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Home , Albert Reynolds, Bertie Ahern, Charles Haughey, George Colley, Hugh Coveney, Irish political scandals

Political Corruption in the Irish Republic - An His- torical Reminder

Brian O’Boyle

Introduction tracker mortgage led him to have a stroke in 2013. His wife Claire has also suffered, The government have announced new losing the power of her speech and suffer- plans to beef up the law around white col- ing a mental breakdown in 2015.3 These lar crime. Two Bills will soon be brought crimes should now be investigated and before the Dáil to disband the Office of those found guilty should be put in jail. the Director of Corporate Enforcement This is not what the government have in (ODCE) and create tougher measures for store, however. corporate crime and in the pub- lic sector.1 The backdrop to this is the Speaking in the wake of calls for a failure of the ODCE to successfully in- criminal investigation, the , Leo vestigate the former Varadkar, claimed that there is a big dif- Chairman, Sean Fitzpatrick. The Fitz- ference between ‘ breach of contract and patrick case collapsed earlier this year criminal fraud’ and that it isn’t the gov- when ODCE solicitor, Kevin O’ Connell, ernments place to instruct the Gardaí in shredded documents that were important their operations.4 Varadkar recently had to the case. This allowed Fitzpatrick to no problem in calling for heavier penal- slip the net, as the judge ruled the case ties for welfare fraud, but when the peo- against him to be ‘biased’ and ‘partisan’.2 ple involved are banking executives he The ongoing tracker mortgage scandal is suddenly leaps to their defence. Fianna also a factor, with the government anx- Fáil have been no better, disgracefully ious to placate an angry public. The Irish protecting the government through their bankers have acted appallingly. Tens of Confidence and Supply Agreement. One thousands of people have been moved off reason for this is surely the appalling tracker mortgages by banks who illegally record of both main parties on bribery put their customers onto higher cost vari- and corruption. Time and again senior able rates. This made the banks around figures in Fianna Fáil and have e600 million in extra profits, but the taken bribes and turned a blind eye to costs to their victims have been incalcula- corporate corruption. This was particu- ble. Speaking to the Commit- larly true during the last quarter of the tee on Finance in October, Thomas Ryan 20th century, with the Irish state set- recounted how the stress of losing his ting up a series of ‘Tribunals’ as a way 1‘New government measures to tackle white collar crime’ irishtimes.com/news/politics/new- government-measures-to-tackle-white-collar-crime-1.3273473 2‘Sean FitzPartrick acquittal raises questions for key State agencies’ irishtimes.com/ news/crime-and-law/se%C3%A1n-fitzpatrick-acquittal-raises-questions-for-key-state- agencies-1.3095172 3‘People have killed themselves over tracker mortgage rate scandal, victims say’ independent.ie/breaking-news/irish-news/people-have-killed-themselves-over-tracker- mortgage-rate-scandal-victims-say-36220624.html 4‘Varadkar pours cold water on calls for a criminal investigation into banks over tracker mortgage scandal’ independent.ie/irish-news/varadkar-pours-cold-water-on-call- for-criminal-investigation-into-banks-over-tracker-mortgage-scandal-36264145.html

16 of avoiding criminal prosecutions. The taken bribes and patronage payments findings of these investigations were of- from businessmen including the financier ten shocking, moreover, with the Mahon Dermot Desmond, the hotelier P.V. Doyle Tribunal concluding that ‘ corruption af- and the retailer Ben Dunne. Despite this, fected every level of Irish political life’ and his colleagues in Fianna Fáil continued that ‘ those with the power to stop it to insist that Haughey was an excellent were frequently implicated in it’.5 This statesman, albeit with some unfortunate essay recounts the events that led to this personality flaws. They also sought to conclusion, focusing on the main players distance the party from the worst excesses in the period between of Haughey’s activity, painting him as an and . Despite the repetition errant rouge in an otherwise heathy sys- of a self-serving establishment narrative, tem. Neither claim stands up to interro- Ireland was not afflicted by a ‘few bad gation. apples’ that have since been eradicated. Rather, it was characterised by a model of capitalist development that was wide open to corruption and remains in opera- tion today.

