Haughey is a criminal

Charles Haughey, former Prime Minister of the Republic of Ireland is a criminal.

One of the most damning facts to emerge from the Moriarty Tribunal that was published today is the fact that Haughey robbed nearly €200,000 from a fund set up to save Brian Lenihan’s life.

I just want to repeat that in my own words – Haughey was the type of individual who robbed money from another human who needed that money for a life saving operation.

Today is a (rare) good day for justice in Ireland

Moriarty Tribunal report

The Irish Times reports that the Moriarty Tribunal report will be published today. It should make for interesting reading to say the least.

You can get it at theMoriarty Tribunal Report. It’s a PDF so you need Adobe Acrobat. It’s a fairly hefty 7mb download.

I especially like this bit (my emphasis)

Ref 22-13:

Given the totality of the evidence heard in relation to the Tripleplan payment, and subsequent payments by Mr. Ben Dunne to Mr. Haughey, communications had by Mr. Haughey with the Revenue Commissioners, and the course of dealings had between Mr. Dunne, Mr. Noel Fox and the Revenue Commissioners, it is the conclusion of the Tribunal that Mr. Haughey in return for such payments acted with a view to intervening improperly in a pending tax case of great magnitude. Whilst recognising that ultimately the Dunnes tax appeal was successful, Mr. Haughey’s role in this matter is particularly noteworthy in the context of the state of thepublic finances in 1987.One of the salient features of his involvement in the Revenue handling of the matter was his persistence in intervening with successive Chairmen, matched only by Mr. Dunne’s persistence in requesting his intervention. This is not explicable, at least on Mr. Dunne’s part, on the basis of a desire to meet the Chief Officer of the agency he was dealing with when, without Mr. Haughey’s involvement, the Dunnes Trustees had already gained access to and made contact with Mr. Pairceir. At a time when the finances of the State were under extreme pressure, Mr. Haughey, as the head of the Government, had a particular duty to maintain the paramountcy of Revenue in collecting taxes, and this ought to have been reflected in a studious avoidance of unnecessary contact as opposed to his persistence in advertising to Revenue his interest in Dunnes affairs so as to signal his support for a radical reduction in the amount of tax being demanded by Revenue.

Or in other words, in return for getting money from Dunne, Haughey did make represenatations to the Revenue on Mr Dunne’s behalf.

And more:

Insofar as any personal aspects did emerge from evidence heard, they undoubtedly included an acknowledgement of much diligence and capability in the manner in which Mr. Haughey discharged his day-to-day responsibilitiesas Taoiseach, but also included elements of fear and domination engendered by him in individuals in both private and public sectors.

The word ‘corrupt’ only appears once in the entire 704 pages.

Bizarre reality of Irish corruption

I have said in the past that denial is a crucial factor when living in a corrupt country like Ireland. This is especially important for those directly involved in politics, business and even the media.

However, sometimes, this absolute refusal to face reality can result in some bizarre reasoning. The following examples will make the point.

Former Irish Press editor and historian Tim Pat Coogan, a man who is widely respected, made the ludicrous claim at the Humbert Summer School that Haughey’s corruption was due to head injuries he suffered in a car accident in the 1960s.

The Fianna Fail politician and form EU commissioner, Padraig Flynn also made bizarre comments about Haughey but I don’t pay too much attention to him because I genuinely believe he occupies a different reality from the rest of us. The second example is even more surreal.

Ben Dunne has learned that the Moriarty Tribunal is going to make damning findings against him. In a desperate attempt to avoid facing reality Dunne is claiming that various traumatic events in his life, like his kidnapping by the IRA in 1981, have affected his ability to recall certain matters under investigation by the tribunal.

By far the most crucial ‘forgotten event’ is a meeting between Dunne and a Revenue Commissioners chairman in 1987, arranged by Haughey, that resulted in a capital gains bill on the Dunnes Stores family trust being reduced by about €22 million. Dunne made a substantial payment to Haughey shortly after this meeting.

Dunne is asking rational people to believe that his traumatic experiences have only affected his memory on matters that could get him into serious trouble. In all other respects, his memory is apparently perfect.

If Moriarty does make the connection between Dunne’s payment and a Haughey ‘favour’ it will do serious damage to the campaign by Haughey supporters, led by Bertie Ahern, to fabricate the most grotesque lie in Irish history – That Haughey was really an honest man.

