House of the rising sum
Last autumn Bertie Ahern purported to reveal all about his personal finances. But new information about extraordinary transactions raises further questions about his money and has caused a crisis for the Fianna Fáil election campaign. But the real corruption in Irish politics is the scale of continuing poverty, the huge waste of public funds and the neglect of important social issues.
I The Political Background
On Wednesday 16 November 1994, the Labour Party, led by Dick Spring, then in government with Fianna Fáil, pulled the plug on Albert Reynolds, then Taoiseach. Labour believed Albert Reynolds had misled it and the Dáil the previous day over the Fr Brendan Smith case (in retrospect, it seems the situation was hopelessly confused and there was no intention to mislead).
Albert Reynolds was forced to resign as Taoiseach and, as a consequence, forced to resign as leader of Fianna Fáil. Máire Geoghan-Quinn gave brief consideration to contesting the leadership against Bertie Ahern but opted out. Bertie became leader and immediately entered into negotiations with Dick Spring for a resumption of the Fianna Fáil-Labour coalition.
Agreement on a new programme for government with Bertie Ahern as Taoiseach and Dick Spring, again Tánaiste, was reached on Friday, 1 December. That weekend Bertie Ahern set about finalising arrangements for a new home and it was the arrangements he entered into that weekend, in mistaken anticipation he would be Taoiseach the following Tuesday, that now threatens his re-election for a third term as Taoiseach. He had a problem. Nowhere officially to live.
II Bertie's living arrangements
Since leaving the family home in Malahide in 1986 he had stayed first with Celia Larkin in a flat she was renting in Upper Mount Street. She moved out after a while and he remained on, although she continued to be the legal tenant. Then he moved into a house she had got in Cabra. After a while he moved out of there and into a small apartment above his constituency office at St Luke's in Drumcondra. This was renovated by a group of people who were later to be the donors of the cash contributions made to him at Christmas 1993 and October 1994. He moved back to Celia Larkin's home in Cabra after a further while and moved back and forth from there to St Luke's.
When Charlie Haughey was forced to resign as Taoiseach in January 1992, Bertie wanted to contest the leadership of Fianna Fáil against Albert Reynolds, who had been instrumental in the removal of Charlie Haughey. In the course of that very brief leadership struggle – Bertie Ahern opted out after a few days – the point had been made by one of Albert Reynolds's supporters, in direct reference to Bertie's unorthodox residential arrangements: “People are entitled to know where the Taoiseach sleeps at night.” Bertie was determined that issue would not blight his chances of the leadership a second time.
III Micheál Wall enters the scene
Some time previously he had had contact about a house with one of his friends in Manchester, Micheál Wall, a coach owner and driver. Micheál Wall was associated with a group who had given Bertie stg£8,000 just two months previously, although, apparently, Micheál Wall was not one of the contributors at that time.
According to evidence given to the Planning Tribunal in private session, Micheál Wall had decided to purchase a house in Dublin at around this time, somewhere to stay on his trips from Manchester. The house was in a new estate, Beresford, in Drumcondra. Micheál Wall was planning on developing in Dublin the coach business he was running successfully in Manchester and had been staying regularly at the Skylon Hotel. Apparently he decided it would be more economical for him to purchase a house in Dublin than to continue to pay hotel charges.
But then in an apparent sudden reversal of his decision to buy a house for his own use in Dublin, Micheál Wall agreed to rent the house to Bertie Ahern, giving Ahern an option to buy the house. Bertie Ahern told the tribunal there was an undertaking on his part that Micheál Wall could stay in the house on his visits to Dublin. But if he had planned on being over here so often as to justify the purchase of a house rather than continuing to stay in a hotel, it would be surprising if he could have been satisfied being a guest in a house occupied by someone else.
A further intriguing aspect to this is that when he first inspected the house, he was accompanied by Celia Larkin, which suggests that the purchase of the house by Micheál Wall was always intended as a means of providing a residence for Bertie Ahern.
Micheál Wall was over in Dublin on the evening of Friday, 1 December, the evening that Bertie Ahern finalised the agreement with Dick Spring to form a new Fianna Fáil-Labour government the following Tuesday. He was over for the annual Bertie-bash at the Royal Hospital, Kilmainham, a fundraising event for Bertie's constituency organisation which every year has brought in tens of thousands of euros.
IV St Luke's, 2 December 1994
And the following morning, Saturday, 2 December, Micheál Wall met Bertie Ahern at his office/residence at St Luke's in Drumcondra.
