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You are > Home > Pee Flynn, Tom Gilmartin and the cheque for £50k
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Wednesday, July 28, 2004
Pee Flynn, Tom Gilmartin and the cheque for £50k
By: Christy Loftus
Western People reporter Christy Loftus attended the Mahon Planning Tribunal in Dublin Castle to hear the long-awaited evidence of Mr Padraig Flynn.
The meetings with Tom Gilmartin
The former Minister for the Environment and EU Commissioner Padraig Flynn told the Mahon Tribunal at Dublin Castle that he first met Tom Gilmartin in November 1987. This followed a request to his Dept from Mr Gilmartin for a meeting. At that meeting the Arlington proposals for
a redevelopment of the Bachelor’s Walk area of Dublin was mentioned. There was no request for an extension of the tax designation for the area.
In November his Dept had already prepared
a draft memorandum regarding extensions to the tax designations in a number of areas around the country, following a government decision to
to extend designations
in a move to generate development and create employment.
By December he had placed before government proposals for extensions to designated areas and one of these included the Arlington proposals in relation to Bachelor’s Walk. These extensions followed on from the government desire to generate development in run down areas of cities and major towns. A cabinet sub-committee had been formed to drive re-development and job creation.
Subsequently, during 1988 and 1989, he had a number of meetings with Tom Gilmartin. These meetings were generally of short duration and in the main related to updates on how the Arlington plans for the re-development of Bachelors Walk was proceeding.
Mr Gilmartin complained often of the delays he was encountering in purchasing properties and securing agreements.
Mr Flynn said that Mr Gilmartin was a man in a hurry and did not understand the “inevitability of gradualness” in terms of local authority business.
Mr Flynn did not become aware of Mr Gilmartin’s involvement in the Quarryvale development (later to become
Liffey Valley Shopping Centre) until later. His primary concern and his main interest was to see the Bachelor’s Walk development proceed. He did become aware that Mr Gilmartin was encountering problems with Quarryvale but at no stage did Mr Gilmartin ask him to intervene or to alter requirements under the planning acts.
About this time Mr Flynn had initiated a garda inquiry into an issue regarding allegations of corruption in planning that was not the subject of the present trubunal. He had brought the matter to the attention of the Taoiseach and it was agreed to have the gardai investigate.
Following a meeting with the then City and County manager Mr Frank Feeley and other officials, in March, 1989, when allegations were made of “interference” interfering in the Quarryvale development, Mr Flynn thought the allegations were serious enough to warrant investigation and he again went to Mr Haughey and the original Garda investigation was extended to include the allegations in relating to Quarryvale.
At no stage, Mr Flynn told counsel for the Tribunal, did he tell Mr Liam lawlor to “look after” Mr Gilmartin nor did he at any time suggest to Mr Gilmartin that his problems would be solved if he made a substantial donation to Fianna Fail.
Mr Flynn insisted that his meetings with Mr Gilmartin were always friendly, they were of short duration, they, in the main, related to Batchelor’s Walk and the delays he was encountering. Later the complaints related to Quarryvale but Mr Gilmartin did not outline any specifics of his problems with Quarryvale.
When he became aware, through Mr Feeley, of the specific complaints and the matter was passed on to the gardai he advised Mr Gilmartin to leave the issue for the gardai to investigate.
Mr Flynn said he knew Mr Owen O’Callaghan (a property developer with an interest in shopping centre developments in the Lucan area, adjacent to Quarryvale) and performed a “topping out” ceremony for him on a project in Limerick. He did not have any meetings with Mr O’Callaghan though he had met him socially.
Following the meeting with Mr Feeley he was aware that allegations of corruption were made about Liam Lawlor and Mr Finbar Hanrahan. These were matters to
be investigated in the extended garda inquiry.
The cheque: ‘a monstrous, enormous sum of money’
“Dia Dhuit. No, Mr Chairman,” were the first words uttered in evidence by Mr Flynn. The ‘no’ was a reply to Ms Patricia Dillon, senior counsel to the Tribunal. She had asked Mr Flynn if he had provided any of the documentation supplied to the
Tribunal to anybody other than his legal team.
“In May” was Mr Flynn’s second response. And this was in reply to the question from Ms Dillon in relation to the fact that Mr Flynn has received a cheque for £50,000 from Mr Gilmartin in June, or May or June, 1989. Ms Dillon went straight for the jugular.
