A DEBT of Pounds 105,000 which the former Taoiseach, Mr Haughey, owed the Agricultural Credit Corporation bank was paid off with money given to him by Mr Ben Dunne, the tribunal was told yesterday.
The bulk of the remainder of the payments made by Mr Dunne, which total more than Pounds 1.3 million, has now been traced to a Cayman Islands bank account maintained in Dublin and from which, the tribunal heard, payments were made to defray Mr Haughey's substantial bills and expenses.
Mr Haughey was last week served with a subpoena and is to appear to give evidence before the tribunal, said Mr Denis McCullough SC, counsel for the tribunal.
The late Mr Des Traynor controlled and operated a secretive coded system which identified the beneficial owners of the Cayman Islands account held in Dublin, which at times contained between Pounds 30 and Pounds 40 million. These monies were owned by Mr Haughey and a number of other people living in Ireland.
A complicated series of payments which ended up in the Guinness & Mahon bank in Dublin, of which Mr Traynor was managing director, had been traced following evidence from bank officials in London and documents gathered in Ireland.
A considerable volume of documentation relating to these payments had been sent to Mr Haughey along with a subpoena to appear at the tribunal. This sub-poena had been accepted.
Mr McCullough told the tribunal that evidence was also to be provided by the Irish Inter-continental Bank and by the Guinness & Mahon bank in Ireland.
The first of the financial transactions related to a sterling cheque for Pounds 182,000 drawn on December 1st, 1987, from a Dunnes Stores account at the Bangor branch of the Ulster Bank. This money was paid to Mr John Furze, an associate of Mr Traynor in the Cayman Islands bank, Guinness Mahon Cayman Trust, which later became Ansbacher Ltd and subsequently Ansbacher Cayman Ltd.
Following a series of complicated transactions, a sum of Pounds 182,630 was eventually credited to an account of the Cayman Islands bank which was maintained by the Guinness & Mahon bank in Ireland.
The money was then paid into an account under the name of Amiens Investments Ltd, a company set up and controlled by Mr Traynor.
"Ultimately, not in a very straightforward way, but ultimately, Pounds 105,000 of that sum was used to pay off a loan which Mr Charles Haughey had with the Agricultural Credit Corporation Bank Ltd," said Mr McCullough.
"The bank, having been asked to do so by Mr Haughey's secretary, sent a letter of acknowledgment of that payment to Mr Haughey. The balance of the monies were dealt with in a certain way that will be dealt with in the evidence."
A second payment of Pounds 471,000 sterling was paid into an account of John A. Furze at Barclays Bank in Knightsbridge, London, in August 1988. From there it was transferred to an account of the Cayman Islands bank maintained at Guinness & Mahon in Ireland.
A third payment of Pounds 150,000 sterling was paid into an account which the Cayman bank had with Henry Ansbacher on May 3rd, 1989. That sum was again credited to the Cayman bank account maintained with the Dublin bank.
A fourth payment of Pounds 200,000 sterling paid into a Cayman bank account in London on March 1st, 1990, followed a similar pattern.
All these payments finished up in accounts maintained by the Cayman bank in Dublin. These were "effectively off-shore accounts", said Mr McCullough.
Bank drafts totalling Pounds 210,000 were sent under cover of letters from Mr Traynor to the Irish Intercontinental Bank, with instructions to be lodged in a Cayman Islands account in the bank at that time.
Mr McCullough said it appeared that an account, or accounts, that the Cayman Islands bank kept at Guinness & Mahon were general accounts, or a general account, into which various sums payable to customers of the Cayman bank were paid. Monies that were paid by Mr Dunne ultimately became intermingled with other monies in the accounts.
Mr McCullough said these monies appeared to be owned, or beneficially- owned, by a number of people who were resident in Ireland. The total sum in that account "has been as high as Pounds 30 to Pounds 40 million". These were referred to by Mr McCullough as the Ansbacher deposits.
These funds, maintained by Mr Traynor and Mr Padraig Collery, a colleague in the Guinness & Mahon bank, were controlled in considerable secrecy, the tribunal heard.
The monies were controlled entirely by the two men and the bank itself had little knowledge of these accounts and the operation of them. "It appears Guinness and Mahon did not know the names of the individual beneficial owners," Mr McCullough said.
Records of transactions to do with these monies were maintained in "memorandum accounts" kept in Dublin by Mr Traynor, who designed a coded system to identify them. Some of these accounts were coded S1 to S9 and it is a small number of these accounts with which the tribunal will be concerned.
This coded system of Mr Traynor's continued after the Ansbacher deposits were moved from Guinness & Mahon to Irish Intercontinental Bank between 1988 and 1991. After Mr Traynor's death in June 1994, Mr Collery carried on the management of these memorandum accounts and continued to liaise between the Cayman and Dublin banks on these accounts. The memorandum accounts would be mirrored in records held in the Cayman Islands.
Investigations by the tribunal team in the Cayman Islands had also led to information which had greatly assisted in tracing the trail of these monies, said Mr McCullough.
An application had been made to the Grand Court in the Cayman Islands seeking leave to interview bank witnesses there and Mr John Furze, to whom some of the payments were made out and who was a director of the Cayman bank at the time.
Mr Furze had opposed the application by the tribunal and the tribunal was now awaiting a court decision on this matter.
Mr McCullough told the hearing: "The Cayman bank, while in the general way not being particularly uncooperative, is awaiting the outcome of Mr Furze's opposition to that application.
"As an indirect consequence of the work the tribunal team did in the Grand Cayman, considerable progress has been made here in Dublin subsequent to the return from Cayman, and the tribunal team has now been able to obtain information from certain people who will be available to the tribunal and who will very considerably assist in completing the payment trail, even without the information from the bank in the Caymans.
"That evidence will show that Mr Traynor made regular and substantial payments to Mr Paul Carty, who is an accountant with Haughey Boland and Co in Dublin, and these payments were subsequently used by Mr Carty to pay various bills and expenses of Mr Charles J. Haughey."
In 1991, another accountant, Mr Jack Stakelum, took over from Mr Carty, and from this time payments were made from Mr Traynor to him and "he discharged Mr Haughey's bills". Mr Stakelum kept a chequebook and detailed records of all these accounts.
It was hoped these records would be made available to the tribunal, said Mr McCullough.
After the death of Mr Traynor in 1994, Mr Collery took over the process and sent Mr Stakelum "substantial sums of money on a regular basis which as I say were used to cover and discharge Mr Haughey's living expenses".
Mr Collery's evidence would be that these monies came from the Ansbacher deposits, which appear in the memorandum accounts under the designation S8, a sterling account, and S9, a Deutschmark account.
The tribunal was also told of accounts used to back loans to Celtic Helicopters, a company in which a son of Mr Haughey, Ciaran, had a substantial interest. A loan of Pounds 100,000 was secured by a sum of Pounds 100,000 from the 58A account in the Ansbacher memorandum.
In 1981, a loan of Pounds 150,000 from Irish Intercontinental was backed by monies taken from Ansbacher deposits, and the following year a loan of Pounds 100,000 from the Bank of Ireland was also secured by funds from the Ansbacher deposits.
A US dollar account was also used to guarantee loans provided to Celtic Helicopters.
Mr McCullough said it was clear now to the tribunal team "that Mr Haughey obtained the use and benefit of the monies held in these confidential and anonymous Ansbacher accounts under the control of Mr Traynor and subsequently of Mr Carty".
"A very considerable volume of documentation has been sent to Mr Haughey and a subpoena has been served on him, serving of which was accepted last week, and Mr Haughey will be called to give evidence to the tribunal," he said.