Haughey's Millions – On the Trail of Charlie's Money

The Bestselling Exposé of the Life and Debts of an Irish Taoiseach

Colm Keena

• Publisher: Gill Books
• Year: 2001
• ISBN:
  9780717167494
• Topic: Politique et relations internationales
• Subtopic: Corruption politique et inconduite

Untangle the financial history of Charlie Haughey, Taoiseach and leader of Fianna F&aacuteil, in Haughey's Millions, the must-read, bestselling exposé of one of Ireland's most controversial politicians Colm Keena, acclaimed Irish Times investigative journalist, examines the extraordinary career of Charlie 'the Boss' Haughey, the backbench TD who became Taoiseach (Prime Minister) and left a financial legacy that lingered long after his retirement from political life. As a politician, Haughey made a huge contribution to Irish life: he played a key role in the Northern Ireland peace process and he laid the foundations for the prosperity that arrived with the Celtic Tiger. But Haughey's Millions does not deal with Haughey's political history; instead Keena uncovers the subject that Haughey most wanted to avoid and you'll most want to read: the truth about his money. From elections to tribunal appearances, Haughey dominated the Irish political landscape from the '60s to the '90s and always lived visibly beyond his means. From his princely accommodation in Kinsealy to his penchant for horses, Haughey's extravagant spending made him look like a rich man on a TD's salary. In Haughey's Millions, Keena traces the origins of Haughey's lavish lifestyle back to the '50s and to his early life as a partner in Haughey, Boland & Co. Moving chronologically forward, Keena looks at Haughey's early involvement with Des Traynor and his developing relationships with property developers and other key entrepreneurs and business figures. Keena's investigations take him up to the Moriarty and McCracken tribunals of the mid-'90s, set up to investigate the alleged financial corruption at the heart of Haughey's infamous political reign. Under the microscope of Keena's investigations, Haughey's financial dealings are revealed. In Haughey's Millions, Keena gives you the whole tangled story of a politician who lived like a prince, from beginning to ignominious end.

Haughey's Millions: Table of Contents

Introduction

• Part One: 1925–1987
• A Descendant of Kings
• The Tax Commissioner's Residence
• The Wilderness Years
• Banking Secrets
• Horse Dealers and Hoteliers
• Helping Ciarán
• 
  Part Two: 1987–1992
• Back in Business
• Tralee Again
• A New Disciple
• Money for the Boss
• Brian Lenihan
• Financial Services
• Taxing the Taoiseach
• 
  Part Three: 1992–
• Bowing Out Gracefully
• Helicopters Again
• An Innocent Bystander
• Disclosure
• Endgame
• The Case for the Defence

Part One

1925–1987

1

A Descendant of Kings

IN 1986, during Haughey’s long period as leader of the opposition, a large hard-backed collection of his speeches was published. It was called The Spirit of the Nation, and it was edited by Martin Mansergh, a senior Fianna Fáil party adviser and specialist on Irish-British relations. In his introduction Mansergh wrote: “Charles Haughey’s political career and achievements are unmatched among his contemporaries and he is the outstanding parliamentarian in the independent Ireland of the late 20th century.” Mansergh wrote that Haughey had no input into what was contained in the book other than with the earlier part of the book’s opening biographical note.

That note informed readers that Charles James Haughey was born on 16 September 1925 at “Mountain View”, Castlebar, Co. Mayo, the third of seven children and second son of Seán Haughey, Commandant, 4th Battalion, Western Command, 2nd Brigade, and his wife, Sarah, née McWilliams. Both parents came from Swatragh, Co. Derry, where their families had lived for generations. Descent “can be traced back to the Uí Neill, the Kings of Ulster.” The note continued: “In Irish ‘Haughey’ means a horseman or knight as the Irish version Eochaidh is derived from the word each, meaning a steed. The numerous Ó hEochaidh clan inhabited a wide area of Mid-Ulster and were Kings of Ulidia up to the end of the 12th century. One of the Ó hEochaidh Kings fought and fell with Brian Boru at Clontarf. Haughey’s Fort is part of the Emhain Macha (Navan Fort) site near Armagh.”

