Mr Dermot Desmond told the tribunal a £100,000 sterling transfer to Mr Charles Haughey in September 1994 "was made payable as a loan, with no repayment dates, no interest rate, nothing written, same Dermot Desmond style with no security". He said that he offered money to Mr Haughey following a "general conversation" around the period.
Mr Haughey mentioned he was thinking of taking up a job as a non-executive director in a bank, Mr Desmond said.
When he asked Mr Haughey whether he wanted to take up non-executive directorships, Mr Haughey indicated his preferred option was not to take up such directorships "but it was a matter of generating income to defray some of his expenses".
Mr Haughey had been two years out of office at this time, Mr Desmond said.
Replying to Mr John Coughlan SC, for the tribunal, about whether this arrangement for Mr Haughey to borrow money was made on an open-ended basis, Mr Desmond said "if he needs money now, I would gladly help him" on the strength of his assets.
Mr Desmond clarified the point saying he would not require any loan to be "backed" by Mr Haughey's assets but that he would be "quite happy to make money available to Mr Haughey on an honour basis, without any documentation, without any interest rate, without any terms of repayment. I was prepared then and I'm prepared to do it now until such time as he resolves his difficulties", Mr Desmond added.
Mr Desmond said he would do this because he was a friend of Mr Haughey. "I am very pleased with all my interactions and dealings with Mr Haughey over the period," he said. A second payment of £25,000 sterling was made in 1996.
Mr James Connolly SC, for the Revenue Commissioners, suggested to Mr Desmond that the payments were not loans but were in fact donations.
The word loan was not mentioned in the three memorandums submitted to the tribunal by Mr Desmond, said Mr Connolly, and the first time Mr Desmond had mentioned the word loan was at the tribunal.
Mr Desmond refused to accept the nature of the money was anything other than a loan, and described it as "a debt of honour".
"This is helping out a friend," said Mr Desmond, adding later: "It is another asset that is not bankable." Mr Desmond also gave evidence that he occasionally met Mr Des Traynor when Mr Traynor opened an account for the Overseas Nominees Accounts in National City Brokers, a stockbroking company of which Mr Desmond was chairman and chief executive in 1988.
In November 1987, Mr Traynor asked Mr Desmond to join a syndicate to repay borrowings that had been generated by "our friend", referring to Mr Haughey. He declined the offer.