Over lunch last week reporters covering the Moriarty tribunal joked about writing a soap opera based on a fictional character who comes from a modest background, rises to be the most powerful politician of his day and ends up in a mansion dressed in French tailor-made shirts and drinking expensive clarets.
The soap would have a cast of larger-than-life characters - a troubled owner of a supermarket chain who gives millions to the politician, a social diarist who is the politician's lover, and a friend and personal financial adviser who also runs a clandestine bank for some of the State's richest and most powerful business figures.
Yes, and there could be another character who comes from practically around the corner from where the politician grew up and who would come back from Afghanistan after the Russians invaded in 1979, set up a stockbroking firm and become a friend of the politician. He would end up being worth hundreds of millions of pounds and spend his time travelling around the world making multimillion pound deals. Yes, and he would have a large moustache and be nicknamed The Kaiser.
At that stage the reporters gave up. The Kaiser character was a step too far. No-one would ever buy such an unbelievable script. So they paid for their lunch and headed back to the tribunal to hear more evidence from The Kaiser.
Mr Dermot Desmond gave evidence to the tribunal for a day and a half. It was a very slow process and at times his frustration was evident. The most torturous part of the evidence concerned Freezone Investments Ltd and Mr Colin Probets. In 1990, Mr Desmond and his friend, Mr Conor Haughey, were having a conversation about sailing, during which Mr Haughey said he needed to refurbish the family yacht, Celtic Mist but couldn't afford to pay for it. Mr Desmond said he'd look after the finance, and it was agreed that the expensive firm, Ron Holland Yacht Design, of Cork, would do the work.
Mr Haughey speculated that one of the motives for Mr Desmond's decision to help may have been the view "that the boat used by the Taoiseach of the country at the time . . . should represent the country in a good light".
Ron Holland did the work on the yacht and the bills were picked up by Mr Desmond. Most of the £75,546 (€959,236) was paid in April/May 1990. At that time Mr Desmond was in the middle of the most controversial deal of his life.
ON May 7th, 1990, Telecom Eireann bought the former Johnston Mooney and O'Brien site in Ballsbridge for £9.4 million. Mr Desmond was involved in organising the sale but Telecom didn't know that Mr Desmond had a beneficial interest in the transaction. The site had been bought for £4 million in August 1989 by a company called Chestvale, also linked to Mr Desmond. Mr Desmond, and his partner in the dealings, currency trader and former bookmaker Mr J P McManus, made a killing. Telecom sold the site in 1994 for £5.6 million.
The money to pay for the Haughey yacht came from an account with the TSB on Grafton Street in Dublin in the name of an Isle-of-Man company, Free zone Investments. Freezone provided finance for the dealings in the Ballsbridge site. Some of the proceeds from the sale were lodged back into the account. A government-appointed inspector, Mr John Glackin, who was to investigate the controversial Ballsbridge dealings, concluded in 1993 that Freezone was owned by Mr Desmond. Mr Desmond has always strongly contested Mr Glackin's findings. Mr Conor Haughey told the tribunal it wasn't until he was contacted by Mr Glackin in 1992 that he first learned the Celtic Mist money had come from the Freezone account. He had by this time heard of Freezone as the Ballsbridge dealings had been at the centre of a huge public controversy since September 1991.
The scandal created political pressures. In October 1991, Mr Charles Haughey told a Fianna Fail parliamentary party meeting that Mr Desmond was a "business friend" rather than a "personal friend". A spokesman for the then Taoiseach afterwards said Mr Haughey had never had "any relationship in a personal business capacity".
No-one mentioned the yacht. Mr Charles Haughey had bought the yacht for £120,000 sterling in 1989. The yacht was placed in the name of Larchfield Securities, a company which holds assets on behalf of Mr Haughey's children. Mr Haughey still pays the insurance premium on the yacht.
Mr Desmond told the tribunal that Mr Probets was an investor in NCB when it was set up. Mr Probets is a former director of one of the largest money brokerage firms in the world, Tullett and Tokyo, of London. He lives in Guernsey. He refused to be interviewed by Mr Glackin at the time Mr Glackin was preparing his report, but said, through his solicitor, he had known Mr Desmond for 10 years and that the two were close friends.
A lawyer said that as Mr Probets had suffered two strokes two years previously, he was not well enough to be interviewed. When The Irish Times contacted Mr Probets's home two weeks ago, a woman said he was not well enough to come to the phone.
MR Desmond's rapid rise to riches in the mid to late 1980s and his association with Mr Haughey have always been subjects of discussion. It is partly his own fault. NCB assisted Pernod Ricard in its controversial takeover of Irish Distillers in 1988 and Mr Desmond later wrote to the company in an effort to justify a £2 million fee. (Pernod paid £1.25 million.)
"We orchestrated entirely the successful campaign to get a positive tax opinion from the Revenue Commissioners, which involved using personal contacts at the highest level, including the Minister for Finance and the secretaries of the departments of the Taoiseach and Industry and Commerce." He also said: "We used up a large proportion of the favours we can call upon from our political contacts - and no doubt we will pay a price on the other side."
Mr Haughey was to describe Mr Desmond's claims as "absurd" and state he had never extended any special favours to NCB. Mr Desmond, naturally, would have hyped his achievements in order to justify the £2 million fee. However, documents discovered by Mr Glackin again disclosed Mr Desmond boasting of his political contacts.
Freezone got a loan of £8 million sterling from Hill Samuel bank, London, in April 1988. Mr Glackin reported that when the bank "sought detailed information from Mr Desmond relating to his personal affairs on an ongoing and regular basis" Mr Desmond "explained to the bank in considerable detail his personal finances, his political contacts, his personal plans for expansion of his business interests and, where relevant, the disposal of such interests".
