Who gave what to whom in Fianna Fáil in the late 1980s? Mark Brennock, Chief Political Correspondent reports
When it first emerged in the late 1990s that property developer Tom Gilmartin had gone to the office of Pádraig Flynn (then minister for the environment and party treasurer) in June 1989 and given him a cheque for £50,000, the event appeared remarkable. It is now clear that in June 1989, in the twilight of Charles Haughey's minority Fianna Fáil government, the event was quite routine.
The previous month, Haughey had dissolved the Dáil and called a general election after 29 months heading a minority government. It was to be his fifth failed attempt at winning an overall majority.
Money started flowing at an extraordinary pace from the rich to the then taoiseach, two of his ministers and his party.
That month, £150,000 was paid by Ben Dunne to Haughey in a transaction organised by Des Traynor on Haughey's behalf. At the same time, Haughey was taking a hands-on approach to the simultaneous fundraising being carried out for his party during the campaign.
The party's financial controller, SeáFleming, recorded some 900 contributions during the campaign, and issued receipts as a matter of routine. However, in relation to 19 of the largest contributions - which had been solicited personally by Haughey - the then taoiseach asked Fleming to send the receipts to him, not to the donors, and to make them out to "anonymous".
These were big sums: one was for £25,000 and another for £50,000, for example. His office handled all or most of the money involved in these donations. We know now that the amount received by Fianna Fáil may have been only a fraction of what was given to Haughey.
On June 14th, the day before polling day, Dr Michael Smurfit made a donation to Fianna Fáil of £60,000 sterling through Des Traynor, according to Dr Smurfit's evidence to the Moriarty Tribunal. The money was routed through the offshore fund also used to funnel money from Ben Dunne to Haughey personally.
There was a lot of financial activity on and around polling day, June 15th.
On that day the Goodman organisation gave £50,000 to Fianna Fáil. This was also listed as anonymous at the direction of Haughey.
Two days later, the Goodman organisation gave another cheque, this time for £25,000. This one was described at the Moriarty Tribunal as being for the benefit of the Brian Lenihan fund. It was signed by Larry Goodman and made out to "Fianna Fáil (Party Leadership Fund)" and seems not to have been used for Lenihan's benefit.
On the morning of polling day, the developer Mark Kavanagh got up particularly early to travel to Kinsealy. He told the Moriarty Tribunal he had been convinced of the necessity to support Fianna Fáil's return to government because Fine Gael had appeared to be lukewarm about the IFSC project in which he was involved.
He gave £100,000 to Haughey in his Kinsealy home in the following form: one cheque for £25,000 made out to Fianna Fáil; and three drafts for £25,000 each, made out to cash. He had been asked to make the donation in this way, but could not remember by whom.
Just the cheque went to Fianna Fáil. The three drafts were lodged to Haughey's Guinness & Mahon Bank account. The proceeds of one were withdrawn in cash. Two of them were used to buy another draft for £50,000 which Haughey gave to Fianna Fáil, saying it was from Dr Smurfit. This was credited to anonymous, and the receipt given to Haughey.
The day after polling day, a cheque for £20,000 co-signed by Bertie Ahern and drawn on the Fianna Fáil leader's allowance was lodged to an account of Charles Haughey.
Despite the dizzying pace of the financial transactions on polling day, Haughey found time to vote.
He arrived at Kinsealy boys' national school two or three minutes after it opened for voting. Ray Burke was waiting to greet him. "It's a lovely morning. Everything's going well. I feel great," said Haughey to reporters.
Cash for Burke
Ray Burke was tanned and that day may have been feeling great too. He had been taking in lots of money in the preceding weeks, not least from people who had benefited from his decisions as minister for communications.
Three months earlier, on March 14th, he had issued a directive fixing the level of charges which RTÉ could levy on Century Communications - co-founded by Oliver Barry - for the use of its national television and radio transmission service. The following year Burke made further decisions benefiting Century, including introducing a cap on RTÉ's advertising revenue.
In May 1989 Barry collected £35,000 in cash from his bank and brought it to Ray Burke's office where he gave it to the minister. Burke lodged it, together with a further £4,500 he received in donations around that time, to his bank on May 31st.
Hot on the heels of Barry's cash came £30,000 in June 1989 from Rennicks, a subsidiary of Dr Tony O'Reilly's Fitzwilton. Burke refused to pass on more than £10,000 of this to Fianna Fáil. Dr O'Reilly's companies had already been very successful in receiving 20 of the 29 licences to operate monopoly MMDS television services around the State under the new communications regime established by Burke.
That was the same month of the now famous visit by executives of the development company JMSE, including James Gogarty, to Burke's house with £30,000 in cash a few days before polling day. According to Gogarty, this was to encourage him to use his influence on Fianna Fáil councillors to rezone some land.
So when Gilmartin arrived in the Custom House to see Flynn that month, he was right to think, as he told the High Court over two years ago, that a donation of £10,000 or £20,000 might seem "derisory". He told the High Court that he complained to Flynn about the "carry-on" of Liam Lawlor and George Redmond, who, he said, sought substantial sums of money from him in exchange for support for his plans to develop Quarryvale and Bachelors Walk. Flynn said a substantial donation to Fianna Fáil might help. Gilmartin said that, in Flynn's office in June 1989, he wrote the cheques for £50,000, leaving blank the space for the payee's name, and left it on Flynn's desk.
Gilmartin may not have known that Redmond retired from Dublin County Council that month.
Haughey's debts
In view of the hundreds of thousands of pounds in donations Haughey and some of his ministers were to receive and evade tax on in the next two years, Haughey's comments on the national finances in March 1987 just after becoming taoiseach now appear deeply ironic. The government would have to cut public spending even more severely than it had planned, he said, as there was no scope for exacting further taxation.