And what did Mr Flynn do with the cheque? He put it in his pocket and took it away with him to Castlebar where he gave it to his wife Dorothy and she lodged it in an account in AIB in Castlebar. He accepted it was probably part of a lodgement of £53,920 lodged in an account in his and his wife’s names.
He told Ms Dillon it was the biggest political donation he had ever received. He was not aware what his annual salary was at the time but accepted Ms
Dillon’s presentation of his balancing statement for ‘89/’90 that it was £51,873. He accepted the receipt of the cheque was a significant amount but not that it was a significant event in his life.
At the time he did not know what account the money was lodged to and he was “unable to assist the Trubunal” as to how an account giving an address at 34 Northumberland Road, Chiswick, London, was opened. He never resided at the address.
He told Ms Dillon that she could refer to the account as a ‘bogus non resident account” but the account was an external UK account. When Ms Dillon pursued Mr Flynn on the matter he told her she had documentation showing that the account was not treated as a non-resident account. (DIRT – deposit interest retention tax – was paid on the account).
Mr Flynn agreed that his signature was on the document setting up the account but could not recall the circumstances in which he had signed the document.
Mr Flynn told Tribunal Chairman Mr Alan Mahon that he was not aware, at the time, that his wife had opened the account. When he became aware of it in the early 1990’s he asked his wife to close the account.
He had not asked his wife to lodge the £50,000 cheque to the account. His wife was in the habit of making the lodgements and he did not specify any account. He told the Chairman that he did not know what account the cheque was lodged to and was not aware of the existence of the account with the London address, until later.
He did not know what had happened to the cheque other than that it was lodged and he had no reason to question his wife about it.
“No, I did not ask my wife that question. And you are quite right when you say that I understood at the time, that because it was a political contribution, it bwould be tax-free, but of course, subsequently as you know, tax was paid on it.
Mr Flynn agreed with Ms Dillon that between Feb ‘87 and June ‘89 a total of £94,230 was lodged to the account6. He had already advised the tribunal through his solicitor that these other monies (aside from the Gilmartin cheque) “probably” represented an accululation of election funds.
However in a further letter to the Tribunal, his solicitor corrected that position and said the lodgement did not represent ‘election contributions’ only. His solicitor went on to point out that Mr Flynn “formally rejects any suggestion that he received election contributions during the period at a level of £110,000.”
Mr Flynn said he did not keep a record of political contributions. Some political contributions were made by cheque and some by cash, but he had no record of who gave him money. Lodgements to the account would have included monies that he had.
He agreed that he had received a donation of £8,000 from National Toll Roads and £3,000 from Davy Stockbrokers. He accepted that an £8,000 lodgement made to a (further) UK external account in Jan ‘93 may have been the National Toll Roads cheque.
“I accept the documentation but every contribution I got over thirty years I did not write into a little black book or anything like that. You can forensically examine these things and match up documentation and I have no propblem with that but don’t go asking me to remember something 15, 16, 20 years ago when I did not keep a record of it. If I had a record, then you (Tribunal) would have had it,” he said.
Mr Flynn told Judge Faherty he did not file away the names of people who made a donation so that he could approach them again for a subsequent election. “I never asked for a political contribution in my life. I did ask for political contributions for the Fianna Fail party throughout my life but I never personally asked anybody for a political contribution.”
He told Judge Keys that politicians would sometimes acknowledge contributions but it would not depend on the size of the contribution. In his case if he was asked for a receipt or an acknowledgement he would certainly provide it. He pointed out, in the case of cheque contributions, the cheque was a record of the donation.
Later (on day two of his evidence) Ms Dillon again returned to the question of the cheque. Mr Flynn told her to the best of his recollection he received the cheque in Leinster House on May 23rd. Gilmartin had the cheque with him and gave it to him. He looked at it and thought first it was for £5,000. he told Mr Gilmartin there was no need for it.
When he saw it was for £50,000 he said there was “absolutely” no need for it. He asked Gilmartin if it was for the Party and was told that it was for himself. Mr Flynn said there could be no strings attached and Gilmartin agreed. “He thanked me and that was it,” said Mr Flynn.
He added, in reply to further questions, that the cheque was filled in completely. It was made out to cash.
