Monday 20 October 2014

Jody Corcoran: A tribe adept at dipping into the pockets of industry

Jody Corcoran uncovers the private ground where big business and politics meet to reveal who supported Fine Gael in its time of need

Published 01/04/2012 | 05:00

There was, said Michael Lowry, a lot of "cant and hypocrisy" spoken about political fundraising here.



He was giving evidence to the Moriarty tribunal. "Since the State was founded," he said, "the two major political parties have to a great extent depended on the corporate sector."

It was a theme picked up on by the Fianna Fail leader, Micheal Martin, last week when he promised his party's support for a more detailed examination of the decade before "regulations and limits" were introduced.

Martin was speaking in the Dail during a debate on the publication of the Mahon report, when he, with some success, sought to refocus the debate on Fine Gael and its relationship with the billionaire businessman, Denis O'Brien.

The regulations and limits referred to have provided an insight into the bankrolling of democracy here, but there remains a widespread view that all manner of means have been devised to keep as private as possible the ground where big business and politics meet.

The decade Micheal Martin had in mind was the Nineties, when Fianna Fail was certainly coining it, but when Fine Gael also managed to wipe out debts of at least £1.3m at a time when it was about to enjoy a half-term in power.

Fine Gael is reluctant to talk about its financial affairs and, by and large, the media has allowed the now main government party to escape a spotlight so frequently turned upon Fianna Fail.

Perhaps that is because the sheer scale of corporate donations seems to largely depend upon proximity to power, and Fianna Fail, after all, has been in power more often and for more sustained periods of time.

But whenever Fine Gael has come close to, or has actually achieved power, well then, the money just seems to roll in.

Take the 1981/1982 period, for example, when both Fianna Fail and Fine Gael led three different governments; Fine Gael is reported to have raised a massive £1.5m at the time through corporate and constituency funding.

Back then the party was led by the late Garret FitzGerald, who was himself to fall into financial difficulty arising out of the collapse of the aircraft leasing company, Guinness Peat Aviation (GPA), in 1992.

The decision to float the company during an aviation industry downturn after the 1991 Gulf War was to prove disastrous.

International financial institutions refused to buy shares; unable to raise the capital needed, GPA plunged into crisis with around $10bn in debts.

In 1993, both AIB and Ansbacher banks wrote off FitzGerald's debts of almost £200,000 following the collapse of the company in which he was a shareholder.

The then chairman of AIB, Peter Sutherland, was also a former director of GPA and had served as Attorney General under FitzGerald, prior to his appointment as a member of the European Commission.

The Moriarty tribunal investigated the matter but found no evidence of any wrongdoing; indeed the tribunal heard evidence as to the considerable hardship caused to FitzGerald, to the extent that he sold his family home to his son, Mark FitzGerald, to help repay the debt.

In 1987, Fine Gael lost 20 of 70 seats and failed to win re-election; FitzGerald was replaced as leader by Alan Dukes, now the chairman of the Irish Bank Resolution Corporation, formerly Anglo Irish Bank.

At the time Dukes saw off the determined ambition of John Bruton, the man who would eventually oust him as leader to be elected the next Fine Gael Taoiseach in December 1994.

Before that, however, Dukes had overseen a relatively unsuccessful Fine Gael fundraising drive in 1987/1988, which involved the compilation of a list of 800 top business people headed "Fine Gael Contact List".

Details of this were revealed by the Sunday Independent on May 4, 1997. The name "John Bruton", then Industry and Commerce spokesman, was marked on the list alongside 26 leading business figures, but, well, it seems Bruton was not particularly keen to follow up, perhaps because he still had ambitions to replace Dukes as leader.

Bruton eventually succeeded Dukes in 1990 at the start of the decade which Martin suggested last week might merit a more detailed examination.

What a decade it was to prove to be, the early part of which was dominated by the man they called the Beef Baron, Larry Goodman, whose interactions with Fianna Fail, but also Fine Gael, were to prove illuminating.

In many ways this was the beginning of the era of tribunals of inquiry.

In 1992, John Bruton, leader of the opposition, gave the beef tribunal an impression that he and his parliamentary colleagues had very little involvement in corporate fundraising for Fine Gael.

But he would later tell another tribunal, the Dunnes payments inquiry, that in 1991, the year before he gave that evidence to the beef tribunal, he had, in fact, been intensively involved in seeking business contributions to Fine Gael.

Bruton subsequently rejected accusations that he had, therefore, misled the beef tribunal; when giving evidence to the beef tribunal, he said, he had been referring, not to 1991, but to an earlier period with which the beef tribunal was concerned.

Whatever about this somewhat Jesuitical defence, there is no doubt that when he took over as leader, Fine Gael was in dire financial straits, thanks in no small part of a strategy followed by Dukes.

If money rolls in according to proximity to power, then Dukes's Tallaght Strategy -- he supported a minority Fianna Fail govern-ment -- would ensure that the coffers of Fine Gael would remain relatively empty.

That strategy, and an expensive, and ill-fated presidential election, required that the new leader concentrate his efforts on staving off the effective insolvency of Fine Gael.

