Judges: Ex-Irish leader Ahern took secret payments

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By SHAWN POGATCHNIK, Associated Press

DUBLIN (AP) — Former Irish Prime Minister Bertie Ahern received at least €209,779 ($276,000) in secret payments while in office and repeatedly lied about this under oath, a mammoth fact-finding judicial investigation ruled Thursday in a long-awaited verdict.

The three judges led by Justice Alan Mahon stopped short of finding Ahern guilty of corruption, because they couldn't prove that Ahern gave favors to any of his cash donors when he was finance minister in the 1990s.

The judges did find two other former lawmakers in Ahern's Fianna Fail party, including former Cabinet minister and European Union commissioner Padraig Flynn, guilty of corruption for soliciting payments from property developers for personal use. They also found 11 past and present 11 members of local councils guilty of the same offense.

While the report itself was a fact-gathering effort and not a direct finding of any criminal wrongdoing, Prime Minister Enda Kenny referred its contents to state prosecutors, the national police force, tax collection authorities and the Standards in Public Office Commission. Potential offenses include corruption, obstruction of justice and tax evasion.

The report "clearly sets out corrupt practices among a number of politicians," said Kenny, who declined to say whether he considered Ahern among them.

Kenny said Ahern had stained the integrity of his office by making "a litany of unacceptable statements" to the judges.

Ahern, whose often bizarre and implausible 2007 testimony enraptured the nation, denied doing anything wrong, but resigned from office in 2008 after 11 years in power. He issued a lengthy rebuttal Thursday night accusing the judges of unfairness and vowing to clear his name.

"I am disappointed that the tribunal has said that I failed to give a truthful account," Ahern said. "... I never took a bribe or corrupt payment. I never made a political decision in return for a payment. I hid nothing."

Yet even his own party, whose name means "soldiers of destiny" in Gaelic, failed to believe him.

Fianna Fail leader Micheal Martin announced after a late-night meeting of party lawmakers that he intended to expel Ahern from party membership. The decision was expected to become official March 30.

"The receipt by a senior office holder of large amounts of money which a sworn tribunal has held is of unclear origins, and the failure to give any credible explanation, requires an unequivocal response," said Martin, who served in three Cabinet posts in Ahern-led governments.

He said Ahern's receipt of surreptitious funds, and his delivery of false testimony, "betrayed the trust placed in him by this country and this party."

No Irish politicians have been convicted of corruption as a result of investigations into the bribery culture at the heart of Irish property development. Prosecutions are hampered, in part, by the fact that the government passed no credible anti-bribery laws until 1996, leaving tax evasion as the only readily proven offense.

Ahern's longtime accountant and friend, Des Peelo, conceded that Ahern's testimony had been hard to swallow, but said the judges couldn't prove Ahern was lying.

"The fact that something is bizarre does not make it untrue. Some aspects of his finances were bizarre," Peelo said.

Ahern's former special adviser in government, Gerry Howlin, described the findings as "far worse than anything I expected or believed possible."

"He told me he was telling the truth," Howlin said. "His narrative is not believed, and it is damning and it is serious. ... His reputation has been very seriously damaged."

Voters last year ousted Fianna Fail from power and devastated its parliamentary ranks, a historic defeat driven by Ireland's humiliating negotiation of an international bailout. Ahern, 60, did not seek re-election.

Interest in the judges' final 3,211-page report — the climax of a 15-year investigation expected to cost taxpayers more than €200 million ($260 million) — was so great that the investigators' Web site repeatedly crashed. The probe, which has published four previous reports on other scandals, has collected 60,000 pages of testimony from approximately 600 witnesses.

"Much of the explanation provided by Mr. Ahern as to the source of the substantial funds identified and inquired into in the course of the tribunal's public hearings was deemed by the tribunal to be untrue," the judges found.

They accused Ahern's government, which founded the original fact-finding tribunal in 1997, of launching "extraordinary and unprecedented" attacks on their work in a bid to stop it once the target of their investigation became Ahern himself.

The judges said lawmakers must do much more to stamp out corruption in their ranks. They recommended judges receive the power to ban lawmakers from office who are convicted of bribery; tougher laws to protect whistleblowers; better reporting of politicians' donations and other gifts, many of which still are kept secret; a new registry for lobbyists and politicians' contacts with them; and new requirements for lawmakers to disclose all their business interests and potential conflicts of interest.

During his 15 days of testimony in 2007, Ahern admitted keeping most of the money in personal safes at his office and home from 1992 to 1994; failing to keep a personal bank account during much of the time under investigation; and paying no tax on any of it until the investigators uncovered its existence.

Ahern testified that undocumented cash payments he received while in Britain were all unsolicited gifts, while identical payments he received in Ireland were loans. Under tax law at the time, overseas gifts and domestic loans were not taxable. Ahern made no repayments on the 1993 "loans" until the investigators discovered them in 2007. He ultimately negotiated a tax settlement for the unearthed funds.

The judges repeatedly dismissed Ahern's explanations for the source of myriad 1990s cash payments in Irish pounds, British pounds and U.S. dollars that eventually were deposited into accounts in the name of his then-girlfriend, Celia Larkin, and his two daughters. Ahern claimed to have won much of the money betting on horses.

They rejected testimony provided by Ahern and several business friends who claimed to have raised money for Ahern without his consent at a pub event in December 1993. The judges ruled that the alleged pub fundraiser was fictional.

The judges instead accepted as truthful the testimony of a senior Dublin stockbroker whom Ahern had identified as one of those friends. The stockbroker, Padraic O'Connor, said he barely knew Ahern and had been asked by Fianna Fail to make a 5,000 Irish pound (€6,350, $8,300) political donation in a company check for Ahern's benefit, which he did.

The judges said they could not prove or rule out allegations by an Irish property developer, Tom Gilmartin, that a rival developer, Owen O'Gallaghan, paid Ahern two bribes in 1989 and 1992 totaling more than €100,000 ($130,000). This allegation inspired the judges to launch a probe of Ahern's finances.

"On this key substantive point there is no evidence whatsoever to show I received anything from Mr. O'Callaghan," Ahern said. "Nor could there be because, put simply, this never happened."

Gilmartin also testified that he bribed Flynn and another Fianna Fail lawmaker, Liam Lawlor, as part of his unsuccessful effort to develop a Dublin shopping center.

The judges accepted that Gilmartin paid Flynn about €63,500 ($83,000), which the EU commissioner used toward buying a farm in his wife's name. They found that Gilmartin paid Lawlor 75,000 British pounds (€91,000, $120,000), and that both payments were corrupt.

Lawlor was briefly imprisoned several times for obstructing the tribunal's work and was killed in a Moscow car crash in 2005 while on a personal trip to buy properties.

Ahern, who cultivated a persona as an affable and plainspoken Dubliner, was personally popular while in office and credited with leading a frugal personal life.

He was Fianna Fail's fundraising director in the early 1990s and a protege of former Prime Minister Charles Haughey, who was found guilty by a previous tribunal of receiving more than €10 million ($13 million) in secret payments from many of Ireland's top businessmen while in office. Haughey faced no criminal charges, paid taxes and penalties of €6.5 million, and died in 2006.

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Online:

Mahon Tribunal's final report, http://bit.ly/GLI1En

(This version corrects that his 1993 donation involved Irish pounds rather than euros.)

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