Committee Reports > List of Committees > Dáil > 1971 > Committee of Public Accounts > Final Report - Northern Ireland Relief Expenditure

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Dé Céadaoin, 10 Feabhra, 1971

Wednesday, 10th February, 1971

The Committee met at 11.10 a.m.

DEPUTY P. HOGAN in the chair.

ORDER OF DÁIL OF 1st DECEMBER, 1970.

Mr. E. F. Suttle (An t-Ard-Reachtaire Cuntas agus Ciste) was in attendance in an advisory capacity.

Chairman: I call Captain Kelly.

Examination of Captain James J. Kelly continued.

6411. Deputy Keating.—Last night, when I had asked if you could show us evidence that you were acting under the instruction of the Government in relation to the arms, we had separated Intelligence from liaison from arms— three distinct things. You were somewhere in the midst of a fairly length reply when time ran out. Would you like to pick it up? Can I ask you again—because you know I have a lot of things to cover and so have other people, you have been here a lot—to do it as briefly as possible?

—I will try to be brief. Actually, as I had said, it is related to the Intelligence operation and I came to the point last night where I was talking about this suggestion of Chief Superintendent Fleming’s about Pádraig Haughey being in London in November.

6412. I recall that I said that you were not tied to that bit of it and the Committee, in its methodical way, will come to that in due course. If it does not relate to your authorisation, I suggest that you leave that point.

—I think it does.

6413. All right, you be the judge, but we certainly do not want to prolong this. It is up to you to decide whether you think a thing is relevant or not.

—It is also related to the whole operation and apart from that it is something I did not even bring out in the court for reasons, as I thought, of State security. But because it was introduced yesterday, I think it must come out. What happened here was—and I will say this briefly and you can ask questions afterwards— that I found out that there were two people in London at a certain stage and they had been brought to London on the initiative of certain people. I never really got to the back of whose initiative it was. On the second day, I think, when they were in London——

6414. Are we talking about November, 1969?

—Yes. This is what I understand the Chief Superintendent mentioned. On the second day they were in London, Pádraig Haughey came back here to me and told me what had taken place. It seems some approach had been made to the Northern people that there would be arms available in London. The Northern people were very chary of this and in grave doubt about it, but one decided that he should go and Pádraig Haughey went along with him. As I say, he came back after two days and told me that this Northern fellow was in London and that the Northern fellow suspected—as a matter of fact, at that stage he knew—that this was a plant and that from the time they had arrived in London they had been followed by various members of, I suppose, the British Secret Service; they had been photographed, three or four people, including a woman, followed them with radios, and that kind of thing. I sat tight until the following day then the Northern fellow came back and I made it my business to see him and ask what was going on. He told me the story again and went through it in greater detail. What he did then was this. He rang the man in London and brought him over here to Dublin, and he arrived at the Gresham Hotel that night. This Northern man got in touch and negotiated for about three days with the man from Britain and at the end of three days he was convinced that this man was a British agent. What it boiled down to was that in the end the Northern lad more or less set a trap for this fellow and this man responded and offered money and a bribe to the Northern people to get information on what was going on in Ireland generally, on the activities in the North; there were all sorts of things that he wanted to see—camps, training, and so on. And he was going to do the devil and all to get it. At this stage the Northern fellow broke off negotiations and told me what had taken place, and I went and reported this to the authorities, to Colonel Hefferon.

Inquiries were initiated in this matter to the police and the first word I got back was that this man was—I suppose a gangster would be the way to describe him—one of those people who is on the make and is willing to involve himself in shady deals and make money, and so on and so forth. But later I learned that a full file on this had come to the police here, which they got some time in February, including photographs of the people involved, and these photographs were all there, this information was there, and at that stage nothing was done about it. As far as I was concerned this was just a very funny situation. How it operated one does not know; one can just come to conclusions; but it was known to the police and they had got the information from British sources about it and Chief Superintendent Fleming was not finishing off what he was saying yesterday at all on this. This is where the money was coming in. The first money spent was spent on this operation— that is, this operation in England—and there was from £1,600 to £2,000 spent at that stage, to my knowledge.

6415. Yes, but I think that this does not really relate to the question as to whether you can show us evidence that you were acting under Government instructions or under the instructions of your own Chief, or under whose instructions, in relation to arms.

—I reported this to my Chief and the purpose was for it to be reported to the Garda authorities, and it was reported to the Garda authorities, from me. This was investigated again and I reported to the authorities concerned and had inquiries initiated about it to try and find out exactly what the background to it was.

6416. I do not propose to pursue this now, but perhaps I could ask you if you have seen this morning’s Irish Times. There is an article by Dick Walsh, a reputable journalist.

—No, I did not read it.

6417. He sets out names and various details. It is substantially as you tell it, and as you now tell it this is a matter of public knowledge. I do not propose to ask you any more about it at this stage at all, Captain Kelly. I should like to go on to the Bailieboro meeting because you have said, and I think with considerable substance, that the whole set of ideas originated at that meeting.

—Yes.

6418. Could I ask you, in relation to it, was the request for training and for arms a request that came clearly from that meeting?

—It came very clearly from this meeting and what emerged from the meeting after long discussion was that these people wanted arms purely for defensive purposes. This was something they were very insistent upon, that this message be got across, and also what they wanted first of all was the training that had been discontinued to be re-initiated, because they believed that people should be trained before the arms were handed out. Also, at this meeting the question of money arose. These people said they had money available and I gave a written report on this meeting and I reported all this. This comes back to the question, once again, of authority, I think, that these people had money was reported at this stage and this meeting was reported to the Minister, as far as I know. This is the meeting that caused the controversy at this stage.

6419. Would you have any reason to think that within a matter of weeks of this meeting its content was reported to the Taoiseach?

—I firmly believe, I have every reason to believe, that it was, because I was queried on this and I think someone else mentioned it here after it got into the papers, a complaint regarding Captain Kelly’s activities. The complaint was, as it came to me from Colonel Hefferon, that the Minister for Defence had gone to him saying that the Taoiseach had approached him on information he got from Mr. Berry as regards this meeting and the general content of what Colonel Hefferon told me; and Colonel Hefferon having already known what had taken place, he gave me a rough summary of what had come from Mr. Gibbons on this occasion and really the only way one could describe it was as a cock-and-bull story concerning the meeting. It was said I had money on a table, or threw money across a table—it sounds ridiculous here—and that drink was being thrown around, I believe, and that Captain Kelly was trying to do something to talk these people into doing something they did not want to do, whilst in fact it had been a detailed discussion of various items. The point I would like to make, and I have made it before, is that there is no question or doubt that the authorities knew about this meeting, and this is one of the matters that was denied in the Four Courts, because, as I say, it is the genesis of the whole thing.

6420. You were certainly made aware of a version of the meeting which you have said a number of times here did not correspond to the true nature of the meeting?

—Yes.

6421. Were you made aware of any reaction on the part of the Government to the request both for arms and for training?

—The only thing is that later on, when I met Mr. Gibbons, this meeting came up for discussion. He brought it up on at least two, or probably more, occasions. The general attitude of Mr. Gibbons was that these people in Justice did not know what they were talking about, and also—what is apparent to me from the tone of the conversation—that the Taoiseach was aware of what was going on. That was my belief from talking to him.

6422. I should like to refer for a moment to my own experience at this period of October 1969, although I am not giving evidence, because—as a working politician—I was to some extent being approached by people from the North. They were talking about the situation. My experience at that time was—although indeed there was no reason why they should ever tell me, and they did not—that they hinted that the request for arms was not being rejected and in fact was being received not explicitly with support but at least with approval by the Government?

—When would this be?

6423. This would be even starting in August, September, October 1969.

—True. No deputations were coming down here. I had no dealings with deputations at that time, but from talking to them, in much the same way as you, I gathered the same thing from them.

6424. Both you and I at this stage are talking about an impression that we gathered in conversation?

—Yes.

6425. That is a distinct thing from being able to show that the Government made promises to them. It is being charged that the Government made promises to them. Our belief or our hunch has nothing to do with it. We have to be able to show this. Is there any way you can show that the Government made promises?

—This operation went on from last August until January. Once again this argument has come up several times and maybe I am skipping slightly on this. You can press me on it later if necessary. It became a concrete proposal more or less some time in January. It was reported to Colonel Hefferon and it was put to the Government. At that stage I made it my business to find out what these deputations were actually saying to Government Ministers because I thought it was getting important and serious. We were getting down to concrete facts at this stage, which we had not been previously. I know that it was in the middle of February. I gave in the High Court the 14th of February 1970 as the date of this. It was around that date. I learned afterwards that it was not the 14th but that it might have been the 16th. On that occasion a deputation came to meet the Taoiseach. They were interviewed by the Taoiseach. When they had finished their interview with the Taoiseach they met me in the pub on the corner of Merrion Square and they told me exactly what took place. They quite emphatically told me that they had asked for arms and ammunition to be made available to them. They said the reply they got was at one stage—there were two meetings with the Taoiseach and another in March—that he would have to have time to think about it. The reply at another stage was that it would be put to their Cabinet colleagues. Whether that was the February reply—I think it was—I do not know. But that took place. I was briefed on this at that particular time. At the same time I was at home one night and I got a ring from a hotel down town. I went down town to meet two very influential people from Northern Ireland who had come down more or less separately on their own initiative and who had made the arrangements themselves by ringing the Taoiseach’s secretary to get an appointment with the Taoiseach. It seems that the Taoiseach was engaged on something else but went to the trouble of arranging for the Minister for External Affairs to meet them. These people met the Minister for External Affairs, I think, in Iveagh House. They called me down to the hotel and told me what had taken place. Once again they were asking for arms and ammunition and were quite happy that they were going to get it if the situation ever occurred that they were under attack. Those were two cases. But there was another case on 3rd March when a deputation came again and went to the Taoiseach. Once again they put questions concerning arms and ammunition to him. There was no unequivocal refusal. This is the point that has been discussed. So far as those people from Northern Ireland were concerned, the message they got was that it would be referred to Cabinet colleagues. Furthermore, when this case “broke,” I made it my business to contact these people and I got very definite evidence from them as to what was said, and I went through it with them. Actually I have said this in public previously and I will say it here now. At one of the meetings, which was a February meeting, it was even put to the delegation as to whether it would be satisfied if the Stormont Government fell and Westminster took over. The reply made by one of the delegates was that this was a political matter which was not really their concern but they would naturally be quite pleased about it, or words to that effect. The question of gas masks came up. They were told that this was probably humanitarian and so on. On the question of arms and ammunition they were told “I need time to think about this type of thing” or it may have been at this stage he said that it would be referred to his Cabinet colleagues.

6426. Captain Kelly, I appreciate the significance of this. I appreciate, as you tell it, that far from being instructions to stop, as far as I would be concerned I would—in your position —look on it as authorisation or validation, because at any moment people could have said “That is enough; hold off; drop it.” I see the significance of it so far as the question of authority is concerned. But looking at it from my point of view, you—as someone who has been charged with being an interested party— have a reason to say this. I am not doubting that. We are extremely unwilling to call people from Northern Ireland. We are very cautious about doing so. Although I cannot speak for the Committee I personally should like to do so. I think you could communicate this to the Committee privately and we would enter into our own discussion about what mechanism we should adopt to guarantee complete security. But I would very much wish that perhaps one or two significant people from these delegations should have the chance to come to talk to us and to testify to us directly. For that reason I appreciate that there are risks. That is something we all appreciate. But there are major issues at stake. In fact they owe it—not necessarily to you—to people here who are taking risks.

—Yes.

6427. I should like, if you have suggestions about this, the Committee either to validate or fail to validate them. The Committee would go into the matter with the people who spoke to the Ministers. Do you have suggestions?

—A man approached me last week with the suggestion that he would come down here and he was suggesting making a public announcement concerning this thing. I said to him “no”, that he was not to do it. But I can contact this man and it is quite possible that he might. I will not guarantee it. He might be willing to talk to you in private but it would have to be very secret because, in the situation that exists, it is very important. He suggested that to me last week and he might be willing.

6428. We are now in public session. I think we might pursue it in private, for reasons which are obvious?

—It might be as well. At the same time there are aspects which have come out in this Committee. I would want what came out yesterday to be discussed in public completely because I know that a lot of the stuff which came out here yesterday morning was untrue. A lot of it was missing and some of it was untrue.

6429. But I am simply suggesting—I do not propose to go into private session now—that we can pursue the mechanics of doing this and we can perhaps have suggestions about who it should be and that?

—Actually, the mechanics would be very simple. I would have to see this man and ask him.

6430. Yes. Can we leave that for the moment because I think we will have to come back to it? We will have to hear these people if they will come and talk to us. Can I ask you about bank accounts? The first hard date we have is the opening of the Clones account on October the 9th with a Red Cross cheque?

—Yes.

6431. Now, it was at this time, as far as the Committee knows, that the whole matter of bank accounts and payments began to be structured and to be channelled through the Red Cross, the cover of the Red Cross began to get off the ground, but we have no reason either to believe or disbelieve at this moment that this was the start of everything. It was, after all, almost two months after the Bogside started. It was certainly eight weeks afterwards. Have you any knowledge of any earlier bank account?

—As far as I know there was no—I know of no bank account earlier than that.

6432. To be more specific, do you know of any Dundalk bank account?

—No, I heard of no Dundalk bank account.

6433. So that as far as you know this is the first?

—This is my first knowledge and the first time I became aware of money at all was when this Clones account was opened.

6434. I see. I said to you earlier I did not propose to pursue at this time the details of the transaction in London that involved instructing the National Provincial Bank in London that £11,450 should be made available to Dixon and the rest of it but I would like to ask you just this: It would have been about the 19th of November or sometime like that, that approximate date, and on that date Pádraig Haughey came back from London to Dublin as the thing was going sour and he talked to you then. Now, you know, that is mid-November. It is not February or any time like that?

—No.

6435. How did he know to talk to you then? Why should Pádraig Haughey have approached you then?

—Well, I knew the Northern fellow who was there also, you see, and he had told me the night before they left about this thing, you see.

6436. The man from the North had told you?

—The man from the North had told me and also actually I had met Pádraig Haughey on the night before and actually I had told him not to go at all, nothing got to do with it, not for any grave reason but just he should not have anything got to do with it.

6437. Yes, but you see the significance of this, Captain Kelly, is that we are now concerned with efforts to purchase arms not in February but in November?

—The point is that the Northern fellow at this stage felt, and this was his own feeling and it certainly was my feeling also, that there was no question of purchasing arms in England and I think he was going and I knew this because these people told me these things in confidence, so I knew these things and he felt that he was just going to see and actually he went under the impression that it was a plant and he wanted to find out. That is as simple as that and he was completely aware and alert when he arrived in London and that is why he found out what he did and it was an exercise carried out by him just to try and undermine this situation in England.

6438. Yes. Could I turn to the Voice of the North now? Firstly, let me put as background to it that I can understand people in the North who have money arranging a switch for arms?

—Yes.

6439. The other point I will make is that we have been talking, you have been talking and I have been accepting it, about the Northern people as if they were all the same in political outlook, in their attitude to force and all these things. Of course we both know that they are very far from being all the same. There are very many different opinions.

—There are many differences but there is a connecting link.

6440. Indeed, there is a basic similarity, a basic unity. Nonetheless you also know that in regard to the Voice of the North there would be the most profound and sharp differences among them and that a very large number of people inside the North were deeply hostile to it from the first moment that it appeared until it ceased publication?

—Yes.

6441. Now, the production outside the Six Counties of a paper that did not represent all the points of view of the minority in the North but that did represent very strongly a particular strand in that point of view cannot by any stretch of the imagination be described as for the relief of distress on the one hand or for the production of arms, for the supply of arms for defence on the other hand and yet there is six and a half thousand pounds or almost, not quite, certainly well over £5,000 involved in this so that, in a totally different way, not the question of arms but in a totally different way, the question of propriety of expenditure of funds comes up in regard to the Voice of the North?

—Yes.

6442. In fact this time it is not the provision of arms. This time it is the making of party political propaganda with public funds?

—Yes.

6443. Can you tell me something about the chain of decisions that led to the establishment of the Voice of the North? From what I have said it will already be clear to you that I am reluctant to believe that it was requested with any degree of unanimity by people inside the Six Counties.

—Yes.

6444. Where did the original suggestion come from that the Voice of the North be established, in your knowledge?

—My knowledge on this is not first hand by any manner or means and——

6445. Can I say to you, Captain Kelly, with respect, that has not always restricted people from uttering things in this room.

—I know. I know quite well.

6446. So that you might feel free to do the same if you wished?

—The point I think is this and I am not avoiding your question at all but I think that you have a man coming before you, he will give you the exact facts of the case and I think it is fair to leave it to him.

6447. All right. I will accept that in regard to the chain of decisions leading to the establishment of the paper. Let us turn on to the matter of the moneys because this is a place you do have direct knowledge?

—Well, the people in the North said they wanted this paper.

6448. I have already indicated that you may tell me that if you wish but that I will be, I should not perhaps be as explicit as this, but I cannot accept the formulation that the people in the North said it. That certain people in the North said it perhaps but that the people in the North as a whole said it conflicts with my knowledge of the situation.

—Well, there were various—I remember at one stage, for instance, to get down to brass tacks, there was an argument. For instance the United Irishman was banned in the North and some people up there felt that they should have another paper and I do not know what way they expected the paper to run when it was established.

6449. But you also know that though it is banned it is rather widely distributed?

—I know this.

6450. So it could not be justified on the basis that no such paper was getting through?

—Also you get into this dispute that they have up there between one group and another sort of thing and I kept removed from this thing completely. My attitude to the people in the North was that they would all be in the same boat if this doomsday situation they talked about arose and that their interest as people in the North was to pull together and stay together type of thing and, as regards this paper, I think it has its origins down here; that is as far as I will go on it and that once these origins took place or once it started there were people in the North who wanted it kept going and they were willing to finance it and I passed on the money to the person who was assisting at it.

6451. I accept that formulation of the situation. We will come back to it in more detail later on. I wanted to ask you about events which were described, if I can find my reference, by Mr. Fagan in regard to the shuffling of an account for payment of the Voice of the North between Mr. Haughey and the Taoiseach. I have found the reference. I can give it to you because you will probably not have the volume of our proceedings. It is Volume 5, page 203. Let me look that up. Page 203. It is Question 2785. Perhaps Captain Kelly could have a copy. Actually, it is page 202, in the second column, at the top of the column. Mr. Fagan said “May I continue answering?” Then he goes on “I was aware from the previous autumn that there was a connection between Seamus Brady and Captain Kelly”. He goes on about this bill: “The account was addressed to the Director of the Government Information Bureau” “The cost of publishing a publication ‘Voice of the North’,” and again, “To ask somebody in the Taoiseach’s office could it be paid”, and then further on down in Mr. Fagan’s evidence “I then discussed with an officer in the Department of the Taoiseach what might be done about it and they told me, I think some days later that they had discussed it with the Taoiseach and the Taoiseach had definitely ruled that this was not a matter for payment out of Government funds,” and then it was on Mr. Haughey’s desk, and Mr. Haughey said “This has been looked after”.

—Yes.

6452/3. Was the looking after, in fact, through the Ann O’Brien account?

—It would be, yes. This was the money which was transferred.

6454. What was the amount of this particular account?

—The Ann O’Brien account?

6455. No. The particular account we are referring to on this occasion to pay for the Voice of the North. Could we find a cheque which related to it?

—The Voice of the North—we are talking about the Voice of the North.

6456. We are talking abou the Voice of the North and the Ann O’Brien account, but this presumably would have been dealt with, this particular account which was shown to the Taoiseach, returned by the Taoiseach to Mr. Haughey, would there be a particular cheque in the Ann O’Brien account? Have you got a set of the accounts?

—No. There was no cheque initially paid in the Ann O’Brien account. It was money that was paid—cash.

6457. Do you remember how much this was? The two first drawings on the 19th and 28th November are cash for £1,000 and cash for £600. Do you know which of those it was?

—Precisely I cannot say. There was £650 paid at one stage. This would have come out of the £1,000.

6458. We are talking about mid-November, anyway.

—I think it was £600 paid then. The figure is over £5,000.

6459. It is altogether, and it is only in two ways—there is either cash or Seamus Brady on the cheques.

—What happened to this account was that it was primarily for the Voice of the North and for what one might call miscellaneous expenses. I know that £600 of this went back to the North at one stage. The rest was used for expenses. It was not enough really.

6460. Tell me the mechanism. Here was an account—possibly a bill actually. Was it a printer s bill from a particular newspaper for printing Voice of the North?

—At a certain stage it arose that this Voice of the North was being printed and however the approach was made through the people in the North, I don’t know. They suggested that this should be paid for and that they wanted to pay for it.

6461. That is O.K. I am concerned with the mechanism. Was it that Mr. Haughey, as Minister for Finance then, said to you “Can you arrange payment of this through an existing account?”

—I could not say he said those words.

6462. We will not worry about the words. I obviously do not know the words either. I am just indicating the sense.

—There must have been some discussion. It may have been mentioned at one stage.

6463. Did he raise with you in mid-November the question of paying this account? I am trying to put you into the chain. From Séamus Brady it went to Owen Neeson in the Government Information Bureau and from Neeson it went up the line to the Taoiseach who said “No”. It went across to the Department of Finance to Mr. Haughey. You have not appeared in the chain.

—I think Séamus Brady dealt with Mr. Haughey himself. I would have said the Northern fellows are paying for this certainly if I was asked for by Mr. Haughey at this stage.

6464. Perhaps you are aware of the point I am trying to get at.

—I would like to be able——

6465. Let me be explicit. Here is some money that is needed. It cannot be paid, according to the Taoiseach’s decision, out of any normally available Government funds. Fagan knows that it is there on the table of the Minister for Finance and after a while he raises it with him again and the Minister for Finance says that has been dealt with and Mr. Fagan drops it. It had been dealt with out of funds which you, I would not say had under your control—perhaps that might not be exactly the right phrase—but which you were administering at that time. How did the Minister for Finance understand that those funds were there and how did he tell you to use them?

—I must have told him.

6466. That account was set up on 14th November?

—Yes.

6467. We see that substantially all of it was used, let us say eighty per cent odd was used for the Voice of the North?

—Yes.

6468. Would the inference be correct therefore that it was set up for the purpose of financing the Voice of the North? Was that the object or was it just set up to have another account and then used for that purpose?

—At this stage that is my recollection that it was. I always looked upon it as the Voice of the North account.

6469. O.K. then. Whether the decision that this account should be set up to look after the Voice of the North was taken in part or in whole by the then Minister for Finance, is that something you know or do not know? Do you know who took the decision?

—That is something I could not say.

6470. Am I correct in understanding you to tell us that by the time the first cheque to cash was drawn for £1,000 on the 19th November that the Minister then knew of its existence even if he was not the person who took then decision initially?

—He would have known that Northern people were going to finance this.

6471. Would he have known more than that? Would he have known the mechanism?

—What I have said—I do not recollect telling him this, but he must have known.

6472. A mechanism was adopted of setting up an account in Clones with three names and then of moving the funds in it to Dublin. All of that was done in October and November of 1969.

—Yes.

6473. It was presented that before the two subsidiary accounts were set up that when the Clones account was set up it was simply done as a mechanism to channel funds for distress to Northern Ireland?

