Arms Crisis
The late 1960s saw the old tensions boil over into an eruption of violence in Northern Ireland. Haughey was generally seen as coming from the pragmatist wing of the party, and was not believed to have strong opinions on the matter, despite having family links with Derry. Indeed many presumed that he had a strong antipathy to physical force Irish republicanism; during his period as Minister for Justice he had followed a tough anti-IRA line, including using internment without trial against the IRA. The hawks in the cabinet were seen as Kevin Boland and Neil Blaney, both sons of founding fathers in the party with strong Old IRA pasts. Blaney was also a TD for Donegal; a staunchly Republican area which bordered Derry. They were opposed by those described as the "doves" of the cabinet; Tánaiste Erskine Childers, George Colley and Patrick Hillery. A fund of £100,000 was set up to give to the Nationalist people in the form of aid. Haughey as Finance Minister would have a central role in the management of this fund.
There was general surprise when, in an incident known as the Arms Crisis, Haughey, along with Blaney, was sacked from Lynch's cabinet amid allegations of the use of the funds to import arms for use by the IRA. Opposition leader Liam Cosgrave was informed by the Garda that a plot to import arms existed and included government members. Cosgrave told Lynch he knew of the plot and would announce it in the Dáil next day if he didn't act. Lynch requested Haughey and Blaney submit their resignations to the President. Both men refused, saying they did nothing illegal. Lynch then asked the President to terminate their appointments as members of the government. Boland resigned in sympathy, while Micheál Ó Móráin was dismissed one day earlier in a preemptive strike to ensure a subservient Minister for Justice was in place when the crisis broke. Lynch chose government chief whip Desmond O'Malley for the role. Haughey and Blaney were subsequently tried in court along with an army Officer, Captain James Kelly, and Albert Luykx, a former Flemish National Socialist and businessman, who allegedly used his contacts to buy the arms. After trial all the accused were acquitted but many refused to recognise the verdict of the courts. Although cleared of wrong-doing, it looked as if Haughey's political career was finished. Blaney and Boland eventually resigned from Fianna Fáil but Haughey remained. He spent his years on the backbenches - the wilderness years - building support within the grassroots of the party, during this time he remained loyal to the party and served the leader but after the debacle of the "arms crises" neither man trusted the other.
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