Mr James Gogarty demanded an additional £25,000 in interest from Bovale Developments on top of a finder's fee of £150,000 for setting up the Murphy land deal for the development company, the Flood tribunal was told yesterday.
A final settlement was reached between the two in June 1996 after Mr Gogarty threatened to implicate the Baileys in media investigations into planning irregularities at the time, said Bovale director Mr Michael Bailey.
He described a series of meetings between himself and Mr Gogarty spanning several years between 1990 and 1996 at which the former JMSE employee sought to get final payment of the money that was due to him. The "interest factor" was first introduced in 1996, said Mr Bailey - in response to questioning by Mr Desmond O'Neill SC, for the tribunal - when Mr Gogarty indicated that he was having "legal problems with the Murphys".
"What possible connection was there between your indebtedness to him and his difficulties with the Murphys?" asked Mr O'Neill.
"I had a lot of sympathy with the man, the way he was speaking."
Mr Bailey confirmed he had paid Mr Gogarty £50,000 cash on November 3rd, 1989, "and subsequent dribs and drabs" over the following year, until he was being pressed for the final payment of £20,000.
"You knew you owed him £20,000?".
"That's what I believed by him telling me," said Mr Bailey.
"You were not in a position to give him £20,000 cash or a cheque?"
"He mentioned a figure of £25,000 interest due on the money outstanding from the time it was outstanding," replied Mr Bailey. It was the first time that "interest" had been mentioned: "I told him I was shocked and I offered him £20,000. He would not accept it. I said I would come back to him."
In the event, said Mr Bailey, it was Mr Gogarty who came back to him - to arrange a meeting for the Sutton Castle Hotel. They met in the car park: "He told me he would be implicating us if I did not pay him what we owed him."
"This was the first time in which he said he would implicate you?"
"Correct. He was saying he was talking to the papers."
"He would say you were at the meeting in Ray Burke's house - was that a problem?"
"I did not want to be implicated in anything that was alleged of wrongdoing, if that's the correct name."
"What was he saying took place at that meeting?"
"He did not say. He wanted his money and said he would expose the Murphys, come hell or high water."
Mr O'Neill asked what Mr Bailey felt he had to fear, since on his own evidence he had engaged in "perfectly straightforward transactions" that were above board. He had not wanted to be implicated, he reiterated.
"Did he give his account of that meeting or that you had made the equivalent of his [payment] and they were handed over simultaneously with the schedule of lands you were the owner of?" asked Mr O'Neill.
"He did not," replied Mr Bailey. He had learned this only from reading the papers and couldn't believe it, he said.
Mr Gogarty had eventually settled for an interest payment of £12,000. He was paid the final sum of £32,000 by Mr Bailey in cash, the tribunal was told. "From what source did you acquire this cash?" asked Mr O'Neill.
"I don't know."
"You run a successful business. Where could you get £32,000 without any record of it being kept?"
"I don't know. I sincerely would like to identify [the source] but I don't know."