At a time when Mr Charles Haughey was £400,000 in debt in March 1975, he was earning £7,000 per year from his parliamentary salary and paying £5,000 per year for domestic staff, the tribunal was told.
Mr Haughey yesterday accepted that the indebtedness could not have been disposed of out of income. "There was no relationship between them." Mr John Coughlan SC, for the tribunal, referred to a memo of a meeting on March 19th, 1975, attended by Mr Haughey, Mr Des Traynor and bank officials dealing with proposals for ending the indebtedness.
The memo stated that Mr Traynor saw no possibility of the sale of Rath Stud or part of Abbeville at that time, not only due to the economic situation but because of the impending wealth inheritance tax legislation, and asked the bank to let matters rest for six months. In the meantime, Mr Haughey would live on his parliamentary income of £7,000 per annum. The memo stated: "Mr Haughey and Mr Traynor also confirm that they are fully satisfied that property must be sold to clear the very substantial borrowings, some £400,000, including Northern Bank Finance Corporation, £220,000 plus interest, but the moment was not the time".
The assets as listed included Abbeville House with 250 acres, worth £800,000; contents £50,000; Rath Stud, 150 acres with house and stables £200,000; house and 12 acres at Sligo £10,000; Inishvickillane Island, Co Kerry, £10,000; site at Wexford £2,000; livestock £20,000; bloodstock £130,000; share in stallion £10,000; life policy £700. The total assets were £1,252,700.
The annual outgoings were wages for stud manageress and eight men £18,000; feed £6,000; veterinary fees £1,200; heat, etc. £2,400; domestic staff £5,000. The total outgoings amounted to £32,600 per annum.
The memo stated that Mr L.J. Sweeney, the AIB central advance controller, said it was very hard to visualise Mr Haughey living on his parliamentary income.
Mr Coughlan asked Mr Haughey if he remembered that particular meeting.
Mr Haughey said he did not actually remember it as set out there but he had some recollection at that point of Mr Michael McMahon of Haughey Boland and Co, a tax expert, giving advice in relation to Abbeville House about the wealth tax situation.
"You can see there that Traynor is coming to the AIB situation in a much more, if you like, realistic or accountant's way than I would have been. I think that the previous memorandum would indicate I had no problem about selling the Rath or the lands at Abbeville and this is the first reference, if you like, that it mightn't be that easy to sell them," said Mr Haughey.