Goodman's C&D investment a boost for Reynolds firm

BACKGROUNDIt's been over a decade since beef tribunal investigated Goodman's dealings with Albert Reynolds

LARRY GOODMAN'S investment in C&D Foods, the Co Longford petfood company set up in 1969 by Albert Reynolds, provides a fresh start for a business controlled since 1990 by Philip Reynolds, a son of the former taoiseach.

After a fire in 2006 devastated its plant at Edgeworthstown, Mr Goodman's arrival in the company is designed to support a rapid international expansion.

The investment comes more than a decade after the beef tribunal, in which Albert Reynolds was the central political figure, investigated his controversial allocation of State export credit insurance to Mr Goodman for contracts with Saddam Hussein's regime in Iraq.

Now well into his retirement, Albert Reynolds himself is no longer involved in C&D as a shareholder or manager.

Philip Reynolds said Mr Goodman's firm Irish Food Processors (IFP) approached C&D with the investment proposal. He accepted the offer because IFP's involvement would provide the capacity to "grow the business quicker and sooner than might have been the case if we have had been a stand-alone family business".

Albert Reynolds was minister for industry and commerce between March 1987 and November 1998 and was responsible for the allocation of the export credit insurance to Goodman International in the aftermath of the Iran-Iraq war.

Iraq had been "off-cover" when Mr Reynolds came into office because it was considered to be too great a risk.

He lifted the ban within a few weeks of becoming minister, allocating nearly £200 million in credit insurance to Goodman International and a separate group, Hibernia Meats, in 1987 and another £100 million in 1998 before he became minister for finance.

The insurance was cancelled in 1989 by then Progressive Democrats leader Des O'Malley in his capacity as minister for industry and commerce.

This led to a legal action for damages by Mr Goodman, a claim he withdrew in 2003.

Evidence Mr O'Malley gave to the tribunal about the sums being claimed by Mr Goodman prompted a serious clash with Mr Reynolds, who was then taoiseach. The rift ultimately led to the collapse of the first Fianna Fáil-PD coalition.

The tribunal report in 1994 said Mr Reynolds's decision to grant the insurance favoured Mr Goodman's company and Hibernia in the sense that both were beneficiaries of the decision.

However, the tribunal qualified that remark by saying Mr Reynolds took his decisions "having regard to his conception of the requirements of the national interest".

Stating that he and the Government were entitled to take decisions in the national interest, the report also said there was no evidence to suggest that Mr Reynolds' decisions were in any way based on improper motives, either political or personal.

However, the tribunal said parts of the scheme should be subjected in the future to closer arrangements with the minister for finance. The "national interest" would require that a "more detailed investigation or analysis of the benefits to the economy of such decisions" should have been carried out.