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, 13 Eanáir, 1971.

Wednesday, 13th January, 1971.

The Committee met at 2.30 p.m.

DEPUTY P. HOGAN in the chair.

ORDER OF DÁIL 1st DECEMBER, 1970.

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

The Committee deliberated.

Examination of Mr. C. H. Murray (Secretary, Department of Finance), continued.

302. Deputy Keating.—Some of the questions that I have to ask will, perhaps, seem very simple to you because I want to be clear about some mechanisms. For example, in the original submission from the Department of Finance of 9th December the first paragraph says: “The Government at a meeting on 16th August decided inter alia that—”—and then there is a quotation. Where is that quotation from and what is actually being quoted there?

—From the record of the decisions taken by the Government; the record prepared in the Department of the Taoiseach and circulated.

303. When you say the Government, is there a distinction between the Government and the Cabinet in this context?

—Not that I am aware of.

303(a). This record is circulated to all the Departments whose work would be influenced by decisions taken on that particular day. Is that the situation?

—That is the general principle in regard to the circulation of the Government’s decisions. I have not checked up as to what other Departments got this particular record.

304. I see, but this is a distinct thing from Cabinet minutes, if there are such things as Cabinet minutes? What is the position about that?

—No, I cannot speak authoritatively on that, but this is a record that is sent out to inform the Departments concerned and, of course, the Ministers, of the decisions taken, to alert them as to any action which has to be taken on foot of the decisions.

305. This document would, in fact, have been prepared by a public servant in the Department of the Taoiseach? Is that the normal practice?

—Yes, that is so.

306. This is a lack of understanding on my part, but when it says “the Government” is this a Cabinet meeting, or is there a distinction in sense between a meeting of the Government and a meeting of the Cabinet? Do they mean the same thing?

—I am a little at a loss here because this raises a constitutional issue. Our Constitution does not recognise the existence of the Cabinet; it recognises the existence of the Government.

307. I see. In the ordinary way, for example, someone like yourself as Secretary of the Department of Finance would not be aware of minutes of Government meetings? You would simply receive a document prepared by someone in the Department of the Taoiseach indicating what the decisions of the Cabinet meeting had been? Is that correct?

—Yes. Lest there might be any misunderstanding, I should say that for some years—I was for some years in the Department of the Taoiseach and, in fact, for a very brief period I was an Assistant Secretary to the Government. That was ten or 15 years ago and I had very little dealings with what I would call the Government business of the Departments. I mention this point in case it might be thought that I should be very familiar with what I might call the housekeeping side of the Government’s business.

308. I was simply under the difficulty of not being quite clear of where this quotation was from and what it represented.

—It was from a minute circulated by the Secretary to the Government, who is the Secretary in the Department of the Taoiseach, and this is the form in which Ministers and Departments are accustomed to be notified of the decisions taken by the Government.

309. Would you only, in fact, receive notification of the decision which referred to your own Department or would you receive notification, as head of the Civil Service, of all of the decisions which applied to all Government Departments on a particular day?

—There may be exceptions to this but, in general, the Minister for Finance receives copies of all Government decisions. I do not receive them in a personal capacity; I receive them from his office.

310. I see. We have it also from this document and indeed from other official statements that there was a meeting between the British Red Cross and the Irish Red Cross on 20th August, 1969 with a view to clarifying the attitude of the British Red Cross towards work in the Six Counties by the Irish Red Cross. I think we have it that the British Red Cross—although we do not know the terms—indicated that it was their area of jurisdiction and that the sequel to that was that the Irish Red Cross had no function there in terms of the formal relationships between the Red Cross Societies of different countries. Is that your understanding?

—Yes. I think the point at issue was that the Red Cross, within the terms of the Convention, could not operate directly there.

311. On the following day, in fact, on 21st August, 1969, there was an announcement by the Government Information Bureau which stated that “The funds”—I am quoting again from your first document—“the funds which the Government was making available for the relief of victims would be administered mainly by the Irish Red Cross Society”. The point I am making here is, this was one day later than the decision reached at a meeting between the Irish and British Red Cross. Do you think one might draw the inference, from your experience as a public servant, that in fact the Government Information Bureau were in possession of information relating to the discussions between the two Red Cross Societies on the previous day when they issued that statement?

—I would doubt that very much, but I could check that up here and now if you would wish. Perhaps if you would allow me and if you wish to proceed with your questions.

