Bertie, the tax break, and the Fianna Fáil donor

Questions arise for Bertie Ahern about favours done for a developer who gave huge donations to Fianna Fáil in 1994, when Bertie was Minister for Finance. By Frank Connolly

Evidence has emerged that raises questions about Bertie Ahern's actions in March 1993, as Minister for Finance, when the designation of Blanchardstown under a tax incentive scheme was blocked to benefit the Cork developer Owen O'Callaghan's plans for a rival development at Quarryvale in west Dublin.

Evidence has also emerged that Bertie Ahern was scheduled to meet bankers in Los Angeles on 11 March 1994 in an effort to progress another of the projects of Owen O'Callaghan.

Owen O'Callaghan donated £100,000 (€127,000) to Fianna Fáil between March and June 1994 and the Planning Tribunal has stated it is investigating a claim that Owen O'Callaghan also gave £30,000 (€38,100) to Bertie Ahern personally a year previously – Bertie Ahern has vigorously denied this claim.

The evidence about the tax designation refusal is in the form of contemporaneous memoranda of discussions in 1994 between Owen O'Callaghan and a senior AIB official, Michael O'Farrell, in which it is recorded that Owen O'Callaghan was assured the designation of Blanchardstown was not on the agenda – meaning the agenda of the government.

Owen O'Callaghan was anxious at the time that if Blanchardstown was designated under the tax incentive scheme it would undermine his project at Quarryvale, now the Liffey Valley retail centre. It was essential to the Liffey Valley scheme that Blanchardstown not be given this preferential tax status. Michael O'Farrell is a former senior manager of corporate banking with AIB.

According to a statement of the Planning Tribunal in an open session in November last, it is investigating a claim by Tom Gilmartin, a developer and one-time associate of Owen O'Callaghan, that he (Gilmartin) was informed directly by Owen O'Callaghan that Bertie Ahern had assured the Cork developer that Blanchardstown would not get tax designation.

Last November, the Planning Tribunal stated in a public hearing that it was investigating an allegation that Bertie Ahern received £30,000 in return for ensuring that Blanchardstown did not receive designation.

Tom Gilmartin has stated in interviews with this reporter in 1998 and 1999, before he submitted a formal statement to the Planning Tribunal, that he had formed a company, Barkhill Ltd, to develop the Liffey Valley site (then Quarryvale) and that Owen O'Callaghan and representatives of AIB joined the board in September 1990. He said that at a board meeting of Barkhill Ltd in 1993 Owen O'Callaghan was asked about the prospect of Blanchardstown obtaining tax designation.

According to Gilmartin, O'Callaghan, who was then his co-partner with AIB in Barkhill, left the board meeting in the AIB headquarters in Ballsbridge and made a call on his mobile phone. When he came back into the room, Tom Gilmartin said Owen O'Callaghan told those present that he was given assurances "from the horses mouth" that Blanchardstown would not get tax designation.

Tom Gilmartin, according to the Planning Tribunal, has claimed that he was told by O'Callaghan that Bertie Ahern later was paid £30,000 (€38,100) for his assistance in the matter. Bertie Ahern has vigorously denied the suggestion.

The new evidence in the form of contemporaneous notes of Michael O'Farrell adds weight to the claim by Tom Gilmartin that Owen O'Callaghan was in a position to be assured that Blanchardstown would not get tax designation. Bertie Ahern will be asked by the Planning Tribunal for his recollections on the refusal to give Blanchardstown tax designation in 1993/94. That is, if the investigation into the Liffey Valley (Quarryvale) issue is to proceed – that is yet to be determined by the courts.

The mysterious LA bank meeting

Bertie Ahern has also been unable to confirm that he attended a pre-arranged meeting at the offices of a Los Angeles investment bank Chilton O'Connor, on 11 March, 1994, on behalf of another of Owen O'Callaghan's projects.

Bertie Ahern and former Taoiseach Albert Reynolds were involved with O'Callaghan in discussions about the development of a national football stadium at Balgaddy, Neilstown, in west Dublin, which was the site in Clondalkin originally planned for a town centre. The Neilstown town centre never materialised because of the development of Liffey Valley (Quarryvale) and this remains a source of major grievance for the residents in the vast area surrounding Neilstown, who have been denied a town centre as a consequence. Residents have regarded the talk of a stadium at Neilstown as a ruse to deflect attention from what they regard as the "corruption" which led to the abandonment of the town centre to enable the Liffey Valley (Quarryvale) project to proceed.

The then Taoiseach, Albert Reynolds, reportedly met William O'Connor, the principal of the Los Anegles-based law firm Chilton O'Connor, which had been approached by O'Callaghan and Frank Dunlop, the former Government press secretary and lobbyist, to raise funding for the Neilstown stadium venture on a number of occasions in late 1993 and 1994. Albert Reynolds told Village he cannot recall any such meetings.

"If I was in a bank in Los Angeles I think I would remember it. I was in Los Angeles for a joint American and Irish cancer society event but I don't remember which year." Mr Reynolds told Village. He suggested that his diaries from 1993 and 1994 might be checked for confirmation.

On 11 March, 1994, Bertie Ahern – who was in the US for the week-long St Patrick's Day festivities – had an appointment to meet William O'Connor in the offices of Chilton O'Connor at the Avenue of the Stars, LA, California.

