At the age of 37, the Fianna Fail TD and businessman John Ellis was facing financial and political ruin. It was late 1989 and the cattle-dealing and meat-processing business he had built with his brother since the 1970s had collapsed.
National Irish Bank had issued bankruptcy proceedings for £263,450; Swinford Mart was looking for £13,600 in similar proceedings, Manorhamilton Mart for £12,400, and several Roscommon farmers were in the High Court seeking £30,000. Other debtors had not got around to taking action - yet.
Not only could he not pay the debts, a declaration of bankruptcy would ensure he lost his Dail seat. The 1923 Electoral Act says anyone declared bankrupt can be disqualified from membership of the Oireachtas. This sorry state of affairs, Mr Ellis said himself this week, "was brought about by a combination of bad management and downright bad luck".
In December 1989 Mr Ellis's luck was about to change. Fired by the desire to retain political power, more powerful political wheels than his had already been set in motion.
Shortly after receiving the bankruptcy summons from NIB, Mr Ellis had told his friend, the minister for finance, Mr Albert Reynolds, about the imminent disaster. On November 28th, according to Mr Ellis, he met NIB to tell it he had no money to pay the debt. "I understand that at the same time Albert Reynolds was informing the bank of my dire circumstances and, in effect, pleaded for leniency for me", Mr Ellis said in a statement this week.
Mr Reynolds initially denied this, then said he had no specific recollection of it but that it could have happened, and then said there was no evidence to say it had happened.
Fine Gael's finance spokesman, Mr Michael Noonan, claimed this week - without providing substantiation - that a serving Cabinet member had also made representations to NIB on Mr Ellis's behalf. However, the Taoiseach said all members of his Cabinet denied this. Meanwhile NIB has declined to explain what happened, citing client confidentiality.
Whatever happened, Mr Ellis's relationship with NIB was transformed. The bank agreed to accept just £20,000 in full settlement of the debt, writing off the remaining £243,450.
But in December 1989 Mr Ellis had other debts to deal with, and things still looked bleak. This all changed one dark winter's evening when, summoned to Mr Haughey's office, Mr Ellis learned not just that Christmas was coming early for him, but that all his Christmases were coming at once.
Mr Haughey told him his bankruptcy and the subsequent loss of his Dail seat could cause the collapse of the government, and this must be avoided. The Fianna Fail/Progressive Democrats coalition had the smallest of Dail majorities, 83 seats compared to 82 for the combined opposition, excluding the Ceann Comhairle.
While Independent Mr Tom Foxe and Independent Fianna Fail deputy Mr Neil Blaney tended to support the government, its voting position was never comfortable. A bankruptcy declaration against Mr Ellis would have made it even less so. Fianna Fail would therefore come to his rescue.
The next day Mr Ellis was summoned to Mr Haughey's office again and was given £12,400 in cash, which Mr Ellis gave to his solicitor who gave it to Manorhamilton Mart. In March 1990, when he was threatened again with bankruptcy by Swinford Mart, Mr Haughey gave him a further £13,600 in cash on behalf of Fianna Fail. These sums came from the Fianna Fail party leader's account, the same account that paid for Mr Haughey's Charvet shirts and Coq Hardi dinners, the account from which money went to another account that paid Mr Haughey's personal bills, to Mrs Maureen Haughey's account, to Celtic Helicopters and Adare Manor. It was the account into which money for Mr Brian Lenihan's liver transplant operation went and from which his medical bills were paid.
It was the account most of whose blank cheques were countersigned in advance by the present Taoiseach, Mr Ahern, in the 1984-1992 period.
The bailing out of John Ellis from this account was just one extraordinary event for Fianna Fail in 1989, a truly extraordinary year for the party. It was the year Mr Haughey gambled on calling an election to seek an overall majority for the fifth time, and came back with fewer seats than he started with. It was the year Mr Haughey led them to abandon their "core value" of never forming a coalition government and instead to go into government with the Progressive Democrats. Mr Haughey started 1989 as Taoiseach of a minority administration, supported by a couple of independents and from the Opposition due to Fine Gael's so-called "Tallaght Strategy", which pledged support so long as the government followed Fine Gael economic policies.
The voting situation was tight and the government lost five Dail divisions, but none on fundamental issues that would cause a general election. Despite constant Dail nervousness Mr Haughey ploughed on with government business as Taoiseach. On St Patrick's Day he met President George Bush in Washington. In early April he met President Mikhail Gorbachev at Shannon Airport. On March 31st he unveiled the £9.1 million National Development Plan for submission to Brussels.
ON April 26th Mr Haughey returned from a trip to Japan where he had met the Emperor and the Japanese Prime Minister, Mr Noboru Takeshita, who, co-incidentally, announced his imminent resignation over a financial scandal during Mr Haughey's visit there. The night Mr Haughey arrived back in Dublin, the government was defeated on a private member's motion to set up a £400,000 trust fund for haemophiliacs infected with the HIV virus, some of whom had contracted AIDS.
Mr Haughey, although "paired" for the vote with the Fine Gael leader, Mr Alan Dukes, had surprisingly turned up in the Dail chamber. He appeared to be in giddy form. As deputies trooped up and down staircases participating in the Dail's voting procedure, he joked with government and opposition deputies, greeting several by theatrically joining his hands in front of him and bowing solemnly from the waist, Japanese style.
