The tribunal finds on page 530 that "the Department of Agriculture, as the Intervention Authority, was at all times aware of the fact that the intervention beef purchased from it was destined for export to Iraq, authorised the repackaging or reboxing of the meat and authorised the payment of the appropriate rate of export refunds".
Because of the nature of the intervention system and the complicated export system which is set out in Chapter 15 of the report and the export refund system — all of which were administered by the Department of Agriculture — it is inevitable that a very large number of officials in that Department would have known that intervention beef was going to Iraq.
It was even printed on the front page of the Farmers Journal for the week ending October 29 1988 that the AIBP Group had a new order for 20,000 tonnes of intervention beef for Iraq. For whatever reason, the Department of Agriculture sought for a long time to conceal the fact from the tribunal. They did not produce details or even confirmation of the export of intervention beef until October 1992, which was well over a year after the work of the tribunal had commenced.
When the chairman asked for these details on 24 June 1992, counsel for the State, Conor Maguire S.C., stated "this would be difficult, if not impossible". Clearly, it was no such thing. All the information was readily available in the Department and a large number of officials were aware of it.
The Minister must have been aware of it. He was aware that substantial export credit cover was being given by his colleague, the Minister for Industry and Commerce, to beef going to Iraq. It seems highly unlikely that he did not inform his colleague, Deputy Reynolds, in 1987 and 1988 of the use of intervention beef to reinforce Deputy Reynolds's own knowledge since December 1987. Mr. O'Kennedy and his Department, however, did not answer my query as to whether intervention beef was being used in these contracts when I asked an official of the Department of Industry and Commerce to make the inquiry in November 1989. By refusing to tell me, perhaps the Minister for Agriculture was simply protecting the interests of Deputy Reynolds who was Minister for Finance at that time, even though he was thereby jeopardising the State's defence to a very large claim against it.
Therefore, when in the aftermath of the publication of the report on 2 August last the present Minister for Agriculture, Deputy Walsh, claimed that certain matters were concealed from his Department, the truth was the direct opposite of what he said, that is, his Department concealed the truth from various others.
Evidence of the fact that Deputy Reynolds was informed of the use of intervention beef in these Iraqi contracts is also borne out by the interview he gave to Rory Godson, who gave sworn evidence of what Deputy Reynolds told him to this effect in volume 213 of the hearings.
While all the foregoing constitutes a damning indictment of Deputy Reynolds's stewardship as Minister for Industry and Commerce of the "national interest", it relates solely to the fundamentally subsidiary question of the composition of the exports. On the more radical question of whether there should have been any allocation of export credit insurance for beef exports to Iraq, the position is still bleaker for Deputy Reynolds. It is expressly held in the report that the Minister consistently disregarded the professional and official advice available to him from his Department and from his own agent, the Insurance Corporation of Ireland. In particular, the following decisions, all of vital importance to the State and the Exchequer, were taken by him against professional and official advice, which was unanimous: (1) the decision in April 1987 to reintroduce export credit insurance for Iraq; (2) the decision in September 1987 to procure Government approval to increase the ceiling of export credit insurance for Iraq from £70 million to £150 million; (3) the decision to obtain Government approval to increase the ceiling for Iraq from £150 million to £270 million in October 1988.
The terms of the advice which the Minister disregarded are of great significance. From first to last, he was advised in unusually strong terms of the utter folly of the course which he followed. As recently as two months prior to the fateful decision of April 1987 his predecessor as Minister had accepted departmental advice that no further cover should be granted in respect of exports to Iraq, based on "the general deteriorating financial and military situation in Iraq"— page 51. The Department had prepared a very comprehensive memorandum stating in terms that the Iraqis would not be able to pay their debts; that they were broke and that an analysis of their economic and military position suggested that their position would worsen rather than improve.
In 1988 the Department of Finance reviewed the history of export credit insurance and noted: "We oppose successive increases in the Iraq ceiling which, because of the extremely volatile Iraq situation, we regard as too much of a gamble with the Exchequer's resources". This was a gamble which the Taoiseach took, a gamble of well over £100 million of public funds placed on intervention beef, owned, ridden and trained by Larry Goodman in the Sadam Hussein stakes and carrying 12 stone 7 lbs and about 4 stone more in overweight.
