THE planning tribunal is investigating if Taoiseach Bertie Ahern politically approved the involvement of the State-owned National Lottery company with dollar-rich casino developers in the early 1990s.

The National Lottery signed a non-disclosure agreement to operate a casino in Ireland with a consortium headed by a Manchester businessman and involving significant American interests, the Irish Independent can reveal today.

The confidential deal, involving a State company, was politically approved at a time when Bertie Ahern was Minister for Finance.

The National Lottery and the Sonas syndicate, prominently involving tycoon Norman Turner, who regularly attended football matches with Mr Ahern, signed the confidential agreement in late 1993.

It is now the subject of "thorough" and ongoing investigation by the Dublin Castle inquiry.

The Department of Finance gave the green light to the National Lottery casino initiative. This led to an understanding that the Sonas consortium, incorporating American billionaire investors Ogden Entertainment, would build and own the casino at the Phoenix Park racecourse -- while the National Lottery would operate the money-spinning establishment.

"An exploration such as this, much less a signed deal, could not have been carried out by a State company without Department of Finance approval and political consent," a source told the Irish Independent.

The Mahon tribunal is now in possession of diaries, statements and documentation relating to meetings on the strategic alliance, including references to the involvement of Mr Ahern's Department of Finance. It is particularly focusing on the personnel in attendance at key meetings.

Mr Ahern regularly attended football matches in Manchester in the company of Mr Turner, who flew Irish parties to see football matches at Old Trafford.

The National Lottery also regularly met with Mr Turner, the British architect who spearheaded the American-backed scheme.

Former Fianna Fail fundraiser Des Richardson has told the Mahon tribunal that Turner gave him a donation for Fianna Fail which turned out to be $10,000 (e6,778) in cash.

Mr Turner denied to this newspaper earlier this year that he had ever made a donation to Mr Ahern.

Mr Ahern also denied receiving money from him. Questions were put to both men, through spokespersons, during the general election campaign.

Casinos

The Irish Independent has also learned that National Lottery executives travelled to the United States and Canada to inspect casinos.

The company looked at massive dollar-spinning operations in Las Vegas and Atlantic City, as well as in Quebec and Windsor, Ontario.

Mahon investigations have also focused on diaries and meetings, not just within the National Lottery, but also at An Post, its parent body at the time.

Meanwhile, Fine Gael leader Enda Kenny last night said "there seems to have been some sort of money-laundering going on" at the time of the Bertiegate controversies.

"There is talk going on about leadership within Fianna Fail at the moment, arising from statements that the Taoiseach made in his defence that were contradicted by the tribunal -- and the unfolding events in Dublin Castle, where the explanations given by the Taoiseach are clearly crumbling," he said.

"It would appear to any objective onlooker that there is some form of money laundering having gone on here. That means that senior Ministers in this Government are going to have some explaining to do when all of this reaches its conclusion."

A Fianna Fail spokesman said last night: "We are not commenting on these remarks, because that is what the tribunals are set up to investigate, and at great expense to the taxpayer. That is where all these allegations should be addressed."

The latest developments came as the Taoiseach claimed he was a "good friend" of Padraic O'Connor, the former managing director of NCB stockbrokers.

Mr O'Connor said a £5,000 donation was not a personal payment to Mr Ahern, but a political contribution to the Fianna Fail organisation locally. And he again insisted he was not a close personal friend of Mr Ahern.

Contradiction

But the Taoiseach claimed Mr O'Connor was a friend and would not accept there was a direct contradiction in their varying versions of events.

"Well I suppose I said two things. I said in the past that those who gave the money, it was raised by friends and I still say that's exactly correct.

"The second thing: I thought Padraic O'Connor was a really good friend of mine, if he has changed his mind, I can't do anything about that," he said.

Mr O'Connor said he had a friendly professional relationship as a currency adviser but he had not regarded him as a personal friend.

- Senan Molony Deputy Political Editor