Corruption in the Haughey Era In January 1980, Charles Haughey made an important address to the nation. As the incoming Taoiseach, he felt it was his duty to warn his viewers that ‘ Ireland was living far beyond its means’ and that ‘ Charlie Haughy delivering his infamous ‘we ae living way as a community we would have to tighten beyond our means’ speach our belts’.6 The first part of this state- ment certainly applied to Haughey him- self. During the 1980’s, Haughey lived in The first indication of the systemic a palatial mansion in , North Co. nature of Irish corruption was its scale. , replete with hired staff costing Over the course of his career, Haughey e5,000 per year. He also had a yacht, a amassed the equivalent of e45 million in thoroughbred stud farm and his own per- corruption payments or a staggering 171 sonal island.7 This should not have been times his official salary.8 The magnitude possible on an annual salary of £7,000 a of this wealth points to endemic corrup- year - and it wasn’t. Over the course of tion far beyond ‘a few bad apples’ as his career, Haughey was found to have an array of businessmen paid for favours 5F. Connolly. Tom Gilmartin. The Man Who Brought Down a Taoiseach and Exposed Greed and Corruption at the Heart of Irish Politics. Gill and MacMillan, 2013, p. 258. 6‘Tighten Your Belts - High-living Charlie To the Electorate’ independent.ie/business/budget/ tighten-your-belts-highliving-charlie-told-electorate-26798793.html 7F. Connolly. Tom Gilmartin. The Man Who Brought Down a Taoiseach and Exposed Greed and Corruption at the Heart of Irish Politics. Gill and MacMillan, 2013, p.190. 8‘: Haughey Stole £45m’ independent.ie/irish-news/moriarty-tribunal- haughey-stole-45m-26352058.html

17 at the top of society. A second indica- after, however, with Des Traynor tasked tion was the political response of Official with facilitating dodgy payments from Ireland. Despite Haughey’s financial af- business leaders into Haughey’s bank ac- fairs becoming public knowledge during counts.12 Overtime, Sam Field Cor- the Moriarty Tribunal, the Revenue Com- bett was also encouraged to move from missioners decided not to pursue him for Haughey-Boland into his own Manage- £6 million in unpaid taxes or for any ment Investment Services firm to ‘supply of his assets.9 This decision, reached registered companies, the maintenance of in 1998, mirrored an earlier one by the share registers, the filing of accounts and Director of Public Prosecutions not to so on’.13 This helped to create the nexus charge Haughey with any crimes, despite of developer’s, accountancy and political his flagrant, and repeated, abuse of the elites that still characterises Irish capital- law. Instead, the Irish elites supported ism today. Property developers were to Haughey to the bitter end, even afford- become particularly close to the Fianna ing him the honour of a state funeral. A Fáil party for a number of reasons. third indication comes from an insider ac- In the first place, the state controlled count from the son of one of Haughey’s planning and rezoning laws that could principal backers-Matt Gallagher. Speak- transform sites that were worth next to ing to the investigative journalist, Frank nothing into prized assets for major de- Connolly, in the 1990’s, Pat Gallagher ex- velopments.14 Being on the inside gave plained how a group of successful Irish property developers a major advantage in businessmen had agreed amongst them- this regard, usually achieved by bribing selves that Haughey would become their politicians. Added to this, construction ‘inside man’.10 Starting life as a corpo- was a relatively sheltered sector, making rate tax accountant, Haughey set up his it more likely that domestic capitalists own firm with Harry Boland - the son of would succeed. For this reason, prop- a Fianna Fáil government minister Gerry erty developers were more likely to be in Boland - in the early 1950’s. the ‘old boy’s network’ than their coun- This gave him immediate access to the terparts in industry and manufacturing. moves of shakers in Irish society and with Finally, the state itself spent billions each the help of Des Traynor and Sam Field year on various construction and mainte- Corbett, Haughey began to forge the nance projects. Having the right polit- links between business and politics that ical connections increased one’s chances were to become his trademark. To create of getting contracts for schools and hospi- the environment in which Irish business- tals. Meanwhile, the state was also happy men could compete with the old money of to lease most of its own official buildings the ‘Anglo-Irish’ it was soon decided that (department buildings for example) from Haughey would himself move into poli- private landlords. For each of these rea- tics.11 The ‘Boss’ would need to be looked sons, property developers were as anxious 9F. Connolly. Tom Gilmartin. The Man Who Brought Down a Taoiseach and Exposed Greed and Corruption at the Heart of Irish Politics. Gill and MacMillan, 2013, p.266. 10C. Keena. The Ansbacher Conspiracy. Dublin. Gill and Macmillan. 2003, p.44. 11Ibid. 12Ibid. 13Ibid. p.27. 14 F. Connolly. Tom Gilmartin. The Man Who Brought Down a Taoiseach and Exposed Greed and Corruption at the Heart of Irish Politics. Gill and MacMillan, 2013, p.23.

