Method of payments facilitated tax evasion

In the late 1980s and early 1990s Dunnes Stores paid hundreds of thousands of pounds to Mr Michael Lowry personally for work carried out for Dunnes by Mr Lowry's company, Streamline Enterprises. The methods of payment chosen were designed specifically to assist Mr Lowry in evading tax. For some of the period Mr Lowry was chairman of the Fine Gael party and a senior government minister.

In the period 1992/1993, Dunnes paid £395,000 to contractors for refurbishment work on Mr Lowry's Tipperary home, and treated the amount in its books as payments for work done at the Ilac centre in Dublin.

Mr Lowry's company, Garuda Ltd, trading as Streamline Enterprises, provided and maintained refrigeration equipment for Dunnes Stores. Streamline was paid amounts which allowed it to show small profits in its books, while Mr Lowry personally received bonus payments.

Between November 1988 and March 1993, a number of cheques were issued to Streamline for work carried out in England and Northern Ireland. The cheques, amounting to over £100,000, were cashed by Mr Lowry or lodged in accounts under his own name. The amounts were not entered into the Streamline books.

Furthermore, sums amounting to over £150,000 were paid by Mr Ben Dunne to Mr Lowry between October 1990 and May 1992, by lodging them in accounts in the Isle of Man. This contravened exchange control legislation and assisted Mr Lowry in evading tax.

"The whole system whereby Mr Lowry would be paid substantial sums of money on a personal basis, and ultimately have a large sum of money spent on renovations to his house, were designed to, and did, assist him in evading tax," Mr Justice Brian McCracken concluded in his report.

In September 1997 the Tanaiste, Ms Harney, having studied the McCracken report, decided to appoint authorised officers to two companies: Garuda Ltd and Celtic Helicopters. The appointment of an authorised officer to Celtic Helicopters was understood to be based on the finding in the McCracken report that a bank loan taken out by that company had been paid off with money from accounts in the Ansbacher deposits linked to the former Taoiseach, Mr Haughey. Mr Ciaran Haughey, the former Taoiseach's son and a director of Celtic Helicopters, told the tribunal he had not been aware that the loan had been paid off from third party resources. Mr Justice McCracken did not accept that evidence.

The tribunal also heard that Mr Ciaran Haughey had been paid £10,000 by Mr Ben Dunne in October 1988. Mr Dunne said the payment was by way of a bonus to Mr Haughey for piloting services. Mr Haughey said the money was for consultancy services. Mr Justice McCracken found that Mr Dunne's account of the payment was the correct one.

Ms Harney in September of last year appointed Mr Peter Fisher as an authorised officer to Garuda Ltd. Mr Fisher had an agreement of co-operation from Dunnes Stores and was not appointed as an officer to that company.

However, on the basis of an interim report in June from Mr Gerard Ryan, the authorised officer inquiring into Celtic Helicopters and the Ansbacher Deposits, Tanaiste decided a month later to appoint an authorised officer to two Dunnes companies, Dunnes Stores Ireland Ltd and Dunnes Stores Ilac Ltd. She appointed a certified accountant, Mr George Maloney, to the role.

Mr Maloney resigned for reasons outlined in court yesterday. Ms Harney replaced him with Mr Ryan, a chartered accountant who works in the Department of Enterprise and Employment. In September 1997, in the wake of the McCracken report, Ms Harney appointed Mr Ryan to Celtic Helicopters. Mr Ryan's interim report on that inquiry led Ms Harney to extend his brief to the Ansbacher deposits generally, and his work in that regard is ongoing. Dunnes Stores, for its part, is not exactly happy with the appointment of an authorised officer, but is believed to understand why the step was taken. While the company was co-operating with Mr Fisher's inquiries, the appointment of an authorised officer to Dunnes Stores means former officers of the company can be interviewed. The most important person in that regard would be Mr Ben Dunne. The matters considered by the McCracken tribunal all occurred during his time with the company. The current management has been anxious to clear up any irregularities which may have existed from Mr Dunne's time at the helm. Inquiries it had carried out subsequent to Mr Dunne's departure led to the discovery of the payments by Mr Dunne to Mr Lowry and Mr Haughey. The media subsequently became aware of the payments, and the McCracken tribunal was eventually established.