Haughey’s father, Seán, was active in the War of Independence in Co. Derry, joined the Free State army upon its establishment, and served as a battalion OC in Ballina and Castlebar. Because of bad health he resigned his commission in March 1928, when aged only twenty-nine years, and settled with his family in Burrow Road, Sutton, Co. Dublin. The following year the family moved to a farm in Dunshaughlin, Co. Meath, and in 1933 moved to 12 Belton Park, Donnycarney. The family there “kept open house for friends and visitors from the North,” according to the biographical note. Seán Haughey suffered from multiple sclerosis, and the family of nine survived on his small army pension. They were poor.

Haughey attended the Christian Brothers’ primary school at Marino and secondary school at Fairview. He was a bright pupil, took first place in the Dublin Corporation Scholarship examinations, and won a scholarship to University College, Dublin. He joined the Local Defence Force in 1940 when he was fifteen years old and transferred to the FCA upon its formation. He studied commerce in university, won a bursary, and graduated with an honours B.Comm in 1946. In college he took an active interest in politics and debating, interests he shared with a contemporary, Garret FitzGerald, who was to be a lifelong political opponent. After graduating he was articled to Michael J. Bourke of Boland, Bourke & Company. In 1948 he won the Institute of Chartered Accountants John Mackie Memorial Prize. He became an associate member of the institute in 1949, and a fellow in 1955. In 1949 he succeeded in the then unusual achievement of being called to the bar while working as an accountant. He was impatient, energetic, and very able.

Haughey had a strong interest in Ireland’s relationship with its nearest neighbour. While still in university he took part in a demonstration outside Trinity College, provoked by the college’s hoisting of a Union Jack to mark VE Day. He was part of a group which pulled down the flag and burned it in front of the college gates, a fact alluded to in the biographical notes which introduce The Spirit of the Nation. When Haughey’s father died in 1947, former IRA comrades provided a guard of honour at the funeral.

That same year Haughey joined Fianna Fáil, signing up for the Tomás Ó Cléirigh Cumann, Dublin North-East, where his friends from St Joseph’s, Marino, George Colley and Harry Boland, were already members. Both his friends’ families were part of the Fianna Fáil establishment. Boland was the son of Gerry Boland TD, Minister for Justice in the period 1932 to 1948. His brother Kevin was to serve in cabinet with Haughey. Colley was the son of Harry Colley TD. Soon after joining the party Haughey was elected secretary of his cumann and then of the Comhairle Dáilcheantair, Dublin North-East. He was an active and valuable party member.

In 1950 Haughey and Harry Boland set up their accountancy practice, a sister of Boland’s who worked as a secretary being the firm’s only employee. The two accountants and party activists had studied commerce together in UCD. Their rented offices at 13 Dame Street were next to the Dame Street branch of the Munster and Leinster bank, now part of AIB. They conducted the firm’s banking in the branch, and Haughey became a valued personal customer.

Haughey Boland & Co. took on its first articled clerk in 1951, a 20-year-old man called John Joseph (Des) Traynor. He was six years younger than Haughey and a little bit shorter in height. The son of a garage owner from Grand Canal Street, Dublin, he was five foot five and already on the way to developing his distinctive double chin. Educated in the Christian Brothers’ school, Westland Row, and later St Mary’s College, Rathmines, he had not attended university and so served a longer apprenticeship than would otherwise have been the case. He was articled to Haughey, and the two men quickly became friends.

The next person to join the firm was Maurice O’Kelly. Like Haughey, O’Kelly was a first-class honours commerce graduate from UCD. He and Traynor shared a room, and Haughey and Boland each had a room of their own. Traynor and O’Kelly became lifelong friends, but O’Kelly and Haughey never hit it off.

In those days articled clerks paid a fee to the firm they were working for. O’Kelly, because he was a university graduate, finished his apprenticeship before Traynor. A sportsman who played rugby and League of Ireland football, O’Kelly developed an interest in venture capital, the funding of businesses in the hope that they would grow and provide a sound return. Soon after completing his time with Haughey Boland he went to work in Hong Kong, where he stayed for a number of years before returning to Dublin and setting up the first venture capital business in the city.