—That is my understanding, yes.

6474. Its purpose was changed after that? The switch was thought up after that.

—The idea cropped up.

6475. This is a version of the event. I have asked myself this question which I will repeat first and then ask you to comment on: if the object was simply to get £100,000 for relief of distress to the North of Ireland why was not a more open mechanism used, in other words why not set up a committee of two or three people in the North who were completely well-known, whose position in the minority community was absolutely clear, if necessary get one well-known public figure from another community, and give the money to them openely and say “There is £100,000. Distribute it”. If the purpose was just to deliver relief moneys why was not that mechanism used? Why bring the Red Cross into it? Why, in my opinion, tarnish the Red Cross and have this whole sub rosa mechanism? In other words the question is, was this not conceived as a mechanism for covering other activities at the very moment when it was started, at the beginning of October?

—No, because at the beginning of October it was, if I may use the expression, aboveboard.

6476. Are you sure it was aboveboard, because my point is that if it was aboveboard it was a very funny mechanism. If I were to think of an aboveboard mechanism for channelling relief funds I would do it much more openly.

—I only know that the committee was set up and the three representatives signed their right names and opened the account. As regards the Clones account I had no real association with it at all. I knew it was there but it was when this matter came up in November that the change took place, for security purposes—that was the reason given.

6477. I am just ventilating these thoughts and seeing what you have to say about them. I do not have any comments on that. You have made clear—indeed the judge in October made it clear—that the directive of 6th February was of very central importance, and I accept that. You have told us some of the things that you recall being in it. Before asking you about it again I would like to quote to you a letter of 2nd February from the Chief of Straff, Lieutenant General Seán Mac Eoin, to the Chairman of our Committee. This letter was in reply to our request for a copy of the 6th February 1970 directive. He says in reply:

I should inform you that I have been directed by the Minister for Defence to claim privilege in regard to the directive of 6th February 1970.

And then the last paragraph of the letter says:

For the information of the Committee I should also say that none of the matters covered by the directive is in any way relevant to the expenditure of the Grant-in-Aid or any funds the subject matter of the inquiry. The directive gave no authority whatever, direct or indirect, to the Department of Defence or to any other body, officer or person to purchase, procure or acquire arms or equipment.

I have read that at length and it is fairly explicit.

—I understand what is said there in general terms.

6478. You may also be aware that the Committee has requested repeatedly to see the 6th February directive. You are possibly not aware but I think I am entitled to say publicly that we have offered every possible guarantee in regard to the 6th February directive that we will not publish it if that is considered contrary to national security. We have also given a guarantee that, individually or collectively, we will not reveal its contents. We have repeatedly asked to read it, and that has been refused to us. I have conclusions I must say, about that refusal, and others may have also, but I do not propose to utter them here. It is therefore important that we should hear again, firstly, exactly the circumstances in which you became aware that it existed and, secondly, to the best of your ability your recollection of its contents, because the judge said it was central and you have said it was central. You have given some indication of what you recall as being in it. The Chief of Staff says as explicitly as anybody could that it has nothing to do with us. Tell us, firstly, how you came to know the directive existed?

—Some days after it was issued——

6479. 8th or 10th February?

—About that, say the second day afterwards.

6480. Within a few days of 6th February?

—Yes. Colonel Hefferon told me, but without any precise details, what was in it, that there were preparations under way——

6481. OK. I will ask you that later. If he told you what was in it, he told you there was a directive?

—Yes.

6482. Did he tell you from whom it came and to whom it went?

—This is my recollection—I got rather mixed up about it in court—but my understanding was that it was a directive from the Government given by the Minister for Defence, a verbal directive to the Chief of Staff.

6483. I was just going to get that in. We want to be clear. Date 6th February, source Government, person who transmitted it Minister for Defence, recipient Chief of Staff. Do you know whether it was transmitted verbally by Mr. Gibbons to Lieutenant General Seán Mac Eoin?

—I do not.

6484. You do not know who was in the Minister s office?

—No, I do not know.

6485. You have indicated and Colonel Hefferon has too that he, as Chief of Intelligence, was there?

—Yes.

6486. Do you know anybody else who was there?

—No.

6487. Have you any reason to think there were more than three people in the room?

—No.

6488. The point is, is there anybody else we can call and ask what he remembers about it? Lieutenant General Seán Mac Eoin would not tell us. Colonel Hefferon would not. But somebody else might?

—There might have been some staff officers, they would be the most likely people to be there.

6489. On the other hand, you will appreciate that if General Mac Eoin says he will not tell us we are not likely to hear it from another Army officer. Is there anybody else you can think of?

—No, not at the moment anyhow.

6490. I am clear on those subjects. So Colonel Hefferon heard about it at the time it was issued with his own ears and then, two or three days but at the outside four days later, he told you. So you are only once removed from the uttering by the Minister for Defence? You heard it through only one intermediary, Colonel Hefferon?

—The reason Colonel Hefferon told me was on account of this, then possible, proposed importation of arms. He saw it as being the formal background to it.

6491. In fact he said in his evidence that in the light of the directive of 6th February—I will not waste time looking up his exact words —these things took on a new aspect.

—Yes.

6492. Well, having clarified the circumstances, can I now ask you what, to the best of your recollection, it said? It fell into a number of parts. You have said this before in a rather spread-out and scattered way. Would you now say it again?

—To the best of my recollection it was a verbal directive given to the Chief of Staff. I do not know the exact wording. I think Colonel Hefferon probably has a better idea. Generally the point was that preparations were to be made to move into Northern Ireland when and if the Government considered it necessary. The plans that were evolved out of this came to the following: first, to prepare for incursions into Northern Ireland; second, surplus arms to be made available; and third, gas masks to be made available. It seems that some of the people were worried about these surplus arms. There was some comment that this was the most important directive since the formation of the State—somebody said this to Colonel Hefferon. I think the question of surplus arms was referred back to the Minister and he clarified it completely and said that these arms were to be made available immediately.

6493. I would like to come in there with this question. There is a very clear distinction between the planning for eventualities, which only involves sheets of paper, one might say, and thoughts about what you will do, and actions, on the other hand.

—Yes.

6494. I seem to recollect, though I cannot say exactly where, that it has been suggested to us in this Committee, that this directive was purely concerned with the former activity, with the planning of what you would do in circumstances (a), (b), (c) et cetera and that no actual physical actions were taken or were to be taken, or it was understood would be taken, in connection with it and, therefore, the physical actions in regard to arms that you were carrying out were not covered by it. Do you know of any other physical actions, as distinct from the making of plans, which were taken under this directive, apart from the actions that you took?

—No, I do not know; and it would not be in my field at all.

6495. Do you know of any movements of arms that took place under this heading?

—Yes, 500 rifles were moved up to Dundalk.

6496. Are you sure that that movement of arms was taken under the heading of this directive?

—There was no other conceivable reason or purpose in sending them to Dundalk.

6497. Had you any part in that movement?

—No, I was on the Continent, but my Director instructed me to come back.

6498. If I understand it correctly, this was a physical action, the movement of arms, taken under this directive by somebody other than yourself?

—That is correct, by the Minister.

6499. Yes.

—Under the Minister’s directive. Another small point. I will not take issue with you but, you see, when a directive is prepared for incursions into Northern Ireland, that is not preparing. This distinction has been made and I want to make this point. For instance, if you go back to last August, I think it is common knowledge that there was a possibility that the Army would have been asked to march into Derry and this was certainly at the back of my mind and knowledge, and I think at the back of Colonel Hefferon’s mind. This arose again and no preparations had been made in the meantime, but everyone could he held responsible for it—neglect of duty, in effect.

6500. I take that point entirely. I wanted to get those matters clarified. You have said in regard to the authorisation for the importation of arms—we were on this last night again—I think in reply to Deputy Gibbons, that no documentary authorisation was necessary from the Minister for Defence; that there was a record kept by two officers, in a book, of imports?

—That is right.

6501. That this was the mechanism and that whatever the statutory situation this did not necessarily imply that the Minister for Defence had to sign a document of authorisation in respect of each batch of arms?

—Yes.

6502. This is something you would be in a position to know, and I have no reason to doubt your presentation or that it is entirely correct but, that being so, the question I ask myself is, why was the approach for authorisation made to the Minister for Finance at all? If there was need for a document from the Minister for Defence, why explore an alternative channel?

—The point is this. When it seemed that the arms were coming in on the 25th of May I discussed with Colonel Hefferon what was the best way of receiving these arms and I put the suggestion——

6503. I am sorry for breaking in, but a question arises here. You discussed with Colonel Hefferon the best method of bringing them in?

—Yes.

6504. But is not, therefore on the 25th March, the inevitable implication of what you say that Colonel Hefferon was then doing more than simply being aware of the facts and looking on this as an Intelligence operation, to the extent that he was head of Intelligence and a person with the power of decision, that he was facilitating you in this work, freeing you for it, and therefore in the sense that you present it he was participating in the importation of arms? I mean, if you were discussing with him the best way to do it and he was saying it would be better to do it not in this way but in some other way I can only interpret it as participation?

—This has been my argument all along, that everything I did was discussed with higher authority and discussed in this way and talked about and no decision was taken by myself without discussing it with either Colonel Hefferon or the Minister.

6505. I wanted to bring this out again with absolute clarity, because it arises about this particular issue very clearly. This was in November. It was already late March, well into the whole set of events. Let us go back to the basic thing as to why the decision was taken, whether by Colonel Hefferon or yourself or by both of you in conversation. Why was a decision taken not to use the ordinary mechanism of the Minister for Defence—which, you tell us, is even simpler than we thought, just a matter of writing in a book by two officers. Why abandon the usual method and go to the Minister?

—There was no necessity to write it, even, in the book, once it was a secret operation. This is a book for administrative purposes only.

6506. Why bring Mr. Haughey into this at all?

—I suggested to Colonel Hefferon that the best way to bring them in would be to bring them into an army barracks and hold them there until arrangements were made to store them somewhere else, or to distribute them, or whatever decision was taken about them. This was arranged by 5th March that this was the best way of handling it. I suggested they should be stored at the Cathal Brugha barracks in Dublin.

6507. That is fine, but after all Cathal Brugha barracks is a part of the Department of Defence and the Chief of the Department is the Minister, Mr. Gibbons, and not Mr. Haughey. Why Mr. Haughey, is what I am asking you?

—What arose was, Colonel Hefferon put the argument that if this was a secret consignment of arms that people did not want to know about it you could not bring it into barracks without fulfilling all the administrative details. During the discussion I remember I said “Could a truck not be parked in a square in the barracks, left there for a while, and just not go through the administrative details”. He said this would be impossible. Too many people would be asking questions and too many people would know about it. It would be much better to bring it in, to go to the proper authority for customs clearance and bring it in and put it in some place outside of a military post; and I know myself that he went to the Minister concerning this later on.

6508. Which Minister?

—The Minister for Defence. And told him where this outside place was.

6509. Well, I note what you said and I am not prepared at this moment to pursue it but so far as I am concerned it does not provide a satisfactory explanation of why it was Mr. Haughey and not Mr. Gibbons, but I will leave that for the moment. You said that Mr. Gibbons suggested to you the setting up of a fictitious company?

—Correct.

6510. This is the sort of nice, hard, specific, checkable thing that it is very nice to have. Can you tell us when and where?

—It was during one of my meetings with him. It was not the first or the second meeting. It must have been into March. I cannot give you a specific date.

6511. I appreciate that. I would not ask you to.

—I have a complete recollection of it. I had come back from the Continent at the time and we were talking about what had evolved there. Whether it was after or before 25th March I do not know. He put the suggestion to me, would it be possible to form a fictitious company.

6512. Was it in his office or where?

—It was in his office in Leinster House, here.

6513. Is this where you always saw him, or almost always?

—I always saw him here.

6514. Was there anybody else there? Were you that lucky?

—No.

6515. It boils down to this: you saw him in his office here in late March, round the 25th— we cannot get the exact date. Shall we simply say the last week in March?

—It might have been earlier.

6516. Between the 15th and the 30th March?

—O.K., yes. I will not be definite on that.

6517. I am not trying to ask you to be, but to see how sharply does your recollection extend to these dates. But it was in Leinster House, it was in March, more the second half than the first, and you were with him by himself in his office?

—I would like to be able to say I was not, but I was, I think.

6518. Tell me this: You are a Captain and he is the Minister: how do you get to see him?

—I went to Mr. Blaney, whom I had met, and I told him I wanted to see the Minister for Defence because this thing was more or less coming to a head and I wanted to make sure he knew exactly what was going on.

6519. My recollection is that this was the first week in March. Is it the 5th March?

—4th March.

6520. But was that your first meeting with Mr. Gibbons?

—This was my first meeting with Mr. Gibbons.

6521. This was set up for you by Mr. Blaney?

—Correct.

6522. Did you have free access to Mr. Blaney?

—Yes.

6523. So that you could telephone Mr. Blaney and say “I want to see you”.

—I could telephone and say “I would like to see you”. I certainly approached him a week or two before the setting up of this meeting.

6524. That was the meeting on 4th March. After that was it understood when you left Mr. Gibbons that you could contact him directly?

—There was no problem after that. I could see him at any stage.

6525. I wanted to revert very briefly, in the context of the Ministers, to the sub-committee of the Government in relation to the North of Ireland. Do you know how many people it consisted of?

—I know of four people.

6526. Yes. Two of them have been mentioned a lot; two of them not at all. Do you know the two who have not been mentioned?

—I know who they are. Once again, from when I got this information, for quite a lot of the time, from nearly the beginning.

6527. Did you ever meet them?

—I never met them in an official capacity. Let us put it that way. I think I did one day but it was incidental.

6528. I see. You never had any discussions of any kind about this work with them?

—No.

6529. Do you know if that sub-committee ever met?

—I think some evidence was given to it. It met once or twice somewhere. I do not know how it operated.

6530. I have seen the evidence of one meeting. So far as you were concerned it was not functioning as a sub-committee. You were dealing with two people.

—Yes.

6531. Did they ever show any signs of it functioning as a sub-committee?

—My assumption was, from talking to Ministers, that it was working as part of the Government.

6532. Yes, I think that was a reasonable assumption at the time. I do not know that it will stand up to the light of hindsight. An awful lot hinges on this, not from your point of view because your assumption is a reasonable one. But can I ask you if you ever had any evidence as distinct from that? I know that it was a reasonable assumption. I am not questioning that. I think the business concerning the collective responsibility of the Government here is in fact written into our Constitution, if I recall correctly. It is fundamental. One is perfectly entitled to assume that it is happening. But, as distinct from that assumption, had you any evidence that these two Ministers were in fact consulting Ministers other than each other? Let us put it that way. It is fairly clear that they were in contact with each other.

—I think that at some stage—and once again I do not know when this happened— Mr. Blaney and Mr. Gibbons were in consultation. Whether it was before or after Christmas I could not tell you. The thing is that they did not tell me what they were doing.

6533. Referring to Vol. 6, page 279, paragraph 3758, I wonder would it be possible to provide Captain Kelly with that volume?

(Volume handed to witness).

—Yes.

6534. Perhaps you have had a moment to glance at that. We were talking about the question, which I would phrase this way, that you said that the Government knew everything about this operation.

—Yes.

6535. And then, certainly on a superficial reading, it seems the questioner asked whether Mr. Haughey and Mr. Blaney knew. You said “No”, that you did not think so. It came down at the end to saying: “Did Mr. Blaney know what they were being used for?” This is with reference to the funds.

—It was with reference to the accounts, yes.

6536. It says “funds” rather than “accounts”.

—Yes.

6537. You said “I do not believe he did.” I can understand why you should be clear in your own mind that there was total Government knowledge and indeed authorisation. What I am not quite clear about is how, if two persons named were very vigorous members of your sub-committee on the one hand, and if on the other hand the Government knew, how they did not know. They must have known even more than anyone else in the Government. Put it this way. You are trying to have it both ways here, that the Government knew but they—the others—did not know. If the Government knew, then surely they knew more than anybody else.

—Yes, they would: as regards knowing specifically I would not state that they would know specifically how the funds were handled as such. I would say—I think I said this previously—that Mr. Blaney would know that the money was coming from the North of Ireland. They would have told him that. As regards the details, I do not know.

6538. We do not want to get into the fine “chopping” of words here. I suppose that every politician has learned in the last 18 months particularly to look very hard at exactly what he said, because invariably it turns out to mean something other than what we thought it meant when it was uttered. I am not talking about you. You cannot say “that is a lie” because it can be explained that it did not mean what you thought it meant. Let us not chop words. I am not asking you whether Mr. Blaney or Mr. Haughey knew the details of dates and quantities of money in the three accounts. I am not asking you that. I am asking you the more general question, did they know that these accounts existed and that they were being operated in relation to the purchase of arms and the support of the Voice of the North?

—I would say that they knew that the Northerners had bank accounts for these purposes. As regards the details of them—I do not think so.

6539. Captain Kelly, when you say that the Northerners had bank accounts in regard to these purposes, they might have known that the Northerners were operating a “switch”. Let us be clear about the chain of bank accounts. The chain is that money passed from the Department of Finance to the Red Cross, to the account held by three people headed “North of Ireland Fund for the Relief of Distress”, and two other accounts of Dixon and O’Brien. Nowhere in this chain is there control by Northern Ireland people. They had other moneys perhaps. They were switching them, which perhaps made a moral, if not a physical, balance sheet. But you cannot call these the North of Ireland balance sheets. They are North of Ireland accounts controlled by North of Ireland people. The chain of those accounts, and how they were all fed from one to another, is perfectly clear and has been established. We have not seen any corresponding accounts and we have not seen any documentation concerning the switching. I am not asking you did they know that North of Ireland people had money, because the answer to that is that everybody in the country knew it. I am asking you this: Did they know of the existence of these accounts and the purpose for which they were being used?

—I should like to be able to say definitely that they did. All I can say is that certainly I would have said that the Northern Ireland people had money for the purchase of arms.

6540. That is the answer to a different question.

—The mechanism of the thing was that I would have been more likely to explain it to Mr. Blaney because I met him more often.

6541. If you are not sure that they knew, then how can you be sure that the Government knew?

—Do you mean as regards the money?

6542. Yes. There is no possibility of Government knowledge without their knowledge. You cannot have it both ways.

—As regards the operation of the money, this was part of the intelligence exercise, as has been my contention all the way along.

6543. Here we are back to the word “intelligence.”

—The point I want to make is this. I got into contact with these Northern Ireland people. I kept in touch with them. I saw the first action taken by the Northern Ireland people regarding London. I reported to my authorities at that particular time on the first money which was spent. The second thing that came to my notice as regards spending of money was that people went to America. I also reported that. The third thing that arose then was the European thing which I also reported and at the same time, you see this is the point, I was keeping in touch with the Northern people on a developing situation and when it came to the stage I arranged for the whole lot to be put concisely and precisely to, I put it to, my Director who could not give a decision himself and put it to the Minister and it was a developing situation and actually I did not say much about the money at all as such when this thing was developing.

6544. Yes, but we know nothing about the American situation, we know a little about the British situation but as far as we can prove at this moment neither of those two relate to the £100,000?

—They related to the George Dixon account.

6545. I see.

—Because that bit of money there, the first bit of money there, is George Dixon, the £1,600 as far as I recollect. The £1,500 and the £100. The next thing is the American one obviously.

6546. When you say the American one I do not mean American. We may misunderstand each other. I am not concerned with money collected in America and paid in here. I thought we were referring to an effort to buy arms in America.

—Yes, well these people financed themselves to go out there to look for assistance and to a possibility of arms. I was informed of this. I kept the relevant authority informed of it at the time as it took place.

6547. Deputy FitzGerald.—Could I ask which £1,500?

—That is the George Dixon £1,500.

6548. What date? November 17th?

—Sorry, the 17th. The first one, yes.

6549. Deputy Keating.—Chairman, as far as I am concerned I have had a fair bite of the cherry now and I have made the points I want to make. While I do not think either of us would suggest that there are not many more questions that would occur, as far as I am concerned I am happy to pass the questioning to the next member of the Committee. Thank you, Captain Kelly.

—Thank you very much.

6550. Chairman.—Deputy MacSharry.

6551. Deputy MacSharry.—Captain Kelly, I am only concerned about how the money was spent, not about intelligence or arms or anything, and I want to ask you first, you knew the three people who opened the account in Clones?

—That is right, yes.

6552. F, G and H? You have no code in front of you, have you?

—I have not, no.

6553. But you know the three people?

—I know the three people, yes.

6554. And these were representatives of a Committee for Relief of Distress in Belfast?

—That is correct.

6555. And this, in so far as the evidence we have before us goes, was the only authorised body to spend the £100,000 Grant-in-Aid?

—That is not correct. I think there was £20,000 given to another grouping which as a matter of fact I was asked to …

6556. Yes, but I mean an account specifically set up for this purpose of the expenditure of £100,000.

—That this Committee was set up for the £100,000?

6557. Yes?

—I could not answer that. I do not know. All I know is that money was sent various places. I know this £20,000 anyhow did not go there.

6558. Yes, that went directly to some other committee but this account in Clones was for the purpose of expending this £100,000?

—That is correct.

6559. Or whatever was left of it?

—Yes.

6560. Now, it was transferred to Baggot Street. Was that with the agreement of F, G and H?

—I beg your pardon, with the agreement of whom?

6561. F, G and H?

—It would be with the agreement of the committee, yes. At their suggestion, as a matter of fact.

6562. Were those three people specifically— did they agree?

—I could not say three people specifically agreed. Members of the committee met me and told me they wanted a change from one point to another and I said I would see what I could do.

6563. Could you tell us what members of the Committee?

—I do not think I should name those people. I mean I have not named them to date and——

6564. I put it to you that one of them did not agree, either G or H?

—I do not know. I mean if they had internal dissension I do not know anything about it.

6565. Well you were, in your intelligence operation up there, aware of internal dissension, were you not?

—I was but I met the person you are talking about also afterwards and he knew what was going on and could talk to me about it.

6566. You do agree that he disagreed with it?

—I do not think he disagreed. I do not know.

6567. You do not know? But you say you met him afterwards, for what purpose?

—Just in my normal intelligence duties I met him.

6568. That was Mr. G?

—I am not naming any of these people at all.

6569. That was Mr. G. The question, in so far as this Committee is concerned, we are to investigate the expenditure of £100,000. In your evidence this morning you say that something in the region of £5,000 to £6,000 went on the Voice of the North?

—Yes.

6570. That was Grant-in-Aid money?

—That was money that the Northern people wanted to use for this particular purpose and that they arranged this switch——

6571. It was Grant-in-Aid money?

—Well, you can call it Grant-in-Aid money if you want to.

6572. But this is what it was. The Grant-in-Aid was lodged in Baggot Street——

—I think I have explained already.

6573. Let me put the questions. I am just seeing it as I see it here before me. If you find me wrong in any way correct me. The Grant-in-Aid money was lodged in the Munster and Leinster Bank in three names?

Yes.

6574. A subsidiary account was opened for the Voice of the North?

—Yes.

6575. Financed solely from the Grant-in-Aid fund as far as we see it here in this book, the accounts from the bank?

—Yes.

6576. Therefore, the Voice of the North, to the extent of £5,000 to £6,000, was financed by the Grant-in-Aid in so far as your experience goes, your knowledge?

