THE former Tanaiste, Mr Dick Spring, threatened to resign from the Fianna Fail/Labour government in early 1994 if amendments were made to the Finance Bill which would benefit wealthy individuals.
This has been confirmed to The Irish Times following Mr Spring's unusual intervention in the Dail debate on the formation of Mr Bertie Ahern's new Government on Thursday night.
In his first speech from the Opposition benches, Mr Spring said: "Deputy Ahern will be well aware, although I am not sure Deputy Harney is, that a small group of wealthy individuals in Ireland, one of whom is the proprietor of a near-monopoly in the media industry, has in the past used its political access to try to secure a cash ceiling on the amount of Capital Acquisitions Tax payable by an individual."
A case was made to him at the time, Mr Spring told the Dail, that such an idea would attract wealthy entrepreneurs to live in Ireland and encourage home-grown entrepreneurs to spend their declining years here, with untold and unspecified advantages to the Irish economy.
"Ever since I rejected that proposal, I have had the uneasy feeling that I may have lost `friends' in a section of the media," the Labour leader continued, inviting the Taoiseach to elaborate on the issue.
It has now emerged that the then Taoiseach, Mr Albert Reynolds, was championing changes in the 1994 Finance Bill which would put a ceiling of £10 million on the amount of Capital Acquisitions Tax to be paid on a gift or inheritance.
The proposal led to a prolonged standoff between the two coalition leaders, Mr Reynolds and Mr Spring. It was only resolved by the intervention of the Taoiseach, Mr Ahern, who was then Minister for Finance.
Mr Spring wrote to Mr Reynolds to inform him that he was rejecting such representations on the grounds that they could only favour a small handful of very wealthy individuals.
The impasse between the two leaders continued over the Easter holidays. Mr Reynolds was in Cyprus and Mr Spring in Kerry.
With the deadline for the publication of the Finance Bill approaching, Mr Ahern travelled to Kerry to try to mediate between the Taoiseach and the Tanaiste.
Mr Ahern met Mr Spring in the Hotel Europe in Killarney. A hand-written letter from Mr Reynolds to Mr Spring was faxed to the hotel during the meeting.
Mr Spring's suggestion that the amendments proposed would favour wealthy individuals was rejected by Mr Reynolds in his letter. His main interest, he said, was to bring capital back into Ireland.
In the midst of the standoff, Mr Spring threatened to resign from government if the Taoiseach proceeded with such an amendment. Mr Ahern dropped the amendment from the 1994 Bill.
Mr Spring made only an oblique reference to these incidents in his Dail speech on Thursday night. Speaking in the context of the programme for the new Fianna Fail/PD Government, he said he had found himself wondering whether the vagueness was designed to conceal a more fundamental intention.
"For example," he said, "on page 10 of the Programme for Government, there is the following seemingly innocuous commitment: `the utilisation of the tax system, including capital taxation, to encourage entrepreneurship'. I wonder what that means?"
He could find no parallel references to this commitment in the election manifestos of either Fianna Fail or the PDs, and no explanation as to what it might be intended to mean. "No doubt we can return to this subject during Question Time if the Taoiseach does not want to clarify it before the end of the debate," Mr Spring added.