18 to cosy up to the party of government as years later, the land was re-zoned with it was to take their money. permission given to build 386 houses, In the mid 1960’s, Fianna Fáil decided before being sold on to Gallagher for to formalise this relationship via TACA £204,000. The deal was put through by - a semi-clandestine organisation, mean- a company known as ‘Merchant Banking’ ing help or support in Irish. Five hun- - a bank of which Traynor sat as a direc- dred business people were invited to join, tor and the year before, Haughey, then paying an annual subscription charge of serving as Minister for Finance, allegedly £100 or roughly e2,150 today. Haughey brought in a measure to avoid paying 19 was an official patron of the group, whilst the resulting property taxes. These re- Harry Boland was both Secretary and lations were particularly incestuous, but Treasurer.15 On the committee were four they were by no means unique. In- men - Ken O’ Reilly Hyland (property deed, , was so concerned developer) Sam Stephenson (architect), that Haughey was granting favours to his Liam McGonagle (solicitor) and Denis friends, he insisted all contracts on build- McCarthy (Odearest) - who were later ing work for the state came across his found to have illegal Ansbacher accounts desk in the Ministry for Industry and 20 run by Des Traynor.16Of these, O’Reilly Commerce. Reflecting on the toxic dy- Hyland is a particularly noteworthy fig- namic between businessmen and politi- ure. His company was involved in the cians that developed under Haughey, Fin- construction of Telephone House, an of- tan O’ Toole had this to say, fice block on Marlborough Street that was In the minds of those who pre-let to the Department of Post and were raising money for Fi- Telegraphy before construction had even anna Fáil...business people 17 begun in 1969. He was also appointed were not giving money be- to the Board of the Irish Central Bank cause they wanted to support even as he held tax dodging accounts that democracy but because they were completely illegal. Another note- perceived that otherwise their worthy character was the aforementioned company would be playing property developer, Matt Gallagher. on a pitch that was slanted As a client of Haughey-Boland, Gal- against them....The other side lagher took advice from Traynor on how of th[e] warm glow of inclusion to minimize his tax bill. In return, Gal- was the fear of exclusion. If lagher built the house that Traynor lived membership of the circle gave in and brought him onto the board of Gal- you the sense that you were lagher Trusts LTD.18During the 1960’s, being sorted out by the Min- Gallagher also made Haughey a lot of ister for Finance...not being money. In 1959, Haughey bought land in one of the lads made you won- North Dublin for £10,000. Ten der whether a rival was being 15C. Keena. The Ansbacher Conspiracy. Dublin. Gill and Macmillan. 2003, 42. 16Ibid, p.43. 17Ibid, p.55. 18Ibid, p.44. 19Ibid, p.45. 20Ibid, p.46. 21F. O’ Toole. Ship of Fools. How Stupidity and Corruption Sank the . . Faber and Faber. 2009, p.42.

