by Colm Keena
He rang me and we met. I can’t remember where, it could have been the Tolka again. Later on I know I met him in the Department of Labour in Mespil Road. We were on our own. He started going on about this, that and the other, and I remember him saying very strongly that if there is something going a Fianna Fáil man should get it. He proceeded to tell me that there were going to be security contracts available in FÁS, and he wanted to know if I would be interested. He said, ‘You’ll get the money, and I’ll get the jobs.’ In other words, whoever he sent to me would get the job. Electorally it made sense. Then he said, ‘What you need to do now is meet Paddy Duffy, and he will arrange how things will work out.’ Paddy is probably the shrewdest of them all. We didn’t know each other at this stage, but I got to know him later.
Kenny said he later met Duffy in the Skylon Hotel in Drumcondra. He was in the habit of giving the party about two hundred pounds a year, channelling it through his cumann so that it would get the benefit. His view was that if you were going to get involved in a political party you should be willing to contribute money to it. When he met Duffy he was expecting to be asked for an increased donation. Duffy discussed Ahern’s constituency operation with Kenny and outlined to him how difficult it was to fund it and how much money it cost. By the end of the conversation it was agreed that Kenny would give two thousand pounds a year. It was about twice the amount he had been expecting. He said he paid the money by taking out ten seats at a hundred pounds each at the annual Kilmainham dinner and giving the other thousand to one of Ahern’s close associates. He could not remember who but he thought it might have been Joe Burke.
Duffy, when asked about this meeting, said that he could not remember it and that it appeared unlikely. He said he had nothing to do with the Kilmainham dinners or the financing of the St Luke’s operation. His role was with policy and strategy matters associated with Ahern’s career. The people who were involved in running the financial side of Ahern’s operation had been clearly demarcated in the tribunal hearings, he said. ‘The structure was that the people who organised that whole area were clearly known, and nobody outside of that group had any hand, act or part in any of that.’
In relation to the FÁS issue Duffy said that there was very high unemployment at the time and that many people in Fianna Fáil and the other parties were asked for help. Ahern tried to help anyone who approached him in that regard. ‘Bertie would be well known for having worked hard, maybe harder than others, at trying to get people jobs, particularly at the lower level. Certainly I would have met a lot of those during my time—ushers and doormen, that sort of role—and they were very grateful.’
Kenny said his company, County Security Ltd, got a contract for supplying security to the FÁS offices in D’Olier House, D’Olier Street, opposite the former offices of the Irish Times. (D’Olier House is rented to the state by an Irish company that is in turn owned by a Cayman Islands trust set up by the property developer John Byrne, who was a long-time friend of Haughey’s. The trust was set up by Haughey’s bagman, Des Traynor, architect of the infamous Ansbacher deposits in the Cayman Islands.)
According to Kenny, D’Olier House ‘possibly needed a doorman for the door and a good alarm system, but we started off with two men during the night and two during the day . . . And it was a small place. It was farcical.’ One of those he employed at Ahern’s request was Ray Brady, father of Royston and Cyprian. Royston Brady, when asked about it, confirmed that his father, who had previously worked as a taxi-driver, was employed providing security at the D’Olier Street offices in the 1980s before getting a job in Dublin Castle. Kenny, who said he last met the Brady children when they were young teenagers, described Ray Brady as a gentleman.
He was extremely honest, a religious man. He said one strange thing one night when we were discussing his salary. Ray was working for me in FÁS in D’Olier Street at the time. Every so often there would be a blow-up about wages. Ray was giving out about Bertie. Obviously Bertie had promised him something else, because, really, security jobs weren’t that good, though it was a job. Ray said, ‘You know, Gerry, how much I love that man, but he is the meanest man in Ireland.’
By this time Kenny had become interested in psychology and was studying in Trinity College, Dublin. He was not paying as much attention as he should have been to his business, and County Security Ltd got into financial trouble. He reduced his payment to Ahern’s constituency operation to one thousand pounds. Then he decided the company would have to fold. When he told Ahern, he said, a number of people became involved in managing the situation.