Ansbacher find cost Haughey €660,264

More on Haughey:

Charles Haughey lost £520,000 (€660,264) when the Ansbacher Deposits were discovered by the McCracken (Dunnes Payments) tribunal in 1997, it emerged yesterday.

Accounts within the secret deposits coded S8 and S9 belonged to Mr Haughey and were frozen along with the rest of the deposits when they were discovered. The money in Mr Haughey’s accounts was subsequently used to settle the tax liabilities of another unnamed taxpayer, the tribunal heard.

The tribunal heard that during negotiations with Mr Haughey’s tax advisers in 2002, the Revenue was told that Mr Haughey did not have access to the accounts, that they were not in his name, and that they should be considered dormant.

On Thursday, principal officer with the Revenue, Norman Gillanders, said the money in the S8 and S9 accounts had been used to settle the tax affairs of another taxpayer. A document shown yesterday stated that the balance in the accounts in September 1997 was about £520,000.

The tribunal was yesterday hearing further evidence in relation to the performance of the Revenue in raising taxes from Mr Haughey. As part of its negotiations with Mr Haughey’s agents in 2002, the Revenue drafted a schedule of known expenditures and receipts by Mr Haughey over the period 1977 to 1997.

Principal officer with the Revenue, Brian McCabe, told Jacqueline O’Brien SC, for the tribunal, that the Revenue wanted to calculate a figure to assess Mr Haughey’s liability to gift tax.

Accountancy firms ran a bill paying service for Mr Haughey since the 1970s but he also spent money through other channels. The Revenue’s calculations arrived at various figures for total expenditure between 1977 and 1997, from a maximum of £9.9 million to a minimum of £6 million. The Revenue and Mr Haughey’s agents, in negotiations, arrived at a “core” figure of £6.9 million in expenditure and agreed this figure could be viewed as representative of the total gifts received by Mr Haughey over the period. Mr Haughey’s salary from politics over the period was not included in the calculations as Mr Haughey cashed his monthly cheques since the 1970s and did not bank the money.

Mr McCabe said accounts received by the Revenue had indicated that “severance payments” received by Mr Haughey when he retired from politics, were used to buy deer worth £71,000 in 1993. In fact, the Revenue now believed, the money for the deer came from the S9 Ansbacher account.

As part of the 2002 negotiations, Mr Haughey’s agents were asked how he had funded his purchase of a boat and a holiday island in Co Kerry in the late 1970s. They suggested the money could have come from Mr Haughey’s borrowings from AIB.

The agents also said they did not know how Mr Haughey funded his holidays and whether he had received any gifts since 1997. They also did not know how Mr Haughey funded his expenditure during the period 1977 to 1984. The agents also had no information about a sterling £400,000 loan Mr Haughey took out from Guinness Mahon Cayman Trust in the early 1980s.

The Revenue calculated that the total amount received by Mr Haughey in the 20 years from 1977 included £2.12 million from Ben Dunne between 1987 and 1992.

Mr Haughey agreed to pay £3.94 million in settlement and the money was raised by the transfer of lands at Kinsealy, Co Dublin, back to Mr Haughey from his children and its subsequent sale.

Mr McCabe said that from the perspective of the Revenue, the outcome was satisfactory.

Have a think about these figures, and think about how much houses and living cost and during those dates. These were massive sums of money. In 1985 you could buy a large house for £30-£40k. Charles Haughey spent £4.1 million through his bill-paying service in the years 1977 to 1997. And yet we are told nothing was given in return.

The spending through the service for the following years was:

1985 -£189,000

1986 -£176,000

1987 -£203,000

1988 -£232,000

1989 -£325,000

1990 -£264,000

1991 -£342,000

1992 -£336,000

1993 -£302,000

1994 -£316,000

1995 -£441,000

1996 -£274,000

1997 -£118,000

Haughey claimed to Revenue he lived on borrowings

Perhaps most interest, RTE TV news failed to report on the Moriarty Tribunal, it features no where in their archives. It finally was dealt with on Prime Time last night. Watch it here.

The IT front page from Friday:

Former taoiseach Charles Haughey told the Revenue in 2003 that he had not received any gifts of money since 1997 and was living on borrowings from the Irish Nationwide Building Society, it emerged at the Moriarty tribunal yesterday.