At the time the party was at least £1.3m in debt; between 1990 and 1993 it paid £628,000 just to service the interest on that debt.

Enter one Michael Lowry. At that time Lowry was a young and ambitious TD from Tipperary North, where he had earned a reputation as a good man to raise a few bob.

Bruton drew him close, appointing him chairman of the Trustees of Fine Gael in 1993 with a mandate to raise funds and to raise them quickly. Lowry set about the task with some enthusiasm.

It was subsequently to emerge that the supermarket tycoon, Ben Dunne, whose company had engaged Lowry's refrigeration business, had paid huge sums to Lowry through nefarious means.

Much of these funds were used by Lowry to extend and refurbish his comfortable pile on the outskirts of Thurles. There were, of course, tax implications for the politician, who would avail of a tax amnesty in 1993.

In consort with Lowry, John Bruton wrote to 100 of the top businessmen in the country what was effectively a begging letter, the import of which was that Fine Gael desperately needed funds or it would go out of business.

The pitch, therefore, was this: for the sake of democracy, open your wallets.

Larry Goodman was among the 100 who received the letter, but he declined to open his wallet in a meaningful way; at the time, Goodman was busy channelling funds to Fianna Fail in power.

Many of the 100 did, however, support Fine Gael in its time of need. We know this because by December 1994, when Fine Gael returned to power, its day-to-day debt of £1.3m was wiped out and a war-chest of sorts was in the process of being built up.

We have never been told which of the country's leading businessmen were to prove so generous, but many of the usual suspects are, well, suspected.

Among other things, their contributions were used by Fine Gael to make under-the-counter payments to staff. In fact, an estimated £120,000 was paid to staff over a nine-year period before the next leader of Fine Gael, Michael Noonan, moved to end the arrangement.

In 1999 Fine Gael arrived at a settlement with the Revenue Commissioners in respect of unpaid PAYE and PRSI, interest and penalties arising from the payments, details of which emerged only when the Sunday Independent began to make a few inquiries.

Thanks to the Dunnes payments tribunal, and the Moriarty tribunal, however, we know that Ben Dunne was to prove more than generous to Fine Gael in its drive to wipe out a crippling debt.

In all, Dunne contributed £130,000 to Fine Gael, a large chunk of which, £30,000, was personally collected at Dunne's Castleknock home by John Bruton, who, by this stage, had got over his aversion to a fumble in the greasy till.

Dunne was nothing if not an each-way bet man.

He had a Taoiseach, Charles Haughey, in his pocket, as well as the up-and-coming Michael Lowry, who, even at that stage, was talked about as a future Fine Gael leader and Taoiseach.

Lowry's main rivals for the leadership were generally regarded to be Michael Noonan and Ivan Yates.

So while he was writing out sizeable cheques amounting to £130,000 for Fine Gael, Dunne also threw in £5,000 each for Lowry, Noonan and Yates, cheques to cash, political donations, left in a Dublin hotel for Lowry to collect and personally deliver to his colleagues.

Without a dissolution of the Dail, Fine Gael found itself back in government in December 1994, as part of a Rainbow coalition with Labour and Democratic Left.

The following February, Fine Gael in power held what was regarded as the biggest political fundraising event ever held in Ireland. Details of this event have never been made public, but the Sunday Independent understands that 1,200 people turned up in the Burlington Hotel in Dublin to hear an address by the new Taoiseach.

Michael Lowry, his "best friend forever", was MC on the night.

In the audience were captains of industry and legal eagles, leading senior counsel, as well as, I am told, at least three judges; there was also a large smattering of personality and celebrity figures.

Tables on the night were £1,000 each. At least £150,000 was raised.

The new Taoiseach, John Bruton, rewarded Michael Lowry for, as the Moriarty tribunal put it, his "particular aptitudes" for fundraising. Lowry was appointed Minister for Public Enterprise, in charge of a department which was to decide on the awarding of Ireland's second GSM licence.

At the time, Bruton, and the then AG, Dermot Gleeson, subsequently to be appointed chairman of AIB, were made aware of Lowry's availing of the tax amnesty.

Denis O'Brien's company, Esat Telecom, retained the services of political advisers as part of its preparations for the GSM licence bid that included two prominent Fine Gael figures, the late Jim Mitchell and Dan Egan.

Egan in particular advised him to rectify the view that he was a Fianna Fail supporter, advice which O'Brien took on board with gusto. Of the political functions attended by, or sponsored by O'Brien or his companies or associates in 1995 and 1996, all bar one were events run by Fine Gael.

Here is the detail of the donations made:

• £1,000 on March 9, 1995, for the Carlow/Kilkenny constituency fundraising lunch;

• £2,000 in March 1995, for the Dublin Central constituency fundraising lunch;

• £440 on May 29, 1995, for the Meath constituency golf classic;

• £5,000 in June 1995, for the Wicklow by-election fundraising lunch;

• £1,000 in June 1995, for the Dublin West constituency lunch;

• £4,000 sponsorship on October 16, 1995, for the Fine Gael national golf classic;

• £200 in October 1995, for the Westmeath fundraising lunch;

• £600 in October 1995, for the Dublin South East fundraising lunch;

• £900 in December 1995, for the Dublin North Central lunch;

• £1,000 in 1996 for the Dublin South West constituency;

• £1,000 in June 1996, for the Limerick East constituency fundraiser;

• £1,000 in June 1996, for the Dublin Central fundraising lunch;

• £1,000 in June 1996, for the Meath constituency lunch;

• £3,000 in June 1996, for the Fine Gael national golf classic.

