THE TRIBUNAL RESUMED AS FOLLOWS ON TUESDAY, 30TH NOVEMBER 1999 AT 10:30AM:
CHAIRMAN: Good morning.
MR. COUGHLAN: May it please you, Sir. These public sittings will be held in two main stages — the first stage with deal with the following four matters: The first one is the operation of a bill-paying service through which some of Mr. Haughey’s finances appear to have been administered in the 1980s and the 1990s.
Secondly, the operation by NCB brokers of an investment account for an account holder with the name Overseas Investments, which included funds which appear to have been invested for the benefit of or on behalf of Mr. Charles Haughey.
Thirdly, certain financial arrangements involving Mr. Dermot Desmond and Mr. Haughey and the Haughey family.
And, fourthly, aspects of the operation of the S accounts.
Where these four matters are concerned, the Tribunal focuses mainly on Terms of Reference (a) and (b).
The second stage of these sittings will deal with the Ansbacher accounts. These accounts have been mentioned from time to time in the course of the Tribunal’s sittings. I have indicated that the Tribunal would return to deal with this subject in a more comprehensive way. Just as the details of a number of transactions involving the Ansbacher accounts have already been mentioned in evidence in the public sittings, there will be further reference to them in the course of the evidence related to the four matters which will form part of the first stage of these sittings.
However, the second stage will contain a more comprehensive account of the manner and style of the operation of the Ansbacher accounts.
Dealing with the first matter I have referred to in stage one, that is the bill-paying service. Between the 1st January, 1985, and the 31st December, 1996 — sorry, I beg your pardon, between the 1st January, 1985, and the 31st December, 1998, a bill-paying service was operated on behalf of Mr. Haughey by two entities; firstly by a section of the firm of Haughey Boland, now Deloitte & Touche, and, secondly, by BEL Secretarial Services, a company controlled by Mr. Jack Stakelum. The Tribunal’s concern at this stage is with the operation of this service between the 1st January, 1985, and the 31st December, 1996.
Reference has already been made to this bill-paying service in the course of evidence given by Mr. Paul Carty in earlier sittings of the Tribunal. Evidence was also given to the McCracken Tribunal concerning this service by Paul Carthy and the service by Mr. Jack Stakelum.
In Mr. Carty’s earlier evidence, he described the manner in which the service operated. That evidence was directed mainly to examining the link between that service and accounts at Guinness & Mahon under the control of the late Mr. Desmond Traynor. There will be further reference in the course of these public sittings to the links between accounts controlled by Mr. Des Traynor and the operation of this bill-paying service.
The two firms by whom the service was operated were regularly supplied with monies to fund the payments that were being made on Mr. Haughey’s behalf. The total amount paid by the services on behalf of Mr. Haughey between the 1st January, 1985, and December of 1996 appears to be in the order of £3.4 million.
Dealing with the operation of the bill-paying service by Haughey Boland: In the period between 1985 and 1991, the service was operated by Haughey Boland, since merged into the firm Deloitte & Touche. Mr. Paul Carty, a partner in the firm of Deloitte & Touche, who was also a partner in Haughey Boland at the material time, has provided the Tribunal with documentation concerning the service and also with a Memorandum of Evidence. The Memorandum of Evidence deals with the total amount of money paid through the service while it was operated by his firm. It also deals with queries raised by the Tribunal concerning links between certain accounts in Guinness & Mahon, which appear to have been used to fund the bill-paying service and the Haughey Boland No. 3 account from which the cheques written on Mr. Haughey’s behalf as part of the service were drawn.
The amounts paid out by the bill-paying service on behalf of Mr. Haughey in each of the years between 1985 and 1991 are as follows;
The 1st January, 1985, to the 31st December 1985 – £189,000.
The 1st January, 1986, to the 31st December, 1986 – £177,000.
The 1st January, 1987, to the 31st December, 1987, – £204,000.
The 1st January, 1988, to the 31st December, 1988 – £232,000.
The 1st January, 1989, to the 31st December, 1989 – £325,000.
The 1st January, 1990, to the 31st December, 1990 – £264,000.
And the 1st January, 1991, to the 31st January, 1991 – £16,000.
It will be remembered that in addition to the evidence given by Mr. Paul Carty concerning the operation of this bill-paying service and the links between the operation of this service and accounts in Guinness & Mahon under the control of the late Mr. J. Desmond Traynor, evidence has also been given by Ms. Sandra Kells, a director of Guinness & Mahon, concerning those links. Both Haughey Boland and Guinness & Mahon have now been requested by the Tribunal to examine connections between debits to accounts in Guinness & Mahon and credits to the Haughey Boland No. 3 account, from which it appears that the majority of the relevant credits to the Haughey Boland account correspond to debits to accounts in Guinness & Mahon under the control of Mr. J. Desmond Traynor.
The Tribunal has been provided with the relevant Haughey Boland account at Allied Irish Bank, 7-12 Dame Street, Dublin 2, from which the payments were made. It has also been provided with the statements of various accounts in Guinness & Mahon under the control of the late Mr. J. Desmond Traynor. An examination of credits to the Haughey Boland account and debits to the various accounts in Guinness & Mahon shows that, with the exception of the year 1988, there were debits to various accounts in the name of Amiens, whether Amiens Investments Limited or Amiens Securities Limited or Kentford Securities Limited.
Now, an example of the exercise which has been carried out will be just shown on the overhead screen in relation to just six payments for the moment. In evidence, we will be covering approximately 21 corresponding credits and debits in relation to this bill-paying service.
Now, this particular example was taken from the year 1987. It shows the date, the amount of the credit to Haughey Boland No. 3 account and the date, the amount and the account in Guinness & Mahon, showing the debit corresponding to the credit in the Haughey Boland No. 3 account in respect of the bill-paying service. On the screen, for the purpose of example, if we just move it along, we can see that on that particular page, there are six such examples shown.
