Irish Crime and Punishment: the corruption of Charlie Haughey

I left Ireland after Christmas with the nation in a strange time warp that reminded me of the 1980s. The current economic crisis was superficially similar to how it felt at the time when I first left the country 24 years ago. The similarities were still there this week as the Dell plant in Limerick closed with the loss of 1,800 jobs. The country offered nothing to me in 1985 and I felt a more interesting life could be had first in Britain and then in Australia. While I wasn’t an economic refugee, 1980s Ireland was a mostly stagnant pool. At the start of that decade the Magill journal published the shocking news that 1 million of the country’s then 3.2 million citizens were living below the poverty line. As the decade developed, things seemed to be getting no better. A falling growth rate, rising unemployment and excessive government borrowing suggested the country was heading towards disaster.

Yet the disaster never eventuated. In the 1990s, Ireland reinvented itself on the back the almighty dollar. Ireland was a suddenly a Celtic Tiger riding an exhilarating wave on the tech boom. Numerous US multinationals (Dell included) were enticed into the country with dubious tax sweeteners. By 2000, the economy was self sustaining and the construction industry had taken over as the most profitable sector. After spilling its people out for its first 60 years, the Irish state was suddenly actively recruiting, both from within the Irish Diaspora and without. The social make-up underwent extreme change.

I said the current crisis was only superficially similar to the crisis of the 1980s. For starters there is now money in the country. There is also a new and talented pool of individuals who like millennia of invader generations before them “have become more Irish than the Irish themselves”. There is also no Charles Haughey, the thief-in-chief who cast a long shadow over the Irish polity from when he emerged as bright but opportunistic junior minister in the 1960s to his retirement in scandal in 1992. British files from 1978 recently released under the thirty year rule described him even then as likely to be corrupt and as someone who “associated with the nouveau riche of the Dublin business world”.

I am reminded of these things after reading a book on the long trip home by Waterford-born Oxford academic Roy Foster. Called “Luck and the Irish: A brief history of change, 1970-2000”, it is an enjoyable and forensic examination of the main reasons for change in Ireland in those hectic 30 years. For better or worse, and it is mostly worse, Haughey was a major figure through much of the era.

Charles J. Haughey became a notorious figure in 1970 when he survived unscathed out of a murky Arms Trial. Haughey and fellow Fianna Fail minister Neil Blaney were arrested and charged for attempts to import arms into the state for use in the North. Then Taoiseach Jack Lynch sacked him from the cabinet (but restored him after a few years in exile). Haughey was acquitted but contradictions in testimony suggested there had been more covert government acquiescence than appeared in court. Haughey retreated to the back benches to the disgust of many who wanted him sacked from the party.

Haughey went back to his party machine to lick his wounds. While he kept a low profile, there were compensations. For starters, he had become exceptionally rich. His academic degrees in commerce and law enabled him to establish a successful accounting business, but as Foster notes, Haughey’s “way of life soon outpaced even that of the richest of his clients.” He used his own windfall tax act to avoid paying duties on a Georgian house he sold at a massive profit in 1969 and moved into the 250 acre Abbeville Mansion at Kinsealy. He added to his portfolio with a stud farm in Meath, a large yacht, and the ultimate status symbol, his own island Inishvickillane, off the coast of Kerry.

No one could tell quite how he could afford it all. After 1960 he was no longer active in the accountancy business and lavishness wasn’t viable on a slender government minister’s salary. Yet no one cared, apart from his bank manager. By the end of the 1970s his personal debt at the Allied Irish Banks quadrupled to a million Irish pounds and was becoming a serious embarrassment to the bank (though not to the politician, who full of chutzpah, solemnly told the people of Ireland “they had been living beyond their means”). By then, he was Taoiseach and in a position to ignore AIB’s complaints about the money he owed them.

His ascension to the top job stunned most of his government colleagues. When Jack Lynch retired, his designated successor George Colley had the support of 22 of the 25 government ministers. But Haughey assiduously worked the back bench and won the ballot. Jack Lynch retreated in shock to his native Cork and although he lived on for another 20 years studiously avoided all further party activity.

Becoming Taoiseach did not change Haughey – his main interest was the accumulation of wealth. His financial go-between Des Traynor transferred bank debts by collecting “loans” (in practice, never paid back) from businessmen and moving the balance to heavily shielded accounts in the Caymans. Haughey surrounded himself with corrupt politicians such as Padraig Flynn and Sean Doherty who followed their master’s venal habits. Haughey also gained control of Fianna Fail party funds and many donations ended up in his pockets aided by the blank cheques provided by naively trusting party secretary Bertie Ahern (who would eventually inherit Haughey’s leadership mantle in 1997).

