Details of Mr Charles Haughey's extraordinary financial relationship with AIB in the 1970s, during which he ran up a debt of over £1 million, were disclosed at the Moriarty tribunal yesterday.
Dozens of bank letters and memos concerning Mr Haughey's affairs were read into the record by a lawyer for the tribunal, so that the settlement of Mr Haughey's £1.143 million debt, for £750,000 in January 1980, could be put in context.
The documents showed that Mr Haughey told his AIB bank manager in 1976 that he intended to be in politics for another 10 years and could direct a lot of business towards the bank. At the time Mr Haughey had debts with AIB of £246,871.
Although Mr Haughey repeatedly failed to live up to promises he made to the bank, AIB continued to issue him with cheque books and to honour his cheques. Mr Haughey's debt with the bank rose from more than £100,000 in the early 1970s to £1.143 million by the end of the decade. During the period he also had debts with the Northern Bank Finance Corporation of more than £200,000.
Yesterday's evidence conflicts with Mr Haughey's evidence to the McCracken (Dunnes Payments) tribunal. Mr Haughey is detailed in the AIB documentation as repeatedly meeting with bank officials, negotiating his overdraft facility and discussing aspects of his business affairs.
However, Mr Haughey told the McCracken tribunal that the late Mr Des Traynor "took over control of my financial affairs from about 1960 onwards. He saw it as his personal responsibility to ensure that I would not be distracted from my political work by financial concerns." Mr Haughey said he "never had to concern myself about my personal finances".
The Moriarty tribunal heard yesterday that Mr Haughey told AIB in March 1975 that he bought his home and estate, Abbeville, Co Dublin, for £140,000 in 1968/ 1969. He also owned a stud farm in Meath and other properties, and he put a value of £1.252 million on his assets. He said he paid out £32,600 per annum in wages and other costs. His income as a TD was £7,000 per annum.
In September 1975 Mr Haughey's bank manager at AIB in Dame Street, Dublin, Mr Michael Phelan, wrote to his superiors saying that despite the unattractiveness of a proposition being put by Mr Haughey, he recommended it be sanctioned "bearing in mind . . . the likelihood of Mr Haughey being a man of influence in the future".
In May 1970, Mr Haughey was dismissed from government as a result of the arms crisis. In 1977 he was appointed Minister for Health and Social Welfare. In September 1979, when his debt exceeded £1 million and just months before the resignation of Mr Jack Lynch as leader of Fianna Fail, Mr Haughey telephoned his bank manager and said he wanted to deal with "this dangerous situation once and for all".
By December 1979, when settlement terms for his debt were being negotiated with AIB, he had been elected Taoiseach. If he had been declared bankrupt, he would have lost his seat in the Dail.
Mr Haughey's debt of £1.143 million was cleared with £750,000 from Guinness & Mahon bank in January 1980. The money came from an account in the name of the late Mr Traynor, though it is not known who the funds belonged to.
In October 1976, when a bank official formally asked Mr Haughey to hand over his cheque books, Mr Haughey "became quite vicious", according to a bank memo.
In September 1979, when Mr Phelan went to Mr Haughey in the Department of Social Welfare, the bank manager said there had been cheques for £31,776 written on Mr Haughey's accounts between July 16th and September 5th. "He [Mr Haughey] seemed very surprised by the high figure on the drawings and implied Abbeville had gone mad buying unnecessarily," Mr Phelan noted.
