Ireland: Financial scandal puts Prime Minister’s political survival in the balance

Joe Higgins parliament speech "tore the Taoiseach [PM] apart"

The Irish Taoiseach (prime minister), Bertie Ahern, is under huge pressure following revelations that he received "loans" and "gifts" from businessmen when he was a government minister in the 1990s. Leaks from a government established tribunal inquiry revealed that Ahern was given €50,000 from "friends" in Dublin and £8,000 (sterling) from Manchester businessmen in 1994, when he was government finance minister. Ahern claims the €50,000 was used to help pay for his marital separation in 1993. He claimed in the Dáil (Irish parliament) he always intended to repay to the loan. Over the last few days, Ahern signed cheques for more than €90,000 to repay with interest the 12-strong group of "Dublin friends", including the former managing director of National City Brokers stockbrokers, Padraic O’Connor. The funds Ahern got from businessmen in Manchester were a "gift" and, therefore, liable for tax. Ahern did not pay tax on this money and claims the gift was not given to him in his capacity as minister.

The Taoiseach was quizzed for days by the media and main opposition parties about the circumstances of the loans and gifts. The pressure on Ahern was increased on Wednesday 27 September when Joe Higgins, Socialist Party TD (MP), spoke in a Dail debate on the issue. Joe produced "draft letter", which he said the Taoiseach could have sent with a bank draft returning the €50,000. Joe’s speech, including his biting, humorous draft letter, was widely covered by the Irish media. Joe’s 27 September Dáil Éireann speech is posted below.

The Fianna Fáil (FF)/Progressive Democrats (PD) coalition government may not survive this crisis. The arch right wing Tánaiste (Deputy Prime Minister), Michael McDowell, and leader of the PD, initially backed Ahern but is now asking for more information about the Manchester money, including a full list of who gave £8,000 to Ahern. Two previous Fianna Fáil prime ministers, Albert Reynolds and Charles Haughey, were eventually forced from office by their coalition partners, in 1992 and 1994.

Various scenarios now face the government. Ahern will try to ride out the crisis and maintain the coalition government. But if the crisis deepens, the PDs could pull out. In that case, Ahern would probably try to continue with the support of independent TDs (MPs). This administration would be prone to instability and could collapse, triggering elections. Alternatively, Ahern could be forced to step down and be replaced with a new Fianna Fáil leader, who continues in office with the PDs. Or the coalition government could collapse, prompting an early general election (elections are due next year).

At the time of writing (2 October), it appears the PDs have pulled back from a confrontation with Ahern, so they can remain in power. Opposition parties talk of a "secret deal" between Ahern and McDowell.

Whatever the result of the current scandal for the coalition government, Joe Higgins’ Dáil speech has already increased the Socialist Party TD’s standing in the eyes of many working people. As the only TD who lives on an average skilled workers’ wage, and who campaigns on behalf of workers, the low paid and the jobless, Joe Higgins is regarded by many workers as the authentic voice of opposition in the Dáil to the main rightwing, pro-big business parties. A Dublin current affairs magazine refers to Joe as the best orator in Ireland since the Daniel O’Connell, the 19th century nationalist leader (the ‘Great Liberator’).

On Thursday 28 September, the ‘Irish Times’ reported the Dail speeches of the leaders of the main opposition parties, Enda Kenny from Fine Gael, and Pat Rabitte, the leader of the Labour Party, and also the speech by Joe Higgins. We reprint articles on Joe Higgin’s intervention, following the text of Joe’s speech in the Dáil on 27 September.

socialistworld.net

Prime Minister’s financial scandal puts his political survival in balance

Dáil Éireann [Irish parliament], Leaders’ Questions, 27th September 2006

Joe Higgins (Socialist Party):

This very morning the Government has thrown thousands of Aer Lingus [national airline] workers to the multinational wolves, on stock exchanges around the world.  Yesterday, the Government had gardaí [police] pushing the decent people of Rossport around the place at the behest of the Shell Oil corporation.

Finian McGrath (Independent):

Hear, hear.

