Witness tells of builders' links to politicians

Builders Tom Brennan and Joe McGowan had a "close relationship" with Mr Ray Burke and other politicians, the Flood tribunal was told yesterday.

Mr Phillip Russell, a solicitor whose father, George, carried out conveyancing work for the two builders over two decades, said this was his impression, although he had no direct knowledge of the matter.

In 1985, when his father was embroiled in litigation with the two builders, Mr Phillip Russell used a Dictaphone to record meetings involving the parties. At the time, Mr Brennan and Mr McGowan were pushing for the sale of lands at Sandyford, Co Dublin, which were the subject of a dispute involving them, Mr George Russell and two financial institutions.

In the typed-up version of the conversation, Mr McGowan mentions Mr Burke's name on two occasions. At one point, he says: ". . . everybody is behind this sale, Ray Burke, the whole works". Later on, he says: "Tom (Brennan) has gone out to Ray Burke . . . (word missing) Sandyford and is probably there at the moment."

The company which owned the Sandyford lands, Canio Ltd, made an offshore payment of £60,000 to Mr Burke in 1984 and £15,000 in 1985. Canio was owned by Mr Brennan and Mr McGowan and the estate agent, Mr John Finnegan.

In 1981, a Brennan and McGowan company borrowed £800,000 from Allied Irish Finance. Mr George Russell gave an undertaking to hold the title deeds as security. However, in 1984, Canio borrowed £525,000 from Lombard and Ulster and Mr Russell was ordered to hand over the title deeds to the bank.

As a result, Allied Irish Finance sued Mr Russell for breach of contract, and Mr Brennan and Mr McGowan for inducement to breach contract. Mr Phillip Russell said he became aware at this time his father was extremely upset. He was not covered by professional indemnity and faced liabilities of up to £3 million.

The witness, who was then "an incredibly naive young solicitor", began helping his father, who started legal proceedings against Mr Brennan and Mr McGowan in Dublin and Jersey.

Mr McGowan swore an affidavit in July 1985 in which he stated he had no interest in Canio or its parent company, Ardcarn. The witness said he was amazed at this "brazen lie" and said he assumed Mr McGowan thought the Russells had no evidence to disprove it.

In November 1985, Mr McGowan filed a second affidavit, in which he admitted he had failed to list Canio as one of his companies.

Allied Irish Finance reached a settlement with Mr Brennan and Mr McGowan and the proceedings against Mr Russell were struck out. Mr Russell's costs were paid by the two builders, the witness said.

Mr Russell said his father, who died in 1999, ran a oneman solicitor's practice. By the early 1980s, he was spending more than half his time conveyancing properties owned by Mr Brennan and Mr McGowan. His relationship with the two builders was "purely professional".

Mr Brennan and Mr McGowan never gave instructions in writing and made no appointments; "they just called in and out as they wished".