A former tax adviser to Mr Charles Haughey said he asked "on several occasions" how he managed to pay for his lifestyle given his declared income.
Mr Pat Kenny, a tax partner with Deloitte & Touche, said Mr Haughey told him he borrowed money. Mr Kenny said he believed Mr Haughey was "stacking up" the interest on this borrowing, as he had no capacity to service it from his income.
Mr Kenny was Mr Haughey's tax adviser from 1984 to 1997, originally with Haughey Boland which was then merged with Deloitte & Touche. In 1997, Deloitte & Touche ceased to act as tax agent for Mr Haughey.
The late Mr Michael McMahon had worked as Mr Haughey's tax adviser up to 1984. Mr Kenny had found nothing on Mr McMahon's file to indicate, as stated by Mr Haughey, that Mr McMahon was involved in the drafting of a contract between Mr Patrick Gallagher and Mr and Mrs Haughey in January 1980. The contract provided for a £300,000 non-refundable deposit as part of a purported land deal.
Following receipt of a letter from the Revenue in 1984, Mr Kenny asked Mr Haughey if he had any outstanding capital gains tax matters. Mr Haughey said he could not think of any.
Mr Haughey subsequently said he had remembered the Gallagher deposit and at a later time again produced a copy of the contract.
Mr Kenny said when working on Mr Haughey's income tax returns for the period 1985 to 1996 he never received any indication he had any income other than that declared.
While he knew Haughey Boland operated a bill-paying service for Mr Haughey, he had not known of the amounts of money passing through it until the McCracken tribunal. No one in Haughey Boland had told him.
