Haughey's Forty Years of Controversy (6 page)

‘You are a reflection on the dignity of this house,' Charlie snapped. ‘You are only a gutty.'

‘Our people will get the government they voted for,' James Dillon declared. ‘If it is
Animal Farm
they want, they should vote for Fianna Fáil, but if it is democracy and decency they want, I suggest they will have to look elsewhere. I think the acceptance of corruption as the norm in public life is shocking.'

‘Is it not another form of corruption to take people's character away, to spread false rumours about them?' Charlie asked. Fine Gael was vilifying and slandering him with malicious rumours, he said. ‘That is all you are good for, the lot of you.'

On the night of 20 September 1968 he was seriously injured in a car accident in Co. Wicklow while driving home following an election rally. The circumstances of the crash were never explained publicly, but it was widely believed in political, garda and media circles that Haughey was driving at his own insistence. As Charlie was seriously injured, the opposition did not press the matter on this occasion. Thereafter, however, ministerial drivers were ordered not to allow anyone to drive their cars, even their respective ministers.

Haughey recovered in time to be appointed national director of elections for the general election of June 1969. This time he was the subject of some particularly strong opposition criticism in relation both to his own finances and his fundraising tactics for the party.

Fianna Fáil had been adopting American methods. Charlie had helped to draw up the blueprint for
Taca
, a support group made up mostly of businessmen who were invited to join at £100 a year. The money was deposited in a bank until election time, and the interest was used to fund lavish dinners at which members of
Taca
could mix with cabinet ministers.

Taca
was ‘a fairly innocent concept,' according to Charlie. ‘In so far as it had any particular motivation it was to make the party independent of big business and try to spread the level of financial support right across a much wider spectrum of the community.' Some members had previously been subscribing ‘substantially more' to the party at election times than the £500 that would accumulate in
Taca
subscriptions, if the Dáil ran its full five-year term, he contended.

Although Charlie was the politician most associated with
Taca
in the public mind, the idea had come from somebody else and he had no control over the funds, but he embraced the scheme with enthusiasm and organised the first dinner – a particularly lavish affair attended by the whole cabinet. ‘We were all organised by Haughey and sent to different tables around the room,' Kevin Boland recalled. ‘The extraordinary thing about my table was that everybody at it was in somehow or other connected with the construction industry.'

Opposition deputies promptly questioned the propriety of such fraternisation between the property developers and members of the government. In particular, there were questions about the selection of property being rented by government departments and agencies as they mushroomed in the midst of the unprecedented economic growth.

Boland insisted that he ‘never did a thing' within his department for any member of
Taca
, but he admitted that other ministers might have been ‘susceptible'. A cloud of suspicion was cast over the operations of
Taca
and it ‘unfortunately provided a basis for political attack which,' Charlie said, ‘did us a lot of damage at the time'.

Insinuations of corruption were widespread and these had been fuelled in May 1967 when George Colley urged those attending a Fianna Fáil youth conference in Galway not to be ‘dispirited if some people in high places appear to have low standards'. It was widely assumed that Colley was alluding to Charlie in particular, in view of the intensity of their rivalry over the party leadership some months earlier, but Colley rather disingenuously denied this intent.

Haughey was involved with Donagh O'Malley in Reema (Ireland) Ltd., a property company of which O'Malley was the chief executive and Charlie was secretary. Reema bought property around Limerick on the road to Shannon airport. At the time, there were suggestions that he and O'Malley used inside knowledge.

When it came to money matters Charlie was very much a mystery man. Following their marriage the Haugheys initially lived in a semi-detached house in a Raheny housing estate, but in 1957, they moved to Grangemore, a large Victorian mansion on a 45 acre site in Raheny. The builder Matt Gallagher advised Haughey to splash out £13,000 to buy the house and lands in Raheny, with the promise that when the time was right and planning permission had been secured to build houses on the property, he would buy it from him.

