Mr James Gogarty, who began his evidence at the Flood Tribunal yesterday, said a trust fund was set up for him in Guernsey in the Channel Islands by Mr Joe Murphy of JMSE, who put in £70,000, and this rose to £100,000 with interest.
Mr Gogarty said the trust fund was started in 1982. He fully accepted what Mr Murphy had told him and that Mr Murphy eventually put in £70,000, rising to £100,000. The witness said he withdrew the money and settled it with the Revenue. He had been clear with the Revenue for years and years, he said.
When he first started in the Murphy companies he was 51 and had been married for 10 or 11 years. He worked very hard and his social life was his home life, his wife and family.
Mr Murphy's companies were in trust. Mr Gogarty said he had no equity and no beneficial interest in the lands. His only salary was from Joseph Murphy Structural Engineering (JMSE) and 110 per cent of his time was devoted to Murphy's.
In the late 1970s Mr Liam Conroy and Conroy Manahan and Associates surfaced on the scene and they were involved in getting planning permission for the lands in the Murphy group.
Mr John Gallagher SC, for the tribunal, asked if Mr Gogarty had resigned as director of JMSE at one stage. Mr Gogarty replied that some problems had arisen when Mr Conroy came in. Mr Joe Murphy, who the witness referred to as "Senior" was making a lot of money. Very big tax accountants in England were advising him on how to deal with his tax affairs.
They advised Mr Murphy to retire and put his companies in trust. He founded a trust for all his English companies and an Irish trust. They were non-discretionary trusts.
They also advised him to invest in a bank, the International Finance Trust Corporation (IFTC) in the Isle of Man. A trust was set up and a few investors were encouraged to invest. Mr Joe Murphy and his brother, Mr John Murphy, invested about £6 million each - and this was back in the 1960s.
Mr Garrett Cooney SC, for Mr Joseph Murphy Snr, Mr Joseph Jnr, Mr Frank Reynolds, Mr Frank Copsey, Mr John Maher and Mr Tim O'Keeffe and the 14 companies in the Murphy group asked what the relevance of this evidence was. "It is supposed testimony of Mr Murphy's private affairs," he said.
The tribunal chairman, Mr Justice Flood, said he was monitoring it. He said to Mr Gallagher that they thought they were going a little wide.
Mr Gallagher said it was background information. This wit ness's credibility had been challenged. Mr Gogarty's credibility would be crucial.
Mr Gogarty said this was important. The £6 million was invested in trust in IFTC and Mr John Murphy had invested the same. In the late 1960s there was an oil crisis and they lent money. The IFTC ran into trouble and went into liquidation. Mr Joe Murphy lost the £6 million he had invested. Mr John Murphy had borrowed £6 million, so he was all right.
"John had invested roughly the same but John had borrowed roughly six million so he was on the safe side and Joe was in trouble right to his neck and he started drinking and going into very serious nervous problems and at this time he was associating with Liam Conroy.
"On a social level and business level, I believe, their main socialising was in the Irish Club in London which was big that time and you had a lot of big Irish men there having a good time," he said.
Mr Cooney objected: "This is just gossip." The chairman said the witness must be brought back to the evidence.
Mr Gogarty said Mr Conroy was taking over full responsibility for Mr Joe Murphy's business affairs. In 1982 Mr Conroy insisted he [Mr Conroy] be there full-time. In 1983, he was well-established as the chief executive in the English and Irish trust companies. Mr Conroy was based in Dublin, commuting to London. Mr Gallagher asked what Mr Gogarty's position was in JMSE.
The witness replied that he had resigned his managing directorship in early 1982. It was finished on his birthday, May 20th.
"I didn't want anything to do with JMSE. I wanted to get my pension. I was 65 in 1982. Senior had promised me a pension but he and his wife, Una, prevailed on me to stay on," he said.
The Murphys hoped to sell and transfer to England and wanted him to hang on.
"They said they would pay me a figure of £1/2 million which would set me up in a pension. I was looking forward to that," he said. He was married to a "fine girl" 20 years his junior with six or seven in the family at that time.
His salary was not that big. He was worried as he had diabetes and he wanted his wife to be secure with the family and for years after "it broke my heart".
He got little over £20,000 a year. In 1983, he was getting £23,000. He got a bonus of £1,000 in August and another £1,000 in December which was taxed. He had no shareholding whatsoever. He had no personal beneficial interest in the six lots which were the subject of the tribunal.
Around 1982, he said, his personal relationship with Mr Murphy and his family was good.
"You would want to take it in the right sense, you know, I was very good with his wife who was very anxious over himself because he was going through a rough period and she was a bit upset about what she thought was the influence that Conroy had over him, because Joe was drinking a lot and, in fact, Conroy did say to me at one time that he had a difficulty in saying Joe considered committing suicide over the IFTC affairs, that would give me an indication of the psychological control," Mr Gogarty said.
Mr Cooney objected: "This is not fair to Mr Murphy. Let's hear evidence, not gossip or hearsay."
Mr Gogarty said: "That's not gossip, there's evidence to back it up. My heart was broken for nothing."
Mr Justice Flood asked if they could get on to the business side of affairs, please.