Unknown source for Haughey's spending in 1988

The Moriarty tribunal has been unable to find any money trail for £370,000 spent by Mr Charles Haughey during 1988, the tribunal has been told.

Mr Haughey was Taoiseach in 1988. A bill-paying service run by Haughey Boland & Co for Mr Haughey recorded £232,000 being spent during the year. He also purchased a yacht in Spain which, including VAT, cost in excess of £140,000.

Except for 1998, the tribunal has been able to show money from accounts controlled by the late Mr Des Traynor going to the bill-paying service.

Mr Haughey said Mr Traynor would have organised the funding for the yacht, but the tribunal can't find any trace of the money leaving accounts controlled by Mr Traynor.

Subsequent refurbishment work on the yacht during 1990 and 1991 cost £75,500 and was funded by the financier Mr Dermot Desmond. Mr Haughey said he wouldn't have known the source of the funding.

Evidence taken on commission in February and March 2001 from Mr Haughey was yesterday read into the record by the tribunal registrar, Mr Chris Lehane. On February 21st, 2001, Mr John Coughlan SC, for the tribunal, asked Mr Haughey about the bill-paying service run by Haughey Boland.

Mr Coughlan said the tribunal could see money going into the service from accounts controlled by Mr Traynor for most years but not for 1988.

Mr Haughey said he was surprised to hear that, and he couldn't help. "I thought the tribunal had all this at its fingertips, as it were."

Asked if there was anything unusual about 1988, Mr Haughey said: "Oh, it was a great year for the country, because we set about establishing what is now known as the Celtic Tiger." He couldn't remember anything unusual to do with his personal affairs.

Mr Haughey said that after Mr Traynor's death in 1994 he did not find out who was looking after his finances. Mr Jack Stakelum, an accountant who had taken over the running of the bill-paying service from Haughey Boland, continued to receive money, but Mr Haughey said he did not know where from.

He contested the £8.5 million estimate which the tribunal has arrived at for the total spent by Mr Haughey during the period being examined, and excluding his public salary. He said he had been advised double accounting was involved.

The tribunal heard that Mr Haughey first met Mr Desmond in late 1986 or early 1987, at a meeting he thought was arranged by Mr P.J. Mara. He and colleagues met Mr Desmond and four leading economists.

Mr Desmond paid the expenses for the meeting and arranged it in the public interest, Mr Haughey said. The purpose was to allow him and the economists to explain the disastrous state of the economy and what needed to be done.

After it was returned to power, Fianna Fail adopted the idea for a financial services centre, which Mr Desmond was promoting. By late 1987 when Mr Traynor sought financial assistance from Mr Desmond for Mr Haughey, Mr Desmond would have been a political supporter of his, Mr Haughey said.

The government had adopted Mr Desmond's proposals in relation to the economic steps which needed to be taken, and the establishment of the financial services centre. Mr Haughey said he was not aware at the time of the request for assistance made to Mr Desmond.

He accepted that Mr Desmond gave him £100,000 sterling in 1994 and £25,000 sterling in 1996. He pointed out he was long out of office by then.

Responding to Mr Justice Moriarty, Mr Haughey said he found the process of giving evidence in private "very stressful". He said if he appeared "irascible from time to time, it's not deliberate".

"I have deep feelings of anxiety and I am apprehensive. I don't get any sleep at night. I resent coming in here and am increasingly taking medication and I long deeply for the whole thing to end."