Boland had no particular speciality or area of expertise as an accountant, according to associates. What he liked most was the detailed dogwork rather than the wide picture, preferring tasks such as the sorting out of specific complicated problems to, say, reviewing the overall financial health of a particular enterprise. That said, he was comfortable mixing with big business. He was to be one of the founding members of Taca, the controversial Fianna Fáil fund-raising organisation, and served as secretary of the organisation. He never made the move into full-time politics and spent his career working with the accountancy firm.

Like his partner, Haughey never developed a speciality as an accountant. He was not particularly driven, his all-consuming interests being politics, the debating of political issues, and socialising. He used his combination of interests and talents to bring business to the fledgling accountancy firm. He was expert in what three decades later would be termed networking. This interfacing between the worlds of business and politics was at the core of the growth of the fledgling accountancy firm.

Traynor was smart, discreet, humorous, meticulous, tough, determined, and very interested in money. He worked hard and he prospered. In time he found he enjoyed the challenge and stress that came with deal-making and major business transactions, a combination which, along with his smoking habit, was to have serious repercussions for his health. One of his specialities was taxation, and according to one former associate he was obsessed with devices for lowering people’s liabilities. “He got a thrill out of tax schemes. He loved them.”

Traynor became a partner in Haughey Boland and played a central role in developing the firm into a significant force. In time his business career expanded to include new roles, and as a tax expert and adviser he played an important part in the affairs of some of the largest companies in the State, saving them millions of pounds in Revenue bills. He provided a similar service to the rich and powerful men who owned and ran these companies. When he died in 1994 he was one of the most highly respected “blue chip” businessmen in the State, an expert deal maker and chairman, a rich and able man who had done very well. His reputation has since been destroyed.

Like Traynor, Haughey had an interest in taxation. He believed the greater the amount of profit business people were able to retain, the greater would be their enthusiasm for business activity, a view shared by the clients he introduced to Haughey Boland. The revolutionary generation which had established the Republic were being succeeded by a generation motivated by materialism rather than ideas of independence and moral asceticism. A patriotism which had almost been defined by its anti-materialism was being replaced by a materialism which was clothed, with varying degrees of sincerity, with patriotism. Haughey became the public face of this new, brash and impatient Irish republic.

Less publicly, he and Traynor were together forming the core of a secret “golden circle” which was to exist for the thirty-year span of Haughey’s political career and was itself to form a crucial component of the new Ireland.

Other early employees of Haughey Boland will feature in this book. Jack Stakelum was articled to Haughey and became a very close friend of Traynor’s. He subsequently left the firm and set up Business Enterprises Ltd, a company which provided financial services and which, from the early 1990s, played a key role in the month-to-month administration of Haughey’s finances. Stakelum carried out the liquidation of Abbeyville Ltd, a company used by Haughey when he was buying his estate and mansion in Kinsealy, north Co. Dublin. He also provided other business services to the Haughey family.

Another former employee of Haughey Boland, Sam Field-Corbett, specialised in providing secretarial services to clients, such as establishing companies, presenting documents to the Companies Office on their behalf, and keeping shareholdings on behalf of unidentified beneficial owners. Field-Corbett acted as a director of Larchfield Securities, a company owned by the Haughey children which held a number of the Haughey family assets. On Traynor’s suggestion Field-Corbett left Haughey Boland in the 1970s and established his own secretarial services company, Management Investment Services. Traynor told Field-Corbett he’d send business his way, and proved true to his word.

Another person who will feature in this book, Paul Carty, joined Haughey Boland in 1967 and rose to become a managing partner in 1980. Carty was born in 1940 and attended the O’Connell Christian Brothers’ school in North Richmond Street in Dublin. He became a partner in Deloitte Touche when that company absorbed Haughey Boland in the early 1990s. Carty played a role in the management of the Haughey family’s financial affairs.

In 1951 Haughey stood as a Fianna Fáil candidate for Dublin North-East alongside Oscar Traynor TD, Harry Colley TD, and Eugene Timmons. He was not elected. Two years later he was co-opted onto Dublin Corporation on the death of Senator Michael Colgan, but he lost the seat in the 1955 local elections. In the May 1954 general election he again failed to win a seat.