19 sorted out ahead of you.21 ways at hand, and as an added bonus, the rich could write off the interest that In this environment tax dodging be- they were supposedly paying as an ex- came almost inevitable, with Des Traynor tra deduction against their taxes.22 To creating an illegal scheme that enabled ensure identities were protected, Traynor 179 of the most powerful people in the developed a system of memorandum ac- country to avoid their taxes over many counts to track who really owned the as- years. During the mid-1970s, the Fine sets, alongside a set of anonymity codes Gael-Labour government brought in a se- for added secrecy. Haughey was known ries of new taxes to pay for a Keynesian- as S8 and S9 for example, but within five style economic expansion. The basic rate years, the Irish Central Bank (ICB) be- of income tax was increased to 35%, but came aware of what was going on. During it could go as high as 80% on marginal a routine inspection in 1976, chartered income. On top of this, the government accounts from the ICB discovered loans introduced taxes on capital for the first backed by off-shore accounts and imme- time in 1975, and a short lived tax on diately realised the potential for a scam. wealth and assets. This was a red rag to a Digging deeper it became obvious that bull for the elites, many of whom began to ‘there could be no reason for these ar- look for ways to avoid their responsibly to rangements other than to reduce the tax the rest of society. Spotting the potential liabilities of the customers in question’.23 to make some money, Des Traynor - who The ICB should have shut it down imme- had since moved into investment banking diately and alerted the Gardaí. Instead, - helped to establish a branch of Guinness they were prepared to accept a personal and Mahon in the . guarantee from Traynor that he would Set up in 1971, Guinness Mahon Cay- cease the operation overtime. man Trust (GMCT) allowed Traynor to To make matters worse the Central take money from wealthy clients under Bank actually doctored its own internal the pretence that it was moving offshore files to refer to the affair as tax avoid- and so out of the clutches of the tax ance instead of more serious - and ille- man. In reality, the money was resting in gal - tax evasion.24 At the time, Ken O’ Stephen’s Green not far from the Central Reilly Hyland was a senior fundraiser for Bank in Dublin. If the amounts were rel- Fianna Fáil, a director of the Irish Cen- atively small, Traynor would make it look tral Bank and a holder of a tax dodging like the cash was on deposit in the Cay- account worth in excess of £600,000.25 mans. With more substantial amounts, Allowing financial crooks to gently wind he would set up fake Trust Funds under down their own operation was an obvi- various pseudonyms. To get the money ous fiction, particularly as the amounts back to his clients, Traynor would cre- flowing through the accounts increased ate the fiction that they were borrow- rapidly once Haughey became Taoiseach. ing money from Guinness and Mahon. In 1979, there was £5 million on de- This meant the client’s money was al- posit, but just three years later this had 22C. Keena. The Ansbacher Conspiracy. Dublin. Gill and Macmillan. 2003, p.30. 23Ibid, p.35. 24Ibid, See Chapter Three. 25Ibid, p.61. 26F. O’ Toole. Ship of Fools. How Stupidity and Corruption Sank the Celtic Tiger. London. Faber and Faber. 2009, p.62.

