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AMCONSUL BELFAST

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 
 
 
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