Mr Flynn agreed that he was aware of allegations of corruption against fellow politicians and that there were garda investigations ongoing. He had initiated the investigations. He had no concern about accepting the money, he did not record the receipt of the money and he did not mention it to any of his staff. The only other person who was aware of the cheque was his wife and presumably some person at the bank. Mr Gilmartin was not seeking anything in return and he had no concern about the money.
“I had done nothing for him, he had asked me to do nothing for him and I made it quite clear that it could not benefit him in any way. He agreed and understood the reality of that,” said Mr Flynn.
He told Ms Dillon that he had not written in the word “cash’ on the cheque. The cheque was totally written when he received it.
In reponse to the Chairman, Mr Flynn said, in the same circumstance he would probably do the same again.
Investments
Under examination by Ms Dillon, Mr Flynn told the tribunal that in July ‘93 a withdrawal of £25,000 was made and placed as a deposit on 26 Burley Court. He agreed he had received a political contrinbution of £8,000 from National Toll Roads but ddid not accept that the £8,000 was necessarily part of the money used to place a deposit on 26 Burley Court. There were other monies in the account used for the withdrawal including a gratuity of £36,000 received when he left national politics.
Returning to the (three) external accounts Ms Dillon pointed out that the lodgements amounted to £155,278 and of this the only sums that could be identified was the Gilmartin cheque, the NTR £8000 and £16,226 that related to the sale of sites.
Mr Flynn agreed there were two cash withdrawal of £25,000 from the account that contained the Gilmartin cheque. Other funds had been lodged and the account stood at £71,729.
He said the withdrawals were placed in the home safe and some of it was used to cover election expenses. The expenses included printing, photographic sessions, posters, advertising, erection of hoardings, entertainment, transport, running the office, payment of staff and all the incidentals involved in running a big campaign … and there were the celebrations that ‘went on for a month or two afterwards.”
In documentation provided to the Tribunal Mr Flynn had identified approximate expenditure under a number of headings that came to £13,000. He claimed that no part of the withdrawals (of the £25,000 by 2) was used in the acquisition of ‘real’ property. Some of the funds were utilised in the acquisition of some unit trust investments through National Irish Bank.
Three investments valued at £25,000 were acquired in Nov ‘89 and some of the funds were used in the purchase of the investments. A further investment of £10,000 was made in July ‘90and some of the money for that may have come from the cash withdrawals but some may have come from other monies available to him.
He added that the two cash withdrawals should not be aligned with the £50,000 cheque from Mr Gilmartin. There were other monies in that account as well.
He told the Tribunal that the investments were made through his daughter Beverley. His recollection was that a draft for £25,000 was used to make the investments. He told Judge Keys that “very little” of the Gilmartin money would have been used to fund the investments. he maintained that most of the Gilmartin money was used to fund the election of ‘89.
The lands at Cloonass
In his statement to the Tribunal Mr Flynn had indicated that a portion of an encashment from one of his investments was used in the partial funding of a “forest planting project in North Mayo” in 1997.
He told Ms Dillon this was a reference to the lands at Cloonass, near Lacken, purchased by his wife.
Mr Flynn agreed the maturing of two investments made in 1989 and part funded out of the two £25,000 cash withdrawals and a BES investment resulted in a lodgement in NIB branch Monaghan of £62,388.
Two withdrawals were made from the account, one for £25,000 cash and one for £37,553. The cash withdrawal was made by Beverley Flynn who “he expected” brought the money to Mayo and handed it to him.
The money was spent on the construction of a new road at Carrowbrinnogue, holoidays, presents for families, household furnishings, part payment on a car and general spending.
The second withdrawal for £37,553 was made by way of a draft and was transferred to his wife’s savings account, via the couple’s joint account, and was used in the purchase of approx 100 acres of land at Cloonass. The lands cost in excess of £45,000.
Mr Flynn told the
Tribunal that he had arranged the purchase of the land in his wife’s name and for the payment of a grant to plant the land and for the premium due annually on the trees planted.
Before his wife could qualify for the grant she had to establish that she had an income from farming and this was established from the sale of hay which generated an income in excess of £1,100.
He agreed with Ms Dillon that his wife had “never walked the land.” He said “little if none” of the Gilmartin cheque was used to fund the purchase of the farm. There would be an annual premium of £7,000 for twenty years from the tree planting scheme.
