate Certificate, and followed his father into the meat industry, starting with meat by-products and sheep. He was "born to a well off family who had been in the meat business for six generations".^[4]

He lives with his wife Kitty at Castlebellingham, County Louth. He has two sons, Laurence and Mark, and does not drink or smoke. In 1988 Goodman purchased a Canada Air Challenger twin-engined jet, costing at the time about £10 million. The plane had a tail number: EI – LJG. His brother Peter Goodman worked as deputy chairman of Goodman International and his other brother Michael was a farmer in County Louth.^[5]

Business life

In the late 1960s Goodman bought Anglo-Irish Meats in Dundalk, which put him into the processing industry in a substantial way. He then began exporting, building up contacts in the Middle East in particular. He sold meat to Libya, Iran, Iraq and Egypt – often going himself as salesman. He was on the advisory committee for HSBC's opening of operations in Ireland in 1979, along with Dermot Nolan, Michael Carvill and Peter Hutson. In April 1980 Anglo Irish Meat Group purchased a meat plant at Bagenalstown, County Carlow from Meade-Lonsdale for around £2.2m.

In June 1980 it was announced that Goodman would invest £10m for a new meat plant in Ardee, County Louth, employing 360 people "when it reaches full production". It also announced an additional £10m investment to expand operations at Cahir, Nenagh and Bagenalstown.^[6] In October 1980, Goodman bought Fermanagh Meats in Enniskillen for about £1.5m. The plant employed 60 people and processed about 1,000 head of cattle a week. By this time Goodman's meat empire was turning over about £100m a year.^[7]

In July 1981 it was announced that the IDA would put £2m towards the £9m expansion of Goodman's plants. One of his companies, Irish Agricultural Feed Co also built a feed manufacturing facility at Castlebellingham, and a complex to "over-winter up to 15,000 cattle to boost supplies to the factories at a time when few cattle are finished for slaughter". The complex "was the result of 14 years research" and cost £2m. By this time Anglo Irish Group employed some 700 people and turnover had reached £120m per year.^[8]

In January 1982 it was announced that Anglo Irish Beef Group had won a £25.5m contract to supply beef to Iraq. The contract involved supplying 9,000 tonnes of boneless consumer cuts and frozen bone-in meat and was part of an overall order for 54,000 tonnes of beef placed by Iraq.^[9]

In March 1983, AIBG acquired the four Northern Ireland factories of the animal by-products processors Robert Wilson for around £1m. By this stage AIBP was slaughtering more than 250,000 cattle a year, and 10,000 cattle were being fattened at Goodman's feeding lots in Louth. Later that year, in April 1983, he won contracts to supply $50m worth of fresh frozen beef to Iran and Morocco. At the time of the deal, Goodman complained that because there was no Variable Premium subsidy scheme in the UK, exporters there had an effective subsidy of $300 a tonne on beef exporters, thus enabling them to undercut Irish exporters. In September 1983 Goodman won a $33m contract to supply beef to Iran. Goodman praised then Minister for Agriculture Austin Deasy, whose visit to Tehran "greatly facilitated the securing of the new contract".^[10]

In December 1984 AIBP purchased the entire fresh meat division of Dalgety PLC, a publicly quoted UK group. It included facilities in York, Blisworth, Wellingborough and Reading, as well as distribution depots in Jersey and Berkshire. By this time turnover at Goodman had reached £300m a year.^[11] The purchased was followed by the acquisition of the Waterford plant of Clover Meats (after that company's collapse) for around £2m in February 1985. It includes the purchase of National Proteins, a by-products plant processing meat and bone meal from edible offal.^[12]

Irish Sugar controversy

In January 1989 it emerged that Goodman, through his company Food Industries, was interested in making a "significant investment" in the Irish Sugar Company and confirmed that it had approached the company and the Government about its plans. The chief executive of Food Industries, David Dilger, said the company had not received "a negative or positive" response from the Government – which then commissioned a study on the future development of Irish Sugar. Dilger said on radio in February 1989 that he had been in touch Irish Sugar two months earlier. Following this Dilger and Goodman made a presentation to senior officials from ICTU on their plans for Irish Sugar.

