Bertie Ahern: The Man Who Blew the Boom: Power & Money (6 page)

It appeared that Ahern didn’t know what to do, and both his supporters and those of Reynolds grew increasingly frustrated. There were references by Reynolds supporters to Reynolds’s family life and allusions to the people’s right to know ‘where their Taoiseach slept at night.’ Ahern was nominally living at home with his mother but was also in a relationship with his partner, Celia Larkin. This was seen by some members as a political disadvantage for a party leader, and it appeared that if Ahern was to put his name forward his marital status would become an issue. According to
Bertie Ahern: Taoiseach and Peacemaker
(1998) by Ken Whelan and Eugene Masterson, Ahern and Reynolds met in the Berkeley Court Hotel in Dublin to discuss the matter. Ahern told the authors that he had informed Reynolds that he was not going to contest the leadership and that Reynolds made it clear that he ‘wouldn’t stay around very long.’ Ahern held back, and Reynolds, when he took over, kept Ahern as Minister for Finance while sacking an unprecedented number of his Government colleagues. However, the use against Ahern of his marital situation had been noted by Ahern and his supporters.

During this period there was an editorial in the
Sunday Tribune
that read:

In terms of age and style, Bertie Ahern would represent a break, but there are questions about his finances which are worrying. He is currently living in a house which ‘supporters’ bought for him and which cost over £120,000. What hostages to fortune have been given in that transaction?

Ahern, who did not have a practice of picking fights with the media, was sufficiently concerned by this to ask his solicitor, Gerry Brennan, to write a letter of complaint and seek an apology. He got his response in the following week’s edition.

In the course of an editorial on the Fianna Fáil succession last Sunday, we stated that ‘supporters’ of Bertie Ahern
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had purchased for him a house costing over £120,000. We inquired what hostages to fortune had been given in that transaction. We have been contacted by a solicitor on behalf of Mr Ahern who informs us that while Mr Ahern has the use of an office and an upstairs apartment in the premises he has no interest whatsoever in the ownership of the house which is held in trust for the local Fianna Fáil organisation. We are glad to take this earliest opportunity of correcting any error in this regard and insofar as we have misrepresented the situation and insofar as our query concerning hostages to fortune is unfair to Mr Ahern, we apologise for any embarrassment or hurt this may have caused him.

The barrister David Byrne was appointed by Ahern as his first Attorney-General in 1997. Two years later Ahern appointed him to the European Commission. Byrne had become one of Ahern’s advisers in November 1994, when he at last became leader of Fianna Fáil. In May 2008 Byrne was called to give evidence to the Mahon Tribunal about St Luke’s after Ahern’s solicitor wrote to the tribunal asking that the former commissioner be called. Some weeks earlier the tribunal had been given documents that, it was told, had been found in St Luke’s among the voluminous files kept there. They concerned the purchase and ownership of St Luke’s.

The tribunal was told that in April or early May 1997, when Ahern was preparing for the general election that would see him elected as Taoiseach, Byrne received a packet in the Law Library from Brennan. It was marked ‘private and confidential’, came with a compliments slip (but with no covering letter) and contained a number of documents concerning St Luke’s, which included copies of the
Sunday Tribune
editorial, Brennan’s letter in response and the paper’s apology and clarification.

Also included were two letting agreements, dated 10 January 1992 and 21 January 1994, between the legal owners of the property and Ahern and concerning his occupation of the building, the deed of assignment for St Luke’s, a ‘Declaration of Trust’ (in which the five men named in the Registry of Deeds in relation to St Luke’s said they were holding the property in trust) and some other newspaper articles.

Byrne told the tribunal he could not recall receiving instructions from Brennan or Ahern in relation to the matter but presumed that he was contacted because the issue of St Luke’s had arisen when Ahern was considering contesting the party leadership in 1992. In the period before the 1997 general election, when Ahern was hoping to become Taoiseach, Byrne said ‘there was a desire to, as it were, draw all the features of this story together into one place and also to have an eye on the legal aspects of this.’ He was to draft a document on St Luke’s, and if there were new queries by the media about the matter during the campaign it could be referred to as part of Ahern’s response.

