From Irish Political Review: January 2007

The Haughey Blackwash:
Moriarty Presumes

After the great age of the Enlightenment the Germans brought forth a mouse. That was Friedrich Nietzsche's contemptuous comment on Martin Luther and the Protestant Reformation. And we hear that Dermot "the Kaiser" Desmond has said the same about the Moriarty Tribunal following the millions it has spent on investigating Charles Haughey and Michael Lowry.

The media reports have given the most painstaking details about the money that Haughey received and, courtesy of Moriarty, have even calculated the value of those receipts in today's money, or at least Moriarty's version of today's money. We learn that Haughey received €11.6 million. Moriarty implies that in "today's terms" this amounts to €45 million. But how does he arrive at that figure? Moriarty says that the midpoint of the period covered by Tribunal was 1988 and he uses this as his base year. However, if the consumer price index is used the value of €11.6 million should be multiplied by 1.7 to give a figure of €19.7 million so where does the €45 million come from?

Moriarty has an 'innovative' approach to what €11.6 million means in today's terms. He calculates it on the basis of the ratio between the €11.6 million and the Taoiseach's salary in 1988. The ratio in mid-1988 was 171. He then multiplies that figure of 171 by today's Taoiseach's salary and voila! He arrives at the €45 million figure. But of course the Taoiseach's salary has risen well above the rate of inflation since Haughey's time and indeed has risen well above the average rate of increase of salaries in general making his arithmetic practically meaningless. So why does Moriarty engage in such dubious calculations?

The media has been far more coy in calculating the costs of Moriarty. The truth is that nobody really knows. Here is what the Sunday Independent says in its editorial of 24th December 2006:

"The cost so far of this part of the inquiry is €25m. But as 66 different parties were granted legal representation—who will now be seeking their costs—the taxpayers' burden is set to soar."

Presumably "this part of the inquiry" means the part of the inquiry specifically relating to Haughey. Liam Collins on the same page of the newspaper has a different estimate of the costs:

"But it is something of a mystery as to why it took nine years and over €60m (and rising) for Judge Moriarty to give his verdict on the lifestyle of the flawed Taoiseach."

We have already had the McCracken Tribunal on Haughey and Lowry and before that there was the Buchanan Tribunal, so what has the Moriarty Tribunal added to the sum of our knowledge? If the media reports are anything to go by the answer must be zero.

Since McCracken, it was well established that Haughey received large sums of money from wealthy benefactors. There are plenty of precedents for this in history such as Winston Churchill and Benjamin Disraeli. The real question is: did the benefactors receive specific favours in return for that money? The Moriarty inquiry seems to have conducted exhaustive investigations and has an opinion on everything. For example the Revenue's dealings with Haughey were "unimpressive". Nevertheless,

"…the tribunal is satisfied that Revenue neither sought to nor did in fact extend untowardly favourable treatment to Mr Haughey" (Village, 21-27 December 2006).

According to The Irish Times (20.12.06) Moriarty has strong views on the performance of Allied Irish Banks:

"Mr Justice Moriarty says the bank took no action to curb Mr Haughey's mounting debt in the 1970s, exhibited a marked deference to him and was disinclined to address or control his excesses as a banking customer."

All very interesting, but what business is it of Moriarty? It wasn't Haughey who saved AIB from bankruptcy. That was Garret FitzGerald who, after retiring from politics, had a substantial loan written off by the bank. When the matter became known about, the loan was subsequently repaid by his millionaire son Mark.

Moriarty also has views about what might have been.

"The tribunal heard evidence in relation to three possible favours to donors by Mr Haughey, and found against him in relation to two. But in a very damaging finding it said that this did not mean that other acts and decisions of Mr Haughey's over the course of his career were "not devoid of infirmity" "(The Irish Times, 20.12.06).