On 14 February 1989 the chairman of the Oireachtas Joint Committee on commercial State-Sponsored bodies, Liam Lawlor, failed to attend a private meeting of the committee at which Opposition members planned to question him about a report on the Irish Sugar Company's affairs, submitted by the company to the committee.^[13]

It emerged that as Chairman of the committee Lawlor had received a report written by Irish Sugar for the committee in November 1988, but had not shared it with other members of the committee. Although at first he denied he knew of the existence of the document, he later admitted he had, though he reportedly "had not read its contents".^[14][15]

The report "spelled out in greater detail than ever before the structures, financial condition and prospects" of Irish Sugar.^[16] At the time Lawlor was a non-executive director of Food Industries, in which Goodman had a majority stake. Lawlor owned 11,000 shares in the company at the time valued at £31,000. He was appointed non-executive director in 1987, given his "expertise in the refrigeration/cold storage business".

Lawlor's involvement with Food Industries led to allegations of a conflict of interest, and proposals from the Labour and Workers parties for the drawing up of a code of conduct and declaration of interests via amendment to standing orders of the Dáil. Labour Party leader Dick Spring was ordered to leave the Dáil after persistent questioning about Lawlor's behaviour.

Lawlor resigned as chairman of the committee on 16 February 1989. Des O'Malley welcomed the resignation, stating that "it was the only honourable course open to him to protect and preserve the independence and the integrity of the committee".^[17]

Desmond and Mac Giolla allegations

On 9 March 1989 TDs Barry Desmond and Tomás Mac Giolla made a series of allegations about Goodman International in the Dáil. Mac Giolla made allegations regarding what the Minister for Agriculture Michael O'Kennedy knew or did not know about Goodman's interest in Irish Sugar. It emerged that the Minister had met Goodman on 19 October 1988 and Goodman had expressed interest in Irish Sugar – however in a parliamentary question submitted by Des O'Malley just a month later O'Kennedy denied any "discussions or negotiations" related to Goodman had taken place. Mac Giolla highlighted a report in the Sunday Press about a Department of Agriculture raid on one of Goodman's companies, Eirfreeze, in North Wall, Dublin the previous week. Mac Giolla stated:

"My information is that it was closed down – and probably this is part of what was referred to by Deputy Desmond – because of very serious illegal activities by a team acting on behalf of one of the Goodman companies – changing labels on meat, changing dates in other words, the dates on which the meat was killed and packed in intervention."

Mac Giolla made allegations about an IDA grant of £25m given to Goodman, and the involvement of Charles Haughey in relation to the grant:

"It is understood that he [Goodman] has got IDA grants of up to probably £25 million. There is also some evidence which has been brought to my attention to suggest that the Taoiseach himself directly intervened with the IDA in some of these grants to get the IDA to drop their insistence on what is called the performance clause. The performance clause is required by the IDA in their contracts when issuing grants and this performance clause was dropped in the case of grants to the Goodman company. I do not know why that should be so. This is a huge concern. It accounts for more than 42 per cent of the total beef exports from this country. Alone they now probably account for up to 6 per cent of our gross national product."

Desmond made similar allegations, including:

"...We are aware that Goodman International are involved; we are aware that Waterford storage plants are involved; we are aware that Ballymun plants are involved. We are aware of allegations that boxes of beef were not found to contain what they should contain, that they had contained trimmings and offal, the export of which would certainly not be in the national interest."

Desmond indicated that the media had been subject to writs, and called for a tribunal of inquiry into the Goodman Group:^[18]

"Any efforts by newspapers to refer to such matters have resulted in writs flowing all over the place, to the BBC, to RTE, to Irish newspapers. No doubt my party leader and I will receive – as did Deputy Stagg when he made a comment here about the same company – substantial letters demanding that the matter be dealt with elsewhere. As far as I am concerned, unless the matter is resolved in an effective manner, in a way in which the State's and the European Community's interests are protected, I will call for a tribunal of inquiry. Indeed the Government have little option but to hold an inquiry, a very detailed one, even if it were to cost £1 million or £2 million to get to the bottom of this matter. We must protect the integrity of Irish beef exports."

On 11 March 1989, the Irish Times published a story which described how Goodman International had via a statement denied the allegations made by Desmond and Mac Giolla. Goodman said it was shocked by the allegations made and that they were "false and malicious comments". "The use of the privilege of the Dail to further this campaign against an Irish company is a matter of the gravest concern," the statement read.^[19]

Goodman denied the EirFreeze allegations, simply stating that the cold store in Dublin was not shut down "at any stage".

