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Testimony: Haughey an active panhandler

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Former Taoiseach Charles Haughey was a serial scrounger who personally cadged cash to maintain his lavish lifestyle, according to evidence emerging at the Moriarty Tribunal investigating his finances.

The personal panhandling by Haughey is in stark contrast to the image he attempted to project at the 1997 McCracken Tribunal, which first probed his affairs and established he received _1.3 million from department store magnate Ben Dunne.

He then maintained he was a lofty statesman whose trusted friend and financial adviser, the late Des Traynor, took over control of his affairs from 1960 onward.

“He saw it as his personal responsibility to ensure that I would be free to devote my time and ability to public life and that I would not be distracted from my political work by financial concerns,” Haughey told Judge McCracken in February 1997.

It was a spin on the truth that attempted to distance Haughey from any possible wrong-doing. Traynor, who died in 1994, had been the bag-man who sponged on his behalf and laundered the loot. Haughey had been a detached sage who guided the destiny of his people aloof from the problems of his domestic cashbox.

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That it was all hollow nonsense is becoming increasingly clear at the Moriarty hearings. Colleagues, friends and businessmen were shamelessly touched by Haughey himself. Bailing out the “Boss” was an expensive business as the cash sloshed in and out of bank accounts.

The personal involvement of Haughey emerged in evidence from Allied Irish Banks, whose staff grappled with his appetite for spending until his overdraft had soared to _1.143 million by 1979 when he first became taoiseach.

He made personal approaches to his friend Bord Failte chief Joe Malone to become chairman of his son Ciaran’s helicopter firm, Celtic. Malone turned down the offer but invested _15,000 in his son’s name.

Haughey also touched Dail colleague John O’Connell for _5,000 for Celtic. He got _12,000 more helicopter cash from cattle baron Seamus Purcell after summoning him to a meeting in a Dublin hotel. Purcell did not seek shares.

An insurance broker, Michael Murphy, paid Celtic’s insurance premium because he was afraid to make an enemy of the son of the most powerful man in the Republic.

Murphy also raised _100,000 in 1992 — ostensibly for Celtic — from David Gresty, a Monaco-based businessman and insurance broker.

Gresty, originally from Britain, thought his cash was invested in Celtic. He had been shocked to discover this year that he held no shares. The money had been routed through offshore accounts before ending up in a sterling account used to pay Haughey’s personal bills.

Asked if it had been a disaster of an investment, Gresty told the Tribunal, “On the face of it, it is.”

Taoiseach and the tycoon

The most sensational revelation was Haughey’s success in getting _300,000 from former building tycoon Patrick Gallagher. The former taoiseach even paid tax on the money.

The Sunday after he was elected taoiseach in December 1979, the debt-burdened Haughey summoned the 28-year-old Gallagher to his Malahide home. The call had come while Gallagher was drinking with his brother Paul in a pub, so they went together. Patrick had been in awe of Haughey as a child and there was a long-standing family friendship. Patrick had already made political donations to Haughey totaling about _15,000 between 1974 and 1979 — in sums of _3,000 a time.

Patrick went into the Kinsealy study with Haughey while his brother waited in another room. Now that he was taoiseach, Haughey said he had to tidy up his financial affairs. He wanted help in dealing with a debt of about _750,000.

Patrick inquired about the bottom line and was told it was _600,000. After a discussion with Paul, the brothers agreed to advance _300,000, but they wanted something tangible in return. The money was coming from within the Gallagher Group.

Haughey agreed to sell 35 acres of land at Kinsealy at _35,000 an acre. It was zoned agricultural land, but Gallagher regarded as “somewhat of a prize” to add to his huge existing 1,500-acre development landbank in the Dublin area.

Des Traynor, a former director of the Gallagher Group, drew up the land sale contract with the now disgraced Patrick, who was jailed in Northern Ireland after the collapse of his Merchant banking company.

The Tribunal’s counsel said the deal was “unusual.” The agreement ran to just seven paragraphs and the deposit was non-refundable in the event of the deal not being completed before Dec. 31, 1985.

The deal also appeared unenforceable. In return for part of Abbeville, the contract stipulated that Gallagher had to provide another stud farm for the Haugheys of at least 60 acres within 20 miles of the GPO in Dublin. The Haugheys had to approve the new stud farm before the deal could be completed.

In the event, the deal was never tested. The Gallagher Group collapsed in 1982 and the Haugheys held onto the money.

Questions also emerged last week about Haughey’s possible misuse of state funds and they have drawn Taoiseach Bertie Ahern into the row about his former mentor’s finances.

Ahern cosigned a _25,000 Fianna Fail check payable to cash in 1989 that ended up in a bank account controlled by Traynor to pay Haughey’s bills. Ahern say he acted properly at all times.

The disclosure has led opposition spokesmen to accuse Ahern of misleading the Dail. In 1997, Ahern said he had satisfied himself that Haughey had used the party leader’s allowance — paid by the State — “for bona fide party purposes.”

Ahern said he had told the Moriarty Tribunal about the check. He was precluded from commenting on the details because confidentiality must be maintained in his dealings with the tribunal.

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