A special account was opened on the same day Mr Charles Haughey was elected Taoiseach in December 1979 and £150,000 was lodged to it, followed by other payments which helped to settle his debt to AIB, the tribunal was told.
Mr John Coughlan SC, for the tribunal, was asking about the source of money totalling £750,000 which was paid to the AIB in settlement of Mr Haughey's overdraft. He said the letter which drew up the agreement between the AIB and Mr Haughey to settle his indebtedness was dated January 24th, 1980. Mr Traynor was negotiating on Mr Haughey's side.
He said £600,000 had been handed over as a first instalment to AIB from the special account.
The bank draft for the £600,000 was drawn on Guinness & Mahon (G&M) on January 25th, 1980. The second payment was again in a draft drawn on G&M and made payable to AIB in the sum of £100,000 on January 31st, 1980. On February 14th, 1980, a draft in the sum of £50,000 made payable to the Haughey Boland No 3 account was used to purchase a draft for payment to AIB. These three payments made up the £750,000.
Mr Haughey said he was not aware of those particular details.
Mr Coughlan said according to the evidence, a designated "special" account, an account opened for a short period and for a particular purpose, was opened on Tuesday, December 11th, 1979 - "the same day you were elected as Taoiseach" - with a £150,000 lodgement.
Mr Haughey replied: "I never knew anything about that account. I had no knowledge of it until this tribunal." Mr Coughlan said it was opened and closed soon after the agreement with AIB to settle. Mr Haughey said it seemed to be the outcome.
Mr Coughlan said the next lodgement to the account was on January 16th, 1980 for £355,000 and there was another lodgement of £150,000. He said the special account was opened five days before Mr Traynor's meeting with bank official Mr Michael Phelan, when concentrated negotiations to settle his indebtedness commenced.
Counsel then referred to a meeting Mr Haughey had with developer Mr Patrick Gallagher. He asked if he would accept Mr Gallagher's evidence.
Mr Haughey replied: "I might have some difficulty regarding the details of the meeting, in other words I'm inclined to think that the meeting took the form of my asking him or suggesting to him that he should purchase the land. His version is that I asked him for funds to pay off the AIB and he then suggested he take the lands in return."
Mr Coughlan said Mr Gallagher had said Mr Haughey told him that as he was now Taoiseach he would have to tidy up his financial affairs and about the £750,000.
Mr Haughey said he did not recall that. "My recollection is that the general idea of selling part of the Abbeville land to Patrick Gallagher had emanated from the AIB and it was in that context that I would approach Gallagher to see if he would purchase some of the Abbeville land, that was the genesis," Mr Haughey said.
Mr Coughlan said Mr Gallagher's evidence was that he considered the £300,000 to be primarily a donation in order to assist him and the purchase of the land was a long-term strategy.
Mr Haughey said he disagreed: "My recollection is that he would purchase a certain amount of land, pay a deposit because we needed the money to settle the account with AIB and the details would be handled by Mr Traynor and Mr Michael McMahon." He added that the sum was given as a deposit but it never was completed.
Mr Coughlan said records showed that £350,000 was drawn down on Mr Gallagher's account in the Rotunda branch of the Bank of Ireland.