In his early years in the Dáil, Charlie projected a high public profile and enjoyed a good press, but he was quiet about his own private life and especially his business dealings. He appeared to amass a considerable fortune at a time when politicians were not a particularly well paid. ‘Now to be a wealthy politician was the sin of the day – and Charlie Haughey was indecently wealthy,' according to columnist John Healy. ‘If a pub changed hands, Haughey was the secret buyer.' At one point, he supposedly owned about five on the north and south sides of Dublin.

In 1968, Haughey bought a 127-acre stud farm in Rathoath, Co. Meath for £30,000 without taking out a mortgage. He was a full-time politician, and was no longer earning from the accountancy firm that he had established with Harry Boland. His only visible income was his ministerial salary of £3,500, but the subsequent profit that he made from the sale of his Raheny property some months later would have more than accounted for the purchase price of the farm. Of course, he protested that his business dealings were all legitimate, but his subsequent behaviour cast serious doubts on both his veracity and his financial probity.

In the midst of the general election campaign of 1969 Charlie found himself implicated in further controversy, following a sensational report in the
Evening Herald
about the sale of his Raheny home, which the newspaper stated was sold to his developer friend, Matt Gallagher, for over £204,000. Charlie used this money to purchase Abbeville and the surrounding 240 acres for £144,997, so even with the purchase of the farm in Co. Meath, he would still have had about £25,000 left over.

‘I object to my private affairs being used in this way,' Charlie declared. None of the figures could be given with certainty, because he did not give details to any reporter. ‘It is a private matter between myself and the purchaser.'

Planning permission would inevitably be granted for the land, regardless of who owned it, once Dublin began to spread out. Gallagher's advice was not particularly inspired, but Haughey had the advantage of knowing that he had an eventual buyer when he purchased the land. By hanging on to the property for a decade its value appreciated greatly. Some opponents tried to suggest that there was something immoral about the profit he made on the whole venture. Maybe what they should really have been questioning was the cost of new land at Kinsealy, because that would seemed to have been an equally propitious purchase, seeing that he sold just 17.5 acres of that land to Cement Roadstone for a quarry in December 1973 for £140,000, which was under £5,000 less than he had paid for the house and the 240 acres four years earlier.

Matt Gallagher, who had made a small fortune in wartime Britain, returned to Ireland and began building houses in the public and private sector in the 1950s. There was a great deal of housing deprivation in urban Ireland, especially in Dublin, where several families often lived in the one tenement. Gallagher was one of the builders most involved in
Taca
, and some of those people were prepared to help Haughey in their own interest.

‘Haughey was financed in order to create the environment which the Anglo-Irish had enjoyed and that we as a people could never aspire to,' according to Patrick Gallagher, who believed that his father saw the construction of a modern Ireland as a great patriotic enterprise.

The controversy over the sale of Charlie's property became a national issue, however, when Gerard Sweetman of Fine Gael charged that Charlie might have acted improperly by not explaining to the Dáil that he stood to benefit personally from legislation that he had introduced himself. It was suggested that he might have been liable for income tax on the sale of his land, if part of the 1965 Finance Act had not been repealed recently.

Suddenly Charlie's private business dealings became an election issue. ‘Because he has impugned my reputation,' Charlie explained, ‘I have felt obliged to refer the matter to the revenue commissioners, under whose care and management are placed all taxes and duties imposed by the Finance Act, 1965.'

The revenue commissioners promptly reported ‘that no liability to income tax or surtax would have arisen' under any provision of the 1965 act. Although this should have killed the issue, one of his opponents in his Dublin North Central constituency – the Labour party candidate, Conor Cruise O'Brien – raked up the issue repeatedly during the campaign in an effort to expose what he described as ‘the Fianna Fáil speculator-orientated oligarchy'. Despite everything, Charlie increased his vote to top the poll, while Cruise O'Brien was a distant second. Although Fianna Fáil's vote dropped by 2% nationally, the party actually gained two seats through the vagaries of proportional representation. Lynch was re-elected as Taoiseach and Charlie was re-appointed as Minister for Finance.