In fairness it must be noted that the departmental advice in the Department of Industry and Commerce and elsewhere is of a very high standard. It is commonly stated, and the Minister for Tourism and Trade reiterated this in defence of the Taoiseach, that hindsight is always 20:20. The fact remains that the departmental advice in advance of the gamble taken by the Taoiseach predicted the coming disaster with uncanny accuracy. I would be the last to say that a Minister is obliged always to follow the advice of his officials, but if he is to dissent from the sustained and unanimous advice from sources inside and outside his Department he must have a rational reason for doing so and this reason must be stated.
The Taoiseach ignored the advice he was given and never stated why he was doing so. When asked at the tribunal if he had read one department memorandum he inquired how many pages were in it. On being told that it considered of 21 pages of reasoned and detailed advice he said in a famous phrase that he would not have read such a document because he was "a one page man". This is surely the nadir of ministerial stewardship.
I have quoted from the findings of the tribunal at page 202 where my allegation that there had been a substantial abuse of the export credit insurance scheme was expressly upheld. In fairness to the Taoiseach I should continue to quote as follows:
(v) Such abuse would not have led to a fraud on the taxpayer because of the insistence by the Minister for Industry and Commerce and his agent the Insurance Corporation of Ireland that proof of the origin of the beef to be exported be retained and such proof would have to be produced to the Insurance Corporation of Ireland before any claims on foot of the said policies would be paid. Such abuse however had the effect of tying up and rendering unavailable for allocation to other companies substantial amounts of Export Credit Insurance cover, which would otherwise have been available for allocation.
(vi) Such abuse was substantial and if AIBP are successful in the proceedings hereinbefore referred to the potential liability of the State is very substantial. Such abuse and such potential liability may not be unprecedented but it certainly is not a regular occurrence.
These findings amount to holding: (a) that there was a substantial abuse of the scheme and (b) that this was an attempted fraud on the taxpayer rather than a successful fraud where they collected the money.
As to whether the Goodman companies and others will recover damages in the courts despite this abuse, the tribunal does not attempt to anticipate the decision of the High Court. As to the extent of the potential liability, the report concludes as follows, after an analysis of the Goodman claim:
Independent of the question of general damages which may be proved in the proceedings, the plaintiff's pecuniary loss claimed is either £115,262,332 if the claim under the alleged second policy relates to the $30 million offer of cover or £159,113,616 if the claim under this heading relates to 70 per cent cover of contracts valued at £76,501,835.
In either case, it is a very substantial claim and that is the only matter for determination by this Tribunal.
I am happy to acknowledge the thorough-going and closely reasoned vindication of my allegation which the report contains. My satisfaction is qualified by the fact that, as the report makes clear. the Goodman Group's enormous action against the State is still pending before the court.
I ask people to note that my view would also appear to be borne out by Mr. Goodman's evidence of what the Taoiseach said, and I quote from page 98 of the report:
the balance would be allocated to AIBP if the contracts materialised and subject to the approval by Government and the Dáil to the increase in the overall limit of Export Credit Insurance.
This shows clearly that his claim is not limited to the cover of $30 million but also relates to the balance of the ECI which he says he was promised. If Mr. Goodman's company recovers the enormous sum which it is claiming, or any significant part of it, the responsibility for this will rest firmly with the Taoiseach, Deputy Reynolds. If this responsibility does arise I am certain he will seek to shrug it off as he has shrugged off every responsibility with a spin doctor's formula which is as fatuous as it is false.
In my evidence before the tribunal and in the statement which I submitted beforehand at the tribunal's request I sought to quantify the amount of Mr. Goodman's claim. I was cross-examined about this by counsel for the State on a basis which was wholly unsound and betrayed a radical misunderstanding on the part of those instructing the State counsel, of the Goodman Statement of Claim and associated documentation. This dispute did not, however, seem to be of any great significance since all concerned knew the potential liability of the State was, to use the report's phrase, "very substantial".