According to evidence given in private to the Planning Tribunal and reproduced by Frank Connolly in the Mail on Sunday on 29 April, at this meeting in Bertie's office, Micheál Wall gave over in cash stg£30,000, allegedly for the renovation of the house, a house that was not purchased until three months later and where Bertie Ahern did not reside until seven months later because vacant possession was not secured until May 1995.
In addition, at that meeting, Bertie agreed to invest £50,000 for the renovation of a house he was simply to rent. This was a total of £80,000 for the renovation of a house that had been built only a few years previously and was worth only about £150,000 (Bertie says he paid £180,000 for the house three years later).
So at a meeting in his constituency office three days before he expected to be elected Taoiseach, Bertie Ahern received in cash stg£30,000 and himself agreed to add to that £50,000 for the renovation of a house he was planning merely to rent (and perhaps purchase at some future time). And, it is claimed, they were planning to spend over half the value of this four-year-old house on renovations!
Bertie Ahern told reporters on Monday, 30 April, that part of the stg£30,000 handed over by Micheál Wall was for stamp duty. But, apparently, Bertie Ahern did not mention this to the Planning Tribunal at the private interviews. In any event, is seems improbable, for the purchase of the house did not take place for months after this, and the more obvious arrangement would have been for the solicitor handling the conveyance on behalf of Micheál Wall to make the stamp-duty payment. The solicitor acting for Micheál Wall, incidentally, was the late Gerry Brennan, who happened to be Bertie's solicitor and close friend.
V Bertie's savings
There are further curiosities about all this.
About the £50,000 that Bertie Ahern had available to invest in the renovation of a house he was purporting to rent, he told the Planning Tribunal that he had “saved” £28,000 of this and that £22,000 was money he had received recently from friends – that was from friends in Dublin and Manchester. And, it emerged, this money was lodged in a bank account opened by Celia Larkin, who opened another account for the lodgement of Micheál Wall's stg£30,000.
VI The ‘whip-arounds' for Bertie
To explain the significance of this, it is necessary to recap the story on Bertie's finances that emerged on 26 September 2006.
He said in that now-famous interview with Brian Dobson in September that at Christmas 1993 his solicitor, the late Gerry Brennan, went to personal friends Paddy Reilly, Des Richardson, Pádraig O'Connor, Jim Nugent, David McKenna, Fintan Gunne, Mick Collins and Charlie Chawke, seeking contributions to assist him (Bertie) at a time when he was financially stretched because of his marital separation. They knew he had taken out a loan at the AIB branch in O'Connell St, Dublin, to settle his legal bills. These gave a total of £21,500. Then “later” (actually not until October 1994), four other friends, Joe Burke, Dermot Carew, Barry English and Paddy Reilly (known as Paddy the Plasterer) gave a further £16,500. A total of £38,000 (€48,260). This was well in excess of a TDs salary at the time, which was the equivalent of €38,219. He claimed he always understood this was a debt which would have to be repaid with interest, although he had not repaid this at the time of the RTÉ interview and said that when he broached the issue of repayment his friends “laughed it off”. He has since repaid the loan in full with interest, he says. The claim that he understood this to be a loan, repayable with interest, was in anticipation of questions about his tax liabilities on these loans.
He acknowledged that in October 1994 he was given a further £8,000 while at a function in Manchester. Micheál Wall attended this function but did not partake in the dinner. Neither, apparently, was he one of the contributors to this £8,000 donation.
VII Bertie's expenses
In the course of his interview with Brian Dowson on RTÉ on Tuesday, 26 September, 2006, Bertie Ahern said: “From 1987, when I separated, until the end of 1993 was a long, protracted period that happens in family-law cases... I had no account in my own name in that period. Miriam had joint accounts and I paid Miriam maintenance but also saved money during that period and I'd saved quite a substantial amount of money because it was from the time I was lord mayor in 1986. I'd saved in the order of £50,000 [€63,500].”
He said: “The trouble was that in the separation I agreed to provide £20,000 for my children to an educational account as part of the agreement that I made... I also had to pay off other bills, so the money I'd saved was gone.
“I had to pay my legal fees, which I did take a loan out, they [the friends] helped me to clear out quicker and then I had to go through, but I did it at that particular time.”
So the £38,000 (€48,260) he obtained from friends was used to clear off the bank loan which he had obtained to pay the legal expenses arising from the marital separation. And the £50,000 he had saved, he says went to provide for his children's educational account and legal bills. This was in early-1994.
And yet by December 1994 he had “saved” a further £28,000!
