Bertie Ahern: The Man Who Blew the Boom: Power & Money (30 page)

But the policy had many critics. Some pointed to the potential for disruption of the civil and public service through the increased need for travel within a dispersed service. Others spoke of the possible loss of corporate knowledge that would occur when some officials moved and when others, who chose to remain in Dublin, were allocated new roles, possibly in new departments or agencies. It emerged that the more senior grades, who tended to be older and have established roots in their communities, were less inclined to opt to move. There was a danger of a widespread loss of senior management. Dan Murphy of the Public Service Executive Union described the idea as a ‘nonsense’ that could not be implemented. It was a ‘cynical political ploy’. Other critics were suspicious about a programme that involved expenditure of up to €1 billion on property deals being overseen by a Government that had such strong links with property developers and builders. According to Quinn,

no-one knows who was tipped off about what sites were going to be bought, what towns, what places would be chosen . . . And again this was McCreevy’s criminal abuse, in my view, of the budgetary process, to prevent the civil service from knowing what was going on. The secretaries-general were only told about the decentralisation plan 48 hours before the budget was announced. And it was unsustainable. It didn’t even adhere with the government’s own spatial plan.

A Government sub-committee was set up, and in time Phil Flynn, a former trade unionist, Sinn Féin activist and then chairman of Bank of Scotland (Ireland), was appointed by Ahern to head the decentralisation process. Direct political responsibility was given to a new
PD
deputy, Tom Parlon, who was Minister of State at the Department of Finance.

However, if the hope had been that the decentralisation plan would revive Fianna Fáil’s popularity, it was a forlorn one. The European and local elections were a disaster for the party. In the local elections it gained only 32 per cent of the national vote and lost 80 out of its 382 council seats. Fine Gael, by comparison, got 28 per cent of the poll, reversing the slide in its popularity in 2002. Sinn Féin saw a 150 per cent increase in its representation, to 54 seats. It also did well in the European elections, with Mary Lou McDonald being elected for Dublin. Royston Brady was the Fianna Fáil candidate in Dublin. His high-profile, well-funded campaign—Des Richardson was in charge of finance—collapsed spectacularly, and afterwards he had a row with Richardson over who had to pay his outstanding bills. Fianna Fáil got 4 seats, compared with 6 in 1999.

The first mention of the need for a Government reshuffle emerged on the very day of the election results. Soon afterwards, reports began to appear in the newspapers that McCreevy might be taking on the position of European commissioner—a surprising development considering the attitude he had displayed towards Europe during the row with the Commission over his budgets of 2000 and 2001. McCreevy consulted his advisers, and journalists were briefed against the idea; but the reports continued to appear. Most political observers believed that Ahern was behind it all. Nevertheless, when McCreevy yielded to the inevitable and went to Ahern saying he wanted the post, and Ahern nominated him for it, Ahern spoke publicly about his regret at losing his Minister for Finance.

With McCreevy despatched to Brussels (where he was to be hugely unpopular), Ahern reshuffled his Government. Brian Cowen was made Minister for Finance. Cowen made it clear when announcing his first budget that he was working in co-operation with his Taoiseach and his other Government colleagues. Harney surprised everyone, including her party colleagues, by requesting a move to the Department of Health. Her move away from Enterprise, combined with McCreevy’s move to Brussels, meant that the
PD
s’ view of economic policy was severely weakened within the Government. Séamus Brennan, another minister who was seen as having liberal economic views, was moved from Transport to Social Welfare. The move came only after two terse meetings between him and Ahern, during one of which Ahern said he might be moved from the Government altogether. Brennan managed to argue himself back into the Government, but not into an economic portfolio.

The new Government was Mary Harney (Tánaiste and Health and Children), Brian Cowen (Finance), Dermot Ahern (Foreign Affairs), Séamus Brennan (Social and Family Affairs), Micheál Martin (Enterprise, Trade and Employment), Mary Coughlan (Agriculture, Fisheries and Food), Michael McDowell (Justice, Equality and Law Reform), Mary Hanafin (Education and Science), John O’Donoghue (Arts, Sport and Tourism), Éamon Ó Cuív (Community, Rural and Gaeltacht Affairs), Willie O’Dea (Defence), Noel Dempsey (Communications, Marine and Natural Resources), Martin Cullen (Transport) and Dick Roche (Environment, Heritage and Local Government).

