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Toxic PDs: The compromised ‘party of conscience’ merits continuing scrutiny.

By Frank Connolly. (November 2014)image-10
It should come as little surprise that a former Progressive Democrat minister is among those named in the dossier on tax evasion compiled by Gerry Ryan, the civil servant who has been investigating the Ansbacher files since 1998 and whose inquiry was closed down by then Tanaiste, Mary Harney, in 2004.
After all, Mary Harney and the PDs had plenty of form in this regard during their power-sharing years with Charles Haughey in the late 1980s and then with Bertie Ahern from 1997. Indeed, her seat at the table was barely warm when Harney was forced to grapple with her conscience as it was confirmed that her cabinet table colleague, Ray Burke, had taken large chunks of cash during the general election of 1989 leading to his resignation that Autumn and the establishment of the Flood tribunal.
Of course, Harney was familiar with such shenanigans as she presided over an inconclusive internal inquiry into an alleged donation to the PDs during the same election that went to fund the campaign of their Waterford candidate, Martin Cullen, rather than to the central party coffers – much to the chagrin of local fundraisers.
In 1998, she had the misfortune of making ill-advised comments to the Irish Independent about the integrity or otherwise of the party’s original adversary, Haughey; and her comments resulted in a decision that the former Taoiseach could not be prosecuted for his improper receipt of over €1 million from retailer Ben Dunne and related matters.
This was the same year that the explosive Ansbacher documents landed on her desk and when she appointed Ryan to investigate them. The papers revealed how more than 200 members of the Irish business and political elite, including senior FF, FG and PD ministers, used the complex offshore mechanism to avoid tax from 1977 until 1995.
In early 1999, Harney muttered a few words about her “conditional” loyalty to the Ahern government after EU commissioner, Padraig Flynn, imploded on the Late Late Show over the 1989 €50,000 donation by Tom Gilmartin to Fianna Fáil which ended up in the then minister’s personal bank account. She was particularly nervous as Gilmartin had dragged Ahern into the affair by claiming to have met him on a number of occasions and had informed him in 1989 about the missing Flynn donation.
Having crossed this particular hump, Harney was forced to agonise again early that summer when it emerged that Joe Burke, a friend of Ahern’s, had  intervened to help secure the early release of Philip Sheedy, an architect serving a sentence for killing a woman in a road incident. Two judges, including Supreme Court member, Hugh O’Flaherty, fell on their swords but the summer recess and the victory of Harney’s conscious once again kept her on board.
In February 2000, Mary Harney gave an undertaking the authorities would carry out a comprehensive investigation into anti-competitive practices at CRH, but this has never happened. Patrick Massey, then head of the Competition Authority, resigned his position that very same month stating:  “it is no longer possible for me to continue as director of competition enforcement due to the failure to provide adequate resources to enable me to do the job properly. My experience has convinced me  that price-fixing cartels represent a serious widespread problem in this country…the resources available are wholly inadequate for carrying out the sort of complex and highly intensive investigations that are required to obtain evidence”. Massey went on to say, “certain complaints made to me in recent months involve matters that would occupy four or five staff full-time for the best part of a year. I simply do not have such staff resources and given the very real concerns expressed to me by the complainants as to the consequences for them if the matter is not pursued properly, I have concluded that it is simply not possible to pursue the matter”.
In 2004, during her second term as Tánaiste and as she left her position as enterprise minister, Harney decided to terminate the Ryan investigation followed another torrid few years of controversy not least as the Moriarty and Flood/Mahon tribunals continued to uncover extraordinary details of corrupt behaviour by FF, FG and PD politicians and as the latter inquiry came closer to unravelling the convoluted financial affairs of the then Taoiseach going back to the late 1980s.
When she aborted the investigation, it was not known of course that among the suspected tax evaders was one of her party colleagues and a (former) minister but it did not go unnoticed that she had an apparent aversion to investigating the affairs of Ireland’s largest corporate monopolist and a central player in the Ansbacher affair, Cement Roadstone Holdings (CRH).
At the time, Vincent Browne wrote; “Among the plethora of recurring self-regarding proclamations Mary Harney makes about herself [‘anyone who knows me…..’] is the boast that she and her party are committed to taking on monopolies and freeing up the market for the benefit of the Irish consumer. And indeed, this government has taken on goliaths such as taxi drivers, bus workers and now airport employees. But when it comes to the big boys – and especially when it comes to the biggest boy of all, the most gigantic monopoly in the history of the state, construction conglomerate Cement Roadstone Holdings [CRH] – it’s a different tune”.

