Tribunal to question Haughey on £1.1m bank loan

Former Taoiseach Mr Charles Haughey will be asked by the Moriarty tribunal this morning how he raised £750,000 to pay off a £1.1 million bank loan within weeks of being elected leader of Fianna Fail in December 1979. Mr Haughey will be questioned about running up a £1.134 million overdraft with AIB during the 1970s, before settling it with a payment of £750,000.

The money to settle the debt was raised from property developer Mr Patrick Gallagher and a number of other as yet unidentified donors.

George's Hall in the upper yard of Dublin Castle will be packed with journalists and members of the public when the 74-year-old former Taoiseach returns to the witness box where he gave evidence to the McCracken tribunal three years ago.

No more than 60 members of the public will be able to watch Mr Haughey's appearance in the main hall. Closed circuit TV will allow a further 280 people to watch from ancillary rooms.

When Mr Haughey was called before the McCracken (Dunnes payments) tribunal in July 1997, members of the public began queuing at 7 a.m. When he emerged into the courtyard of Dublin Castle after giving his evidence, he was booed by the assembled crowd.

Counsel for the Moriarty tribunal, Mr Jerry Healy SC, yesterday said Mr Haughey will be asked about his dealings with AIB in the 1970s. If there is time, the former Taoiseach will also be asked about his dealings with Guinness & Mahon bank and Guinness Mahon Cayman Trust, the Cayman Islands bank set up by the late Mr Des Traynor and later renamed Ansbacher Cayman Ltd.

Mr Haughey is suffering from prostate cancer and travelled to the US earlier this year for consultations. He is to give evidence for only two hours each day in deference to his age and condition.

After this morning's session, Mr Haughey will give further evidence on Monday, Tuesday, Thursday and Friday mornings.

Other witnesses will give evidence in the afternoons, including Dr Michael Smurfit and Mr Dermot Desmond. The tribunal is set to break for the summer next Friday.

The tribunal heard yesterday that Dr Smurfit will give evidence that a Jack B. Yeats painting, The Forge, was given to Mr Haughey by his company in 1990 to mark Ireland's presidency of the EU.

In relation to the bank loan, documents kept by AIB show that Mr Haughey was personally involved in managing his debt with the bank in the 1970s. The tribunal has heard evidence from Mr Gallagher of being called to Kinsealy by Mr Haughey in December 1979, within days of his election as Taoiseach. Mr Gallagher said he was asked by Mr Haughey to help clear his debt. After some discussion Mr Gallagher agreed to provide £300,000.

Mr Haughey will be recalled after the summer break to give evidence about payments he received in the period 1979 to 1996. The tribunal has estimated he received more than £8 million during the period, though Mr Haughey is expected to contest this figure. In all, Mr Haughey is likely to have to spend a number of weeks in the witness box.

Mr Ben Dunne gave evidence yesterday of a cheque for £20,000 he gave to Mr Haughey in May or June 1993. Mr Dunne said he most likely handed over the cheque during a lunch in Kinsealy, though he couldn't remember doing so.

At the time he was very depressed, Mr Dunne said. He was in a wheelchair as a result of an accident, had just been ousted from Dunnes Stores, and had recently stopped taking cocaine.