Haughey's Forty Years of Controversy (23 page)

Haughey was so well read that he was undoubtedly aware of the historical significance of the name, the Boss, but he obviously did not care, because because he was apparently content to be called ‘the boss'.

Charlie continued to live beyond his means and quickly got back into debt, especially while he was out of power from December 1982 to February 1987. At the start of this period in opposition, he borrowed £400,000 from Guinness & Mahon, where he would have four different bank accounts, which he said that Des Traynor opened without reference to him. But he had to accept that he applied for the loan. He tried to give the impression that Traynor ran his finances essentially without consulting him, but there is ample evidence to suggest that his own involvement was much more extensive than he tried to let on.

The Guinness & Mahon loan was to be repaid by 31 January 1985, but this was extended. Even £400,000 was not enough to fund Charlie's life-style. In May of 1983, there were unexplained deposits in his account of £240,000, and he got a further £120,000 the following month when hotelier P.V. Doyle took out a loan for him that he promised to pay back. Doyle obtained another loan of £50,000 for Charlie in 1985. Haughey also received £50,000 from the billionaire Arab, Mahmud Fustok, supposedly for a horse that he had purchased. He gave the money to the independent deputy Dr John O'Connell, who paid with a cheque of his own. Nobody was able to provide any details about the mysterious horse.

By way of explanation, Charlie said that he had tried to interest Fustok in establishing some bloodstock business in Ireland. ‘I feel sure that his offering to purchase the yearling from us was by way of recompense for not acceding to any request,' he explained. ‘I think it may have been a sort of gesture on his part.'

In the 1985 Charlie and Traynor organised funds for Haughey's son Ciarán to establish a helicopter business in partnership with an American pilot John Barnicle, who put up just £60 each. Traynor organised things and Haughey approached people for money for Celtic Helicopters. They arranged to get money from Charlie's contacts. They included John O'Connell, the former Labour party deputy, former chairman of Bord Fáilte Joe Malone, and the beef magnate Séamus Purcell. There may have been nothing wrong with a father helping out his son, but Traynor appeared to cross the line of corporate ethics, by involving himself in the organisation of a rival firm while he was acting as a director of Aer Lingus, a semi-state body that had it own helicopter subsidiary, Irish Helicopters.

Of course, it seems ludicrous to highlight Traynor's lack of business ethics in this matter when one considers his other activities. He was already engaged in organising a massive tax evasion scheme for a number of business people and it can be demonstrated that he facilitated Charlie in diverting hundreds of thousands of pounds intended for the Fianna Fáil party.

Haughey used the party leader's fund to launder money. This was a fund initially established by Eamon de Valera's government in the 1930s to provide for a party secretariat and fund political research. From 1984 to 1992, the state contributed £1.05m to this fund, and Charlie topped it up to £1.5m with money donated to Fianna Fáil, or contributions towards a medical fund for Brian Lenihan to secure a liver transplant in the United States.

All cheques drawn on the account had to have two signatures of senior party members. The account, which was held at AIB branch in Baggot Street, was administered by Eileen Foy in Haughey's office, and she and Charlie were the only people who knew how much was in the account. The records of deposits in the account, from 1980 to 1983, were destroyed along with other bank records from the period, so what happened to the account during those years remains a mystery.

The cheques drawn on the account between 1984 and 1992 were all co-signed by Charlie and either Ray MacSharry, the party's finance spokesman, or by Bertie Ahern, the party's chief whip. Ahern signed most of the cheques in an accommodating and unquestioning manner. Despite his own accountancy background, he signed most of them blank. He would sign up to thirty at a time. One cheque dated 16 June 1989 was subsequently made out to cash for £25,000. This was deposited in Haughey's own account, as well as three other cheques made out in 1991. In February of that year, Ahern signed a whole book of blank cheques, which totally negated the control element of having two people sign the cheques.

