Tribunal cop-out

The Planning Tribunal will not now investigate the payment by an O'Reilly company of £30,000 to Ray Burke although substantial favours may have been done in return Vincent Browne

The government is about to approve a change in the terms of reference of the Planning Tribunal, chaired by Judge Alan Mahon, that will permit the Tribunal to avoid any investigation into one of the most curious payments made to former minister, Ray Burke in June 1989, a period during which he received very considerable donations from a variety of sources.

The payment in question was made by a subsidiary company of Fitzwilton, which is controlled by Mr Tony O Reilly, who also has a controlling interest in Independent Newspapers plc and involvement in many other ventures, including Valentia, which took over Eircom, with the assistance of a tax change introduced in 1999 by the former Minister for Finance, Charlie McCreevy.

When this payment of £30,000 was first disclosed in 1998, it led the then Minister for Justice, Equality and Law Reform, John O'Donoghue, to introduce in the Dáil an amendment to the Tribunals Evidence Act to permit the Planning Tribunal, then chaired by the sole member, Mr Justice Flood, to investigate the matter because of the significance then attaching to it and the questions it posed concerning the knowledge of the present Taoiseach, Bertie Ahern, of this payment. It further raised questions about the failure of Fianna Fáil to make a full disclosure to the Planning Tribunal of what it knew concerning this payment and the failure of the Taoiseach to inform the leader of the partner party in government, Mary Harney.

But in a change of policy soon to be announced by the new Minister for the Environment and Local Government, Dick Roche, on behalf of the government, further legislation is to be introduced to permit the Planning Tribunal to avoid investigation into that payment and the surrounding circumstances and it is now virtually certain that the Tribunal will decline to pursue the matter further.

The £30,000 payment was made through a subsidiary of Fitzwilton, Rennicks, and it was made by way of a cheque made payable to cash. The payment was made directly to Ray Burke at his home in Swords, Co. Dublin by Robin Rennicks of the Rennicks company (formerly the owner but by then no longer so) and Paul Power of Novum, another Fitzwilton company. The cheque was made payable to cash because Mr Burke suggested that. Mr Rennicks has since stated that on 5 June 1989 he was informed by a director of Fitzwilton that the group wished to make a contribution of £30,000 to Fianna Fáil and that this was to be done through the wholly owned subsidiary, Rennicks Manufacturing Ltd. He was asked to join Mr Power in visiting Mr Burke at his home. He said in a statement in June 1998, when the matter first became public, that he or his family had "no personal responsibility" for the decision to give a £30,000 donation to Mr Burke.

The circumstances of the payment were curious. It occurred after Fitzwilton had first informed Fianna Fáil fund-raisers it would be making a £30,000 contribution to party funds in a manner it had done on several occasions previously, through Mr James Cawley, then a close associate of Mr O'Reilly, and a co-partner with Mr O'Reilly in the solicitors firm, Cawley, Sheerin and Wynne. Mr Cawley was also a member of the Fianna Fáil fund-raising committee.

However, Mr Cawley was informed by James McCarthy, another close associate of Mr O' Reilly and a director of both Independent Newspapers and Fitzwilton, that the usual £30,000 payment from the group would not be made through Mr Cawley on that occasion but would be made through the subsidiary, Rennicks Manufacturing Ltd, and that it would be made directly to Ray Burke.

When the £30,000 failed to materialise in the Fianna Fáil election fund, the then chief fund-raiser, Paul Kavanagh, contacted Ray Burke and asked that the money be handed over. Subsequently, prior to a Fianna Fáil election function in the Westbury Hotel, Dublin, Mr Burke handed over a £10,000 cheque, accompanied by a Rennicks compliments slip with "Ray Burke" and "Robin Rennicks" handwritten on it.

Paul Kavanagh made further representations to Ray Burke to obtain the outstanding £20,000 but Ray Burke said he had discretion to retain this for his own election expenses. Several people in Fianna Fáil were fully aware that Fitzwilton had made a £30,000 contribution via Ray Burke and that the latter had passed on only £10,000 of this to the central election funds. Among those so aware, apart from Paul Kavanagh, was Sean Fleming, then finance director of Fianna Fáil and now, since 1997, Fianna Fáil TD for Laois- Offaly.

Interest in this payment is heightened by the fact that as Minister for Industry and Commerce and Minister for Communications, Ray Burke had ministerial responsibility for many areas of policy that had direct relevance to Mr O'Reilly's corporate interests, in Independent Newspapers, Fitzwilton and otherwise.

As was stated in the Dáil on 10 June 1998, when the amending legislation was introduced to enable the Planning Tribunal investigate this matter, Princes Holdings Ltd, a wholly owned subsidiary of Independent Newspapers, was granted extensive MMDS licences (television transmission rights) throughout the country and in granting these licences, Ray Burke agreed to all the terms requested by Princes Holdings. In addition, he wrote a letter of comfort to the then managing director of Independent Newspapers, Mr Joe Hayes, assuring the company that the licences would be renewed after 10 years.