Haughey’s shonky dealings gave no indication that a major economic recovery was just around the corner. The economic crisis meant most of his 1980s budgets were hairshirt affairs. The burden of taxation was unfairly borne by salaried employees while farmers (and some politicians) paid virtually nothing. When Haughey was returned to power in 1987 after a gap of almost five years, the country was making slow steps to what would become an astonishing transformation. Much of the early wealth was skewed. Although Ireland was beginning to get a dividend from EU membership, large farmers fared best from the Common Agricultural Policy. Agribusiness also benefited from phony export credits. Meanwhile property developers made money from tax breaks and land rezoning.

It wasn’t until the late 1990s that politicians began to be called to account for their crimes in a series of tribunals. The McCracken tribunal found the offshore accounts but luckily for Haughey, Traynor his bookkeeper was dead by then and the secrets of who owned the money died with him. The Flood Tribunal showed Fianna Fail cabinet members had accepted bribes from businessmen for land deals. By the time of the Moriarty Tribunal it was clear Haughey was the biggest offender. The tribunal found he had taken payments of 12 million euros between 1979 and 1996 for “services rendered”.

But by then Haughey had long retired. In 1992 his position as leader became untenable after a series of party room blunders. Finance minister Albert Reynolds positioned himself for a spill. After a sacked and embittered Sean Doherty revealed Haughey had ordered phone taps of unfriendly journalists ten years earlier, the game was up. For the remainder of his 14 surviving years, much of his remaining reputation withered as further revelations of his malfeasance emerged. His death in June 2006 was marked with mixed commentary. The best I could say of him at the time was “he was the first quintessential modern politician in Ireland. He was driven by desire not by dogma.” Having read Foster’s account, I’m even less inclined to be charitable. Haughey was a criminal who infected the body politic for decades and made corruption acceptable at the highest levels. Ireland is a far better place for his passing.

The country craft of Charlie Haughey

Country Craft
An Irish joke
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Q. What's the difference between Charlie Haughey and an Aran jumper?
A. One's a country craft.
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Charlie Haughey is dead. Haughey, the one not a country craft, pretty much ruled Olde Irelande pre Tiger. Now he is dead at 80. Charles J. Haughey, or Haw hee as the British media learnt to call him, was a trained economist turned three times prime minister who ‘mastered his every brief.’ A politician and a crook like all of them. And a millionaire with an astute eye for the property market. He was a crafty cunt indeed. My apologies for use of the vulgarity. But obscenity it isn’t. Use of the word "cunt" here is a reflection of some clever ruse the Irish instinctive would be proud of in themselves, but recognise when it is done better by someone else. “Cute hoor” is another way of saying it.

Charles Haughey could certainly do it better than most. He will be buried with full Irish state honours on Friday. The Taoiseach Bertie Ahearn, his successor as leader of Fianna Fail, will deliver the funeral oration. Bertie will be sure to mention the good bits. And they were many. In his third term of office, he economically presided over an Irish perestroika. He was a strange breed with the ability to turn conventional wisdoms upside down. He attempted to implement “Irish solutions to Irish problems” (contraceptives could be provided legally under prescription to married couples.) He bought arms and he bought an island. But his people loved him. Giant screens will be installed outside Donnycarney church in North Dublin for the funeral. The church will be open on Thursday between 11.30am and 4pm so that members of the public can pay their respect.

Respect. Not something Haughey was ever short of during the tumultuous years of his government. Thatcher hated him but she could do business better with the taciturn Haughey than the trivia-obsessed Garret Fitzgerald. Fitzgerald was the man who kept him out of power between 1982 and 1987 and the alter-ego of Haughey. Fitzgerald was a doctor of economics and the leader of Fine Gael, the main opposition. There was a family slant. Haughey’s father was a staunch Fine Gaeler. There was even a personal slant. Haughey once dated Fitzgerald’s wife Joan O’Farrell.

Haughey was born in Castlebar, Co. Mayo on the 16th of September in 1925. So was B.B. King. King, of course, wasn’t born in Co. Mayo. But Haughey shouldn’t have been either. His parents were Catholics on the run from Northern Ireland. The family farm in Co Derry was burned in a sectarian attack. The Haugheys were disliked not only by Protestants by also by a significant Catholic population because Sean Haughey (Charlie's father) fought on the side of the Free State in the civil war. This war was the fulcrum of Irish politics. The main Irish political parties ignored social indicators as a reason for voting. They either aligned themselves as Free-Staters (Fine Gael) or Republicans (Fianna Fail). Though a nominal left voted Labour, neither Marx nor Adam Smith had a look in the decision of allegiance.

When the Republican leader De Valera came in from the cold in the late 1920s and decided he no longer wanted to be seen as a terrorist, he decided to install his version of Ireland by political means. He set up Fianna Fail “The Soldiers of the Fianna” Fianna is a complex term that can mean Ireland or Destiny. Fianna Fail are now aligned in the EU group known as the Union for Europe of the Nations. Other parties in this group such as the Danish Folksparti or the Italian Alleanza Nationale are either nationalist or euro-sceptic. In a sense Fianna Fail is neither. Fianna Fail is a populist chameleon. Edward George De Valera dominated the party until shortly before his death in 1975. In 1966 De Valera retained the presidency at an election but disliked his young campaign manager, the then government minister for Agriculture Charles Haughey.

