Bertie

by Colm Keena

  The planning tribunal organised itself into modules, each of which began with an opening statement outlining what the tribunal would be inquiring into. In November 2005 the opening statement of the Quarryvale module was made, and it included the allegations against Ahern; but they did not get much traction in the media, in part because similar allegations had been aired in the O’Brien article and had been shown to be mischievous.

  Behind the scenes, the confidential correspondence between the tribunal and Ahern was failing to settle the tribunal’s concerns. Ahern supplied a detailed statement in November 2004 in which he rejected the claims made against him.

  It was standard practice for the tribunal to make orders of discovery against people whose affairs it was investigating, and in 2004 there was correspondence between Guidera and the tribunal regarding the scope of any such order. The tribunal wanted to examine Ahern’s bank accounts to see if there were unexplained lodgements. If he could, in private, explain his finances, the tribunal would be inclined to let the Gilmartin allegations drop.

  In November 2004 Guidera, on behalf of Ahern, suggested that the order covering bank accounts that had held money for Ahern be limited to the period 1 January 1989 to 31 December 1992—the period during which the O’Callaghan payments to Ahern were alleged to have been made. Guidera also suggested that discovery be limited to lodgements of £30,000 and more.

  Later that month the tribunal issued an order that sought the identification, but not the production, of documents. The period covered by the order was January 1988 to December 1995, and it would in the first instance cover only lodgements that exceeded £30,000. The documents were to be produced by 11 January 2006. Ahern later agreed with tribunal counsel that, had his solicitor’s request with regard to the period to be covered been agreed to, the order would not have captured most of the transactions that Ahern subsequently found difficult to explain.

  He was asked about the matter by tribunal barrister Des O’Neill when he began to give evidence on 13 September 2007.

  O’Neill: Now of course in hindsight, when we look at the submissions which were being made at that time, Mr Ahern, none of the matters which are the subject of our current inquiry today would have been caught by an order had it been limited to the period initially proposed by your solicitor, that is from January 1 1989 to December 31, 1992? Isn’t that right?

  Ahern: Yes.

  O’Neill: And the reason for that, in the main, was that whilst these orders were directed towards accounts of yours, you in fact had no bank account that you were operating in your own name during that period. Isn’t that right?

  Ahern: Correct.

  In February 2005 Ahern supplied an affidavit in response to the order of discovery. His solicitor said it was plain that there were no lodgements of £30,000 or £50,000. Ahern had no tax liability and had not availed of the 1993 tax amnesty, the tribunal was told. The solicitor’s letter said that in early 1987 Ahern had separated from his wife and that from that period up to the end of 1993 he ‘did not operate any bank account.’ During the period ‘each of his salary cheques was cashed either by himself or by one of his staff.’ The letter also said: ‘I am also instructed that in December 1994 our client transferred funds from his accounts at AIB Upper O’Connell Street, into the account of his then partner, Celia Larkin.’ This sentence would later get Ahern into trouble. He had been instructed to inform the tribunal of every account into which money had been lodged to his benefit. The money that went to the Larkin account was money being held for his benefit. It hadn’t been given to Larkin: it was still Ahern’s. Yet he had not included it in the list of accounts that held funds for his benefit. Ahern subsequently told the tribunal that the transaction related to the renovation of his house in Beresford Avenue. If Ahern had listed this account, the tribunal’s work would have proceeded more quickly than it did, as the account would in turn have led the tribunal to transactions concerning Beresford Avenue as well as to the alleged arrangement with Michael Wall concerning the house.

  The first discovery did not include a lot of other transactions that Ahern later found difficult to explain, because they were for amounts of less than £30,000. In February 2005 the tribunal extended it to cover all amounts, giving Ahern until March to comply with the order.

  In the main, Ahern was receiving the banking documents covered by the order a few days before the tribunal did. In March the tribunal decided to begin seeking not only bank statements that would have been issued to Ahern but also internal bank documents from its archives. In June 2005 Ahern provided the authority to the tribunal to do so. It would later emerge that two of the transactions being inquired into at this stage—from a total of sixty-six—involved foreign currency: lodgements of £24,838.49 and £19,142.92 in the O’Connell Street branch of the AIB. The bank provided the result of its searches to Ahern and the tribunal in October 2005. On 25 October the tribunal wrote again to the Taoiseach, by way of Guidera, this time asking questions about the source of identified lodgements and the purpose of certain withdrawals, as well as about some general questions, such as whether or not Ahern had sold any assets during the period at issue or if he had any other sources of income. The tribunal had no power to force Ahern to respond to its written questions, though it could, if he failed to respond, issue a summons for him to appear in public and put the questions to him in the witness box. The tribunal pointed out that if the matter could be resolved by way of private correspondence this would be in everyone’s interest. No doubt by this time, if not since as far back as the late 1990s, Ahern knew he was dealing with a situation that had the potential to bring his political career to a sudden end.