—The people who were running the account will tell you otherwise.

6577. I am asking you. This is what we have in front of us. In your evidence you said that this account was used solely for the Voice of the North this morning?

—I know, but the point is: you say it is Grant-in-Aid money. What I say is that these people for security reasons who had money in Northern Ireland—this is my understanding of the situation—used this money for relief and used money that they had down here for their other purposes.

6578. They did not lodge any of it in these accounts. We are only concerned about what was lodged in the account and that was the Grant-in-Aid money. So it was Grant-in-Aid money that was used for the Voice of the North?

—That is your interpretation.

6579. It is the evidence I have before me. I have to wait until I get further evidence.

—The point is this—I have explained it to you.

6580. I know but where did the money come from?

—Where did the money that was in Belfast come from?

6581. Yes. Where was it lodged in any of these accounts. Can you tell us any of the lodgments?

—Excuse me. I will put a hypothetical situation to you. Supposing you had a bank account here with £10,000 in it and somebody else had a bank account in Belfast with £10,000 and you wanted to buy something in Belfast and he wanted to buy something in Dublin and you were friends and you said to the fellow in Belfast: “Buy that stuff for me at £10,000” and he said to you: “You buy the stuff in Dublin for me at £10,000” and you do it. What would this amount to?

6582. Bank Giro.

—What would it amount to?

6583. This is hypothetical.

—You do not need Bank Giro, just by word of mouth, telephone.

6584. OK. Well can you tell us where these accounts are in Belfast?

—I cannot tell you.

6585. The Northern people will know that too?

—I have no responsibility for their accounts at all. The accounts were in the hands of a committee.

6586. OK. You have no responsibility. Accepted. But I am putting it to you that, in so far as the evidence before us is, three people representing a committee had an account in Clones and then in Baggot Street and I believe in between the transfer there was even an internal dispute among the three. I do not know what it was about but it was possibly because of the reason for the transfer?

—Well, the dispute could have arisen since then.

6587. For the purchase of arms which was not at all decided in so far as the money was allocated.

—I beg your pardon.

6588. The question of the George Dixon account which was solely financed from the main account, financed by the Grant-in-Aid, you have in your evidence yourself stated this was the arms account.

—I have given an analogy of the £10,000.

6589. Let me put my case. I am waiting here for three weeks. My turn has come. I want to find out where the money went. I have no other purpose other than to find out where the £100,000 was spent. I do not want to convict anybody. I am not trying anybody.

—It has been explained several times.

6590. It has not been explained at all. Can you tell me where £1 was spent, and we will have a good day’s work done, of the £100,000 Grant-in-Aid? You tell me it is a switch——

—Excuse me, take it easy. I have explained several times that this switch took place. I have given you a fairly good indication of how it took place.

6591. Could you tell us who made the switch? F, G, H, E?

—This is where the initial statement that you want to divorce the money from Intelligence and the whole situation in Northern Ireland——

6592. I am not concerned about Intelligence. I am not conerned about arms but about the expenditure of £100,000 which this Committee was set up for.

—You are trying to do it in a vaccuum, which is an impossibliity.

6593. That is my concern. You can describe it any way you like.

—You are wrong. You just cannot do it.

6594. This is the terms of reference of this Committee. Mr. Chairman, is this right or wrong?

6595. Chairman.—It is our terms of reference. I would request Captain Kelly to try to answer the questions of the Deputy without getting involved in arguments. The questions are simple.

—I will do so, but I think that he is insisting on saying things which are contrary to the answers I am giving.

6596. Deputy MacSharry.—You are entitled to correct them if they are wrong, but not to argue about them. I will accept your corrections if you have evidence to show——

—If you insist on saying that the corrections are not correct——

6597. Mr. Chairman, the question of the involvement of people from the North is very important because consistently throughout this evidence——

—I would like to make a submission to the Chairman. Let me say to the Chairman it is extremely important—the Chairman knows there is the Scarman Tribunal sitting at the moment at which my name was mentioned the other day and it is of extreme and utmost importance that the question of people in Northern Ireland should not by any chance come out from this Committee.

6598. No names have been issued by this Committee at any time. Not one. Not one name has been issued. There seems to be great protection for these people in the North and none at all for people in the South.

—The people in the North must be protected. The people in the South are not in danger, I trust.

6599. We are referring to these people by code. Nobody knows them. You know them. We know them. I want you to help us in you investigation of this expenditure of £100,000. I am putting it to you that £6,000 of the Ann O’Brien account was Grant-in-Aid money spent on the Voice of the North?

—This means you are ignoring the switch.

6600. Yes. Am I right or wrong?

—You are wrong.

6601. If I ignore the switch am I right?

—You are wrong. This is how the thing operated. What is the point arguing about it——

6602. I am trying to find out where the money went. So far as I see there is an account in front of me—money lodged from the Department of Finance through the Red Cross, transferred here and this, you say, was spent on the Voice of the North. It was logical to ask was this Grant-in-Aid money?

6603. Chairman.—So far, the switch is a hypothesis. So far, no evidence has been offered here—no evidence at all to verify this hypothesis. So far, to us it is merely a thesis put up and the Deputy is trying to get at that and you have not offered him any assistance.

—The point is that the Deputy started off here by saying that he wanted to divorce this money from the operation as a whole. This is a complete and utter impossibility. It cannot be divorced from the security question of the country and the security in Northern Ireland as such. Anyone who thinks otherwise is out of touch with the situation.

6604. Chairman.—I have not heard the Deputy talking about divorce at all. Try to answer the Deputy’s questions.

6605. Deputy MacSharry.—All I want to do is get to the facts. I have heard you say in evidence that the George Dixon account was the arms account. Almost all the money in that account was spent on arms and the Ann O’Brien account was spent on the Voice of the North. All of that money came out of the main account in Baggot Street. It was transferred into these accounts and therefore was Grant-in-Aid money spent on arms and the financing of the Voice of the North. The switch and the hypothesis in relation to the switching operation will be one that this Committee will have to decide on according to the evidence put to us. You have put your side. You say that certain people can bear it out and certain people have made statements. We have got a list of coded names in front of us and you are not helping us one iota. The point is, in helping us you are helping yourself and helping the whole situation.

—I know that these people have put forward what you call a hypothesis—you have it. So far as I am concerned I was working with the North of Ireland people on a security operation, mark you, on Intelligence and it cannot be divorced from this, regardless of what is said. This was arranged in a certain way by the Northern people for their security purposes. I have no definite proof of how much money they had in Northern Ireland or otherwise. Possibly it is quite conceivable that they could have been using some of the money. So far as I know, and it is in this book, they have given an account for the equivalent of the Grant-in-Aid. I must assume that what they have told me is true and that they had this switching back and forth. I had no way of verifying it. This thing is taken out of context of the whole operation. The money question was only secondary to the major question of finding out where arms were going which was concerned possibly with life and with possibly the future trouble which might arise and the avoidance of trouble which might arise in Northern Ireland. You cannot divorce one from the other.

6606. Deputy MacSharry.—We are not divorcing it as such. We are going by evidence before us. We are asking you to assist us in that evidence. The impression is abroad that in so far as you are concerned that you are on trial here. This is not the case. We only want your assistance.

—I have given you my assistance in so far as I can give it but this is the point: I have an obligation and I may explain something to you here that when one is working as an Intelligence Officer and goes to people and gets information it is the custom in every Intelligence service in the country that one does not reveal one’s sources, for example, one works closely with them and you do not even reveal them to your higher authority.

6607. In so far as the setting up of this Committee is concerned, you are not revealing any people to us that have not already been known to us.

—There is no necessity for me to reveal them then.

6608. There is so far as individuals that may help and substantiate things you have said.

—I can substantiate them more than I have substantiated.

6609. I put it to you that the George Dixon account and the Ann O’Brien account, financed solely by Grant-in-Aid money, were used for arms and for the Voice of the North?

—This one once again—you are back on the old track again. You are not even accepting the hypothesis put before the Committee.

6610. Nothing of that has come before us.

—The Chairman said we had a hypothesis.

6611. The letter was published here. We have no evidence as such.

6612. Chairman.—It is only a hypothesis.

—He is making a categorical statement.

6613. Deputy MacSharry.—You can deny it if it is not true. So far as the evidence before us is concerned, it is the case that this money was Grant-in-Aid money.

—I will not accept it but we will let it go.

6614. You said in evidence yesterday that Padraig Haughey was not George Dixon?

—I said that, yes.

6615. Could you be more specific and tell us who was George Dixon?

—No. Once again I hark back to this. I did my job, reported to the authorities here, and——

6616. That is not the point at all. It is completely irrelevant. I am asking you to clarify something. There were five fictitious names. As regards three of them, we have an idea that two of these are known. George Dixon and Ann O’Brien are unknown to us but you know them. Why can you not assist the Committee?

—You made a wrong statement that something I said was completely irrelevant. This question of money would not have arisen if an Intelligence exercise had not been under way first, so the money is secondary. If this money can be accounted for, Irish money, it is not necessary to expose sources or expose people to danger.

6617. The money was set up as a fund for people in distress from the North coming to the Government and asking for assistance, not for Intelligence work?

—Agreed.

6618. Then how can you say that Intelligence is responsible for this?

—The fund was set up for the people in the North and the money was given to the committee, and they went to Clones and carried on doing this. Then this problem of arms arose.

6619. They were fumbling the accounts among themselves——

—Were they not entitled?

6620. They were not. No one was entitled to spend one penny of the State fund of £100,000 other than on aid and relief?

—Who said they were State funds? Only yourself.

6621. That is what I am here for?

—You are making statements that are wrong.

6622. Mr. Chairman, we have the accounts in front of us.

6623. Chairman.—Mr. Kelly, you are not here to enter into arguments. just to answer questions. You must try and confine yourself to the questions put to you and answer a simple yes or no.

—The point I want to make is that it is completely impossible to divorce the operation I was on from the money. As a matter of fact, the money was only a secondary consideration. The main objective was to know exactly what was happening as regards arms and ammunition; how they were to be controlled and to be kept under proper control, so that the Government and this country would know what was going on. In this context the money is of secondary importance. I was told that this money was being reimbursed from Northern Ireland and that they were using these accounts as cover.

6624. The people of Ireland are trying to find out what happened to their money. I think that is important?

—And they put people in Northern Ireland at risk.

6625. They are simply asking for information and you should endeavour to help us?

—I will name no people from Northern Ireland in this Committee. It is as simple as that. I have good reason. Anybody who ever served in an army and was associated with Intelligence will know that when you get confidential information you do not tell anyone where it comes from. It is on this understanding that you talk to people and that is why you get information and get to know how arms are being moved, what operations are taking place. If this confidence is broken the whole thing collapses. As a matter of fact, if this confidence is broken by this Committee the whole Intelligence Service of this country could collapse.

6626. Deputy MacSharry.—We are only involved in the expenditure of £100,000.

—Well, in that narrow field——

6627. That is the narrow field we are concerned with. Unfortunately this Committee has gone off along side roads. We could have been finished by now had we stuck to our guns and got the assistance of witnesses. In the evidence in the Four Courts you said that George Dixon was a resident of the North of Ireland?

—Yes.

6628. Was it Mr. J?

—I am not answering any questions of that kind.

6629. I put it to you that it was not Mr. J?

—I am not answering.

6630. You are not denying it?

—I am not answering. I am refusing to give any information on that.

6631. We are accepting that it was Mr. J. if it was not the other person?

—That is your privilege.

6632. Could two people be George Dixon?

—Not that I am aware of.

6633. How many specimen signatures did you give to the bank?

—I do not know. We went through it the other day. The record is there somewhere.

6634. You do not remember?

—It was three, was it not?

6635. All of the one person, were they?

—They were.

6636. And what you tell us is that it was not Pádraig Haughey?

—The reason I make that statement is that I know it was not and there was a categorical statement here yesterday that it was.

6637. Can you not assist us further by telling us who it was?

—It does not make any difference.

6638. It makes a tremendous difference.

6639. Deputy R. Burke.—The statement was made by a person relying on confidential sources. Your refusal is also based on confidential sources. Everything is confidential from the Committee. We cannot get to the sources one way or the other.

—I accept that. I understand the difficulty but the point is as regards these accounts that the people running them were outside the jurisdiction and those people are caught in what could be a very serious situation.

6640. Deputy FitzGerald.—I think the question to put is, does he think that Dáil Éireann must be bound by principles of Intelligence laid down by an ex-Intelligence officer or that Dáil Éireann has authority to decide——

6641. Chairman.—Deputy MacSharry is questioning the witness. You have all had your opportunity to ask questions and now you are doing it again.

6642. Deputy FitzGerald.—I am not asking questions. I am putting it to you that this is the issue.

6643. Deputy MacSharry.—I have every sympathy with Captain Kelly having to spend so much time here in the witness box but I think he could have got through it in half an hour or an hour if he had co-operated and assisted this Committee in relation to the expenditure of the money. This is what we are concerned with basically; nothing else.

—There would have been no inquiry into this money if there had not been a switch in Government policy at the end of April.

6644. That is completely irrelevant. You are not prepared to say who Ann O’Brien was here?

—I have stated my position on this before.

6645. You are aware of the contacts these people in the North have made with this Committee, and the Committee with them?

—I am aware that there has been contact, yes.

6646. And that it is more or less the protection of people down here they are worried about, rather than themselves?

—I do not know how this could arise.

6647. Mr. Haughey was never aware that the account was transferred to Baggot Street?

—He must have been aware.

6648. He never knew of it according to his evidence in court?

—Maybe he did not, but I think he authorised it. I do not know.

6649. Why would you say he must be aware?

—I would assume he was aware, that is all. If he said he was not, that is that.

6650. But it was you who asked Mr. Fagan to arrange the switch without telling Mr. Haughey?

—It must have been.

6651. Therefore, Mr. Haughey could not have any knowledge of the subsidiary accounts if he did not know of the transfer of the main account?

—I do not know whether he knew or not. You say he said in court that he did not know. I rang his chief personal assistant, or Mr. Fagan, and got this arrangement made for the Baggot Street account.

6652. Why did you want a switch. Was it because of a dispute?

—I have explained this long ago, Mr. MacSharry, and I do not like going back too often on what I explained previously, with all due respects to the Committee.

6653. We do not want to either.

—I have said this before. I said that these people in Northern Ireland, for security purposes, wanted to switch from Clones.

6654. Where is Clones?

—Where is Clones? It is on the Border.

6655. Is it in southern Ireland?

—It is in southern Ireland.

6656. What is the security involved, then? What is the difference between Dublin and Clones in relation to security?

—I would put it here: Clones is a very small town. There is a very small staff in the bank and everyone knows everything that goes on, for a start. I will not go any further. There are other factors arising, too.

6657. But that is what we are here to find out and we expect your assistance.

—The people thought that, for security reasons, they should move to Dublin. They came, very simply, and said “Could you arrange another bank?” I rang Mr. Fagan and arranged the bank. It is as simple as that.

6658. When you were involved in the spending of this money you were aware at that time that it was Grant-in-Aid money here in so far as the accounts would show?

—I have told you on numerous occasions since you started asking questions here that my information was that people in Northern Ireland, to protect themselves, were switching money—if you like, reimbursing the Grant-in-Aid to Northern Ireland—and using the money down here for the purposes for which the money they had collected in Northern Ireland was intended to be used. I have explained this at least ten times.

6659. When did you become aware of the switch?

—I knew about it when this thing started, or shortly after the Baggot Street accounts were opened. This is the whole idea. These people were worried about security and they wanted security down here.

6660. But was not security in one account enough?

—They wanted to have some idea of where the money was going and they thought the accounts a good idea. Accountancy came in also.

6661. Could they tell us where the money went now?

—I think these are the people you have been talking to and I think they have given this statement of the current situation. I think it is in the back of that book there—£74,000.

6662. But they have not given us any lodgment slips?

—I do not think you would get any lodgment slips, with these people.

6663. If we do not, Captain Kelly, we are faced with no alternative but to accept what is before us in evidence. And as the evidence stands, so far as I personally am concerned, while awaiting further evidence, at the very least £45,000 of the grant-in-aid was spent in a way other than was directed by the Government of this country. The accounts before us prove that. If you can disprove that, we are waiting to hear it.

—I am not here to disprove at all. I am here to tell you what information I have. And then you made a comment there that is completely wrong. As a matter of fact, in the early part of the statement when I tried to interrupt Mr. MacSharry when he was opening on that last question, I do not know——

6664. I said that in so far as the evidence before me——

—Yes, I have the point now. I am sorry. You made a point about people in Northern Ireland not having documents.

6665(a). This was previous to that.

—The reason that you have not got documents was that when this co-operation they had arranged with the Government down here fell through and they saw various statements made on 6th and 8th May last, they destroyed the documents, because they did not want to be involved in it.

6665(b). Was it then they decided on the switch?

—I am talking about 6th May, when this exposure took place.

6666. Was it then they decided on a switching operation, or was it before?

—This happened at that time.

6667. As far as you are aware, the switching operation went through?

—These people had got money. I know they had got money. I know the sources they got it from, as a matter of fact.

6668. Your attitude towards the people in the North—in evidence this morning you said it was to pull together and stay together?

—No question about that; yes.

6669. Did you find them doing that?

—In any community you will have various arguments, various disputes and people with various attitudes, they approach problems in different manners, and they can come into conflict possibly; but as far as I was concerned, at all times the Northern people should work together and stay togetheer for their own good and benefit.

(The Committee held a short discussion.)

6670. Chairman.—We have decided to go on until 1.30. Deputy MacSharry?

6671. Deputy MacSharry.—It was, Captain Kelly, the Northern people who decided to open the subsidiary accounts, apart from the transfer?

—It would be, yes.

6672. You did not look for permission into that, or they did not ask you to look?

—There was no question of permission at all. No one worried about it very much at the time. They just wanted to open subsidiary accounts, and they were opened.

6673. On 14th November, when the George Dixon account was opened, were you aware of what it was opened for?

—I suppose I was. I say that because I just cannot, at this stage, say that at that exact date I knew. I assume I was aware.

6674. So you were aware of the switching operation?

—I was. These people were making arrangements to cover themselves in case they wanted to use money for purposes other than the relief of distress, and this is why they went to the trouble of changing their account from Clones to Baggot Street, to a safer bank, so that they could carry out this operation and have what they assumed to be the necessary security.

6675. Was it a good way to do it?

—There was nothing wrong with the way to do it, I think. If one accepts it as just a practicable job it is quite okay.

6676. You were completely happy with it at the time?

—If I was a Northern person——

6677. I am not asking you that. I as asking you, as the liaison man, were you happy about it?

—It was not my responsibility at all, but when these people put the question of security to me I helped them out, and I was quite happy from that point of view. I saw no reason why anyone should be worried about it.

6678. You did not at all refer yourself to the way the account was, as it is made out in front of us now, and the description that was given so far as the expenditure of this money was concerned?

—No, I did not worry about these at all, as I tell you. This is where we start on the wrong foot. I was primarily concerned with the Intelligence aspect and the point——

6679. I accept that. I do not want to go into that work at all. I have no axe to grind in relation to your Intelligence work.

—I understand. But I still make the point.

6680. But you must accept, Captain Kelly, that so far as we are concerned the position is that this money—the George Dixon account, the Ann O’Brien account and possibly some other moneys we are not sure of—was spent other than for the purpose that was sanctioned by the Government and Dáil Éireann.

—Anyone is entitled to make an assumption.

6681. Chairman.—Captain Kelly, to come back to these accounts again, there was, out of that £100,000—just using round figures— nearly £5,000 comprising additional funds directly from the Red Cross. We can take it roughly as £100,000. About £10,000 was sent to the North and £20,000, via the Red Cross, went to the Belfast bank. The Committee has so far not investigated those two items very much. We have been concentrating on the £7,000 that went via the Red Cross into the bank account. This is the fund which you have been so closely associated with.

—Yes.

6682. Perhaps you have been more associated with it than anybody else, apart from the people who held it. You said it was switched from Clones. The new account was opened here and some of the money was transferred to Baggot Street for security reasons.

—Yes.

6683. But security for what?

—For the people who are operating the account.

6684. Do you mean security to utilise the money for buying guns?

—These people felt that …

6685. Would you answer whether the security was for the purchase of arms?

—That would be the eventual security; but, apart from that, initially these people were worried that the bank, being very near the Border and being in a very small town, would know what their business was, and that if ever people in the North wanted to find out anything about it then they could possibly do so. That is as far as I would go. That is the security reason.

6686. Security was necessary because it was in their minds at that time to utilise this fund for the purchase of arms?

—There were at all times people in Northern Ireland interested in weapons. This had been a continuous process from August. This is where I go back to the Bailieboro meeting which I reported and from which at that time I learned that even these people had money which they wanted to invest in the purchase of arms. So at all times in the Northern situation they were looking for arms.

6687. The other purpose, and particularly the purpose for which the subsidiary account was opened, on your evidence, was, apart from security, to establish a clear-cut accountancy procedure to divorce what had been spent on arms from the other types of expenditure.

—This is one of the reasons given.

6688. This £70,000 was passed into Baggot Street, and according to your evidence about £30,000 of that was spent on arms. Is that correct?

—I would say that is correct.

6689. That does not include the £8,500 in Mr. Luykx’s name. That is outside it.

—My estimate was about £26,000 or £28,000. That was the estimate I had in mind. In court I said it was between £20,000 and £30,000. I have been thinking and I now say that it was between £26,000 and £28,000, without Mr. Luykx, say £25,000. I just do not know exactly.

6690. There would have been about £5,000 spent for propaganda purposes.

—Yes.

6691. Altogether roughly half of the fund was spent on arms and propaganda. It was withdrawn for that purpose?

—£30,000, yes.

6692. In other words there would be half of the fund available for transfer to the North?

—Yes.

6693. That would be for relief purposes?

—That would be correct, yes.

6694. We had the constructors statement from the Northern Relief Committee to the effect that they spent approximately £7,000 on relief, so that would mean that from various secret sources in the North another £35,000 would have to be found to make up the £70,000?

—Yes.

6695. Roughly the position was that £70,000 from the Department of Finance went into Baggot Street. Half of that was removed for guns and propaganda—£30,000 for guns and £5,000 for propaganda—and the other £35,000 was moved up by various couriers to the Belfast Relief Fund, supplemented by £35,000 from secret sources to provide the figure of £70,000, which we are told by the Northern Relief Committee was in effect spent purely on relief work?

—Yes.

6696. The reason for this particular operation was to disguise the fact that money was being moved in the North to buy arms?

—That is right.

6697. For security purposes the money in the North was put into the relief fund and, by substitution, a similar amount was moved from the South. I do not know whether you agree with me or not. There are several gaps in all this. You are an army officer of 20 years standing. You probably know the civil service mind?

—Yes.

6698. Probably you do not like it very much. Most army officers do not. You realise that everything must be vouched for in army life?

—Yes.

6699. Would you agree with me that the constructors statement produced by the Northern Committee would not be considered a vouched statement?

—I do not know what they could do. If they get the statement they can probably think that it might not be; but if there is nothing to the contrary they have to accept it I think.

6700. Would you agree with this hypothesis, that the £35,000 removed from various secret sources in the North of Ireland, to supplement a corresponding sum from the South, was also unvouched?