Now, Ms. Sandra Kells has informed the Tribunal that there do not appear to be any debits to the Amiens Accounts for the Kentford account or any other likely account under the control of Mr. Traynor which appear to match credits to the Haughey Boland No. 3 account for the year 1988. The Tribunal has not been able to ascertain how the account in Haughey Boland was funded during that period. While the Tribunal has yet to take up the matter with one other witness who may be able to provide assistance to the Tribunal concerning the operation of the account in that year, it is also possible that there may be other Amiens Accounts, the records of which are no longer available. This is because, as has been stated in evidence by Ms. Kells, Guinness & Mahon has not been able to retrieve, from its microfiche records, full sets of statements from all of the Amiens Accounts. It is a question, therefore, whether the bill-paying service in 1988 was funded through the Amiens Accounts or through other accounts in Guinness & Mahon or whether, in fact, there was another source of the funds during that year.
Mr. Paul Carty has not been able to provide the Tribunal with any information concerning the source of the credits to the Haughey Boland account and has, in earlier evidence, informed the Tribunal that it was not until the Tribunal’s investigations began that he became aware of the existence of accounts known as the Amiens Accounts. He has, however, in evidence already given to the Tribunal, explained that the funds for the account were at all times supplied on foot of requests to Mr. J. Desmond Traynor.
Turning now to the operation of the bill-paying service by BEL Secretarial Limited, the company controlled by Mr. Jack Stakelum. Mr. Stakelum has given evidence to the McCracken Tribunal of how he took over and operated the bill-paying service through his company, BEL Secretarial Limited, from February of 1981 onwards – sorry, 1991, I beg your pardon.
The manner in which the service was operated by Mr. Stakelum was essentially the same as in the period during which it was operated by Haughey Boland. The total amount of money which went through the bill-paying service while it was operated by Mr. Stakelum was in the order of two million pounds. It was Mr. Traynor who requested Mr. Stakelum to operate the service and initially the funds for the service were provided by Mr. Traynor. Mr. Stakelum has informed the Tribunal that whenever the account he used to operate the service was running low on funds, he informed Mr. Traynor, from whom he would then receive a bank draft to put the account in credit. He had no input as to the amount of any lodgment to the account and simply received whatever funds were provided by Mr. Traynor from time to time.
Mr. Stakelum has informed the Tribunal that on the death of Mr. Traynor in May of 1994, contact was made between himself and Mr. Padraig Collery, with a view to Mr. Collery taking over from Mr. Traynor in supplying funds to Mr. Stakelum for the operation of the bill-paying service. As before, funds were received by Mr. Stakelum by way of bank draft from Mr. Collery and the manner of disbursement was the same as before, that is on the instructions from Mr. Haughey received through his secretary. There was, however, one change from that arrangement which obtained prior to Mr. Traynor’s death, in that after May of 1994, Mr. Stakelum received from Mr. Collery memoranda detailing the balances of four separate accounts from which funds for the service were drawn from time to time. Starting in the period up to the 31st March, 1994, these memoranda showed the balances on several accounts described as:
No. 1 sterling account,
No. 2 sterling account,
US dollar deposit,
I think perhaps to focus and just show the type of memoranda which were furnished. The date of the document is the 5th July, 1994. It shows the balances as of the 31st March, 1994, with accrued interest added on to bring it up to the end of June of 1994 in each case. This was the first time that Mr. Stakelum had knowledge or information concerning the fund from which the bill-paying service was drawn.
Evidence will be given by Mr. Padraig Collery indicating how, at least in the period while the service was operated by Mr. Stakelum, the funds came from these accounts. Most of the funds for the account were provided by way of bank draft, although some may have been provided by cheque. There was one exception to this, in the case of a lodgment to BEL Secretarial Services account on the 12th November, 1996. This is a lodgment of £24,630.50. This was the then equivalent of sterling £25,000.
The Tribunal has been informed by Mr. Stakelum that the circumstances of this lodgment were as follows, and we can see the lodgment credited to the account of BEL Secretarial Services on the 12th November, 1996. Mr. Stakelum has informed the Tribunal that from time to time he would meet Mr. Haughey and on one occasion, around October of 1996, Mr. Haughey asked him to contact Mr. Dermot Desmond of NCB Stockbrokers. Mr. Haughey had indicated to Mr. Stakelum that Mr. Desmond would be making a lodgment for the purpose of defraying bills, that is for the purpose of the bill-paying service. Mr. Stakelum contacted Mr. Desmond and subsequently received a payment from him of STG £25,000, which was lodged to a sterling account in the name of Business Enterprises Limited Nominees. Business Enterprises Limited Nominees was a company controlled by Mr. Stakelum. The Irish pound equivalent was then lodged from an Irish pounds client account under the control of Mr. Stakelum to the BEL Secretarial Services account used for the bill-paying service.
This is not the only contact Mr. Stakelum had with Mr. Desmond at the request of Mr. Haughey. There is one further contact, which I will refer to later on, in the context of financial dealings between Mr. Desmond and Mr. Haughey.
Mr. Stakelum has also provided assistance to the Tribunal in connection with a sum of money used to fund the No. 1 sterling account which I have already mentioned. In the memorandum of balances on the various accounts furnished to Mr. Stakelum for the period to the 30th September 1995, the balance in the No. 1 sterling account as of that date was £283,060.91. This included a credit described as a transfer from NCB, but that this was all the information Mr. Stakelum had at that stage – I beg your pardon, I will go over that again. The balance is £283,060.91. There is a transfer of £168,036.81, and that’s the only information Mr. Stakelum had concerning that particular transfer at that stage. He has, however, informed the Tribunal that after the McCracken Tribunal had commenced its business, he made contact with Mr. Padraig Collery and inquired from him as to the identity of this lodgment. He was told by Mr. Collery that it was from an investment account of Mr. Haughey. He then contacted Mr. Haughey and asked him what the lodgment was in respect of and Mr. Haughey’s answer to that was, “Isn’t that from an investment account.” The Tribunal has made inquiries concerning the operation of this investment account and it is the involvement of NCB brokers, the second of the four items I have mentioned above, to which I will now turn.
