Tony O'Reilly's Fitzwilton gave a £30,000 cash cheque to Ray Burke in June 1989
Fitzwilton plc, which is controlled by Tony O'Reilly, paid £30,000 to Ray Burke—then Minister for Industry and Commerce—on June 7, 1989. The payment was made by way of a cheque made payable to “cash”, drawn on a subsidiary company of Fitzwilton plc.
In a statement issued to Magill, Fitzwilton acknowledged the payment of the £30,000 to Mr Burke, which it said was intended for the Fianna Fáil Party. The cheque was handed to Mr Burke at his home in Swords. On the same day or within a few days of June 7, 1989, Mr Burke received another £30,000 (this time in cash) from Joseph Murphy Structural Engineers (JMSE). That contribution was made again at Mr Burke's home in Swords by Mr James Gogarty of JMSE, accompanied by Michael Bailey of Bovale Construction. These payments were made in the period immediately prior to the 1989 general election, which was held on Thursday, June 15.
The payment by Fitzwilton is being investigated currently by the Planning Tribunal, chaired by Mr. Justice Fergus Flood.
Representatives of Fitzwilton and of Fianna Fáil have made statements and handed in documents to the Tribunal concerning this. Magill interviewed no official of the Tribunal or anybody connected with it, in connection with this article and no information was made available otherwise to Magill from the Planning Tribunal.
The cheque was handed over and signed by an executive of one of the Fitzwilton subsidiaries. It is accepted by all parties involved in this controversy, that the two Fitzwilliam representatives acted with propriety and disinterest. Indeed one of them had been in conflict with Mr Burke a short time before the cheque was handed over, when Mr Burke announced that the company concerned was about to create more jobs in the Dublin North constituency.
We presented a series of questions to Mr Burke, through his solicitor, concerning this payment. We were informed that Mr Burke did not wish to comment as the matters referred to were being investigated by the Planning Tribunal. A source close to Mr Burke confirmed that the £30,000 payment had been made.
Fitzwilton said that its representatives asked Mr Burke to whom the cheque should be made payable and that Mr Burke said to make it payable to “cash”. According to Fitzwilton, Mr Burke said he wished to defray some constituency expenses and that he would pay the balance to the Fianna Fáil Party head office. In the event, Mr Burke did make a payment of £10,000 to the Fianna Fáil Party.
We understand that it is Mr Burke's position that he was given to believe by the two people making the payment on behalf of Fitzwilton that he could decide himself on how to dispose of the money. We further understand that it is his position that he said he would pass on £10,000 to the party head office and retain the remainder to secure the second seat for Fianna Fáil in the constituency (Dublin North). In the event Fianna Fáil lost its second seat in this constituency in June 1989, the seat formerly and currently held by G V Wright.
Fitzwilton disputes that Mr Burke was given to understand that he could dispose of the £30,000, as he thought fit.
Fitzwilton also has stated that its chairman, Mr Tony O'Reilly, was “absolutely not” aware of the £30,000 contribution intended for Fianna Fáil and given to Mr Burke. It also states that Mr O'Reilly was “absolutely not” aware that the payment had been made by way of a cheque payable to “cash”.
The cheque (number 9922) was drawn on the account of a Fitzwilton subsidiary company (account number 72902038) at the Ballsbridge Branch of the Bank of Ireland. It was dated June 7, 1989 and made payable to “cash”. It was negotiated at the Dublin airport branch of the Ulster Bank on the following day, June 8, 1989.
In its statement to Magill, Fitzwilton states it believes “that Fianna Fáil party head office was most probably informed that Fitzwilton and its subsidiaries would be contributing £30,000 to the party's general election expenses”.
We understand from another source that the Fianna Fáil party head office was aware of the £30,000 payment and it was following representations by it to Mr Burke that the £10,000 payment was made.
Mr Burke made a payment of £10,000 to Fianna Fáil by way of bank draft, drawn on his account in the Ulster Bank. The bank draft number was 340804 and the draft was lodged and paid by the bank on June 16, 1989, the day after the general election of that year.
