Mr Ben Dunne's distribution of largesse to politicians caused outrage to his fellow Dunnes Stores directors, the tribunal was told. Counsel for Dunnes Stores, Mr Garrett Cooney SC, said the tribunal report should exonerate the company in specific terms "of all the charges and insinuations of wrong-doing".
He said the company acknowledged that, while he was at its helm,
Mr Ben Dunne steered it through a period of growth.
"He did, however, engage in business practices which were unorthodox to say the least and his distribution of largesse to politicians by the improper diversion of company funds was extremely ill-advised and, when discovered, caused outrage to his fellow directors."
He said the payments had four common characteristics: they were made by or at the direction of Mr Ben Dunne; they were not authorised by the company; they were deliberately concealed from the other directors; and almost all of the payments were made from accounts outside the books and records of the company.
Mr Cooney said once the fact of what had occurred became known to the other directors, they moved immediately to investigate. But the nature of the payments made finding out what had happened "all but impossible".
Mrs Margaret Heffernan and Mr Frank Dunne had worked to resolve the situation. There was a transformation of the way business was done and the Price Waterhouse reports were commissioned.
Mrs Heffernan's and Mr Frank Dunne's personal reactions to the payments had been variously described as "stunned", "amazed" and
"shocked", said Mr Cooney.
Counsel for the tribunal had acknowledged that the evidence from
Dunnes Stores was that the board of the company had not sanctioned or acknowledged the payments in advance. Mr Cooney said what was clear was that, up to the time of the removal of Mr Ben Dunne, a small select group was accustomed to acting without reference to the board or to directors other than Mr Ben Dunne.
Mr Noel Smyth had given evidence of the establishment of various companies and accounts in the Isle of Man by him "on Mr Bernard
Dunne's sole instruction". Mr Michael Irwin had been the "principal nexus" between Mr Dunne and Mr Michael Lowry.
"The departure of the select group had such an effect on the state of knowledge of the remaining executives that Mr Michael Lowry acknowledged that the group financial controller was on a learning curve after the departure," said counsel.
The directors other than Mr Ben Dunne had only become aware of the nature of the dealings with Mr Lowry after Mr Dunne was removed from the board. The payments for the most part had been routed through off-shore companies established by Mr Dunne, or on his behalf by Mr
Smyth, or through accounts held by Mr Dunne at the Bank of Ireland in
Marino.
Mr Smyth's secretary, Ms Pauline Finnerty, had confirmed that the beneficial owner of the Isle of Man company, Tutbury Ltd, was Mr Ben
Dunne. "It was Margaret Heffernan's uncontradicted evidence that the board was unaware of the existence of these accounts. The monies contained therein do not appear in the books and records of the company," said Mr Cooney.
The board, other than Mr Dunne, were also unaware of the payments to Mr Charles Haughey. These were made by Mr Ben Dunne and were, with one exception, made from outside the group. Since Mr Ben Dunne's removal from the board, vigorous steps had been taken to retrieve the money paid to Mr Haughey.
Mr Cooney said the Celtic Helicopters payment was one which was intentionally hidden from all the directors but Mr Ben Dunne.
Knowledge of the transaction with Celtic Helicopters was once again confined to Mr Dunne, Mr Smyth and Mr Irwin.
"No resolution in the minutes of Associated Fashion contemplates the pledging of £275,000 to cover the loan to Celtic
Helicopters. Mr Noel Smyth seeks to characterise the arrangement as one which would avoid embarrassment or misconstruction in the event of the security having to be redeemed," said counsel.
However, this fear was illusory as far as the company was concerned because, under the direction of Mr Frank Dunne, Mrs
Heffernan and Ms Therese Dunne, the company had had no qualms about suing for the return of the money.
Mr Cooney said the tribunal had raised three specific issues as evidence of the existence of a possible political motive for any payments.
The first concerned a prosecution in the District Court of Dunnes
Stores' Ballyvolane branch in Cork. Mr Bernard Walsh, of Dunnes
Stores, had made an approach to Mr Lowry to establish the procedure for dealing with such a prosecution.