The government lost, as expected, by 72 votes to 69. However, it had lost five Dail votes before and had decided to ignore motions passed against its wishes during Private Members' Time. That it seemed set to do so again was confirmed by Mr Haughey himself when on arrival at Dublin Airport he said he was not unduly concerned about the impending defeat.
But that night a government spokesman came to reporters and said that this defeat was being viewed particularly seriously. The next day Mr Haughey summoned journalists to meet him and further cranked up election speculation, suggesting the previous night's events, the government's sixth Dail defeat, had been terribly serious. Mr Haughey had apparently decided to gamble on a mid-term election and a fifth attempt to win an overall majority in the Dail. However, seeking a mandate on the basis of having just sought to stop people poisoned by a State agency from getting compensation seemed, on reflection, to be a bad idea. Mr Haughey waited another month before calling the election.
Before he finally set the election date he had other important matters to deal with. Three months earlier, on January 29th, Mr Haughey had trenchantly underlined the independence of the Voluntary Health Insurance board. Refusing to provide alternative funding to patients affected by VHI's abolition of its drugs refund scheme, Mr Haughey said the VHI was an independent insurance body, responsible for its own decisions and obliged to operate on commercial criteria.
BUT in early May, according to evidence given at the Moriarty tribunal this week, he summoned the chief executive of Voluntary Health Insurance, Mr Tom Ryan, to his office. He outlined the total likely cost of Mr Lenihan's liver transplant and associated treatment and the likely hospitalisation bill. He asked if VHI would pay the hospital account. On May 18th the board of VHI agreed to pay the cost of the operation, which turned out to be approximately £57,000.
A major injection to Mr Haughey's personal funds was also sought in May 1989. Some time between his return from Japan and his calling of the election, his close friend and manager of his personal finances, Mr Des Traynor, rang Dunnes' Stores' accountant, Mr Noel Fox, to ask if he could get Mr Ben Dunne to give a further £150,000 to Mr Haughey. Mr Dunne had already provided Mr Haughey with two cheques, one for £182,630 sterling and the other for £471,000 sterling.
On May 25th Mr Haughey finally called the election for June 15th, 1989. His political judgment was proved spectacularly wrong, as Fianna Fail came back with 77 seats, compared to the 81 won in 1987. After a short period of political vacuum during which it appeared Mr Haughey did not know how he would proceed, he broke what was described by many party figures as the "core value" of refusing to go into government with any other party. In this deeply traumatic time for Fianna Fail Mr Haughey was not the only senior party figure with financial matters to distract him. Other of his ministers also received enormous sums of money during this defining period in Fianna Fail's history. In the three-week period beginning on May 31st, 1989, the minister for justice, Mr Ray Burke, lodged £107,100 to the bank. Not all of the sources of this money have been revealed. It is known that on June 8th or 9th Mr Burke was given £30,000 by Mr James Gogarty on behalf of Joseph Murphy Structural Engineering (JMSE). On June 9th he was given a cheque, also for £30,000, from Rennick's Manufacturing, a subsidiary of Fitzwilton, the holding company controlled by Dr Tony O'Reilly and his family. Mr Burke received a further £35,000 from a donor whose identity has not yet been revealed.
And that very same month, a third member of the outgoing government, the minister for the environment, Mr Padraig Flynn, received a £50,000 cheque from the London-based property developer, Mr Tom Gilmartin. Mr Gilmartin says this money was intended for the Fianna Fail party, but Mr Flynn insists the donation was for his own personal campaign. Mr Gilmartin was at the time seeking government support for his plan to build a massive shopping complex in west Dublin.
Also in June 1989, a cheque for £20,000 from Irish Permanent, intended as a contribution to Mr Lenihan's medical and related expenses, was lodged to an account of Celtic Helicopters, the firm run by Mr Haughey's son, Ciaran. The cheque was lodged with another Irish Permanent cheque for £10,000, which was a contribution to Mr Haughey's political expenses. Mr Haughey has said this was a mistake. It was noticed and the money transferred to the Fianna Fail party leader's account, from which money raised for the Lenihan fund was administered. However, counsel for the tribunal said earlier this month that the evidence suggested the cheque was most likely cashed at the AIB Baggot Street branch where the party leader's account was held.
The £220,000 lodged to the Fianna Fail party leader's account in 1989 included a £25,000 cheque from Goodman International, signed by Mr Larry Goodman, which followed a request to him to contribute to Mr Lenihan's medical expenses. The Moriarty tribunal has identified £82,528 as having been paid out of the account to cover expenses incurred in relation to Mr Brian Lenihan's liver transplant operation. The tribunal is investigating whether more of the £220,000 was intended for the Lenihan fund, and if so what happened to it.
At the end of 1989, there was no outward sign from Mr Haughey that he was concerned about financial matters. He was preparing for his six months of glory as president of the EU Council during Ireland's EU presidency, which began the following month.
At exactly the same time he was organising the bailing out of Mr Ellis, he appeared to those around him to be in high good form. In early December Mr Haughey breezed into a press briefing following an Irish Times/MRBI poll chanting in a low voice: "Fifty seven and eighty four, fifty seven and eighty four . . . ". This referred to the 57 per cent shown in the polls as being satisfied with his performance and the 84 per cent of Fianna Fail supporters who thought he was doing a good job. He was in classic Haughey good form, playing a double act with his press secretary, Mr P.J. Mara, who reminded Mr Haughey when he stopped his chanting he didn't believe in opinion polls.
"No, no, no . . . " mused Mr Haughey, suppressing a grin. He appeared calm, relaxed, with not a care in the world.
