When fact replaced rumour

The McCracken Tribunal: The suspicions of many were borne out by the McCracken Tribunal. Colm Keena examines how Charles Haughey financed his lifestyle and how he was caught out in a lie.

A crowd waiting in the upper yard of Dublin Castle booed Charles Haughey when he emerged having given evidence to the McCracken (Dunnes Payments) Tribunal on July 16th, 1997.

Huge interest in his appearance led to people queuing from the early hours of the morning to ensure they got a seat in the main hall. Afterwards people waited in the yard outside for Mr Haughey to emerge and when he did, accompanied by his son, Conor, and solicitor Mr Ivor Fitzpatrick, he lifted his hand and waved. Some people cheered but those cheers were then drowned out by the more substantial sound of booing.

The establishment of the tribunal in February and the dramatic way in which it proved that Mr Ben Dunne had given Mr Haughey £1.3 million caused huge damage to Mr Haughey's reputation and shed light for the first time on how he funded his lavish lifestyle.

As well as revealing the role played by his old friend, the accountant, Mr Des Traynor, the proceedings of the tribunal during the earlier part of 1997 showed Mr Haughey to have lied. This aspect of his conduct led the tribunal chairman, Mr Justice Brian McCracken, to refer statements made by Mr Haughey to the Director of Public Prosecutions.

During his evidence Mr Haughey denied he had a lavish lifestyle. The tribunal showed that most of the money given to him by Mr Dunne went towards a bill-paying service operated for him by Haughey Boland & Co. In 1989 Mr Haughey's bills came to £325,000, or more than £27,000 per month. The following year the total was £264,000.

Mr Haughey's evidence was that he knew very little about his own financial affairs and specifically knew very little concerning how his lifestyle was funded.

At the outset Mr Dunne admitted he had made five payments to Mr Haughey during the period November, 1987, and November, 1991, during which time Mr Haughey was Taoiseach. Mr Haughey denied receiving the money.

Mr Dunne said that some time in late 1987, Mr Noel Fox, an accountant and financial adviser to Mr Dunne and acquaintance of Mr Haughey, received a telephone call from Mr Traynor, whom he knew, although not very well. Mr Traynor told Mr Fox he was dealing with a significant financial problem concerning Mr Haughey. Mr Haughey was in debt and Mr Traynor said he was seeking to put together about half a dozen people to contribute £150,000 each towards settling the problem. Mr Fox agreed to convey the request to Mr Dunne.

The following day Mr Fox told Mr Dunne of the request. Mr Dunne, after thinking about the matter for a number of days, said to Mr Fox: "I think Haughey is making a huge mistake trying to get six or seven people together - Christ picked 12 apostles and one of them crucified him."

Mr Dunne said he would provide all the money needed to clear Mr Haughey's debt. He said he needed time to accumulate the funds required.

A short time after the initial contact, Mr Traynor again contacted Mr Fox and said Mr Haughey urgently needed £205,000. Mr Dunne organised a cheque for that amount from Dunnes Stores (Bangor). As requested by Mr Traynor, the cheque was made out to a Mr John Furze.

In July, 1988, Mr Traynor again contacted Mr Fox, this time looking for £471,000 sterling. Mr Dunne organised the money from companies he controlled in the Far East and had it transferred as requested to Barclays Bank, Knightsbridge, London, for the credit of J. Furze.

In February 1990, £200,000 was requested and again the request was acceded to.

The final payment revealed by the McCracken Tribunal was one of £210,000 sterling in November, 1991. Mr Dunne's evidence was that he had been playing golf in north Dublin and called into Mr Haughey's home in Kinsealy afterwards. He formed the impression that Mr Haughey was depressed. As he was leaving he took three drafts for £70,000 sterling each from his pocket and handed them to the then Taoiseach. "Look, there is something for yourself," he said. "Thank you, big fellow," Mr Haughey replied.

Mr Haughey's evidence was that he never discussed the details of his financial affairs with Mr Traynor and, specifically, where the money he was spending was coming from. It was also Mr Haughey's evidence that he first learned about the payments from Mr Dunne in 1993, when he was confronted about the matter by Mr Dunne's sister, Ms Margaret Heffernan, and subsequently spoke with Mr Traynor. He apologised to the tribunal for not being truthful when first asked if he had received money from Mr Dunne.

His evidence was that he had no memory of this event.

The tribunal established that most of the money given by Mr Dunne was lodged to the secret banking system the tribunal's legal team dubbed the Ansbacher deposits. This included the three drafts totalling £210,000 sterling.

The deposits were placed in Dublin banks under the name of Ansbacher (Cayman) Ltd, a Cayman Islands bank founded by Mr Traynor. Mr Haughey had an account in the deposits as had some of the top Irish business figures from the latter half of the 20th century. The primary purpose for the deposits was to facilitate tax evasion.

During his evidence, Mr Haughey was asked by Mr Justice McCracken if he would on occasion discuss with Mr Traynor how much of the Dunne money had been spent and how much remained. Mr Haughey replied: "No, I mean he would have been supplying the statements of account in that regard."

The judge chose not to believe Mr Haughey's contention that he did not know the details of his own financial affairs. Mr Haughey's reply implied he knew of the existence of the Ansbacher deposits.