Flynn paid tax on money from Gilmartin

Ten years after he got £50,000 from Mr Tom Gilmartin, former minister Mr Pádraig Flynn ended up paying over half the amount in a settlement with the Revenue Commissioner, he said.

Mr Flynn paid taxation on the entire £50,000 as part of the settlement in 1999, he told the tribunal yesterday. He said he was tax compliant and held a tax clearance certificate.

Ms Patricia Dillon SC, for the tribunal, pointed out that Mr Flynn's financial advisers in KPMG had advised the tax authorities that the Gilmartin money should be treated half as a political donation and half as a gift. However, the Revenue had rejected this, and ultimately the entire amount was taxed.

Mr Flynn said this was the advice he had received and he wasn't pleased with the arrangement.

It was always his view that the money was a political donation and therefore not liable to tax under the finance acts.

Asked about his dealings with the tribunal since 1998, he said he had been advised not to disclose any matter. The "whole thing" was confidential up until he started giving evidence this week.

"I've never broken my peace on that, despite provocation and a lot of asking," he said, gesturing to the press benches.

Mr Flynn agreed that he contacted Mr Gilmartin by phone in September 1998, after the Sunday Independent published a story headlined "Another Fianna Fáil minister 'kept 50k donation'."

He said he decided to ring Mr Gilmartin because the story said the donation was for Fianna Fáil. Former minister Mr Ray MacSharry, who was from the same county as Mr Gilmartin, helped get him the phone number.

A few days later, the newspaper faxed Mr Flynn a series of questions.

Asked whether he had received a cheque for £50,000, intended for Fianna Fáil, from Mr Gilmartin, he replied "No".

Asked whether he had any dealings with Mr Gilmartin "in relation to funds", he referred to the above negative answer.

Yesterday, he denied Ms Dillon's assertion that he had failed in his answers to disclose the true position.

"I made a full and honest disclosure of the questions asked. I said I hadn't received any cheque from Tom Gilmartin for Fianna Fáil and that's it." Ms Dillon queried how anyone "with a modicum of intelligence" could understand from his answers that he got the payment, but Mr Flynn said he wasn't asked if he had received £50,000 from Mr Gilmartin.