Cheques co-signed by Ahern included two cheques for a total of £15,832 for Charlie's Charvet shirts. There were also cheques for a total of £15,000 for meals at Le Cog Hardi restaurant between April and December 1991, and there were three cheques made out simply to cash for a total of £22,500. Those three cheques were deposited in Charlie's own account. Of course, he was to claim that these were to cover legitimate expenses, such as entertaining in his own home, but then – as the call girl said in court during the infamous Profumo scandal in Britain – ‘he would say that, wouldn't he?'

Only a fraction of the excess money has yet been explained. In 1986, some £134,00 extra was deposited in the leader's fund. The Irish Permanent Building Society contributed £100,000 of that to Fianna Fáil. The money was in the form of two £50,000 cheques made out to the party. Both were signed by Haughey and deposited in the leader's fund. Later £75,000 was withdrawn from the account in five cheques, which coincided with similar deposits into an account from which Des Traynor paid Haughey's domestic bills. A sixth cheque made out to cash for £25,000, which was signed by Charlie and Bertie Ahern, was also deposited in the account. In effect, the leader's fund was used to launder the £100,000 that was diverted, from Fianna Fáil.

Charlie was living so far beyond his means, that the £100,000 made little difference to his finances, which were again in a dreadful state. In 1986 Des Traynor left as managing director of Guinness & Mahon Bank to take up the position of chairman of Cement Roadstone Holdings (CRH), and the bank was taken over by the Japanese, who did not care whether Haughey was Taoiseach or not. They insisted that his loan and overdraft in the region of £900,000 be cleared up. Traynor moved Charlie's account to a subsidiary, Ansbacher Cayman. But the new owners still desired that Haughey's account should be straightened out. Traynor decided to raise the money by again tapping a number of business contacts. One of those he approach was the auditor of Dunne Stores, Noel Fox, who talked to Ben Dunne, the family member then controlling the business.

In January 1987 Dunne had handed over six cheques made out to ‘bearer' for a total of £30,000 that somehow ended up in Charlie's account. Neither of them could remember the circumstances afterwards, but Dunne had apparently demonstrated that he was prepared to give money to Haughey, and he was more than amenable to the idea of helping when Fox told him about Traynor's approach. ‘I think Haughey is making a huge mistake trying to get six or seven people together,' Dunne contended. ‘Christ picked twelve apostles and one of them crucified him.' Consequently, Dunne offered to pay all the money himself.

He intended to source it outside the state, which was going to take some time. The first payment was a £285,000 sterling cheque drawn up in Northern Ireland on 20 May 1987. In December, there was a further cheque sourced in Northern Ireland for the sterling equivalent of £204,055, and the following summer Dunne provided a cheque worth £471,000 from Switzerland. Thus from May 1987 to the summer of 1988, he gave Haughey over £960,055, and he also gave Ciarán Haughey £100,000 for services rendered, both in flying him and looking for a private helicopter for him. That same year Haughey bought a new yacht for £122,000, but the source of that money was never traced, though Dermot Desmond of the Brokerage firm, NCB, paid £75,546 to have the yacht refurbished. He said that this was really an interest free loan to be repaid only if the boat was re-sold.

In 1989 there were European, local, and general elections and the money came rolling in to Haughey's coffers. A total of £220,000 extra was deposited in the leader's fund. This included money collected to defray Brian Lenihan's medical expense for a liver transplant. That whole saga will be considered separately.

Mark Kavanagh gathered £100,000 for Fianna Fáil on behalf of the builders of the Financial Services Centre in June 1988. He was asked to put the money in the form of four cheques for £25,000 in 1989. He said that he handed the cheques to Charlie on election day. Haughey explained that Fianna Fáil would get half and £25,000 would go to Lenihan, while the remaining £25,000 would go to selected FF candidates. One of the cheques was lodged to his account and the other were exchanged for a draft for £50,000 and given to Fianna Fáil supposedly as a contribution from Michael Smurfit, who had contributed £60,000 through Des Traynor. Thus out of the £160,000 that was collected for Fianna Fáil and Lenihan, only £75,000 was handed over and the remaining £85,000 was retained by Haughey, who got another £150,000 from Ben Dunne in 1989.