However, in his evidence before the tribunal the Taoiseach, of his own volition and without being asked any question about it, stated that my evidence in the tribunal on this point was not merely false but knowingly false. Pressed by counsel on my behalf it was found that he was not suggesting that my figure was wrongly or carelessly computed or that a mere mistake had been made but that I had told a deliberate lie. It should be borne in mind that all evidence before the tribunal was given on oath. This scandalous allegation is, of course, fully exploded by the tribunal's report. The chairman pointed to a degree of ambiguity in the statement of claim and finds firmly that the cumulative amount of the claims mentioned in that document is capable of amounting to £159,113,616, exclusive of general damages.
To read the statement of claim in any other way, ignoring alleged contracts with a value of £76,501,835 which is specifically mentioned in paragraph 6.4 of the statement of claim seems unreal. All these sums, of course, are independent of the question of interest.
As the Minister who voided the relevant insurance policies on the grounds of misrepresentation I naturally hope and believe that no liability whatever will attach to the State. Certainly I have done everything in my power to ensure that this is the case. No such step had been taken before I became Minister, but I reiterate that my estimate of the potential liability is justified and, if interest and general damages transpire to be recoverable, it would now be a significant understatement.
It should be said in fairness to him that it became clear in cross-examination that the Taoiseach had no personal understanding of the statement of claim or of the manner in which the potential liability could be computed. I seem to recall he said he never even read the statement of claim. It appears, therefore, that he made a gratuitous allegation of perjury against me based on vet another spin doctor's notion which he himself could not or did not take the trouble to understand.
I have no doubt that this was done quite simply for the purpose of setting up a public relations smokescreen to divert attention from the significance of the tribunal's proceedings even though he knew it would have profound consequences. It was done cold-bloodedly without regard to the truth or falsity of what was said and without even an understanding of the way in which its truth or otherwise could be worked out. This allegation of perjury — for that is what it was — was made against a Minister in the Taoiseach's Government and the Leader of the other party in Government. The Tánaiste and his colleagues should have no doubt that the Taoiseach will turn on them with as little reason the moment his handlers think it necessary to put that script into his prompt cards or, as I think they are called now, his idiot cards.
The provision in 1987 and 1988 of between one-third and one-fifth of all export credit insurance cover available to just two companies, both exporting beef to Iraq, with over 80 per cent going to Goodman, amounted to an abuse of the scheme. The provision of the bulk of the cover under this scheme to one company, to the exclusion of competitors, excluded fair competition within the State which aggravated the scandal. On the basis of such answers as I and other Deputies of my party had received up to that date in May 1989, and other information I attempted to estimate the extent of the imbalance in the allocation of the limited amount of export credit insurance available to Iraq, to beef going to Iraq and to Mr. Goodman's company. This estimate is borne out by the report of the tribunal which shows that position was even more ludicrously imbalanced than I had alleged.
At page 203 the tribunal found as follows:
As illustrated herein 50 per cent of the entire amount available for Export Credit Insurance worldwide and in respect of all manufactured goods and services was between 1987 and 1988 allocated to exports to Iraq and of this allocation, 75 per cent was allocated in respect of beef to Iraq, representing 37.5 per cent of the entire amount available for all exports worldwide. Of this allocation 75.52 per cent went to AIBP and 24.38 per cent to Hibernia Meats.
It has already been established that the composition of the beef exported by these two companies constituted a substantial abuse of the scheme. The figures contained in the last extract from the report of the tribunal constitute a more fundamental abuse. There was a real and massive imbalance in the allocation of export credit insurance to two companies in respect of a single commodity to one destination, Iraq.
This is by no means the end of the peculiarities in allocation in the period 1987 to 1988. The amounts of insurance allocated were enormous but so too was the period of cover required, which went from one year to 18 months and, subsequently, to two years. The normal period for which export credit insurance was required for comestibles is only 28 days. Furthermore, these exports were to a country which the Irish public service rightly considered to be effectively bankrupt, which was ruled by a tyrant peculiarly prone to the type of economic and military adventurism which would, and eventually did, prevent the payment of national debts by that country. I also raised the question of the massive concentration of available export credit insurance on one company which required the rejection of other applications. The extent to which this is so, is strikingly clear from the findings of the report.
