The Sligo-Leitrim Fianna Fail TD, Mr John Ellis, was paid £26,000 in cash by Mr Charles Haughey to help rescue him from the threat of bankruptcy, the tribunal heard.
Mr Ellis said he received the money from Mr Haughey in two separate payments in 1989 and 1990 after his business failed.
The money appeared to have come from the party leader's allowance account in Allied Irish Banks' Baggot Street branch, counsel for the tribunal, Mr John Coughlan SC, said.
Questioned by Mr Coughlan, Mr Ellis said that in 1989 he was in substantial financial difficulty due to a failed business venture which had received media attention. He had incurred substantial liabilities with Manorhamilton Mart in Co Leitrim which had threatened proceedings which would lead to his bankruptcy.
Mr Ellis said he was approached after hours of business in the Dail in mid-December 1989 by Mr Haughey, who said he wished to see him urgently in his office.
Mr Ellis said he would have been automatically disqualified from holding public office as a member of the Oireachtas were he to have been declared bankrupt.
He said Mr Haughey told him the government would fall if this was to happen and that the Fianna Fail party would help him out.
The following day Mr Haughey invited Mr Ellis to his office and gave him £12,400 in cash. Mr Ellis passed this money to his solicitors, who forwarded the payment to Manorhamilton Mart.
Mr Ellis said that in March 1990 he was again threatened with bankruptcy by another creditor, Swinford Mart, Co Mayo. When Mr Haughey became aware of this, he gave Mr Ellis a further £13,600 in cash on behalf of Fianna Fail around March 22nd, 1990.
He said no one else was present in Mr Haughey's office on either occasion.
Mr Haughey had made clear to him that both payments were made from Fianna Fail funds and were for the benefit of the party, he said.
He said he was not aware at the time of any possible connection between the funds paid to him and the leader's allowance account. Nor was he aware at the time that the leader's allowance account included funds paid out of central funds to the leader together with other funds, including payments contributed to defray medical expenses of the late Brian Lenihan.
Mr Ellis said there was no discussion between him and Mr Haughey about whether the money was a loan, gift, grant or otherwise. ail being able to stay in government or probably going out of government," he said.
Earlier Mr Coughlan told the tribunal it would appear that both payments were reflected by debits to the leader's allowance account. On December 12th, 1989, the sum of £12,500 was debited from the account. While this amount did not correspond precisely with the £12,400 given in cash to Mr Ellis, the two transactions seemed to be related. He said a debit of £13,600 on March 22nd, 1990, from the account coincided directly with the second cash payment to Mr Ellis.
Mr Coughlan said the payments to Mr Ellis as well as to the Parisian shirtmaker, Charvet, "warrant a re-examination of all cheque payments" out of the leader's allowance account.