20 grown to £27 million.26 Despite this, the to the Denis O’ Brien owned, Esat Digi- Central Bank never stepped in to shut phone in 1995. As Minister for Transport, it down or passed on their information Energy and Communications, Lowry was to the Revenue Commissioners. Indeed, found to have secured the highly lucra- the whole sordid affair only came to light tive phone licence for O’ Brien in return in 1997, when corruption payments from for two cash payments totalling £500,000 Ben Dunne to Charles Haughey and for- (roughly e900,000 today) and a further mer Fine Gael Minister, , ‘loan’ of £420,000. Lowry also sought led investigators to accounts for nearly to hike the lease on the Telecom Eire- 200 people. Among them were many of ann headquarters in Marlborough House the inner circle who had bankrolled Fi- at the request of its then landlord, Ben anna Fáil, but it also included Fine Gael Dunne, and was criticised for his ‘ cynical TD, , - the father of cur- and venal abuse of power in office’.28 Dur- rent Minister for Foreign Affairs - mem- ing the period of the phone licence award bers of the Board of Cement Roadstone, O’ Brien’s companies supported 14 Fine a director of Allied Irish Bank and the Gael fundraising events and contributed hotelier P.V. Doyle. Although Haughey £22,000 by way of donations.29 A further deservedly bore the brunt of public anger $50,000 donation was made to Fine Gael during the mid-2000s, what this episode through Telenor on behalf of Esat Digi- really exposed was a model of capitalism phone. This proved exceptionally good tailor made for corruption. Being on the business for O’ Brien who made e317 mil- inside was all mattered and this meant lion from the sale of Esat in 2000, avoid- joining an elite group of bankers, develop- ing $57 million in tax by moving his as- ers and business men all using the state sets to Portugal. Like Haughey, O’ Brien to their own advantage. has never been charged with any offence and has since become Ireland’s richest man. Lowry too has remained virtually Corruption in the Ahern Era unscathed, still serving as an Independent TD for his Tipperary constituency. The findings of the Moriarty Tribunal were explosive. Set up to explore corrup- Set up in the same year as Moriarty, tion payments to Charles Haughey and the spent ten years look- Michael Lowry, it found that Haughey ing at corruption in the Irish planning had taken bribes for many years and process. The first major casualty was for- stolen e250,000 from the medical fund of mer Fianna Fáil Minister for Foreign Af- one of his senior colleagues - Brian Leni- fairs, Ray Burke. In its second interim han.27 The findings against Fine Gael report published in September 2000, the TD, Michael Lowry, primarily related to Tribunal found that Burke had taken the awarding of a mobile phone licence bribes from the businessman Joseph Mur- 27‘Moriarty Tribunal. Haughey took £250,000 From His Sick Friend’s Lifeline Fund’ independent.ie/irish-news/moriarty-tribunal-haughey-took-250000-from-his-sick- friends-lifeline-fund-26352061.html 28‘Moriarty Report Accuses Michael Lowry and Ben Dunne of Corruption’ bocktherobber.com/ 2011/03/moriarty-tribunal-report-accuses-michael-lowry-and-ben-dunne-of-corruption 29‘Lowry helped O’ Brien Get Mobile Licence’ rte.ie/news/2011/0322/298935-moriarty_ background 30F. Connolly. Tom Gilmartin. The Man Who Brought Down a Taoiseach and Exposed Greed and Corruption at the Heart of Irish Politics. Gill and MacMillan, 2013, p.136.

21 phy as well as the builders Michael Bailey, Dublin city official most responsible for Tom Brennan and Joe McGowan.30 In planning at the time.33 When Gilmartin return for favours over many years, Bren- point blank refused, he was told that he nan and McGowan built the house that would ‘ go no fucking place if you want Burke lived in and put money into off- to get this off the ground’.34 Lawlor was shore accounts he controlled. Burke also to prove as good as his word. A long- received a corruption payment from the standing political associate of the beef Principal of Century Radio, Oliver Barry, baron, , Lawlor made life before making a deal with the Criminal hell for Gilmartin with the help of Owen Assets Bureau to hand over e600,000.31 O’ Callaghan. O’Callaghan was a This wasn’t enough, however, as he even- based developer with a long history of tually served 4 1/2 months in jail for giving money to Fianna Fáil, including misleading the Revenue Commissioners £10,000 to the current leader, Michael and under-recoding his income by nearly Martin. He was also recognised as a pow- £200,000.32 Burke tried every trick to erful backroom force in the party, using throw the Tribunal off his scent, but there his money to curry influence.35The Ma- were other witnesses who were willing to hon Tribunal eventually found that O’ talk. Of these, the most important was Callaghan issued £120,000 in bribes in undoubtedly Tom Gilmartin. Originally relation to the Quarryvale development from Sligo, Gilmartin made his money in via Frank Dunlop - the one time direc- the UK construction sector before turn- tor of elections for Fianna Fáil. Before ing his attention to two major develop- this, however, he had to force his way ments in the greater Dublin area. One of into the deal. O’ Callaghan’s first move these involved corruption surrounding the was to buy lands in nearby Neilstown Quarryvale Shopping development that is before threatening to scupper Gilmartin scarcely believable. Over the course of with a rival development less than three a decade, Gilmartin was asked for bribes miles from Quarryvale. The fact that and corruption payments from Taoisigh, this never materialised shows that that government ministers, TD’s and Cllrs’. O’ Callaghan was merely using the Clon- He was also expected to accept a rival dalkin site as leverage into the more lu- developer as his business partner and to crative arrangement. Gilmartin initially pay the City Planning-Czar £100,000. promised to buy the Neilstown lands off Gilmartin was eventually forced out of O’ Callaghan, but with money tight and his own development by a combination the banks breathing down his neck he was of corrupt politicians, developers and Al- eventually forced to bring O’Callaghan lied Irish Bank executives. He recounted directly into the Quarryvale development. these experiences to the Mahon Tribunal, Once he got into the deal, moreover, O’ starting with his dealings with Dublin Callaghan began to scheme with senior Mid-West TD, . executives from AIB to take overall con- According to Gilmartin, Lawlor ini- trol. Gilmartin was eventually forced out tially asked for £100,000 for himself and of the deal in 1996, having faced an end- £100,000 for George Redmond - the less stream of bribery and corruption re- 31Ibid. 32Ibid, p.178. 33Ibid, p.32. 34Ibid, p.33. 35Ibid, p.35.

