John Ellis, whose friends in high places helped him to avoid bankruptcy, once threatened to have a farmer declared bankrupt if the farmer did not help to pay the TD's legal costs.

Mr Ellis, ail TD for Sligo-Leitrim whose disastrous foray into the meat factory business left farmers in the north-west with debts totalling approximately £200,000, used the tactic in 1992 - two years after £230,000 of his own debt of £250,000 to National Irish Bank was written off by the bank.

The less fortunate farmer, Joe Walsh, of Knockmore, Ballina, Co Mayo, had to pay £2,701 to Mr Ellis and his two brothers after he was threatened with bankruptcy in February 1992. Mr Walsh had already lost £6,750 as a result of selling cattle to the Ellis meat factory in Ballintra, Co Donegal, in 1986. On both occasions he had to borrow money from ACC Bank to cope with the financial setbacks.

It emerged in the Moriarty tribunal two weeks ago that Mr Ellis was given £26,000 in cash in 1989-1990 by the then Taoiseach, Mr Charles Haughey, to pay off Swinford and Manorhamilton marts, which were threatening to have him declared bankrupt. This week Mr Ellis said political representations were made to NIB around the same time by Mr Albert Reynolds, then minister for finance, after the bank had initiated bankruptcy proceedings against Mr Ellis. Later, Mr Reynolds said that the Sligo-Leitrim TD now accepted there was no evidence to substantiate the claim.

This week, Mr Walsh reflected on Mr Ellis's good fortune and his own contrasting treatment.

"It was the bankruptcy thing that was really hard," he says. "I just couldn't take it. When I heard about Mr Haughey giving the money, I just couldn't face it.

"The small people get crushed but the powerful get everything. Even now I know we can't get at him [Mr Ellis]. He's just smiling down at us."

At the time of the cattle sale, Mr Walsh kept dairy and beef cattle on a 44-acre farm. He also had an auctioneer's licence and did part-time livestock auctioneering.

He said he sold cattle to the Ballintra meat plant in September of 1986. The plant had been taken over by three brothers - John, Cillian and Richard Ellis - in August 1986. Mr Walsh made a number of sales over a period of a few weeks, and received cheques in return, which he banked. One Saturday morning in November he received a phone call from an official in his bank, telling him the cheques from Mr Ellis had bounced: they had been returned on the Friday unpaid.

Mr Walsh said he had unpaid cheques totalling £52,000, but managed to get some of them cashed by resubmitting them. He ended up with just one unpaid cheque, for £6,750. He still has the cheque, which is from Stanlow Trading Ltd, the company set up by the Ellis brothers, which is now dissolved.

Mr Walsh and a number of farmers sought to get their money from the Ellis brothers by taking a case to the Circuit Court in Carrick-on-Shannon. Because he had an auctioneer's licence, the court said Mr Walsh should have known he sold his cattle to Stanlow Trading Ltd, and not to the Ellis brothers. Costs were awarded against him.

He appealed to the High Court but then, afraid of the mounting costs, withdrew. He was subsequently served with a bill for the Ellis costs of £2,701.

John Gardiner, who has a 55-acre farm in Killala, Co Mayo, said he sold cattle to the Ellis plant in November 1986 and received a cheque for £5,701.

"The cheque bounced," he recalls. It was from Stanlow Trading. He said he went to a meeting in a hotel in Castlerea attended by about 60 farmers who were owed money. The farmers came from counties Donegal, Cavan, Mayo and Roscommon. The meeting took place before the 1987 election in which Mr Ellis was elected to the Dail for the first time.

The farmers were told they would be paid eventually, but they never were. "I feel sick about it," says Mr Gardiner. He thinks the Government should compensate the farmers, since the marts were paid by Mr Haughey.

Willie Armstrong, of Ballintra, Co Donegal, still has three Ellis cheques for Stanlow Trading, for £21,000, dated 1986. "He told me to hold on to them and I might get paid."

NIB was pursuing Mr Ellis because he had given personal guarantees for money loaned to Stanlow Trading. The two marts had sold cattle to Mr Ellis in a personal capacity. Mr Ellis at one stage bought cattle from marts and sold them on to cattle exporter Seamus Purcell.

Mr Ellis could not be contacted yesterday. According to the register of interests of Oireachtas members, Mr Ellis is a non-executive director of Indus Bank Ltd, Karachi, Pakistan. A spokesman for Mr Ellis could not say how the TD came to be a director of the bank. Mr Ellis is a farmer.

One of Mr Ellis's brothers, Cillian, a school bus driver, was elected to Leitrim County Council in June, taking over the seat held by John, who did not stand for election because he is chairman of the Oireachtas Joint Committee on Agriculture, Food and the Marine.

The other brother, Richard, now lives in the Isle of Man.