I think it was a bit alarming for him because he had a number of people working for him through me, and he arranged basically how the company would be liquidated. He sent me to a guy over on Percy Place, then to a second guy. I had a one-to-one meeting with a man where we discussed whether we could keep the business going or shunt it to someone. A meeting was arranged in an impressive office in Merrion Square, a recruitment agency, I think. There were about four people there. Des Richardson officiated.
During Ahern’s time as Minister for Labour his image was that of the scruffy, workaholic politician no-one could dislike. Miriam Lord recalls going for Christmas drinks to the Department of Labour with a colleague from the Irish Independent, where she then worked. They talked to Ahern.
He was standing with his back to the wall and drinking a beer. My colleague was an experienced journalist who knew him over the years and, as she was speaking to him, she was brushing dandruff and lint off his jacket, like a mother would do with a child. And then she straightened his tie, ever so slightly, and he continued to speak, like a little boy. If she had taken out a handkerchief and spat on it, and rubbed it on his face, I wouldn’t have been surprised. It was only afterwards that she realised what she had been doing, and she was embarrassed and she said, ‘I’ve just been rubbing the shoulders of the Minister for Labour.’ And then she thought: ‘Ah why wouldn’t I? It’s Bertie. Somebody has to look after him.’ People just felt very at ease with him.
In May 1989 Haughey, who had been running a minority Government with the support of independents, decided to call a general election. The election featured regularly in the Mahon Tribunal and the Moriarty Tribunal (inquiring into payments to Michael Lowry and Charles Haughey) during the 1990s because of the large amount of money given to Fianna Fáil politicians in the course of the campaign. Some of this ended up in personal bank accounts. One of Fianna Fáil’s fund-raisers, Paul Kavanagh, gave evidence to the Moriarty Tribunal that some who gave money to Haughey were indifferent as to whether he put it in his own pocket or gave it to the party.
The 1989 general election saw Ahern poll the second-highest number of first-preference votes in the country, coming in far ahead of his fellow-candidates in the constituency, Dr Dermot Fitzpatrick and John Stafford. The electorate rejected Haughey’s gamble for an absolute majority, and he managed to get back into power only by doing a deal with the PDs. Ahern and Albert Reynolds negotiated the deal on behalf of Fianna Fáil. When Haughey announced his new Government, Ahern was still Minister for Labour.
In 1991, when tensions were particularly high between the coalition partners because of suspicions about Haughey, Ahern and Reynolds successfully conducted a review of the Programme for Government with their coalition partners. Shortly afterwards Ahern was in a room in Government Buildings, briefing the journalists Sam Smyth, Stephen Collins and Gerald Barry, when Haughey poked his head round the door. He pointed a finger at Ahern. ‘He’s the man,’ he said. ‘He’s the best, the most skilful, the most devious, the most cunning of them all.’ The comment was duly recorded and has dogged Ahern ever since, though perhaps it did him as much good as it did harm.
As was the case throughout Haughey’s time as leader, there were tensions within Fianna Fáil. Reynolds and a group that became known as the country-and-western set were intent on ousting Haughey. A motion of no confidence was put down for a parliamentary party meeting. It was defeated, and afterwards
Haughey sacked Reynolds. Ahern replaced Reynolds in the Department of Finance and so became the second most powerful figure in the Government and a contender for the future leadership of the party.
However, when Haughey resigned a year later, Ahern opted not to fight Reynolds for the leadership. Reynolds became Taoiseach and jettisoned a huge proportion of the Cabinet. Ahern was one of the few left standing.
