By Michael O’Farrell

Investigtions Editor

Disgraced former taoiseach Bertie Ahern has  gone into business with a tax  defaulter who was forced to make a €1.6m  settlement with the Revenue,  the MoS can reveal.

Despite repeatedly castigating tax defaulters  in the strongest terms throughout his political career, Mr Ahern has become a  director and chairman of a  company owned by one.

That  company – Scientia Solar Ltd – is owned  by several partners but the  largest shareholder is 66-year-old businessman and  developer Frank  Smith.

Mr Smith is best  known for having once owned  the Submarine bar in Crumlin, west Dublin – which he has now sold to his son,  Gary – and for having owned the Baggot Inn pub in Capel Street with former  Ireland soccer manager Jack  Charlton.

The Submarine attracted controversy  last  month for hosting a benefit night for the family of murdered RIRA  thug Alan  Ryan, which was attended by Glasgow Celtic and Ireland soccer  star Anthony  Stokes.

But in 2003 Mr Smith and his brother John  made tax settlements of more than €5m after they were snared in the Revenue’s  bogus non-resident accounts  investigation.

Active: Bertie Ahern on his home turf in Drumcondra this  week (photo credit Sean Dwyer)

John Smith  made a settlement of €3.7m, of  which €2.6m was interest and penalties,  and Frank Smith made a settlement of €1.6m, of which €1m comprised  interest and penalties.

At  the time, the brothers had been in  business together for 30 years and  had become serious players in the property  market as well as prominent  publicans.

But more  recently Frank Smith – who sold his  170-acre family residence and farm  in Hazelhatch, on the border of Kildare and  Dublin, for €90m in 2006 – has become an unlikely player in the Italian  renewable energy sector… with the assistance of Mr Ahern.

Mr Smith’s company, Scientia Solar Ltd, was  founded in 2009, a year before Mr Ahern joined as chairman in July  2010.

Mr Ahern’s decision to join a firm owned by  such a massive tax defaulter  is in stark contrast to his public stance on tax  evasion.

‘You have to have a merciless view on this  and I think people know my view  for 20 years,’ he said on the occasion of the  Revenue’s second tax  amnesty in 1993.

‘It would  actually give me the greatest of  pleasure watching non-compliant tax  payers going to jail. That’s the kind of  person I am,’ he continued.

At the time, Mr Ahern was minister for  finance and it would only emerge  years later that he had himself that very year  received £39,000 from  various businessmen.

But  now that he has been branded a liar by  the Mahon Tribunal in relation to hundreds of thousands of euro that he received  in questionable  circumstances, Mr Ahern appears to have cast aside his dislike  of tax  cheats.

Little is known  about what Mr Ahern’s  involvement in Scientia Solar Ltd actually entails but he was listed as a  delegate at a September 2010 conference hosted  in Dezhou, China, by an  organisation called the International Solar  Cities Initiative.

Although Scientia Solar intends to invest in  massive solar panel installations  in several locations world-wide, the company  has so far taken control of only three projects, all of them in Italy. Just one  of these projects –in the southern Italian village of Mottola, south of Bari – is  completed and has been connected to the national grid.

The Mottola project is run through a  fully-owned Italian subsidiary called  Maxone SRL, which lists Mr Smith and his  son Gary as directors.

The accounts of this company reveal that the  project is financed through a  lease deal with Unicredit bank that is designed  to profit from lucrative renewable energy subsidies and incentives on offer from  the Italian  government.

tax dodgers: Brothers John and Frank Smith, pictured  here in the Submarine Bar in Crumlin, west Dublin

Last year, for example, Mr  Smith’s Mottola  project received €1.6m in direct incentives from the  Italian government and a  further €380,000 for selling electricity into  the national grid.

But  because of set-up costs, the enterprise  is not yet profit making,  despite the subsidies, with Scientia Solar’s Irish  accounts posting  expected losses of €1m between this year and next.

In his only known public comment on the  company to date, in September  2010, Mr Ahern told a specialist Italian finance  publication that  Scientia Solar ‘believes in the rich potential of solar energy  and will  continue to invest to provide this alternative energy resource to the  Italian population’.

He  continued: ‘Projects like this are  helping the EU to meet its targets  for both renewable energy and the need for  power with clean energy from  the sun for private homes and businesses, reducing  the amount of carbon  we put into the atmosphere.’

The Italian renewable energy sector has  boomed in recent years because the  authorities there are offering the highest  prices in Europe to producers of solar and wind energy. But precisely because of  this, the sector is  also rife with corruption as many criminals and mafia  bosses – particularly in southern Italy – have sought to launder their money  through renewable energy projects.

The problem is so extensive that in February,  Italian police and revenue  officials launched a joint investigation called  Operation Eclissi  (Eclipses) which resulted in 10 solar panel farms being  seized and the  owners arrested.

Dozens of other arrests have been made in the  wind energy sector, with some mafia bosses now being nicknamed ‘lords of the  wind’. But there are no  concerns in relation to ­Scientia Solar and its  owners.

The company did not respond to MoS questions  this week about Mr Smith’s tax settlement and the amount paid to Mr Ahern as  chairman and director.  Scientia Solar Ltd was founded by Frank Smith and seven  other investors –including his son Gary – in October 2009.

Early investors included Ian Lawrie, a  co-founder of fund manager Liberty  Asset Management who sold that company to  Friends First five years ago.

Another was Northern Irish developer Ivor  Dougan who, along with Gary Smith,  got into a multi-million-euro dispute with  NAMA developer Bernard ­McNamara in 2010 over plans to develop a shopping  centre beside the  Westbury Hotel in Grafton Street.

Mr Lawrie resigned from Scientia Solar Ltd in  August and Mr Dougan stepped aside in November, although he still retains an  ownership stake.

Other investors include estate agent Brendan  Byrne and businessmen Colm Kileen and Aidan McDonnell.

But from the start, Mr Smith was and has  remained the majority shareholder  although he only became a director in January  this year.

Last month, he converted a €2.6m loan to the  company into preference shares and his son did likewise with a €349,915  loan.

Neither the Dublin office number nor the  London office number of Scientia Solar Ltd appeared to be working this  week.

But when the MoS called former director Ian  Lawrie on his mobile he was in  Poland and said that we could reach Frank Smith  through the general  company email.

Questions  were then mailed to this general  email account as well as to the company email account of Gary Smith. The general  mail account did not appear to work and the message could not be delivered. But  the message to Gary  Smith was successfully delivered and opened.

Mr Ahern was also emailed at his Dublin  office with a set of questions  about his involvement. Separately, Mr Ahern was  asked, as chairman of  the company, to forward our request to his fellow board  member Frank  Smith.

Mr Ahern’s secretary replied to say that his  trip to the solar energy event in China had not been on behalf of Scientia  Solar.

ENDS

POSTSCRIPT – Bertie Ahern resigned as a board member of  Scientia Solar Ltd shortly after this article was published.