At constituency level, therefore, the most sizeable contribution made was a £5,000 donation to the Wicklow by-election lunch in June 1995.

Phil Hogan, now the Minister for the Environment, was also involved on this occasion as he was the then Fine Gael director of elections for the by-election.

The second most sizeable payment, a donation of £4,000, was made towards a Fine Gael golf classic held on October 16, 1995, where, yet again, Hogan was chairman of the organising committee.

There were two distinguishing features of this particular donation. The first was that the bank draft was purchased with funds drawn from a joint account held by the Denis O'Brien company Communicorp and its Norwegian partner Telenor for the purpose of "expenses" connected with the Esat GSM licence application. The second was its proximity to the conclusion of the GSM licence evaluation process.

Apart from the donations outlined above, there was a further payment for $50,000.

That payment was made by Telenor on behalf of Esat Digi-fone, at O'Brien's request -- and it was made in the most unusual circumstances.

The payment had its origins in certain fundraising activities undertaken on behalf of Fine Gael and which had been initiated by the businessman David Austin, who, for much of his career, had been a senior executive with the Smurfit Group.

Although never a trustee or officer of Fine Gael, he had for some years been involved in a relatively loose and informal way with fundraising activities. He was also a close personal friend of Michael Lowry.

It seems there was a feeling within Fine Gael that, with the party back in government, it could emulate Fianna Fail's successful US fundraising forays.

Therefore, the Esat/Telenor $50,000 donation was made towards a fundraising dinner held by Fine Gael in New York in November 1995.

At the time, the result of the GSM licence competition process had been announced and Esat/ Telenor were the controversial winners.

The $50,000, which as it turned out nobody wanted, was paid into an offshore account of David Austin. He brought the donation to the attention of the then Taoiseach, John Bruton, who declined to accept it.

That was not to be the end of the matter, however.

The $50,000 was ultimately transmitted to Fine Gael on May 6, 1997, when a cheque for £33,000 -- the Irish pound equivalent -- from an account held by Austin was made payable to Frank Conroy, a long-standing Fine Gael supporter. Conroy endorsed the cheque and furnished it to the party, just in time for the General Election of that year.

When in February 1998 Fine Gael learned of the original source, the party sought to return it. However, the donation was not returned until March 7, 2001.

The point is, however, that nobody connected with the payment saw fit to notify the Moriarty tribunal, notwithstanding the substantial degree of knowledge of its "clandestine circumstances and proffered return", as the tribunal put it.

A final point worth noting: in the relevant two-year period Fine Gael received more than £55,000 from Denis O'Brien, or his associated companies, whereas in the same period the losing consortia, or people associated with them, gave Fine Gael just £2,600.

The departure of John Bruton heralded the arrival of Michael Noonan as leader in 2001 for an ill-fated tenure of just one year.

It being the hot topic at the time, one of Noonan's first decisions was to ban outright all corporate donations to Fine Gael, a decision which contributed in no small part to Fine Gael's disastrous General Election in 2002.

Upon his election as leader after that election, Enda Kenny immediately reversed Noonan's decision and the party set about again replenishing its coffers, with some success, particularly as the 2007 election approached.

Fine Gael was pipped at the post in that election, but virtually from the moment the votes were counted it became certain that it would win the next election, whenever that would be.

Just before the election last year, it was reported that Fine Gael had a war chest of €2.25m.

Phil Hogan denied that the money came from donors, but that most of it had been raised directly from members and supporters in two previous superdraws.

He said that only "bits and pieces" of corporate donations had come into head office.

Despite the massive sums accumulated, we have no idea how much came from corporate donations as Fine Gael has not declared a single corporate donation for years.

Last year during a debate on a Fianna Fail private members' bill seeking to ban corporate donations, independent TD Catherine Murphy made the point that the Standards in Public Office Commission was completely toothless.

"In the past nine years, the Fine Gael party has not declared a single corporate donation, while the Labour Party has not declared any corporate donations in the past four years," she said.

We know this, however: prior to the General Election in 2011, Fine Gael held a number of golf fundraisers at the K Club in Kildare, Adare Manor in Limerick and Moor Park near London.

However, the party has always refused to issue details of who attended these events.

The Sunday Independent did, however, manage to gate crash an event at the K Club, which was attended by the great and the good, including property developers, telecoms and utilities companies, accountancy firms and PR men.

The report caused great unease within Fine Gael and prompted now Minister of State in the Department of Foreign Affairs, Lucinda Creighton, to call for an end to "cute hoor" politics and warn that Fine Gael was becoming "Fianna Fail Lite".

She may as well have dropped the 'Lite'.

There are many who would say that Fine Gael, given the chance -- that is, of proximity to power -- is just as, if not more, adept at dipping into the pocket of big business.



Sunday Independent

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