—The people up there would have to vouch for it if they were capable of doing so.

6701. So far as we are concerned you have not vouched anything?

—No I cannot vouch for them.

6702. You have told us that the transport of the £35,000 from Baggot Street to the Belfast Relief Committee to the North was by couriers and that money was drawn not by you alone but by other people?

—Yes.

6703. Would you agree with me that this clear transfer of £35,000 from Baggot Street to the North is also unvouched?

—I do not know. I think those people came to the bank and collected money.

6704. So far as this Committee is concerned we have not seen a person yet who has told us he crossed the Border with even £1 in his pocket?

—This is the problem that arises in these circumstances. In effect, in theory, you are dealing with people under your jurisdiction, under a special situation up there. I do not think you will ever get people to do so.

6705. Those within the jurisdiction—for example you yourself: what effort have you made to give us any measure of vouchability for your personal activities?

—All I can tell you is what I know and what I was told or what I was led to believe happened and I have told you this. The only other question that arises is this question of names in Northern Ireland and I do not believe I should give names in Northern Ireland and that is it.

6706. The fourth field in which there is a deficiency again of vouchability is the removal of this money from Baggot Street for guns and propaganda?

—Yes.

6707. I am forgetting, for the moment, this would be regarded by many as an unorthodox use of the fund but there is a measure of vouchability available to us as regards the use of the money for the propaganda purposes in so far as we have a statement from a person, a witness who has not appeared as yet for £5,000?

—Yes.

6708. But can you help us to vouch for the other £30,000?

—The other how much?

6709. £30,000 for guns?

—£30,000 for guns. I think Mr. Luykx gave us some information on this the last day.

6710. I am asking you.

—My figure is £26,000 to £28,000 for guns. That is my recollection of the thing, and as I said here previously and as I said in the Court, I had this thing all documented fully and it was when I was arrested under the Offences Against the State Act that I destroyed them and it was all at home and the question would never have arisen if this change of policy had not taken place, this change of attitude. All I can say to you is £26,000 to £28,000 in my belief was paid to Herr Schleuter. I know that these people on the Continent to even get to Herr Schleuter it cost them money. How much I do not know exactly but it cost them money, as you can realise, when people go looking for that sort of stuff. Also they spent money in England and I know they spent money on a trip to America for the same purpose. Also, some of the money went to Northern Ireland as well to my understanding. I have no proof of that, of course, but I gather it did.

6711. You appreciate our difficulty, Captain Kelly, that in respect of sums removed from secret sources in the North of Ireland into this Belfast relief fund and the actual expenditure, or claimed expenditure, of the Belfast relief committee that we are in a field of poor vouchability?

—I appreciate this completely and I cannot see any way of getting round it.

6712. But let us come back more to our own position here. Should we not be able to do better in respect of the money removed from Baggot Street, the primary shifting of that money?

—I do not think you can. I have told you, I think, quite a bit about it. As a matter of fact, as much as I know. I have given here this morning to Deputy Keating this £1,600 which I think was spent in England. I assume the £849 13s. 9d. was for an American trip. Possibly more money was spent on that. Then you come to the £3,500 which is the first, as far as I am concerned, deposit on arms, cash £200——

6713. Captain Kelly, we will go over these in detail with you later but may I contrast your attitude with the attitude of the Belfast relief committee? At least they have attempted to provide a constructive statement, whatever validity it may have, however it would stand up in the eyes of a professional accountant or auditor, there is not a single receipt in it and it is just a set of figures, but you have not even gone that far to provide us with even a reconstructed statement on the same lines?

—The point is this: I was not responsible for their account as such. All I can give you is information as to what I collected on it.

6714. We are not concerned with your responsibility for the account at all; we are concerned with getting the maximum information from you about the account?

—Yes, well I think I have given this as far as I know.

6715. It is given in such a spread out fashion —it might be this and it might be that—it has not been presented to us in any well thought out, concise fashion?

—There is no point in I coming along and saying: “This was spent on that and that was spent on the other” and saying it definitely. All I know is that I was working on information that I got from people from time to time and that is it. It is the same thing as this transfer. People tell me that they have other money. As a matter of fact, I knew where some of the money came from so I had some verification of that but one must accept what one is told.

6716. Captain Kelly, we will be resuming at a quarter to five and you might have an hour’s leisure or so. Would it be too much to suggest to you that you might—you have been very good at making submissions to us, even when we did not want them?

—Yes.

6717. Perhaps now, when we do want them you could, in the meantime, juggle up your memory a little bit and see if you can come back and give us, as far as you can remember, some reconstruction, item for item, from that printed book and you can take it with you and tell us where every item went of the three accounts?

—I do not think I could tell you where every item went but, however, O.K. Mr. Chairman. That is fine.

The Committee adjourned at 1.30 p.m. until 4.45 p.m.

Examination of Captain James J. Kelly continued.

6718. Deputy Nolan.—Captain Kelly, last week we discussed the accounts as on Page 10 and 11 of the Pink Book. You referred to the George Dixon account and we have referred to it since as the arms account. Since last week we have travelled a long road but have not got a lot of information about the money. If you take that book there—appendix four—the George Dixon account which was opened on 14th November, 1969, if we take the payments side of it, the first payment was, of course, the cheque book 6s. 3d. on November 14th. The next payment is 17th November, cash £1,500.

—Yes.

6719. Could you tell us anything about that £1,500?

—This, plus the other £100, is money that was spent in England, to my recollection. This operation that I explained this morning—

6720. This is the one mentioned in today’s paper?

—Yes.

6721. That was a total of £1,600?

—Yes. This is my recollection.

6722. Am I right in recollecting that a sum of £1,300 was mentioned?

—I did not read this thing but it could have been mentioned, but £1,600 is the figure.

6723. On the next one we have 11th December?

—Yes.

6724. £849 13s. 9d.?

—I believe this was spent when people went to America.

6725. For what purpose?

—They went to America looking for assistance generally—generally assistance—it could be arms if they got them. They were interested in arms if they could get them.

6726. Did the money that came into the main account, £4,993 10s. 0d., would that have anything to do with this?

—No, I don’t think so, no, no relation.

6727. We have 11th December and a transfer of £1,000 which is self-explanatory?

—Yes.

6728. December 22nd, cash £3,500?

—This is the first deposit on arms.

6729. In Europe?

—Yes.

6730. And the next is a transfer again, £1,000 to the Ann O’Brien account?

—Yes.

6731. We come now to 2nd January, 1970, cash £200?

—Yes. I could not say about that. It could be for some expenses. I do not know.

6732. The next one is cash £6,000.

—I think you can take these two together and say they are arms.

6733. The two £6,000 together, the £12,000 would they be taken out of the country?

—They would be, yes.

6734. By a person?

—They would be taken by someone outside the jurisdiction.

6735. And the next amount mentioned is £1,500.

—Yes. You see, I can’t be definite about this thing myself but I know some of this money went to the North, whether it was £2,000 or £3,000 I am not too sure.

6736. From the George Dixon account?

—Yes.

6737. Some went to the North?

—Yes. It was just brought back by the people concerned and it might have gone to this relief as such.

6738. You think that this figure of £1,500 …?

—We will work on the assumption that it went to the North for the time being.

6739. And again we have the transfer to Ann O’Brien of £1,000.

—Yes.

6740. And the next item is on 23rd February —cash £1,000?

—You have missed out one—£12,000 on February 12th, and arms you can put down for that also.

6741. From Europe?

—Yes.

6742. That brings the total to £24,000 for arms to date and £3,500, that’s £15,700, and we could also take the figure of £1,600 the first two there at the top?

—Yes. I have down here “to North”, a total of £3,000, so we can leave that to North too for that, for the time being.

6743. There is mention then of February 12th—Ann O’Brien account, £1,000, and on February 23rd, you have cash £1,000 again?

—I do not know about that. This is what I say—that £100 and the £600 I put down to the North, giving a total of £3,000 approximately to the North to date.

6744. Take the £1,000 and the £600 together?

—Yes.

6745. On March 4th you have £4,000?

—This would go to arms, I would say.

6746. Deputy Collins.—I think the date should be March 13th.

6747. Chairman.—No, it is on the left-hand side.

6748. Deputy Nolan.—That leaves then: March 13th, £200; March 25th, £200; April 17th, £600?

—I do not know about this—I have this marked to arms also for the purposes of this.

6749. Have you a total then on the payments side for arms?

—I have, but the total amount I worked out separately does not balance with that, but I will give you what I have worked out for arms.

6750. From the George Dixon account?

—From the George Dixon account, yes.

6751. What is the total?

—The estimate I worked out for the arms, based on what actually happened, is £42,750, with a deduction of £8,500, which gives a sum of £34,250.

6752. The £8,500 is in relation to Mr. Luykx’s cheque?

—Yes. It might be a bit high but I based it on actual facts which I can give you. There were 400 sub-machine guns and these were £16 each, in my recollection. I heard Mr. Luykx saying here they were £12, but I do not think that is correct because £8,500 was the figure in question and the proposed charter of the plane was £2,100—around £2,000—so at £16 each we get a figure of £6,400 which would fit in with the £8,500.

6753. Can you recall what type of sub-machine guns they were?

—They were Italian sub-machine guns.

6754. You do not know the make?

—No, I could not say at this stage, but all subs are much the same. They are all the same type. There were 200 subs involved earlier on, so that you can take half the £6,400 for that. This is the way I am working it. There were 25 other weapons which would be a heavier type of machine gun and I would imagine that those were around £30, as an estimate,— I do not know exactly—which gives you £750. These 40 vests which were bought were around £70 each, giving £2,800.

6755. Which were actually delivered here?

—That is right. Then there was about a quarter of a million rounds of ammunition and I worked these out at 9d. each—I do not know the exact figure. I heard Mr. Luykx say 8½d. but they were a different type so I took them at 9d. That is £9,735.

6756. What calibre?

—They would be for the machine guns— what type would they be?—9 millimetre; and then there were some heavier ones—a small portion of heavier ones. These pistols that cropped up earlier on—they were rather expensive. I think they were £25 each.

6757. And how many?

—400 of these. You realise that these are rough figures?

6758. I accept that?

—That is £10,000, giving a total of £35,625, and I add on 20 per cent to your storage, contact and various things. I would not say that it is an over-estimate really, which brings it to £42,750. Then there is the £8,500 deduction from that.

6759. Giving £34,250?

—Yes.

6760. Are there any other comments you would like to make on the George Dixon account at this stage?

—No, I do not think so. As I said in my original letter in here, I think all this money was spent in the way it was supposed to be spent.

6761. Then we come to Appendix V— Ann O’Brien account, the Voice of the North Account. There is no need to go down the payments side, unless you have a general comment to make, Captain Kelly?

—I do not think so because I think you have the Voice of the North, £5,000 odd, and £600 went North at one stage. This was collected and brought North at one stage when someone wanted money up there. The remainder would go down to expenses and this sort of thing and it was not enough for the expenses involved. We had the four trips, with paying for Mr. Luykx, and so on, so that there was some reimbursement actually from the George Dixon account in respect of that. That is my recollection of the two accounts.

6762. The two figures that do show up are December 22nd and February 12th from the George Dixon account to this account?

—Yes—three transfers there, I think.

6763. Going back to the main account, the Belfast Fund for the Relief of Distress,— which one of those two accounts—would you like to take the payments side?

—There is not much I can say about that really because most of this money would be drawn by the people concerned. On occasions I possibly changed cheques for them, that would be it, I imagine. I see my own name there for £2,000, and I cannot honestly tell you what happened it. It is December 5th. There is no comparable lodgment so that it was probably drawn for them and given to them.

6764. It would be possible that a cheque would be signed and you would have cashed it and given it to somebody who came down?

—Yes. I made this point on at least one occasion and possibly more—that this happened when fellows arrived late.

6765. The others then are all cash payments which, in your opinion, went to the North?

—I think there is no question about that.

6766. Deputy Treacy.—I have already. questioned the Captain at some length last week but I do have some very brief questions. I appreciate that he has been in the witness stand a long time and I wish very much to avoid repetition if I can. You availed yourself of an opportunity this morning to deny categorically the statements made by Chief Superintendent Fleming yesterday in respect of your alleged involvement in the passing on of information, money and possibly arms to the IRA?

—Yes, and I wish to re-emphasise that and to reiterate that denial. I think that if one considers the matter there is no question of this happening because the last meeting I had with the man in question was on 4th October, and there was no question, for instance, of any money before that, and there were no other funds available before that.

6767. You appreciate the dilemma in which this places a Committee of this kind in that there is now obviously a very great gulf separating truth from falsehood, fact from fiction?

—I wonder if I could have a copy of what he said yesterday so that I might possibly be able to assist you better?

6768. Chairman.—We have not got it yet.

6769. Deputy Treacy.—Would a press report do?

—That would help because some of the stuff given yesterday was given in a very offhand manner with nothing at all to back it up. In the report I saw there were long statements with nothing to support them. For instance, there was the statement that I met Cathal Goulding umpteen times. That is absolutely wrong, unless he meant three times. That might be right, or maybe four times, but the last meeting was definitely in the early days of October.

6770. I think you should be afforded an opportunity of clarifying the situation so far as you can and having the greatest possible weight of evidence on your side in respect of clarity, fact and truth in this matter. You were a central figure in this whole episode, you will agree, and my primary concern at the moment is to ascertain precisely who this Committee is to believe in this matter, Captain Kelly or Chief Superintendent Fleming. Where does the truth lie in so far as the Dáil and the people are concerned and what further evidence can you give us to refute convincingly the statements of Chief Superintendent Fleming?

(Copy of Irish Times of 10/2/71 handed to Witness.)

—I can tell you that, as regards my meetings, he mentioned also that I met Rory Brady. This is completely wrong. I never met the man in my life, so that is that. As regards Cathal Goulding, I met him for the purpose of my Intelligence work up to 4th October; I met him three times and we had very general conversations really. The point is that this was reported to my superior and my superior went to the police, Garda headquarters in Phoenix Park, and told them that I would be meeting such people and they should know about it. So I think this would possibly clarify that. This was done when the contact was broken and it was handled in a completely official manner.

6771. You are aware that Chief Superintendent Fleming is on record as saying that he double checked the source of his information, which he regards as most trustworthy in that respect?

—He said this at the end, that he double checked, but what did he say concerning the movement to England, I wonder, in September? This may get to the heart of the matter.

6772. You now have the press report?

—This is today’s paper, yes. Well, there is a statement here:

Mr. Collins—Captain Kelly has definitely stated that he was not involved with the IRA at that period.

—To my knowledge he had at least five or six meetings with the IRA and he definitely should have known them.

This is completely and utterly wrong; there is absolutely no question about it. I did not meet the IRA as such. It goes on:

Mr. Collins.—I am under the impression that he did not co-operate with them to any extent.

—He promised them arms and he handed over money. I have already stated that.

This is utter nonsense. I never handed over money to anyone.

6773. This is the voice of the Chief Superintendent of the Secret Service in this country.

—I appreciate that but he is very badly informed, that is all I can say. Actually I think from a perfessional point of view, listening to him giving evidence here yesterday, that what he gave was what anyone who had ever done any Intelligence work would call unprocessed Intelligence—rumour and hearsay, a lot of it, thrown out without any effort to give any reason why he should throw it out. But I am getting away from the point I was going to make. As regards the trip to London, he said that Pádraig Haughey went to London on 16th or 17th November, 1969. Those dates are probably right. As I told the Committee this morning, there was a North of Ireland person who was informed that there were people in England anxious to send arms. This person did not believe this, he thought it was a plant, and on the night before he went he told me this. He was in contact with Pádraig Haughey and I met Pádraig Haughey that night also and suggested to him that he should not get involved in this thing at all. However, he said he would go with this fellow and see what was happening. After this I kept in touch with what developed. Pádraig Haughey returned after about two days and I asked him what had happened. He said that when he went over there it seemed they were being followed by various people and the Northern Ireland lad told him to come home, and he came home. The following day the Northern Ireland lad came back too and I got in touch with him again and asked what was taking place. He told me that he had gone over there and as soon as they arrived they were being trailed by people with walkie-talkies, sometimes a woman with a shopping bag— this was in Oxford Street—and they could see them watching them and reporting on the walkie-talkie. So he came back to Ireland. Then he rang the man in London and got him to come over here. He stayed in the Gresham Hotel and gave the name Malcolm Randall. This Northern Ireland man negotiated with him for about three days, leading him on, and eventually got it to the stage where the man offered him a bribe to give him all the information he could on Irish activities and Irishmen generally and people who would be likely to have arms, and so on. This convinced the fellow that this man was not what he purported to be. He was convinced that he was a British agent. This was my information, which I reported in the normal way, and it was checked up with the police. The first word I got back was by word of mouth from one of the people in my section who said ot me that this person was some type of gangster—that was the term he used—a person who would be involved in shady deals, and so on. This did not prove that he was an agent, but that seems to be the follow-up, because in February I was asked concerning the identity of some people, specifically the man from Northern Ireland. This was around February, I think, and of course I could identify him. The point was at this stage that this operation to bring in the arms from Europe was under way, but the point is the police have all this information and they have got it in their own special way.

6774. Captain, were you aware that you, too, were under surveillance by the Special Branch?

—This is what I do not understand at all. All I know about the Special Branch——

6775. All your movements were known, in fact, as recounted by Chief Superintendent Fleming.

—What I think was this: for instance there was some suggestion yesterday that I was at a meeting in Monaghan. I was not at a meeting in Monaghan, but I reported to my authorities that a meeting had taken place there. I was in Monaghan to meet a person from Northern Ireland and when I saw the people moving around the hotel, I knew what was going on. I asked would it be possible to get into the meeting. The natural reply was “no”.

6776. His reference to your going to Virginia Co. Cavan is also untrue?

—I never met Cathal Goulding in Virginia Co. Cavan. The only time I met him was in Dublin.

6777. I do not want to pursue this line, Captain. As I see it, this is my dilemma and the dilemma of my colleagues——

—I think Chief Superintendent Fleming is either a very naive person or is taking information from some source that does not know what it is talking about, or is based on rumour or suggestion. That is all I can say.

6778. I want to get back again to the old subject of the sale of arms to Herr Schleuter. I have been probing with Mr. Luykx, and with yourself, the possibility of the recoupment of large amount of money involved, £26,000 or £28,000.

—Yes.

6779. I was wondering, Captain, if in the transaction there was any understanding, verbally or in writing, that the money would be refunded in the event of the goods not being supplied?

—No. I do not think there was any understanding to that effect; and I do not think in this type of deal this arises, though I would imagine it would be possible to recoup some of it. But, as you will realise, the merchandise is not very negotiable, really, and it is of no value to the person who has it unless he can get a buyer; but there may be some possibility. Mr. Luykx seems to think so. I listened to him yesterday.

6780. But this hypothetical recoupment—to what extent?

—I could not give a suggestion. I would say I would be talking out of the top of my head if I said I thought you would lose 30 per cent. I do not know.

6781. In the matter of accountability our task would be a relatively easy one, as you appreciate, were it not for the fact tht you thought fit to destroy all documents when things got difficult in this whole episode. I know you have got some reasons why you destroyed documents but, quite frankly, I am not all that convinced. Would you be kind enough perhaps to elaborate on it? You were acting on authority?

—Yes.

6782. You claim, acting on authority from a senior official, is not from the Government itself?

—Yes.

6783. One, I assume, who had called you aside?

—Yes.

6784. Why did you think it necessary and desirable to destroy all this relevant evidence?

—I think it has been stated at some length. The point is that back on 23rd April last a meeting took place in the office of Mr. Blaney, at which Mr. Gibbons was present and Colonel Hefferon was present, and at this meeting the suggestion came out, it was put to me by Mr. Gibbons, that I was in the hot seat—a remark which I did not take too kindly to, because Mr. Gibbons had known all along what was going on and I was slightly annoyed, I suppose, but still not too worried. However, on the Monday—it would be 27th April—I had a meeting with Mr. Gibbons in his office at Leinster House. I suppose he asked for me, I am not sure, but I know I was there and I had this meeting with him and the suggestion put to me by Mr. Gibbons was that I should be transferred to a unit in the Army where, in effect, I would have no work to do but where I would be free to carry on the work I had been doing up until then and that I could report directly to him as to what was going on; and he made some suggestion that for the moment it would be as well to lie a bit low but that there was no question of breaking my contacts in Northern Ireland or of breaking off this particular operation. I accepted this and said “O.K.”. I went away and the next morning, to my surprise, there arrived at my door two Army officers. They said it was not an arrest, but it was the closest thing to an arrest possible, and carried it out in an extremely not very nice manner. I was told to get into uniform and that I had ten minutes to report to Colonel Delaney. Going back a bit, this is Colonel Delaney who on 10th April, the day after Colonel Hefferon retired, had the staff officer ring my house and tell me I was excused duty from the following day and that I was to carry on with what I was doing. Later this man was to say that he had to send out an officer to give me a message to come in. My phone was available between the 10th and 27th, so there was no reason why he could not phone a second time. The two officers came and gave me ten minutes to get into uniform. No explanations, nothing. I went to my car and they fell in, one behind me and the other in front, and we went in convoy off down the road and arrived at Army Headquarters where I was marched in before Colonel Delaney. No formality, nothing. He produced a sheet of paper and read out. I cannot give the the exact words. It came out in Court: “You are to desist from your present duties, break all contacts so established and confine yourself in future to legal Army duties, and you are hereby transferred to the Main Training Depot. Eastern Command.” This took me by surprise, but I said nothing. I reported to Eastern Command Training Depot and I went to report to the officer there and checked on what leave I had. This was three and a half days. I went off that afternoon. The leave started from that afternoon. It must have been the Wednesday that took place. I went on leave in the afternoon to my home and I got a phone call to report back for duty. I was to be allowed no leave. Leave was cancelled. So that night I made it my business to go and see the Minister for Defence again. I went to see him and asked him what did this mean and he said the Army had over-reacted, and so forth. I said “What about the leave?” and I objected very strongly to the form of arrest.

6785. Naturally.

—Which was pure intimidation, from hindsight I would call it, intended to frighten me into a position where I could be used in a certain way. It was the only conclusion. However, I went to the Minister and mentioned the leave and he said, “It is probably my fault. I told him you were to be kept quite free”, and so forth. This was in complete contradiction, to my way of thinking, to the arrest. He had been friendly the night before and certainly there was no reason for him to arrange for this high-handed arrest, which is all I can call it.

6786. We need not go through all that again.

—The point I am making is that something further developed. I left the Minister that night and I was very dissatisfied. I went home and thought about it and next morning I put in my resignation. The Minister sent for me the following night and went through much the same “waffle” as the night before; and actually either on the last or the second last night we had some discussion about breaking contacts in Northern Ireland. Colonel Delaney had made it very clear and given a formal order. I said to the Minister for Defence, “What about the order given by Colonel Delaney? How can you associate this with your suggestion or instruction that I continue my contacts in Northern Ireland?”

6787. Is this new evidence which you are giving now?

—This is what actually happened. He gave me no direct answer. I said it would be all right—that type of thing. I went home. I resigned the next day. I was called back again. In conversation with the Minister I said something about whether the people in Northern Ireland were going to be left high and dry at this stage, and whether all these negotiations were coming to nought and were they going to be left out on a limb. The Minister said, “No. Actually you could not do that.” He made the comment, I remember distinctly— walking towards the lift in Leinster House— that John Kelly was too intelligent to be so hoodwinked.