The fourth floor mystery ‘Cabinet’ meeting
Questioned about the “Cabinet meeting” which Tom Gilmartin told the Tribunal took place in Leinster House involving the Taoiseach, Mr Haughey, and a number of cabinet Ministers and after which Mr Gilmartin was approached by a man demanding £5 million, Mr Flynn told the Tribunal he had no recollection of any such meeting taking place.
The fourth or fifth floors on which the meeting was alleged to have taken place consisted of parliamentary party rooms and offices and “to his perfect recollection” no cabinet meeting ever took place in his time on these floors.
He told Ms Dillon he was familiar with the evidence of Mrs O’Rourke and he had no recollection of going to her office and asking her to come to meet with the Taoiseach and Mr Gilmartin. He added that he would have sympathised with Mrs O’Rourke on the death of her mother in the immediate aftermath of the death, not three, four months later.
Later, examined by Mr McGarry, SC for Mrs O’Rourke, Mr Flynn said he accepted that what Mrs O’Rourke had suggested was not that he had sympathised with her but had asked her to come and meet a fellow county man of her mother’s (Mr Gilmartin) and he apologised if he cause any offence to Mrs O’Rourke or upset her in any way.
Mr McGarry added that some of Mr Flynn’s cabinet colleagues who did not recollect the meeting taking place, as suggested by Gilmartin, accepted that Mrs O’Rourke’s recollection of a gathering may have happened.
Mr Flynn responded that such gatherings or meetings as had been suggested were not commonplace and such meetings as did take place took place in the cabinet or sub-cabinet rooms.
“No, to my recollection, this meeting did not take place.”
The function in the Reform Club
Mr Flynn told the Tribunal that he was Treasurer of Fianna Fail at the time (late 1980/early’90). The finances of the Party were “like they have always been, in need of funds.” He was involved in fundraising in so far as he attended some fundraising functions and assisted the national Collection and was involved in draws and golf classics.
He attended a fundraising function in the Reform Club in london. he did not organise the function. That would have been organised and the invitations sent out by the Partry fundraisers.
He told Ms Dillon that he had asked Arlington (Mr Dadley) for a contribution for the Party. he could not recollect asking anyone else for a contribution.
To his recollection the request to Mr Dadley was the first and only time he had asked, person to person, for a political donation for Fianna Fail.
He never suggested to Mr Gilmartin that his “difficulties” might be solved if he made a sustantial contribution to Fianna Fail.
He accepted that a donation of £50,000 would be regarded as a substantial donation to the Party.
His request for a contribution was refused.
The revelation, the phone calls and the redacted notes
A front page story in the Sunday Independent in September 1998 by Jody Corcoran under the headline “Another Fianna Fáil Minister kept £50,000” caused Mr Flynn to find out Tom Gilmartin’s telephone number. While he was not named in the article, Mr Flynn felt the article may have referred to him. He made contact with Mr Gilmartin and spent over two hours talking on the phone with him. He also made a further series of calls that would have gone on for another two hours.
Mr Gilmartin, in evidence, told the Tribunal that the purpose of the Flynn phone calls was to get him to change his story that the £50,000 donation was for Fianna Fáil. Mr Flynn provided the Tribunal with records of the phone calls and a copy of contemporaneous notes taken. The notes were edited by the Tribunal and blanked out in certain places.
Mr Flynn told the Tribunal he got Mr Gilmartin’s Luton phone number through his former colleage Mr Ray McSharry. He contacted Mr Gilmartin to clarify what was his version of the cheque, that it was for him, not Fianna Fáil.
Ms Dillon put to Mr Flynn that his (Flynn’s) notes of the conversation included the following “I (Gilmartin) got out — Lawlor up to dirty tricks time of Arlington.
They all had info. Some senior Fianna Fáil men involved. A fellow of repute involved and some others.”
And on a further page Mr Flynn noted Mr Gilmartin as saying “Sherwin said no money went into Party funds. I complained once to Sean Haughey and he gave to the Garda Fraud Squad. I gave donation to Fianna Fáil party. I never had complaints against planners, I was held to ransom all the way.”
Mr Flynn agreed with Ms Dillon that these notes were his record of what Mr Gilmartin was saying over the phone.
At this stage Mr Bernard Madden, SC for Mr Flynn, pointed out to the Tribunal that the notes were recording what Mr Gilmartin had provided in a statement to the Tribunal. It was not a record of what he was telling Mr Flynn was the situation at the time of the phone call.