During Ahern’s time as Minister for Finance he had to deal with a very serious crisis involving Ireland and the European Union’s plan for a single currency. International speculation forced sterling out of the Exchange Rate Mechanism and caused a collapse in the value of the currency—a huge blow to the Irish economy, which depended so heavily on exports to Britain. Ahern came under enormous pressure to devalue the Irish currency within the ERM. Speculators bet huge amounts against the Irish currency. As well as working with a number of senior civil servants, Ahern worked at this time with Padraic O’Connor, the NCB executive who would later become embroiled in one of the dig-out scenarios presented to the Mahon Tribunal to explain lodgements to Ahern’s bank accounts. The currency crisis straddled the collapse of the Reynolds coalition with the PDs, a general election and the negotiation of a new coalition arrangement, this time with the Labour Party. Ahern held out against the currency speculators for a period, stating that Ireland would not devalue and was determined to remain within the ERM. In the end, in January 1993, he announced a 10 per cent devaluation, and the crisis came to an end. Ahern received wide praise for his handling of the issue, and though the devaluation cost the state money it immediately led to a fall in interest rates and gave the economy a competitive boost that had important long-term consequences.
One of the more notable and controversial initiatives of Ahern’s career during this period was the introduction of a tax amnesty in the early months of the Fianna Fáil-Labour coalition. The measure allowed people with tax debts to settle their liability by paying 15 per cent of the amount owed, and it also provided for elaborate measures to ensure the right to secrecy of those who availed of the amnesty. The legislation creating the amnesty made it a criminal offence for anyone to avail of the deal without declaring all their liabilities; but, as it later transpired, the secrecy measures made it all but impossible for an offence to be proved.
Ruairí Quinn’s explanation of how the amnesty got through a Government that included the Labour Party is surprising. ‘Bertie wasn’t going to allow it to happen, and then he just announced it at the cabinet.’ This is similar to the account given by the Labour Party adviser Fergus Finlay in his book Snakes and Ladders (1999). He wrote that the party had been given the impression that, although Reynolds wanted the amnesty, Ahern wasn’t going to go along with it and had assured the Labour Party that it would not go ahead. Then, when the matter came up at a Government meeting, Ahern presented the amnesty proposal, and it went through without debate. Greg Sparks, a principal with the accountancy and financial consultancy firm FGS, acted as an adviser to Dick Spring during that Government. He recalled getting a phone call from Ahern at about 1 a.m. on the Tuesday morning the meeting was to be held. Ahern was seeking to ascertain the Labour Party stance on the proposed amnesty, which, of course, was being kept secret. At the time the Labour Party had a system whereby measures due to come up at Government meetings would be considered beforehand by the party advisers and programme managers and then discussed with the Labour Party ministers before the meeting. Sparks recalled one minister, Mervyn Taylor, banging the table and saying ‘over my dead body’ in relation to the amnesty proposal.
Then off they went into the cabinet meeting and there was total surprise when they came out four or five hours later and it had been passed. Now, there is cabinet confidentiality, but, from what I can make out, Albert was the main advocate for it. Bertie didn’t want it, and we didn’t want it. Dick was waiting for Bertie to object to it, and Bertie was waiting for Dick to object to it, and neither of them objected to it, and, because of that, it went to the cabinet and it was passed. I have to say it seems very, very strange, but that is the way it was explained to me.
Sparks thinks that, perhaps because it was early in the lifetime of the Government, neither Ahern nor Spring wanted to expend political capital going up against Reynolds, and so each held back. He does not believe that Ahern was in fact in favour of the measure, while presenting himself to the Labour Party as being against it. ‘I have no doubt but that Bertie was against it. No doubt at all.’
Pat Rabbitte, who was then a member of Democratic Left (the breakaway group from the Workers’ Party) and on the opposition benches, is not so sure. He believes that Ahern had no principled objection to the measure.
If Bertie had meant anything of what he pretended about his empathy with the trade union movement he could not have promoted the tax amnesty . . . Ruairí Quinn has gone on the record to say that Bertie gave them to understand that he would stop it. Then it was suddenly proposed at the cabinet and it was through. I don’t understand that.