The absence of McCreevy from the Government table meant that Ahern could now assume control of his Government in a way he hadn’t done before. The revival in economic growth from 2004 resulted in funds beginning to flow with force into the exchequer again, giving the Government the scope to authorise spending on increased employment and pay rates in the public service, as well as increases on a range of transfer payments. Once again, public expenditure was shooting up as Ahern set his sights on the next general election.

Martin, who was moved to Enterprise, Trade and Employment from Health, thinks Ahern took greater charge of his Government after the 2004 election. ‘Seán Healy coming to Inchydoney and so on, and a social welfare focus in the budgets going into the election. That government consolidated things.’

Healy was a priest and leading light in the Conference of Religious of Ireland, who had throughout the boom years been a constant critic of the Government and of the effect of its policies on the distribution of income. Ahern invited him to address a gathering of the Fianna Fáil parliamentary party in Inchydoney in west Cork in the first week of September 2004, in an effort to alter the public’s impression of Fianna Fáil as ‘right wing’ or uncaring. Healy’s high-profile address called on the Government to focus more on the poor, who had been left behind despite the commendable economic growth of the previous decade. Ahern went for a walk on the beach with his jacket strung over his shoulder, accompanied by his new Minister for Finance and Minister for Education, Mary Hanafin, who walked barefoot, her sandals dangling from one hand. The relaxed trio were surrounded by a scrum of excited camera crews from the national media.

Reporters noted that McCreevy didn’t attend Healy’s address. They also noted that McCreevy, while up to then widely praised as an architect of the low-tax, high-growth Ireland, was now being spoken of within the party as the Minister for Finance who had failed to consult his party colleagues—or at times even his Taoiseach—before introducing the sort of policies that had led Fianna Fáil to the disaster that was the 2004 election. Ahern, in his memoirs, said it bothered him a great deal at the time that the party was seen as ‘Thatcherite’ and uncaring.

Before his move from Health, Martin oversaw the introduction of the world’s first nationwide ban on smoking in the work-place. Ahern was noted for his view that decisions with a capacity to annoy someone, somewhere were best avoided. He was nervous about a measure that was heavily opposed by some—including the powerful publicans’ lobby—and Martin was unsure about exactly what Ahern’s stance on the matter was. According to Martin, Ahern would often keep his own views secret, and at times he even confused the Government as to what his real views on a matter were.

You had to decode Bertie. John O’Donoghue told me that, way back. You never quite knew where he was at some times on a particular issue. There were some issues, not all issues, where he allowed the debate go around the cabinet, and I’d say it’s plausible he would have started off with a proposition and ended up with a position he was quite comfortable with at the end of the day. He was quite a cunning politician.

I was always trying to work out where he was on the smoking ban. He was always supportive of me in public and in the Cabinet. He never let the side down in Cabinet in front of other ministers, and he was brilliant when the Galway guy rebelled against it. So you were always wondering. I remember the day I announced it, he was downstairs to me afterwards. ‘What are you doing? What are you doing?’ He thought I was doing it immediately. Obviously some of the guys had got to him. I said, ‘I’m doing it in twelve months’ time,’ and he said, ‘Ah,’ and you could see the relief, thinking obviously we could modify that by the time twelve months came.

According to Ahern himself in the ‘Bertie’ documentary, he would sometimes deliberately mislead his Government colleagues about what his position was on a certain subject in order to see what views they would express.

The makeover of the party’s image after the 2004 election was dubbed a success by Mark Brennock in his end-of-year political review in the
Irish Times
. The new caring image had replaced the hard ‘right-wing’ image, with the shift being in part assisted by Brennock’s own interview with Ahern, published in the paper in the period after Inchydoney. During that interview Brennock remarked on Ahern’s apparent lack of interest in accumulating personal wealth, and the Taoiseach responded:

I don’t. People might not believe this, but I have a very socialist view on life. I have it in my mind that I own the Phoenix Park. I own the Botanical Gardens. I own Dublin Zoo. And I don’t feel I need to own any of these things. They are there. I don’t feel I need to own a huge house with a huge glasshouse when I can go down the road ten minutes and do it [visit the Botanical Gardens]. It’s just the way I think about things. What is the best form of equality? It’s the fact that the richest family in this area can go on a Sunday afternoon to the Bots, and the poorest family can too. They can both share the same things.