  The tribunal asked that Ahern respond by the end of November 2005. However, the end of the year came and went without the tribunal hearing from him. On 3 March 2006 the tribunal wrote to Ahern’s solicitor saying it was anxious to conclude the information-gathering process, drawing attention to the correspondence that had already been exchanged and to Ahern’s failure to respond to the letter of 25 October 2005. The tribunal solicitor, Susan Gilvarry, said a reply was now being sought by 24 March 2006. She asked Ahern to give priority to certain queries, listing five. They included questions concerning the two lodgements that the tribunal would eventually learn included foreign exchange. They also included cash lodgements.

  On 7 March 2006 Guidera was informed that the tribunal intended to make orders of discovery against AIB in relation to Ahern’s affairs. Ahern was asked the names of persons who were authorised to make lodgements on his behalf to AIB during the period 1991–8, as well as of those in AIB with whom he dealt. Furthermore the tribunal asked for Ahern’s authority to allow it interview the bank officials who dealt with his affairs. They asked that the authority be returned within nine days. In late March 2006 Ahern supplied four books of documents in response to the order of October 2005.

  Guidera asked the tribunal a number of questions, including what allegations exactly formed the basis for the request for Ahern’s voluntary cooperation. ‘The tribunal is engaged in a number of inquiries in which the payment of any money to your client could be of relevance,’ it answered. ‘The tribunal has decided to conduct public inquiries into tax designation, not limited to matters involving Mr O’Callaghan, and in this context payments received by your client which may be referable to the period during which he served as Minister for Finance may be inquired into.’

  The tribunal expressed its concern that Ahern had still not furnished the information sought about the lodgements to his accounts, and it pointed out that what had been provided gave no information as to the source of the cash known to have been lodged. The letter of 30 March pointed out that the five cash lodgements that Ahern had been asked to give priority to totalled £108,981.41 and were made in the period December 1993 to December 1995, when Ahern was Minister for Finance.

  Gilvarry told Guidera that his client had until 21 April 2006 to provide the information.

  I am to inform you that in the
event that the tribunal does not receive the information requested by that date it will consider issuing a summons directed to your client requiring him to attend at a public session of the tribunal which will be listed to take place not earlier than Tuesday 2nd May 2006. At such hearing your client will be questioned in relation to the already mentioned five cash lodgements.

  In political terms, the tribunal was threatening Ahern with a move that could in one fell swoop destroy the public image he had so successfully created over the previous decades.

  On 6 April, Guidera told the tribunal that Ahern’s lodgements were mostly made by Ahern himself or by his secretaries, Gráinne Carruth and Sandra Cullagh. Ahern identified, and gave the tribunal permission to speak to, the bank officials he sometimes dealt with.

  When the deadline set by the tribunal for answers about the sources of certain lodgements and about the reasons for certain withdrawals arrived, Ahern supplied a document drafted by an accountant, Des Peelo. Peelo was a long-time friend of Charles Haughey who had featured in the Moriarty Tribunal. The Peelo document was dated the day before its receipt by the tribunal.

  As O’Neill later put it to Ahern, ‘the tribunal had invited your response; what it received was the response of Mr Peelo. Isn’t that right?’Ahern replied, ‘That’s correct.’ Peelo only had the documents that were already available to Ahern, as well as the information Ahern had given him orally.

  In the document, Ahern said for the first time that he had been given sterling in cash after a dinner in Manchester. He said it was lodged along with £16,500 (Irish pounds) in cash that he had been given by four friends. They were Paddy Reilly (Paddy the Plasterer), £3,500; Joe Burke, £3,500; Barry English, £5,000; and Dermot Carew, £4,500. ‘All of the above persons are personal friends of Mr Ahern. The amounts were entirely unsolicited and represented a goodwill loan from friends towards the building up of Mr Ahern’s personal finances re possible purchase of a house.’ The report said Ahern had lodged the money.

  The document noted another goodwill loan in which Ahern received £22,500 from Paddy Reilly, Des Richardson, Padraic O’Connor, Jim Nugent, David McKenna and Fintan Gunne. It also revealed that Ahern had no bank account in the period from 1989, when he settled his separation agreement with his wife, to late 1993, when he began to lodge funds with AIB, O’Connell Street. By this time, the tribunal was told, Ahern had accumulated £50,000 in cash in safes in the Department of Finance and St Luke’s.

  Another lodgement that featured in the document—£19,142.92 to an account with AIB, O’Connell Street—had a complicated and tortuous explanation. Ahern had given money to Larkin, who had lodged it and then withdrawn it and had used some of it on the Beresford Avenue house before returning the remainder to Ahern, who then lodged it to the account. What the report failed to reveal was that the lodgement had been exactly £20,000 sterling in cash, which was exchanged in the bank for Irish pounds before being lodged. Ahern was later asked about this at the tribunal. He said:

  While I suspected that might have been either fully or partially sterling, when I had checked with the banks and tried to get the details behind that to clarify that, they had given me the information in Irish pounds. It was their view that it wasn’t sterling.

  Ahern was also later to agree that the Peelo document was not comprehensive and did not answer all the questions he had been asked. He accepted that he had known since October 2005 that there was a series of transactions in his accounts that would have to be explained before the tribunal would be able to rule out his having received the payments that Gilmartin had alleged.