Now I want to deal with the operation of an investment account by NCB brokers.
In the course of the Tribunal’s examination of the bill-paying service, the transfer from NCB, which I have just mentioned, came to its attention with the result that queries were raised with NCB concerning the transaction. Mr. John Keilthy, a director of NCB and the head of the private client division of the firm, has assembled documentation and provided information to the Tribunal in response to queries from the Tribunal concerning this transaction and other transactions which came to the attention of the Tribunal in the course of dealing with NCB. Mr. Dermot Desmond of NCB has also provided information to the Tribunal in connection with these matters.
Mr. Keilthy has informed the Tribunal that this payment of £168,036.81 was made on the closing of an account operated by NCB on the instructions of Mr. Desmond Traynor. This account had been set up by Mr. Dermot Desmond at the request of the late Mr. Desmond Traynor. Mr. Keilthy has informed the Tribunal that the account was set up sometime in or about the 7th July, 1988. The account was a nominee account and the name of the account was Aurum Nominee No. 6 account.
Mr. Keilthy has informed the Tribunal that Aurum Nominees Limited is a nominee account used by NCB stockbrokers. It is similar to nominee accounts operated by most stockbrokers on behalf of clients for the purposes of ease of administration and to facilitate settlement of accounts between stockbrokers on the purchase and sale of securities and so forth. Apart from holding securities, such an account may also hold cash from time to time, arising from dividend income and/or from the proceeds of the sale of securities. Each client of a stockbroker is allocated a separate nominee account and any securities, or cash, for that matter, held for the benefit of that client within the account are segregated. Securities purchased through a nominee account are registered in the nominee name. This enables the authorised signatories for the nominee account to execute transfers and to deal with the account in a timely fashion, facilitating efficient administration.
In the case of Aurum Nominees, it would appear, as Mr. Keilthy has informed the Tribunal, that each client had a separate individually identified bank account, and I think that is also clear from the example on the overhead projector. These accounts were held in the Ulster Bank Limited at College Green in Dublin.
Insofar as Mr. Keilthy is concerned, having examined information available in NCB, the identity of the account holder on the Aurum Nominee No. 6 account was an entity known as Overseas Nominees Limited. Overseas Nominees Limited is the nominee company of Ansbacher Cayman. Mr. Dermot Desmond has informed the Tribunal that this was also the only knowledge he had concerning the identity of the person for whose benefit the account was held.
From entries in the Aurum Nominees bank account at Ulster Bank, the following lodgments appear to have been made to the account (that is the No. 6 account): A payment of £105,586.26 lodged to the account on the 26th July, 1988. A lodgment of £149,432.16 lodged to the account on the 23rd August, 1988. And £98,504.50 lodged to the account on the 26th September, 1988. I think on the overhead projector, those two lodgments are shown as being credited to the account on those dates.
These sums appear to have been received into the NCB settlement account, which was then with the Bank of Ireland and then transferred by NCB to the Aurum Nominee No. 6 account at Ulster Bank. It would appear that the source of the funds transferred from the NCB settlement account at Bank of Ireland was an NCB sterling account number 25581879, also in the Bank of Ireland. To date, NCB has not been able to identify the source of the funds in the sterling account and inquiries with NCB and with the Bank of Ireland are in train with a view to endeavouring to ascertain the sources of these funds.
Mr. Keilthy has informed the Tribunal that, generally speaking, it would appear that the stocks that were bought and sold appear to be typical of the range of stocks dealt in by other clients of NCB over the period the account was active. He has also informed the Tribunal that withdrawals from the account were as follows: £206,613.57 was withdrawn on the 8th May, 1990. The date is obliterated on the copy which is on the screen, but that is the date, the 8th May. That’s a sterling draft, to purchase a sterling draft. On the 15th March, 1991, there was £95,000 withdrawn, again to purchase a sterling draft. And on the 18th September, 1994, £165,471.99 was withdrawn.
Dealing with each of the withdrawals, it would appear that the £206,613.57 was used to purchase a sterling draft for £200,000 made payable to Overseas Nominees Limited, the nominal holder of the account. Now, the copy which is on the screen isn’t the clearest, but it is made payable to Overseas Nominees Limited and it’s in the sum of £200,000 sterling and with the amount of the Irish, the amount of the withdrawal.
The £95,000 withdrawal appears to have been used to purchase a sterling draft payable to Ansbacher Limited at the request of Mr. Desmond Traynor. That is the actual copy of the — copy of the actual draft.
Turning to the third withdrawal, it would appear that on the 8th February, 1994, Mr. Desmond Traynor wrote to NCB instructing that the balance of securities on the account be sold and it’s a letter addressed to NCB and it’s re Aurum Nominees account, and it gives the account number and it goes on to read, “I have received from Mr. John Furze, in Overseas Nominees Limited, a copy of your letter dated 24th January, 1994, together with the valuation referred to therein. Enclosed herewith is a copy of the valuation dated 6th March, 1991. I will be grateful if you would, A. Arrange to dispose of the total holdings; B. Let me have a reconciliation of the account from the 6th March 1991, to the 31st December, 1993. Yours sincerely, J.D. Traynor.”