The Labour Party successively opposed changes to the capital acquisitions tax regime that their coalition partners wanted to introduce. It was while reading through Government papers one weekend that Sparks noted a short passage regarding the tax, which applies to gifts above a certain value. The proposal was that the tax would be capped, that is, that there would be a threshold above which increases in the value of the asset or money received would not increase the associated tax bill. Sparks and Fergus Finlay flew down to Co. Kerry and had a meeting with Spring in a hotel in Tralee to discuss the matter. Ahern, who was in the area, turned up, and he and Spring went to a hotel room to talk. The measure was dropped, and the media never got to hear what had happened.
Another issue that arose when Ahern was Minister for Finance involved planning and tax concessions. In an effort to stimulate building in blighted urban areas there was a scheme whereby identified urban areas could be ‘designated’ so that developments in those locations could benefit from tax concessions.
The department responsible for overseeing the scheme was the Department of the Environment, where Michael Smith was minister and Emmet Stagg of the Labour Party was minister of state. Ahern, as Minister for Finance, had an ancillary role. Neither Smith nor Stagg would speak to the present writer about an episode in which plans associated with prospective designations were moved from the Department of the Environment to the Department of Finance. The Mahon Tribunal conducted private, confidential inquiries into the matter as part of its intended module on allegations relating to the tax designation scheme. Evidence was never heard in public because of a ruling of the Supreme Court. Although evidence on the matter will not now be heard, Stagg, who gave a statement to the tribunal, would neither talk about the matter nor explain why he didn’t want to. ‘I just don’t,’ he said.
According to one of Stagg’s party colleagues, his statement to the tribunal was that ‘the maps had gone up to the Department of Finance; the maps showing the areas that were going to possibly be included, key insider information. These had disappeared.’ The issue for the tribunal was whether confidential information might have been made available to persons who should not have had access to it.
When Stagg discovered that the files had been moved from the department, he contacted Smith, who in turn had to take steps to have the documents returned to his department, which they were. Another source, who does not want to be identified, has also confirmed that the tribunal inquired into this matter in private.
The reason public hearings into the tax designation allegations were never heard is worth noting, since it is not the only private inquiry concerning Ahern that did not go ahead. In 2004 the tribunal, responding to the concerns of the Oireachtas about the growing scale of its costs, drafted a list of matters that could be the focus of future public inquiries. No new items were to be added to the list. This became known as the J2 list.
The tribunal drafted a list of items it might hold public inquiries into in the future rather th
an a list of items it would hold public inquiries into. Later, in a case taken by the Fitzwilton Group, which was seeking to prevent the tribunal conducting public inquiries into a payment to Ray Burke, the Supreme Court ruled that, because the tribunal had drafted a list of items it might, rather than would, inquire into, it was now barred from conducting public inquiries into the items on the list or into any new allegation.
The J2 list was never published, but in July 2007 Ahern’s senior counsel, Conor Maguire, in the course of making an argument that the tribunal should not be holding public inquiries into Ahern’s finances, mentioned it. An edited version of it had been supplied to Ahern by the tribunal, and it included items that it felt might be relevant to him. The first of these was the most strange.
The tribunal, Maguire said, had listed a possible public inquiry into the affairs of fourteen people, including Ahern, and ‘all matters involving separately or together, directly or indirectly’ these fourteen people and ‘persons, companies, trusts or entities controlled or operating for any of their benefits, individually or otherwise.’ The names of the other thirteen people were not disclosed, and Ahern would not comment on it at the time.
The other allegations Maguire mentioned related to tax designation and ‘Green Property Group/rezoning or tax designation’. Maguire’s submission was unsuccessful. The public inquiry into Ahern’s finances was a subset of the tribunal’s inquiry into Quarryvale, which had begun before the instruction from the Oireachtas that the tribunal draft a list of allegations it would be inquiring into in the future.
The Reynolds Government eventually fell apart because of the bad relationship between Reynolds and Spring. The final break was a complicated scenario involving the extradition of a paedophile priest, Brendan Smith, the appointment of the Attorney-General, Harry Whelehan sc, to the High Court, and concerns over the reasons for the extradition of Smith to Northern Ireland encountering a months-long delay, despite a series of warrants being submitted to the Attorney-General’s office.