The directors of JMSE bypassed the company's own chartered accountant in its early investigation of newspaper allegations of corrupt payments for planning permission, the Flood inquiry heard yesterday.
Mr John Maher was asked by Mr Tim Ahern, a solicitor (representing his brother, the Minister for Social, Community and Family Affairs, Mr Dermot Ahern) whether he was aware of the involvement of the company's book-keeper, Mr Jim Mitchell, in an investigation into the allegations, with the managing director, Mr Frank Reynolds, some time after the first newspaper disclosures in April 1996.
Mr Ahern referred Mr Maher to the transcript of Mr Reynolds's cross-examination by Mr Hugh Mohan, counsel for the Minister, in which the managing director had indicated that it was the first articles in the Sunday Business Post (March 31st and April 7th, 1996) that had prompted his early investigations of the allegations at this time.
He had sought the assistance of the book-keeper, Mr Mitchell, who was "good at putting his hand on things" of this nature, Mr Reynolds had said.
"Were you aware of that investigation?" Mr Maher was asked. "No," he replied.
Again, Mr Reynolds in his evidence to the tribunal said he had been asked to check a second time just before the meeting between Mr Murphy jnr and Mr Dermot Ahern in London on June 24th, 1997. "I was checking myself as well as with Jim Mitchell," he had said.
Mr Maher said that he was not aware of that investigation, either. He could not possibly have been familiar with "every movement" made by the managing director, or Mr Mitchell, now retired. He was extremely busy with the day-to-day financial administration of the business, particularly with such crucial matters as cash flow, the payment of wages, preparation of accounts and other matters.
"You were quite blithely unaware of both of these investigations?" asked Mr Ahern. He was, the JMSE financial controller responded.
Mr Maher, who was also cross-examined by Mr Frank Callanan SC, for Mr James Gogarty, was again adamant that he had never been told by the auditor, Mr John Bates, about an "unvouched" payment of £30,000 made in 1989. Mr Bates had told the tribunal that he could not ascertain anything about the payment from any of the directors and had also asked Mr Maher about it.
"It would have been remiss of him if he had failed to raise the matter with the in-house accountant?" Mr Callanan suggested. There was no note of the transaction or aide-memoire that he was aware of, Mr Maher responded.
Earlier he had told Mr Des O'Neill SC, for the tribunal, that Mr Reynolds had informed him he had established that £30,000 had been paid through "two cheques to Mr Gogarty".
"He knew they were charged to Grafton Construction [a Murphy land-owning company]," said Mr Maher. The managing director felt that there might be Revenue implications arising from this and had contacted the auditor, Mr John Bates, who would have prepared the Grafton accounts in the relevant year. This was in 1997.
"Did it follow that Mr Reynolds had concluded there was a Revenue implication from what he had seen?" Mr O'Neill asked.
"Frank Reynolds said to me, `Check the Revenue implications', which we did." Mr Reynolds had not been sure of the exact position which was why Mr Bates had been called in as the person who had submitted the original tax computation. The £30,000 transaction had originally been treated in the Grafton books as part of the "enhancement expenditure" for lands which had qualified for tax relief. Political contributions did not qualify. "He did a revised tax computation, added back the £30,000 and prepared a revised CT1 form."