  While the Peelo document contained information on particular lodgements and transactions that the tribunal had wished to be given priority, the tribunal was still seeking responses to its original long list of queries. This information was supplied on 7 June 2006. Ahern’s payments as a TD and those as a member of the Government came in different cheques: one was posted to him at home and the other to his office in Government Buildings. The lodgements being inquired into included a number of round-figure amounts. Ahern said the lodgements all came from his income as a politician. In some cases they were lodgements of two or more cheques; in other cases, the round-figure ones, they were the result of cheques being cashed and round-figure amounts being lodged. Not one lodgement was for an amount exactly the same as an individual cheque issued to Ahern. In a letter of August 2006 it was made clear that the inquiry into Ahern’s finances still had a number of motivations.

  Bank statements of your client show lodgements which are in excess of your client’s gross salary at that time. The tribunal believes that this issue requires to be resolved in the context of its inquiry into tax designations during the period in which Mr Ahern served as Minister for Finance.

  The letter also pointed out that the sum of the lodgements dealt with in the Peelo document—£97,338.49—exceeded Ahern’s salary for the period, which was ‘approximately £42,000 per annum gross.’

  Meanwhile, as a result of the narrative in the Peelo document concerning the Beresford Avenue house and Larkin’s dealings with AIB, O’Connell Street—as well as the goodwill loans from an identified list of people, most of whom were still alive—the tribunal’s inquiry was spreading. All these highly confidential dealings with the tribunal were taking place during a period when Ahern’s image as an international statesman was continuing to grow.

  There were extended and difficult negotiations in the wake of the Belfast Agreement about policing, decommissioning and other matters. They involved Ahern continuing to work closely with Blair and also with the White House. As if that wasn’t enough, on January 2004 Ireland took over the Presidency of the European Union. The EU, in the wake of the collapse of the Soviet Union and the unrest in the Balkans, was expanding to the east, bringing in tens of millions of new citizens from ten new member-states. This unenvisaged expansion led to the need for a reformed institutional framework. As Ahern took on his new role, the efforts to agree a constitution for the EU under Silvio Berlusconi were seen as having been unsuccessful, and few had an expectation that there would be any change now that the European leadership had shifted to Dublin. They hadn’t reckoned with Ahern’s negotiating ability, patience and drive.

  He decided to mark the entry of the ten new states on 1 May 2004 in a special way. It was the largest expansion of population and territory in the EU’s history, and many of the states that were joining had spent the previous decades under the yoke of Soviet control. Ireland and Britain were exceptional in their approach to the enlargement in that they opened their borders immediately to workers who wished to travel from the new member-states. Multinational companies that had set up in Ireland had been complaining for years about the difficulty of finding employees—something that had led Mary Harney, as Minister for Enterprise, Trade and Employment, and others to begin a programme of trying to lure workers to Ireland. The campaign began by urging Irish emigrants to return, then identifying members of the wider Irish diaspora and, lastly, seeking out non-Irish skilled workers throughout Europe and farther afield. Lavish expenditure during this period by FÁS, which was spearheading the effort, would later be the cause of political scandal, FÁS ran a Jobs Ireland campaign during the period 1998–2002 that included targeted advertisements in foreign media, as well as a roadshow that visited, among other cities, London, Brussels, Cologne, Hamburg, Hannover, Prague, Moscow and Mumbai. Cities in Canada, Britain, Australia, New Zealand and the United States were targeted.

  Not all the workers who moved to Ireland, some with families, were returned emigrants or persons of Irish descent, and, in a significant change of policy, the state began to issue thousands of work permits. The downturn that hit the Irish and global economies in 2002 lessened the demand for workers from abroad, but the enlargement of the EU occurred as the Irish economy returned to growth, and it meant that a population of tens of millions of potential workers was now available to feed the once-again growing demand for labour. The number of young people leaving
countries such as Lithuania and Poland for Ireland became a political issue in those countries. The Mushroom Covenant, a book by Laima Muktupvela, a Latvian mother of four, became a best-seller in her home country. In it she wrote about her experience of working long hours on a mushroom farm in Co. Meath and sharing a three-bedroom house with eleven other Latvians. ‘There is hardly a family left in this country who hasn’t lost a son or daughter or mother or father to the mushroom farms of Ireland,’ she told the International Herald Tribune when it carried a report on the phenomenon in 2005. ‘During the Cold War we all dreamed of leaving but the risk is that if everyone leaves, our country will disappear.’

  According to Micheál Martin, the contribution made by the growth in population to the overheating of the Irish economy has yet to be analysed.

  It was Bertie who signed the 2004 agreement [on the accession countries] because at that time it made sense economically: all the multinationals were saying we don’t have the skills sets. The IDA [Industrial Development Authority] too. Most multinationals would have said to us at the time, ‘Where are you going to get the skills sets?’ And we would say, ‘Actually, our skill base now is Europe. We have access to here, there and the other.’

  I was Minister for Health, and the effect was dramatic, not just on maternity hospitals but on accident and emergency services. And the demand on infrastructure, housing. It was part of the boom in housing. You were employing Lithuanians and Poles to build houses that were rented to Lithuanians and Poles who were coming in, and so it was a sort of circular thing.