It was not the custom for the Government to conduct the export credit insurance business but rather to allow its agents, the Insurance Corporation of Ireland, to do so on its behalf. More innocent or naive applicants for insurance applied to that company, which in turn raised the question with the Department and were duly informed in most cases, that no such insurance was available. On the other hand, cannier applicants went directly to the Minister, Deputy Reynolds.
In respect of the first enormous grant of cover in September 1987, the Minister was aware of the application before it was received in the Department.
At page 209 of the report the tribunal found as follows:
...no satisfactory evidence was available to the Tribunal to establish the circumstances in which the Minister for Industry and Commerce was informed of the application prior to its receipt in the Department or of the necessity to have it dealt with at such speed, or why it was necessary to have the matter dealt with with such a degree of urgency that the Department of Finance and the Department of Agriculture and Food did not have an opportunity to express their observations on the matter in the Memorandum for Government.
Neither, the Minister for Industry and Commerce, Mr. Reynolds, the Taoiseach, Charles J. Haughey, who was to deal with the matter in Cabinet, Mr. Goodman, nor Mr. Britton have any recollection of who informed Mr. Reynolds that the application would be made.
On the same page, and the following page, the tribunal quotes the observations of the Department of Finance on this proposal including the damning sentence:
"In essence the Minister for Industry and Commerce's proposals are too much of a gamble with the Exchequer's resources".
However, as the tribunal finds, on page 210:
These views were not forwarded to the Minister for Industry and Commerce for inclusion in the Memorandum for Government because time did not permit.
My observations in these allegations about the impact of the distorted allocations on competitors were the subject of the following findings by the tribunal, first at page 202:
Such abuse however had the effect of tying up and rendering unavailable for allocation to other companies substantial amounts of Export Credit Insurance cover, which would otherwise have been available for allocation.
At page 230:
There is no doubt but that the allocation of Export Credit Insurance in the amounts which were allocated to AIBPI and Hibernia Meats Ltd with the consequent effect that no Export Credit Insurance cover was available to other exporters of beef to Iraq, placed other beef exporters at a considerable disadvantage when seeking to negotiate contracts for the export of beef to Iraq.
As a result of the size of the contracts involved, exporters who had not the security of a promise of Export Credit Insurance with the benefits of Short and Medium-Term Finance which was dependent thereon, were at a very considerable disadvantage in seeking to obtain such contracts.
The tribunal went on to note on the next page:
The Tribunal does not suggest... that this was the intention or motive of the Minister for Industry and Commerce in making these decisions but rather was the effect of such decisions.
Exporters excluded from the market in this way included those who demonstrably could, and presumably would, have filled their orders wholly with Irish beef.
In his recommendations at the end of this section of the report, the tribunal chairman makes specific suggestions to avoid any repetition of this imbalanced allocation; to ensure that all exporters in a particular area are aware of whether export credit insurance is available and on what terms; and to ensure that future allocations are made in a fair and transparent manner.
Two more of my allegations examined by the tribunal were that allowing just two companies, of which by far the larger and more substantial was Goodman, cover under the export credit insurance scheme for beef exports to Iraq for such large sums, so considerably in excess of the actual exports to that country, was an act of blatant political favouritism and that decisions by Ministers and in some cases by the Government on export credit insurance, had the effect of strengthening further the already strong position of Goodman — to whom members of the Government was extremely personally close — as the dominant group within the beef processing and allied trades, contrary to the interests of farmers and employees, and of exporters in other business sectors.
These two allegations may conveniently be taken together. They are relevant to the portions of the report which are the basis on which Deputy Reynolds and his spokesmen, anonymous and otherwise, make the claim that he has been vindicated.