312. Yes, perhaps, we can come back to that. The last day we were discussing the possibility that a Minister who has often vastly less experience of the administration of the law than his senior civil servants might possibly give an instruction to a civil servant which was in fact illegal. I think I am quoting you correctly when I say that you gave the opinion that you did not recall such a circumstance ever having arisen though it might possibly arise. Is this a correct summary of your opinion?

—I am not sure whether I said that it could possibly arise. I was asked what I would regard as a hypothetical question and I hesitated and explained my hesitation on the ground that it had never arisen as far as I was concerned and I was not aware of any one where it had arisen.

313. Would it follow from your answer that you are satisfied that at no time was an illegal instruction issued by the ex-Minister for Finance, Deputy Haughey, to any officer of your Department during the course of the events which we are now investigating? Does that follow from what you have just said?

—I do not think it follows from what I have said but nevertheless I am fully satisfied. I do not think it follows from what I have said. I was thinking about the hypothetical question. I am saying that even apart from answering a hypothetical question I am satisfied to reply in the negative, if you like, to your questions.

314. That in fact no instructions which were contrary to the law were issued by the ex-Minister to any of your officers? You are satisfied no such event occurred?

—Yes.

315. You have told us on the 7th, and I am quoting you approximately: “I was satisfied regarding the appropriateness and propriety of these payments.” Are you satisfied in view of the fact that discussions had taken place between the Irish and the British Red Cross, are you satisfied that the Government’s decision announced by the Government Information Bureau to use the Irish Red Cross as the channel for most of the funds was in fact appropriate and proper?

—Yes, I am. This did not mean and was not taken by the people concerned as meaning that the Red Cross was being encouraged or facilitated or prodded to operate directly in Northern Ireland. They were being used as a channel for channelling into the north.

316. Yes. I take your point, because you said on the last day: “In effect we knew that the Red Cross could not administer these funds directly in the north.”

—That is so.

317. So that it was clear, I think, I would draw the inference that it was clear, from 21st August, 1969 that the Government was intending to use the Red Cross simply as what I might call an accommodation address.

—In effect, yes.

318. We will come back in a minute to the matters that are being looked up but I wish to turn again to what you told us about the transfer from the Clones account to the account in Baggot Street. You said on the 7th that the Department was told expressly by Captain Kelly that the account holders in Baggot Street were the same as those in Clones. Am I correct in that understanding of the evidence you gave?

—That is so. It was represented to us almost as if it was the transfer of an existing account.

319. Then, is there any way to escape the inference, in your opinion, that your Department was misled by Captain Kelly?

—I might hesitate to be specific on this because it may well be that—I am only surmising here—that when Captain Kelly approached us that that was his information and that, when the account came to be established, the people concerned may have taken the further step in security arrangements as they saw it of withdrawing, shall we say, their real names and substituting fictitious names. This is only a surmise. It may or may not have happened.

320. Would it then be the situation that one of the officers of your Department was misled by Captain Kelly or, else, that Captain Kelly was misled by other persons?

—I commented on your earlier question and the use of the word “misled”. I am in no position to state definitely who misled whom beyond stating that it was quite clear that we were told that the same people concerned with the Clones account would be involved with the Baggot Street account.

321. You were so told by Captain Kelly?

—Very definitely.

322. That is a point I wanted to be clear on. Perhaps at this stage we might revert to the question I was asking originally as to whether the Government Information Bureau when they made their statement of August 21st, 1969, were familiar with the content of the discussions between the Red Cross of Ireland and Britain on the previous day?

—I am sorry, I thought that information would be readily available. What I was seeking for was the date on which the Red Cross informed us of the results of their discussions with the British Red Cross.

323. Perhaps we can come back to that on another occasion. On the last day we asked you about explanatory material which might have been prepared in your Department in connection with the presentation on the 16th March, 1970 to the Dáil of this Vote. Are you in a position now to tell us anything about that?

—Yes, I am. I wish to introduce a general point here. At the last meeting of the Committee quite a number of matters were raised in connection with which I undertook to get some information or to make certain inquiries. It has happened that this particular instance has come up in discussion but I am in the hands of the Chair as to when he wishes me to introduce all the other items. There are about ten. I can answer this particular one categorically but if the Chair wishes me to make a statement on the others or to leave them until the end of the session—some of them are of information and would be possibly of current use to the Committee in their inquiries——

324. Chairman—Are they prepared in the form of a memo?

—No. In fact some of the information is coming on every day. I can make a statement on them.