J. Higgins:

At every hand’s turn the Taoiseach [prime ministers] has facilitated the powerful and the very wealthy.  Therefore it is no surprise that wealthy businessmen should cough up €50,000 to him.  What is shocking is that the Taoiseach still apparently does not see that a Minister for Finance taking large amounts of cash from businessmen is by any objective yardstick a massive conflict of interest.  The Taoiseach minimises the amount of money, but in 1993 the average industrial wage was €13,416 per year, so that three times that amount, by any ordinary worker’s standard, would be colossal.  By coincidence, two years after that, I bought a semi-detached home for €47,000 with a mortgage that goes on until I am 65.  At no stage should the Taoiseach have brought his personal life or difficulties into this issue.  It is not relevant.

  Again last night, deliberately, he cast RTE’s [state televion station] Brian Dobson in the role of agony aunt in order to divert attention from the critical issues which he is refusing to answer.  The Taoiseach’s personal circumstances are irrelevant because he said, last night, that he had already got a bank loan to pay off pressing bills, that they were taken care of.  Presumably he had a schedule of repayments to the bank.  He then used what he says were personal loans to pay off the bank loan.  Can he explain that conundrum to the House?

  When the Taoiseach was in the Dáil in 1997 setting up tribunals on payments to politicians, it beggars belief that the alarm bells that should have been going off in his head were not so deafening as—–

An Ceann Comhairle (Chair):

The Deputy’s time has concluded.

J. Higgins:

—–to tell him to pay back the €50,000.  It was at the very least a catastrophic failure of political judgment.  It further beggars belief that he could not give it back.  Did the Taoiseach ever hear of a bank draft?  This morning it took me two minutes to draft the letter the Taoiseach could send with it:

‘Ah Jaysus lads, you’ll have me in huge trouble if you don’t take back the €50,000.  My circumstances are improved and I’ll have 50 reporters traipsing after me for the rest of my life if this comes out.  Bertie.’

It was as simple as that.  Perhaps he might have said: "P.S.  Tell Paddy the plasterer to steer clear of Callely’s house.  He is in enough trouble with the painter already."

  A senior Minister gets substantial amounts of money from wealthy people.  Half of them are subsequently lifted into influential positions on prestigious State bodies.  What would any objective assessment of that be in any jurisdiction?  That was nauseous patronage and cronyism.  Incredibly, the Taoiseach blocked it out last night: the appointments were not because they gave him money but because they were his friends.  That is just as bad.  Can he not understand that appointing cronies to State boards because they are friends is the most despicable abuse of the State and of public bodies?

An Ceann Comhairle:

The Deputy’s time has concluded.  He must give way to the Taoiseach.

J. Higgins:

Finally, we had the hapless Deputy Callely.  A businessman gave his house a slap of paint.

An Ceann Comhairle:

I ask the Deputy to please give way to the Taoiseach.

J. Higgins:

That caused the Taoiseach to show him the door, while he walked away with the whole house.  By those standards, should the Taoiseach not go after the former Minister of State, Deputy Callely?

The Taoiseach:

As I said earlier, these were loans with interest, not from businessmen but friends.  My friends have been described as businessmen but the impression given that they are captains of industry is far from the truth.  They are people who assisted me at a particular time because they knew the circumstances.  I accepted that only on the basis these were loans with interest.  That is the position.

  Every person appointed to a State board whether by myself or my colleagues is someone we believe is qualified for such an appointment.  They are appointments based on merit taking into account the particular combination of skills, qualifications, background and life experience that each person has.  Over a long political career I know a great many people who have been appointed to key boards.  I knew these people.  They had relevant skills and experience.  Three of the five had served on State boards long before they gave me any loan.  The other two could be considered under any fair examination to be outstanding people who served the State well on these boards.  I do not accept the position outlined.