It also emerged that in 2002 Mr Haughey’s accountant, Des Peelo, told the Revenue that Mr Haughey was “dying” and wanted to settle his tax affairs.

The tribunal yesterday resumed hearings into the Revenue’s performance in raising tax from Mr Haughey.

Im going to quote a large exerpt here and highlight interesting bits:

The Revenue accepted a payment of £3.94 million (€5 million) from Charles Haughey in 2003 in settlement of an estimated tax bill of £5.5 million (€6.98 million), the Moriarty tribunal heard yesterday.

At the time the settlement was the largest ever made by a taxpayer, but Mr Haughey’s name did not appear in the quarterly list of tax defaulters.

Jacqueline O’Brien SC, for the tribunal, said this was because Mr Haughey’s settlement did not include penalties valued at greater than 15 per cent of the overall settlement. She said the Revenue applied a 100 per cent cap on the amount of interest Mr Haughey paid.

The Revenue has told the tribunal that the application of the cap was the “invariable practice” of the Revenue in Capital Gains Tax and gift tax (CAT) cases.

Ms O’Brien said the tribunal believed there was no obligation on the Revenue to apply the cap.

She said the gifts being taxed dated back to 1977, the “receipt of the gifts was shrouded in secrecy”, and not one gift tax return had been made.

Also, during this period Mr Haughey had the benefit of the gifts received, including the increase in the capital value of his lands at Kinsealy.

Ms O’Brien was reading an opening statement during resumed hearings into the performance of the Revenue in relation to raising taxes from Mr Haughey. An earlier £1 million settlement had been made in relation to payments identified by the McCracken (Dunnes Payments) tribunal.

She said a special Revenue team had been set up to deal with Mr Haughey. In 2001 the team conducted an intensive analysis of the information that was emerging from the tribunal. The first issue to be decided was whether the funds received by Mr Haughey should be subjected to CAT (40 per cent), or income tax. The Revenue decided that CAT was the appropriate tax. It also decided it would seek a negotiated settlement.

Mr Haughey had tax agents Paul Moore and Terry Cooney working for him, as well as accountant Des Peelo and Gore-Grimes solicitors. Mr Haughey’s agents said no tax should be sought until the tribunal had reported but the Revenue did not agree.

The tribunal heard that the Revenue looked at the period 1977 to 1997. It decided that as it did not know all the gifts of money Mr Haughey had received, it would use his estimated expenditure over the period as a “proxy”. It estimated the expenditure over the period at £6.9 million. It did not take Mr Haughey’s income from politics into account (an estimated £600,000) as he cashed his pay cheques and did not bank the money.

Different, higher expenditure estimates led to different higher estimated tax liabilities, but the £6.9 million figure was eventually agreed with Mr Haughey’s agents.

The Revenue noted the possibility that Mr Haughey could be prosecuted for failing to file certain returns. During the negotiations Mr Haughey’s agents said he had been under no obligation to keep books of account as he had not been conducting a trade.

Also, he was in poor health. For these reasons, it was hard to analyse Mr Haughey’s finances over the years. At one stage the agents offered to settle for £2 million. The Revenue estimated that Mr Haughey may have spent £9.9 million over the period in question, making for a potential tax bill of £6.5 million. However it did not think this was achievable. A settlement of between £3.25 million and £3.8 million was more likely, it decided.

On October 8th, 2002, an all-day meeting between the Revenue and Mr Haughey’s advisers took place. It agreed a “core expenditure” figure of £6.9 million. This would lead to a tax bill of £5.5 million, including 100 per cent interest.

After a break for lunch the negotiations resumed and Mr Haughey’s side made a final offer of £3.85 million. This offer was taken back to the board of the Revenue Commissioners. Mr Peelo was subsequently informed that the Revenue would settle for £3.94 million (€5 million) and this was agreed.

A deal was signed in March 2003.

And the question asked on Prime Time was why Haughey was treated with ‘kid gloves’. Why indeed, especially given the sale of lands at Kinsealy. Some of the payments to Haughey included:

A £300,000 “forfeited deposit” on a supposed land deal, from the developer the late Patrick Gallagher (left), in December 1979.

A further £516,000 from donors unknown at around the same time, used to clear Mr Haughey’s debt with AIB.