On page 232 of the Report is the following finding while the decisions made by the Minister for Industry and Commerce with regard to the allocation of Export Credit Insurance in respect of exports to Iraq in 1987 and 1988 undoubtedly favoured AIBPI and Hibernia Meats Ltd, in the sense that they were the beneficiaries of such decisions, the decisions were made by him having regard to this conception of the requirements of the national interest and there is no evidence to suggest that his decisions were in any way based on improper motives, either political or personal.
It has not always been noted that the tribunal here refers to Deputy Reynolds's "conception" of the national interest, rather than that interest itself.
The tribunal at page 213 also found that the exports covered did not "justify the risk involved in granting Export Credit Insurance in the amounts granted" at page 216 that the benefits of these exports to the economy "were illusory rather than real" and at page 233 that the Minister's decisions "were made by him against the professional advice available to him, which advice is set forth in detail in the course of this Report."
The tribunal also found that these decisions were taken on the basis of arguments presented by Mr. Goodman and that the Minister for Industry and Commerce accepted the arguments put before him by Mr. Goodman and without any independent appraisal, but based on his experience.
In addition the tribunal found that the national interest required the Minister to carry out certain investigations which he did not carry out and which, if carried out would have revealed that the benefits of his proposed course "were illusory rather than real".
That is not a vindication of Deputy Albert Reynolds. The very best he can convincingly claim is that his integrity has been salvaged at the expense of his capacity for ministerial office.
He accepted Mr. Goodman's argument without independent appraisal; he disregarded the advice given to him; he failed to carry out the investigations required; he favoured two companies above all others; he was aware of the principal application before it came into the Department's hands, but cannot remember how; he insured beef which should not have been insured and he exposed the State to the risk of enormous liability. There is no evidence that he did any of these things for an improper motive. There is, in fact, no evidence as to why he did them at all.
The tribunal also held on page 231—
There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time was personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the Party that they represented.
Naturally, I accept that finding but the words "at the time" may be significant since there was evidence that Mr. Goodman was a guest at Deputy Reynolds's daughter's wedding in December 1990.
There was the Cáirde Fáil dinner of 10 December 1987, when Mr. Goodman was the guest of the Minister Deputy Reynolds, to which event I have already referred. Interestingly, Deputy Reynolds swore several times — four times in all — at volume 135c, page 188 of the tribunal report that Mr. Goodman was "never ever a guest of mine at a Cáirde Fáil dinner". The public can and have drawn their own conclusions from what they have seen.
In September 1987 Minister Reynolds allocated Mr. Goodman cover in respect of a contract worth $134.5 million and in November 1987 he allocated a further $30 million cover to Mr. Goodman. This $30 million was at the expense of Halal and we know from pages 116-118 of the report that at the very time that this function was being held, Deputy Reynolds was using the services of the Irish Embassy in Baghdad to find out what business Halal and Agra were doing in Iraq, since he had sent urgent telexes to the Embassy on both 9 and 11 December 1987.
Against this background, I understand the Department of Foreign Affairs was very unhappy about what was happening and gave certain advice to the Ambassador. It is not surprising that Mr. Khalid of Halal should have complained to the Ambassador that "his company's efforts to obtain Irish insurance cover were being blocked by an Irish competitor which, he said, had more influence at the political level".
There is a number of important questions left unanswered by the tribunal. In the first place, why is it that neither Minister Reynolds, nor Mr. Haughey, nor Mr. Goodman, nor Mr. Britton, can recall the circumstances in which the largest ever application for insurance cover was made in August-September 1987? Why was it necessary to deal with the application with such speed? (page 209). While the tribunal does not come to any conclusions, one obvious one, and I submit the only logical one, is that Mr. Goodman had been promised insurance cover by Mr. Reynolds in advance of the application.
All of the circumstantial evidence points to this. Messrs. Britton and Connor, both senior Goodman executives, stated before the tribunal that Goodman would not have gone into Iraq in such large contract volumes without export credit insurance cover. Moreover, the logistical plans — the chartering of ships etc. — were all put in place several weeks before Deputy Reynolds made his formal allocation of cover to Mr. Goodman on 8 September 1987. The first ship for Iraq set sail on the same day the cover was granted.
