Morris tribunal: A member of the Carty Garda investigation team said there were suspicions in 1999 that Det Sgt John White was involved unethically with Bernard Conlon.
Chief Supt Austin McNally said these suspicions hardened and resulted in the arrest of Sgt White.
Sgt White was acquitted earlier this year in Letterkenny District Court of perverting the course of justice.
Mr Conlon has alleged Sgt White told him to be discovered drinking after hours on the premises of McBreartys nightclub in Raphoe and to be a State witness to set up the McBreartys. He also claimed Sgt White told him to fabricate a story about two members of the McBrearty family - Mark McConnell and Michael Peoples - threatening him with a silver bullet at his home.
Both men were arrested but released without charge. It was later found Mr McConnell had an alibi.
Sgt White has denied all allegations against him.
Senior counsel Paul McDermott, for the tribunal, asked Chief Supt McNally how Sgt White became drawn into the investigation into the Donegal division.
He replied that Sgt White came into the equation as he was involved in a lot of the licensing cases being taken against the McBreartys. "We'd certainly have suspicions but there was very little evidence, certainly we had suspicions that he would have been involved unethically with Bernard Conlon," he said.
They were suspicious about the pub issue and the threats and these suspicions hardened by December 1999 to January 2000, especially when told about Mr McConnell's alibi.
Mr McDermott asked if those suspicions crystallised when Mr Conlon was arrested and told the Carty team in January 2000 that he had been told to make false statements by Sgt White.
"We saw Bernard Conlon as a key person to unlock the mystery and further our investigations," Chief Supt McNally said.
He said they were very much aware Mr Conlon was untrustworthy and told lies. That was the reason it was so important to corroborate the statement.
The arrest of Sgt White came about as a result of Mr Conlon's allegations and corroboration of his statement.
"We were satisfied that there was reasonable suspicion to arrest Sgt White," he said.