Mr. Traynor died on the 11th May, 1994, and on the 25th September, 1995, as I have already indicated, the account was closed. This was done on the basis of a written instruction from Mr. Padraig Collery. The balance on the account at closing was £165,471.99. This sum was used to purchase a sterling draft for £168,036.81. That sum appears to have been credited to the No. 1 sterling account, the Hamilton Ross account, the records of which were kept by Mr. Padraig Collery. It has the amount which Mr. Collery has described in the memorandum of accounts he provided to Mr. Stakelum on the 30th September 1995, as the “transfer from NCB”. In fact, a draft may not have been purchased, it may just have been a transfer of funds directly.
From documents made available by Mr. Keilthy, it would appear that Mr. Collery, writing on notepaper headed “Hamilton Ross Limited” and with an address at 8 Inns Court, Winetavern Street, Dublin 8, wrote to Mr. Keilthy directing him to transfer the balance on the account to Irish Intercontinental Bank at 91 Merrion Square, Dublin 2, for the account of Hamilton Ross Limited, account number 02/01354/81. And if we see on the overhead screen, just if we take it down, it’s on the account, on the notepaper of Hamilton Ross Company Limited, giving an address of P.O. Box 887, Grand Cayman, Cayman Island, British West Indies, and on the left-hand side corner, “Please reply to 8 Inns Court, Winetavern Street, Dublin 8.” It’s dated the 12th September 1995, and it’s addressed to Mr. Keilthy in NCB Stockbrokers, and it’s re Aurum Nominees. It reads, “Dear Mr. Keilthy, further to Mr. Traynor’s letter of the 8th February, 1994, I should be grateful if you would now transfer the balance on the account to Irish Intercontinental Bank Limited, 91 Merrion Square, Dublin 2, account Hamilton Ross Company Limited, account number 02/01354/81, and advise me of the amount. In addition, please let me have a reconciliation of the account from the 6th March, 1991, to when all the holdings were sold. Yours sincerely, D.P. Collery.”
Mr. Collery has informed the Tribunal that he gave this instruction to Mr. Keilthy at the direction of Mr. John Furze, who also directed that, on the transfer of the funds to Irish Intercontinental Bank, the amount of the balance was to be credited to S8. It would be recalled that at paragraph 26 of chapter 11 of the McCracken Report, it is stated that at least two of the memorandum accounts or sub accounts in Ansbacher (Cayman) Limited were held for the benefit of Mr. Charles Haughey, being those designated S8 and S9. As the balance of the funds in that Aurum Nominees investment account held ostensibly for the benefit of Overseas Nominees Limited was paid into an account for the benefit of Mr. Charles Haughey, it is a question as to whether, by reason of the fact that the closing balance on this account was credited to an account which appears to have been held for the benefit of Mr. Haughey, the total amount of the money held in the Aurum Nominees account was, in fact, at all times, held for the benefit of Mr. Haughey.
I now turn to financial arrangements involving Mr. Dermot Desmond. Two press statements were issued on behalf of Mr. Dermot Desmond in January of 1998 concerning matters which appeared to the Tribunal to be germane to the Terms of Reference. The first statement was a statement dated the 8th January, 1998. It was headed, “Statement on behalf of Mr. Dermot Desmond”, and it reads:
“Following publication of an article today in Magill magazine and the attendant comments in other media outlets, Mr. Dermot Desmond would like to clarify issues relating to his dealings with Mr. C.J. Haughey and to correct considerable misinformation which has been reported.
“Mr. Desmond did not make any payments to Mr. Haughey while he was in public office or, indeed prior to 1994. Any arrangements which he had with Mr. Haughey since that time are of a private nature.
“Mr. Desmond never at any time collected or solicited money for or on behalf of Fianna Fail. He has no idea who might be the ‘source’ of information to the contrary because it is not true.
“Regarding contracts awarded to NCB between 1987 and 1992, NCB and its affiliates companies were awarded nine contracts or consultancy agreements from seven state or semi-state organisations. A competing stockbroking firm and its affiliates during the same period were awarded more than twice this number (on a comparable basis, it is believed that between 1987 and 1992, more than 100 such contracts would have been awarded.) Only two of the contracts awarded to NCB required ministerial or governmental approval. One was Irish Life, where an international competition was won by NCB and Goldman Sachs. The other was the sale of the State shareholding in Tara Mines in which case the Government could not have publicised its intended share sale in advance and therefore a tender situation was not appropriate.
In relation to the International Financial Service Centre, Mr. Desmond made no money from the centre nor from the building which he bought in the development. In fact, audited accounts show that Mr. Desmond made a loss of 6.2 million pounds in the purchase and sale of that building.
Mr. Desmond did not receive any favourable treatment from anyone in relation to his involvement in the IFSC. Indeed, he is not aware of having received any political favours from any party on any matter.
There has been comment with regard to litigation which Mr. Desmond has pursued against sections of the media in recent years. Mr. Desmond confirms that he has pursued actions where there have been inaccurate or defamatory statements made against him or his businesses. In twelve such cases, Mr. Desmond has agreed financial settlements totalling more than a six figure sum, all proceeds of which have been donated to charities in Ireland. The time and cost involved in pursuing these cases have been borne by Mr. Desmond.
For information, Mr. Desmond’s solicitors are issuing proceedings against Magill magazine, its editor and the reporter in question.
If any of the above matters fall within the Terms of Reference of the current Tribunal, Mr. Desmond will offer his full cooperation, including confirmation that he has not, and never has been an account holder or a beneficiary of the so-called Ansbacher accounts. In the interim, Mr. Desmond just wishes to correct the inaccuracies and mischievous suggestions which have been made”, and it’s dated the 8th January.
19 The second statement issued on behalf of Mr. Desmond was dated the 10th January, 1998, and it’s headed, “Statement on behalf of Mr. Dermot Desmond”, and it reads:
“Further to a statement of the 8th January 1998 regarding Mr. Dermot Desmond’s dealings with Mr. Charles J. Haughey, questions have been asked about any dealings which Mr. Desmond has or had with other members of Mr. C.J. Haughey’s family. We wish to set out these relationships as follows:
In 1987/’88, Mr. Desmond invested £17,500 in a full partnership operated by Mrs. Eimear Mulhern. This partnership interest has continued and is now held by Mrs. Pat Desmond.