So, after all the millions spent by the Tribunal, the question of possible favours arises in three cases. But Moriarty and the media have not confined themselves to these three cases. A large proportion of the coverage related to the money raised for Brian Lenihan's liver transplant. The fund raising was initiated by Haughey and the claim of Moriarty is that some of the money was diverted for Haughey's benefit. No one claims that anything that Haughey did resulted in anything less than the best treatment for Lenihan. The Lenihan family regard the matter as closed. Both Brian Lenihan and Charles Haughey are dead. Conor Lenihan said that, if any private individual feels aggrieved at the way the money was spent, that is a matter for that person to pursue in whatever way he sees fit. The Haughey family believes that not all the money spent on sending Lenihan and his wife to the United States, and Lenihan's treatment, was formally accounted for as expenses, and therefore the costs of the undertaking were not fully recorded. The dispute, in so far as there is a dispute, amounts to tens of thousands among private individuals. Again the question must be asked as to what business Moriarty has in investigating this.

The three possible favours that were investigated relate to:

1) Glen Ding Wood
2) The sale of passports
3) The Dunne Family Trust

Regarding Glen Ding Wood Moriarty found no evidence of corruption relating to Haughey.

Regarding the alleged sale of passports, Moriarty claims that there was a payment of £50,000 from the late Mahmoud Fustok. This money was supposed to have been paid for a horse. Moriarty claims that this sum did not represent a payment to Mr Haughey for a horse. But, according to Village (21-27 December 2006), Moriarty also concludes that, if it did, the non-existent horse (Shergar, perhaps) wasn't worth that amount.

According to The Irish Times (20.12.06), the Haughey family claim that "all of the evidence available to the tribunal supports the evidence that a sale involving a horse took place between the late Mr Mahmoud Fustok and Abbeville Stud".

The question regarding the horse involves tens of thousands but the most serious allegation is that Haughey attempted to reduce the Dunne Family's tax liability following the receipt of IR£2 million from the Dunnes between 1987 and 1993.

The possible tax liability of the Dunne family became an affair of State in the 1980s because of the amount involved in that era of high public debt. The tax liability arose from the setting up of a Trust in 1964, which was due to expire in March 1985. Subsequent to the setting up of the Trust the tax laws changed, which resulted in a possible liability which would not otherwise have occurred.

It appears that it was by no means clear as to whether a liability was in fact due because the legislation was introduced after the setting up of the Trust. However, the initial estimate from the Revenue Commissioners was £38.8 million, which represented a sizeable proportion of the value of the Trust of £120 million. It was thought at the time that the only way that the Dunnes could pay this back was through raising the money publicly (i.e. diluting the family ownership of the Dunnes Business) or selling off a portion of the business. In short, the matter had very serious implications for the largest Irish-owned Retail chain in a business which was beginning to see incursions from foreign owned Supermarkets.

Haughey asked the then head of the Revenue Commissioners, Seamus Pairceir, to meet Ben Dunne. According to The Irish Times (22.12.06):

"…the chairman of the Moriarty tribunal, Mr Justice Moriarty, found that there was a real and tangible benefit for him, in that it provided Dunne with an option that had not previously been available to him."

But Colm Keena in the same report seems to indicate that the Fine Gael Finance Minister did exactly the same:

"An early contact in the matter was between trustee Frank Bowen and Dukes. The meeting was organised by the late Hugh Coveney TD and Mr Dunne attended. Dukes expressed the view that the group could fund the tax bill. After the meeting he told Bowen that Pairceir would be in contact, and that how the matter was handled was a matter for the Revenue and not for him as Minister."

Nevertheless, the future Fine Gael leader offered Dunne the "real and tangible benefit" of a meeting with the head of the Revenue Commissioners before Haughey was involved.

Following Haughey's suggestion that Pairceir meet Dunne (a meeting which Pairceir told the Tribunal he intended to have anyway) there was some serious "horse trading" (in the metaphorical sense as distinct from the metaphysical sense mentioned earlier).

Pairceir made an offer to reduce the liability to £23.6 million and then further reduced the liability to £16 million. Why did Pairceir do this? Practically all the media coverage suggests that the reason was the corrupt influence of Haughey. In Colm Keena's article, for example the opening paragraph says:

"Former taoiseach's intervention with the Revenue led to an offer to cut Dunnes Stores tax bill by £22.8m, the tribunal found, writes Colm Keena, Public Affairs Correspondent" (The Irish Times, 22.12.06).

