The Moriarty tribunal yesterday added another £750,000 to the amount of money known to have been contributed over the years towards funding the lavish lifestyle of the former Taoiseach, Mr Charles Haughey.
Counsel for the tribunal, Mr John Coughlan SC, in his opening statement, gave details of payments which were made by way of three Guinness & Mahon bank drafts to AIB to pay off debts which Mr Haughey had with that bank in January 1980. At the time, Mr Haughey's debts with the bank totalled £1.143 million.
The bank had charges on properties worth more than the amount owed. The properties were: Mr Haughey's home and 248 acres at Kinsealy, Co Dublin; his island, Innish vickillaune, off the coast of Co Kerry; and a house and 13 acres in Co Sligo. The deeds to Kinsealy were released as part of the deal whereby Mr Haughey paid £750,000 and promised to pay a further £110,000 (which he seemingly never did). The rest was written off.
AIB, in a statement read out on its behalf by Mr Coughlan, said the bank did not consider the settlement with Mr Haughey to be "in any way commercially unjustified". The settlement was justified commercially "given the difficult history of the account" and given that it would have no further dealings with Mr Haughey. No favours were sought.
However, the tribunal still wishes to investigate the circumstances of the settlement given that the security the bank had was worth in excess of the amount of indebtedness. Mr Coughlan also made the point that the talks which finally led to the settlements began in December 1979 and ended in January 1980. Mr Haughey had won the Fianna Fail leadership election during this period and became Taoiseach.
The £750,000 paid to AIB came from an account in Guinness & Mahon Bank in the name of the late Mr Des Traynor. Mr Coughlan said the tribunal did not know who owned the funds in the account. They could have belonged to Mr Traynor or they might have been donated by "a Mr Patrick Gallagher or his group" and two other unnamed individuals.
He also outlined some details concerning the negotiations which occurred between Mr Haughey and AIB.
In June 1979, Mr Haughey, the then minister for health and social welfare, offered £400,000 in full and final settlement to the bank and mentioned "the possibility" of the bank getting a £10 million deposit at below the market interest rate. The source of this suggested deposit was not clear but there was reference to a Middle Eastern bank in bank documentation, Mr Coughlan said. AIB did not take up the offer.
Bank documents also state that Mr Haughey said there might be money coming "from certain land deals" in Baldoyle, Co Dublin, and mentioned £200,000. It is not yet clear to the tribunal which land deal was involved, Mr Coughlan said.
By September, Mr Traynor, who was Mr Haughey's financial adviser, was very actively involved in clearing the debt. One scheme put forward by him involved the disposal of part of Mr Haughey's Kinsealy lands to "a Mr Patrick Gallagher or his group". Later in 1979, the scheme had changed and money was to come from Mr Gallagher and two other unnamed individuals.
In December 1979, Mr Traynor told the bank that a scheme which he had in mind could not now go ahead, for political reasons, as the parties involved did not want their names mentioned in Dail Eireann. An offer of £600,000 in full and final settlement was rejected. The money was to come from Guinness & Mahon by way of a loan. The bank said the most it would be able to write off was £200,000, bearing in mind the questions it would be asked by its auditors.
In January 1980, Mr Traynor met the late Mr Niall Crowley, the then chairman of AIB. Mr Pat O'Keeffe, a former chief executive of the bank and then a deputy chief executive, seems to have also been involved. A deal was eventually agreed and the payment made. By this time, Mr Coughlan pointed out, Mr Haughey had become Taoiseach.
The details surrounding the clearing of Mr Haughey's AIB loan were the most interesting developments yesterday.
Payments of approximately £500,000 which came from Dunnes Stores, via Mr Ben Dunne, and appear to have gone to Mr Haughey, were mentioned in the High Court last year. They are in addition to the £1.3 million detailed by the McCracken tribunal.
Mr Coughlan said Mr Dunne would say he had no recollection of instructing that these payments go to Mr Haughey and did not believe he had done so. The payments were made in January 1987 (£32,000); May 1987 (£282,500 sterling); and November 1992 (£180,000).