22 quests. His time in Ireland could have Gilmartin’s claims, but the investigat- been far more successful, however, had ing officers failed to interview Haughey, he agreed to just pay the right people - Lawlor or George Redmond. Meanwhile, starting with the ‘Boss’ himself, Charles a man who introduced himself as ‘Garda Haughey. Burns’ phoned Gilmartin to tell him he When the Fianna Fáil leadership first wasn’t welcome and that he should just heard about the potential for a major ‘ fuck off back to England’.37 The offi- development in Quarryvale, they sum- cial report predictably stated that there moned Gilmartin to government build- was no evidence of any crime having been ings. A few days later, Lawlor brought committed. A month later, Gilmartin Gilmartin to the Dáil for a meeting with met with the Minister for the Environ- Charles Haughey, and a number of Min- ment, Padraig Flynn. Angered and frus- isters, including Padraig Flynn, Bertie trated at the continuing demands for Ahearn, Ray Burke and Albert . bribes and kickbacks, Gilmartin wanted Haughey initially asked whether ‘ Liam Flynn’s support for what would be a ma- is taking good care of you?’ Thereafter, jor aid to employment in Dublin. When Gilmartin was ushered out of the room he met the developer, Flynn indicated to be confronted by an unnamed man in that a substantial donation to Fianna the corridor. Without a hint of irony Fáil could help to curb the unwanted ad- or embarrassment, the unidentified figure vances. Flynn was one of the party trea- handed Gilmartin bank account details in surers at the time (along with Bertie Ah- the Isle of Man and asked for five million ern) and he made it clear that party fi- punts to be deposited into it. Gilmartin nances were in need of a boost. Desperate relays the shake down he experienced in for help, Gilmartin gave Flynn a dona- the following way, tion of £50,000, which was immediately lodged into a bogus non-resident account I was invited by Mr. Lawlor in London - presumably to avoid the to meet the Taoiseach. I went Irish tax authorities. The money even- to meet the Taoiseach. I went tually went to Flynn’s daughter, Beverly to the Dáil. I met the major- Cooper Flynn, who purchased off-shore ity of Ministers...and on my unit trust investments for her parents. way out, just at the door, Flynn issued no receipt and apparently a gentleman asked me, told told no one in the party of the Gilmartin me, because of the amount of donation.38 money I was going to make out of all the help they were Gilmartin’s next shake down came going to give me, I should give from the then Minister for Labour, Bertie them five million pounds....so Ahern. Although Ahern initially helped all in all, I could only come to the Sligo developer, O’ Callaghan soon the conclusion that the place claimed that Ahern had only done so was totally corrupt.36 only because O’ Callaghan had paid him £50,000.39This claim soon gained cre- Gardaí were asked to look into dence, moreover, when Gilmartin was 36Ibid, p.42. 37Ibid, p.48. 38Ibid, p.53. 39Ibid, p.62.