£170,000 from the hotelier, the late PV Doyle, between 1983 and 1986.

£50,000 from the wealthy Saudi diplomat, the late Mahmoud Fustok, in 1985.

Sterling £282,000 from Ben Dunne (left) in 1987, by way of a cheque made out to a company called Tripleplan.

Lodgments totalling £354,000 made to an NCB investment account from sources unknown.

Payments to Mr Haughey’s bill paying service totalling £100,000 that came from the Fianna Fail party leader’s account in 1986 and 1989.

£180,000 from Ben Dunne in November 1992, the so-called “Carlisle cheques”.

Three “interest free loans” from Dermot Desmond, for sterling £145,000 in total, given in the period September 1994 to September 1997.

Apparently the Revenue felt ‘weak’

The Revenue was “acutely aware” of the weakness of its position when seeking to raise taxes from Charles Haughey, a senior Revenue official said at the Moriarty tribunal yesterday.

Norman Gillanders, assistant secretary at the Revenue Commissioners, told John Coughlan SC, for the tribunal, about seeking to raise taxes from Mr Haughey arising from millions of pounds worth of payments to Mr Haughey identified by the tribunal.

Mr Gillanders said that what might appear to be common sense to the general public might not be the case in tax law. “Different conditions mean different payments are subject to different taxes.”

He said having considered the payments revealed in the tribunal, it was decided, with legal advice, that the payments did not give rise to income tax. Income tax is raised on income that arises from the conduct of a business or a profession, the rendering of a service, or income such as rent.

It was decided to seek to raise gift tax, or Capital Acquisitions Tax (CAT), on the money received by Mr Haughey. “If the money given to Mr Haughey was not amenable to gift tax, it would not be amenable to tax at all.” In order for a gift to be amenable to CAT, it must come from a donor who is domiciled in the State or be property that is in the State. The Revenue needs to know who gave the gift and on what date.

“Given the money trails revealed by the tribunal, it was clear enough to me that demonstrating [ the payments eligibility to CAT] would be no easy task,” Mr Gillanders said. He said the Revenue’s prospects of success would be “limited to a minority of the payments revealed by the tribunal” if it had to go to court.

There had earlier been a “dramatic demonstration” of the risks involved when the Appeal Commissioners had ruled for Mr Haughey in relation to CAT on the payments identified by the 1997 McCracken (Dunnes Payments) tribunal.

He said the Revenue drafted a “worst-case scenario” from the point of view of Mr Haughey when going into negotiations, but knew Mr Haughey’s agents would know such a settlement was not achievable. “You have to have a choreography of compromise,” he said. In a “doomsday scenario” where the Revenue had to go to court against Mr Haughey, it was confident it could procure “maybe a little bit more than £2 million”.

Arab sent BMW in thanks to Dr John O'Connell

O’Connell got the car, and gave it right back, apparently. Keena notes an interesting relationship between Fustok and Haughey. I have highlighted another interesting bit.

A wealthy Arab sent a “top of the range” BMW to former minister Dr John O’Connell, who had sponsored successful Irish passport applications for a number of the man’s associates, it emerged at a hearing of the Moriarty Tribunal in Dublin yesterday.

Dr O’Connell told the tribunal he sent the car back to the late Mahmoud Fustok two days after receiving it in 1980. He said he had only once taken a political donation during his political career. That was £200 he took from businessman Pat Quinn, who was trying to give him £2,000.

He said Mr Fustok was a son-in-law of King Abdullah of Saudi Arabia, the former crown prince. On Christmas Day, 1979, he had met Dr Mahmoud Barbir at a house in Dublin. Dr Barbir was studying medicine in Dublin.

A number of Lebanese Palestinians who had fled Lebanon during the civil war there were living in Dublin and being assisted by Dr Barbir, Dr O’Connell said, and he was asked to help.

In 1980, he sponsored an application for citizenship on residency grounds for four of these people. A form shown to the tribunal showed Dr O’Connell had signed the document stating he had known the men for seven years. He said this had not been the case. He subsequently sponsored a number of other, related applications. All of the people were related to or connected with Mr Fustok.