  Deputy Joe Higgins can make the point that all of this is a bit of fun.  I do not see it as a bit of fun but as a serious issue.  As regards paying them back and how, he could be right in saying that I should have paid them back.  Perhaps I should have just paid them back and not worried how it would be interpreted, although I had taken the initiative of giving documentation to the tribunals.  I should have been able to say that I had paid them back over several years.  I did not do it that way because I thought that would be seen as just doing it at that particular time.  I followed the advice I got to the effect that these matters could not come out, and that I should keep the interest and the paperwork up to date.

  Deputy Rabbitte asked me earlier whether there was documentation on the circumstances of these loans from the individuals concerned.  There is comprehensive documentation and it is with the tribunal as well.  On the issue of the Deutsche Bank and the forgery, the tribunals, I believe, have finished with that matter.  I mention it because again, it was a sinister act to try to set me up by suggesting I had extensive accounts.  I am not making a point about it, however it shows the things one has to try and deal with.  That is why I dealt with the tribunals so comprehensively.

J. Higgins: I do not think it is a bit of fun, but sometimes one has to resort to ridicule to show the untenable position the Taoiseach is holding onto with his explanations.  The Taoiseach is not the only person who has to offer an explanation to the House.  In the face of patronage, cronyism and double standards we have the Trappist-like silence from the Tánaiste [Michael McDowell, the deputy prime minister] and leader of the Progressive Democrats.  In a previous life in Opposition, one can only imagine the fulminations that would rain down from on high on the Taoiseach’s head from Deputy McDowell as regards these issues.  To say he would become beetroot red is really only a pallid description of the shade of crimson verging on purple which would describe the glow irradiating from the indignant persona of Deputy McDowell.

An Ceann Comhairle:

The Deputy’s time has concluded.

J. Higgins:

Far from standing up for standards, he is sitting neatly beside the Taoiseach today.  Admittedly, his demeanour is rather tombstone like, without the moonlight even.  However, since his appointment two weeks ago, Deputy McDowell is trying to work hard to have us believe he has no previous history in Government, that he has not been in Government for ten years, and that he has no responsibility for the billions of euro in stamp duty and the rest.  He wants us to believe he is a political newborn, dropped by a stork, perhaps, into a basket outside Government Buildings two weeks ago, with Deputy O’Donnell playing along as the besotted nurse fetchingly referring to him as Michael, if one does not mind.  That is somewhat different from the name she was spitting out two months ago from behind clenched teeth, when Michael was trying to take the PD rattler from Mary. What has the Tánaiste said to the Taoiseach about this and will he make a statement?

  The image which Fianna Fáil [Bertie Ahern’s governing party] has carefully cultivated of the Taoiseach, who is on €250,000 per annum, is that of an ordinary, struggling man like the rest of the ordinary people out there.  This image has taken a fierce battering.  Ordinary people do not have wealthy friends to do a whip around and the myth that Fianna Fáil is somehow the ordinary working person’s party will hopefully end with this episode, where rich people come to the assistance of senior politicians.

Deputies:

Hear, hear.

The Taoiseach:

As I said a number of times, these people are friends.  If the Deputy wants to categorise people who are friends, that is his entitlement, but it is not an offence to get loans from friends at times.  I did that one time in my 55 years on this earth.  If in hindsight that was not the wisest thing to do, so be it, but I think there are few of us in this House who have not benefited from friendship at times, particularly in times of difficulty.  I have broken no laws and have violated no ethical codes.  I have co-operated fully with tribunals that are there to make findings of fact.  Other circumstances are used to put out half-truths, exaggerations and claims.  I made it very clear what I did and did not do, and I did so many years ago under the confidentiality of tribunals to show that I had nothing to do with any of the issues that I was accused of doing.  People are well aware of what has been stated about me over a number of years.  I would not wish that people in this House would have to go through the same process I have had to go through in the past eight or nine years to prove that I had no hand, act or part in any of the serious allegations that have been pressed against me, but time will see that right.

Deputies:

Hear, hear.

Reports from The Irish Times

’Your personal circumstances are irrelevant’

Michael O’Regan, Irish Times, 28 September 20006

Socialist Party TD Joe Higgins said the Taoiseach should not have brought his personal life into the controversy over payments.