325. Perhaps if the witness would just deal with Deputy Keating’s question.

—I just wanted to bring the point to notice. In regard to that point I indicated that I would have to seek the authority of my Minister before making a copy of this official document available to the Committee. I consulted the Minister and I have to inform the Committee that it has been decided it would not be in the public interest to make a copy of this document available to the Committee. Briefs of this nature are internal matters between the Department and the Minister and it would be contrary to established practice and to public interest if they were made available outside the Department. This sort of briefs relates to original or supplementary estimates, Parliamentary questions or other matters and often contain material which it would not be in the public interest to disclose but which would have to be brought to the Minister’s notice if he is to be fully aware of the issues involved. I am not suggesting that the brief prepared in this case contained any information which it would be undesirable to publicise but I am making the point that, in many cases Departmental briefs do contain such information. We would regard it as undesirable to establish a precedent and make available Departmental briefs but I would like to ensure the Committee most categorically that the fact that the Department finds itself in a position not to make a copy of this brief available does not mean that all the information available to it regarding this Grant-in-Aid has not been made available to the Committee. There is nothing in the brief which has not been made available already to the Committee.

326. Deputy Keating.—Mr. Murray has given us a decision that it would be contrary to standard practice——

—I said it would be contrary to public interest.

327. Can we take it that this decision was taken by the Minister for Finance?

—Yes, that is so but the Minister asked me to convey the assurance that I have already conveyed that this does not mean that information available in the Department relating to the Grant-in-Aid is being withheld from the Committee.

328. At this moment we have no choice but to accept that information from you. I would like to have it recorded that I am disappointed that the mechanism of private meeting which this Committee have established was not utilised to acquaint the members of the Committee with the contents of this document. Since the legislation under which we operate will lapse with the termination of this Committee and since it is recognised generally that this is quite an exceptional situation, I personally cannot accept the precedent argument. I regret that we have not been made familiar with the contents of this brief?

—The Deputy referred to a private meeting but this is a public meeting.

329. At this time it is but the witness has not conveyed to us a decision that the document would be made available privately to the Committee. He has given us a decision that its provision would be contrary to public interest?

—I said it would be contrary to the public interest to have an internal document publicised.

330. We have already established the mechanism by which we are using a list of names which we do not even take out of this room so that mechanisms by which documents can be kept private and discreet have already been established. I did not understand the witness to say that he would be prepared to utilise this mechanism to acquaint us with those contents. I understood him to say that to acquaint us with the contents in any circumstances would be contrary to the public interest?

—If I conveyed that impression, I am sorry. I was stressing publicity aspect.

331. Would it be possible then for us to see it under the same sort of arrangements under which we have been furnished with the list of the people who are named in the public document, simply by letters?

—If that were the wish of the Committee I would certainly seek the Minister’s instructions and I could do this very quickly.

332. I do not know what are the views of other members but personally I would like that to be done.

333. Chairman.—Do the Committee appear to wish that?

Members.—Yes.

334. Deputy Keating.—I would like to ask Mr. Murray about a statement which appeared in the newspapers in October of 1970. I have a copy of The Irish Times of the 31st of October 1970 and copies of this have been circulated to the members of the Committee. In it there was a statement from the Chairman of the Irish Red Cross Society which said that she said yesterday, which would have been the 30th October, 1970, that sums of money had been transferred to bank accounts in Clones and Baggot Street Dublin by her society on “written instructions from the Department of Finance.” Are you aware of any written instructions from your Department, Mr. Murray, to the Irish Red Cross Society?

—All the written instructions conveyed by us to the Society have been made available to the Committee.

335. I see. There was one last thing which refers to the mechanism by which it is possible to check up on expenditures made under the sort of mechanism, the Grant-in-Aid mechanism, that we are discussing and I am specifically thinking of some of your replies. For example on page 21 of the proceedings of this Committee on 7th January at paragraph 183 you say:

… I am satisfied that the steps taken in regard to payments out of this subhead were correct and proper at the time in question …

You go on to say in the next column:

The officials concerned, senior officials in the Department, find it difficult to see what procedures would have avoided this particular outcome.

Can I take it that it is your opinion that, in fact, the existing mechanism is entirely satisfactory and that you are not visualising any changes in it?

