Australian connection to Ansbacher comes to light
In December 1991, an Australian accountant involved in an investigation into political and financial scandals in Western Australia sent a fax to Irish Intercontinental Bank (IIB) in Dublin.
The accountant, working with the Western Australian Crown Solicitor's Office, wanted to know about dealings involving a collapsed merchant bank, Rothwells Ltd, of Perth, and its former chairman, Mr Laurence Robert Connell. In particular, the accountant was interested in a payment of £91,000 sterling (€148,000) made on February 20th 1991, through the Royal Bank of Scotland in London, from an account in the name of Ansbacher Ltd.
Ansbacher Ltd is the Cayman Islands bank founded by the late Mr Des Traynor in the 1970s. In January 1991, it had moved its Irish depositors' accounts from Guinness & Mahon bank in Dublin to IIB. One month later the payment being investigated by the Australian authorities was made.
IIB knew nothing of Mr Connell or Rothwells Ltd and contacted Mr Traynor about the letter. The following month Mr Traynor got back to the bank and said he would deal with the matter. He gave IIB a copy of a covering letter he was sending to Australia.
In it Mr Traynor said he was disturbed the Western Australian Crown Solicitor's Office had contacted the Dublin bank, given the confidentiality which surrounded the dealings of Cayman Islands banks. He also said that, despite the Cayman secrecy laws, his client had agreed to co-operate with the Australian authorities. Who exactly he was referring to is not clear.
However, it is understood the Ansbacher deposits were used regularly during the 1980s and the 1990s for the transfer, via Dublin, of funds from the Cayman Islands which were being sent to Australia. It is not known if these transfers are linked with the 1991 inquiries into Mr Connell's affairs.
It is also understood that financial dealings involving Mr Brian Burke, the former premier of Western Australia, were also linked to the deposits.
Rothwells Ltd was a merchant bank built up by Mr Connell from the shell of a Queensland menswear retailers during the 1980s. Mr Connell, the son of an Irish bus driver, was one of a number of brash and extravagant entrepreneurs who prospered in Western Australia during the 1980s and who were closely associated with Mr Burke.
The bank backed a number of Australia's most high profile business figures and was involved in joint business ventures with Mr Burke's government.
Mr Connell was Mr Burke's key link with the Australian businessmen who funded his political career. Referring to Mr Connell's interest in doing deals, Mr Burke once said: "I wouldn't like to be standing between Laurie and a bag of money."
Mr Connell was famous in Australia in the 1980s for, among other things, once having won three million Australian dollars (€1.89 million) in a single horse racing bet. He was known for keeping a large number of expensive race horses and for living a hugely extravagant lifestyle.
However, in 1987, in the wake of the stock market collapse, his merchant bank got into severe difficulties.
In fact, the bank had always been insolvent, though this was not reflected in the books. Money invested in the bank was, seemingly, Mr Connell's to spend if he wanted to, which he did.
The stock market collapse led to a run on the bank which even the most creative of accountants could not conceal. Mr Burke and the disgraced Australian tycoon, Alan Bond, were involved in the attempt to save Rothwells. A total of Aus$570 million was pumped into the effort, but the bank collapsed anyway.
As part of the effort, the Western Australian government and the Bond Corporation paid Mr Connell Aus$350 million for his half share of a company called Petrochemical Industries Co Ltd.
The bank collapsed in 1988. That same year Mr Burke resigned and was later appointed ambassador to Ireland and the Holy See.
An inquiry into how millions of dollars of taxpayers' money was put into the attempt to save Mr Connell's bank, at Mr Burke's direction, led to the establishment of the Royal Commission on Commercial Activities of Government and Other Matters, better known as the "WA Inc" royal commission.
As the commission continued with its inquiries Mr Burke lived in Dublin with his family and socialised with Mr Traynor. He was involved in financial dealings with Mr Traynor which sources now say were linked to the Ansbacher deposits.
Meanwhile the clamour was growing in Western Australia over how so much public money had disappeared without trace into Mr Connell's bank.
In 1991, Mr Burke was forced to resign his position in Dublin and return to Australia. It emerged during the commission hearings that Mr Burke had been given a £200,000 "interest free loan" by Mr Traynor during his time as ambassador in Dublin. Mr Traynor was mentioned in the Australian federal parliament in relation to the loans, which were used for the purchase of property, silver, crystal, and cars.
Mr Traynor told The Irish Times in April 1992 that Mr Burke, whom he considered a friend, was "under pressure on a continuous basis from the bank" and it was in that context that the loan had been given. He said the loan was smaller than was being reported, and that some of it had already been repaid. Mr Traynor said he had met the Australian commission during a visit it had made to Dublin and made it aware of the "exact situation" in relation to his financial dealings with Mr Burke. However, when the commission issued its findings in October 1992, it said it could come to no conclusion about the loan because it had been unable to interview Mr Traynor.
In 1993 Mr Burke was sentenced to jail for two years for taking public money under false pretences in relation to expenses claims for trips already paid for and uncovered in investigations following on from the "WA Inc" commission.
A few years later Mr Burke was back in court in relation to charges that he had stolen party as well as public funds. He himself estimated that Aus$8 million may have gone through his party leader's account during his time as premier in Western Australia. The money was spent at his discretion and some was spent on improving his beloved stamp collection, including some from Mr Connell. A jail sentence was handed down but was later quashed on appeal because of doubts over whether the Labour Party owned the donated money.
Mr Connell died in February 1996, aged 49, while in the midst of fighting charges of having falsified his bank's accounts and other related charges.
The Moriarty tribunal has heard evidence recently of dealings involving the Ansbacher deposits and an account called "The Diamond Trust", which went on until 1997. The dealings involved the transfer of funds to Australia from Dublin, with instructions coming from the Cayman banker, the late Mr John Furze.