Byrne met Ahern and Brennan twice to discuss the issue and produced a draft report that was never completed, because on 24 May 1997, twelve days after the second consultation, Brennan died unexpectedly. Des Richardson phoned Byrne to tell him of Brennan’s death. Byrne spoke to a solicitor, David Anderson, who, with the approval of the Law Society, took over the management of Brennan’s practice before its sale. Byrne also contacted another solicitor, Hugh O’Donnell, who subsequently, with the appropriate authority, took control of Ahern’s files in the Brennan practice. Anderson later acted for Ahern in dealings relating to his home in Beresford Avenue.

Henry Murphy, senior counsel for the tribunal, pointed out that it had received a letter from Ahern’s solicitor concerning the draft report after it had been found among the files in St Luke’s. The letter said the document was

in fact prepared for and on behalf of the Fianna Fáil constituency organisation and various components thereof, including the trustees of St Luke’s. As you know such entities are represented [at the tribunal] by Ivor Fitzpatrick & Co., solicitors, and I would suggest that you now seek their authority on their clients’ behalf.

In other words, the tribunal was being told that the report belonged not to Ahern but to the trustees and to Fianna Fáil and that it had been prepared not for Ahern but for these bodies. As it transpired, this was the exact opposite of the impression created by evidence the tribunal heard later.

The draft report was dated 6 May 1997. The general election of that year was on 6 June. It was twenty-three paragraphs long and divided into seven sections. The title was ‘Report on acquisition, legal ownership and financing of St Luke’s 161 Lwr Drumcondra Road’. It dealt in brief with the decision to sell the Amiens Street building and said some of the proceeds of the sale were distributed among various cumainn, ‘and the balance was put on the Fianna Fáil deposit account for the constituency.’ It stated that the purchase price for St Luke’s was £56,000 and that it was expected that renovations totalling £48,497.90 would be required. According to the report, when stamp duty was included the total amount estimated to be required for the building was £107,859.

To raise the funds necessary to purchase and renovate the premises, the St Luke’s Club was informally established at a meeting held in the Gresham Hotel on 3 December 1987. This meeting was attended by over 20 people, most of them from the constituency, who resolved having regard to the funds required, that this sum could be raised over a period of four to five years by 25 people giving a commitment to provide £1,000 each per annum. It was also resolved that St Luke’s should be purchased and that five of the members of the club should be appointed to act as trustees for the acquisition of the property. A resolution was also passed to the effect that the primary beneficiaries of the trust would be the local Fianna Fáil party and the ultimate beneficiary the Fianna Fáil national party.

The following paragraph said that the club—formed on 3 December 1987—had raised £16,000 by early 1988.

It was resolved that a further £50,000 would be raised by a bank loan should this be necessary. The fund continued to increase in value and by late 1989 the fund had accumulated £73,200. This left a shortfall of £34,657. This occurred because a number of commitments made were not fulfilled or only partly fulfilled. (Check this paragraph.)

In fact no bank loan was taken out. The note to check the contents of the paragraph for accuracy was, Byrne told the tribunal, indicative of the fact that the document was a work in progress that went no further after Brennan’s death. Although the document introduced the whole St Luke’s issue by dealing with the sale of the property in Amiens Street, none of the proceeds of its sale went to the purchase of St Luke’s. That part of the proceeds associated with Ahern was placed in the investment account, where it was still sitting in 2008 when the tribunal was investigating these matters.

The two crucial issues for the report were the source of the funding and the ownership of the building. On the latter point the report stated:

The property was acquired by deed of assignment to the five trustees in mid-1988. A deed of trust was also executed by the club members as settlors [people who put assets into a trust], naming the five members of the club as trustees and specifying that the trustees held the trust property upon the following trusts.

The document then went on to list the use to which the building was to be put and the powers available to the trustees in furtherance of this use.