Haughey graduated from Trinity College Dublin with an economics degree. He worked as an accountant and started his move into politics. He ignored his father’s Free Stater credentials. Instead he formed an alliance with one of Ireland’s patrician Fianna Fail families. In 1951, he married Maureen Lemass daughter of future Irish Taoiseach Sean Lemass. He was elected for Fianna Fail at the fourth attempt in for the seat of North Dublin six years later. His father-in-law offered him patronage with his first ministry role in 1961 as Minister for Justice. He became very busy in the role. He introduced legislation such as the Succession Act to protect the inheritance rights of wives, and the Extradition Act to remove the protection of criminals. Haughey also reactivated the Special Criminal Court and helped to defeat the IRA’s ill-fated border campaign of 1962.

His work got him a promotion to Agriculture. The farmers are a powerful force in Irish politics and Haughey was not as successful here. But his battles with farmers raised his profile and made him a very public figure. In 1966 his father-in-law Sean Lemass retired and Haughey applied for his job. Lemass advised him to bide his time and support Jack Lynch instead. Lynch rewarded Haughey by giving him the Ministry of Finance. Here he used his accountancy background and economic training to good effect. He presided over popular budgets with increased spending in an economic boom.
Northern Ireland was to burst its way back into the spotlight in 1969 with the start of the Troubles and the British Army on the street.

Members of the ruling Fianna Fail party wanted to support the Nationalist population in the North. They decided to arm the IRA in secret and a front organisation sent money to a Northern Irish aid agency. Haughey and Neil Blaney were the government ministers on the committee to make it happen. The scheme to import weapons was leaked to the opposition, Liam Cosgrave. Cosgrave exposed the scandal and Haughey and Blaney had to go to save the government. The scapegoats went to trial in 1970 but were acquitted of illegally acquiring weapons. It didn’t save the government in 1973 when Fine Gael took power. Haughey served his time in banishment and got back on the front bench of the opposition in 1975. The country forgave Fianna Fail its sins and Lynch won a landslide election in 1977. Haughey was now installed as the Minister for Health. The power behind the throne in this brief was the Roman Catholic Church. The church controlled Ireland's schools and hospitals. Haughey took them on in 1977 by slyly legalising contraceptives by prescription. He called it “an Irish solution to an Irish problem” but in truth it was a Haughey solution to a Haughey problem. Meanwhile Lynch was in political trouble with the economy in decline. Over in Health, Haughey’s hands were clean. He was in a good position to profit when Lynch resigned in 1979. The cabinet supported George Colley to replace Lynch but the back benches voted for Haughey. Charles Haughey was elected leader of the party and Taoiseach on 11 December 1979 exactly ten years after he was hung out to dry for the Arms Crisis.

Haughey inherited Lynch’s economic woes. The oil crisis had hit resource-poor Ireland. Haughey couldn’t do enough to stop it and was beaten at the polls by Fitzgerald’s Fine Gael in 1981. Though Haughey had a brief hiatus in power again a year later, his margin was knife-edge and lost a second election after the death of a Fianna Fail TD. The economy continued to spin out of control through the eighties until Fitzgerald lost the 1987 election. Fitzgerald ruled long enough to pass important social legislation but by the end of his watch Ireland was in danger of intervention from the IMF. Haughey was prime minister for the third time in 1987. In 1989, another tight election saw Haughey cling on to power at a price. The election had forced Fianna Fail into something they had never done before: form a coalition. Haughey formed an alliance with the Progressive Democrats, a new party not constrained by the bitter history of the Irish Civil war. The Progressive Democrats (PDs) were Ireland’s first free market Liberal Party and was founded by an ex-Fianna Fail renegade Desmond O’Malley. While this arrangement saved power for Haughey, it was too much for Fianna Fail traditionalists who saw him betraying their tradition. In 1990, Ireland was the head of the EU and Haughey served as chair with much distinction. While he basked in the role of world statesman, the knives were sharpening for him at home. His aura of invincibility slipped as a series of scandals embroiled his ministry. One of his ex-ministers Sean Doherty went public and stated Haughey had authorised him to conduct phone tapping. With a –gate just waiting to be put at the end of this scandal, the PDs pulled out of the government. Haughey resigned. His final speech to the Dáil echoed Othello: "I have done the state some service, and they know it, no more of that."

In retirement he was dogged by investigations and allegations. A tribunal under Justice Michael Moriarty looked at whether Haughey may have received “unethical payments” between 1979 and 1996. The tribunal never got anywhere. It was suspended in 2004 pending a High Court hearing that is now unlikely to happen. Those that followed Haughey, Albert Reynolds and now Bertie Ahern, have reaped the success of the Irish economic recovery. Ireland is now a vastly different place that the past of Haughey’s time. But he was the first quintessential modern politician in Ireland. He was driven by desire not by dogma.