In 1990, Mr. Desmond arranged loans in consultation with Mr. Conor Haughey totalling £75,546 to refurbish the boat Celtic Mist, of which he is skipper and owner together with the other Haughey children. These loans have been settled. To date, Mr. Desmond and related companies have also invested a total of £275,000 in Feltrim Mining Plc, (now Minimet plc), of which Mr. Conor Haughey was a founding director. To date, Mr. Desmond has sold shares in Feltrim to the value of £744,000 and retained shares with a current value of £112,000 pounds. The net realised and retained profits exceed £500,000.
In 1995, IIU Limited (of which Mr. Desmond is Chairman) made a commercial advance of £100,000 to Celtic Helicopters to cover flying hours for executives. Mr. Ciaran Haughey is a Director and shareholder in Celtic Helicopters. To date, hours to the value of £56,150 have been used.
Over the years, Mr. Desmond has contributed not more than £2,000 to Mr. Sean Haughey TD in relation to funding his election expenses.
There are no other gifts or payments except for wedding and Christmas presents which in aggregate do not exceed £15,000.
The foregoing transactions, and payments made by Mr. Desmond to Mr. C.J. Haughey since 1994 are matters that could fall within the terms of reference of the Moriarty Tribunal. Mr. Desmond has already stated that he will fully cooperate with this Tribunal.
No other payments have been made or arranged, directly or indirectly, to Mr. Haughey and his family by Mr. Desmond.” And the statement ends.
Arising from these statements to the press, the Tribunal sought the assistance of Mr. Desmond. In response to the Tribunal’s request, Mr. Desmond has provided the Tribunal with documentation and information concerning his dealings with Mr. Charles Haughey other than those dealings referred to already in relation to the investment account placed with NCB by Mr. Desmond Traynor in the name of Overseas Nominees Limited.
Mr. Desmond has informed the Tribunal that in or about November of 1987, he was approached by the late Mr. Desmond Traynor, who asked him whether he would be prepared to participate in a proposed five or six person syndicate which would advance funds to repay what the late Mr. Traynor described as “Our friend’s borrowings” . Mr. Desmond understood this to be a reference to Mr. Charles Haughey. Mr. Desmond declined to provide any financial assistance. It will be recalled that evidence has been given by Mr. Noel Fox that he received a similar telephone call from the late Mr. Traynor in 1987. Evidence has also been given as to the date which this telephone call may have been received. Apart altogether from the dating of the call, it will be recalled that the approach to Mr. Noel Fox was not with a view to soliciting the assistance of Mr. Fox, but rather with a view to soliciting assistance from Mr. Bernard Dunne. Evidence has been given that, consequent upon that approach, Mr. Dunne made substantial payments in excess of over £1 million for the benefit of Mr. Haughey.
Mr. Desmond has informed the Tribunal that apart from instructions he received from Mr. Traynor concerning the opening of an account with NCB, instructions to which I have already referred, he had no further dealings with Mr. Traynor concerning Mr. Charles Haughey. However, it appears that Mr. Desmond did make two further payments for the benefit of Mr. Haughey in 1994 and in 1996 respectively. These were made in circumstances which were obviously unconnected with Mr. Traynor. I have already mentioned one of those payments and that is the payment of £25,000 in connection with the evidence to be given by Mr. Stakelum. At this point, I propose to deal with the payments chronologically.
The first payment of £100,000 was made in September of 1994. Although this payment was not made to a Business Enterprise Limited account associated with Mr. Stakelum, it was, nevertheless, a payment with which Mr. Stakelum was involved. Mr. Stakelum has informed the Tribunal that sometime after the funeral of the late Mr. Traynor, he was in touch with Mr. Haughey who requested him to contact Mr. Dermot Desmond and that he should advise Mr. Desmond of the details of a bank account to which the payment for Mr. Haughey could be made. Mr. Stakelum contacted Mr. Padraig Collery, who gave him detailed information, identifying a bank account, a code for the bank, and such like similar information. Mr. Stakelum passed this information on to Mr. Dermot Desmond by telephone. While at that stage Mr. Stakelum did not know that Mr. Desmond was to make a payment for the benefit of Mr. Haughey, he did not know the amount of the payment and, in fact, at the time he did not know whether the payment had or had not been made.
What he was aware of was that in the memorandum of accounts given to him by Mr. Collery, there was a credit for the 3rd October 1994, reference to a lodgment of £99,988 and that is shown on the overhead screen. But even at that stage, he did not know where this money had come from. However, subsequent to the commencement of the McCracken Tribunal, Mr. Stakelum inquired from Mr. Collery as to what his knowledge was concerning this lodgment, and Mr. Collery informed him that it had been made by Mr. Dermot Desmond.
Mr. Desmond has confirmed that a sum of sterling £100,000 was transferred on the 20th September, 1994, for the benefit of Mr. Haughey. The route taken by the money involved a payment by Anesia Etablissement, Banque Scandinave, on Suisse, Geneva, and the instruction is — yes, it’s actually a confirmation of the payment and it’s re the transfer of sterling £100,000, dated 20th September, 1994: “We herewith confirm having executed the above mentioned instruction. As per attached document, we have transferred sterling £100,000 on the 21st September, 1994, for value dated the 23rd September, 1994, in favour of Henry Ansbacher & Company Limited for further credit to CIBTC — that’s Cayman International Bank Trust Company — to Royal Bank of Scotland, London EC 2. We hope the above is to your satisfaction and remains. Yours sincerely.”