"It is not relevant. But again, last night, deliberately, you cast RTÉ’s Bryan Dobson in the role of agony aunt in order to divert attention from the critical issues you are refusing to answer," said Mr Higgins.

"Your personal circumstances are irrelevant, because you said last night that you already had got a bank loan to pay off pressing bills."

Mr Higgins said it had taken him two minutes to draft the letter which the Taoiseach should have sent with a bank draft in returning the money.

To laughter from all sides, Mr Higgins read: "Ah jaysus, lads, you’ll have me in huge trouble if you don’t take back the 50 grand. My circumstances have improved, and I will have 50 reporters traipsing me for the rest of my life if this comes out. Bertie."

Perhaps, said Mr Higgins, the Taoiseach would have used a PS: "Tell Paddy the plasterer to stay clear of Calelly’s house. He is in enough trouble with the painter already."

Mr Higgins accused the Taoiseach of facilitating the powerful and the wealthy at every hand’s turn.

"Therefore, it is no surprise to me that wealthy businessmen should cough up €50,000 to you. What is shocking is that still you apparently do not see that a minister for finance, taking large amounts of cash from businessmen, is by any objective yardstick a massive conflict of interest, by anybody’s standards." Mr Higgins said that, in 1993, the average industrial wage was €13,416 annually.

"So three times that amount, by any ordinary worker’s standards, would be a colossal amount."

Mr Ahern said that the impression was being given that his friends were "captains of industry", which was very far from the truth.

"They are people who assisted me at a particular time because they knew the circumstances. I accepted that only on the basis that they were loans with interest. And that’s the position."

He said everybody appointed to a State board, whether by himself or his colleagues, was a person believed to be qualified for that appointment.

"They are appointments based on merit, taking into account the particular combination of skills, qualifications, background and life experience which each person has," he added.

Mr Ahern added that three of the five had been on State boards long before they had given him a loan. He thought the other two would be considered, under any fair examination, to be outstanding people. He added that "comprehensive" documentation relating to the loans existed and it was with the tribunal.

Mr Higgins referred to the "Trappist-like silence" of the Tánaiste and the PDs.

Deputies take to tip-toes in fear of more explosives

Miriam Lord, Irish Times, 28 September 2006

Dail sketch: The Protocol on Explosive Remnants was up for mention in the Dáil yesterday. Wartime stuff, apparently. The Taoiseach’s time-bomb may not yet be in a fully dismantled state, which explains why Fianna Fáilers were tip-toeing gingerly around the House.

A week after the detonation of Bertie’s Drumcondra dig-out, and a day after he blew up emotionally on the six o’clock news, it was, perhaps, a little too early to think about tidying up the fallout. Opposition leaders are convinced a few more unexploded bombs are still out there.

So they behaved like men navigating a minefield when they arrived to tackle the Taoiseach on his admission that he accepted two payments totalling €50,000 from his friends, supposedly in the form of a loan, although Bertie never returned the money.

His explanations for this lapse in judgment – he was minister for finance at the time – were convoluted and rather odd.

As a story, it was a three-hankie tearjerker. Taken in one go, it was very good. But taken apart, it was somewhat more difficult to swallow.

Great things were expected of Enda and Pat on their first day back after their long break from the exhausting business of legislating. Bertie trudged into the Dáil like a man expecting a right roasting. The chamber was packed. The gallery crammed.

With any luck, there might be a few more explosive remnants going off.

After a few minutes of Leaders’ Questions, it was like the boys had never been away.

(This would explain why Ceann Comhairle Rory O’Hanlon forgot the three-month recess by teatime. In exasperation, he informed the Opposition that deputies couldn’t keep coming in "day after day" and disrupting the rules of the House.

"We haven’t been in here for 12 weeks!" exploded Labour’s Brendan Howlin.

Enda had his silencer on. Serious and stern, he addressed Bertie like a disappointed father lecturing his son for getting a young wan into trouble. "It’s a simple issue of right and wrong," he quivered across at the Taoiseach, who sat with his head bowed in contrition.