In his three full years in that portfolio, the budget deficit quadrupled. He intended to tell the Dáil in his next budget address that the deficit would be ‘substantially higher' in 1970.

‘There was a hushed silence as Mr Haughey rose from his usual seat and walked across to the Taoiseach's place on the front bench to open his briefcase,' the
Evening Herald
reported. ‘The minister, who began his budget speech earlier than usual because of the small number of queries during question time, started off with a review of the economy in general.'

Over the years Charlie had complained more than once about the unreliability of the media in general and the
Evening Herald
in particular, and this must have been one of the most glaring pieces of irresponsible journalism. Far from starting his budget address early, Charlie was not even in the Dáil. He was in hospital.

Lynch told a stunned gathering that the Minister for Finance had been hospitalised that morning following an accident. As a result the Taoiseach read the budget address himself.

Charlie's injuries resulted from a fall from a horse, but contrary rumours began circulating almost immediately. The garda commissioner informed Peter Berry, the secretary of the Department of Justice, that ‘a strange rumour was circulating in North County Dublin that Mr Haughey's accident occurred on a licensed premises on the previous night.' Berry passed on the information to the Taoiseach, who ‘was emphatic' that there should be no garda inquiries into the matter.

‘Within a couple of days, there were all sorts of rumours in golf clubs, in political circles, etc., as to how the accident occurred with various husbands, fathers, brothers or lovers having struck the blow in any one of dozens of pubs around Dublin', according to Berry.

One unfounded rumour that was later published suggested that Haughey was beaten close to death by the father and brother of a young woman after they supposedly caught him in bed with her, upstairs in the Grasshopper Inn in Clonee, Co. Meath.

Charlie had tried to dismount by hoisting himself out of the saddle by grabbing the guttering above the stable entrance, but it gave way with a large crack, which spooked the horse. Haughey was thrown heavily to the ground, receiving serious injuries that required hospitalisation. The rumours were so persistent that Charlie took the unusual step of having one of his stable hands talk to the press about having witnessed the riding accident.

By then, however, rumours of Charlie's other activities were already rampant and the country found itself in the midst of the arms crisis, which led to his dismissal as Minister for Finance on 6 May 1970.

At about three o'clock in the morning of 6 May 1970 Jack Lynch issued a statement to the press. He announced that he had ‘requested the resignation of members of the government, Mr Neil T. Blaney, Minister for Agriculture, and Mr C. J. Haughey, Minister for Finance, because I am satisfied that they do not subscribe fully to government policy in relation to the present situation in the six counties as stated by me at the Fianna Fáil Ard Fheis in January last.' On learning of the Taoiseach's decision, Kevin Boland resigned as Minister for Local Government and Social Welfare in protest, and Paudge Brennan, his parliamentary secretary did likewise. The country was suddenly awash with rumours that the Taoiseach had discovered plans for a
coup d'etat.

It was not until hours later that Lynch explained to the Dáil that he had acted because security forces had informed him ‘about an alleged attempt to unlawfully import arms from the continent'. As these reports involved the two cabinet ministers, he said he asked them to resign on the basis ‘that not even the slightest suspicion should attach to any member of the government in a matter of this nature'.

To understand the crisis one must go back to events surrounding serious violence which erupted in Northern Ireland following the Apprentice Boys Parade in Derry City on 12 August 1969. The parade was attacked by Nationalist protesters. The police, supported by Unionist thugs, then besieged the Nationalist area. What became known as the Battle of the Bogside had begun and quickly spread to other Nationalist areas of Northern Ireland, which seemed on the brink of a full-scale civil war.

Amid the escalating violence the cabinet met in Dublin. Lynch had a draft address that he intended to deliver live on television that evening. Several members of the cabinet objected that it was too weak in the circumstances. Charlie, Blaney, and Boland, together with Jim Gibbons, Brian Lenihan and Seán Flanagan all called for something stronger. A new speech was prepared at the cabinet meeting.