For a while now, we've known that Charles Haughey was happy to take money from rich businessmen while he was Taoiseach. For an even longer while, we've known that when Haughey was in power, some rich businessmen became even richer as a result of deals that ended up costing ordinary citizens a great deal of money.
What we have not known, and still don't know, is the connection, if any, between these two facts. The Moriarty tribunal is supposed to tell us. But it is probably naive to expect the discovery of invoices for services rendered or cheques for favours granted. But this week's hearings of the Moriarty tribunal have thrown up some intriguing suggestions about where, if such a relationship exists, we might possibly find it.
What we have learned this week takes us back to where we came in on this decade of disillusioning revelations, the scandal surrounding the purchase by Telecom Eireann of the Johnston Mooney and O'Brien (JMOB) site in Ballsbridge, Dublin. This is one of the most flagrant examples of public money ending up in private hands and what we have heard this week suggests the need to look at it again. In April 1989, Dermot Desmond concluded an agreement with the liquidator of JMOB to buy the Ballsbridge site for £4 million. The sale to a company called Chestvale was concluded on September 1st 1989. Just six weeks later, Dermot Desmond told his bankers, Ansbacher, that he would be selling the site to a UK property company for £5.8 million. This deal was not done, however, because Dermot Desmond had become involved in negotiations to sell the site to Telecom Eireann.
In these negotiations, Dermot Desmond was understood by Telecom to be a "bona-fide intermediary" between it and the owners of the site. Telecom did not know that he was in fact one of the owners and that he stood to make a massive personal gain from its sale. On January 9th, Dermot Desmond told Telecom that the "best price" he could get the site for would be £9.4 million - well over twice what it had cost three months previously and £3.6 million more than he was willing to sell it for two months previously. Telecom agreed to pay this price. Essentially, Dermot Desmond and a small group of associates made over £5 million in less than a year at the expense of the public.
THE significance of what has emerged at the Moriarty tribunal this week is that it now seems clear that, precisely during this period, Dermot Desmond had intimate financial connections with the then Taoiseach, Charles Haughey. According to counsel for the tribunal, Dermot Desmond made payments of £75,000 for the refurbishment of Charles Haughey's yacht between April 1990 and February 1991. Likewise, from 1988 to 1991 Dermot Desmond was the "contact man" for an investment account established for Haughey by Desmond's firm NCB and operated under instructions from the men most centrally involved in the Ansbacher scam, Des Traynor, Padraig Collery and John Furze.
There is a close chronological correspondence between the key moment in the unfolding of the Telecom scandal and a sizeable payment to Charles Haughey through Dermot Desmond. The contracts for the sale of the JMOB site to Telecom were executed on May 7th 1990.
The following day, May 8th, £200,000 sterling was paid from the NCB account to Haughey's Ansbacher account. This may well be coincidental, but it merits some scrutiny.
This week's evidence also throws an intriguing light on one of the central conflicts in the Telecom affair. In the course of John Glackin's inquiry into this scandal on behalf of the Department of Industry and Commerce, Dermot Desmond consistently denied that he had a financial interest in the various companies that were involved in buying and selling the site. He was adamant that he did not own an Isle of Man registered company called Freezone Investments, which provided much of the financing for the purchase of the site and received £1.3 million of the profit. Freezone was said to be owned by a Guernsey-based financier, Colin Probets.
John Glackin discovered, however, an option agreement dated June 15th 1988 which gave Dermot Desmond the right to "call on Mr Probets to transfer to Mr Desmond or his nominee for the sum of £1 the beneficial interest in the entire issued share capital of Freezone". Mr Desmond continued, nevertheless, to deny he was the beneficial owner of Freezone.
IT IS interesting, therefore, that the money for the refurbishment of the Haughey yacht came from Dedeir, Dermot Desmond's personal investment company and from Freezone. But these two loans were later consolidated into one, held by Freezone. This strongly supports John Glackin's contention that Dedeir and Freezone were both essentially vehicles for Dermot Desmond's own investments. Basically, the offshore company at the heart of the Telecom scandal was giving money at that time to Charles Haughey and his family. This money may have been described as a loan, but since it was unsecured and has not been repaid, it was to all intents and purposes a donation.
Freezone, moreover, was the source of one of the more colourful lumps of money that was being carted around Dublin in those halcyon days of free enterprise. Twice in late July 1990, Dermot Desmond went to the Trustee Savings Bank in Grafton Street, Dublin and withdrew a total of £500,000 in cash from the Freezone account. Dermot Desmond told the Telecom inspector that he kept this money in a "tennis hold-all" and then gave it to its "owner", Colin Probets. But John Glackin found this story "very difficult to believe" and decided that Colin Probets did not get this money. He suggested that it probably went to another investor, J.P. McManus. But he, in turn, denied getting it, and there is no direct evidence that he did. In the light of what has emerged this week, a second look at what happened to it might be worthwhile.
It may be, in the end, that there is no connection at all between the Telecom scam and the fact that its central figure, Dermot Desmond, had a hand in the financial affairs of Charles Haughey. But we won't know that for sure until the whole business is re-examined in the cold light of justified scepticism.
Fintan O'Toole can be contacted at fotoole@irish-times.ie