War in Iraq and emergency legislation

On 2 August 1990, Saddam Hussein ordered his troops to enter and occupy Kuwait. Goodman International, which was already under strain from a BSE scare was now under pressure because Iraq defaulted on payments for beef delivered, even before UN Sanctions were imposed. Initially the losses to the group and its bankers were estimated at £70m. There were rumours that a receiver to the company was about to be appointed.^[20]

By this time Goodman's companies accounted for 40% of the national beef kill, and had turnover in the region of £1 billion, almost all of it in exports. On 24 August 1990, share prices on the Irish Stock Exchange fell by £400m, with some of Goodman's companies including Food Industries (in which he held a 68% stake) falling from 170p to 110p.^[21]

By Friday, 24 August 1990 the situation had become so serious that Taoiseach Charles Haughey recalled the Dáil for an emergency session to pass a section of the Companies Bill on Tuesday, 28 August. Haughey denied that the legislation was being enacted specifically to aid Goodman.^[22] The legislation allowed for the courts to appoint an examiner who could freeze company assets for up to 12 months – compared at the time to US Chapter 11 bankruptcy protection laws.

It later emerged that Goodman International was owed up to £180 million by Iraq and that the group owed over £400m to banks around the world – and that the group was "insolvent to the tune of somewhat under £100m".^[23] As the group holding company, Goodman International, was an unlimited company and Goodman was 98% owner, he could personally be called on to make good any shortfall owing to creditors. To pass the emergency legislation, TDs had to be recalled from their holidays including Ceann Comhairle Sean Treacy. Attorney General John Murray returned from his holiday in Italy to attend the emergency session – and work to install the new TV and sound system in the Dáil had to be suspended, with scaffolding being removed.^[24]

World in Action

At 8.30pm, on 13 May 1991 Granada Television broadcast an episode of its flagship investigative programme, World in Action. The researcher on the programme was Susan O'Keeffe. The show examined the core business of Goodman International, how its operations were funded by national and European Community schemes, including export insurance and credit schemes, EC export subsidies and the variable premium paid on cattle. It questioned whether the dominant position of Goodman in the Irish and British beef processing industry was in the best interests of consumers. It also made allegations of inappropriate political influence by Goodman. The programme featured Patrick McGuinness, a former Goodman accountant who had left the company and immigrated to Canada. The Tribunal later established to investigate the allegations made in the programme, summarised them:^[25]

Abuses of the system under which subsidies are paid by the EEC

• Falsification of documents which provide the basis for the payment of such subsidies.
• Use of bogus stamps to alter the classification of animals being processed;
• Switching of meat taken into intervention the property of the Intervention Authority and the substitution therefor of inferior product;
• Falsification of weights shown on cartons of beef;

Abuses of the Export Refund subsidy system

• failing to comply with the contractual requirements of Middle-East customers with regard to Halal slaughtering of beef exported to such countries and the unauthorised use of Islamic stamps, in the possession of the Company, to show compliance with this requirement;
• Re-boxing of meat purchased from the Intervention Agency for the purpose of misleading customers.

Abuses of the Aids to Private Storage Scheme at the AIBP factory in Waterford

• Falsification of weights;
• Addition of poor quality meat;
• Attempting to conceal the extent thereof by:
• altering case weights at the Cold Store,
• preparing a plan at Senior Management level within the Goodman Group to limit the extent of the damage to the Goodman Group which proved abortive.

Allegations of Political Influence

• That Larry Goodman and his companies had "the right connections at the right places that could basically control any investigation that would be put in place."
• That, though the National Governments of each individual country are responsible for tackling fraud on the European taxpayer, Larry Goodman had, in the Irish Government, some of his strongest supporters.
• That the links between the then Taoiseach, Charles J Haughey TD and Larry Goodman went "back a long way": that Larry Goodman gave money to the Fianna Fáil Party and the then Taoiseach publicly promoted Goodman at the very time that Customs investigators were warning that Goodman's operations were strongly suspected of involvement in fraud.
• That a major European investigation into the operation of Goodman companies was prevented by assurances from the Irish authorities that they themselves had a wide ranging investigation of Goodman in hand and that there is no evidence of any such investigation.
• That the Customs report on the Waterford investigation was withheld from the Garda Fraud Squad for a period of eighteen months even though the Customs authorities had recommended the instigation of criminal proceedings.
• The Commissioner Ray Mac Sharry had sought the assistance of the Dutch Agriculture Minister, Herik Braks to approach a Dutch Bank, Amro, to withhold proceedings against Goodman.

