March 22, 2012 / 4:36 PM / 5 years ago

UPDATE 2-Former Irish PM Ahern's explanation of payments untrue-inquiry

5 Min Read

* Corruption tribunal says account of former PM untrue

* Initial evidence had forced Ahern to resign in 2008

* Ahern said he never accepted a bribe or corrupt payment

* Fianna Fail proposes former leader's expulsion from party

By Lorraine Turner and Conor Humphries

DUBLIN, March 22 (Reuters) - Former Irish Prime Minister Bertie Ahern failed to give a truthful account of the source of payments 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.

One of Europe's longest-serving premiers, Ahern was widely praised for his work in resolving a three-decade conflict in Northern Ireland but his star had been on the wane since allegations were made that he received money from businessmen.

Ahern said he never accepted a bribe but that was not enough to stop the party he led for almost 15 years from proposing his expulsion as a member, saying he fell short of the standard of personal behaviour expected of a holder of high office.

"I have never received a corrupt payment and I have never done anything to demean any office I have held," Ahern said in a statement after the release of the report.

"I know that some people will feel that some aspects of my personal finances are unusual and that in retrospect it is obvious I was wrong not to have paid more attention to my financial affairs and records."

The government said it would refer the report to the police and the director of public prosecutions. The findings 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 favours, 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"

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 or won through betting on horse racing. 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 criticised, 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.

Fianna Fail's leadership will recommend Ahern's expulsion from the party at a special meeting next week.

"In the manner in which he received this money while holding high office and in the giving of rejected evidence to a sworn tribunal Bertie Ahern betrayed the trust placed in him by this country and this party," party leader Micheal Marin said.

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