The payee was the Royal Bank of Scotland, 67 Lombard Street, London. The payment was for the account of Henry Ansbacher & Company Limited, with the Royal Bank of Scotland for further credit to Cayman International Bank Trust Company, account number 190017/101. The £99,988 credited by Mr. Collery in the account, of which he furnished memoranda to Mr. Stakelum, represents the bulk of the sterling £100,000 payments made by Mr. Desmond. The shortfall appears to be accounted for by bank charges.
The second payment of sterling £25,000 on the 28th October 1996, took the following route: Payment of sterling £25,000 was made by Anglo Irish Bank Corporation (Isle of Man) Plc, to Royal Bank of Scotland, St. Helier, Jersey, for the account of Allied Irish Banks (Channel Islands) Limited. Again, we have the confirmation issued as of April of this year and it’s addressed “To whom it may concern. Dear Sir, I write to confirm that on the 28th October 1996, a payment of STG £25,000 was made by ourselves to Royal Bank of Scotland, P.O. Box 64, St. Helier, Jersey, sort code, 16-10-28, with the following details: Pay AIB Bank (Channel Island) Limited, account number 11158833, reference AITC, account number 1205. Yours faithfully, for and on behalf of Anglo Irish Bank Corporation (Isle of Man) Plc.”
The Tribunal has been informed that the nominal account from which the payment was sourced was an account in the name of a company entitled “Bottin – B-O-T-T-I-N – (International) Investments Limited”. Mr. Desmond in one of the public statements to which I have already referred, has described these payments as being of a private nature.
Apart from his direct dealings with Mr. Haughey, Mr. Desmond has also had dealings with other members of the Haughey family and with the company associated with Mr. Haughey and his family known as Larchfield Securities Limited.
In his public statement made on the 10th January, 1998, Mr. Desmond stated that he arranged loans in consultation with Mr. Conor Haughey totalling £75,546 to refurbish the boat “Celtic Mist”, of which Mr. Conor Haughey was skipper and owner together with the other Haughey children. Mr. Desmond stated that these loans had been settled. The Tribunal raised queries concerning the loans and has now been informed by Mr. Desmond that between April of 1990 and February of 1991, the sum of £75,546 was paid by him to Ron Holland Yacht Design on behalf of Mr. Conor Haughey in respect of the repair and redesign of the boat “Celtic Mist”.
He has informed the Tribunal that these payments arose in the following circumstances: That Mr. Conor Haughey indicated to Mr. Desmond that the boat needed refurbishment but that funds were not available to him to do this; that Mr. Desmond informed Mr. Haughey that he would arrange a loan and an introduction to Mr. Ron Holland, the designer of NCB Ireland, a yacht sponsored by NCB brokers for the round the world race; that Mr. Conor Haughey understood that he was dealing with Mr. Desmond and that Mr. Conor Haughey, in turn, made a loan to Larchfield Securities, who Mr. Desmond understood to be the owners of “Celtic Mist”; that the loan has not been repaid but that, approximately three years ago, Mr. Desmond dealt with the manner in which Mr. Conor Haughey would repay him and it was agreed that the loan was to be repaid by Mr. Conor Haughey when funds became available to him from the sale of “Celtic Mist”; that no securities were formalised in relation to these liabilities.
From information made available by Mr. Desmond, it would appear that the following payments were made to Ron Holland Yacht Design: On the 3rd April, 1990, £10,000; on the 4th April, 1990, £10,000; on the 24th April, 1990, £10,000; on the 23rd May, 1990, £38,353; on the 30th August, 1990, £4,606; and on the 14th February, 1991, £2,587, totalling £75,546.
From information furnished by Mr. Desmond in response to queries from the Tribunal, it would appear that, in fact, the loans were made available by Dedeir – D-E-D-E-I-R – Limited, then of 48 Lower Mount Street, Dublin 2, (now of 19 Mount Havelock, Douglas, Isle of Man) and by Freezone Investments, care of 13 Avenue Morely, St. Petersport, Guernsey. It would appear that Freezone was wound up in January of 1997. Mr. Desmond has informed the Tribunal that the loans by both Dedeir and Freezone were consolidated in the accounts of Freezone Investments Limited, that the consolidated loan was taken over by a Mr. Colin Probets, a director and sole shareholder of Freezone Investments Limited, and that this loan was subsequently taken over by Mr. Desmond in an arm’s length transaction.
Mr. Desmond has informed the Tribunal, however, that no assignment documents were executed in respect of the taking over of this loan by Mr. Probets, nor, indeed, the taking over of the loan by Mr. Desmond. The Tribunal anticipates receiving further information from Mr. Desmond concerning the circumstances in which these payments were made in the role of Dedeir and Freezone in the making of them.
The Tribunal has also sought the assistance of Mr. Conor Haughey in connection with the dealings of Mr. Desmond concerning “Celtic Mist”. He has informed the Tribunal that after the boat was purchased, it required refurbishment and that it had been assessed by Mr. Ron Holland, a well-known yacht designer. Mr. Conor Haughey has stated that he knew Mr. Desmond and he knew Mr. Desmond would be in a position to give him sound financial advice, but he also knew that Mr. Desmond’s company, NCB, was having a yacht designed and built by Mr. Holland at that time. He, therefore, asked Mr. Desmond to help him to get a good price from Mr. Holland and also for advice as to how the project might be financed.
In Mr. Conor Haughey’s Memorandum of Evidence to the Tribunal, he has stated that Mr. Desmond indicated to him that he would lend the money for the refurbishment, that it was understood between them that the loan would be backed by Mr. Conor Haughey’s shares in Feltrim Mining Plc. Mr. Conor Haughey has said that the loan had not yet been repaid.
I now turn to the fourth matter which I have indicated will be dealt with at this first stage of these public sittings, and that is aspects of the operation of the S accounts.