It is impossible to believe that this would have been done without a prior promise of cover. Many allegations have been made about the Goodman Group in this House, but nobody has suggested that they were fools. They would never have committed themselves to this enormous exposure without a prior promise of cover.
Second, why did Minister Reynolds tell Taher — page 221 — on 7 July 1988, a few days after the legislative ceiling for ECI had been increased to £500 million, that "ECI cover cannot be made available for the Taher Meats contract or indeed any other major contract in Iraq for the foreseeable future" when he went ahead and allocated £100 million extra, plus £99 million roll-over — a total of £199 million — to Goodman and Hibernia in October 1988?
The only explanation is that he had already determined on giving Goodman the bulk of the extra money — and remember that Mr. Goodman claims that this promise had been made as far back as November 1987 — and that at this stage the "managed policy" of confining cover to both Goodman and Hibernia was already in operation, even though Deputy Reynolds did not want to disclose that fact.
In other words, this secret policy was put in operation, but other competitors and, indeed his own Minister of State, Deputy Seamus Brennan, were deliberately kept in the dark about this. Even if there was economic merit in this spurious managed policy argument, which there was not, fairness and transparency dictated that its existence be disclosed to all applicants, as the tribunal was subsequently to recommend at page 235.
In a poll published in The Irish Times last Saturday, it transpired that, despite the fact that the tribunal — operating as it did subject to legal constraints and requiring forensically acceptable evidence — found that there was no evidence of personal closeness between Mr. Goodman and Deputy Reynolds — some 70 per cent of the sample was of the opinion that there was undue closeness between Mr. Goodman and the 1987-1989 Government. Interestingly, this view is also held by two-thirds of Fianna Fáil supporters.
It is easy to see why this is the pattern of public opinion. The tribunal lists many things which should not have been done; things undone which should have been done; hundreds of millions of pounds in export credit insurance allocated in the most informal of fashions, other applications disregarded without adequate reason and pages and pages of excellent advice from inside the public service disregarded if the one-page Minister deigned to read it at all.
To this must be added evasiveness and concealment in the answering of Dáil questions; misleading and distorted reasons given to this House for increasing the statutory ceiling for export credit insurance, and disgraceful attacks on those who dared to question the propriety or the advisability of what the Minister was doing. None of this may amount to direct sworn evidence by which alone the tribunal was affected, but is clearly sufficient to allow The Irish Times poll respondents, and the population as a whole, to draw their own commonsense conclusions.
What has been the Taoiseach's response to this litany of damning findings in the report? Let us examine some of the defences put forward by him and on his behalf since the report was published. I am here quoting from a briefing document circulated by the Government press secretary on the night the report was officially published, on 2 August. This in essence, is almost a summary of the Taoiseach's speech this morning. It is a one page document, the first sentence of which reads: "The Chairman found that all decisions were made in the national interest". The tribunal found no such thing. It was something of a calculated untruth. What the tribunal concluded was that the Taoiseach had acted according to his own subjective view of the national interest — radically different from what the national interest actually required.
I quote again from the briefing document:
Everything has to be balanced against the benefits to the economy from these exports. In 1987 and 1988 ... cattle prices reached their highest level to date, about 120p per pound. Farm incomes were at their highest level ever. The multiplier effect of buoyant farm incomes was felt right through the whole economy. That is one result one gets from a decision taken in the national interest.
It is perfectly clear from page 213 of the report that whatever may have been the reasons for high cattle prices during these years, it was not due to the actions of the then Minister, Deputy Reynolds. Thirty eight per cent of Goodman's beef exports were sourced from outside the State and of the remainder, 84 per cent came from intervention stocks, making a total of 94 per cent in all his shipments so that only 6 per cent of what Goodman exported could have had any influence on the price of cattle.
The tribunal's conclusions — page 213 — swiftly dispatch the validity of this spurious argument: "the benefit accruing or likely to accrue to the Irish economy from this situation would be minimal compared to the benefit which would accrue if the exports consisted of commercial beef and would not justify the risk involved in granting Export Credit Insurance in the amounts granted".