23 tapped up by Ahern loyalist, Cllr Joe Dunlop had scratched out meetings with Burke for £500,000. Gilmartin never paid O’Callaghan, Ahern and a number of high a penny, but it was enough to make him ranking executives from AIB. Taken to- distrust Ahearn’s political motives from gether, this was important circumstantial then on. Meanwhile, O’ Callaghan also evidence, but there was no smoking gun claimed to have given Ahearn e30,000 in that linked Ahern directly to corruption 1992 to stop the shop- payments. ping development from gaining a special tax designation and a substantial pay- ment -between £25,000 and £30,000 - for granting a special tax designation to O’Callaghan’s development in Golden Is- land, .40 The Dáil record shows that Ahearn did grant the designation to O’ Callaghan’s site on the last day before the dissolution of the Dáil in December 1994. The records also reveal a series of Bertie Ahern leaving a sitting of the Mahon Tribunal meetings between O’ Callaghan, Frank Dunlop and Ahern on a range of com- mercially sensitive issues. According to There was enough to dig into Ahern the investigative journalist, Frank Con- finances however, and when they did so, nolly, these often revealed conflicts of in- the tribunal lawyers were amazed by what terest between those making political de- came out. Despite holding Ministries cisions and those looking to benefit from for the entire period in question, Ahern them.41It was Dunlop’s appearance at the never held any bank account in his own Mahon Tribunal that really put the cat name throughout the early 1990’s. He did amongst the pigeons, however. By the have access to accounts in his children’s time of his appearance, Dunlop had been names as well as £50,000 (e90,000) in on the payroll of both O’ Callaghan and cash which he kept in a constituency safe. Fianna Fáil for a number of years, making The accounts he controlled played wit- the fallout from his confessions poten- ness to tens of thousands in transactions tially enormous. To make sure things often denominated in dollars and ster- would go his way, O’ Callaghan paid ling. This left more questions than an- Dunlop £360,000 to help with his ‘le- swers for Ahern, given the fact that his gal fees’. This seemed to have the desired wages were paid in Irish punts. Mean- result, moreover, as Dunlop threw lots of while, it emerged that a busi- muck at junior politicians and Cllr’s, but nessman named Michael Wall had pur- kept the heat away from Ahern and O’ chased the house that Ahern was occupy- Callaghan. It later emerged that Dun- ing and had -apparently unbeknownst to lop had presented a heavily doctored set the politician - decided to leave it to Ah- of records to the tribunal. This came ern in his will. This seemed like a fictional to light when the FBI used high resolu- arrangement to own a property without tion imaging technology to confirm that anyone knowing and with this revelation 40Ibid, pp. 227, 230. 41Ibid, p.140.

24 Ahern came under massive pressure to ex- the property and, (possibly the same) plain himself. £30,000 for refurbishments, to which he In a now infamous statement, Ahearn added a further £50,000 himself. As if claimed that in the midst of his mari- this wasn’t bad enough, the Taoiseach tal breakup he had been given ‘dig outs’ was eventually reduced to claiming he by twelve of his closest friends totalling won some of the unaccounted-for-money £37,000 and a ‘present’ of £8,000 ster- on the horses. The tribunal lawyers - ling by a number of Manchester business- like the rest of the country - didn’t buy men. His problem was that at least one it. Reserving some of their most tren- of them, Padraic O’ Connor, flatly de- chant criticism for Ahern, the tribunal nied Ahearn’s whip around claims and rejected as ‘untrue’ his explanation for five of the twelve ‘friends’ were politi- the source of substantial funds flowing cal appointees to various state boards. through his accounts in the early 1990’s. The story just didn’t seem credible and In contrast, the tribunal lawyers believed pretty quickly most people thought that Gilmartin’s claims about O’ Callaghan the Taoiseach was lying. Speaking in the and noted that a lodgement of £30,000 Dáil, - who himself took and had gone into an account controlled by then returned money to O’ Callaghan - Ahern on the same day that he met Frank had this to say about the sordid affair, Dunlop.43 Accepting that he had also solicited money directly from Gilmartin, Do you believe that busi- the tribunal labelled this, along with a nessmen happen along to a similar demand from , as posh hotel in Manchester to ‘entirely inappropriate and an abuse of hear any old Joe Soap lec- power and government authority’.44 ture on the Irish economy and then have an impromptu whip In all, it estimated that Ahern had around....In normal life you failed to account for £165,000 passing get gifts from friends and you through accounts he controlled, although take loans from strangers. Yet - due to the lack of smoking gun evidence Mr. Ahearn says he got loans - it stopped short of convicting him of tak- from friends and gifts from ing bribes. During a decade long investi- strangers....Why if there was gation, it also found that politicians from £50,000 in savings was it nec- Fianna Fáil, Fine Gael and the Progres- essary to raise a bank loan sive Democrats were implicated in taking and if there was a bank loan, bribes, with Fianna Fáil members partic- why was it necessary to have ularly corrupt due to their longer periods a whip around to reduce the in office. Alongside this, the Gardaí had bank loan?42 failed to properly investigate Gilmartin’s claims and executives from Allied Irish Ahern’s outlandish claims were not Bank had actively colluded with illicit finished there. He subsequently told payments to local Cllr’s in order to secure tribunal lawyers that Wall had given votes for the Quarryvale development.45 him £30,000 to pay the stamp duty on Coming alongside the Moriarty revela- 42Ibid. 43Ibid, p.258. 44Ibid, p.263. 45Ibid, p.268.