Mr. Padraig Collery has already given evidence to the Tribunal on a number of occasions concerning the operation of the Ansbacher accounts and specifically with reference to the S8 account, which as I have already stated, is described in the McCracken Tribunal as having been held for the benefit of Mr. Charles Haughey. He has now provided the Tribunal with further evidence and further information concerning the operation of a number of other accounts with the designation S.
Mr. Collery’s association with the Ansbacher accounts began when he joined Guinness & Mahon in 1974. At the time he joined the bank, Mr. Desmond Traynor was the joint managing director. From that time until 1984, he was also Chairman of Guinness Mahon Cayman Trust. From sometime shortly after Mr. Collery took up his employment with the Accounts Department of the bank, Mr. Collery was involved in posting transactions across certain confidential Ansbacher accounts. In the main, this involved the keeping of records of individual balances in sterling funds, which at that time were held in accounts not in the name of the individuals entitled to those balances but in the name of Guinness Mahon Cayman Trust. In other words, these balances were held in a pooled account in the name of Guinness Mahon Cayman Trust. Even after he left the bank, that is Guinness & Mahon, in 1989, Mr. Collery continued to do this work but he no longer kept the records in Guinness & Mahon’s premises but rather at the premises of CRH at 42 Fitzwilliam Square, the offices from which Mr. Traynor operated. From January of 1991, the bank accounts were held not at Guinness & Mahon but at Irish Intercontinental Bank.
Apart from the sterling funds held in pooled accounts with Guinness & Mahon in the name of Guinness Mahon Cayman Trust, currency accounts held by Guinness Mahon Cayman Trust with Guinness & Mahon, that is to say accounts in currencies other than sterling, were not kept in pooled accounts. The currency accounts represented the funds of single customers or single beneficiaries in the case of each account.
Mr. Collery’s association with the operation of these accounts continued after the death of Mr. Traynor. On the death of Mr. Traynor, Mr. John Furze, who was a director of Guinness Mahon Cayman Trust, which was by then known as Ansbacher (Cayman) Limited, asked Mr. Collery to continue to assist with the keeping of the records of various Ansbacher accounts until he had time to make alternative arrangements.
Mr. Collery has informed the Tribunal that the S accounts formed part of the holdings of Poinciana Fund Limited. Poinciana Fund Limited was a company registered in the Cayman Islands, according to Mr. Collery. While he has no direct knowledge of any trust associated with the company, he believes that the shares in the company were held by the trustees of the Cayman Trust and that the company was the vehicle through which the Trust held bank accounts and administered funds held under the Trust. He has also informed the Tribunal that his impression from his dealings with the S accounts and with other monies held for the Poinciana Fund is that the Fund was the vehicle used by the late Mr. Traynor for his own monies, for the monies of Mr. Charles J. Haughey and other monies which he, Mr. Traynor, directly controlled.
Mr. Collery recalls that sometime in or around August or September of 1992, the late Mr. Traynor identified a number of accounts, the records of which had been kept in confidential memorandum form, and which he wished to move into a new structure. The new structure was to be under the name of Hamilton Ross Limited, which Mr. Collery understood to be a Cayman registered company owned by the late Mr. John Furze. It would appear that the accounts which were transferred to this new structure included the S series, which were held by Poinciana Fund Limited. New sterling accounts were opened in Hamilton Ross by the transfer of funds from the main Ansbacher (Cayman) Limited deposit account, then with Irish Intercontinental Bank under account number 02/01087/81, to the Hamilton Ross Limited sterling account with the same bank, with account number 02/01354/81. For non sterling funds, that is the currency accounts at Ansbacher Cayman which were non pooled accounts, were closed and new currency accounts were opened in the name of Hamilton Ross Limited. As in the case with the old currency accounts, the new currency accounts were likewise not in the form of pooled accounts. As before, therefore, accounts were operated both in pooled form and in non pooled form. The S sterling accounts in Hamilton Ross were kept in respect of pooled funds and the currency accounts in Hamilton Ross were kept in respect of the funds of single customers or a single beneficiary in the case of each account.
The Tribunal has asked Mr. Collery to provide details of his knowledge, direct or indirect, of the beneficiaries of various S accounts. He has provided the Tribunal with the following information: The S8 sterling account appears to have been operated like a deposit account. The McCracken Tribunal reported that this account was held for the benefit of Mr. Charles Haughey. It was an account which received funds from time to time and for which funds were drawn down on a regular basis. From evidence given to the McCracken Tribunal and from further evidence which would be given by Mr. Padraig Collery, drawings on the account from the 1st October, 1992, were used to fund Irish pound cheques issued by Irish Intercontinental Bank, payable to BEL Secretarial Services Limited.
Mr. Collery is able to say, from his own knowledge, that from May of 1994, when he assumed direct responsibility for operating the accounts, that is after the death of Mr. Traynor, the Irish pound drafts were, to his knowledge, delivered to Mr. J.J. Stakelum.
The S8 A sterling account was a blocked deposit account and was maintained at a balance of £100,000 sterling. The McCracken Tribunal reported that this blocked account was used to support a guarantee given by Irish Intercontinental Bank to Bank of Ireland in respect of a loan facility given by the Bank of Ireland to Celtic Helicopters Limited.
The S8 deutschmark was a call deposit account which was held directly with Irish Intercontinental Bank by Hamilton Ross, being account number 04/39231/81. The account operated from October 1992 to November 1992 and the drawings from the account appear to have been by way of foreign exchange deals in support of Irish pound drafts; two of these drafts were payable to BEL Secretarial Services, one was payable to Dr. John O’Connell. One of the drawings was used to support the purchase of two drafts, one for Mr. Sean Haughey and one for Mr. Conor Haughey.