6788. I see.

—At that stage, that last night, the question was that my resignation was on his table. He seemed to have some hesitation in signing it. Eventually I said, “It must be signed: I will not accept anything else”. Then I went home. The next morning I was arrested under the Offences Against The State Act, which was a follow up from the attempted coercion in the Army. There was a “close-in” by the establishment to try to intimidate me. Naturally enough, for self protection, when I went home I destroyed my documentation. I think that explains pretty well why I should do so. You said you were not satisfied as to why I should do so.

6789. There is one other point. The Cabinet sub-committee has been adverted to from time to time. I refer to the Cabinet sub-committee which was responsible for affairs in Northern Ireland at that time. You were reputed to be the liaison officer between the Cabinet sub-committee and the Northern committee. Can you enlighten us a little further as to what you knew about the operations of that sub-committee? How close were you to it, to the members of it, individually or collectively as such, and what instructions, if any, emanated from this sub-committee of the Cabinet to you directly?

—I got no instructions from the sub-committee as such.

6790. From individuals?

—As you have said, I realised that the sub-committee was formed. I went to see Mr. Blaney when I came back from Belfast on the 14th. This is where my contacts started. He referred me to Mr. Haughey on that night. I met Mr. Blaney much more often than Mr. Haughey. Any information I had I passed on, and I collected any information that they had.

6791. Did this sub-committee, to your knowledge, actually sit on Northern affairs as such? I understand that the membership was comprised of deputies, Ministers Brennan, Blaney, Haughey and Faulkner. To your knowledge did they sit or issue instructions? Did they exercise control over money and did they allocate funds as such?

—I do not think so. I have heard since that they sat once. It is written somewhere I think. That is all I know about them as a committee.

6792. No instructions to you, or anyone, to your knowledge, emanated from this committee?

—No, not as a body. I have never met them as a body.

6793. In respect of its composition—the membership of which was Ministers Brennan, Haughey, Blaney and Faulkner—was it not strange that the Minister for Defence was not included on that sub-committee, the then Deputy Gibbons?

—From hindsight I suppose it was. I do not know.

6794. From the evidence we have had there seems to have been a breakdown of liaison or co-operation between this committee, the Department of Justice and the Department of Defence?

—I think this became very clear during the court trial from the evidence of Mr. Ó Moráin.

6795. I was coming to that.

—He made the suggestion to the Court that the sub-committee should have been set up way back before the events that led to the trial arose at all.

6796. Was it clear to you during the course of these events that there was no cohesion between these three important departments?

—No, it was not clear to me at all; because for instance I can quote you the example of Malcolm Randall. I reported this to the guards. This meeting with Cathal Goulding was reported to the guards. I do not know where the breakdown occurred.

6797. With regard to the rifles which were sent to Dundalk on the occasion involved, were you involved? You were under contract?

—I was not involved. This was taken above my head completely. To my way of thinking, the only reason for it was on account of the directive dated 6th February.

6798. What truth is there in the suggestion that the rifles in any event were of a very primitive and rather harmless kind?

—I did not think so.

6799. Were they obsolete?

—I think they would be rifles that were no longer used in the Irish Army but would be quite good rifles. There was nothing wrong with the rifles.

6800. Deputy Tunney.—I am interested in the directive, in the circumstances where the Chief of Staff put the following sentence on paper, “The directive gave no authority whatever, direct or indirect, to the Department of Defence, or to any body, officer or person, to purchase, procure or acquire arms or equipment.” It was signed by S. MacEoin, Chief of Staff. Would you take that as a true statement of fact?

—I do not know. I cannot say anything. It only strikes me as funny that privilege should be claimed on the document at all.

6801. I am not asking that. That is a statement from the Chief of Staff.

—My interpretation is completely different, as was put to me by the Director of Intelligence, and as emerged very clearly in the Four Courts, that, out of this directive, arms would be distributed to civilians in Northern Ireland. Superimposed on that was this other operation.

6802. What you are saying is that you do not accept what the Chief of Staff has said in the letter dated the 2nd February to this Committee?

—I will accept nothing—only the directive.

6803. I am going to refer to the meeting in Bailieboro’ on the 4th and 5th. That was the meeting for which you were allocated a sum of money for expenses.

—Correct.

6804. It is the meeting I think which you described as the genesis of the whole operation.

—Yes.

6805. This is where you referred to the brainwave in connection with it.

—In what context?

6806. The brainwave of operating in this fashion.

—Of operating what?

6807. I mean, in connection with the subsequent importation of arms.

—I do not think that arose there. The possibility of getting arms was discussed and I think training was one of the chief things involved. As I have described, this was the weekend the training was stopped at Fort Dunree.

6808. This was a very important meeting, was it?

—I thought it was important.

6809. It was very important in so far as you would say that what happened subsequently emanated from this.

—Yes.

6810. Do you know whether the Director of Intelligence told the Minister for Defence of that meeting?

—I would say this. I assume he did, but I would tell you that I know that definitely the Director of Intelligence discussed the meeting with the Minister for Defence.

6811. That was in connection with a report which came subsequently about some suspicions which people had concerning it?

—Yes, I would imagine that the Director of Intelligence spoke to the Minister about it.

6812. But it was before the court case?

—I cannot answer whether he did or not. I just cannot say at this stage. I am sure he did.

6813. In circumstances where the Director of Intelligence has told us here that he sought the expenses for it from some other department rather than his own, would that not indicate to you that he had not acquainted his own Minister of the fact that it was taking place?

—There was no possibility of that arising whatsoever and I know definitely that the Minister for Defence was aware of this meeting, whether he became aware of it because of a complaint about the meeting—I would assume he became aware of it first from the Director of Intelligence and the complaint was only a check on——

6814. You said in connection with this matter, you said earlier on that any time you met Cathal Goulding it was in Dublin.

—That is correct.

6815. I think now when you get a transcript of your evidence yesterday—I think you said you met him in Bailieboro’ on the afternoon of that meeting?

—I could not have said that.

6816. You might look at the transcript.

—If I said it it is very, very wrong. I withdraw it completely if it was said. I met Cathal Goulding only in Dublin and the last day I met him in Dublin was 4th October. What I said yesterday as regards a meeting in Monaghan was——

6817. The 4th October was the date of the meeting in Bailieboro’?

—That is correct. This is why I remember so specifically.

6818. You met him in Dublin after the meeting?

—Yes.

6819. After the meeting? I thought all the people at the meeting stayed overnight?

—This was on Sunday. The meeting started on Saturday. They did not all stay overnight. I said some stayed overnight and some had a meal.

6820. There was £500 granted for their expenses for that meeting.

—It was not spent on that meeting.

6821. That is what we are concerned about. It was granted for expenses.

—It was granted for Secret Service expenses because of special circumstances which were in existence at that time.

6822. Would not these moneys be available from the Department of Defence?

—Department of Defence have a very low allowance. This was extra money that was paid because of the conditions which arose, and because of the expenses of the Intelligence Section.

6823. I thought it was easier to get money from your own Department than from the Department of Finance?

—The point is, it really does not concern me. I was invited out to this meeting with the Director of Intelligence. The question of the Bailieboro’ meeting came up. I was asked for an estimate of what it would cost and I said £150. I was told I would get a cheque to cover it and subsequently, and some two days afterwards I got a cheque from the Director of Intelligence. Out of that, on the Bailieboro’ meeting £35 was spent.

6824. You are aware that this £100,000 was granted for the relief of people in Northern Ireland. It was never indicated who those people might be except people in distress of one kind or another arising out of the disturbances?

—Yes.

6825. Quite frequently you say these people in Northern Ireland asked you to do certain things or you did certain things on their behalf. Would you be quite sure they were fully representative of all the people in Northern Ireland who were suffering as a result of what had occurred?

—The Committee was based in Belfast, as you know and it was a very representative committee, as representative as one could get.

6826. You are quite sure that they represented the general view in Northern Ireland?

—They did, yes.

6827. You are suggesting then that representing that view they initiated this move to import arms?

—I did not say that at all.

6828. I am making that as a deduction from what you are saying.

—I would say that the genesis of the arms importation—I have said this on at least three occasions—was the Bailieboro’ meeting which was denied by the Minister for Defence. This was the reason he denied it. He also knows it was the genesis of the arms importation. This was when a proposal was put forward that these people would get training prior to getting arms and they were interested in getting arms and it developed from there.

6829. As a member of this Committee seeking out how money was spent, what I put to you is that you know this money was intended for the relief of anybody suffering from distress in Northern Ireland. Therefore, I think that in any involvement which you had you would have to be satisfied that the people on whose behalf you were working represented the wish of all those people in Northern Ireland.

—On whose behalf I was working—I was not working on their behalf.

6830. I thought that—you said in your evidence that you took this genesis of this operation from the Bailieboro’ meeting to your Director of Intelligence and subsequently to the Minister and subsequently to the Government. That is the case you made, I thought with full authority——

—As regards the Bailieboro’ meeting my information is that the Taoiseach knew all about it. I assumed the Government knew all about it.

6831. You are happy that the people with whom you were associating in connection with this whole operation—accounts and the whole lot—represented all the people in Northern Ireland who were free to avail of the moneys which were being made available for them in their distress?

—It was called the Belfast Fund for the Relief of Distress. This would confine the committee to Belfast as such. The relief—the Grant-in-Aid committee, I could see them certainly giving money to other areas of Northern Ireland. I do not know. I do not think they did so.

6832. Suppose we confine it to Belfast, would we be happy that it was for all concerned in Belfast?

—All the people who were looking for relief—the people who came down here looking for relief.

6833. My difficulty is that “all the people”— in what I see before me it seems ultimately in the matter of these accounts to have reduced itself to two or three people in the matter of involvement with these accounts.

—These are the people who signed the cheques, the nominees of the committee.

6834. I am not going to labour it—I am talking about one of the holders—but there is one name which no longer appeared from the time the accounts were transferred to Baggot Street. We are told there was general agreement that certain moneys should go towards financing the Voice of the North?

—Yes.

6835. We were supplied with a copy of Voice of the North and I note from that that they described themselves as a non-profitmaking group, selling copies of this at 3d and inviting subscriptions. Is it the case that, in the circumstances where the Ann O’Brien moneys went to the cost of production and distribution, we presume they got no takers for the actual paper?

—I do not know the actual mechanics of the actual paper itself—I do not know what its distribution was, and its price, or how it was sold and so on.

6836. My questions now will refer to your first trip to the Continent. I notice on page 369, Question 4958, in answer to a question by Deputy Collins, Deputy Collins says Mr. Blaney introduced you to Mr. Luykx, and you say “Yes, the introduction was made through Mr. Blaney. It was a result of a phone call that this person was introduced to act as interpreter.”

—Yes.

6837. This was in connection with what visit?

—It was in connection with no visit as such at that stage because this happened earlier on. I think it was around February it happened. I did not bring Mr. Luykx with me until 1st April.

6838. We had here in your evidence the other day—I referred to this when talking to Mr. Luykx—we were talking about your visit of 19th February—Question 4417, page 332, in answer to a question: “That was the occasion you went to the bank with somebody who acted as interpreter?” You said “That is correct”.

—Yes.

6839. As far as we are concerned Mr. Luykx was your interpreter?

—On that occasion?

6840. If he was not on that occasion, I thought you were making the point that he was your interpreter.

—Oh, no. Mr. Luykx did not come into this thing until the 1st April and I have made this quite clear to the Committee as I made it quite clear to the court.

6841. Again, Captain, I am not saying this in any feeling of disrepect but our problem here is that what might be quite clear to you is not so clear to us and I am asking you now when you said “that is correct, yes,” in answer to that question, whom had you in mind when you talked about the interpreter?

—On the Continent?

6842. Yes?

—I think I said I met a contact man on the Continent for the Northern people. If you mean was it Mr. Luykx, I want to say categorically that it was not.

6843. In circumstances where Mr. Luykx has told us that on the 19th February certain Ministers were complimenting him on the good work he was doing and where we know that he left Dublin on the 16th February and did not return until the 20th and where we know that he admits to having been in these places and where you say we have been accepting him as your interpreter, would you agree that around this table at least there would be room for suspecting or accepting that Mr. Luykx was your interpreter on that occasion?

—Deputy Tunney, the facts of the case are as I have stated them and I have stated categorically already that he was not my interpreter.

6844. OK—we accept that. On the 6th April when you returned here you wrote this cheque for £8,500 for Mr. Luykx, drawn on the Ann O’Brien account?

—That is correct, yes.

6845. I asked you this question, I think, before and I got an answer but looking at the circumstances since, I have some . . . . I am not happy that the answer satisfied me. You were familiar with the three accounts in Baggot Street?

—Pretty familiar, yes.

6846. And you knew that at no stage did the Ann O’Brien account exceed £6,500?

—That is correct.

6847. And you wrote out this cheque for £8,500—I think you said you were hoping subsequently to satisfy that account so that it would service the £8,500?

—Yes, this would be the idea.

6848 Why did you not do that?

—This was 6th April—I do not know what happened. I remember that when the cheque was returned—when it bounced, as they say—I was surprised and I just cannot recollect what happened at that particular stage. It would have been a question of some people from the North putting the money in and as happened before when accounts were not up to scratch, this was arranged between the Northern fellows and the manager and so on, so that I heard nothing about it. That was it. The bank strike intervened—I think they were on a go-slow at that stage.

6849. The bank strike did not occur until the end of the month?

—I think they were on a go-slow at that stage but I did not realise till later and I assumed this cheque had been put in and cashed, and the Northern fellows were down quite regularly.

6850. I still think you should have known because I think that at the time you had got statements of the bank’s position—that there was not £8,500 in the account in so far as all along it had been feeding the Voice of the North?

—I knew there was not £8,500 in the Ann O’Brien account but I assumed that there was money in the other account.

6851. But you did not make any move towards having a transfer?

—I did not make any move towards having a transfer, no. What date was the cheque, as a matter of interest?

6852. I think, 6th April?

—Yes. There was nearly £8,000 there between the three accounts at that particular time.

6853. Again, you see, Captain, a new dimension comes in here, if you are asking us to accept that the Ann O’Brien account was definitely Voice of the North and the George Dixon account was definitely arms?

—Yes.

6854. What you are telling me is that they may not have been that at any given time at all?

—I am not telling you that and this means that I have to give you an explanation which I have given here before and I give it again. A very unusual set of circumstances arose on the week-end of the 2nd April. This was the week-end when the Minister for Defence thought it wise to send 500 rifles to the Border on foot of this directive which has not been produced here and when I on the Continent was phoned up and told to come home and help in the distribution of these rifles to civilians in Northern Ireland which I later checked out and found it was not necessary to come home, and in these circumstances we were told of 400 extra weapons which were readily available and in this context one certainly would do nothing else only buy the weapons because, in my opinion, at that stage the authorities here, to wit, the Director, instructed by the Minister, had ordered the movement of these rifles and these arms being purchased were of the type that would be required for such an operation, so that this was in the context of having Mr. Luykx pay for the 400 guns. If this had not arisen, I doubt if I would have bothered with the guns at all at that particular stage. I would have come home and inquired further.

6855. But having bothered, it was free to you, having come home, to contact the people on whose behalf you were working and explain to them and to get them, as happened earlier on, to requisition the £10,000?

—I probably did. I probably told these people that they should fix up this account. I would do this without any shadow of a doubt.

6856. Chairman.—I want to ask you a question, Captain Kelly, which you have mentioned in passing, in respect of the Bailieboro meeting. You say that your information was that the Taoiseach knew all about it?

—This came to my notice later.

6857. What information was that?

—This was this complaint mentioned here previously, I think, that there came to the Taoiseach and to the Minister for Defence concerning this meeting which was reported back upon by the Director of Intelligence.

6858. Do you know Captain Squires?

—I met him on the occasion of the 16th April.

6859. Had you any business with him?

—This was the night we went out and made tentative arrangements with him that he would be available to fly in the arms if it was necessary to call upon him.

6860. And ultimately he did not go?

—No, he did not go. He was not called upon.

6861. I just mention these things because they have been recently adverted to. In respect of the £8,500 cheque you wrote for Mr. Luykx on 6th April, shortly before that you would have had the statements of accounts. You would have had them in March covering the three accounts from the Baggot Street bank.

—I cannot say definitely that I had the March statement.

6862. They were issued for January and March?

—As I said, I had an envelope containing statements from the bank at home which I had borrowed on the same occasion I borrowed everything else. Whether they were March or January I cannot say.

6863. Would you not have known when you wrote that cheque for £8,500 that there was not enough money to meet it in an account in which the total credit was only £6,500?

—In view of the circumstances of the time I did not think there would be any problem about it. I have explained to Deputy Tunny what arose and how it arose and as this matter had actually been brought up by the Government, this question of getting arms up to the Border for possible distribution, I did not see any problem.

6864. A number of cheques had already been written on that account, the Ann O’Brien account. Those cheques were handed over by you, mostly if not entirely, to Seamus Brady. It was an account which had a very large access, for which you could readily get a signature. It seems strange to me that you should write a cheque for £8,500 knowing you had already withdrawn from that account £5,500 and that the total amount ever reached in it was only £6,500?

—It would be a question of having the Northern people put in this money, that is all. And you must take it in the context of the time.

6865. Was it not a fact that at that time there was only £949 in the Ann O’Brien account to meet it?

—The Ann O’Brien account was not capable of meeting it, I realised that.

6866. And all the credit at that time in the three accounts was £3,792?

—The three accounts, 6th April?

6867. Yes?

—On 17th April was withdrawn £1,000; 24th April, £2,000; 28th April, £1,200. That is £4,200. A balance of £2,842, which brings us up to——

6868. I think you would read that more accurately if you read it from the bank balance sheets, not from that constructed statement in front of you.

—It does not matter from my point of view really because the Northern people would have fixed this up.

6869. You tell us that Messrs. F, G and H controlled the Clones account?

—Yes.

6870. Were these persons chosen by Mr. Haughey?

—No, they were the nominees of the committee, as far as I am aware.

6871. Was the committee chosen by Mr. Haughey?

—No, the committee was got together in Belfast, to my knowledge, at that stage to handle this money.

6872. The committee had to have the approval of Mr. Haughey?

—I do not think so. If he was satisfied it was a genuine committee, that is the point.

6873. He would have to accept them as a genuine committee?

—Yes.

6874. There was a change in one of the account holders, in the personnel of the account holders, when the accounts were moved from Clones to Baggot Street?

—Yes.

6875. Did Mr. G fall out of the account at that stage?

—I do not know, I cannot answer that definitely, but, I met the person in question afterwards, some time in January, and I know there were some arguments between himself and others, but this was on a different level, I think, from this thing.

6876. But Mr. G failed to keep friends with the others?

—I think that does not arise now.

6877. Well, it arose then?

—There was some dispute all right but it is one of those things that happens on these occasions.

6878. Did Mr. Blaney know about the account in Baggot Street?

—I would say he did.

6879. Can you tell us more definitely?

—What I said about Mr. Blaney was that I met him fairly regularly and quite possibly I would have told him.

6880. You are satisfied he did know?

—Yes.

6881. Did Mr. Haughey know about the account in Baggot Street?

—Certainly I told Mr. Fagan about the account in Baggot Street and I should imagine Mr. Haughey would know too. I cannot see any reason why not.

6882. In so far as he sent the American money there, I suppose we must assume he did?

—This is my assumption anyhow.

6883. Did he know about the subsidiary accounts in Baggot Street?

—This is what I do not know. I did not meet Mr. Haughey very often but I met him some time around February and that was the time I gave him a fairly good briefing on events, but I think it was more concerned with these arms and the people looking for arms than with the actual money.

6884. Do I take it, then, that your evidence is to the effect that Mr. Haughey knew about the subsidiary accounts some time in February? Is that what you said?

—I cannot say definitely that he knew in February but I would say that he knew that there was a proposed arms importation.

6885. But I am asking about the subsidiary accounts?

—I would imagine that he would know about the accounts. It is possible that he would not know about George Dixon, Ann O’Brien, and the details.

6886. Did you tell him about the subsidiary accounts?

—This is what I am trying to think, whether I can pin down anytime when I did. I have no recollection of telling him specifically about the subsidiary accounts as such.

6887. Why do you think, then, that he had knowledge of them?

—I would think that he would have knowledge of the subsidiary accounts through Mr. Fagan.

6888. Mr. Fagan, you will recall, maintains that he had no knowledge of the subsidiary accounts?

—Well, I do not know at this stage. I went and opened the subsidiary accounts so it is possible he did not.

6889. You opened the subsidiary accounts?

—Sorry. I gave in the names and that sort of thing. I do not know, but I think there was some switching of money at some stage between one account and the other. It was referred to Mr. Fagan’s office as far as I know.

6890. That is why you think Mr. Haughey should know about it?

—I would imagine so, yes.

6891. But did you never think it was desirable that you should tell him?

—I would have told him, I say, without being specific about it. I would have told him in February that these fellows had money available for arms and I thought there was a possibility that it might be used for importing arms. But it was nebulous, as I have said, at this stage. Certainly there was some discussions as regards arms in February.

6892. But the subsidiary accounts were opened within three days of the main account—and opened, let us face it, in order to manipulate the account for the purchase of arms.

—The Northern people had their money first of all in Clones and at a later stage, I do not know how much later—this was opened on October 9th and on October 14th it was transferred to Baggot Street. They wanted to do this for security purposes. And then they had this idea of how to make finance available for the purchase of arms.

6893. I am putting this to you, Captain Kelly: Within three days of the main account being opened you participated in the opening of a subsidiary account which was designed to facilitate and cover up the importation of arms. Did you not tell that to the Minister to whom you were going regularly for funds to fund these accounts?

—I did not go to see him reguarly. This is the strange part about it. Normally I went to Mr. Fagan and was referred to him on one or two occasions.

6894. We are not discussing how often you went, but did you tell him?

—I just cannot recollect specifically telling him about the subsidiary account. I have to say this.

6895. But the opening of the subsidiary account surely must be a highlight in your mind?

—No. This is the point, you see, when things are taken out of context. The highlight in my mind was this question of arms and Intelligence generally and this was, I suppose, in one way a break-through, in that one would know more accurately what was going on concerning the arms. But otherwise the money itself was of secondary importance.

6896. But the use to which the money was put could hardly be described like that?

—This is why I was keeping my contacts, in an Intelligence capacity, and it was being reported all along the line.

6897. Did you feel from the beginning that this money was available, and properly available, for the purchase of arms?

—I thought it was a good security arrangement.

6898. I am not talking about security. Did you feel that this money was properly available for the purchase of arms?

—I had known, or found out, people in the North had got quite a bit of money.

6899. That does not answer my question. Did you think from the beginning that this money was properly available for the purchase of arms?

—I did think it was properly available for the purchase of arms.

6900. On what basis?

—In that people in the North had money for arms.

6901. But you did know it was money voted and passed through the Red Cross into the account?

—Yes.

6902. And forwarded for relief?

—Yes.

6903. Did you swap this, in your mind, for propaganda work and guns?

—There is no question of swapping. I have gone through this before. These North of Ireland people had money for the purcase of arms, and for security they thought it would be much safer to have it down here and that the moneys in Northern Ireland were actually used for relief. As a matter of fact I gather that the people in the North who would have been concerned with the arms money as such feel that they have lost some money on the transaction.