I quote again from the briefing document:
All decisions were taken in strict adherence to the guidelines of the Export Credit Scheme, in place since the Fine Gael led Government of 1983.
Again, this is totally untrue. Let us look at the reality of what happened. The 1986 ECI arrangements — set out at page 45 of the report — approved the possibility of cover "under strict and specific conditions" to give cover for exports "which may not be acceptable under the normal scheme but nevertheless have an assumable risk". It also cautioned about "the need to avoid over-dependence by a particular company on a single market".
The evidence is overwhelming that ECI cover was granted by Deputy Reynolds in circumstances which were far from "strict and specific". In the first place, the terms offered by AIBP were significantly better than those outlined in the Government decision of September 1987. Instead of 70 per cent cover, with a 12 month claims waiting period and a premium of 4 per cent — plus 2 per cent if a claim arises — a total of 6 per cent, the terms offered by Minister Reynolds were 80 per cent cover, six months claims waiting period and 1 per cent premium. In other words the premium he charged his friend Mr. Goodman was not a quarter, as Deputy Bruton said this morning, of what the Government had approved, it was one-sixth of it. Deputy Bruton did not know about the 2 per cent add-on in the event of a claim. Deputy Bruton said the Taoiseach gave a direct gift in cash terms to his friend Mr. Goodman of £2.74 million. In fact an extra one-third has to be added to that figure making the direct gift, as a result of his deliberately disregarding the terms of the Government decision, about £3.7 million. No explanation has ever been offered as to why these significantly better terms were offered — pages 211-212.
Secondly, the evidence shows that the then Minister, Deputy Reynolds, was incredibly casual in granting cover. Not only did he consistently reject all Civil Service and professional advice in granting the extended Iraqi cover — that was bad enough — but, worse still, he was apparently quite willing to commit the State to potentially huge sums of money on the strength of oral promises to Mr. Goodman made in social surroundings and, as Deputy Bruton stated, never with a civil servant present and usually in some person's house.
The first of these so-called commitments came on 13 November 1987 — when the then Minister, Deputy Reynolds, made an oral promise that Mr. Goodman would get the balance of the cover — US$30 million available under the then ceiling of £150 million — for Iraqi contracts which he was then seeking.
The second took place on 21 October 1988 when Deputy Reynolds decided to commit the State to a further extra £100 million exposure, together with roll-over of £99 million. A civil servant was then told to inform the companies verbally that the extra cover would be forthcoming.
Thirdly, Mr. Goodman claims — and, unfortunately, there seems to be grounds for believing him — that the then Minister, Deputy Reynolds, gave him an oral promise that, in effect, he, Mr. Goodman, would also be getting the entirety of all ECI cover available for Iraq once the new legislation was passed by the Oireachtas, as it was in July 1988.
In these circumstances, it is no wonder that the chairman recommended at page 236 of the report that, "having regard to the potential liability on the Exchequer if default in payment is made by the purchaser, an allocation of cover for an amount in excess of £3 million should only be made by the Minister, with the specific consent of the Minister for Finance".
It is also worth reminding ourselves that the decision in October 1988 to allot the further £100 million plus roll-over of another £99 million to Goodman and Hibernia was taken at a time when practically no payments had been made for a five month period; when every civil servant and professional adviser had pleaded with the then Minister, Deputy Reynolds, to reduce the State's exposure to Iraq and when dire warnings had been given about the massive over-dependence on this risky market. In addition, these decisions were communicated to the companies concerned before Department of Finance approval had been secured or perhaps even applied for.
So far from being an "assumable risk", the Department of Finance concluded, page 158 of the report, that in both September 1987 and November 1988, "... because of the extremely volatile Iraq situation, we regarded it as too much of a gamble with the Exchequer's resources". In evidence given to the tribunal, Mr. Frewen of ICI concluded that the risks involved were "betting odds" and the risk was 50:50 of ever being paid and Deputy Reynolds charged them a premium of 1 per cent. This is the competent man who has struck the world stage now.
