A former group chief executive of AIB has told the Moriarty Tribunal that the bank's decision to effectively write off almost £400,000 of Charles Haughey's debt to the bank in 1979 was motivated by the fact that he was a prominent politian. Gerry Scanlan said the decision was also influenced by Mr Haughey’s earlier threat to the bank that he would be a troublesome adversary. Mr Scanlan has been giving evidence on the manner in which AIB reached a final settlement with Mr Haughey over his £1.14 million debt the month he became Taoiseach. Mr Scanlan said that he believed the board of AIB made the correct decision in the climate of the time and with the information that was available to them.
Mr Scanlan earlier told the tribunal that in the early 1970s Mr Haughey would have been described in the fashionable marketing language of the time as a "KBI" or Key Business Influencer. Any bank would have been happy to have a KBI on its books. He said at the time Mr Haughey was prominent, influential and had all the appearances of being very affluent. But he said his account, which had seemed a dream account, had become a banker's nightmare. He said it was very difficult to control and had been diverting a lot of senior executive time.
Later, Sandra Kells, a director of Guinness and Mahon Bank confirmed to the Moriarty Tribunal that a special account was opened in Guinness and Mahon Bank and was controlled by Des Traynor. The account was opened on the December 11, 1979 just a few days before the key meeting between both sides, which cleared the way for the settlement. The account was closed in the early 1980s. According to Ms Kells it was understood that this account was opened for a short period only and that the £750,000 which was used to clear Mr Haughey's AIB debt came from that account. The first lodgement into the account was on December 11, for £150,000. The second lodgement was on December 16, for £355,000. There were other lodgements in that month for £50,000 and £150,000.
The final lodgement into this account was on February 13, for £80,000. Ms Kells gave evidence that £600,000 was withdrawn from the account on January 18. A second withdrawal occurred on January 31, and the third withdrawal occurred on Feburary 14, 1980 totalling £750,000. This was the total amount paid to AIB to help clear off Mr Haughey's debt. She also gave evidence that of the £35,000 remaining in the account, £30,000 went to Haughey Boland and £5,000 was withdrawn.
The Tribunal has been adjourned until Tuesday week.
