The chairman of the Fine Gael Trustees, Mr Buddy Kiernan, a pig farmer from Co Cavan, has resigned his position.
He had informed the trustees of the $50,000 Telenor/Esat donation to the party three years ago without identifying the donor. The trustees decided to return the cheque but Mr Kiernan never informed them later that the cheque had been returned to Fine Gael.
The resignation of Mr Kiernan, who took over the position from Mr Michael Lowry in 1997, follows a review of the party's knowledge of the controversial Telenor/Esat cheque this week.
The $50,000 (£32,000) donation was given to Fine Gael by Telenor. However, when the party discovered the $50,000 had not been a personal donation from the late Mr David Austin, a party fundraiser, but had instead come from the company it decided to return the money.
The party sent a cheque to Telenor for that amount. As Telenor had been reimbursed by Esat it forwarded the money to Esat. Esat returned it to Fine Gael. On Wednesday Fine Gael sent a bank draft to Telenor, which says it will return it to Esat.
The trustees met on Wednesday night and the donation from the Norwegian telecommunications company Telenor, which had been a 40 per cent shareholder in Esat Digifone, was discussed. The meeting was adjourned to last night.
A statement from the trustees after their meeting last night said that on reviewing the donation they paid particular attention to "the knowledge that the trustees had about the matter".
A review of the minutes of the trustees' meetings showed they had been informed on March 4th, 1998, of a donation to the party which the then party leader, Mr John Bruton, and Mr Kiernan, felt should be returned to the donor. It had been returned on March 2nd, the statement said.
The trustees decided that Mr Bruton's decision to return the cheque should be ratified and "legal advice should be sought to established if the receipt of the donation should be referred to the Moriarty tribunal". The donor's name was not disclosed at the meeting, the statement said.
However, the meeting was told the donor was concerned that the donation might be drawn into the Moriarty tribunal, it said. The Telenor/Esat donation was not discussed at any later trustee meeting, which the statement said was borne out by the minutes.
The trustees were never told later that Fine Gael's attempt to return the cheque had failed and that it had been returned to the party. "However the chairman of the trustees acknowledges that he knew of the return of the cheque to Fine Gael," the statement said.
Last night a Fine Gael source sought to convey the impression that Mr Kiernan had resigned voluntarily. A party spokesman said Mr Michael Noonan, party leader, had nothing to add to the statement.