There appears to be a discrepancy between Fitzwilton and Fianna Fáil about the issuing of a receipt in connection with this payment. Fitzwilton states that on August 3, 1989 it received an acknowledgement of a “very generous” donation from the Fianna Fáil party office. However in a statement to Magill, Mr Des Richardson, the Fianna Fáil person now in charge of fund raising, stated:
“A formal receipt was issued by the Party to (the Fitzwilton subsidiary). This was for the sum of £10,000. A copy of this has been sent to the (Planning) Tribunal. I understand that subsequent to the issue of the formal receipt, a standard letter was sent by the Leader (Charles Haughey) at the time to all substantial contributors to the Party. I believe that (in that) letter that there is a reference—in common with other such letters to ‘a substantial contribution'. It was not a receipt. The formal receipt was issued for £10,000 in June 1989”.
Close to going to press Magill submitted at short notice further questions to Fitzwilton concerning the receipts (see panel). Fitzwilton was unable to respond in the short time available.
In his statement to the Dáil on September 10, 1997, concerning the £30,000 JMSE cash payment in June 1989, Mr Burke, then Minister for Foreign Affairs, said that the £30,000 payment he received from JMSE was “the largest contribution I have ever received during any election campaign either before or since” (Col 618). He repeated this assertion later: “I never received a larger contribution” (Col 623). Nothing now disclosed contradicts these assertions.
He also said in that statement to the Dáil and in response to questions that in June 1989 he had transferred £10,000 to the Fianna Fáil national organisation during the 1989 election campaign. He said: “I confirm that I contributed £10,000 to the Fianna Fáil national organisation during that election campaign” (Col 618). He quoted a letter from his bank confirming the payment of the £10,000 to Fianna Fail by way of bank draft. These statements left open whether the £10,000 came from the £30,000 he got from JMSE or otherwise. However he also said:
“The bottom line is that the money given to me by Mr Gogarty was applied by me to my personal expenses and to Fianna Fáil at a national and local level” (Col 630).
It would be surprising if Mr Burke had made two contributions of £10,000 to Fianna Fáil during the June 1989 election campaign and not referred to the second of these when under pressure in the Dail on September 10 of last year over the JMSE contribution.
Magill submitted a series of questions to Fianna Fáil in connection with this payment by Fitzwilton. These were (in part):
1. Why, when the issue of the payment of £30,000 to Mr Burke by Bovale arose (in July, August and September 1997), did Fianna Fáil not acknowledge that at just that same time (i.e. June 1989) a further payment of £30,000 had been made to Mr Burke?
2. Why did the Taoiseach, Mr Ahern state to political corespondents on Friday, September 5, 1997 in relation to the Bovale £30,0000 to Mr Burke: “he did give £10,000 to the party”, when the party was aware that the £10,000 which Mr Burke passed on to Fianna Fáil in June 1989 related to the monies received from Fitzwilton.
3. Why did the Fianna Fáil Party and the Taoiseach not contradict Mr Burke when he told the Dáil on September 10 last that “The bottom line is that the money given by Mr Gogarty was applied by me to my personal expenses and to Fianna Fáil at a national and local level”. (Col 630).
4. Also, why did the Taoiseach not clarify the position in relation to payments received by Mr Burke when the latter told the Dáil also on September 10 last: “As regards the contribution, £30,000 is the largest contribution I have received during any election campaign either before or since 1989… It was an exceptional contribution.” (Col 622)
Mr Richardson's response on behalf of the party and on behalf of the Taoiseach stated: “The Taoiseach was not aware at the time Mr Burke made his statement to the Dáil (September 10, 1997) that the £10,000 paid to the Fianna Fáil Party by Raphael Burke came from (the Fitzwilton subsidiary) ...the Taoiseach, Bertie Ahern TD was only appraised of the fact that the £10,000 was paid by (the Fitzwilton subsidiary) in the course of preparing the affidavit of discovery (for the Planning Tribunal). He had no actual knowledge of the source of the £10,000 payment received by the Fianna Fáil Party until then”.
While there is no evidence that Mr Ahern personally had any knowledge of the payment from the Fitzwilton subsidiary, others in the party in 1989 appear to have been aware of the payment. Furthermore, in its statement to Magill, Fitzwilton states that it “believes that Fianna Fáil head office was probably informed that Fitzwilton and its subsidiaries would be contributing £30,000 to the party's general election expenses”.