Mr Cooney said this was on the basis of a long-standing personal relationship and the approach was made solely at Mr Walsh's initiative. "That the approach was entirely innocent of political motivation is borne out by the testimony of Mr Michael Miley, the programme manager for the Minister for Agriculture, and Mr Mark
Kennelly, special adviser to Mr Michael Lowry," said counsel.
The second issue concerned the claim by the Fine Gael TD, Mr Paul
McGrath, that Mr Lowry sought to apply pressure over the opposition of Fine Gael councillors in Westmeath to a shopping centre development in Mullingar. Mr Cooney said Mr Lowry had "hotly"
contested" Mr McGrath's characterisation of the exchange. No suggestion had been made that what occurred was instigated by the board of Dunnes Stores.
The third issue concerned contacts between the Revenue
Commissioners and Dunnes Stores' professional advisers. Any suggestion that there had been any attempt to avoid taxation liabilities was unfounded and "it is a matter of regret that this topic has been given any real credence".
After outlining a series of exchanges between the Revenue
Commissioners and advisers of the company, Mr Cooney referred to a meeting between Mr Ben Dunne and the chairman of the Revenue
Commissioners, which was arranged at Mr Charles Haughey's request. No benefit was sought or gained and the meeting was "clearly the product of Mr Bernard Dunne's modus operandi rather than a resolution of the company".
Mr Cooney said that in evidence to the tribunal, the current chairman of the Revenue Commissioners had said there was "no political influence whatsoever".
"Indeed, the companies with the Dunnes Stores group, as well as being substantial contributors to the national tax take, were described as `model' taxpayers. Among the messages that go out from this tribunal, this message should go out loud and clear."
Mr Cooney said that since the tribunal was established in
February, it had been variously described in media shorthand as "The
Dunnes Stores Tribunal", "The Dunnes Stores Payments Tribunal" and in other terms which suggested the group was at the heart of matters being inquired into.
The suggestion had been reinforced by the constant use on television of the company logo. It was understood that the pictures were motivated by "considerations of convenience" rather than any desire to convey the impression that the company was at the heart of any perceived or real wrongdoing.
"Nonetheless, it illustrates the potential for grave harm and damage being done to the company's reputation and good name which could, in turn, have very grave consequences for its business activities and commercial success."
For that reason, justice required that the tribunal's final report should exonerate the company in specific terms of all the charges and insinuations of wrong-doing.
The huge volume of evidence adduced before the tribunal established that the company had achieved its "unparalleled success"
without the assistance of any grant, subsidy or other form of payment or favour from any government or individual politician.
The evidence had also established that Mr Ben Dunne had engaged in unorthodox business practices and distribution of largesse to politicians without the consent or knowledge of his fellow directors.
The "great reform and change" instigated by Mr Frank Dunne, Mrs
Heffernan and the late Ms Therese Dunne had ensured that the commercial success of the group would continue.
Meanwhile, counsel for Mr Ben Dunne told the tribunal yesterday that, in making payments to politicians, Mr Ben Dunne neither sought nor was given political favour.
In his submission to Mr Justice McCracken, senior counsel for Mr
Ben Dunne said the businessman had told the truth about all payments made to politicians and the circumstances in which they were made.
Mr Seamus McKenna SC said Mr Dunne had no desire to become involved in controversy and did not wish to create difficulties for any of the people involved in the tribunal. However, he saw it as his duty to go before the tribunal and tell the truth.
Mr McKenna said it was unfortunate that Mr Cooney, counsel for
Dunnes Stores, had dealt with matters which were subject to separate family litigation.
Mr Dunne had not dealt with the process of decision-making at
Dunnes Stores, their accounting procedures or "his right, as he saw it at that time, to do certain things", said Mr McKenna. These matters were totally outside the terms of reference of the tribunal.
He said he would submit that the tribunal should not make any finding as to any impropriety between Mr Dunne and the Dunnes Stores group of companies. "You should not find whether or not Mr Dunne was entitled to act as he did at the time he took such decisions."
Mr Dunne accepted that his payments to politicians could and did give rise to legitimate public concern. "However, I would strongly urge you, on the totality of the evidence, that Mr Dunne is entitled to a finding that in making the payments he had neither the intention nor the expectation of obtaining political favour or other benefit of any kind."