6904. What did you tell Mr. Blaney. Did you tell him of the subsidiary account?

—I am sure I did, because I saw him regularly and I would certainly go as far as telling him they had an arms account, I would imagine, at the bank here.

6905. When did you tell him?

—I would have told him, I suppose, shortly after it was opened—I imagine.

6906. Did you?

—Once again, I have no specific recollection of telling him. This is a particular point in time. But I would see no reason to hide it.

6907. That is a different answer.

—Well, this is all I can say as regards it, really.

6908. Did you tell Colonel Hefferon if you had an arms account?

—I would have told Colonel Hefferon there was money available from Northern Ireland for arms.

6909. Did you tell him there was an arms account at Baggot Street?

—I would probably have mentioned Baggot Street to him?

6910. “Probably”—Can you not go further than that?

—I cannot go further. I just cannot.

6911. When did you give him this information?

—I kept him informed all the time, so we would have discussed this in general terms. But as far as Colonel Hefferon and I were concerned, once we know this money was there that was all we were worried about.

6912. That arms account, or George Dixon account, which was opened on 14th November, two or three days after the main account was opened, did you not deem it part of your service as an Intelligence Officer to inform immediately Colonel Hefferon on that?

—I probably did inform him. I would not say immediately, but certainly when this question of money being drawn to go on this English trip was mentioned. I certainly informed him of the English trip and in conjunction with this I would tell him where the money came from.

6913. But did you do that?

—I certainly told him about the English trip, because I know this was recorded. So I would have told him these people were wanting so much money out of Baggot Street account, I imagine.

6914. I am trying to get at this, did you keep your superior officer informed of a very fundamental departure from what you might call the expenditure money, through Red Cross auspices, on relief to the settingup of an arms account in Baggot Street?

—Well, I did not look upon it in that light at that time. I looked upon it as an account that was here to facilitate people in Northern Ireland, which they wanted here if they could purchase arms. My main concern, and I imagine Colonel Hefferon’s, was to keep in touch with this arms operation so that we knew exactly what was going on. It suited us fine that it was in Baggot Street.

6915. Keeping in touch is one thing; participation is another.

—I did not participate.

6916. Did you not see the difference?

—No. I got authority.

6917. From whom?

—From the Director of Intelligence, initially, to carry out my Intelligence work. It was reported, when it became of any consequence, to the Minister.

6918. Did the Director of Intelligence give you an authority to open a subsidiary account in Baggot Street?

—When the Northern people opened it, he did not.

6919. Did you get authority to participate in it?

—I did not get authority to open the account.

6920. To participate in it?

—To participate in it, yes, I would imagine that I told him.

6921. You would imagine that you told him?

—Yes.

6922. Do you say: “Yes, I told him” or “No I did not”?

—At this stage one cannot say yes or no. All I would say is that I reported in detail to Colonel Hefferon. I have said this before. I have no recollection of holding anything back. There would be no reason whatsoever to hold anything back.

6923. Did you report to Mr. Blaney?

—I did not report to Mr. Blaney, but I would have told him.

6924. You told him. Did you know immediately the account was opened that there was a change in the account-holders of the main account?

—I assumed there was no change.

6925. When did you discover there was?

—I never realised there was a change.

6926. We discussed it a moment ago. One person withdrew from the account. We have discussed it.

—I did not realise then.

6927. When did you realise it?

—Until it was put here I did not realise it. I thought the three names were still there.

6928. The same names as in the Clones one?

—Yes.

6929. Did you participate in the discussion leading up to the opening of the Baggot Street and subsidiary accounts?

—Do you mean with the people from the North?

6930. Yes.

—The people from the North approached me at one stage and said that they were not satisfied to have their account in Clones and would like to have it moved. I said, “certainly, I will see what I can do.”

6931. On whose authority did you feel you were acting when you participated in the operation and opening of this subsidiary account at Baggot Street?

—Subsidiary account?

6932. Yes, the Dixon arms account.

—I considered this as part of my intelligence duties and work and it was necessary to keep in contact with what was going on and get concrete evidence thereof, so I knew exactly what was going on and was not depending on rumour and hearsay, as happened here yesterday morning.

6933. In the first instance did you consult anybody before you took that statement?

—As regards the subsidiary accounts, no.

6934. You cannot specify, except in a general way, what kind of authority you felt you were operating under.

—I was operating under my authority as an intelligence officer reporting back to the competent authority. Nothing was held back from there.

6935. You were participating in something rather than observing it, and reporting back?

—The point is that if you are doing intelligence work and sit back on your heels and do not get into it you will find out nothing. If you want to find out what is going on then you want to get in there and find out.

6936. That is one way of looking at it.

—I do not believe in causing any arguments. It is the only way you can do it in these circumstances.

6937. At that stage you merely felt you were working under the authority of Army intelligence, Colonel Hefferon being your immediate officer?

—Yes. This is the important point. When I had reached a certain stage I made sure that I brought it to the Colonel at a certain stage as a precise operation. He brought it to the Minister. This was the stage where the Minister could have said, “call the whole thing off, forget about it; it is not on.” Instead of that he agreed that I should carry on. That is the point when you bring something concrete to your competent higher authority, which I had at that stage. It could have then been stopped, finished, and forgotten.

6938. You would deem that your authority as an intelligence officer derived through the intelligence service, Colonel Hefferon being your immediate officer?

—Yes.

6939. You had another function. You described yourself as having a dual function, as a liaison officer?

—Yes.

6940. Would the opening of the bank account not be more properly described as part of the liaison services?

—It was, but I related it very closely to my other duties because the liaison thing to me developed out of my intelligence work, and one worked in conjunction with the other.

6941. Is it not true that the person who introduced you to the banking question was not Colonel Hefferon? He was probably never in the Baggot Street Bank in his life, or knew anything about it. It was Mr. Haughey?

—Mr. Fagan did the introductions and Mr. Haughey had given authority for the money to be expended.

6942. Was it Mr. Fagan who discovered you?

—No. Mr. Haughey knew me before that. When the committee was named I was asked for my opinion of the committee as such.

6943. Do you accept freely that the setting up of the Baggot Street banking mechanism was for arms and propaganda as well as for relief?

—Certainly at this stage I was in no doubt that it was for arms and propaganda. At the early stages I assumed that it was for arms; and as it developed, it was for arms and this is it.

6944. What specific type of report, in respect of the import of arms did you give to Colonel Hefferon before mid-January?

—I told him about people attempting in England and that I had inquiries initiated to the police concerning it. I also told him that people had been in America using money out of this account, and that they were looking for assistance and giving talks over there, and looking for whatever assistance they could get. I would imagine that arms were on their minds also. So far as I am concerned, neither of those trips yielded anything.

6945. In December, in respect of the £3,500, you withdrew that money. Is that correct?

—I think I withdrew it. I have no recollection of withdrawing it at this stage. I will accept that I did.

6946. You said earlier in your evidence that you gave it to somebody.

—I had it for a period, anyhow.

6947. Who did you give it to?

—I gave it to a Northern person.

6948. Is his name on your list?

—I am not naming the Northern person. Sorry.

6949. You appreciate, Captain Kelly, you are admitting that you withdrew £3,500 of money voted by the Dáil, gave it to a person outside its jurisdiction, and are failing to disclose, by court order or otherwise, to whom you gave it.

—No. First, I would take the statement you made there. I have not at this stage admitted that I withdrew the money. I said I would accept that I could have withdrawn it. I do not recollect at this stage having withdrawn it. Apart from that I think it has been explained here why the second and third accounts were operated. It is a question of whether one accepts that there was a switch in operation or not, whether one can say it was Dáil money? So far as I was concerned it was Northern money, belonging to people from Northern Ireland, and I had no reason to believe otherwise.

6950. The £3,500 was Northern money?

—Yes, it belonged to Northern people.

6951. Do you put that forward as a true judgment of the situation?

—Yes, it was Northern money.

6952. You do not know for what purpose that money was utilised?

—The money in the Dixon account was utilised for arms.

The Committee adjourned at 6.30 p.m. until 8 p.m.

Examination of Captain James J. Kelly continued.

6953. Chairman.—Now, Captain Kelly, I want to ask you something about your second journey to the Continent. I do not think it has been dealt with very much here. It was, I understand, on the 10th March?

—March 10th, around that time.

6954. You travelled by plane, I take it?

—Yes.

6955. You travelled alone?

—I did, yes.

6956. Again it was to look into this question of arms?

—Yes, that is right.

6957. Where did you go to?

—Antwerp, it must be. Yes. I get mixed up myself by this stage. Antwerp, yes.

6958. How long did you remain there?

—I stayed there only two days. I met Mr. Schleuter there anyhow—at Antwerp, yes. I am certain of that. It was in Antwerp.

6959. You met him by appointment?

—Yes, that is correct.

6960. What business was transacted on that occasion?

—I was trying to find out if these arms actually existed. At this stage he said he would have them put on this ship that was due to arrive on the 25th. I left him with that arrangement worked out.

6961. You did not take any money with you on that occasion?

—No. The money was on the first occasion. You may be sure of that.

6962. You duly informed Colonel Hefferon?

—This is when the question arose of where the arms would actually be taken and where Cathal Brugha Barracks came into it, and this type of thing.

6963. Had you any contacts out there when you arrived?

—No. I met him—he arrived down. The appointment had been made and he arrived down with his secretary to Antwerp on the day after I arrived and we had a long discussion and I was trying to find out if I could see actual arms and this type of thing, and it turned out that I did not—I could not. So far as I remember some of them were supposed to be at the docks at that stage but we could not get there and we could not see them. I was silghtly dissatisfied that I did not see them.

6964. You were chasing your £10,000?

—This is the point, yes.

6965. He assured you——

—He assured me it would be O.K. and that they would arrive on this boat.

6966. About the importation of arms, you are not a lawyer and have no knowledge of the law?

—That is correct.

6967. Neither have I. But I understand— and I am asking you do you understand the same thing now—that only the Minister for Justice and the Minister for Defence may import arms and then only for use by the Army or by the police?

—That is correct, yes.

6968. And did you know that twelve months ago?

—I did not know it in that detail. I assumed that the Minister for Defence had authority.

6969. Not being a legal man, you would not be expected to know?

—Well, I worked under my normal authorities, under my normal superiors.

6970. And any departure from this orthodox procedure would, I suppose, be regarded as irregular, if not illegal?

—This was what the case was about anyhow in the Four Courts.

6971. And if there was a departure or any irregularity, I take it you would agree that that could not regularise except by an order or intervention by the Minister for Defence or the Minister for Justice?

—The Minister for Defence was the man in question in this case.

6972. A customs clearance order by any Minister such as the Minister for Finance would not regularise it? That would be your idea?

—The point is that it was only a question of getting it in as quickly and as secretly as possible and this was the suggestion put forward, that we get it in this way.

6973. You were not too concerned with regulation?

—It did not strike me that there was anything wrong about it.

6974. The proposition you put up was that the arms be imported through normal channels—is that right?

—That they would be brought into Cathal Brugha Barracks in the normal way.

6975. And stored there in the normal way under Army control?

—Yes.

6976. For distribution to the North?

—It depends—if ever such orders were issued.

6977. I take it from your evidence that Colonel Hefferon advised otherwise?

—Yes. He thought that this would not be the best possible way of doing it.

6978. He suggested that the arms be imported via customs order from Mr. Haughey?

—That is correct, yes.

6979. And he did not agree with your storage suggestion, I think. He suggested that they be stored in a safe place under the control of whom?

—I would know where they were; the Minister for Defence would know where they were; and certainly Colonel Hefferon would know where they were. It would be up to his superiors to let anyone else know if they wanted to know.

6980. That is the concensus of his advice to you and when you put up your proposition to him?

—He did not say that at that stage but I know that he did tell the Minister where they were going to be stored.

6981. He did in the initial stage come down with the suggestion that you should approach the Minister for Finance for customs clearance?

—That is correct.

6982. That suggestion came from him?

—That is correct.

6983. Not from you or anybody else?

—No.

6984. It might be held now that that importation suggested by Colonel Hefferon which ultimately was—I think we can agree —attempted—it might be held now that that was not a legal method of importing arms?

—I would think that once the Minister for Defence was informed, which he was, and which he has admitted himself that he was informed of this importation of arms that did not take place and he was informed also, on his own admission, that there was going to be a follow up action, that I would have to follow it up, and in effect he mentioned what I told him that this stuff was on the way to Trieste. I briefed him and he mentioned this in Court and once he was informed I was quite happy.

6985. Is it your concept of things that any act, if it is illegal still remains legal where it is carried out by Government, Taoiseach, Ministers, Chief of Staff and down to the small officer down the line?

—No. The point is this, that it was reported back to the person who is responsible in the Department of Defence, the Minister for Defence, and he has himself admitted this in Court. He has actually gone back as far as February on his own evidence especially in the first trial.

6986. Taking your position now as the last link in the chain of command and as a person not versed in the law, your degree of culpability it might be claimed would be least of all—do you still contend that? Is it your belief, because none of us is a lawyer, that an illegal act can be legalised by the status of the person who puts it into operation?

—If the person who puts it into operation is the person who under statute is the person responsible, then it becomes legal and the Minister for Defence is the man who was responsible for the importation of arms for the use of the Defence Forces. The Minister for Defence was briefed on this operation so therefore he is the authority and no one else is the authority.

6987. But do you believe that he would have authority to import arms in an unorthodox fashion?

—I would say, in any way he wishes, once he is importing them for the use of the Defence Forces, and this was all gone through in the Court very thoroughly and actually my counsel explained it very closely. Authority, he explained—he told quite a long story to illustrate it and also explained this question of use and this was accepted.

6988. We all understand that a Minister of Defence can import arms in the orthodox manner for the use of the Army but do you think now, if he so chooses, he could not import arms or have given permission to have arms imported by merely getting customs clearance from another Minister?

—Once he knows and gives his agreement and says so, to the importation of arms.

6989. Any method of importation?

—The point I would make is this that when the proposition was put to him in January-February, at that stage this proposition was put to him that this thing was going to take place—I was not sure that the actual arms were there or would ever arrive—but the proposition was put and we had fairly concrete evidence to go on. At that stage he had a chance to say “No, this is wrong; this should not take place”. In effect, he went along with it and agreed with it and, as I said in Court, I think he was enthusiastic.

6990. But is it not a fundamental prerequisite that the arms would be for the use of the Army?

—This was all gone through in Court to a very large degree—it was a major issue.

6991. Anyway, your first appearance on the scene—to put it briefly—followed your visit to the North. You come back and you report to Deputy Blaney and you are then introduced to Deputy Haughey?

—That is correct.

6992. And the next stage is that you are invited to Mr. Haughey’s house with Colonel Hefferon?

—That is correct, yes.

6993. And on that occasion you got some money to organise the Bailieboro meeting?

—That is correct.

6994. And that you describe as the foundation of all that happened subsequently?

—Yes.

6995. Could I be clear on this—the Northern people were looking for arms?

—Yes.

6996. And the suggestion was made that they should contact the Government here in the South to help them in the importation of arms?

—They had been down here, I think, visiting various Government Ministers and at the early stage I did not interest myself in it very much, but when it came to the stage where it was obvious that these people were making a serious attempt to import arms, I interested myself in it. This was after Christmas when I got interested in what actually was going on as regards delegations coming to see Ministers, and so on.

6997. And you suggested they come down here and do the best they could after that?

—If any proposition was put to me I said it would have to have Government authority and go to members of Government.

6998. Your other activity, the Grant-in-Aid, you are aware that the Government decision was that the Grant-in-Aid was merely to be administered through the Red Cross?

—I am certainly aware of that at this stage. I was probably aware of it at the time but it made no great impression on me.

6999. Well, you will accept it from me that that announcement was made by the Government Information Bureau?

—Yes, certainly.

7000. Would you accept that it was how the fund was administered?

—That it was administered through the Red Cross? I gather it was, that the money was passed through the Red Cross.

7001. Administered?

—I do not know the mechanics. There is no point in my trying to say I do.

7002. I stress the word “administered” because merely passing money through the Red Cross Fund in a Bank here in Dublin and then into the Baggot Street account is not the same thing. Would you agree that in effect the Red Cross was by-passed and was merely used as a front for the disbursement of £70,000 rather than as an administrative organ?

—I just do not know. As I say, I was not really interested in the mechanics of the thing at all.

7003. Would you accept this, that the administration of £70,000 of the Grant-in-Aid Fund through a complex trinity of accounts in Baggot Street under three false names would not be the ordinary method that you would expect the Red Cross to use?

—I do not know about the Red Cross part of it but I would certainly agree it was an unorthodox operation; I have said that previously. It was not usual by any manner of means.

7004. I have put this to the Secretary of the Department of Finance. He, not being a legal man any more than I am, did not agree with me, but I put the point to him. I suggested to him that this might be, in effect, an illegal method of distributing the Grant-in-Aid. I cannot ask you about that, of course?

—That it might be an illegal distribution of the Grant-in-Aid? I do not know.

7005. Would you accept that the tampering with the fund and the way it was handled was not in conformity with the wish of Dáil Éireann when they voted this money that it should go for relief in the North?

—I do not think I am in a position to answer that question, but my personal opinion is that this was irretrievably involved with the intelligence operation. I have said this before. This was the position and these people, for security reasons, thought the money would be safer down here, so they used this account as a cover in this way by this process of switching money.

7006. Where do you think the primary or major responsibility might lie as to the way this fund was ultimately manipulated? Do you disclaim all personal responsibility for your activities in respect of this fund?

—It never struck me at all once this question of arms was under control, was made the first objective. Being under control means that one knows what is going on, where these arms are likely to come in and who is likely to bring them in. When this was put to the relevant authority in the country they said “Go ahead”, and this meant we went ahead and carried out the job. And, as I said previously, the money was completely secondary to this main operation and the important thing was that these arms would be in hands where they were under the control of the Government of this country.

7007. Do you accept any personal accountability in respect of this fund?

—I do not, no.

7008. You do not accept any accountability?

—No. I do not see how I could have any accountability for it.

7009. You do not accept any personal accountability even to the people in whose names the account lay?

—If I thought any of the money went astray—and I mean astray from the arms or whatever the money was used for—I would think then that one might have some responsibility, but when it was used for the purpose for which it was intended, no.

7010. I am speaking now not alone about responsibility but about accountability?

—I would accept no accountability for it at all except if I were involved in handling some of the money that it was handled for the Northern people in the way they wanted it and went where they wanted it to go.

7011. You did keep accounts?

—Yes.

7012. Of all your withdrawals and the disposal of the money?

—I kept accounts as best I could, even of the amount that was expended on arms as far as I knew, and I think I have said here that as far as I remembered it was around £26,000 to £28,000.

7013. Did that imply a sense of accountability in your mind?

—As far as I was concerned it was proably because of my training that I kept these things as a matter of course so that I could produce them if required.

7014. Who did you feel you owed accountability to?

—I was mixed up in this organisation and if the Northern people wanted to know or the Government here wanted to know I could show them the position. At that stage I accepted that it was an authorised Government operation and had no reason to believe anything to the contrary.

7015. Do you accept that you participated in the diversion of at least half of this £70,000 for purposes other than those envisaged by the Dáil Éireann?

—The point is that people in Northern Ireland had this money for Grant-in-Aid purposes and there were people in Northern Ireland who wanted arms and intended importing these arms into Northern Ireland. It turned out eventually that they decided to get the assistance of the Government down here. They came to this Government to get this assistance and were told they would get the assistance. Therefore I do not see that any question of diversion arose. The money was put to an operation authorised by the Government, the Minister for Defence specifically.

7016. I did not mention the Government. I mentioned Dáil Éireann.

—All I can say is that I was operating through the person who was my chief superior, the Minister for Defence, and I was responsible to him; and if he authorised it, so far as I was concerned that was it.

7017. I am not suggesting that any responsibility attaches to you——

—I understand.

7018. You were the last link in the chain, and a small one, but do you accept that you did participate in an operation which culminates in half of this £70,000 which Dáil Éireann voted for the relief of distress, that money, being authorised for other purposes?

—At that time this did not cross my mind, because this operation of the importation of arms was fully authorised. And I have to say this: if the man who authorised it, the Minister for Defence, had not switched, twisted or done an about-face at some stage there never would have been any question of the money arising.

7019. Was Mr. Haughey aware at any time that this money was being manipulated by anybody?

—I would like to say categorically that he was. I cannot say that categorically but I am fairly sure he knew that there was a possibility of an arms purchase on and I think he gathered this from me in February.

7020. Did Mr. Haughey know, for instance, that you had visited the Continent with £10,000 in your pocket for the purchase of arms?

—He did not, because I only saw him once in February and at that time these people were down for the purchase of arms and the purpose of looking for arms and ammunition. At that stage I believe Mr. Haughey knew that these people intended to import arms, or that this importation of arms was on.

7021. Who else knew, within the jurisdiction here, that you had lodged £10,000 in a bank in Germany?

—I do not think anyone else knew. I would probably have told Mr. Haughey. I met him after the event but I just cannot say whether or not I would have told him in conversation. I would have no reason to hide it, put it that way.

7022. Did you report that particular operation to Colonel Hefferon?

—I did. I told him that I had been on the Continent? As regards the figure of £10,000, I have no recollection distinctly of telling him. As I have said before, I reported to him at all stages, and I think he indicated himself that he knew the money was coming from Northern Ireland to back up this thing. I had no reason not to tell him.

7023. What was your ordinary method of reporting to Colonel Hefferon?

—Verbally, normally.

7024. Did you sometimes give written reports?

—In the beginning I did but afterwards no, because he wanted to keep this a secret operation, and this was it.

7025. From what date did the written reports cease

—I think round about October or November. I am not exactly sure. Before Christmas, say.

7026. Then you went on to verbal reporting?

—Yes.

7027. Do you know George Dixon?

—I do.

7028. You will see from your pink book that the main account was opened on the 11th or 12th November?

—Yes.

7029. And the subsidiary account was opened on the 14th November, the big subsidiary account, the George Dixon account, the arms account?

—Yes.

7030. There is a lodgment there, a first lodgment, of £11,450?

—Yes.

7031. There is a withdrawal on the same date from the main account of £7,000?

—Yes.

7032. And there has also been a transfer of £4,450 at Clones.

—Yes.

7033. You would agree that that is the basis of that first lodgment?

—It sounds logical to me.

7034. You do not know who withdrew that £7,000?

—I cannot tell you at this stage. I never knew. But that sounds a reasonable explanation for it.

7035. That was on the 14th November?

—Yes.

7036. Was anybody else interested in the bank in Baggot Street except yourself at that stage?

—That is what I do not know, really. All I know is that I gave signatures for the subsidiary accounts. As regard the transfer, I would not have transferred, as far as I know. It would have to come from the people who ran the main account.

7037. What was the first date you went to the bank in Baggot Street?

—I could not give an exact date but it was around about the time the accounts were opened.

7038. Are you aware that arrangements were made by letter from Baggot Street?

—Yes.

7039. On the 17th November?

—Yes.

7040. To provide banking accommodation?

—Yes.

7041. For George Dixon in London?

—This would be concerned with this £1,500 here he withdrew.

