The Labour Party is coming under pressure to explain the precise circumstances surrounding the cancelling of a £28,000 loan by Woodchester Bank in 1994.
The money, personally guaranteed by the former Tanaiste and Labour leader, Mr Dick Spring, along with Mr Fergus Finlay, Mr John Rogers and Mr Greg Sparks, was used to fund the failed European election campaign of Ms Orla Guerin in 1994.
Ms Guerin was imposed as a candidate by the party leadership after the sitting Dublin MEP, Ms Bernie Malone, won the nomination at a selection convention. Sources close to Mr Ruairi Quinn, who was the party's director of elections on that occasion, said that he was not aware of the special financial arrangement.
Ms Malone said last night that there was no equality of treatment in how her campaign and Ms Guerin's had been dealt with by the party. She had spent up to £60,000 of her own money, but she estimated that Ms Guerin's campaign would have cost about £70,000. She had repeatedly asked the party for full disclosure of the financial details of the campaign and she felt that, in the interests of democracy, these should now be published.
The Woodchester loan was written off by the bank as a political donation following a written fund-raising appeal from the party to the business sector after the election. The sum involved a loan of £24,000, plus interest of £4,000. A spokesman for Woodchester, Mr Frank Dunlop, declined to make any comment on the matter, saying that the affairs of clients were never discussed.
The "leaking" of details of the transaction to the broadsheet Sunday newspapers was regarded by Labour sources as an attempt to deflect attention from the difficulties being experienced by Mr John Ellis, the Fianna Fail TD. Mr Ellis had a sum of £240,000 written off by National Irish Bank in 1989, when his bankruptcy might have threatened the survival of the government. His resignation as chairman of the Dail Committee on Agriculture is being sought by Fine Gael.
Mr Fergus Finlay, former programme manager to Mr Spring, said that no personal representations had been made by him or by the other guarantors to Woodchester to write off the loan.
He said that Ms Guerin had agreed to stand in the 1994 European election and that there was an understanding that the party would run, and fund, a central campaign, while the two candidates would "do their own thing".
"The reality was that Bernie Malone was the outgoing MEP and had a job and some experience in fund-raising. Ms Guerin had no job and no income. A loan for the Orla Guerin campaign fund was sought from Woodchester Bank and, as was the case with most Labour Party loans, personal guarantees were sought and given.
"This was money that was raised and spent for entirely bona-fide political purposes. We sought no favours from the bank and we did not seek to benefit personally in any way". Ms Guerin said last night that, until contacted by a journalist a week ago, she had "no knowledge of the loan being sought, obtained or written off".