THE Q&A: Colm Keena provides a basic guide to the Ansbacher Deposits
What were the Ansbacher deposits?
The Ansbacher deposits were funds lodged here by the Cayman Islands bank, Ansbacher Cayman Ltd. They were at the core of an unauthorised financial service run in secret by the late Mr Des Traynor. Wealthy clients opened offshore trusts and lodged money to offshore accounts through Mr Traynor. They also made withdrawals from their accounts and took out loans, which were secretly backed by their offshore deposits, through Mr Traynor.
What's wrong with that?
Firstly, banks have to be authorised before they can take deposits in this jurisdiction. Secondly, for most of the period during which the Ansbacher deposits were in existence, there were exchange control regulations in existence which required people wishing to move money overseas to seek permission to do so from the Central Bank. Finally, while it may not always have been the case, many of the people who used Mr Traynor's secret financial service did so because they wanted to hide money from the Revenue.
So how did it work?
Mr Traynor was a director of Guinness & Mahon Bank from 1969 to 1986. For much of the period he was de facto chief executive. The bank established subsidiaries in the Channel Islands and the Cayman Islands. These subsidiaries then lodged some of their money with the parent bank in Dublin. Money given by people to Mr Traynor would be put in an account in the Dublin bank in the name of the offshore bank it was supposedly lodged in. So you might nominally have an account in the Cayman Islands but your money was, in fact, in College Green, Dublin. It was a bit more complicated than that but that was the gist of the scheme.
That seems very simple.
Well it was; though the books which monitored the scheme were anything but simple. Mr Traynor, or his associate Mr Pádraig Collery, would keep computer files which tracked who owned what in the accounts in Guinness & Mahon which were in the names of the offshore subsidiaries. This was because all or most of the depositors' money was being pooled in general accounts in the name of the offshore bank.
The computer files were called the memorandum accounts. If someone put, say, £1,000 into their account, it would be lodged to the account kept by Ansbacher in Guinness & Mahon Bank, but Mr Traynor or Mr Collery would make an entry in the memorandum accounts adding £1,000 to the account of the particular depositor.
For example, if Joe Bloggs was the depositor his account in the memorandum accounts would be increased by £1,000. A similar entry would be made in his account record in the Cayman Islands. The offshore books mirrored the memorandum accounts.
Only those involved in their operation were supposed to know about the memorandum accounts. When the memorandum accounts were being kept in Guinness & Mahon you needed a special password to get into the part of the computer which contained the memorandum accounts. Furthermore, the names of the depositors did not appear on the memorandum accounts, which were coded. Joe Bloggs, for instance, might be AAA/1.
So how did you open an account if their existence was kept so secret?
You would be asked by Mr Traynor. The former Fianna Fáil TD for Tralee, Co Kerry, Mr Denis Foley, told the Moriarty Tribunal about being approached by Mr Traynor in the lobby of the Mount Brandon Hotel and being asked if he had money he wanted to invest. Mr Traynor probably knew Mr Foley, who managed the hotel's dances, was being paid under the table. In another instance the late Mr John Furze, one of the key Cayman executives running the Cayman bank, approached businessman Mr Ray McLoughlin while on a visit to Dublin and asked him if he wanted to open a Cayman trust account. Mr McLoughlin declined.
How did you make a deposit?
Mr David Doyle, son of the late Mr P. V. Doyle, gave evidence to the Moriarty Tribunal about this. He said he would meet Mr Traynor at lunchtimes in the lobby of the Berkeley Court Hotel, where Mr Traynor often had lunch, and hand him drafts or cash he wanted to lodge. When he was opening his account Mr Foley travelled up to Dublin on the train and gave Mr Traynor some bank drafts he had been keeping at home in his dresser. The exchange happened in a Guinness & Mahon office. A Dunnes Stores cheque given to Mr Traynor for Mr Charles Haughey was sent to a London bank for lodgement to an Ansbacher account, before being transferred to an Ansbacher account in Guinness & Mahon, Dublin.
What about a withdrawal?
You could have a Guinness & Mahon draft sent to you by ringing Mr Traynor or his secretary, Ms Joan Williams. You could also get your money in cash. Mr Foley once collected £10,000 from Mr Traynor in Mr Traynor's then office in the Cement Roadstone headquarters on Fitzwilliam Square, Dublin. On another occasion Mr Collery handed the then deputy £50,000 in a Doyle hotel bar. In December, 1987, £57,000 was withdrawn in cash for Mr Haughey from Guinness & Mahon. You could also, if you wanted, take out a back-to-back loan.
What's that?
It's a loan which is backed by a deposit for a similar amount. Sometimes you might want a large amount of money but you wouldn't want to draw the attention of the Revenue to your deposit. If the bank gave you a loan but didn't mention on its files that it was backed by an offshore deposit, then you had a perfect explanation for the Revenue if it asked where you got the money.
How did Ansbacher get involved?
Mr Traynor set up a Guinness & Mahon subsidiary in the Cayman Islands in the early 1970s, called Guinness Mahon Cayman Trust. All through the 1970s and up to the mid-1980s the deposits in Dublin were in the name of Guinness Mahon Cayman Trust. The Cayman bank was then bought by the Henry Ansbacher group, and renamed Ansbacher Cayman Ltd.
In the late 1980s and early 1990s, Mr Traynor moved the Ansbacher deposits from Guinness & Mahon, which he'd left by then, to IIB Bank on Merrion Square, Dublin. Some deposits were still in this bank in 1997 when they were discovered in the course of the McCracken Tribunal's inquiries into payments to Mr Haughey. The depositors saw where the inquiry was leading and most of them moved their money before the tribunal discovered what had been going on.