When he first became taoiseach in 1979 Haughey had had debts of £1.143 million. In 1987, it is known that he had a bank overdraft of more than £250,000.
This was the balance after six cheques from Dunnes Stores, amounting to £32,000, had been lodged to Guinness & Mahon for the benefit of Haughey at the start of the February 1987 campaign.
The Goodman organisation gave Fianna Fáil a substantial political donation of £50,000 in February 1987, the month of the election, but it was not enough to win Haughey the Dáil majority he wanted. Fianna Fáil won 81 seats in February 1987, three short of an overall majority.
Haughey's government and the Goodman organisation were to cross paths a lot in the subsequent couple of years. On Friday, May 15th, 1987 negotiations between the Goodman organisation and the IDA over State support for a massive company development plan had broken down, and the Goodman side had walked out.
The IDA had offered £13 million in grants: the Goodman side wanted £90 million.
The following Monday at 7.30 a.m., Larry Goodman met Charles Haughey at Kinsealy. After the meeting, Haughey contacted Albert Reynolds, then minister for industry and commerce and Joe Walsh, then junior minister for food, to tell them to "get the negotiations back on the rails".
Later that day, Haughey addressed the annual dinner of the Local Government and Public Services Union. The State did not have the resources to keep financing the health services at existing levels, he said. If the government had not acted decisively that year to make the necessary cuts, the national debt would have grown to £35 billion. At that point, he warned, the country would not even be able to borrow what it needed to keep going.
Decisive action had been taken in relation to Haughey's own finances too. That month £282,000 sterling from Dunnes Stores (Bangor) was lodged in accounts in Guinness & Mahon, paying off his £261,000 overdraft with a bit to spare.
On June 16th, Goodman met Haughey again in Kinsealy. Two days later both men attended a press conference with Joe Walsh to announce a £260 million investment plan for the company. There were to be substantial cheap loans, and £25 million in grants.
The IDA press release on the day warned that the IDA expenditure "will be related to the company meeting its targets". This performance clause was strongly opposed by Goodman.
In September 1987, the government provided Goodman International with another enormous favour by reversing the existing policy of refusing to provide export credit insurance for exports to Iraq. According to the Beef Tribunal, the government went on to put more than £200 million of taxpayers' money at risk.
Haughey's own finances remained in difficulty. In November 1987, Des Traynor phoned Noel Fox, a close adviser and friend of Ben Dunne. Haughey was in financial trouble, he said.
Dunne agreed to help within a few months but Traynor said the first instalment couldn't wait. Dunne sent a cheque for the sterling equivalent of £205,000, dated December 1st, 1987. Shortly afterwards, Haughey paid off a £105,000 loan from the ACC.
He may, therefore, have been speaking with feeling when on December 10th he reflected to the annual Fianna Fáil president's dinner on the year that had passed. It had been a year of outstanding achievement for Fianna Fáil. The government had inherited an economic and financial crisis and had greatly restored the situation, rallied the people and brought back confidence and hope.
In early 1988, the Goodman organisation was stepping up the pressure to have the performance clause dropped from the IDA deal. On March 1st, the IDA refused once more. That afternoon, Larry Goodman met Haughey again. According to the Beef Tribunal report, the next Cabinet meeting determined that the performance clause should be removed - incidentally, a decision in excess of the government's powers.
Tom Gilmartin, meanwhile, was seeking State support for his plans. He said he was told that if he wanted to progress his plans, he would have to deal with Liam Lawlor, Dublin West Fianna Fáil TD. In May 1988, Lawlor introduced Gilmartin to George Redmond, Assistant Dublin City Manager and, according to Gilmartin, Lawlor asked for £100,000 for his services on Quarryvale. Gilmartin says he started paying Lawlor a consultancy fee of £3,500 a month in respect of the Bachelors Walk site.
In June 1988, Haughey was just a few days out of hospital after treatment for a kidney stone complaint when Traynor again made contact with Ben Dunne's adviser, Noel Fox. This time he wanted, and got, about £500,000.
Gilmartin meeting
It was on February 1st, 1989, according to Gilmartin, that he met the taoiseach and a group of ministers in Leinster House to discuss his plans. Outside that meeting, he says he saw Liam Lawlor and was approached by a man he did not recognise and asked to deposit £5 million in an Isle of Man bank account. The only minister who recalls such a meeting is Mary O'Rourke.
In May came the dissolution of the Dáil. Despite the avalanche of money during the campaign Fianna Fáil lost four seats. Haughey led Fianna Fáil into its first coalition government, with the Progressive Democrats. A calamitous loss of power was avoided. Burke, while moving from the Department of Industry and Commerce to the Department of Justice, took the Communications portfolio with him and continued to try to bring about what he later called "a fairer, competitive environment" in broadcasting. Flynn remained at the Department of the Environment. Liam Lawlor had been re-elected with 73 votes to spare.
Gilmartin's plans were to come to nothing, Quarryvale eventually being developed by a rival, Owen O'Callaghan.
Gilmartin is finally expected to tell his story at the Mahon tribunal in the next few months, but his story is but a small part of the extraordinary relationship between businesspeople and Fianna Fáil in government in the recent past.
What we know now is much more than we knew then, but probably much less than the whole truth.
£50,000: how much it was worth
In 1989:
£41,000 Taoiseach's salary
£30,600 Tánaiste's salary
£27,140 A minister's salary
£24,700 A TD's salary
£53,863 Cost of average new house in Dublin
£45,818 Cost of average new house outside Dublin
£45,000 BMW 5 series code 535 manual