25 tions, Mahon proved beyond reasonable almost inevitable, with a powerful nexus doubt that fraud and deception were rife of politicians, bankers and property de- in the higher echelons of Irish society with velopers turning Ireland into their own key figures in government, planning, con- personal fiefdom during the last quarter struction and banking all using their po- of the 20th century. sitions to defraud the public.46 This was more than a few bad apples. It was a sys- Things were particularly bad during tem that rewarded corruption and pun- the period in question, but as the recent ished those not willing to go along with Apple judgement proves, not much has it. really changed. In 2016, the European Commission exposed the fact that Ireland had facilitated one of the biggest corpora- Concluding Remarks tions in the world to avoid e13 billion in unpaid taxes. This is merely the tip of the This essay is an historical reminder of the iceberg, moreover, as the rest of the cor- corruption that characterised Irish soci- porate sector still avails of all manner of ety during the final decades of the 20th cosy loopholes to pay an effective tax rate century. Most people know that Haughey of around 4% per annum.47 If one aspect lived way beyond his official salary and of Irish capitalism is breaking the rules to that Ahern claimed to have won some of support multinationals the other is sup- his money on the horses. Less people will porting domestic capital through patron- remember the finer details of the various age and state resources. When the Irish scandals, however, and even fewer will re- developers went to the wall in 2008, they call just how critical the tribunal findings were bailed out by tax payers through really were. This essay aims to remind the establishment of NAMA. When Irish them. It also aims to debunk the myth banks suffered the same fate, they re- of a ‘few bad apples’ by showing just how ceived e64 billion through the Blanket endemic the corruption really was. The Bank Guarantee Scheme. Neither were roots of this corruption go back to the very grateful, however. Instead of build- way that Irish capitalism was developed. ing much needed houses, the Irish de- As a post-colonial state, Irish capitalism velopers have colluded with international has historically been weak, except in ar- vulture funds to monopolise land-banks eas like banking and construction that re- and drive up prices. This has created the lied on Foreign Direct Investment. Since worst housing and homelessness crisis in the 1950’s the Irish state has used its the history of the state. The behaviour sovereignty to grant favours to foreign in- of the bankers has, if anything, been even vestors, whilst selecting favoured domes- worse. Tens of thousands of people were tic firms for special (often illegal) priv- illegally moved off tracker mortgages, and ileges. This, in turn, created overbear- for the rest, their reward has been loans ing and demanding multinationals, a sub- and mortgages repayments that are dou- servient state apparatus and a domestic ble the levels on the European continent. capitalist class eager to cosy up to po- Despite such appalling behaviour, succes- litical decision makers. In these condi- sive governments have sat on their hands, tions, and corruption became allowing bankers and developers to lord it 46Ibid. 47Transform - Housing, Jobs and Public Services Solidarity-People Before Profit Budget Statement pbp.ie/alternative_budget_2018

26 over the wider population. The faces at talism still relies on a cosy elite who make the top may have changed, but Irish capi- up the rules as they go along.

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