Prior to Mr Burke's appointment to the government in July 1997, the incoming Taoiseach, Bertie Ahern, undertook an investigation into the JSME payment to Mr Burke. In the course of that investigation, it appears no discovery was made of the £10,000 transmitted from the Fitzwilton subsidiary to Fianna Fáil, via Mr Burke.
There is no suggestion that the payment of £30,000 to Fianna Fáil via Mr Burke by Fitzwilton was in any way other than as stated by Fitzwilton to support “the democratic process in Ireland through contributions to the main political parties”.
Indeed an initial claim that the payment of the £30,000 was linked to applications for IDA grants has been found to be baseless. The company involved did receive IDA grants of a total of £1,370,096 but Mr Burke had no involvement of any kind with that, nor was there any improper pressure exerted to secure these grants.
Neither is there any suggestion or evidence to contradict Fitzwilton's claim that “no political favours were sought or offered in return for this contribution”.
Many of the larger donors to Fianna Fáil have wanted to hand their donations to leading figures in the party personally, rather than, for instance, the campaign fund raiser. There have been a number of controversies between leading figures in the party and the party head office over the destinations of these donations—in some instances there have been disputes over the intended objective of the contribution. The Fitzwilton contribution was by no means exceptional in that respect.
But the manner of this payment—particularly the cheque made payable to “cash”—coupled with the range of Mr O'Reilly's interests in Ireland and his political influence exerted through Independent Newspapers plc are certain to give rise to controversy.
One of Mr O'Reilly's interests concerns the television transmission system, MMDS. That was the source of considerable controversy in the lead up and the aftermath of the general election of June 1997. Mr Burke was linked to that controversy.
In 1988 Mr Burke, then Minister for Communications, issued licences for the operation of a television transmission system, Multi Micropoint Distribution System, MMDS. Of the 29 licences awarded 19 were awarded to Princes Holdings, a company associated with Independent Newspapers plc, which is controlled by Mr O'Reilly.
On January 22, 1991, Mr Burke, then Minister for Justice and Communications, wrote to Joe Hayes, managing director of Independent Newspapers plc on the status of the MMDS franchises. He wrote:
“You were invited to apply for exclusive franchises and it is accepted that no further licences for television programme retransmissions, wired, broadcast, relay or other rebroadcast or relay within or to your franchise regions will be granted for the duration of your television programme retransmission licences.
“Neither will the Minister, during this time, permit geographical extensions to any wired broadcast relay (cable television) licences which now exist in the region. …
“The undertaking given in my letter of 28 May 1990 to the Irish Cable Operators Association apply to your company. Immediately MMDS service is available in any of your franchise regions, my Department will apply the full rigours of the law to illegal operations affecting that franchise region. My department will use its best endeavours to ensure that there are no illegal rebroadcasting systems affecting that region within six months after the commencement of MMDS transmission”.
Controversy arose from this undertaking when the State failed to intervene to prevent illegal deflector operators from continuing in business—about 150,000 homes in rural Ireland get their television signals from these illegal deflector operations. The failure on the part of the State to prevent the operation of the illegal deflectors has caused considerable losses (£21m over seven years) for Princes Holdings.
During a by-election campaign in Cork in November 1993, the Fine Gael leader, John Bruton, undertook to legalise the unlicensed deflector operators. When Mr Bruton went into government a month later he was under pressure from the deflector operators to meet his promise to legalise them. This promise placed Mr Bruton at odds with Mr O'Reilly, who was contemplating instituting proceedings against the State for its failure to meet the commitments outlined in Mr Burke's letter of January 1991.
A meeting between Mr Bruton and Mr O'Reilly took place in Glandore, Co Cork on August 25, 1996, at which no resolution to the impasse occurred. There was a subsequent meeting between Sean Donlon, then an adviser to Mr Bruton, and representatives of Independent Newspapers on September 4, 1996. According to a minute of that meeting recorded by the representative of Independent Newspapers, they told Mr Donlon that if the Government would not deal with the illegal deflector problem “it (the government) would lose INP (Independent Newspapers) as friends.
An editorial was published on the front page of The Irish Independent on the eve of the June 1997 general election. Under the heading “Payback time” it stated: “On any objective analysis, it is a vote for Fianna Fáil and the Progressive Democrats tomorrow which offers the better chance of securing our future. We had had decades of harsh tax regimes. Let us start to enjoy some payback”.
(Additional reporting by Ursula Halligan.)