The S9 sterling account was also a call deposit account. To date, the Tribunal has succeeded in obtaining only one statement in respect of this account. This is the statement for page number 24 which records transactions, all of which were dated the 1st October, 1992. The funds represented by this account were held in Ansbacher call deposit account 02/01087/81. The sterling balance on this account of £1,203,295.23 was used to purchase deutschmark 3,049,981.14. These deutschmarks were then credited to a deutschmark account in the name of Hamilton Ross S9 account number 04/39236/81. From this account, funds were debited to purchase Irish pound drafts payable to BEL Secretarial Services and given to Mr. Jack Stakelum. This is the S9 deutschmark account mentioned in the McCracken Tribunal as having been held for the benefit of Mr. Haughey.
The S9 A US dollar account was also a blocked deposit held with Irish Intercontinental Bank in the name of Hamilton Ross, account number 03/39312/77. As the McCracken Tribunal reported, the funds in this account were blocked to the order of Irish Intercontinental Bank Limited in support of a guarantee given on behalf of Celtic Helicopters Services Limited.
The S9 deutschmark account was a call deposit account which was held directly with Irish Intercontinental Bank Limited in the name of Hamilton Ross Limited as account number 04/39246/81. This was opened on the 8th October, 1993, with a lodgment of deutschmark 3,049,981.14, which arose from the conversion of the sterling funds drawn from the S9 account which I have just mentioned.
The S7 sterling account was a call deposit account which appears to have been in the form of a portfolio account in the Poinciana fund. It appears to have been used by the late Mr. Traynor to monitor and control the purchase of and the sale of investments. Mr. Collery has informed the Tribunal that, to the best of his knowledge, funds were at one time held in this account for the benefit of Mr. Charles Haughey.
The S sterling account, that is S, letter on its own, was also a call deposit account used by the late Mr. Traynor as a type of control or working account. Mr. Collery has informed the Tribunal that this appears to have been used as a tracking account, that is receiving transfers from other accounts and making transfers to other accounts on a regular basis and making payments on a regular basis.
Turning now to the balances on the individual S accounts:
It appears from the statements of the S accounts that as of the 30th September, 1992, the total sum held to the credit of the S accounts for what appears to have been the benefit of Mr. Charles Haughey was sterling £1,286,661.70, made up of sterling £83,266.47 held to the credit of the S8 sterling account, and sterling £1,203,395.23 held to the credit of the S9 sterling account.
Apart from the accrual of interest on the various S accounts, a further sum of sterling £460,847.50 was lodged to the S8 sterling account between the 1st October, 1992, and the 31st December, 1996, the details of which are as follows:
On the 30th October, 1992, sterling £108,017.69. I will say that again – £108,017.69. In evidence previously heard by the Tribunal, this appears to have been the sterling equivalent of Irish £100,000, dated the 21st September 1992, payable to Credit Suisse and drawn on Bank of Ireland, Dundrum, Dublin 14, account Mike Murphy Insurance Brokers Limited.
Sterling £84,000 on the 10th December 1992. It appears from evidence previously heard by the Tribunal that this represented the sterling equivalent of a cheque for £80,000 dated the 30th November 1992, payable to cash on and drawn on Bank of Ireland Rotunda bank, account Carlisle Trust Limited No. 1 Account, lodged to Bank of Ireland, St. Stephen’s Green, account Kentford Securities Limited No. 2 account. Sterling £99,993 lodged on the 31st October, 1994. It appears that this was the proceeds of a payment made by Mr. Dermot Desmond. Sterling £168,036.81 on the 29th September, 1995. It appears that this was the proceeds of the credit balance on the Aurum Nominees No. 6 held with Ulster Bank Limited. On the 30th September, 1992, funds from both the S8 sterling account and the S9 sterling account were withdrawn and converted into deutschmark or placed on two separate accounts with Irish Intercontinental Bank, each in the name of Hamilton Ross Company Limited. As a result of the withdrawal of funds, the S9 sterling account was closed.
From the 1st October 1992 to the 31st December 1992, drawings were made from the S accounts to fund cheques and drafts payable to BEL Secretarial Services which were lodged by Mr. J.J. Stakelum to the account maintained by him in Allied Irish Bank from which he made payments on behalf of Mr. Charles Haughey. The Tribunal has prepared a series of tables showing the accounts from which these drawings were made. As appears from the tables in October and November 1992, funds were debited from the S8 deutschmark account number 04/39231/81. The tables prepared by the Tribunal show the credit, various credits to the BEL account from which the bill-paying service was operated, the debits to the IIB account and the debits to the account, where available, held in the memorandum form.
By the 18th November, 1992, the credit balance on this account was drawn down. That is on the deutschmark S8 deutschmark account, was drawn down and the account was closed. In the period from December 1992 to August 1993, the sterling equivalent was debited to the Hamilton Ross sterling account number 02/01354/81 which held pooled funds in the name of Hamilton Ross and corresponding debits were made to the S8 sterling account. Again, the tables reflect those particular transactions being recorded across the various accounts. From August 1993 to November 1995, the deutschmark equivalent to meet the cheques was debited to Hamilton Ross S9 deutschmark account number 04/39236/81, all ultimately debited to the Hamilton Ross S9 deutschmark account.
During the remaining period from December 1995 to December 1996, the sterling equivalent was again debited to the Hamilton Ross number 02/01354/81 with corresponding debits to the S8 sterling account. These tables again reflect the posting of transactions across the accounts which show the ultimate source being the S8 sterling account.
There were some further drawings to the S accounts during these years which will be dealt with by Mr. Padraig Collery in the course of his evidence to the Tribunal. Mr. Charles Haughey has been provided with all of this material but, as yet, has made no comment in relation to it.
As I have said, Sir, these are the four areas or matters which the Tribunal will hear evidence in these public sittings, that is in the first stage of these public sittings, and in the second stage, the Tribunal will deal more comprehensively with the style and manner of the operation of the Ansbacher accounts.