It follows from this that the five legal trustees are the legal owners of the premises but specifically for the benefit of the Fianna Fáil party in Drumcondra electoral constituency with the trustees having the discretion to apply the trust property for the ultimate benefit of the Fianna Fáil party itself.

Accordingly, if the property is ever sold, the net proceeds of the sale must be applied for the benefit of the local Fianna Fáil constituency organisation or, at the discretion of the trustees, for the benefit of the Fianna Fáil party itself. Such proceeds cannot be handed over to any individual member of the party.

Byrne made it clear at the tribunal that all the information he put in the report came directly from Ahern and Brennan or from the documents Brennan had sent him. Brennan had acted as solicitor in all the dealings relating to St Luke’s, including its funding, and therefore had an intimate knowledge of what had happened.

There was in fact no ‘deed of trust. .. executed by the club members as settlors, naming the five members of the club as trustees and specifying that the trustees held the trust property, on the stated trusts’. Indeed, there was nothing in the documents seen by Byrne or by the tribunal that identified any settlors, members of the club or any contributor to the fund that was used to buy the property. At one point during his evidence Tim Collins, one of the people who signed the deed of assignment, gave the impression that he had never heard of the St Luke’s Club. ‘The first time I’ve come across that, St Luke’s Club. Now, reading that now,’ he said.

The tribunal did see a ‘declaration of trust’. This was a document in which the persons named in the deed of assignment as having bought St Luke’s declared that they were holding the property in trust. This was among the documents sent to Byrne in the Law Library ten years after the purchase of the property. Byrne told the tribunal he had never seen a deed of trust. He said the mention of a deed of trust executed by the settlors and the trustees, and the reasons for the trust, as appeared in his draft report, arose from his notes from his first meeting with Brennan and Ahern. The notes from his second meeting included the statement ‘no formal deed of trust’, so he believed that he must have raised the issue at the second meeting. The notes from the second meeting recorded that there was a declaration of trust in existence. (One difference between a declaration of trust and a deed of trust is that the former is a declaration by the trustees and does not name the settlors.) Byrne said that the earlier note about there being a deed of trust must have been a transcription of what Brennan had told him and that Brennan must have made a mistake.

Byrne agreed with Murphy that the declaration of trust made it obvious that the property was held in trust and that little else by way of documentary evidence was required. Furthermore, considering the simplicity of the matter, and that Brennan was not only a solicitor but the solicitor who had been involved in structuring the ownership, there seemed little need to get Byrne involved. ‘So why were you consulted?’ Murphy asked. Byrne said he was asked to apply his skills as a barrister to drawing together all ‘the complex issues’ into one document and to presenting his opinion on the legal status of St Luke’s and Ahern’s residence there, given the media interest in the matter during the 1992 leadership controversy, when it had been raised by the
Sunday Tribune
. Byrne said, ‘There clearly was an apprehension that this issue may arise again. And if it does, we need to have this thing in writing so that we know what the situation is in relation to it.’

In other words, the document was to be something that Ahern could point to if he was questioned about St Luke’s, its ownership and how it came to be purchased in the context of his bid to become Taoiseach. But the document, albeit in draft form, was full of inaccuracies about exactly the points it was created to clarify, and it was drafted by someone who had got all his information from Ahern and Brennan.

The net effect, then, if the media had asked questions of Ahern, would have been that Ahern, who knew about the matter, would have referred the reporters to Byrne’s report; and Byrne’s report, if it had not been radically altered, would have been wrong.

On 6 June 2008 Ahern was questioned about St Luke’s at the Mahon Tribunal. He said:

Queries had been put to them [the trustees] a number of times, and they were anxious that we would pull one document together, and certainly one or two of them were very anxious that this would be done before there was a general election. And, as I recall, they asked Gerry Brennan if he would pull that together. He subsequently asked David Byrne and myself to work with him in drawing that document together. We had two or three meetings about that. Two or three meetings with Mr Byrne. There was two or three meetings with the trustees around about the same time.