Reynolds put to test on vindication over export credit insurance, beef tribunal

AT THE core of Albert Reynolds's case against the Sunday Times was his insistence that he always gave the Dail all the information he had on whatever subject was being debated.

Referring in the first instance to his speech on the Harry Whelehan affair, he insisted: "I gave them all the information that I had available to me when I was speaking to the House. It is one of the most serious matters. A politician has to be very conscious at all times that whatever information is available to him, and any particular research, he should impart it to the House."

The Sunday Times, for its part, sought to show that Mr Reynolds had not only misled the Dail by failing to tell it about the Duggan case, but that he was also "not telling the truth" in two previous instances.

One such instance was a speech he made in the Dail in June 1988, introducing the Export Guarantees Bill, which would raise the limit for export credit insurance from £300 million to £500 million. The other was his claim to have been "totally vindicated" by the report of the beef tribunal.

The first issue was important because, in his speech to the Dail in June 1988, Mr Reynolds did not "impart to the House" the information that the reason for the Bill was to allow him to allocate huge amounts of export credit insurance to two companies, Goodman International and Hibernia Meats, which wanted to export beef to Iraq.

In October 1992, in his sworn evidence to the beef tribunal, Mr Reynolds said he could not tell the Dail the specific reason for the increase because there was a need for secrecy.

His evidence then was: "If I might give you some insight as to why it might not be more elaborate than that. You must appreciate Iraq and Iran were engaged in a war, that we were suppliers to both markets, that any publicity in relation to how much we were giving to Iraq and how much we were giving to Iran was sensitive, especially sensitive to Iran ... It would be extremely sensitive, and that would be reflected in the minds of the civil servants who would have prepared that speech for the Dail."

Four years later, however, his sworn evidence to the High Court in London said there was no secret about export credit for Iraq at all. His replies on the subject to questions from his own counsel Lord Williams QC, are:

Q: It is suggested that you were trying to hide the fact that Irish beef was going to Iraq. Were you?

A: No. They were one of our biggest customers.

Q: Was that a secret at all?

A: Not at all. Sure, everybody knew that.

Q: Was it well known in the public newspapers?

A: Of course it was. It was well known.

MR REYNOLDS offered the jury another explanation for his failure to disclose the specific intention behind the legislation - that he could not predict what he might do with the extra money. He told counsel for the Sunday Times, Mr James Price QC, that "specific figures as to where it might go to in the future were not given or were not asked, and I will tell you the reason why because nobody could foresee where they might go."

It has long been a matter of public record, however, that Mr Reynolds did foresee at the time where most of the extra credit insurance would go to the beef companies in the Iraqi market.

He told his officials that, at the Cabinet meeting which approved the new legislation, not only had Iraq been discussed, but it had been decided which companies would get the credits: Goodman and Hibernia. And he accepted, both at the beef tribunal and in London, that the reason for the legislation was to allow him to give more credit for beef going to Iraq.

The Sunday Times did not, however, ask Mr Reynolds to reconcile these facts with his statement that "nobody could foresee" where the extra credits would go.

The other issue on which the Sunday Times tried to show that Mr Reynolds was "not telling the truth" was that of his claim, on the night of July 29th, 1994, to have been vindicated by the beef tribunal report. This claim was made in a press statement which put two quotations from the report together without indicating that they were, in fact, separated by over 30 pages of text.

In his evidence, Mr Reynolds seemed to suggest that this statement was the responsibility of his lawyers and of his press secretary, Mr Sean Duignan. Mr Price put it to him: "I would suggest that `totally vindicated' was just simply grossly misleading, Mr Reynolds.

Mr Reynolds replied: "My legal team sat down and did an analysis, and that was the conclusion they came to, and Mr Duignan, whom we have mentioned earlier, consequently put out a statement."

Mr Duignan's account of the event in his book One Spin on the Merry-Go-Round, however, puts it in a somewhat different perspective: "`OK', said Reynolds, `I've taken this shit long enough. I'm not taking another minute of it. Tell the pol corrs I'm vindicated, Diggy.' I hesitated: `Taoiseach, Labour are going to go spare. They've warned me against this.' ... Reynolds said: They told the dogs in the street they would bring me down on this if they didn't like the judgment. Now, I've been cleared, and I don't need their permission to tell it as it is Then as I made no move, he glanced at his watch and said: `You're already losing the country editions of the papers, Diggy. Now, if you don't do it, I'll bloody well do it myself.'"

In London, as he had done in Dublin, Mr Reynolds repeatedly insisted that the tribunal report had indeed vindicated, not only himself, but the entire government of which he was a member. He told the jury that "every allegation against the government and against me as minister was thrown out by the learned judge."

He also maintained that the tribunal report had made no findings critical of himself personally. These claims are not, however, in keeping with the findings made by Mr Justice Hamilton.

SOME allegations, especially those implying an undue closeness between members of that government and Mr Larry Goodman were indeed rejected. On some of the most important allegations, the judge declared himself unable to make findings because of the action on Cabinet confidentiality taken by Mr Reynolds's attorney general. But the report also contained severe criticisms of both Mr Reynolds personally and of the government as a whole.

The central allegations against Mr Reynolds - that he confined export credit cover for beef to Iraq to just two companies and that he issued huge amounts of cover for non-Irish beef - were entirely sustained. The "learned judge" found that Mr Reynolds had failed to protect the national interest by asking where the beef was coming from.

He found that Mr Reynolds had "exposed the State to a potential liability of well in excess of £100 million" even though "the benefits to the Irish economy arising from such exports were illusory rather than real". And he found that the government had acted outside the law in its handling of an IDA plan for investment in the Goodman group. The minister responsible for the IDA at the time was Mr Reynolds

In his sworn evidence at the Old Bailey, Mr Reynolds made an even more puzzling claim. Having claimed vindication for himself and the government of the day, he extended that claim to all allegations against Larry Goodman. He told Mr Price: "I hope you are not going to read just one part of one finding of the beef tribunal. I hope you are going to go on to say that all of the allegations of impropriety against Mr Goodman and all of that were all thrown out, both in relation to me, my predecessor, and my own party."

In fact, it is clear from the tribunal report that Mr Goodman abused the export credit insurance scheme. His companies though not Mr Goodman personally - were found to have engaged in a series of large-scale abuses of the EU's beef intervention scheme, for which Mr Goodman "must accept responsibility".

IF THESE apparent contradictions tended to confuse an already complex saga, Mr Reynolds did offer one enlightening insight. He gave the Old Bailey jury an explanation for his willingness to risk huge sums of money on the good faith of the Iraqi regime that he did not offer to the beef tribunal.

If Ireland exported £100 million worth of beef to Iraq, he said, the exports would get £90 million in subsidies from the EU. This would have a "trickle-down effect to the economy, creating more jobs, transport, printing, packaging, you name it ... So what's the risk to the Irish national economy, to an Irish government? It's even less than 10 per cent. It's probably closer to 5 per cent. So in effect, if you never got paid for the £100 million of beef that was shipped to Iraq, the loss to the national economy would be in the region of £5 million ... To any businessman I suggest that the risk to the national economy from a government point of view was minimalised to that extent."

In Mr Reynolds's calculation, in other words, it was no great disaster if - as subsequently transpired - the Iraqis failed to pay up. The taxpayer would lose tens of millions of pounds but this loss would be balanced by the gains made by private individuals, chiefly Mr Goodman. In his idea of the "national economy", the difference between public funds and private wealth seems not to have been at all clear.