A painting by Jack B Yeats which Michael Smurfit gave to Charles Haughey in 1990 in the hope that the then taoiseach might keep it as a "family heirloom", has since been sold, it emerged at the Moriarty tribunal yesterday.
A tax official giving evidence to the tribunal was asked how the Revenue had managed to put a value on the painting as part of the Revenue's effort to have Mr Haughey pay tax on monetary and other gifts he had received over the 20 years up to 1997. "I believe Mr Haughey sold the painting," Revenue principal officer Brian McCabe replied.
Mr Smurfit told the tribunal in July 2000 that the painting, The Forge, was given to Mr Haughey by the Jefferson Smurfit Group, to mark his assumption of the presidency of the European Union.
Mr Smurfit said he did not see anything inappropriate in making such a generous personal gift to the then taoiseach and added: "I did put in the caveat that I didn't expect it to be sold the next day. I said I expected him to hold on to it for a long time."
Counsel tribunal Jerry Healy SC then asked at the July 2000 hearing: "So when you were handing it over and indicating that you didn't expect it to be sold the next day, does that mean that you were not handing over an article that could be converted into cash the following day? You thought it would be held in remembrance of the occasion?"
Dr Smurfit had replied: "Yes, I had it in the back of my mind that it would look very bad if you gave a painting like that to somebody and they cashed it in the next day. It would look like a cash gift. I wasn't into that situation and I requested that he hold it for a considerable period of time. I hoped it would become what is known as a family heirloom."
The painting was subsequently listed in a schedule of Mr Haughey's receipts and expenditures drafted by the Revenue in 2002 in the wake of revelations at the Moriarty tribunal concerning payments he had received over the years and on which he had not paid any tax. The painting was listed as a receipt equal to £40,000.
Mr McCabe said yesterday that he believed that value was put on the painting in relation to when Mr Haughey received it, for Capital Gains Tax purposes linked to the sale.
He did not say how much Mr Haughey secured for the painting when he sold it.
The tribunal was hearing evidence concerning how it negotiated a £3.94 million (€5 million) settlement with Mr Haughey.
The schedule of receipts produced by the Revenue also included £60,000 in 1989 which the tribunal heard "probably came from" Mr Smurfit.
