Haughey 'handed pounds 1.3m to clear debts'

Charles Haughey, the former Irish prime minister, was secretly paid pounds 1.3m by the head of one of Ireland's leading supermarket chains to help meet huge personal debts, a judicial tribunal in Dublin was told yesterday.

The payments, made between 1987 and 1991 according to counsel for the tribunal Denis McCullough, had been traced through accounts in Ulster, London, the Isle of Man, the Cayman Islands and Dublin.

Mr McCullough was summarising evidence to be heard by the tribunal following allegations of extensive payments to politicians by Ben Dunne. Until 1992, he effectively had sole control of his family's clothing and supermarkets group with an annual turnover now close to pounds 1bn.

The revelations led last November to the resignation of transport minister Michael Lowry who received payments estimated by Dunnes at pounds 395,000, partly for work for the stores. But the cash channelled through intermediaries to Mr Haughey, who retired as Taoiseach in January 1992 and from the Dail in November the same year, helps explain one of modern Ireland's great intrigues.

Taoiseach four times between 1979 and 1992, few could fathom how his ministerial salary could sustain his regal lifestyle, large mansion, estate, thoroughbred riding stables and private island with holiday home off the Kerry coast.

The tribunal was also told there would be evidence that besides the payments arranged by Mr Haughey's banker, Des Traynor, and Mr Dunne's company solicitor Noel Fox, three bank drafts with a combined value of pounds 210,000 and made out in fictitious names were handed personally to Mr Haughey by Mr Dunne in 1991.

Mr Traynor, who died in 1994 was both an accountant with Mr Haughey's firm, Haughey Boland, and subsequently head of Guinness Mahon bank in Dublin. The payments began after Mr Traynor, a close friend of Mr Haughey's, had contacted Mr Fox, a key ally who had helped secure Mr Dunne's release after an IRA kidnapping in 1981.

Mr McCullough said Mr Fox was rung by Mr Traynor who said he had "a significant business problem", which he understood to mean that it related to Mr Haughey. Mr Traynor indicated he was attempting to assemble a group of benefactors who would each pay pounds 150,000 towards easing Mr Haughey's debts, then put at pounds 700,000.

Mr Dunne, when informed, suggested it would be better for Mr Haughey if he (Mr Dunne) put up the entire amount to prevent the matter becoming public. Asked by tribunal counsel Michael Collins about the idea of five or six people providing money, Mr Dunne quipped "Jesus Christ had 12 apostles and one of them crucified him."

The tribunal revelations emanate from disclosures of widespread payments to politicians made in legal documents by Mr Dunne during a 1992-93 family dispute that preceded the break-up of the Dunnes Stores controlling trust.

Mr Dunne's brothers and sisters bought out his share of the company for a reported sum of pounds 150m after an embarrassing scandal in which Mr Dunne tried to jump from an Orlando hotel balcony after a drink and cocaine session with a call-girl.

After Mr Dunne left the firm, letters were sent to Mr Haughey by Dunnes' lawyers when - under new management - the company sought return of its money, the tribunal was told. Mr Haughey wrote in reply denying he received funds from either Dunnes or a related company and insisting he had not benefited from any improper payments.

The hearing is expected to continue for several weeks.