Both the Rennicks and Novum companies, owned by Fitzwilton, were also afforded considerable facilities by State agencies for which Ray Burke had responsibility (see extract from Dáil debate on previous page).

Further issues arise concerning this payment.

Bertie Ahern has claimed that before appointing Ray Burke Minister for Foreign Affairs in June 1997 he had made full enquiries concerning allegations that Mr Burke had received a £30,000 payment from the structural engineering company, JMSE, in June 1989 (the same month that he received the £30,000 from Fitzwilton and shortly after he had received a further £35,000 from Oliver Barry on behalf of Century Radio).

In September 1997, Ray Burke disclosed the £30,000 payment from JMSE to the Dáil and in the course of exchanges in the debate that ensued he said that he had passed on £10,000 of this JMSE payment to party headquarters. Several people in the party were in a position to know then that this claim was untrue and that the £10,000 payment passed on to the party had come not from the JMSE contribution but from the Fitzwilton one. However, it is claimed that no one informed Bertie Ahern of this falsehood.

Then when the issue of the Fitzwilton payment became an issue with the Planning Tribunal in March 1998, in its affidavit to the Tribunal concerning this mater, Fianna Fáil claimed that the contribution from Fitzwilton was £10,000 and it failed to make any mention of the £30,000 payment which it knew had been made to Ray Burke. In addition, Bertie Ahern withheld for several months information concerning these payments from his coalition partner, Mary Harney.

It appears that once Fitzwilton originally agreed to make a £30,000 contribution to Fianna Fáil in June 1989 and before it was communicated to the party that the donation would be made via Ray Burke rather than as usual through James Cawley, an invoice was issued by Irish Printers, a company then controlled by Paul Kavanagh, under what was known as the "pick-me-up" system. This was an arrangement whereby companies could make contributions to political parties by way of paying for, for instance, printing, rather than making a direct contribution. This had two advantages for the companies concerned. It permitted these companies to represent the contribution in their books as payment for printing services and it enabled them to reclaim VAT on the amounts contributed. So there was a double tax fraud involved – avoidance of corporation tax and the VAT reclaim. This practice was commonplace among Fianna Fáil, Fine Gael and Labour and has since been the focus of inquiry by the Revenue Commissioners.

This facility enabled Fitzwilton to misattribute the payment to Ray Burke in its company accounts. It had to make a payment of about £6,300 to the Revenue Commissioners in 1998 as a result of the way it incorrectly accounted for this £30,000 payment to Burke. There was special interest in the Planning Tribunal's investigations into this matter because of the pressure that was placed on the Rainbow government by Mr O'Reilly and associates to accommodate Mr O'Reilly's interests. The then Taoiseach, John Bruton, has told the Moriarty Tribunal of a meeting with Mr O'Reilly in west Cork in the summer of 1996 at which Mr O'Reilly expressed considerable displeasure at the failure of the then government to make what Mr O'Reilly believed were adequate concessions to demands being made by his companies on a wide area of issues.

On the day before the May 1997 general election, the Irish Independent, which traditionally had supported Fine Gael, published a front-page editorial urging readers to vote Fianna Fáil. The editorial was published under the heading "It's Pay-Back Time".

Under pressure to complete its business in the shortest possible time, the Planning Tribunal, chaired now by Judge Alan Mahon, recommended last June that the terms of reference be changed to give it sole discretion on whether to pursue a particular investigation or not, based on a variety of factors, including the likely duration of such investigation, its likely cost, the likelihood that it would enable the Tribunal to make findings of fact and "any other factors which, in the opinion of the Tribunal, would or should be likely to render an investigation into any matter inappropriate, unnecessary, wasteful of resources, unduly costly, unduly prolonged or which would be of limited or no probative value".

An accompanying catalogue of work that the Tribunal referred to made no mention of the Fitzwilton payment to Ray Burke, leading to a belief that the Tribunal wishes to avoid this issue and in the announcement to be made next week, it is likely this will be endorsed by Dick Roche, on behalf of the Government.

In its June report, the Tribunal signalled its wish to be permitted discretion to cut back very substantially on the workload its existing terms of reference requires. It said it was likely to take 10 or 11 years to complete that work and the new arrangements are intended for it to wind up its affairs by March 2007.

This inevitably will mean that a great deal of the corrupt payments the lobbyist, Frank Dunlop, has admitted to will not be investigated. Allegations of corruption in Dublin and in other places – notably in Cork, Athone, Wicklow and Kildare – will go unexplored. Furthermore, what is known as the "interlinked modules", involving in the main Liam Lawlor, the former Fianna Fáil TD and councillor, will not be investigated in full.

Only the Gardaí will then be empowered to undertake investigations into allegations of corruption and the Planning Tribunal has uncovered several instances in which the Gardaí, presented with substantial evidence, failed to act.