7042. I find it hard to follow that.

—This is the trip to England.

7043. The accommodation that was provided for George Dixon was exactly what the first lodgment was on the 14th November? The accommodation this was?

—Yes, this was in England. I was aware there was some provision provided, yes.

7044. At the National Provincial Bank?

—I could not say which bank.

7045. Of £11,450?

—I could not say the figure either.

7046. Did you know anything about that operation?

—I told you this morning what I knew about the operation and that this man expected he was going into a situation where there was a plant operating, and he went aware of this.

7047. Have you any idea who instructed the bank to make this accommodation available to George Dixon?

—At this stage I cannot say.

7048. If you look at the main account there are ten or 11 lodgments there?

—Yes.

7049. Apart from the lodgment of £4,993 10s. in respect of the proceeds of US dollars, were all those other lodgments made at your request to the Minister for Finance directly or through Mr. Fagan?

—Possibly they were all made. Maybe one or two were not. I am not sure. Except for one or two, possibly all of them were made at my request.

7050. As regards the withdrawals, can you tell me about the first withdrawal of £7,000? Have you any information as to who would do that?

—I do not know.

7051. It was transferred to the George Dixon account?

—I do not know. The cheque was presented by the people concerned, I imagine.

7052. The next one is the £500 withdrawn in cash. Have you any information to offer?

—On that account I could not give you information as to who withdrew it at certain stages. It is possible that I withdrew some of it but I have no specific recollection of withdrawing any particular amount there.

7053. Can you give us any indication as to who withdrew in cash the next item, £1,800, November 27th?

—No.

7054. The next one is cash, £2,000?

—The only one I see there is in my own name, £2,000.

7055. Yes, that is the one?

—I withdrew that.

7056. What happened to that money?

—All I can do is to refer it across and see if it fits in here. It does not, so it was given to the Northern Ireland people.

7057. Can you vouch for it in any way?

—No.

7058. From our point of view it would be preferable if you could produce some evidence to back up your statement.

—That is an impossibility.

7059. Do you remember whom you gave it to?

—No.

7060. The next one is dated December 11th, £1,000.

—No, I have no idea.

7061. The next one is dated December 19th, £650.

—I have no idea.

7062. Then, December 24th.

—I have no idea. I could not give you any indication as to who drew them, or who did not draw them, or anything else. I know I handled money for these people. That is all I can say at this stage.

7063. Who kept the three cheque books?

—The people running the accounts had the cheque books.

7064. The cheque books were originally given to you, were they?

—I have no recollection of getting cheque books. As I have said here before, If I was asked to collect a cheque book I would have collected it. I would not have hesitated.

7065. Do you know anything about the January 6th withdrawal of £13,000?

—That was transferred to the George Dixon account.

7066. Do you know who transferred it?

—No. It would be the people, I imagine, who were running the account. They probably gave a cheque for that amount, and transferred it.

7067. The cash withdrawal on January 9th—have you any information on that?

—No, I am afraid I cannot say.

7068. The cash withdrawal of £2,000 on January 15th?

—No.

7069. The cash withdrawal of £2,000 on January 23rd?

—I cannot be specific about any particular figure. If I was asked to withdraw money, I withdrew it.

7070. The cash withdrawal on February 20th of £12,000? Do you know anything about that transfer?

—It was transferred to the George Dixon account, I know.

7071. Do you know anything about that? You were not consulted about that, were you?

—As I explained earlier on, as regards the mechanics of this thing, it did not affect me at all. I was not only the accountant. There were people running the account. They were the people who signed the cheques to take out the money.

7072. £4,000 were withdrawn on 13th March.

—Once again that is the George Dixon account.

7073. That was withdrawn by you, was it not?

—Mr. F is there. I could not say. I withdrew the money. I do not think I withdrew much money from the main account. The only time I would do that, as far as I remember, would be when these people could not get a cheque changed themselves and they left it with me to change for them. I think that happened once or twice. I do not think I withdrew any large sums from the main account, so far as I know: the moneys I would withdraw would have been from the George Dixon account.

7074. Was the transfer of £4,000 there to the George Dixon account? That operation was carried out separately by you? In what circumstances did that arise?

—The £4,000 on March 25th…?

7075. That is incorrect. It should be March 13th.

—Yes. Sorry. I see it now. This is a lodgment of £4,000 to the George Dixon account. I obviously lodged that on behalf of the Northern Ireland people, I would say.

7076. Can you recall the incident?

—I cannot. I must explain something there. This money was to me a very small part of my job. At the time, with my contacts, it was only incidental to what I was doing. I am not saying this because I do not think money is important. I know the importance of it owing to the £13,000 I owe on account of the recent arms trial. As regards my job, this was only a very small part of it. There were much more important things involved. I think anyone I was in touch with concerning the Northern situation, and who knew I was trying to deal with it in Northern Ireland, would appreciate that. I have no definite recollection of specific incidences as regards drawing the money. I just could not have any.

7077. There are further transfers here. On March 25th, £4,000 were withdrawn by Mr. E. Of that £4,000, £1,000 was transferred to the Dixon account and £1,000 was transferred to the Anne O’Brien account. You can shed no light on that transaction? The £2,000 were cash.

—It was brought away by the Northern people for their business.

7078. The other withdrawals on 6th, 17th, 24th and 28th April—can you throw any light on those?

—I know nothing about those whatsoever because my last dealing with this money was, so far as I remember, this £8,500.

7079. In respect of the payments from the Dixon account. I did not catch your explanation as to the November 14th and November 17th payments. One was for £1,500 and the other was for £100.

—I gave this to Deputy Nolan earlier on. It was drawn down on the money generally. I had a piece of paper with it written.

7080. Deputy H. Gibbons.—This £16,000 went to England?

—I can go through it again certainly.

7081. Chairman.—We will pass that. November 26th, £849 13s 9d—you say that went to the USA. Are you able to produce any corroborative evidence in respect of that?

—None, except that people went there. Actually, at this stage these people were running their own accounts and I do not think I assisted them in any way in withdrawing the money at that stage, so far as I recollect.

7082. Do you know who these people are?

—I do, yes.

7083. Are you prepared to disclose their names?

—They were two North of Ireland people.

7084. Were they signatories to any of the accounts?

—They were two Northern Ireland people who went out and I do not intend indicating who they were, as such.

7085. This money was not used then for relief?

—This money in the George Dixon account, I think I have said, was primarily concerned with arms. This is the accounting I gave earlier today for it.

7086. The £3,500—that was the deposit on the arms? Where was that deposit given?

—Where was it given? I gave it to a person here from the North in Dublin. I did not get a chance to follow it up until February but I found it was paid. It had found its way to Herr Schleuter.

7087. That is entirely distinct from the £10,000 you took out yourself?

—I beg your pardon?

7088. That is distinct——

—That is distinct, yes.

7089. You have given or somebody has given £10,000 plus £3,500 to Herr Schleuter.

—There is a total of what figure?

7090. Deputy Nolan.—£34,500.

—That is an estimate.

7091. Chairman.—That is excluding £8,500? The two £6,000 of January 9th and 25th?

—They were for arms generally.

7092. Were they for Herr Schleuter?

—That would be. All the arms money was paid to Herr Schleuter.

7093. £12,000?

—Yes, it would be.

7094. Then the £1,000 and £600 you said went to the North?

—I said some money went to the North. I said I assumed £3,000 went to the North, £2,000 or £3,000 went to the North out of that account.

7095. £4,000 on March 4th?

—That is arms, I would say.

7096. To where, to the North?

—It is all Schleuter.

7097. Can you tell us anything about the authorisation of the people who drew money to go to the US?

—So far as I was concerned it was their own money—they had control over it.

7098. You mean this £849 13s 9d was their own money?

—Yes.

7099. Voted by Dáil Éireann?

—This is the point at issue, and I have explained several times what happened.

7100. Were all cheques drawn on the Ann O’Brien account presented by you?

—I would say the most of them—I do not think them all, so far as I can recall, I do not think the last one was, but I would say the others were.

7101. Did you retain the Ann O’Brien cheque book in your possession?

—I retained nothing relating to this case after 2nd May.

7102. Up to that?

—I had. Any records I had, I had them.

7103. The cheque book—did this exotic individual, Ann O’Brien, retain the cheque book?

—I had not charge of the cheque book.

7104. Is Ann O’Brien, be the person male or female, within the jurisdiction?

—I have said here previously that I am refusing to give any indication as to Ann O’Brien or George Dixon, and I think I put the proposition forward before if the money is accounted for I think this is sufficient. These people would have been— some of them could have been innocently involved in this case. This was a Government operation as far as I was concerned. Any one who was dealing with it was so informed and accepted such, and it was only converted into an illegal operation in the latter week of April. As a matter of fact, it was converted into an illegal operation on the week end of the 17th and 20th April.

7105. Captain Kelly, do you accept that you stated that Ann O’Brien is a person within the jurisdiction at a previous trial?

—I refuse to answer any questions on Ann O’Brien or George Dixon. I think I have made my position quite clear on this. I am sorry but——

7106. Why did you depart from the usual practice of using the Dixon account when you were issuing the Welux cheque for £8,500?

—Because this man wanted his money on the day he arrived back and I gave it to him. It was easier to get him this cheque and I did not foresee any problem in having it met.

7107. Who instructed you to issue money from the Ann O’Brien account to Seamus Brady?

—The Northern people wished to pay for the Voice of the North and I gave them the money through Seamus Brady.

7108. Did you discuss it at any stage with Mr. Haughey?

—I think I conveyed to Mr. Haughey at some stage that the Northern people were paying this money.

7109. Were you aware at that stage that the Taoiseach had refused to have the project, the Voice of the North, financed from the funds of the Government Information Bureau?

—I was not very much aware of what was going on with the Voice of the North as such. I had some indication it was started by this propaganda unit. Other than that, I do not know what happened afterwards.

7110. You say that your expenses from 31st December were met from Northern people, as you describe them?

—When I went to the Continent, my fare was paid out of this Northern money, and my expenses.

7111. To whom did you present the statement of your expenses?

—I presented a statement of my expenses to no one; as I said, I had a record which I destroyed and I was never asked to produce any statement of expenses.

7112. You stated here that you gave £50— I presume you gave it on both occasions— to Mr. Luykx as out of pocket expenses?

—Yes.

7113. Who would determine that figure— how would it be determined?

—It would be just an estimate that £50 would be fair enough out of pocket expenses.

7114. And were most expenses based on estimates?

—Based on?

7115. On estimates?

—There were no expenses involved except he was the only person I would have to pay.

7116. Did you get any expenses from other Belfast groups outside the Belfast Relief Committee?

—I had no dealings with any money other than the money in question here.

7117. Did you personally secure the signature Ann O’Brien to each cheque?

—Did I personally secure it to each cheque?

7118. Yes.

—I got Ann O’Brien to sign the cheques, yes.

7119. Each cheque?

—Yes.

7120. And you can tell us that the signature Ann O’Brien on the eleven cheques drawn on this account—that these were all signed by the same person?

—Yes.

7121. In presenting the signature of Ann O’Brien to the bank—you presented that signature, a specimen signature?

—Yes.

7122. Did you personally witness that signature?

—I would need to see this thing again. My writing is on one of these, whichever it is.

7123. From memory?

—I witnessed one of them—I do not know which one it is. I have no recollection of doing it but that looks like my writing. That is all I will say (handed to witness). The George Dixon one is the one that looks like my writing. I have no recollection of actually writing that.

7124. You witnessed the George Dixon signature?

—Yes.

7125. You say that you witnessed the George Dixon signature but the witness named here is John Lynda?

—I said that I have no recollection of actually witnessing but that this looked like my writing, and I accept that it is.

7126. But it is John Lynch?

—That is right.

7127. Did you sign yourself John Lynch?

—It did not matter really—just immaterial.

7128. Is it in fact your writing?

—It is. It is my writing as far as I am concerned, yes.

7129. You were John Lynch that day?

—I stuck it on—it did not matter.

7130. Deputy Barrett.—You mentioned to Deputy Tunney, I think, that Mr. Luykx did not come into this operation until April?

—No.

7131. That is when he came into it?

—That is when he was brought in.

7132. When did you first get to know Mr. Luykx?

—It was around February I would say, the beginning of the year, or the end of January.

7133. You know of his evidence about other Ministers, meeting them on the 20th February—you know about that?

—I heard this story. As a matter of fact, the two people who were there on that night told me about meeting the Ministers there.

7134. Apart from that, he also mentioned that he got a slap on the back from Mr. Lenihan on the 30th January who told him he was doing a very good job for the country which he interpreted as helping to import arms?

—Yes.

7135. But he did not come into the operation until April?

—He did not come into the operation until April but I do not know how this would arise unless Mr. Lenihan was talking to the Minister who was introducing me to Mr. Luykx.

7136. He had no direct contact with the attempt to import arms anyway until April?

—Until I brought him to the Continent as interpreter.

7137. So then it would be unusual for him to get a slap on the back and be congratulated for helping on the 30th January?

—I will not attempt to explain that.

7138. With regard to the directive, Captain Kelly, I understood that you said Colonel Hefferon was present when this directive was given?

—So I gathered, yes.

7139. Did you ever see the actual directive yourself?

—No, I would not see the directive.

7140. Who told you what was in the directive?

—It was given out in the Four Courts— what was in the directive.

7141. By whom?

—By Colonel Hefferon in evidence in the first trial.

7142. And General Mac Eoin has a different version, as you now know?

—I do not think he has.

7143. In his letter which was read out today?

—Yes, but I do not see why the directive is not produced. The only reason I can see for the directive not being produced—and perhaps one can resort to legal terminology here and say that in the court we had a lot of talk about oblique motive—and one oblique motive I see, that presents itself to me, is the following, that on either the 8th or the 9th May in Dáil Éireann, Mr. Lynch made a statement to the effect that the Minister for External Affairs was not intervening in the debate, that the Minister for Defence had already intervened and would not be intervening again.

7144. The Minister for External Affairs?

—And the Minister for Defence, and that from neither of these had he got any indication whatever—I am working from memory but this can be checked—that the Army was standing at the ready to go into Northern Ireland. I would put this forward as one oblique motive. Prepare for incursions into Northern Ireland and one can draw one’s conclusion from that. Either the Minister for Defence was acting without the knowledge of An Taoiseach or otherwise.

7145. But you would not accept what General Mac Eoin says, that it has no connection with the importing of arms?

—Why is the directive not produced?

7146. That is a matter for the Government?

—I do not know either. I have my own ideas on the subject.

7147. Anyway, it was Colonel Hefferon told you?

—He told me in general terms about the directive within two, three or four days after the directive was issued. This was in line with the proposals from the Northern people and on this directive there was this question of surplus arms and he saw this as providing arms for civilians in Northern Ireland. This came out clearly in court. He was asked how he knew this and he said that he had made it his business to ring Army Headquarters and have his recollection of the directive verified through a staff officer there who went to the Chief of Staff, I gather and gave Colonel Hefferon what was on record there. The prosecution at that stage could not produce the directive because despite quite a detailed search it could not be found. An officer who had retired, by making a phone call, could find out where it was. This directive has been a mystery since the beginning and it seems it is going to remain one.

7148. Deputy Briscoe.—I want to be very brief and I hope you will enable me to be brief, and just to clear up a couple of small points. This morning when you were being examined by Deputy Keating you mentioned to him the visit of the committee down here to meet the Taoiseach?

—That is correct, yes.

7149. Was this the Defence Committee, the appointed committee of the North?

—No, these were representatives from Northern Ireland.

7150. These were not the people you were dealing with?

—They were not the people who were dealing with this, not the Committee as such.

7151. Were there any members of the committee on that delegation?

—I do not think so.

7152. I see. I mean, your recollection is serving you well?

—I do not think any of them were there.

7153. Did they know of your activities?

—These were the people who were down here looking for arms and assistance and I would say yes, some of them did.

7154. When approximately did these visits take place?

—The visits to the Taoiseach?

7155. Yes?

—One in February and the other on 3rd March.

7156. You mentioned, I think, that you were in a pub in Merrion Square, you waited until they came out from that meeting. Was that the February or the March meeting?

—It was after the February meeting that I met them in the pub in Merrion Square. At the March meeting I met them but I cannot remember where.

7157. On each occasion they told you that they had assurances from the Taoiseach that he would do something about arms?

—They got no assurances one way or the other. The point I make is that they got no refusal and they got no firm promise. They were told as regards arms— what was the word?—that they would have to think about it and it would be referred to the Cabinet.

7158. The first question I want to ask you on that is this: your understanding was that you were the liaison officer between the cabinet sub-committee and the committees in the North. Why were you not present there at these meetings with the Taoiseach if you were the liaison officer?

—At that stage I never made it my business to be present at any meetings because I did not think it was my function to be there.

7159. But if you were the liaison officer would it not have been more natural?

—Well, it did not happen that way.

7160. The main case you have been making is that all your operations were properly authorised, and all the purchases of arms, and yet we have in February and on 3rd March committees still coming down, still looking for arms, which were in fact already being purchased. This can hardly tie in—I am trying to see how it does— with the information that the Taoiseach knew all about the arms coming in?

—On 3rd March, to take that meeting, this man met the Minister for Defence and I sat in on this for the first time.

7161. I do not want to delay you longer than necessary. It is just about your meeting with the Taoiseach I am asking. There is one other question here. You mentioned that the 500 rifles which were moved to the North were moved under the directive?

—Yes, of course, this would be straightforward.

7162. Well, I think my memory serves me correctly and I recall that during the trial it was said that Mr. Gibbons was stopped in Naas by Mr. Blaney. He was told of a situation which had suddenly arisen in the North. He told him quickly to get arms up there. Evidence was given further that Deputy Gibbons then telephoned the Chief of Staff and the arms went up to Dundalk in the care of the army authorities. The question I want to ask you is this: you were on the Continent at the time; how did you know that they were old rifles? You said they were old rifles, how would you know that?

—I am saying that now, I said here that they were old rifles. I found out since. But also even at that stage, since they were surplus rifles, from my knowledge of the army I would know.

7163. Since the arms trial or before the arms trial?

—I think it was after the arms trial.

7164. When you were no longer in the army?

—Rifles and gas masks and ammunition were moved up at the same time.

7165. And they were brought up under the direct order of the Chief of Staff?

—Under the direct order of the Minister, as far as I know, given to the Chief of Staff.

7166. I am almost finished with you. You have given a tremendous amount of evidence to this Committee. We have taken up a lot of time. I am putting this question to you: You have destroyed all documentary evidence?

—That is correct, yes.

7167. You have actually left yourself in a position where you have no evidence to support everything you have said other than your version. I want to bring you back to something which I said on the first occasion. I said to you on the first evening that you were before us:

The only time your recollection is clear is whenever you are trying to incriminate the Minister for Defence.

And your reply was:

I am not trying to incriminate the Minister for Defence. I reported to my lawful authority.

Then I said:

You are absolutely clear on everything to do with him but on nothing else.

And you replied:

Naturally I am clear on that because this is the important aspect of the case and there is documentation to back it up, what is more.

Can we see that documentation?

—The directive? It is under privilege.

7168. So the whole case is based on the directive?

—No. The directive gives the formal Government backing for the operation. The Minister for Defence gave his verbal backing to the operation.

7169. The point is that the only documentation you can produce—well, not produce; you said there was documentation, you did not say you had it. So this is the only documentation you can refer to?

—This is very important documentation in this case, extremely important.

7170. Is there any other documentation?

—Not that I am aware of anyhow.

7171. My last question to you was this, and I will read it:

This afternoon you have been asked about whether or not Mr. Blaney or Mr. Haughey knew of the existence of the subsidiary accounts.

If my interpretation is correct, you were not too certain?

—I would assume that they would know. That was what I was trying to get across.

7172. This again is what is confusing. I asked you the same question and on your own admission you said that the Government knew everything about this operation. When I asked you if the then Minister for Finance, Mr. Haughey, knew what the funds that had been allocated to Baggot Street were being used for you said “No”.

—Yes.

7173. Then I said: “Did Mr. Blaney know what they were being used for”? and you said: “I do not believe he did.”

—Yes.

7174. Today your story is completely in conflict with that. Is there any reason?

—No reason. The point is I have no recollection of saying—I could not swear here, for instance—that I told him of it on any specific occasion.

7175. On any occasion? That is the point I was making. On one occasion you were not sure but you say you do not believe you did. On the other occasion you were not so emphatic.

—True. I do not know how that arose. The point is that I am positive and this is what I have in my mind, that I got authorisation for this operation from purely official channels. As regards the other two people with whom I was working, as we will see, members of the sub-committee, and reporting to them, I believe sometimes, that, with regard to Mr. Blaney, whom I met quite often, that I must have kept him in the picture. I have no specific recollection. I believe also that in February I put Mr. Haughey in the picture. But as regards the question of the money I have no recollection of telling him specifically.

7176. Deputy R. Burke.—Very briefly, when you met the Northern people at the corner of Merrion Street, in a pub there, they said “Mr. Lynch said ‘I will have to think about it. It will have to be conveyed to the Cabinet”’.

—Yes.

7177. Did either Minister or the Northern people, or anybody else with whom you had contact subsequently, indicate whether such consultation at Cabinet level had in fact taken place?

—I am sorry, my mind wandered a bit and I missed part. Could you please repeat?

7178. Mr. Lynch said, according to the people who spoke to you, “I will have to think about it and it will have to be conveyed to the Cabinet”?

—Yes.

7179. Did any of the Ministers or the Northern people, or anybody, subsequently tell you or indicate to you that in fact the consideration at Cabinet level had taken place, that in fact he had brought it before the Cabinet?

—No, I got no information as regards what took place in the Cabinet. The only firm indication I got that this was official policy, that is to my own personal satisfaction, was when I met the Minister for Defence. This was my first personal indication, apart from the directive and what I had reported to the Director of Intelligence.

7180. Did you get it clearly from Mr. Gibbons that in fact consideration had taken place at Cabinet level?

—I would not put it as clearly as that by any means, that there was Cabinet discussion on it, but this was the man in charge of defence and he considered that this should go ahead.

7181. Deputy E. Collins.—Captain Kelly, you handled quiet a lot of money, you took a substantial amount of money over to the Continent, as you say, on behalf of Northern people. No doubt you got a receipt for the deposit you made, for the £10,000?

—I would have got the normal banking receipt certainly.

7182. When the Army put you under arrest, or whatever you may call it, you have said today you destroyed the documents, for self-protection. I think that was the word you used?

—Yes.

7183. Why, if you claim that you are innocent of any illegal activity and that you were working under proper or authority, did you destroy all the documents rather than keep them—because you used the word “self-protection”.

—Yes.

7184. Why did you not keep documents which would not incriminate any person in the North but which would protect your own position so far as the moneys handled were deposited as you had been asked to do?

—My conception of the thing at that stage was that I was being set up, if I may use the term, and made into a fall guy because the Government had changed its mind. When they went to the extreme of arresting me under the Offences Against the State Act it seemed to me they were willing to go to any extreme, so I did not feel I should have anything in my possession that would possibly help them to try and prove a false case.

7185. Your case rests on the fact that you were working under authority?

—Yes.

7186. I think initially from the Director of Intelligence, your immediate superior, and afterwards under the direction of the Minister for Defence?

—Yes.

7187. In any court of law, whether military or civilian you would require documents as evidence?

—Yes.

