A sum of £112,000 paid to Mr James Gogarty by Mr Michael Bailey as part of a "finder's fee" for arranging the sale of the Murphy lands seemed to disappear from the books of Bovale Developments, the tribunal heard.
Mr Bailey said that some of the £162,500 finder's fee was in the company's books, but he agreed with counsel for the tribunal, Mr Desmond O'Neill SC, that he did not know where the £112,000 was recorded. Mr O'Neill asked: "You don't know how it is recorded, is that right?" Mr Bailey replied: "That is correct."
"And how is it that you can operate your company so that £112,000 simply disappears from the accounts?" Mr O'Neill asked. "Well, I can only give you the facts", Mr Bailey replied.
Mr O'Neill said he was asking for an explanation. "I don't know, but I am giving the facts as they are, to the best of my knowledge and to the truth of the tribunal here. That's what I am doing", Mr Bailey responded.
Earlier, Mr Bailey described giving Mr Gogarty £150,000, made up of £50,000 in cash and two post-dated cheques of £50,000 each, in the Royal Dublin Hotel as part of an agreement over a finder's fee. Some £12,500 was later added as interest.
Mr Bailey explained that Bovale Developments would get the two cheques back from Mr Gogarty after they paid him their value in cash. "We would pay him the money in cash against those cheques and those cheques wouldn't be presented if the money was being paid", he said.
Mr Bailey said that after agreement was reached on this he paid Mr Gogarty the £100,000 remaining, plus interest, of the £150,000 finder's fee in "bits and pieces".
Using this method of payment, it was not until June 1996 that all the money had been paid to Mr Gogarty. "I was paying him when he put pressure on me", he added.
Mr Bailey said that he did not keep records of the individual payments to Mr Gogarty because Mr Gogarty kept very good records. "I remember one day I gave him £1,000 in cash and he came back to me on the phone a day later and told me I was £20 short, so that is how I know he kept records", Mr Bailey said.
Asked whether Mr Gogarty was happy to be paid in "bits and pieces", Mr Bailey said he was, because "he would keep ringing me looking for money".
Asked how the payments to Mr Gogarty were recorded in the books of Bovale Developments, Mr Bailey said they were entered as "wages drawing".
Mr O'Neill said: "So, if you were paying a wages bill, there would have to be equivalent PRSI records, there would have to be income tax records, there would have to be matters of that nature. Isn't that right?"
Mr Bailey said this was correct. Tax had been paid on the payments to Mr Gogarty "at the rate of 35 per cent of whatever was drawn". Mr O'Neill said that if the payments were included as wages the records would be down against the wages of a particular workman. "Not Mr Gogarty's payments, no", Mr Bailey replied.
Mr O'Neill asked: "Well then, were you giving the credit for these payments to somebody else, some other wages, some other person who was employed by you?" Mr Bailey replied: "I would have to check the book to see exactly what way it was done."
Mr O'Neill asked if it was correct that he could not remember how "these substantial payments" were accounted for. "That's the position", Mr Bailey said.