Abuses of the Tax system

• having a company wide scheme of under the table payments to employees;
• making out cheques against bogus invoices, having same endorsed by Goodman employees, cashed at local branches of the Allied Irish Bank and the cash received distributed to employees, the amount involved being approximately £3 million per annum.The next day Opposition parties called for a full judicial inquiry into the allegations made on the programme.

Goodman said he would welcome any investigation from any source and that he would co-operate fully with it. He said he was astounded by the allegations made in the programme. He said that the malpractices alleged during the programme in relation to stamping and weighing meat had never been carried out in a "routine fashion", and if they had taken place they had done so without his knowledge or consent.He said systems that meant payment of £3 million in non-taxable wages to employees had existed but that this had been ended.^[26]

Rabbitte allegations

Gifts to civil servants

Opposition TD Pat Rabbitte made a number of further allegations in the Dáil on 15 May 1991. These includes that customs personnel at Greenore, Carrickarnon, Dundalk, Waterford and Dublin, as well as staff at the Department of Agriculture, including staff at cold stores and vets, and from the Department of Industry and Commerce had all received gifts from the Goodman group. It was also alleged that staff at the Northern Ireland Customs and the Northern Ireland Department of Agriculture had received gifts.

Carousel operation

He also said that Goodman operations had been subject to a lesser degree of customs inspections than other commercial operations and "especially in regard to container loads going North, and that he has been able to virtually secure the closing off of the port of Greenore to other people when he was exporting meat". Rabbitte continued that in 1988 a container load of boneless beef left a Goodman plant near Wexford. The lorry, carrying 500 sides of beef, crossed by ferry to Britain, travelled up the mainland and crossed to Northern Ireland at Larne. The lorry was intercepted by customs officers on an unapproved road near Castleblayney on its way back to the Republic. The driver explained to the customs officers that he was on his way to a Goodman plant near Enniskillen, but had got lost. The customs officers concluded that they had intercepted a "carousel' or missing trader fraud operation.

The allegations were addressed during the Beef Tribunal. In the Tribunal Report published in July 1994, Justice Liam Hamilton stated: "The Tribunal accepts there was no basis whatsoever for the suggestion that the Goodman companies were subjected to a lesser degree of customs inspections than other commercial operations".^[27] In relation to the supposed "closing off" of the port at Greenore to other people, the Tribunal found that: "No evidence was adduced before this tribunal which in any way sought to support this allegation. In fact, all the evidence was to the contrary".^[28] Regarding the allegations of a "carousel operation" Justice Hamilton stated "The Tribunal is satisfied that the incident referred to in Deputy Rabbitte's speech was not part of a carousel operation.^[29]

Beef Tribunal

The Tribunal of Inquiry into the Beef Processing Industry, also known as the Beef Tribunal, was established on 31 May 1991, chaired by Mr Justice Liam Hamilton. The Tribunal was tasked with "inquiring into the following definite matters of urgent public importance: (i) allegations regarding illegal activities, fraud and malpractice in and in connection with the beef processing industry made or referred to:-- (a) in Dáil Éireann, and (b) on a television programme transmitted by ITV on 13 May 1991; (ii) any matters connected with or relevant to the matters aforesaid which the Tribunal considers it necessary to investigate in connection with its inquiries into the matters mentioned at (i) above; and 2. making such recommendations (if any) as the Tribunal, having regard to its findings, thinks proper." The Tribunal began hearings on 21 June 1991 and it reported its conclusions in July 1994, at the time the Irish State's longest running inquiry. The Tribunal was established by the then Fianna Fáil/Progressive Democrat coalition, though only after the leader of the PDs, Des O'Malley threatened to pull out of the coalition if no inquiry was established. Then Taoiseach Charles Haughey acquiesced to the demand.^[30]

Notes and references

External links