Bertie Ahern was living in "a twilight zone" when he was controlling the Exchequer, according to a former Cabinet colleague.
For most of his period as minister for finance, from November 1991 to December 1994, Ahern was cashing his state pay cheques (for ?78,000 in 1993) without recourse to a bank account and he was moving between two residential addresses on Dublin's northside. A small coterie of his friends and colleagues was aware of his Scarlet Pimpernel lifestyle but his unhappy marital circumstances prompted them to turn a diplomatic blind eye. It was to this untidy personal arrangement the TD Michael "The Cardinal" Smith was alluding when he asserted, in the preamble to an anticipated leadership contest in Fianna Fáil between Ahern and Albert Reynolds: "The people need to know where the Taoiseach sleeps at night."
When Reynolds made a doomed solo-run in November 1991, Charlie Haughey sacked him as minister for Finance and installed the minister for Labour, Bertie Ahern, his enfant terrible since producing an eleventh-hour master-stroke as Fianna Fáil's negotiator with the PDs in 1989 to form the coalition government. This was the coup that caused Haughey to hail the one-time party poster-boy as "the most skilful, the most devious, the most cunning of them all".
The first of his three budgets, which he produced almost before he had his feet under the desk in Merrion Street, bore the hallmarks of a civil service budget-by-committee but it was his unorthodox 'family photo' with his two daughters on the Leinster House plinth that made the biggest headlines. Until then, his estrangement from his wife, Miriam, had been a badly-kept secret in political and media circles and his decision to pose for the traditional Budget Day picture with his children was seen as courageous and progressive.
His second budget, in 1993 (the first of a Fianna Fáil-Labour government) is best remembered for imposing a one per cent tax levy on PAYE workers to boost revenue. Though the Celtic Tiger label would surface for the first time in 1994, Ireland was still lumbered back then with steep personal taxes, a £10bn national debt, emigration and a 22 per cent national rate of unemployment that soared as high as 60 per cent in certain areas.
While the finance minister did not wrap himself in the mansion-and-yacht trappings enjoyed by his Taoiseach, he lived comfortably at a time when the average industrial salary hovered around £12,500. He had few personal outgoings, having a state car at his disposal since 1987. After quitting the Mansion House in 1987 at the end of his term as Lord Mayor of Dublin, he briefly resided at a flat in Upper Mount Street, where his partner, Celia Larkin, was the tenant. When she bought a house on the Navan Road in 1989, Ahern stayed on in Mount Street as Larkin's sub-tenant, before moving to the Navan Road house.
In early 1992, he took up part-time residence in St Luke's until May 1995. The property had been acquired in 1988 as a constituency office-cum-clinic, following the sale of his existing office in Amiens Street. St Luke's was purchased for £56,000 by five trustees and Fianna Fáil is its beneficial owner. Renovation expenses and stamp duty brought its total cost to more than £100,000. The money was partially raised through fundraising. Planning permission for the refurbishment required that some residential element be retained and a one-bed apartment was incorporated on the first floor. Ahern became a tenant of the trustees for residency in the apartment.
In his leisure time, he was attending half-a-dozen soccer matches each season at Old Trafford in Manchester. On at least two occasions, he travelled to Manchester United home matches as a guest of English businessman Norman Turner, who was then spearheading a planned casino and stadium development at the old Phoenix Park racecourse in Dublin. The project, which the finance minister's friend and Fianna Fáil fundraiser Des Richardson also worked on, along with former government press secretary PJ Mara, ultimately failed in the face of widespread community resistance.
In the past fortnight, Ahern has revealed that 1993 was his own annus horribilus. Despite saving £50,000, he felt compelled to take out a bank loan to conclude his legal separation from Miriam.
In the lacuna between his second and third budgets, on either Christmas Eve or St Stephen's Day, he received the first "loan" from friends of £22,500. The second sum, of £16,500, followed less than 10 months later. It was roughly the same time 25 unidentified businessmen in Manchester presented him with a gift of stg£8,000. He lodged the last two moieties together. Just one month later, Ahern would be elected Fianna Fáil leader.
Within government, meanwhile, he was a central figure in some simmering controversies, such as the introduction of the tax amnesty in 1993, despite implacable opposition from his officials in the Department of Finance and the Revenue Commissioners. In his recently published book, former Labour Party finance minister Ruairí Quinn recalled that the expectation among Labour ministers was that Ahern would refuse to accede to what was regarded as "an Albert idea".
Another controversial measure was his devaluation of the Irish pound. While some economists credit him with steady management, arguing that other states had been required to devalue twice or three times, his critics claimed his indecisiveness over several months allowed some people to amass personal fortunes from the move.
Probably the worst time for Ahern as finance minister was in mid-1994. The Fianna Fáil-Labour cabinet was inherently unstable, seeming to stagger from one political crisis to the next. This was hammered home with farcical reports of Dick Spring's adviser, Fergus Finlay, being locked out of Government Buildings on the night the beef tribunal report was published, as Albert Reynolds drafted his statement inside, declaring that he had been vindicated.
What was not known at that time was that the government came very close to collapsing some six months before it finally overcame a contentious proposal related to non-tax residency. Spring, the Tánaiste, is said to have had "a furious meeting" with Reynolds, arguing that the measure to reduce the number of days tax exiles had to stay outside the jurisdiction was being implemented to assist certain millionaires, such as Tony O'Reilly. "Spring was still raging over changes Bertie had made two years earlier to the tax regime for the oil and gas industry. That row between him and Albert almost broke up the government," confirms a minister from that period.
There are lingering questions about another tax amendment made by Ahern in that era. In 1994, he introduced a single addition to the Finance Act which benefited only one person, the property developer Ken Rohan.
Rohan had hosted a fundraising dinner at his home in Enniskerry, Co Wicklow before the European Parliament elections in June. An estimated £250,000 was raised by 10 guests contributing £25,000 each. The change made to the legislation by Ahern allowed Rohan to write off the value of art works in his home against his annual tax bill, giving him an instant saving of up to £1.5m and subsequent savings of about £300,000 a year.
In 1994, Ahern also introduced legislation granting urban-renewal tax incentives to a site at Golden Island in Athlone. The decision benefited Cork property developer Owen O'Callaghan, who had met the finance minister the night before the government fell.
By November 1994, Ahern was the new Tánaiste, in the absence of Spring and his cohort, having pulled out of cabinet over the Fr Brendan Smyth scandal. A month later, with his separation from Miriam completed, he was elected Fianna Fáil leader by a parliamentary party that had been noticeably panicky two years earlier about his ambiguous marital situation.