Category: Archive

Spendthrift Haughey

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Charles Haughey was a kept man on a grand scale who may have received about £2.5 million in cash gifts during his political career and ran up a £1 million-plus overdraft at Allied Irish Bank, a debt he tried to settle with bizarre proposals involving Arab cash and land-deal profits.

The extraordinary new details of the former taoiseach’s personal finances surrounding his lavish lifestyle emerged last week at the first public sittings of the Moriarty Tribunal, which is investigating payments to politicians.

Haughey has been credited with sorting out the nation’s finance in the 1980s. Now it emerges that while he was pledging government austerity, his own domestic finances were hair-raising.

In January 1980, shortly after he became taoiseach for the first time, his financial adviser, the late Des Traynor, was brokering a deal with AIB bosses on a £1.143 overdraft. The bank effectively agreed to write off £350,000 of the debt.

In the years following he continued to run up debts and needed constant cash handouts.

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The McCracken Tribunal has already established in 1997 that Haughey received £1.3 million from businessman Ben Dunne. Now the tribunal under High Court Judge Michael Moriarty is investigating an additional £1.2 million that may have gone to Haughey through a complex system of payments.

The figures were revealed by tribunal counsel John Coughlan last week when the first main public sitting was held after 16 months of closed-door investigations.

The tribunal was established by the Oireachtas to probe payments to Haughey and former Fine Gael Transport Minister Michael Lowry.

Lawyers sought adjournment

When the session started, Haughey’s legal team unsuccessfully sought an adjournment of his affairs until criminal proceedings against him are completed.

Haughey has been charged with obstructing and hindering the McCracken Tribunal. The case comes before the Circuit Court later this year.

The Moriarty Tribunal is investigating payments in four batches often involving circuitous routes through banks and companies:

€ A 1987 check for more than £300,000 paid to a company called Triple Plan by Dunnes Stores in Bangor, Co. Down. Part of that ended up paying off a Haughey overdraft of £262,000 in Guinness and Mahon Bank.

€ Six checks from Dunnes Stores, drawn on one day during 1987, totaling £32,000 and lodged to Guinness and Mahon for Haughey’s benefit.

€ More than £180,000 in three Dunnes Store checks from 1992, part of which ended up in Celtic Helicopters, run by Haughey’s son Ciaran, with the remainder going into a company run by Traynor.

€ Bank drafts worth £750,000 paid to AIB in 1980. The source of this cash is not yet clear.

AIB, in a statement to the tribunal, said it had not sought "advantage or favor" for the deal it brokered on Haughey’s overdraft with Traynor in late 1979 or early 1980, when he was elected leader of Fianna Fail and became taoiseach.

Haughey had owed the bank substantial amounts of money during the 1970s and the amount grew to £1.143 million. The high-profile customer got high-profile attention in bargaining sessions that resembled horse fair trading. At one stage the negotiations involved then AIB chairman Niall Crowley.

At one point Haughey offered just £400,000 to clear the AIB debt, then offered a £10 million Middle Eastern deposit at a rate of interest below the market rate. The bank showed no enthusiasm for the idea.

At another stage, in 1979, Haughey believed he might be able to pay off £200,000 as a result of an unspecified land deal in Baldoyle in north Dublin.

Then there was an idea for disgraced property developer Pat Gallagher or his group buying part of the taoiseach’s estate in north Dublin.

Finally, in early 1980 Haughey paid off £750,000, the bank wrote off £350,000 and the remaining £110,000 was to remain on the books without accruing interest.

The bank’s then deputy chief executive, Paddy O’Keeffe, wrote to Haughey outlining the deal.

"You will appreciate that the implementation of arrangements of this nature would, in the normal course, give rise to certain legal requirements," O’Keefe wrote. "However, since the fulfillment of the agreement outlined is a matter of honor, I am dispensing with such formalities, confident in the knowledge that you will ensure beyond any doubt that the £110,000 would be cleared within a reasonable time."

The tribunal was told that it appears the bank is still waiting for the money.

The bank, however, returned the security on the debt: the deeds for his Abbeville mansion and estate in Kinsealy, Malahide, a house and 13 acres in Sligo and his holiday island of Inishvickillaun off Kerry.

In February 1983, AIB issued a statement to the media describing as "outlandishly inaccurate" reports that Haughey had been heavily indebted to the bank in the previous year. No one has yet owned up to issuing it.

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