New questions posed on link between politician and builders

Loyalty, that's what they call it in some quarters - the unflinching fidelity of politicians to the businessmen who pay their…

Loyalty, that's what they call it in some quarters - the unflinching fidelity of politicians to the businessmen who pay their way. But surely there is no greater example than the relationship between Ray Burke and his builder mates, Joseph McGowan and Tom Brennan.

We already knew that Brennan and McGowan bankrolled the politician for more than a decade. But only now, thanks to the investigations of the tribunal, are we learning about the full extent of their relationship.

It was a dizzying series of transactions and company dealings that Mr Pat Hanratty SC, for the tribunal, unfolded yesterday when the tribunal resumed after seven weeks of private investigations. A complex web of business links took us on a whirlwind tour of the favourite spots for clandestine financial activity - the Isle of Man, Guernsey, Jersey, the Cayman Islands, the British Virgin Islands and Liechtenstein. Familiar names popped up along the way, including Des Traynor and Henry Ansbacher.

But sometimes to go forward you first have to go back. For this reason the tribunal started at the point where the controversy about Ray Burke first began, back in 1974.

READ MORE

In that year, a newspaper first made the link between the fledgling politician and Brennan and McGowan, whose accounts appeared to show a payment of £15,000 to Mr Burke under the heading "planning". At the time, the accountant involved, Mr Hugh Owens, told Garda investigators he had made an error.

Fast forward a few years, to the construction of Mr Burke's house, Briargate, in Swords. It has long been known that this was built by a Brennan and McGowan company, and long rumoured that it was built for the politician for nothing.

Now the solicitor, Mr Esmonde Reilly, who handled the conveyancing of the property - and whose boss at the time was Dr Tony O'Reilly - has told the tribunal that no money changed hands, even though the company had paid £7,000 for the land.

However, the managing director of the Brennan and McGowan subsidiary, Mr Michael J. Foley, says Mr Burke subsequently paid £15,000 directly to the company. It will be interesting to see whether any documentation exists to support this contention. Briargate was designed by Mr John Keenan, an employee of Brennan and McGowan, whom Mr Burke later appointed to An Bord Pleanala. Mr Burke last year sold the house and surrounding land for £3 million.

Mr Burke has already admitted as untrue his earlier claim that the money he got from Brennan and McGowan was the result of lavish fundraising dinners at Cheltenham. Now it is the turn of the two builders to admit that the story was fabricated.

As the tribunal has established, the money came in the form of large, lump-sum payments paid by offshore companies associated with the two men. Mr Hanratty is trying to follow the money trail and to establish why it was paid to Mr Burke.

It isn't easy. Mr Brennan and Mr McGowan set up subsidiary companies' trusts the way most people have hot dinners. They went to elaborate lengths to avoid publicity and taxes. They told lies when it suited them, as in the case of court proceedings in 1985, when Mr McGowan claimed to have no knowledge of offshore companies that we know today he part-owned.

The same accountant who slipped up in naming Mr Burke in the 1974 accounts masterminded elaborate schemes to avoid capital-gains tax. Correspondence between related companies was orchestrated in order to give the appearance of normal business activity. Bank loans were obtained for a few days to give the taxman the impression that offshore companies had significant other assets.

Mr Hanratty homed in on the transactions that led to the acquisition of lands in Sandyford, Co Dublin, by Canio Ltd, a company in which the two builders and the estate agent, Mr John Finnegan, held equal shares. It was Canio that paid Mr Burke £60,000 in 1984 and £15,000 in 1985, using money from the mortgage raised to buy the Sandyford lands.

Mr Finnegan has told the tribunal he knows nothing about remittances to Mr Burke; he later sold his interest in Canio to his two partners, who sent the money to an Ansbacher bank in London.

Brennan and McGowan, meanwhile, tried to sell the land. From a secretly-taped conversation in 1985, we learned that Mr McGowan claimed that Mr Burke was "behind" the sale. Mr Hanratty took this to indicate that Mr McGowan had discussed with Mr Burke the sale of lands by a company which had given him £75,000. In the same year, Mr Burke was elected chairman of Dublin County Council.

In 1989, Mr Burke, then minister for industry and commerce, wrote to the chairman of the Revenue Commissioners about the tax problems faced by one of the Brennan and McGowan companies. What, asked Mr Hanratty, could Mr Burke "bring to the table" if it wasn't his "influence and authority" as a minister?

Mr Burke's response to this and other questions is expected in a few weeks.