Millionaire businessman Dr Michael Smurfit decided "literally on the spur of the moment" to give Mr Charles Haughey a personal gift of a Jack Yeats painting in 1990, valued at £55,000.
Dr Smurfit hoped the painting The Forge would become a family heirloom and he put a caveat on the donation that he would not sell it "the next day". He thought it would "look like a cash gift" if he had done so.
He also said the only thing Mr Haughey ever asked him to do was to take out a shareholding with Celtic Helicopters when it was formed.
Mr Haughey "never, to the best of my knowledge, ever asked me for personal funds. We declined to get involved in the company but decided to give it some business after it was formed," and he added they still did business with the company.
Dr Smurfit presented the Yeats painting at the same time as he presented Mr Haughey with a painting for the State, The Flag by Sir John Lavery.
The Lavery painting of the raising of the flag at Aras an Uachtarain was to mark Mr Haughey's taking on the presidency of the EU.
When he was going to meet Mr Haughey to present him with the Lavery painting, he just decided "literally, on the spur of the moment" to also present him with a personal gift of the Yeats painting.
Mr Jerry Healy SC, for the tribunal, asked if he thought there was anything inappropriate about giving a valuable painting to the taoiseach in 1990.
He said "No", but "I did put in the caveat that I didn't expect it to be sold the next day. I said I expected him to hold on to it for a long time."
Dr Smurfit did not know if Mr Haughey still had the painting.
Mr Healy said: "So when you were handing it over and indicating that you didn't expect it to be sold the next day, does that mean that you were not handing over an article that could be converted into cash the following day? You thought it would be held in remembrance of the occasion?"
Dr Smurfit: "Yes, I had it in the back of my mind that it would look very bad if you gave a painting like that to somebody and they cashed it in the next day. It would look like a cash gift. I wasn't into that situation and I requested that he would hold it for a considerable period of time. I hoped it would become what is known as a family heirloom."
He gave the two paintings at the same time because he had an appointment with the taoiseach and thought it appropriate because Mr Haughey had become the EU summit leader.
"I thought it was a nice gesture," he said.
Asked if there was any "special sense of occasion" about the handover, Dr Smurfit said it was "done during the business hours of the day" and only he and Mr Haughey were present.
The taoiseach had no idea about the paintings because he did not know what the purpose of the meeting was.
