Yesterday the Moriarty tribunal heard that two payments by Mr Ben Dunne to Mr Charles Haughey in 1987 were written off by the Dunnes Stores group some time in late 1993 or early 1994.
The sum involved was over £500,000 and the two payments had been lying dormant as "suspense items" in the books of Dunnes Stores Ireland Company, the group's main legal entity, since 1987. They were being treated as "suspense items" because the company's accountants and auditors didn't know who they'd been paid to.
One item was a cheque made out to Tripleplan, dated May 1987, for £282,500 sterling. The second was a cheque to Mr John Furze for £185,000 sterling, dated December 1987. Both were from Dunnes Stores (Bangor) but were charged to Dunnes Stores Ireland Company. The amounts came to over £500,000 when converted into Irish pounds.
Mr Haughey's counsel, Mr Eoin McGonigal SC, yesterday said his client now accepted he got the benefit of the Tripleplan money. The declaration was based on the evidence which the tribunal had produced last week. Mr Haughey has already accepted he received the benefit of the Furze cheque, which was part of the group of payments valued at £1.3 million considered by the McCracken tribunal.
It is known that difficulties developed within the Dunne family from around 1991 and by 1993 they came to a head with Mr Dunne's removal from executive positions in the group. Mr Dunne launched legal proceedings in 1993 and they were settled in 1994. As part of the settlement all debts remaining between him and his siblings "were wiped clean", Mr Dunne said yesterday.
During the proceedings Mr Dunne said he had paid about £1.1 million to Mr Haughey and had mentioned the Furze cheque. He had not mentioned the Tripleplan cheque, he said on Monday, as in 1993 he did not realise it was linked to his payments to Mr Haughey.
Mr Pat O'Donoghue, a director and secretary to the Dunnes group, revealed yesterday that the £500,000 plus was written off the Dunnes books in the period to January 1994, i.e. the period soon after Mr Dunne's removal from executive positions in the group. Mr O'Donoghue was answering questions put to him by Mr James Connolly SC, counsel for the Revenue Commissioners. Mr Connolly is the Revenue's counsel in the tax assessment case against Mr Haughey arising out of the McCracken tribunal. A central point in this case is the ownership of the funds which were given to Mr Haughey.
Mr Connolly has questioned both the Dunnes trustee Mr Noel Fox and Mr Dunne in relation to the various payments to Mr Haughey. Yesterday, during questioning of Mr Dunne about operations in the Far East connected with Dunnes Stores, Mr Adrian Hardiman SC, for Dunnes Stores, questioned whether Mr Connolly should be allowed to examine the tax implications "of any matters discussed". The tribunal chairman, Mr Justice Moriarty, said he would allow some flexibility but that the Revenue must confine itself to the matters concerning it within the terms of reference. These relate to the Revenue's performance in raising taxes from Mr Haughey and Mr Lowry.
Mr Dunne yesterday gave some of the history behind the Dunnes' Far East operations. A trading company had been set up in the Far East in the 1970s and began to make profits. Subsequently and upon advice, a trust was established and taxes were paid in the Far East. He later said he had envisaged the funds he intended to give Mr Haughey would "be generated" by these operations. One of the advantages of this would be that money from these operations would not appear in the Dunnes Stores books.
However, an approach was made to Mr Dunne through Mr Fox in 1987 for funds needed "urgently" by Mr Haughey. The money was sourced from Dunnes Stores (Bangor) because there was no money in the trust set up for the Far East operations at the time. "I had this trust and there were beneficiaries and a distribution had already been made out of that trust to members of my family, so there were not funds available," Mr Dunne said.
Mr Dunne repeatedly said that all the money given to Mr Haughey was Dunnes Stores money. Mr Fox said on Monday he believed most of the money came from Mr Dunne's own resources, and in the late 1980s he had expected that Mr Dunne would repay to Dunnes the funds connected with the two Bangor cheques written in 1987.