Ms Dillon said if that was the situation it clearly was very important and she accepted “it changed the basis of things.”
Ms Dillon then referred to a list of questions that the Sunday Independent had faxed to Mr Flynn in Brussels. Mr Flynn had responded “no” to question four which asked “had I (Mr Flynn) received a contribution for Fianna Fáil”.
Mr Flynn argued that the response he had given “as at four” to other questions were not inaccurate.
Ms Dillon: So, are you saying that what you intended to convey by giving that answer, was that you had received a cheque from Tom Gilmartin but it was not for Fianna Fáil, it was for yourself.
Mr Flynn: I don’t say that at all.
Ms Dillon: No, you don’t Mr Flynn. You make no disclosure of the true position.
Mr Flynn: I make a full and honest disclosure of the questions asked.
Ms Dillon: Did you disclose in answering those (faxed questions) that you had had financial dealings with Mr Gilmartin in May or June of 1989 that enriched you by £50,000?
Mr Flynn: I answered that I had not received any cheque from Mr Gilmartin for Fianna Fáil. That’s the answer I gave and that’s it.
Mr Flynn told Ms Dillon that the purpose of his phone call to Mr Gilmartin was to establish if his understanding of what had gone on between them was correct and Mr Gilmartin confirmed that it was. He added that his notes of the phone call contained an explanation from Mr Gilmartin as to why “matters were being changed.”
He went on to explain that his financial advisers KPMG had suggested to him that he should describe the cheque he received as a £25,000 political donation and £25,000 as a gift in his dealing with the revenue when he approached them in 1998 to settle his tax affairs.
The Revenue rejected that approach and the end result was that he paid tax on the entire amount. He was not happy with the outcome as his contention was that the money was a political donation and not subject to tax.
He added that he had been approached by Fianna Fáil in relation to the cheque and had advised the Party that, as he was “effectively injuncted” by the Tribunal, he could not reply.
“They (tribunal lawyers) advised me, in fact they went further than that, that I should not disclose any matters concerning the Tribunal and that the whole thing was confidential and should be kept as such.
“And until yesterday I have never broken my peace on that, despite provocation and a lot of asking from a lot of people over here (indicating the Press benches). I made it clear it was wrong to breach the confidentiality of the Tribunal and I have suffered somewhat for that.”
On examination by Mr Hugh O’Neill, SC for Mr Gilmartin, Mr Flynn said there was nothing sinister in his decision to take a note of his phone conversations with Mr Gilmartin. He denied that his request to Mr Gilmartin was that he say the £50,000 had been returned.
Mr Flynn emphasised that he had never asked Mr Gilmartin to lie about anything. He said the conversation he had with Mr Gilmartin reflected statements he (Mr Gilmartin) was “told” to tell the Tribunal.
Ms Dillon said the obvious question to flow from Mr Flynn’s response was “who told him (Gilmartin) to say that?”
Replying to Mr O’Neill, Mr Flynn said if he could see the totality of the phone notes he had taken he would see that they covered a wide range of issues … some of them “quite serious.”
Witness was not at liberty to say what these issues were because the Tribunal did not want him to go into them. Mr Gilmartin had recounted an enormous amount of detail “about a lot of things and about a lot of people.”
Following a short adjournment the hearing resumed and Ms Dillon indicated that an unredacted copy of the phone conversations would be given to Mr Flynn so he could refer to them in terms of context but that he should not refer to any party that is not in the redacted notes.
Mr O’Neill declined to examine Mr Flynn further as he would, in effect be “asking questions in the blind.”
He did ask Mr Flynn about his responses to the questions faxed to him by the Sunday Independent and why he felt it necessary to have the conversation with Mr Gilmartin when he (Flynn) was satisfied in his own mind that the money was not for Fianna Fáil.
Mr Flynn said he wanted to confirm that his view of the transaction was a shared one and he (Gilmartin) willingly confirmed that it was. “In the redacted thing (notes) it is quite clear why he had to go a different road,” and he also explained “why other things were being said and why they were being said.”
Mr Flynn added that he ended the telephone conversations at Mr Gilmartin’s request. He said Mr Gilmartin had expressed fear about continuing the phone calls.
* Ms Dillon is to return to the issue of the redacted notes and their contents in re-examination of Mr Flynn on Thursday.
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