£35,000 from leader's account appears to have been used for personal bills, tribunal told

Two withdrawals totalling £35,000 from the Fianna Fail leader's allowance account in 1986 seemed to have gone into an account…

Two withdrawals totalling £35,000 from the Fianna Fail leader's allowance account in 1986 seemed to have gone into an account used to pay Mr Charles Haughey's personal bills, the tribunal was told yesterday.

The withdrawals, for £10,000 on April 26th and £25,000 on October 29th, corresponded with lodgements of identical sums on the same dates to the Haughey Boland No. 3 account, from which payments were made to Mr Haughey as part of a bill-paying service.

Counsel for the tribunal Mr John Coughlan SC said that because of the absence of documents and bank records from AIB relating to the leader's allowance account, it was not possible to track all withdrawals. However, there appeared to be "a direct correspondence" between the two withdrawals and the two lodgements mentioned.

He said the tribunal would seek to establish whether there were other such withdrawals corresponding to lodgements to the Haughey Boland account or other accounts belonging to Mr Haughey.

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The tribunal will also examine whether the leader's allowance account was "a potential source of funds" for Mr Haughey. In particular, a series of cash cheques drawn on the account will be investigated.

Mr Coughlan said these cheques shared a number of features. First, there was no record of their purpose. Second, they all appeared to have been cashed at AIB Baggot Street, the branch where the leader's allowance account was held. Third, they seem to have been signed by Mr Haughey after they had been signed by the current Taoiseach and "Mr Ahern appears to have signed them in blank".

As well as seeking to establish whether leadership allowance payments were diverted to Mr Haughey, Mr Coughlan said the tribunal would investigate whether other payments were made to Mr Haughey through the leader's allowance account.

Mr Coughlan said that in a number of years the amounts lodged to the account appeared to be substantially in excess of the leader's allowance. In 1986 and 1991, they seemed to be in excess in the order of £100,000, and in 1989 they were in excess in the order of £200,000.

Mr Coughlan said "the additional lodgements appear to have been mixed with the instalments of the leader's allowance paid from central funds."

In his outline statement making the start of a new phase of the tribunal's investigation, Mr Coughlan explained the background to the leader's allowance account.

It was opened as a current account in the names of Mr Charles Haughey, Mr Bertie Ahern and Mr Ray MacSharry and was numbered 30208/062. They were the only three authorised signatories on the account, and two signatures were needed for each cheque.

Mr Coughlan said the tribunal had investigated drawings on the account between February 1984 and November 1992 and identified 49 substantial withdrawals of £5,000 or more.

He said the tribunal's attention was drawn to the fact that "there appears to have been a substantial number of round-sum withdrawals from the account and in particular to the fact that a number of these round-sum withdrawals were in the form of payments to cash."

Four such cheques drawn on the account and made payable to cash were for £5,000 on April 4th, 1991, £10,000 on September 11th, 1991, £7,500 on September 18th, 1991 and £25,000 on June 16th, 1989. All were signed by Mr Haughey and Mr Ahern.

Mr Coughlan noted there were substantial cheque withdrawals in other years. For example, £50,400 in round sums was withdrawn in 1984, £10,000 in round sums was withdrawn in 1985 and £75,000 in round sums was withdrawn in 1989.

Mr Coughlan said the £25,000 cash withdrawal mentioned above appeared to have been lodged in an Amiens account in Guinness and Mahon controlled by Mr Des Traynor. This was an account through which large sums of money were transferred to Mr Haughey. It was open between February 3rd, 1989 and January 12th, 1990 during which time a total of £191,380.39 was credited to it.

Mr Coughlan said the leader's allowance was paid to party leaders to assist them in financing the political activities of their parties. Typically, they were used to pay salaries and expenses of party members.

As the Government party has access to the resources of the civil service, it was recognised that parties in opposition should receive a larger allowance than those in Government. The allowance is generally calculated by the size of the parliamentary party.

Mr Coughlan said after Mr Haughey left office the administration of the leader's allowance account was taken over by Mr Sean Fleming. He proposed that the party leader's account should be administered by Fianna Fail head office and that the party keep separate books, records, and bank accounts and that there would be a separate audit for each accounting period. The account has operated on these lines since, with Coopers and Lybrand acting as independent accountants and auditors.

Mr Patrick Mackey, a Department of Finance accountant, gave evidence of the amounts paid to Mr Haughey as the leader of Fianna Fail between 1984 and 1992. The annual payments rose from £181,215 in 1984 to £196,612 in 1988 before falling to £12,033 in 1992. The lower payment for the latter year reflected the fact that Mr Haughey ceased to be leader of the party in February 1992.

Mr Alan Kelly, branch manager at AIB Lower Baggot Street, was questioned about a number of the 49 cheques drawn on the account which had been identified by the tribunal as worthy of investigation.

An £8,332.34 cheque dated February 4th 1991 made payable to AIB seemed to have been used to purchase a draft for £6,829 on the same day. A cheque for £12,914.50 dated February 12th, 1991 made payable to AIB seemed to have been used to purchase a draft for the same amount. A £5,000 cheque dated April 4th 1991 made payable to cash seemed to have been cashed in the branch. A £10,000 cheque dated September 11th, 1991 made payable to cash seemed to have been cashed by an off-counter teller.

A £7,500 cheque dated December 18th, 1991 made payable to cash appeared to have been used to purchase a draft in French francs, with the balance taken out in cash. A £5,750 cheque made payable to Celtic Helicopters dated September 26th, 1991 appeared to have been negotiated at Bank of Ireland Dublin Airport.

In all cases, Mr Kelly said he could not be certain about what happened to the cheques, but that these were the probable outcomes based on an examination of documents.

He said the bank was still engaged in searches for other documents which might help to provide more definite evidence.

Party leadership allowances paid by the Department of Finance to Mr Charles Haughey between 1984 and 1992:

1984: £181,215 1985: £189,950 1986: £196,612 1987: £78,056 1988: £90,666 1989: £93,107 1990: £113,207 1991: £123,137 1992: £12,033.

(Mr Haughey ceased to be leader of Fianna Fail in February 1992.)

Joe Humphreys

Joe Humphreys

Joe Humphreys is an Assistant News Editor at The Irish Times and writer of the Unthinkable philosophy column