Dublin's sleaze scandal grows

Ireland is bracing itself for revelations of more political sleaze in the wake of the resignation of the transport minister who received pounds 208,000 for modernisation work on his constituency house from a supermarket firm.

Michael Lowry, 42, quit on Saturday night after a meeting with the Prime Minister, John Bruton, over the payments. Dunnes Stores, Ireland's second- largest supermarket chain, funded the modernisation of his Tipperary home in 1992 when Mr Lowry was chairman of the Fine Gael party, then in opposition. Mr Bruton said he had accepted the resignation "with regret." Mr Lowry's departure was essential if the two-year-old coalition between the centre- right Fine Gael, Labour and Democratic Left parties was not to be destabilised. Both smaller parties indicated privately that Mr Lowry's position was untenable if the claims were true.

On Saturday, The Irish Independent reproduced one of the cheques in the transaction, in which pounds 76,674 was paid to a building firm. Dunnes' own accounts described the payment as for repairs to a Dublin shopping centre owned by the chain. An architect's note showed it in fact referred to "alterations and additions" to the Lowry home at Holycross in Tipperary.

The final cheque was signed personally by Ben Dunne, the then chairman of the supermarket group.Mr Lowry's company, Streamline Enterprises, had provided refrigeration services to Dunnes since 1979. An unusual arrangement meant Mr Lowry's firm supplied equipment at cost price and had its accounting carried out by the store's group. It is believed the Lowry home deal may have formed part of a larger loan-finance arrangement repaid in different ways.

The existence of the deal emerged during an investigation by accountants Price Waterhouse into Mr Dunne's running of the group, ordered by his sister, Margaret Heffernan after she ousted him as head of the group in 1993. In a resignation statement Mr Lowry said he was satisfied that he "had behaved with integrity and honour at all times." But he gave no further explanation of why Dunnes paid for the building work. He said the arrangements with Dunnes "were and are entirely legitimate. As part of these arrangements, credit facilities were made available by Dunnes from time to time, to be repaid from after-tax income."