This  is no doubt surprising for many who believed that the company with which her party’s nemesis had such a close connection would surely be good hunting territory for the uber-ethical PDs. The links between Roadstone and the former FF leader stretched back to the 1960s when his father in law, Sean Lemass, was chairman of Roadstone which went on to become CRH.
In 1969, Roadstone Ltd sold 80 acres of land to Haughey, then Minister for Finance, for £120,000.  In 1973, Haughey sold 17.5 acres of that land back to CRH for £140,000. Within four years, Haughey had made a net profit of £20,000 and 62.5 acres at CRH’s expense.

The Ansbacher accounts set up in 1971 were funds lodged in Ireland by the Cayman Islands bank, Ansbacher (Cayman) Ltd. The unauthorised financial service was run in secret by the late Des Traynor who previously worked with Haughey Boland, the former Taoiseach’s accountancy practice. The system allowed account-holders to lodge money with Guinness & Mahon Bank in College Green, which was then held offshore.

The scheme, first disclosed in 1997 during the Mc Cracken tribunal’s investigation of payments from Ben Dunne to Haughey and Michael Lowry, was later run out of CRH headquarters on Fitzwilliam Square when Traynor was its chairman. In 2002, a report identified 200 holders of Ansbacher accounts, including Haughey and members of the CRH board.

High Court inspectors, led by the late Justice Declan Costello (who once held a domestic Guinness and Mahon account) into offshore Ansbacher found that CRH “did not knowingly” operate the illegal bank. This was despite the fact that eight out of 15 CRH directors had Ansbacher accounts and that the bank was run from CRH’s headquarters by Traynor who was  Haughey’s personal financier.

Responding in early 2005 to a question by Labour leader, Pat Rabbitte, about her decision to end the Ryan investigation, Harney said she felt it was time to bring the investigations to a conclusion seven years on and that she was under the impression they would have concluded much earlier. She says she submitted the Ansbacher report (by Ryan) to the Revenue Commissioners, the DPP and other authorities.

“Much of the work that the authorised officer (Ryan) was uncovering was also in the remit of the various tribunals. I directed the authorised officer to send much of the material he acquired to the relevant tribunals because I judged it was more relevant to their work than to a company law inquiry”.
Rabbitte replied that Harney’s action “lays itself open to the belief that the investigation was not terminated because it had come to fruition, but rather because it might do so”. Harney insisted she acted properly throughout her time as enterprise minister.
The Moriarty tribunal which might have been the more appropriate agency to investigate as it was already dealing with the Dunne/Haughey allegations did not manage to make any further inroads due to a lack of resources, according to its chairman, Justice Michael Moriarty.  It was clear that any inquiry would have to embrace the role of CRH in the long running scandal.
Unfortunately, during the investigation it materialised that Justice Moriarty held approximately £500,000 in CRH shares and this in his opinion precluded him from investigating CRH. Until the most recent disclosures by Ryan about the failure of subsequent ministers and other agencies to deal with the outstanding issues arising from his investigation into the Ansbacher accounts, the issue faded from the public discourse.
As Harney and the PDs rolled from one crisis to the next in the Ahern led government, she was eventually deposed by her deputy and rival, Michael McDowell, as the 2007 election approached. When Ahern made his infamous and tearful appearance on the RTE News in September 2006 to explain how his assorted friends had gave him substantial ‘dig-outs’ when he was finance minister in between 192 and 1995, McDowell had a wobble and demanded clearer explanations from the Taoiseach.
He then stuck firmly to government until the eve of the general election in May the following year when he threatened to jump ship after Ahern’s explanations of his financial affairs defied any logic or belief.
Once again, the political instinct for survival overcame whatever McDowell’s legal nous might have dictated. This time, however, the voting public was not prepared to reward the ‘party of conscience’ as its founder Des O’Malley liked to regard his creation. Even he was horrified when McDowell resigned as party leader and from politics as his troops lay injured on the battlefield during the election count. The PDs were history and the lesson of their complicity should be heeded by all of those attracted by the new version now touted by Lucinda Creighton and her assorted right-wing allies.