The Moriarty Tribunal has spent the day examining a loan to a company involving Denis Foley and the property developer John Byrne. The two, along with the Clifford brothers of the Brandon Hotel, were involved in buying a ballroom in Ballybunion in the 1970's, however the venture turned out to be unsuccessful. Mr Byrne appeared at the tribunal but denied knowledge of how the loan was secured and paid off.
John Byrne and the Clifford brothers had a highly successful business in the Brandon Hotel in Tralee when they decided to branch out into Ballybunion in 1972. Mr Byrne told the tribunal they asked Denis Foley to get involved and they asked Des Traynor to raise a loan of £70,000, under the name of Central Tourist Holdings. The money was used to buy the Central Hotel in Ballybunion. Mr Traynor got the loan from Guinness and Mahon, and the security was a backing deposit in the Caymans. However, Denis Foley and John Byrne have told the tribunal they know nothing about this.
By 1985 the debt to Guinness and Mahon had grown to £135,000, something that Denis Foley says affected his health. What he did not know was that the loan was in fact paid off with money from Guinness and Mahon Cayman Trust. Mr Byrne told the tribunal that he was a participant in that trust, but that he had no idea where the money to pay off his loan had come from. He said it was all most mysterious and he would be delighted if someone could answer these questions, but he said he could not. The property magnate said that some of the evidence was "double dutch" to him. Mr Byrne also said he had no recollection of signing a cheque for £42,000 in 1986, although he accepts that he did sign it. He has no idea how that money ended up in an account controlled by Des Traynor.
So far, no one can identify the mysterious benefactor who cleared the loan to Guinness and Mahon. In a bizarre move, it was recreated on their books a year later. The tribunal heard how in October 1985 the accounting firm Haughey Boland wrote to Guinness and Mahon requesting details of the Central Tourist Holding loan for the purposes of an audit. That loan had been paid off just over a month earlier with funds from the Cayman Islands. However, the tribunal heard how a fictitious loan for the very same amount of money was created on paper, and details of this non-existent loan were sent to Haughey Boland. Senior counsel for the tribunal, John Coughlan, described the process as "a little ring o' ring o' rosies." A couple of days later this fictitious loan was cleared. The audit was never actually carried out. Paul Carty who worked with the ballrooms' accountants, Haughey Boland, agreed that this process would have resulted in erroneous dealings with the Revenue Commissioners.
At this stage Central Tourist Holdings was in financial difficulties. Money was owed to creditors and the Revenue Commissioners. The company directors paid off this money even though as counsel for the tribunal pointed out they had no personal liability to do so. The debt belonged to the company not the individual directors. Mr Carty said the debts were cleared because it was the honourable thing do and it kept the credibility of the directors intact. Mr Coughlan asked why that sense of moral obligation did not extend to paying off their debt with Guinness and Mahon.
