The Moriarty Tribunal has detailed how Mr. Haughey reduced his overdraft of 1.2 million pounds to £110,000, in 1980. This afternoon, the Payments to Politicians tribunal heard that in 1976, Mr. Haughey had a heated exchange with AIB officials at which they again demanded the former Minister's chequebook.
According to an official, he became quite vicious and said he would not give up his chequebooks and said, "I have to live". He then went on to say "I am an adult", and he warned, "I can be a very troublesome adversary. By April 1977, Mr. Haughey was over £400,000 in debt.
Earlier, the Tribunal was shown a hand-written note dated June 1979, which said it could provide £400,000 in cash to wipe out Mr. Haughey's debt with AIB, before the end of the year. It also went on to say "plus £10,000 last 6 months", and "Gallagher won't be necessary now". It then referred to what appeared to be a £10 million loan to AIB from the Middle East, with Iraq in brackets. This note also had a footnote that read "end of year crucial in politics".
Another document dated April 1979 showed that Mr. Haughey owed the bank almost 1.2 million pounds and heard how Mr. Haughey was paranoiac about the possible sale of Abbeyville. At another meeting in September 1979, Mr. Haughey when told about further drawings on his account said he found the spending "incredible". When asked by the bank, why there were no lodgements to his stud account, Mr Haughey told the bank that he "snaffled all the stud income himself". At another meeting around the same time, he said that the situation was near to crisis, "that Abbeyville had gone mad."
In the latter part of the afternoon, the Tribunal's senior counsel read out the documents outlining how much of the debt was cleared. These series of documents centred on correspondence between Mr. Haughey himself, his financial advisor Des Traynor, officials of the bank including the Deputy Chief Executive of AIB at the time, Patrick O'Keefe.
The final settlement of the debt to AIB of 1.2 million involved three payments from Guinness and Mahon on behalf of Mr. Haughey of £600,000, £100,000 and £50,000. A debt of honour of £110,000 still remains.
The Tribunal legal team also read a letter from Michael Phelan from AIB dated 11th December 1979, to Mr. Haughey shortly after he became Taoiseach. This letter congratulated the FF leader on becoming Taoiseach and said "to say the least, the task you've taken on is daunting, but I've every faith in your ability to succeed in restoring confidence in this great little nation".
The Tribunal heard this morning that Mr. Haughey told AIB that the bank was not making sufficient use of his influential position. He said he was more than willing to assist the bank in securing more business. In 1976 he said he would be able to sell Rath Stud in North County Dublin to Gallaghers Brothers, Abbeyville for £15,000 an acre. In an internal AIB memo he is quoted as saying that planning permission for the site would be "no problem."
The tribunal has also heard that the AIB threatened to take away Mr. Haughey's cheque book during the 1970s because of his excessive spending. During the first hour of this morning's sitting, counsel for the tribunal has been outlining the extensive correspondence between the AIB and Mr. Haughey over his soaring overdrafts.
In an internal AIB letter from October 1974, the regional manager of the Leinster Region said that Mr. Haughey had abused the confidence and trust of the bank. At one stage the bank threatened to tell Mr. Haughey to take his business elsewhere.
Despite persistent breaches of his overdraft conditions, the bank agreed to extend Mr. Haughey a loan of £350,000 in 1977. This was at a time when five bank accounts belonging to Mr. Haughey were all overdrawn to the tune of around the same amount. The tribunal also heard that Mr. Haughey had large loans from Northern Bank Finance Corporation and the ACC bank.
When asked by AIB to approach ACC for further loans to help pay his AIB debts, Mr. Haughey said he was loath to approach ACC because a senior executive at the bank had affiliations with the Fine Gael party. Despite repeated demands by the bank that Haughey should operate his account in an orthodox fashion, his spending appears to have exceeded all overdraft limits throughout the 1970s.
In a letter to the manager of AIB Dame Street in June 1974, the regional manager of said that the bank was "quite frankly appalled at the manner in which Mr. Haughey went about drawing excessively on his account." Throughout the period Mr. Haughey tried to reassure the bank money was due to him from an insurance claim and the sale of lands and bloodstock at Rath Stud. The tribunal also learned that the bank held the deeds for Inishvickillaun as well as a house and lands at Sligo.