IRISH PRIME MINISTER DEFLECTS CORRUPTION ALLEGATIONS

UNCLAS DUBLIN 001119 SIPDIS DEPARTMENT FOR EUR/UBI E.O. 12958: N/A TAGS: PREL PGOV IE SUBJECT: IRISH PRIME MINISTER DEFLECTS CORRUPTION ALLEGATIONS Summary -------------- ¶1. In response to information leaked to the press from a confidential tribunal, Irish Taoiseach (Prime Minister) Bertie Ahern SIPDIS has revealed that he received euro 50,000 in loans from twelve personal friends in 1993 and 1994 while he was Minister of Finance. However, he declared that the money constituted personal loans intended to help him financially during a personal crisis -- his separation from his wife. For the moment, Ahern appears to have deflected opposition parties' claims that he engaged in wrongdoing. Nonetheless, the perception of impropriety lingers and could come back to dog him as he leads his Fianna Fail party into national elections in 2007. End summary. Allegations and Response -------------- ¶2. On September 21, the Irish Times reported allegations, allegedly leaked from the confidential Mahon Tribunal, that Irish Taoiseach (Prime Minister) Bertie Ahern had received payments from businessmen while serving as Minister for Finance in 1993 and 1994. (Note: The Mahon Tribunal, previously known as The Flood Tribunal, was established by the Irish Government in 1997 as a "Tribunal of Inquiry into Certain Planning Matters and Payments," following allegations that senior politicians had received illegal undeclared payments from property developers. End note.) ¶3. On September 26, after initially refusing to discuss the issue, Ahern revealed in a nationally televised interview that he had received a total of euro 50,000 in loans, as yet un-paid, from twelve personal friends. He declared, however, that the money constituted personal loans intended to help defray legal costs associated with his separation from his wife, Miriam, a legal process that lasted from 1987 to 1994. Parliamentary Focus on the Scandal -------------- ¶4. During the opening of the Dail (Parliament) on September 27, Ahern faced a barrage of questions from opposition party leaders. Fine Gael leader Enda Kenny demanded that Ahern admit he had been wrong in accepting money while serving as Minister of Finance. Kenny also accused him of adopting a different ethical standard for himself than he demanded from other political leaders, and insinuated that he had engaged in corrupt behavior. ¶5. Ahern responded, vehemently denying any wrongdoing and stating that no laws or regulations had been breached. He pointed out that he had declared the loans to the Mahon Tribunal. He further noted that he had, on occasion, tried to repay the loans, but his friends had refused to accept repayment. He castigated those who, he said, were adopting sinister smear tactics by digging into his personal life and declared that no favors had been returned for the loans. (Comment: No one disputes that Ahern attempted to repay the loans. In addition, even though four of the twelve friends were subsequently appointed to statutory government boards, the appointments have not become an issue, as the individuals were eminently qualified for their appointments. The opposition also focused on whether Ahern had paid tax on the money, but since it was provided in the form of loans, there would have been no tax liability. End comment.) Coalition Support -------------- ¶5. Late on September 27, the Tanaiste (Deputy Prime Minister) Michael McDowell, leader of Ahern's coalition partner, the Progressive Democrats, came to Ahern's defense, describing Ahern's acceptance of the loans as an honest error of judgment. Stating that he had never doubted Ahern's integrity, McDowell urged Ahern to repay the money, with interest, immediately. McDowell's statement appears to have eased the pressure on Ahern. ¶6. New McDowell statements, the question of a euro 12,000 payment to Ahern by a group of Manchester (UK) businessmen for a speech he gave there in 1993 remains an outstanding question. Kenny claims the payment was a gift, improperly received and not properly disclosed. (Legislation enacted in the late-1990s forbids Ministers from receiving payments for public appearances.) Ahern, who voluntarily revealed the payment, responded that he had acted correctly. He noted that he had paid taxes on the money and had declared the payment to the Mahon Tribunal. Comment -------------- ¶7. While Ahern appears to have gained the high ground in denying that he acted improperly -- and is noted for his 'teflon' ability to shrug off political slurs -- the perception of impropriety lingers and will almost certainly color voter's perceptions of his performance as he leads the Fianna Fail party into national elections in 2007. Kenny NNNN