The meeting was facilitated by Niall Lawlor, son of the late Liam Lawlor, who worked for the investment bank at the time. Liam Lawlor was a secret shareholder in Leisure Ireland, the company established to develop the Neilstown stadium project. The other shareholders were Frank Dunlop, Owen O'Callaghan and architect Ambrose Kelly – all four each holding 25 per cent of the company.

On Tuesday, 19 September 2006, a spokesperson for Bertie Ahern said that he had not yet confirmed with the Department of Finance whether he was present at the meeting in Los Angeles on 11 March, 1994, or whether he recalls the fact that the arrangement was facilitated by Niall Lawlor, then an employee of the bank.

Bertie Ahern was a key figure in the ultimately unsuccessful plan to develop the stadium which would have provided permanent grounds for the FAI, although he has claimed he was against the location of a sports stadium at Neilstown.

Bertie Ahern was approached by Leisure Ireland, and its associated company Leisure West, to commit the government to providing £5 million (€6 Million) each year for 10 years for the project. The funds were to come from the National Lottery and the then sports minister, Liam Aylward, was also involved in the discussions on the project. Owen O'Callaghan claimed at the time that he had assurances that the Neilstown site would also be tax-designated and therefore not liable to property taxes.

Tom Gilmartin has claimed that monies were taken from his Barkhill account and used to reimburse Owen O'Callaghan for payments he made to politicians and on the Neilstown stadium project.

Curiously, neither Owen O'Callaghan nor the Leisure Ireland shareholders owned the Balgaddy/Neilstown site at the time – it was controlled by a company called Merrygrove which was owned by Tom Gilmartin – he had purchased it from Owen O'Callaghan.

Subsequently, when Owen O'Callaghan and AIB took stakes of 40 per cent and 20 per cent in Tom Gilmartin's company, Barkhill, in 1990, Tom Gilmartin retained a 40 per cent stake in the company. Tom Gilmartin has alleged that he was never informed by Owen O'Callaghan or AIB about the national stadium project although he was at least part-owner of the land on which it was to be located.

Bertie Ahern's meeting at the Chilton O'Connor offices on 11 March, 1994, came just a day after Albert Reynolds and then party fundraiser and close associate of Bertie Ahern, Des Richardson, attended a private dinner event in Cork when a reported £80,000 was raised for Fianna Fáil. Des Richardson has confirmed that the amount was raised from eight donors including Mr O'Callaghan who provided a cheque for £10,000 on the occasion.

Bank records show that Owen O'Callaghan gave a further £80,000 to Fianna Fáil through his company Riga Ltd in June 1994 and he was also a substantial donor to the party and individual candidates over the subsequent years. Owen O'Callaghan gave a further £10,000 in May 1994 to the Fianna Fáil MEP, Brian Crowley prior to the European Parliament elections in June 1994.

In November 1994, just before the collapse of the Fianna Fáil-Labour government led by Albert Reynolds, Owen O'Callaghan met with Bertie Ahern. The latter has acknowledged that at that meeting, he and Owen O'Callaghan discussed another controversial tax designation issue – that concerning the Golden Island retail centre in Athlone. The designation was approved by Bertie Ahern as Minister for Finance just hours before the government fell and before he left office.

As well as the controversial designation decisions in relation to Blanchardstown and Golden Island, Bertie Ahern is also expected to face questions from the Planning Tribunal about the alleged movement of files from his department relating to other proposed tax-designation locations during his term as finance minister between 1992 and 1994.

On one occasion, Mr Reynolds ordered Bertie Ahern to ensure that files taken from the Department of the Environment to the Department of Finance over a weekend be returned. This followed a complaint to Mr Reynolds by then environment minister Michael Smith about the movement of the sensitive tax designation files.

The Planning Tribunal has heard claims that the files were shown to a group of developers in a Dublin hotel.

Whether Bertie Ahern is questioned in relation to these matters, including his planned visit to the offices of Chilton O'Connor at the behest of O'Callaghan and his partners Dunlop, Lawlor and Ambrose Kelly, before next year's general election depends largely on a High Court judgement due next month.

O'Callaghan and his partner, solicitor John Deane, halted tribunal hearings last year when they took proceedings against the inquiry because of its alleged bias and improper methods of examination.

During hearings in April, lawyers for Owen O'Callaghan claimed that Mr Gilmartin had made provably wrong allegations against him and his associates. Lawyers for the tribunal claimed that its proceedings were fair and that it had complied with all court orders in relation to the distribution of documents.

It is expected that whatever decision is made by Justice Thomas Smyth, who heard the case, will be appealed by the losing party to the Supreme Court which may well not rule on the issues before Christmas.

The tribunal has also confirmed in public that it is investigating a claim that Bertie Ahern personally received a sum of £50,000 in 1989 from O'Callaghan in connection with the Quarryvale development.

It has also questioned Joe Burke, the current chairman of the Dublin Port and Docks Board and another close associate of Bertie Ahern, in connection with meetings he attended with Tom Gilmartin at the request of the Taoiseach.

Bertie Ahern has said that he does not recall a number of the contacts which Tom Gilmartin claims he had with him.

Whatever emerges from these inquiries is certain to add to tensions between the coalition partners, given the proximity of the next general election.

The new Tániste and leader of the Progressive Democrats, Michael McDowell, is familiar with some of the issues involved in these matters, as he legally represented Owen O'Callaghan in private sessions with the tribunal in 1998 when these allegations first surfaced. p