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INSIDE POLITICS - AIB's lies that kept Haughey safe as bullion and free to corrupt for a decade
By Kevin Rafter



ON 28 January 1983 the Evening Press newspaper published a report which suggested that Charles Haughey owed Allied Irish Banks £1m. At that time, Haughey was leader of Fianna F�?il and down on his luck. He had just lost a general election which ended his second short stint as Taoiseach, a position he had first acquired in a highly effective internal coup against Jack Lynch in late 1979. In his three years as Fianna F�?il leader, Haughey fought three general elections but won no overall majority for his party. Despite his utterances about the need for fiscal prudence, the national finances were in dire straits and getting worse. There were suspicions in some quarters about his character and a few people had raised questions about the source of his wealth.

Indeed, never had a senior politician polarised opinion or faced so many enemies.

By early 1983 Haughey's internal opponents were once more lumbering up for a heave against his continued leadership. The £1m debt reported by the Evening Press was a huge sum of money. If true, the revelation would more than likely have ended Haughey's career; in effect, his leadership of Fianna F�?il would have been over in early 1983. But Allied Irish Banks saved Haughey. A press statement was issued on 31 January 1983 in response to newspaper story. "In the Evening Press on 28 January, in an article by a Special Correspondent dealing with the financial affairs of a well known figure it was stated that sources close to Allied Irish Banks insist that he owed around £1m last year. This statement is so outlandishly inaccurate that Allied Irish Banks feel bound, as a special matter, to say so positively and authoritatively."

In his report last week, tribunal chairman Michael Moriarty goes as far as concluding that "the press release issued on 28 January 1983 was an unhappy, misleading and inaccurate document". He concluded that for AIB to describe the Evening Press article as "outlandishly inaccurate" was "disingenuous in the extreme". When Haughey was first elected Taoiseach in December 1979 he had an overdraft at the AIB branch on Dame Street. The debt was £1.143m. It had been built up through spending on personal and household items during the 1970s. The Moriarty Report concludes that AIB "exhibited a marked deference in its attitude to Mr Haughey, and as a disinclination to address or control his excesses as a banking customer which had accumulated over several years, and which became increasingly pronounced when he was appointed a Government Minister in 1977". Conveniently for all involved, a settlement between Haughey and AIB was eventually reached in January 1980, a few weeks after Haughey's election as taoiseach. The bank wrote off almost £300,000 in return for £860,000 although Haughey actually only paid £750,000. The balance of £110,000 was never paid and AIB did not look for its money.

Haughey would have been in serious trouble if AIB had told the truth in January 1983 - that for a decade it had been chasing the Fianna F�?il politician over an ever-increasing indebtedness. His defenders in Fianna F�?il - including Bertie Ahern - would have found it almost impossible to have continued backing him. He would have been dumped as Fianna F�?il leader. It may be naïve to speculate but it is quite possible that if AIB had not told lies in January 1983 then Ireland would not have been duped throughout subsequent years by Dunlop, Lawlor, Burke, Flynn and the others who took cash and favours. The pity in all this is that the Moriarty tribunal censures AIB as an institution. We know nothing of the senior figures in AIB who helped Haughey, and helped to keep him in positions of power for a decade after they approved the publication of a dishonest press release on 31 January 1983.




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