According to Martin, it was in about 2004 that Ahern’s attitude towards his role changed.

Bertie would have a few pints with his ministers two or three times a year. At Christmas and so on. But he did that less in the latter years. I think he got more presidential in the second half. I think some of his advisers said, Get more like Clinton, and I think that was a mistake. His first seven years he was more engaged with ministers, and I think he did better because of that.

Meanwhile, the planning tribunal was continuing with its confidential inquiries into allegations that concerned Ahern. From comments made during its proceedings it appears that as far back as 1999 the Luton-based Irish property developer Thomas Gilmartin had told it about allegations involving Ahern. Gilmartin said he had been told by the Cork developer Owen O’Callaghan that O’Callaghan had made payments to Ahern. It is not clear when exactly Ahern first found out what was going on, but on 15 October 2004 the tribunal wrote to tell him of Gilmartin’s allegation that he had been told by O’Callaghan of two payments, one of £30,000 and one of £50,000. Ahern was being represented by Liam Guidera of Frank Ward and Company, the law firm that acted for Fianna Fáil. Guidera wrote back on Ahern’s behalf and asked when the payments were supposed to have been made. On November 2004 the tribunal informed Ahern that Gilmartin said that he recalled O’Callaghan telling him in or around 1992 that he had given £50,000 to Ahern in 1989, and that the £30,000 was supposed to have been paid over between January 1989 and December 1992. Ahern was also told in April 2005 that a claim had been made to the tribunal that he had received a cut of a €150,000 payment that O’Callaghan had made to Albert Reynolds. This payment related to tax designation being assigned to a site O’Callaghan owned at Golden Island, Athlone. The assignment of tax designation to the site was one of Ahern’s last acts, if not his last, as Minister for Finance in the Reynolds Government. All the parties involved in these claims denied that any of the payments had ever been made.

This highly confidential correspondence between Ahern’s solicitors and the tribunal that his Government had established was the beginning of a cat-and-mouse game for very high stakes which would ultimately bring Ahern’s political career to a premature end. Its effect on his performance as Taoiseach during the period can only be imagined.

The issue of the tribunal and payments to Ahern involved a very bizarre prologue. The then
Sunday Business Post
journalist Frank Connolly was contacted in his office one day in 2000 by a Cork businessman and property dealer, Denis ‘Starry’ O’Brien. O’Brien claimed that he had handed over cash to Ahern in a Dublin car park after a major sporting fixture and that he had been acting for O’Callaghan. Ahern was Minister for Labour at the time of the alleged payment. Connolly did not know O’Brien, but the Corkman produced documents supposedly showing the money being lodged, and then withdrawn, from an Irish Nationwide account. Connolly eventually wrote a story saying that an alleged payment to a senior figure in Fianna Fáil was being investigated by the planning tribunal. The story was published on Easter Sunday, 2000.

Ahern had been contacted by the tribunal and told that O’Brien was claiming that Ahern had been given £50,000 by him in or around September 1989 and that the payment was on behalf of O’Callaghan. Ahern, in response, swore an affidavit in which he said that no such payment had been made. The tribunal in time dropped the matter.

On the day Connolly’s story was published, Ahern was at the Fianna Fáil commemoration at Wolfe Tone’s grave in Bodenstown, Co. Kildare, and was very exercised about the issue. Katie Hannon, a political reporter with the
Irish Examiner
, wrote a report on the matter for the following Monday’s edition. She identified Ahern as the person being referred to, having been urged by a senior figure in Fianna Fáil to do so. She was assured that there would be no comeback—in the form of a libel action—against her or her newspaper if she named Ahern.

Ahern sued O’Brien in the Circuit Court. He did not sue the
Sunday Business Post
. The case went ahead despite O’Brien withdrawing his defence, and a number of witnesses were called who dismissed O’Brien’s claim. The judge said the allegation against Ahern was ‘utterly, completely and absolutely false and untrue.’ Ahern was awarded £30,000 in damages—the maximum that could then be awarded by the Circuit Court—and his costs. But six years later it was reported that he had collected neither. In the wake of that report, Ahern’s solicitors instructed the City Sheriff in Cork to collect the debt. The request was made only two days before the expiry of the six-year deadline.