He stood in April 1956 in a by-election caused by the death of the former Lord Mayor of Dublin Alfie Byrne and again was not successful. In March the following year he was rewarded for his persistence when he was elected in the last general election of the pre-television age. He got 4,168 first-preference votes. His win, however, was at the cost of his friend George Colley’s father, Harry Colley. When the Dáil reconvened after the election Éamon de Valera, then seventy-five years old, was elected Taoiseach for what was to be his last term of office.

Haughey had married Maureen Lemass in 1951. His father-in-law, Seán Lemass, was Minister for Industry and Commerce in the de Valera government. It was a time when morale in the State was particularly low, with boats to England carrying both the economy’s chief export, live cattle, and the most visible sign of the economy’s inadequacy, young emigrants. Lemass was at the forefront of Fianna Fáil’s efforts to jump-start economic life in the State. As Minister for Industry and Commerce he came into contact with many of the business people who were to prosper in the coming decades, people such as the hotelier P. V. Doyle and property developers Matt Gallagher and John Byrne. Haughey, through his relationship with Lemass and his involvement with Fianna Fáil, also got to know these men, some of whom began to use the services of the Haughey Boland firm and, in particular, of Des Traynor.

In his first speech to the Dáil in May 1957, during the budget debate, Haughey concentrated on the need for economic development. What was needed, he said, were industrialists who were making profits and who would in turn make investments in pursuit of further profit. “I should like to put forward the proposition that the trouble with this country is that too many people are making insufficient profits. Too many people are actually making losses. The trouble is not that our bloated industrialists make too much profit but that too few of our industrialists are able to carry on at all.”

He argued that the profit motive would fuel the State’s economic development, and that the State should be ready and willing to support industrialists in their pursuit of profit. It would be of benefit to the State from every point of view, and particularly from the point of view of the weaker sections of the community, if industrialists were put in a position where they could make profits adequate to ensure their continuation in business and their ability to finance further expansion. What was needed, he said, was a “tremendous national crusade” for economic development.

Over the following few years Haughey made a number of unsuccessful proposals for the reduction or elimination of taxes on specific activities in order to stimulate growth, at one stage suggesting, for example, tax exemptions for market gardening in Irish-speaking areas. In a speech on the budget in 1961 Haughey told the Dáil: “Since I have interested myself in economic affairs I have always been aware of the fact that the greatest single stimulus one can give to an economy is to reduce direct taxation.”

Two years after Haughey’s first electoral success, de Valera resigned as Taoiseach and was replaced by Lemass. In May 1960 Haughey was appointed parliamentary secretary to the Minister for Justice, Oscar Traynor.

In offering Haughey the post of parliamentary secretary Lemass said: “As Taoiseach it is my duty to offer you the post of parliamentary secretary, and as your father-in-law I am advising you not to take it.” Lemass must have known that giving this advice was a pointless exercise. Haughey was patently a political animal and had already publicly expressed his desire to become leader of Fianna Fáil within ten years.

He was already showing signs of personal wealth. A year before the offer from Lemass he had moved with his family from their semi-detached house in Raheny to nearby Grangemore. The large Georgian house was on 45 acres and was a long way in size and luxury from his childhood home. As the 1950s came to a close Haughey must have viewed his progress with some satisfaction. The pleasure must have been all the greater for being mixed, as it presumably was, with the conviction that the adventure had only just begun.

2

The Tax Commissioner’s Residence

PEOPLE who knew Haughey in the 1950s say he was such an able young man, so driven and so involved in politics, that they have no doubt he would one day have become Taoiseach, whether or not he’d married Maureen Lemass. Whatever the truth or otherwise of that, there can be little doubt that his marriage put him on the inside track, knocking years off the time it took him to become a recognised contestant for the party leadership.

When he married Maureen Lemass on 18 September 1951, the ceremony was attended not only by her father, Seán Lemass, then Minister for Industry and Commerce, but also by the then Taoiseach, Éamon de Valera. Haughey was just two days past his twenty-sixth birthday. The couple had met at university, where Maureen had, like her husband, read commerce. Haughey had at the time of his marriage established his accoutancy firm with his friend Harry Boland. The young couple moved into 490 Howth Road, a comfortable, middle-class semi-detached house.

During the following ten years the couple had four children: Eimear, born in 1955; Co...