Former Irish PM Ahern lied over finances: inquiry

DUBLIN Thu Mar 22, 2012 2:03pm EDT

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DUBLIN (Reuters) - Former Irish Prime Minister Bertie Ahern lied about the source of substantial sums of money he received, an inquiry concluded on Thursday in a long-awaited report into the dealings of one of the architects of Ireland's ill-fated economic boom.

The verdict comes four years after the economy collapsed under the strain of a decade-long housing and banking boom, cultivated by Ahern and his Fianna Fail party, and a year after the party was ejected from power by angry voters.

Ahern was one of Europe's longest serving premiers and widely praised for his work in resolving a three-decade conflict in Northern Ireland. He said in a statement he was reviewing the findings and would make further comment in due course.

The government said it would refer the report to the police and the director of public prosecutions. It described the actions of two former Fianna Fail figures, including one-time European Commissioner Padraig Flynn, as corrupt but stopped short of using the same word in reference to Ahern.

Legal experts said evidence from the tribunal could be used in court, but a prosecution of Ahern over his testimony would be very difficult to secure.

Set up in 1997, the Mahon Tribunal probed the relationships between politicians and property developers after builders made vast profits on land re-zoned as commercial.

In its report it said corruption was "endemic and systemic" at every level of government in Ireland in the late 1990s. Ahern was Taoiseach, or prime minister, from 1997 to 2008.

It investigated allegations that Ahern accepted money from a developer in return for favors, a charge he rejected. He said his finances were complex but not improper during the turmoil that followed the breakdown of his marriage in the 1990s.

Ahern had admitted to accepting an envelope filled with 8,000 pounds ($12,700) in 50-pound notes from businessmen after speaking at a function in Manchester in 1994, which he said was his speaking fee. In late 2006 it emerged friends and businessmen had lent him 50,000 euros ($66,000).

'TEFLON TAOISEACH'

IRISH CORRUPTION ENDEMIC AND SYSTEMIC

In its conclusions, the report says Ahern failed to account for over 165,000 Irish pounds lodged in bank accounts.

"Much of the explanation provided by Mr Ahern as to the source of the substantial funds identified and inquired into in the course of the tribunal's public hearings was deemed by the tribunal to be untrue," the tribunal report said.

It rejected Ahern's explanation that substantial amounts of money were accumulated as the result of savings kept in safes. When he was finance minister, Ahern did not have a bank account.

He was known for much of his premiership as the "Teflon Taoiseach" -- the well-loved, beer-supping prime minister who could do no wrong while he turned Europe's poorest countries into one of its richest.

But he was later widely criticized, along with members of his Fianna Fail party, for their close links with bankers and property developers whose reckless actions helped bring the country's financial system to near collapse.

He resigned in May 2008 following earlier disclosures from the judicial tribunal, leaving his successor Brian Cowen to tackle Ireland's economic problems that forced the country to seek an 85 billion euro IMF/EU bailout.

His downfall mirrored that of another powerful Fianna Fail prime minister Charles Haughey whose dominance of politics in the 1980s was overshadowed by a series of scandals and allegations of corruption revealed a decade later. ($1 = 0.6310 British pounds) ($1 = 0.7582 euros)

(Additional reporting by Padraic Halpin; Editing by Robert Woodward)

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