But, as far as it can be discerned from the media coverage, the Tribunal did not say that Haughey influenced the negotiations between Pairceir and Dunne. There is another perfectly logical explanation for the behaviour of Pairceir. As the negotiations developed, it became very clear that the legal foundation for the tax liability was very shaky. Pairceir knew this and not only did Pairceir know this but so did Ben Dunne. And that is why Dunne rejected the offer to reduce the tax bill to £16 million. And it turns out that Dunne was right to reject Pairceir's offer because when the case went before the Appeal Commissioners the Dunnes won, and the bill was dropped.

It is difficult to disagree with the Haughey family's view that the findings of the Moriarty Tribunal are unfounded on the basis of the evidence. It also made the following pertinent points:

"…the family stated that at no stage was Mr Haughey ever made aware before he died of the proposed findings of the tribunal and never was it communicated to him by the tribunal that adverse opinions were to be made against him.

" "If he had been made so aware in 2001 (when his dealings with the Tribunal ended), it would have given him an opportunity of dealing with each of those allegations and of answering them or tendering such evidence as might be useful for the tribunal to consider", it submitted" (The Irish Times, 20.12.06).

So what has it all been about? Ben Dunne thinks he knows the answer. In a Sunday Independent interview with Jody Corcoran (24.12.06), he contrasts the treatment of his evidence with that of Peter Sutherland whose involvement arose as part of inquiries into possible payments to public office holders from the Ansbacher accounts.

First, here is what Moriarty says about Dunne's evidence:

"While it is accepted that Mr Dunne was a courteous witness, and one who regularly attended public sittings when requested to do so, the tribunal cannot accept what has been conveyed to it, in submissions and medical reports furnished on his behalf, to the effect that several instances of further payments on his part discovered by the tribunal had eluded his memory."

And now here is what Moriarty says about Sutherland's evidence:

"Even after careful consideration of the evidence and such documents as were to hand including such documents that were found and produced after the evidence was heard… the understandably imperfect recollections of Mr Sutherland… and the limited documentation leave elements of confusion and uncertainty over the matter, and inhibit the degree of confidence with which findings can be made."

Could the different treatment be explained by the snobbishness of old money against those who are associated with trade?

If it is a choice between the squeaks of Moriarty and the deeds of the former Taoiseach, the Irish Political Review finds in favour of Haughey.

PS Dermot Desmond issued a statement on the Moriarty Report. The Irish Times reported this fact and gave a snippet from it, with the comment:

"Elements of Mr Desmond's strongly-worded statement are not being reported in The Irish Times on legal advice…" ( 21.12.06).

This was written by Colm Keena, and no doubt endorsed by Editor Geraldine Kennedy, the heroes of the Ahern 'revelations' stolen from the Mahon Tribunal. Was this legal pretext used to curry favour with the Tribunal establishment in view of possible forthcoming prosecutions, or was the Desmond statement really libellous. This magazine determined to try to find out.

We tried to trace Mr. Desmond's full statement on the Internet, but were unable to find the full text, though it appears that it was read out on radio.

The Irish Times article did include Desmond's statement that—

"I am thrilled at the nine years and millions of euros the tribunal spent to verify the information, which I issued in press statements in January 1998,"

Here are the additional pieces of Desmond's statement which we found and which were too strong for the Irish Times to publish:

"He then criticised the Moriarty legal team for the length of time they had taken and said the inquiry should have been completed at "a fraction of the cost".
He said it was "ironic" that last week’s report drew an analogy between the payments he made to Haughey and the taoiseach’s salary, "when each of the tribunal counsel earn annually almost three times Bertie Ahern’s salary".

"If the current taoiseach wants a change of career, a better paying job and apparently no accountability, I suggest he applies for a cushy job at the Moriarty tribunal." (Sunday Times, 24.12.06)

"Mr Desmond said the tribunal legal team had been paid over €19 million and spent nine years to audit two individuals, adding that if he had employed them, he would have fired them after a year." (RTE News 20.12.06)

We leave it to readers to judge for themselves the motives of Mr. Keena and Ms Kennedy in withholding this information from their readers.

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