This brought the total from Dunne to £1.1m. Ben stated that he never sought any favours from Haughey, other than asking him to arrange a meeting with Philip Curran, the chairman of the revenue commissioners. Nothing came of that meeting, but Dunne handed over a further £400,000 sterling for Charlie in 1990 and, without even being asked for money, he handed him £210,000 in cheques on one Friday in November 1991. He gave him three further cheques totalling £180,000 a year later after Charlie had retired from politics. In all he had given him over £1.93m, and he even offered him a further £1m to help him to cover his tax liability on the money, if he decided to declare it. Thus, it would seem that Dunne was not looking for political favours.

But the same cannot be said with any confidence about other people, because many of the people who made the contributions have never been identified. On 22 and 24 February 1988, there were two mystery bank transfers to Haughey's account of £195,000 and £49,700 respectively. Charlie said that he could not explain them, but for decades he had been suffering from convenient amnesia when it came to explaining embarrassing matters, especially about money. He was clearly evading taxes and would eventually be compelled to pay over six million euro in back taxes, penalties and interest.

Of course, tax evasion was rife in the country at the time. In 1988, Charlie's government introduced a tax amnesty allowing people to pay off tax previously evaded without penalties or interest. It was estimated that about £30 million in evaded taxes would be collected in this way, but over £500 million was actually collected in the amnesty that year. Tax evasion seemed to be a way of life in which even the Taoiseach was participating, but he did not avail of that tax amnesty himself.

Des O'Malley was first appointed to the cabinet as Minister for Justice in May 1970 during the arms crisis. In the ensuing months as arrangements were being made for the arms trial, the special branch reported seeing him with Charlie at the Rose of Tralee Festival. Peter Berry, the secretary of the Department of Justice, tried to give O'Malley a subtle warning, telling him that Brian Lenihan, the Minister for Transport and Power, had been seen with Charlie in Tralee. With the arms trial due to begin later in the month, Berry noted that it was inappropriate for any minister to be seen with Charlie before the trial, because the special branch, which had the former minister under surveillance, might get the wrong impression.

O'Malley promptly admitted that he had also met Charlie and added that they planned another meeting at Charlie's home the following week. Berry objected. If O'Malley was determined to meet Charlie, then the meeting should be in the minister's own office in Leinster House, where it could take place without the knowledge of special branch. O'Malley therefore met with Charlie in Leinster House for some thirty minutes on 9 September 1970. Afterwards he told Berry that the conversation had concentrated on Berry's statement in the
Book of Evidence
and the testimony he was likely to give at the trial.

‘He said that Mr Haughey's principal worry was over my evidence and that he had asked if I could be “induced”, “directed” or “intimidated” into not giving evidence or changing my evidence,' Berry recalled. When he asked if ‘induced' meant bribed, O'Malley did not answer. ‘The whole nature of the meeting,' Berry added, ‘left me in no doubt that he (O'Malley) was pretending to Mr Haughey that he was a friend. It gave me a touch of nausea.'

O'Malley flatly rejected any suggestion of impropriety surrounding the meeting. ‘I thought it quite appropriate at the time,' he later explained. ‘I had told Mr Berry beforehand that I was meeting Mr Haughey and I told him afterwards what had transpired. But unfortunately the connotation is put on it that I made some kind of request to him which I certainly didn't. I factually reported what had happened because I thought it was appropriate that he should know.'

Thereafter relations between Charlie and O'Malley were strained. The latter was firmly in the Lynch wing of the party. He backed Colley for the leadership in 1979 and he led the abortive heave against Charlie a little over two years later. O'Malley supported the McCreevy no-confidence motion later in the year, going so far as to resign from the cabinet before the meeting.

When the telephone-tapping scandal broke a few months later, O'Malley immediately dismissed Charlie's call for a judicial inquiry. ‘The record of these enquiries is not very satisfactory,' he said. He was apparently in sympathy with those who wished to railroad Charlie. When Charlie survived again, Dessie was obviously in political trouble. At the Fianna Fáil Ard Fheis a few weeks later he was defeated when he ran for one of the five vice-presidential posts. This was the route Charlie had taken in his slow resurrection within the party following the arms crisis, but he was now firmly in control of the party and he was determined to block O'Malley.