Celtic Helicoptor's Ansbacher trail

Details of how a loan of £150,000 to Celtic Helicopters Ltd from Irish Intercontinental Bank (IIB) was paid off with money from the so-called Ansbacher deposits were outlined at the McCracken tribunal last year.

Mr Ciaran Haughey, son of the former Taoiseach, Mr Charles Haughey and a director and secretary of, and major shareholder in Celtic Helicopters, told the tribunal in July that he had not known the money used to pay off the loan had come from the deposits.

He thought, he said, the money had come from his own company's funds.

But Mr Justice McCracken, in his report, said he did not accept Mr Haughey's evidence.

Counsel for the tribunal, Mr Denis McCullough SC, outlined how money from the Ansbacher deposits was used to support loans to Celtic Helicopters from Guinness & Mahon bank (£100,000 in 1990) and IIB (£150,000 in 1991). Money from the second loan was used to pay off the earlier loan. Both loans had been arranged by the late Mr Des Traynor.

Mr Haughey told the tribunal he had not been aware that money from the Ansbacher deposits had been used to back these loans. Nor was he aware that Ansbacher monies had been used in March 1992 to back the provision of security by IIB for a £100,000 overdraft Celtic Helicopters had with the Bank of Ireland. In April 1993, money from one of the Ansbacher deposit accounts - the "S9" deutschmark account - which contained money belonging to Mr Charles Haughey, was used to secure a £45,000 guarantee Celtic Helicopters had with Jet Aviation Business Jets, of Zurich.

The tribunal was told that the money used to support the loans and to pay off the £150,000 loan had come from the "S8" account. This account was used to defray the living expenses of Mr Charles Haughey. Mr Justice McCracken, in his report, said of Mr Ciaran Haughey and the £150,000 loan: "The tribunal cannot accept that directors of a company would not be aware that a loan of this magnitude from a bank to the company had been discharged, not out of funds of the company, but by a third party.

"The tribunal accepts that it is a possibility that Mr Desmond Traynor made the backing arrangements (for the loans) without the knowledge of Mr Ciaran Haughey, but the tribunal cannot accept that the loan of £150,000 was actually paid off out of these monies without such knowledge."

Mr Justice McCracken's report was published in late August. On September 9th, the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, appointed Mr Gerard Ryan as an authorised officer to examine the books of Celtic Helicopters. Ms Harney extended Mr Ryan's powers and instructed him to examine the "Ansbacher deposits" in Guinness & Mahon and IIB after he reported to her that he needed access to the information in order to complete his report on Celtic Helicopters.

However, she asked also him to examine the deposits for other possible instances of breaches of company and tax law, besides any that may have been committed by Celtic Helicopters.

IIB is now seeking a judicial review of this decision.

The existence of the Ansbacher deposits was kept a closely guarded secret until their discovery by the McCracken tribunal.

Mr Traynor was described by Mr Justice McCracken as the "link man" in a system which initially involved Guinness & Mahon bank and a subsidiary it established in the Cayman Islands.

The details of the system and the names of the depositors were closely guarded secrets, even within the bank itself.

The client base was Irish and the system was in existence since at least the 1970s.

Money was deposited in the Cayman Islands bank which, in turn, deposited the monies in a general account it kept in the Dublin bank.

In 1989, there was some million in the accounts, equalling almost 35 per cent of the liabilities of Guinness & Mahon, in Dublin.

Over a period of about two years, from 1989 to 1991, the deposits were transferred from Guinness & Mahon to IIB.