Dr O’Connell said he approached the then taoiseach, Charles Haughey, about the original four applicants being given citizenship on humanitarian grounds. A letter from Dr O’Connell to Mr Haughey, dated July 1980, stated that Dr O’Connell had “befriended” the four applicants soon after they had arrived in Dublin in the mid-1970s. “That’s not correct. It was 1979,” Dr O’Connell said.

Dr O’Connell said he may have had contact 12 to 16 times with Mr Haughey in relation to the matter.

Dr O’Connell said he first become friendly with Mr Haughey when they had discussed an article by journalist Bruce Arnold which, Dr O’Connell said, Mr Haughey had said “as much as said I had my hands in the till”.

Dr O’Connell said he knew Mr Arnold and he had arranged a lunch attended by him and Mr Haughey. He said his relationship with Mr Haughey was a “peculiar kind of relationship”, adding: “I looked upon him as a friend. He looked upon me maybe as someone who suits his purpose. I don’t know. I did persuade him, finally, that he should retire. I have to say that I succeeded in that respect.”

He said Mr Fustok had suggested to Mr Haughey that crown prince Abdullah should be invited to Ireland. However, Mr Fustok had fallen out with Mr Haughey after he failed to invite him to his talks. During the visit, the crown prince had made representations to Mr Haughey’s secretary about the naturalisation of a Mustapha El-Imad. Mr El-Imad had since died, Dr O’Connell said.

Haughey received £50,000 from Fustok, when O’Connell effectively acted as the ‘bagman’. It is noted that Fustok may have also bought a horse from Haughey, as well as buying shares in another horse because he may have felt ‘he had to’. The obvious question was asked by Counsel for the Tribunal:

Mr Healy asked if it had ever crossed Dr O’Connell’s mind that the payment to Mr Haughey could have been connected with the citizenship applications.

“You could be influenced by reading about the other funds [received by Mr Haughey] but I am not judgmental and you could give him the benefit of the doubt,” Dr O’Connell said. “It did cross my mind.”

What a logical leap it is to suggest that Haughey may have given passports in return for money.

Former Revenue chief tells of Dunne meeting

Yet another lapse of memory at the Moriarty Tribunal. There is definately something in the air at Dublin Castle that prompts people to forget important information.

The former chairman of the Revenue Commissioners, Philip Curran, said he had forgotten by the time of the McCracken (Dunnes Payments) tribunal that his predecessor had met Ben Dunne.

However he did not tell the tribunal that his predecessor, Sa©amus Pairca©ir, had also met Mr Dunne.

Mr Curran said he must have seen a Revenue briefing note of March 1988 stating that Mr Dunne had a number of meetings with his predecessor.

“It would not have surprised me because chairmen sometimes meet people.”

By 1997, at the time of the tribunal, the issue did not occur to him, and if it had he would have thought other people had dealt with the matter. He said that when the tribunal had contacted him in 1997, by way of the Revenue, he “felt it was best” to mention his meeting with Mr Dunne. “It didn’t occur to me that I should talk about meetings others had.”

Mr Curran was a commissioner with the Revenue from 1983 and was appointed chairman in 1987. He retired in 1990. He said he was requested to go to Mr Haughey’s office in March 1988 and did so. Mr Haughey told him Mr Dunne wanted a meeting to discuss his tax affairs.

Former Revenue chief gave tax advice to Dunne

So I guess we have some idea of the payback Dunne may have got for giving Haughey the £1.9 million in donations. But then Dunne can’t recollect any of these events anyway. And Haughey is too ill even to instruct his lawyers now, despite sunning himself on his yacht in France.

But let’s break this down a little. In 1987, Charlie Haughey, as Taoiseach arranged a meeting between the Head of the Revenue Sa©amus Pairca©ir, and Ben Dunne. The purpose of the meeting was to arrange a settlement.

Pairca©ir has now said that he didn’t think this information was relevent to the Moriarty Tribunal’s predecessor, McCracken.

Mr Pairca©ir had told the tribunal, in a statement of intended evidence, that he did not view a request from Mr Haughey that he meet Mr Dunne as a representation or submission on behalf of Dunnes Stores.

Maybe we all live on a different planet then. How could Dunne Stores possibly be related to Ben Dunne in 1987?

Indeed now it appears that:

the total amount that has been identified as being paid to Mr Haughey, by various parties, is approximately £8.5 million.

What could a reasonable person assume from these details? Answers on a postcard please.