Des Traynor initiated the system used by Ireland's wealthy to protect their assets, writes Colm Keena
The Ansbacher deposits was a clandestine banking system put in place by the late Mr Des Traynor and was used by senior figures from corporate Ireland.
At the time the secretive banking system was put in place in the early 1970s, Mr Traynor was a senior executive with Guinness & Mahon (G&M) bank in Dublin. He founded Guinness Mahon Cayman Trust, a G&M subsidiary in the Cayman Islands, and used the Cayman bank to manage Cayman trusts set up for his clients. The bank was subsequently sold and re-named Ansbacher (Cayman) Ltd.
Wealthy clients of G&M and of the Kennedy Crowley accountancy firm (now KPMG) made use of the scheme from its outset. At the time tax rates were high and preparations were under way for the introduction of new capital taxes.
"Those with money were concerned about their financial future and were receptive to schemes that appeared to offer a measure of security," the High Court inspectors wrote in their report.
There were two key aspects to the scheme, the inspectors found. One was that the Cayman trusts were in fact under the control of the Irish people who placed money in them, rather than the Cayman trustees who should properly have had control.
Secondly, money that appeared on the G&M books as having been deposited with the Dublin bank by the Cayman bank, was in fact money on deposit by Irish-resident clients. The supposedly offshore money could be withdrawn by contacting Mr Traynor at G&M's premises on College Green, Dublin.
In 1986 Mr Traynor left G&M and a year later he became chairman of CRH plc. In 1990 the Ansbacher Deposits were moved to IIB Bank, on Merrion Square. The inspectors concluded there was "evidence to show" that G&M was an accessory to the business carried on illegally by Ansbacher in the Republic. In relation to IIB Bank, however, it decided that it was "not actually aware of the true nature of the Ansbacher activities in Ireland".
Mr Traynor died in 1994. The secretive deposits were still operated, though at a much reduced scale, up to their discovery in 1997. Their existence was disclosed by the McCracken Tribunal, which discovered the system while tracking payments by Mr Ben Dunne to Mr Charles Haughey. The former Taoiseach was a close friend of Mr Traynor and a client of Ansbacher.
The inspectors found that eight directors of CRH were clients of Mr Traynor. They found that CRH could not be said to have knowingly assisted the carrying out of Ansbacher business in Ireland, but should bear some responsibility for the fact that Ansbacher's activities continued between 1989 and 1994.
Mr Traynor moved some of his Ansbacher accounts to Bank of Ireland private banking in 1992. The inspectors concluded that the bank could be said to have assisted Ansbacher (perhaps unwittingly) in concealing the fact that Irish residents were owners of the funds.
Persons found to have been clients of Ansbacher included developer Mr John Byrne, former Fine Gael minister, the late Mr Hugh Coveney, former Fianna Fáil TD, Mr Denis Foley, hotelier the late Mr PV Doyle.