His gross salary at the time would be been around £68,000. His net salary was probably no more than £52,000, given the high tax rates that then prevailed. He was paying maintenance to his wife and presumably making maintenance payments for his children and paying the mortgage on the family home. To have saved 54 per cent of his net salary at that time would have been quite an achievement.
Nevertheless, this is what Bertie Ahern said happened at that extraordinary meeting in St Luke's on the morning of Saturday 3 December 1994, three days before he expected to become Taoiseach for the first time.
VIII Parallel with Charlie Haughey
By a fascinating parallel, on the Saturday before he became Taoiseach in December 1979, Charles Haughey also had an extraordinary meeting. His was with the property tycoon at the time, Patrick Gallagher, and at that meeting Patrick Gallagher agreed to hand over £500,000 in return for a sham land deal, simply to help out the then Taoiseach-elect. Bertie was Taoiseach-elect on the Saturday he did his deal with Micheál Wall, although of course there is no suggestion that there was anything of a sham in the arrangements made by these two.
IX Taoiseach deferred
In the event, Bertie Ahern did not become Taoiseach on that following Tuesday. He rose early on the morning of Monday, 5 December, 1994 and his ministerial car was there to take him to the airport to take a flight to Brussels for a meting of finance ministers. On their way to the airport, around 6.30am, they stopped off at a newsagents where Bertie purchased that day's Irish Times.
Sitting in the passenger seat as the car drove on towards the airport, he read a front-page article by Geraldine Kennedy, then political correspondent of the newspaper, now editor. The article purported to reveal new information about what Fianna Fáil ministers knew about a detail concerning the Fr Brendan Smith affair – this was the infamous Duggan case. And the purport of her article was to the effect that all the Fianna Fáil ministers, not just Albert Reynolds, knew of that Duggan case on Monday, 14 November 1994, thereby implicating them all in the alleged deception of Dick Spring and the Labour Party.
Bertie Ahern, like almost everyone else in Fianna Fáil at the time, was entirely confused by the detail of all that, but realised that the story would scuttle the deal with Dick Spring.
Shortly before 11am Irish time that morning, he was called out of the finance ministers' meeting to be informed that the deal with Labour was off. Dick Spring later did a deal with John Bruton of Fine Gael and that brought about the Rainbow Coalition government, which kept Bertie Ahern from office until June 1997.
X Micheál Wall's will In 1996,
Micheál Wall was seriously injured in a hit-and-run accident in Manchester. In the same year, he made a will leaving this house to Bertie Ahern. Bertie Ahern did not purchase the house himself until after he became Taoiseach in 1997 and he paid for it by way of £46,000 from, presumably, further “savings” and a mortgage for £140,000. So strange were all the transactions that, apparently, he was questioned by tribunal lawyers about whether Micheál Wall was in fact merely a trustee and that from 1995 onwards Bertie Ahern was the beneficial owner of the property. He denied this.
XI Bank accounts and sterling
Aside from the transactions to do with the house, Frank Connolly reported in the Mail on Sunday that the tribunal also asked Bertie Ahern about lodgements made by him and Celia Larkin to various bank accounts in 1994 and 1995, sums that matched round-figure sterling amounts.
Bertie Ahern told the tribunal he had bought large amounts of sterling in those years, intending to use it to repay Micheál Wall (it is not at all clear what it was he was repaying).
Celia Larkin opened two accounts in her own name in December 1994, into which she lodged Micheál Wall's stg£30,000 in one and Bertie Ahern's £50,000 in the other. It is not at all clear why this was necessary and why her accounts were used, since Bertie Ahern was by then using a bank account himself, having avoided using an account from 1986 to 1993, during which time he was undergoing a marriage separation.
XII Owen O'Callaghan
All these enquires arose from the original allegations by the then London-based property developer, Tom Gilmartin, that he had been informed by the Cork property developer, Owen O'Callaghan that he (Owen O'Callaghan) had made payments of up to £80,000 to Bertie Ahern in return for ensuring that a rival development to the Quarryvale/Liffey Valley site at Blanchardstown was not given tax designation and that a site in Athlone, in which O'Callaghan was involved, was given tax designation.
Ironically, these allegations now seem implausible, for Tom Gilmartin's credibility has been significantly undermined by the disclosure of transcripts of his private interviews with the Planning Tribunal in the course of which he made allegations inconsistent with those he made in public and other allegations that were perceived as preposterous.
While Bertie Ahern, in all probability, had nothing to worry about concerning the Tom Gilmartin allegations, the issues that have caused him difficulty are ones unconnected with Quarryvale, issues that have arisen from the examination of his financial affairs in connection with Quarryvale.