Former Taoiseach offered to get AIB some new customers

An AIB internal memo said that Mr Charles Haughey offered to direct new business to the bank after a meeting in September 1976.

The former Taoiseach told the Moriarty tribunal that he would have had "some influence among my friends and acquaintances" but he could not be sure to what extent that was followed up. Notes of the meeting were part of a report on the state of Mr Haughey's accounts at the time, when he was opposition spokesman on health.

The report showed that his debt rose by £96,000 in a year from £173,776 in April 1975 to £272,980 in June 1976. His assets in September 1975 were £1.2 million and his total debt to both AIB and Northern Bank Finance Corporation was £500,000.

The document stated Mr Haughey "mentioned the bank did not make use of his influential position and he indicated that he would be more than willing to assist the bank in directing new business etc. He intends to devote a further 10 years to politics."

He told Mr John Coughlan SC, for the tribunal, that he recalled "something like that". He had been in in "political isolation". For most of the 1970s "I was just an individual deputy with no particular political standing or status".

Mr Coughlan: "Notwithstanding your perceived view of yourself as a lowly political figure, I think you would accept that you had certain status nationwide." Mr Haughey said he was certainly endeavouring to build up a nationwide status.

Counsel said he was not suggesting there was anything wrong in directing business to a bank, "but you would have had a degree of influence perhaps to direct business to the bank".

Mr Coughlan put it that at the time AIB was known as the small person's bank, the widows' and orphans' bank. Mr Haughey said it was a Cork institution and had its own special traditions and was a rural bank.

Mr Couglan then suggested Mr Haughey was endeavouring to establish a political base which took in a lot of rural Ireland. Mr Haughey did not think there was any political connection in that regard.

Part of the same report showed that interest on Mr Haughey's accounts were put into a separate suspense account. Total debt had risen by £96,000 in the previous year, including interest of £36,000. Mr Haughey pointed out that interest rates at that time were "absolutely crushing" and he was being charged interest at 18.5 per cent.

Mr Haughey said he was not aware that the bank had put his interest into a suspense account. He read "with great interest that while they were putting great pressure on me about my debt they in fact had more or less, not exactly written off but certainly reduced considerably that debt".

According to bank documents, Mr Haughey refused to sell his stud farm outright because the publicity would "indicate that his bankers were exerting pressure". He is quoted as saying that the Gallagher group would purchase a portion of the lands at Abbeville for £15,000 an acre.