When Mr Desmond left school in 1968, he started working with Citibank in Dublin. In 1975 he switched to Investment Bank of Ireland and some time later went to Afghanistan to work for the World Bank. In December 1979, when the Russians invaded, he came home.
NCB, a money brokering business, was set up in 1981, when Mr Desmond was 31 years old. In 1984 it acquired Dillon and Waldron, thereby breaking into the hitherto exclusive Dublin stockbroking sector. The company prospered, taking on and passing out most of its rivals. In an interview Mr Desmond said: "Greed is a great motivator of people."
But Mr Desmond also said he was motivated by concern for his country. He ploughed more than £2 million into NCB Ireland, the yacht built by Ron Holland for the Howard Kilroy-chaired Sail Ireland Trust, and which was aimed at raising national morale in the late 1980s through participation in the Whitbread around the world race. Mr Desmond said: "I do have the national interest at heart and I believe in investing in the country." His proposal for the establishment of the International Financial Services Centre (IFSC) was also motivated by a desire to help, he said.
In 1986, Mr Desmond approached the Fine Gael-Labour coalition with his idea of establishing a financial services centre in Dublin. Mr John Bruton, minister for finance at the time, didn't go for the idea, so Mr Desmond contacted the leader of the Opposition, Mr Haughey.
He liked Mr Desmond's idea and it became part of his party's manifesto for the 1987 general election. The two men met often during 1987/1988. Whenever NCB got State contracts, there were grumbles about the closeness of the Haughey/Desmond relationship.
In October 1987, there was the stock market crash. In November, Mr Des Traynor called on Mr Desmond and asked if he would give some money towards settling Mr Haughey's debts. Mr Traynor was approaching a number of people. Mr Desmond thought about it and then said no. Some days later he bumped into Ben Dunne, probably on a golf course. He told the Moriarty tribunal: "Mr Dunne said `I know that you have been approached. I knew you wouldn't be able to help because you have got no money and I am making a payment for confidential reasons so that Mr Haughey won't be subjected to any pressure from any source'."
In October 1991, around the time Mr Haughey was describing him as a "business friend", Mr Desmond resigned as chairman of Aer Rianta and stepped aside "temporarily" as chairman of NCB. The Telecom scandal and the leaking of details of how confidential information concerning Irish Helicopters had been sent to its rival, Celtic Helicopters, were seen as being damaging to NCB.
During the following two years Mr Desmond was little in the news apart from court challenges to the Glackin inquiry and a statement rejecting Mr Glackin's findings when they were eventually published. In 1994, Mr Desmond returned to the position of chairman of NCB, but in a non-executive role. He would be spending a lot of time abroad in the future, it was said.
NCB was sold to Ulster Bank for £25.5 million and Mr Desmond netted a reported £14 million for his stake. He stepped down as chairman and started a series of dealings which were to make him extraordinarily rich.
In December 1994, one of his companies, QFS Financial Services, bought a 10 per cent shareholding in Celtic for £4 million. In July 1995, Mr Desmond made £20 million from the sale of Quay Financial Software, which develops software for bank dealing rooms. He added this money to the money from NCB which he was using to build his investment portfolio.
In October that year he was involved in a £23.5 million sterling purchase of loss-making London City Airport and some land adjoining it. Around this time, when he was establishing the IFSC-based International Investment and Underwriting, it was noticed that he was using a new address - Queensway Court, Gibraltar. He had become a non-resident for tax reasons.
By 1996, London City Airport was turning around and so too was Celtic football club. Mr Desmond began making investments in second-line Irish stocks, buying significant shareholdings of low-priced stock, without announcing his intentions, and then selling them when it was profitable to do so. He made significant profits over subsequent years from dealings in Golden Vale and Unidare. He also made $57 million - £44 million at current exchange rates - from selling most of the stake he acquired at the start-up phase of Esat Digifone.
However, the biggest single coup of his entire career was the sale last month of a £55 million shareholding in Baltimore Technologies. Baltimore is an IFSC-based e-commerce security company involved in encryption. In December 1998, the company, in which Mr Desmond had a stake of between 50 and 60 per cent, was taken over by a British company, with the merged entity taking on the Baltimore name. Mr Desmond made a £6.7 million profit on the deal but kept a 15 per cent stake in the merged entity. In November, he sold the bulk of these shares, netting himself £55 million sterling (€87.7 million), but still keeping a 3.5 per cent stake. He sold the Baltimore shares when they were doing well - between £20.83 and £22.88 sterling - though this week the shares are selling at a much higher £38 sterling.
No doubt this is all good news for Mr Charles Haughey. In 1994, when Mr Haughey told Mr Desmond he might have to take on a few non-executive directorships because funds were running low, Mr Desmond said he'd help him out whenever he was stuck. He subsequently gave Mr Haughey £100,000 sterling. In 1996, he gave him another £25,000 sterling. The Moriarty tribunal's terms of reference do not stretch beyond 1996 so Mr Desmond could not be asked if he had given Mr Haughey money since that time.
"If he needs money now on the back of his assets, I would gladly make it available to him," Mr Desmond said. The money, like the previous donations and the money for the Celtic Mist, would be an interest free loan. "I am quite happy to make money available on a basis . . . without any documentation, without any interest rate, without any terms of repayment to Mr Haughey. I was prepared then and I am prepared to do it now until such time as he resolves his difficulties."
Asked for his reasons, he said he was a friend of Mr Haughey.