7188. Also, where any person handles money, and a large amount of money, the documents to keep for evidence as to its proper use would be a deposit receipt from a bank?

—Well, at that stage they would be useful, I agree, but my conception of things in May, as you can appreciate——

7189. No, I cannot appreciate it.

—Put it this way. Supposing you are hauled in by your own people and one day you resign from the Army, the next day you are hauled in under the Offences against the State Act and turned into a criminal overnight, how do you feel?

7190. I would not panic and destroy documents.

—I was not panicking. I felt I should destroy these documents so that people would have as little as possible to go on.

7191. As little as possible to go on what?

—For instance, they had converted what was a legal operation into an illegal operation.

7192. Who had converted what?

—The Government, Mr. Gibbons.

7193. At that stage you did not know what was going to happen surely?

—Well, it is fairly obvious from what had taken place, as I have described to you, over the previous three days that something funny was going on. When I was dragged in under the Offences against the State Act by Chief Superintendent Fleming and Mr. Doocey it was not extremely funny. And when the Taoiseach sent Mr. Gibbons to tell me to make a further statement, the man who knew all that was going on——

7194. As an Intelligence officer—you maintain this quite strongly throughout your evidence—your principal aim was to protect anyone outside the jurisdiction?

—Yes.

7195. I would accept that in those circumstances, perhaps, from your point of view it would be right to destroy incriminating documents?

—Yes.

7196. Why did you destroy the deposit receipt for £10,000?

—The point is that an investigation was under way, if you remember, and people were looking everywhere to try, as far as I was concerned to swing me for merely doing my duty.

7197. For doing your duty?

—Yes, for doing my duty. There was no question in my mind at any rate.

7198. But this was the one document which would prove that.

—It would be useful now. I have given a pretty fair summary to Deputy Nolan, I think, of what is in the thing.

7199. You were not under pressure from any one to destroy the documents?

—No question. I was completely on my own from the 1st May, I do not mind telling you.

7200. In the first arms trial, I think, or the second, Colonel Hefferon, cross-examined by Mr. McKenna said;

Did Captain Kelly make it clear to you as a result of many meetings that he was acting on behalf of certain Ministers in the Government?

—He did.

And up to the time of his meeting with Mr. Gibbons the only Ministers so concerned, Captain Kelly said were Mr. Haughey and Mr. Blaney?

—Yes.

7201. Can you give me any concrete proof that you were acting on behalf of those Ministers?

—I carried out liaison duties and, as I said, I have no documents or proof as such except my word that I reported to the people, saw them and talked to them.

7202. One thing I am trying to establish is whether or not you had authority. You say you had. The proof you have given us has not been very substantial. We have no documents. Have you understood what I mean?

—That I have no documentary evidence?

7203. Yes.

—I have absolutely no documentary evidence. The only evidence, I would say— to get back to it again—is the directive.

7204. Deputy FitzGerald.—You said that after 1st May you were completely on your own. I put it to you that you still are and that to some extent your answers suggest that you are at times so busy protecting various people—certainly in the North and perhaps elsewhere—that you have not perhaps have had complete regard to your own interests. I wanted to ask you whether you understand fully the nature of our inquiry even at this late stage. I am not sure whether you understand or whether in presenting your case you feel it diplomatic not to suggest that you do. We are the Public Accounts Committee. In our ordinary work our job is to establish not only whether money was spent but that it was spent for the purpose for which it was intended. Even in our ordinary inquiries if it transpires that money allocated for one legitimate purpose was spent for another legitimate purpose, under a different heading, even in the same Vote, then that is a matter we would have to report on. The system of accountancy is very tight and strict. You said earlier this evening, as if it were a justification of some kind, that the Minister for Defence knew about what was going on— correct me if necessary—as if that justified money being taken from these accounts. I am not sure you understand it. If the Minister for Defence had himself signed the cheques and taken the money out of these accounts then this would not have legitimated the operation because the money went into these accounts for a particular purpose and when it is used for another purpose, for anybody, even for the Taoiseach himself, he would still have to come up before this Committee and explain himself—even if it were for a legitimate purpose. I am not clear from all you have said that you fully understand that.

Arising from that you have not been able to give a direct authority from any Government, Army or Civil Service source for taking money from these accounts. As you cannot even produce, for reasons you have explained, documentary evidence of the purpose to which the money was put then you are in a hot seat. So far as our Committee is concerned, we have in our questions been trying to put to you whether there was any way in which you can at least provide direct authority for your action in taking money from these accounts for the purpose of buying arms, an authority which would diminish your personal responsibility for an action which would satisfy this Committee’s criterion. I want to put it to you that the switching is irrelevant. It is interesting and if it were true it would certainly alter the moral responsibility. But the fact that in another part of this island, in a different State, there were people engaged in financial transactions between each other could not legitimate anything done with this account. We can only look at this account; accounts elsewhere are irrelevant. I am anxious even at this stage that you be clear on this and clear on where you stand and that you do not end up in the position of being so busy looking after other people that you do not look after yourself. I have put that to you to start with. Do you appreciate that for any person to take money from this account, no matter what transactions are taking place elsewhere, is, by the standards we have to apply, illegitimate?

—Yes.

7205. Whoever was responsible for it is in trouble. If he cannot produce any authority from above which would at least give him some exoneration, then he is in trouble. Do you fully understand that?

—I appreciate that. But that is talking to me from hindsight. When this was going on, so far as I was concerned, it was authorised, and I accepted it as being an authorised operation, carried out under Government auspices.

7206. Were you under the impression that the Government had power to use money, even though they knew all about these accounts, for a purpose different from the one which the Dáil intended? Were you under some delusion about that?

—It seems to me to be a delusion at this stage. I had no doubt but that once the Government arranged something they were quite entitled to carry it out. I was not aware of this technicality of money being voted in the Dáil, for instance.

7207. I can see you regard it as a technicality, but it is fundamental to the democratic system and to the control of governments by parliaments?

—Yes.

7208. You thought the Government had power to use any money for any purpose it wanted regardless of the Dáil?

—For any purpose authorised.

7209. But authorised by whom? Not by the Dáil?

—No; so far as I am concerned, this is simply it. I was doing an intelligence operation. These people ended up with money. This money was switched. I found out where these people were bringing in arms. The question of the arms and the ammunition was much more important than the money. Certain moneys were spent which did not succeed in bringing in arms. At a certain stage it seemed that these people were going to succeed and that was put to the authorities here. The authorities here accepted that.

7210. Here is the other difficulty. Nothing you have said to us shows conclusively that any authorities knew about these two subsidiary accounts, never mind authorising you to take money for arms. We would be more than happy if you would give us any evidence or statement that some other authority over you ever knew of these accounts or did authorise this. If they did not, that is irrelevant.

—I cannot make a specific statement that I told people the details of these accounts.

7211. I shall not press it any further. I did think that before you left here we should put it to you plainly in case there was any misunderstanding at this stage.

—I believe people knew but I cannot give a specific statement as such.

7212. If at any stage you recall anything further it would be in your own interests to come along with it. Did you take any steps to ensure that the switch was carried out? Here you were taking money from this account and justifying it on the grounds that it was being replaced in the North, which is a moral justification but only if you had made certain that the precise sum to the last penny was being substituted. What steps did you take to ensure that?

—I could not check the precise sum but I know that people in the North did get money and had money. I had been told of various figures which they had got and I knew they had money, but I could not make any check.

7213. You did not make any check on that?

—I could not make any check.

7214. Could you identify the point at which the operation changed its character from being an Intelligence operation, of finding out information with a view to stopping or controlling it, to the point where it became a question of, in your mind, being desirable to go ahead with? Please do not tell me it happened when you saw Mr. Gibbons, that that is when you got the authority. That could or could not be true. But at what point in your mind did the orientation change from an Intelligence officer, trying to check up and preventing something, to one of deciding that this is a good thing and that you must get authority to go ahead with it? At some moment this absolute revolution in thinking occurred.

—There was no revolution in my thinking at all.

7215. You justified your original withdrawal of £3,500 on the grounds that this was a necessary act in order to keep the trust of people to go on finding about this?

—Yes.

7216. You then justified your involvement in the importation of arms on the grounds that is was authorised by the Minister, and was Government policy. There must be some point in your mind when it became desirable for the operation to change its character, where you decided, instead of reporting on it to have it stopped, that you would get authority to go on with it. When did that happen?

—We did not get authority to go on with it as such. I did not do so. What I got was that the people in Northern Ireland, whom I was in touch with, were looking for arms and had been looking for arms since the previous August. I kept in touch with this developing situation. At a certain stage, which was January, these people said that they should operate through the Government here. They put that proposition to me and asked would I put it to the authorities here.

7217. As a result of that, your operation changed from where you were watching on behalf of our Government to control it to one where you decided to seek authority——

—This would be it.

7218. January is the answer.

—All right.

7219. On the Ann O’Brien account, there are certain sums which were not transferred to Séamus Brady either in cash or otherwise. We will go to December 15th, £300; January 2nd, £250; March, 31st, £500; April 17th, £900. Can you tell us who withdrew these and what were the sums used for? It is not enough to say most of this account was used for the Voice of the North. If you have answered this already, I am sorry. I did not hear the answer to it.

—I gave details already—£5,100 for the Voice of the North. There was £600 went to Northern Ireland at one stage.

7220. £600?

—Yes.

7221. There is no sum of £600 in Ann O’Brien. You are thinking now of George Dixon?

—No, it was £600 went to Ann O’Brien at one stage.

7222. The 28th November amount was paid to the Séamus Brady account. It is a cheque lodged on 26th November to Séamus Brady’s account and cleared through this account on the 28th November.

—That is November 19th?

7223. You are reading it wrong. It is 19th November, £1,000; November 28th, £600.

—Yes.

7224. That went to Séamus Brady. The sums involved—£300, £250, £500, and £900—what happened these?

—All the money in this account, £5,100— I will give you the bulk—went to the Voice of the North. There was £600 to my recollection which went to Northern Ireland.

7225. There is some mistake here.

—There is not.

7226. I would like to identify £4,500 as having gone from this account to the Voice of the North. I will tell you the sums and the authority. £1,000 given in cash to Séamus Brady who, as I understand it, lodged £650 to the account to offset £650 of his own and took £350 against other expenses he had incurred. £600 was lodged to the account. The £800 was lodged to the account. £500 on 2nd January was lodged to the account. £600 on 16th January was lodged to the account. £500 on February 16th lodged to the account and £500 on March 9th lodged to the account. These sums add up to £4,500, not £5,100. First of all, there is £600 missing and there is no figure of £600 as such anywhere left. Unless there were split sums I cannot quite reconcile my figures with yours.

—There was £600 went to the North from this account.

7227. Do you accept first of all that there is only £4,500 went to Seamus Brady?

—I thought it was more as a matter of fact.

7228. Have you got another £600 there?

7229. Deputy H. Gibbons.—There is some confusion about £1,000. A cheque was dishonoured for £1,000.

7230. Deputy FitzGerald.—I am not counting the £1,000 dishonoured. It becomes then £5,500 if you count that.

—What are the figures against the Voice of the North there?

7231. £1,000, £600, £800, £500, £600, £500, £500. They are all sums which went to the Voice of the North.

—That is £4,800.

7232. There is another sum which probably did not come from this account at all. There is another £600 which he said he got from you in cash but not from this account. That is 7th November. The account was not even opened. I think you are confusing things. That would account for your £5,100, but it did not come from your account.

—This is what I do not know. He may have got it in arrears.

7233. It could not have come from it on the 7th November. It could not have come from this account.

—The position is this as regards this Ann O’Brien account—the Voice of the North was paid out of it and there was £600 at one stage went out to people in the North to my recollection and I paid out of this my expenses on the Continent and I had not enough to meet those expenses.

7234. I think perhaps if you could give us a note in writing on this—it does not reconcile. Perhaps you can work it out more easily when you have time to think about it. Where did the £600 come from which you paid Seamus Brady on the 7th November? It could not have come from Ann O’Brien or George Dixon because they were not open. The only sum taken out at that stage—7th November—it could not have come out of Baggot Street either—you did not get any direct from Clones——

—I wonder was he actually paid on the 7th November?

7235. This is the bank account. His statement says he was paid by you in cash on that day.

—That might be clarified. My recollection is that all this money from the Ann O’Brien account was from the Ann O’Brien account.

7236. I think there are some understandable faults of recollection at this stage. It means you will have to account for £600 more from the Ann O’Brien account than you thought for purposes other than the Voice of the North. The total amount you have to account for now is £1,950.

—It is the £5,100 the Voice of the North figure?

7237. Yes, but £600 of that did not come from Ann O’Brien. It was paid before Ann O’Brien was opened.

—It was reimbursed some way. The Ann O’Brien account was for the Voice of the North.

7238. That may be. You may be taking other bits and pieces out and reimbursing yourself. The £600 in cash on 7th November did not come from this account. You must explain what happened.

—I wonder did he get paid on the 7th November? This is what I do not know.

7239. Deputy Keating.—Could I give a quotation from the statement on page 6? It says: “He”—that is Captain Kelly,— “came to me with £600 in cash”.

7240. Deputy FitzGerald.—You said “contacts in the North wished the newspaper to continue.” To continue—“he told me there were people prepared to subsidise the cost of production of the newspaper”. If you think about that and let me know in due course where the £600 came from and what happened to the £1,950 taken from the Ann O’Brien account in sums of £300, £250, £500 and £900 which has not been accounted for —that accounts for £1,950 in all—I do not want to press you now. It is no hour of the night for you to be conjuring up recollections. Perhaps you would give us a fuller account of that later. I also wanted to ask you a question which may arise from my not having heard all the evidence. Deputy Nolan said the sums you said as going for arms to the Continent added up to £34,250 plus £8,500 in the Luykx cheque. Could you explain how you reconcile that with the £26,000 to £28,000 paid for arms?

—This will be the figure paid for arms. The others were extra expenses which I estimate would be about 20 per cent—for people going out and finding out and all the rest of it.

7241. Perhaps you could give us a fuller account of that?

—I could not give you any real information on it.

7242. It is a lot of money.

—I could not give you any real information as regards the people.

7243. I am asking for a picture of what it was spent on. Does that figure include or exclude Luykx’s £8,500?

—That is my figure. What did he give?

7244. £42,750.

—This is what I made out roughly based on the price of the actual weaponry concerned and I added on 20 per cent for extra expenses and contacts and so on. These people all have to be paid in these circumstances.

7245. I accept that could explain it. If you can give us a more detailed breakdown when you think it over, it would be helpful. I do not understand, if your evidence this morning is correct that this trip to London is one which you suspected and which Jock Haughey also thought was a plant which you were exploring to try to track it down—why was £11,450 needed on 17th November in London for that purpose if it was a plant?

—This was part of it because these people won’t operate unless they think there is money there.

7246. How could that tell them? I do not understand. A letter is written by the bank in Dublin to a bank in London saying that if George Dixon turns up give him £11,450?

—Afterwards they found it was necessary to bring this person to the bank to show them that they had this money, type of thing.

7247. Only £100 was actually drawn?

—These people do not respond unless there is some bait. This was the situation.

7248. That explains it, but what is not entirely clear to me, going back day by day, is that on 14th November, from two sources, a total sum of £11,450 is lodged into George Dixon. That is clearly intended for this London transaction because exactly the same sum was requested on the 17th to be made available in London. Yet on the 17th a sum of £1,500 was cashed, not, I think, in London?

—Yes.

7249. How could you be about to draw £11,450 in London when you had already taken £1,500? When I say you, I do not mean you personally?

—I did not do it, but I would say that the people there had no intention of withdrawing the money.

7250. I see. What happened the £1,500? Was it used to buy arms? You said it was for England. Was it spent?

—The people concerned used it and they had to find out as far as they were concerned what they were doing, and I think they had paid a deposit and had to support themselves out there and this is what happened.

7251. An awful lot of people seem to have had an awful lot of expenses out of this for which there are no accounts. Finally, I just want to put to you again: is there anything you would like to add at this stage, either about your contacts with the IRA in the South, or any financial transactions with them you may have heard of or know anything of indirectly or anything about arms which you know indirectly or anything further about your involvement with the Ministers, because we have a variety of denials, but we would like to be sure that we have not failed to ask the right question to get the right answer? Is there anything you would like to add, because it is important at this stage that we should be in a position to assess fully your evidence; we do not want to come back again later and say that we now have information which proves something or other, contrary to what you said. If you have anything you would like to give us, perhaps you could give it now before we find ourselves in that position.

—There is a lot of stuff there concerning the IRA and that sort of thing related to what Chief Superintendent Fleming said and I would like to have an opportunity of going through all he said in relation to me because all he said in relation to me, as I pointed out last night——

7252. I know you have denied the particular statements?

——was wrong. I would like to have an opportunity of clearing myself concerning these allegations which I can only describe —I do not know whether you were here earlier today—as being based on unprocessed intelligence—this is the phrase I used— which is just rumour, hearsay and not fact.

7253. I understand your position and you have in fact denied the particular allegations made?

—There is more to it than denying it— this allegation that I met various members of the IRA. The only person I met with the IRA was Cathal Goulding, whom I met for intelligence purposes, and the last time was 4th October. I met him with the full knowledge and consent of the Director of Intelligence, who, as a matter of fact, told the police that I was meeting such a person. I did not meet him after the 4th of October, so I had no funds at my disposal until away up in November.

7254. From these accounts?

—Until these accounts arose, so I would have no funds as such, and there was no question of my giving any money to the IRA as such, and it is something I take the most grave exception to, because, regardless of what this Committee may think as regards the accounts, at all times my sole purpose was that any operation that should take place should be at the behest— should be a Government operation and Government backed and there was no question of going outside that. I had to have authority for it before I did it and I regard this a most despicable, mean and low slur to cast. I cannot use words strong enough concerning it.

7255. I appreciate your denials, and I understand the strength of your feelings in the matter, but what I am concerned with is whether at this stage you can help us with any further information at all on that.

—I can give further information on it, yes.

7256. Which might perhaps explain some of the things because some times things get garbled in the process?

—I do not think so because anyone who would follow up information and had any training or experience in the field would not produce the type of stuff produced here.

7257. You have said that and we accept that?

—I am disgusted with it really.

7258. I appreciate your feelings but you may be able to give us some assistance?

—I would like very much to come back and I would not like to finish with this Committee without coming back.

7259. You need time to think about it?

—Yes.

7260. Deputy H. Gibbons.—Was your house searched after your arrest at any time, Captain Kelly?

—No, it was never searched.

7261. To come back to this arms question to Dundalk, I am at a loss to know how this could be interpreted as sanctioning, even post hoc, the illegal bringing in of arms, or making what was an illegal operation legal. Could you explain that to me briefly?

—The movement of arms to Dundalk?

7262. Yes—how that could be interpreted…?

—This was as a result of the directive issued on 6th February, that the arms were removed to Dundalk.

7263. Can you give us, vaguely even, what wording you took up from any source on this directive as it was expounded to you by Colonel Hefferon or as it was expounded in the court—any version of the words whereby this directive would make what was an illegal operation legal?

—I think Colonel Hefferon’s evidence in the court explained this, and I think I mentioned this previously—when the jury came back to ask a question, their question was related to this very point. What they put to Mr. Justice Henchy was: did Colonel Hefferon give evidence in the court that the directive covered the distribution of arms to civilians in Northern Ireland, and they were told yes.

7264. But granted that the directive would give authority for the distribution of arms to the people in the North, if this unfortunate situation arose, to my mind, this would be something that would arise, even if there was never any question of them importing arms beforehand. This of itself does not, to my mind, sanction the taking in of arms, legally or illegally, or more correctly, does not turn an illegal operation into a legal operation?

—The 500 rifles matter itself does not turn anything into anything. The point is that the Minister had authorised the importation of these arms, long before the 500 rifles were moved. The only thing I would say about that is that they prove the existence of this directive and were issued on the strength of this directive which has not been produced to this Committee.

7265. I do not want again to argue about this, but in fairness to you, I will tell you my view, my interpretation, of the movement of 500 rifles to Dundalk. There were surplus rifles which you stated to Deputy Keating, I think, were serviceable?

—Yes.

7266. This means that they were surplus stock in the Army stores. Secondly, we do know that in fact arms were imported on 25th March, or something was received at the docks—we presume, arms—so my inference would be that here was a situation where the Army had surplus stock. They were importing stuff, as I think you referred to it yourself, and my feeling would be that there would be no need to have an illegal operation to bring in arms. Had an illegal operation covered ammunition purely, I would see some substance in it, that they were taking in ammunition for those surplus rifles which they had not got. This is my interpretation but I do not want to argue about it?

—I will tell you. I think the answer to this is that there was no illegal importation for a start but apart from that there was this question that these arms should be untraceable and the Minister was worrying about this. When I came back from the Continent after 6th April I went to see the Minister concerning this very point.

7267. You said to us today that the weapons would have borne serial numbers anyway so that they would not have been untraceable. You made the statement that the Government changed its mind in the last few days of April. In what way did it change its mind?

—As far as I am concerned, Mr. Gibbons changed his mind.

7268. If you wish to go on I would prefer you to say the Government——

—I think it has been clearly said already.

7269. It has not. This is what I am asking?

—I will explain. Mr. Gibbons was the statutory authority for the importation of arms and was the person authorised but under section 28 of the Constitution, paragraph 4, sub-paragraph (2) this is a collective Government responsibility.

7270. Why did Mr. Gibbons change his mind? What did he change his mind about?

—Mr. Gibbons should answer that

7271. No, there is only one circumstance in which I could see that Mr. Gibbons changed his mind. Up to this date he was undertaking an illegal operation and at this stage, to put it at its worst, he got cold feet, realised he was involved in an illegal operation and decided to change. Is this the interpretation you want the Committee to take up?

—It is not, because if he did that, if he simply wanted to change his mind, he had only to tell some people.

7272. What did he change his mind about? That is what I want to get at?

—About the operation he had authorised.

7273. If he had authorised it, it was legal, and what was the point in changing a legal operation which you say had the approval of the Government?

—The only logical conclusion I can come to is that it was a power play by the Government itself.

7274. But even this would not turn an illegal operation into a legal one? If it was a power struggle then the original idea was to import these arms illegally and at this stage, to use the words I used before, the Minister for Defence decided to change his allegiance from one power to another. That is the only circumstance in which I can see the Minister changing. Deputy FitzGerald asked you if there were any points you wished to raise even at this late stage. I think this is one of them and that we must be vitally concerned with this. You say there is a change by a particular man. If he changed to save his skin he moved into a legal position. If he moved into a legal position he moved from an illegal position, and this means that the whole operation up to this particular date was illegal. This is what I said earlier and it is what I keep asking about?

—There is no question of its being illegal before Mr. Gibbons changed his mind. It was completely legal and he was authorised to do what he did.

7275. Now you say “illegal”?

—I said it was legal.

7276. But if it was legal why should he have to change his mind?

—That is what I cannot explain. It is up to Mr. Gibbons to explain.

7277. Chairman.—It is five past ten and I do not think the other members of the Committee wish to continue. I suggest we adjourn now until 11 o’clock tomorrow.

Captain Kelly withdrew.

The Committee adjourned at 10.5 p.m. until 11 a.m. on Thursday, 11th February, 1971.