The Moriarty tribunal has revealed £750,000 was lodged with AIB in January and February of 1980 to clear debts totalling £1.143 million Mr Charles Haughey had with the bank.
The money came from an account in Guinness & Mahon bank in the name of the late Mr Des Traynor, the personal financial adviser to Mr Haughey, but may not have belonged to Mr Traynor.
The consumer price index indicates £750,000 in 1980 is the equivalent of about £1.8 million today.
The debt was settled just weeks after Mr Haughey won a leadership battle in Fianna Fail and was elected Taoiseach for the first time.
Mr John Coughlan SC, for the tribunal, said at the opening of its first public hearing of evidence in Dublin Castle the £750,000 may have come from "a Mr Patrick Gallagher and his group" and two other unnamed individuals. It also could have come from "Mr Traynor's resources or from other resources of Mr Haughey or somebody else. It is not known."
The tribunal wishes to investigate the AIB settlement, as it involved a significant discount "when the bank had securities in excess of the amount of the indebtedness". Mr Coughlan also said that during a two-month period in which Mr Traynor concluded settlement talks with AIB, "Mr Haughey had become Taoiseach".
AIB, in a statement read out by Mr Coughlan, said it had sought "no advantage or favour" from Mr Haughey, and believed the compromise to have been "commercially justified". It said it had pressurised Mr Haughey to deal with his affairs "when it could be said that he had reached the apex of his career, having just become Taoiseach."
Mr Coughlan said that according to documents received from AIB, Mr Haughey had at one stage in 1979 said he might be able to pay off £200,000 as a result of "a land deal in Baldoyle". Mr Haughey had also "mentioned to the bank the possibility of the bank being offered a £10 million Middle Eastern deposit at a rate of interest below the market rate". AIB had not been interested.
The deal with Mr Haughey involved him paying £750,000 and committing himself to pay a further £110,000 "within a reasonable time". No interest was to accrue on the £110,000 in the meantime. "It does not appear that this was ever cleared, although the bank did comply with its terms of the settlement in releasing security documents to Mr Haughey," Mr Coughlan said.
Details were also given of payments from Dunnes Stores, which were made by way of cheques signed by Mr Ben Dunne. The total involved is about £500,000 and was paid out in January 1987, May 1987, and November 1992. Mr Coughlan said Mr Dunne would tell the tribunal he could not recall writing the cheques and never meant the amounts to be paid to Mr Haughey.
Mr Dunne was present at the tribunal but has not yet been called to give evidence.
The payments are in addition to the £1.3 million Mr Dunne gave Mr Haughey and which was investigated by the McCracken tribunal.
At the hearing's outset, Mr Eoin McGonigal SC sought and was granted representation for Mr Haughey and his wife, Maureen. His colleague, Mr Paul Gardiner, made an application that the proceedings be adjourned in so far as they concerned Mr Haughey, pending the completion of the criminal proceedings he is facing.
Mr Haughey is awaiting trial on charges of obstructing the work of the McCracken tribunal. Mr Justice Moriarty rejected Mr Gardiner's application.
Limited representation was also granted to the former Fianna Fail minister, Dr John O'Connell. His counsel, Mr Brian O'Moore, said Dr O'Connell had made a statement to the tribunal and assisted the tribunal in its earlier work.