"Stand up and admit that what you did was wrong . . . Yes, I was WRONG!" He could have come in with the thumbscrews and a box of Daniel O’Donnell albums, and he still wouldn’t have wrung that confession out of Bertie.

Labour leader Pat Rabbitte, as befits his role as the robust side of the FG/Lab partnership, upped the volume slightly and lowered the tone a little.

But like his new best friend, Enda, he was uncomfortable going anywhere near the subject of the Taoiseach’s marriage break-up. The fact that Bertie talked about it with such toe-curling frankness the night before on television had no effect on Pat’s sensibilities.

So he decided to get stuck into the Taoiseach’s carefully cultivated "man of the people" image. "A bit less of the common man routine," harummphed Pat. "You’ve been driven around this country since 1987. You’ve never put your hand in your pocket at a forecourt to fill the car with petrol. You’re earning over a quarter of a million per annum. So there’s no point in comparing yourself to the man on Hill 16 who got into a bit of trouble and had a whip-around . . . Mr Haughey’s collection started with a whip-around as well."

Bertie refused to get riled. Throughout, he spoke in level tones, his eyes lowered in the now familiar Diana routine.

When he got around to the nitty-gritty of how he arranged his finances in 1993, Bertie whispered and mumbled and it was impossible to hear him properly.

Pat was agog at the news that the minister for finance had no bank account for six years between 1987 and 1993. How did he cope? The Taoiseach explained that he couldn’t use the joint account he had with his wife, given that they were separating at the time. He used "cheques". The Labour leader didn’t dig deeper, unwilling to go anywhere near the marital situation. However, some of us wondered what Bertie meant by "cheques". Were they the special sort of ones you can get without owning a bank account?

Were they a few blank ones left over from his days signing them for Charlie Haughey? Or was he talking about his £70,000 pay cheques?

More questions. Did he cash these cheques in the bank and then stick the money under the mattress? Did he cash them in one of his benefactor’s pubs, walking around for the rest of the month with the bulk of the 70 grand shrinking in his pockets as he paid his bills? Certainly, it solves the mystery of those baggy suits with the saggy pockets he was so famous for wearing at the time.

We’re on to something here. This could be the answer for the voluminous anoraks, the ones that earned him the nickname "Nanook of the Northside". The man was a mobile bank.

A large family could have been fed and watered for a year on the contents of his jacket.

We shouldn’t be making fun. Not after Joe Higgins, who decided Bertie’s position was so outrageous it was risible.

He tore the Taoiseach apart with a series of polished one-liners, so sharp that even the po-faced Fianna Fáilers couldn’t resist the poke in the ribs.

Joe didn’t see how it would have been such a problem for the Taoiseach to return the money to his friends. In fact, he drafted the kind of letter Bertie might have written to them.

"Ah jaysus lads, you’ll have me in huge trouble if you don’t take back the 50 grand. My circumstances have improved and I will have 50 reporters traipsing after me for the rest of my life if this comes out. Bertie. PS. Tell Paddy the plasterer to stay clear of Callely’s house. He is in enough trouble with the painter already."

He then moved on to the glum and silent Michael McDowell, sitting next to the Taoiseach on his first day in the house as Tánaiste. "He’s sitting meekly beside the Taoiseach today, admittedly with the demeanour of a tombstone, but without the moonlight," he sneered. It was as if Tánaiste McDowell was a political novice, "a political newborn dropped by the stork into a basket outside Leinster House two months ago."

The newly defanged McDowell managed a gummy smile. Bertie, when his turn came to reply, sniffed he didn’t think Joe was very funny.

Meanwhile, the PDs had a meeting, and issued an amusing statement after it in which Tánaiste McDowell blamed the businessmen for their altruism as much as he blamed Bertie for his "honest error of judgment".

Docile McDowell is in charge today. Bertie is off to Ballyjamesduff, home of Paddy Reilly, but no relation to either of the two Paddy Reillys who participated in his whip-around.

 

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