Category: Archive

Dublin Report Tale of 2 leaders: same crisis, different result

February 16, 2011

By Staff Reporter

By John Kelly

Former Taoiseach Charles J. Haughey never looked as bad as he did at the Moriarty Tribunal last week. And he wasn’t even there.

During his appearances at the tribunal, a total of 12 days when he attempted to answer questions about his complicated personal financial details, Haughey repeatedly insisted that he had rarely met his former financial advisor, the deceased Des Traynor.

Last week, Tony Traynor, his son, forthrightly told the tribunal that this was not the case.

He said that his late father went to meet the ex-taoiseach at least twice a month, often more, at his Kinsealy mansion.

Meetings, lasting two hours, were held most Saturdays and often on Sundays, he said.

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Clearly, Haughey will have to answer some very hard questions as the result of testimony like that.

But now the tribunal chairman, Justice Moriarty, has decided that he will have to give his answers only in private. He accepts that his medical condition is such as to necessitate this approach.

Haughey is not a well man. His own medical consultant, an urologist, has already informed the tribunal that Haughey is suffering from terminal prostate cancer.

His legal team has insisted that forcing him to continue giving evidence to the tribunal will shorten his already threatened life.

Thus, it has been decided that the remaining questions are still of such gravity that he will have to be continued to be questioned.

The only concession is that he will do so in private. Yet, at this juncture and at this stage of his illness, he will have to continue attending the tribunal at Dublin Castle.

Transcripts will be prepared as normal and then released publicly at the chairman’s discretion.

It is, of course, no way for a former taoiseach to make his last hurrah. But that, alas, is the way of life and the way of tribunals which, since the beef tribunal, are exerting more and more of an influence on the Irish political scene.

Apart from the direct conflict of evidence such as that provided by Haughey and Tony Traynor, they also throw up fascinating revelations, dutifully headlined daily in the national newspapers.

Most affecting of all last week was the testimony given by another former taoiseach, Dr. Garret FitzGerald.

The rumpled ex-leader, who looked like he needed a haircut, offered evidence in direct contrast to Haughey, who shared some of the same student years in University College Dublin where FitzGerald later became a lecturer in economic statistics.

Whereas Haughey has been uncertain and forgetful in answering all questions about his personal finances, FitzGerald crisply recalled just about everything, even the details that might have proved to have been embarrassing.

Last week, he recounted how he had jumped at the offer of a directorship in Guinness Peat Aviation after he had resigned as taoiseach in 1987.

It seemed to be a very good deal indeed. He would get emoluments as director. He had his pension as a former taoiseach. He earned money from lecturing and journalism. Finally, he had the option of buying cut-price preferential shares as a director.

And his bank, AIB, were fully behind the GPA flotation, so much so that it literally threw loans to potential shareholders, just as it did to Irish farmers anxious to expand and reap the advantages of continually rising land prices.

Everybody, it seemed, was going to make money.

FitzGerald was only one of many who took the bait. He borrowed two loans from the bank, in 1988 and ’89. Then he amalgamated both in 1992, totaling about £170,000.

His sparkling late wife, Joan, who suffered from a chronic debilitating illness for much of her short life, had surrendered an insurance policy she held over her husband’s life as security for the loan.

He had also surrendered his own policy. When he agreed to the terms of the amalgamated loan in 1993, he failed to realize that he was liable to full payments on both the principal and the interest.

Amazingly for a man who is such a superb economist, he had failed to read the small print.

It was only in 1993 that he realized he was up to his tonsils in hock to the bank.

That year, the GPA flotation collapsed. The shares he had given the bank in equity were practically worthless. All that he had was his pension, his relatively meager earnings and his home on the prestigious Palmerston Road in Dublin, a home that is probably worth a cool million more now than it was then.

Effectively, he was faced with bankruptcy.

In 1993, the house was worth little more than £200,000 with vacant possession, meaning that there were no tenants.

His crippled wife and he had nowhere else to live. They would have to remain as tenants and that meant that the house was worth just about £150,000, less than he owed the AIB bank.

That did not matter very much because the FitzGerald family had nowhere else to live. Neither could they afford it. There was also a high mortgage remaining on the property.

How quickly the great can be brought to the level of mere groundlings.

The bank considered legal action but pulled back. Ostensibly, according to one former loan manager, this was because it feared that such action would cost more than it was worth. It continued, however, to insist that he should honor the terms of his loan. It wanted to possess his pledged equity.

That could have left the former taoiseach and his ailing wife homeless.

For anybody, it was a horrible prospect. For a former taosieach, it was just unbelievable.

His son Mark, a businessman who specializes in property, came to the rescue.

He arranged for the purchase of the Palmerston Road house, on foot of the sale of his own, another prestigious residence in Rathmines.

His father and mother would remain as sitting tenants, occupying the upstairs part of the house while Mark and his young family would occupy their new home in the lower level.

At last, FitzGerald could come to terms with the bank.

AIB wrote off a considerable portion of his loan. Joan and he continued to live in reasonable comfort in their new accommodation.

That was how one former Irish taoiseach was forced to cope with his new circumstances.

Contrast it with the position adopted by Haughey, who informed top executives in the same banking group that he could be a "formidable adversary." At the time, he owed more than a million.

There they were, two former leaders of the Irish Republic with totally contrasting styles toward their banking obligations.

Which of them, would you reckon, was most responsible for the birth of what we now describe as the "Celtic Tiger"?

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