—I was making the point last week that the Department had reviewed two or three years ago the systems of checks and counterchecks in relation to payments made by us and I said that that new system would obviously have to be reconsidered to assess how it was working in practice. I said that it was now timely to look at that and that that review was being considered and I said that we would, as part of that, see whether it was necessary to make any change in the light of our experience in connection with this Grant-in-Aid. We had a preliminary look at that at a more senior level and could not offhand see what changes in our present system would have made any effective difference as compared with what had transpired so I would not like to comment more specifically on whether we regard the system as satisfactory or whether we propose to make any changes.

336. Yes. A final thing I would like to come back to is the question of these written instructions. I think I have the same experience as other members of this Committee of difficulty perhaps in mastering a large amount of documentation. I do not recall seeing a copy of a written instruction from the Department of Finance prior to the end of October, 1969 to the Irish Red Cross Society. Have we received such a copy?

—Perhaps you will allow me to check up on that.

337. I do not have a recollection of it. This is the thing that is specifically referred to in Mrs. Barry’s press release of 30th October, 1970?

—The first payment from the Grant-in-Aid to the Red Cross for transmission to the Belfast Committee was made on the 20th of October so it was in those circumstances that no contact was made between the Department and the Red Cross anyway before that date.

338. Yes, but was that first payment from the Red Cross’s own funds or from the Department?

—It was from the Department, yes. The first payment which the Red Cross itself made to the Clones account was made about, I think, the 8th October.

339. Yes, but in connection with this payment on the 20th October are there, in fact, any written instructions?

—Perhaps you would allow me to check on that? Yes, I would refer you to a copy of a letter that was sent to the Red Cross on that same date, the 20th October. It was included in the first batch of documentation that we sent to the Committee, I think, on the 23rd December.

340. I see. Well then we can turn it up. While I have a copy I did not recall it?

—Could I just come back? You were asking me in effect when did the Bureau or a responsible Department know that the British had refused to allow the Red Cross to operate directly in Northern Ireland. I can give you an interim reply on that because we know, from a statement furnished by the Red Cross to their executive committee meeting on the 30th September, 1969, that the chairman of the Red Cross was not informed of the outcome of their contacts with the British Red Cross until the 27th August. Now I would take it that it would be some time later before my Department heard about it. I cannot readily turn up that particular date but you can take it that it was some time after the 27th August, 1969.

341. I wonder could we just have the text of the letter from your Department, the written instructions from your Department to the Red Cross, the 20th October, 1969. Is it the top letter of the two on page 21? Is that the one referred to?

—I was referring to our original documentation.

342. It simply says “perhaps you would sign the enclosed receipt and return it to me”. It is from Mr. Fagan to Miss Murphy?

—Yes, that is so, yes. Of course, this was preceded by a number of telephone calls because it was at this stage that, in effect, the Minister had asked Mr. Fagan to ask the Red Cross to repeat the operation earlier in October under which, at the Minister’s request, the Red Cross made available to the Clones account money out of their own funds. The Minister asked that that operation be repeated. Mr. Fagan was in touch with the Red Cross. The Secretary consulted the chairman. There were a number of conversations so that this letter was a formal letter just looking for a receipt. It was not as if this was an originating letter.

343. I appreciate my difficulty now. I had, in fact, read this letter and did recall it, but I did not think it was the same letter that Mrs. Barry was referring to when she said the society received written instructions to transfer moneys to bank accounts in Clones and Baggot Street, Dublin, because I can see no written instructions to transfer moneys to bank accounts in Clones or Baggot Street, Dublin, in the letter on page 21 of the pink book from Mr. Fagan to Miss Murphy. Are we satisfied that this letter in October, 1969, from Mr. Fagan to Miss Murphy is the written instruction referred to by Mrs. Barry because they seem to be rather different things, you know?

—I have a number of comments on that. I have no idea of what instructions Mrs. Barry is referring to. Secondly, this was not the only communication sent to the Red Cross. In general, I think one can say that in connection with every payment a letter went to the Red Cross and some of these were fairly specific as to the method of operation. For example, if you look at page 26—the top of that page—where there is a specific direction to transfer this to the Baggot Street account; and not all these letters followed the same form, but it was clearly understood between the Department and the Red Cross that this was the pattern to be followed. That particular instruction is repeated in some other letters, but I could not say whether it was repeated in all.

344. But the letter of October 20th, which is the first stage, is a request for a receipt, a perfectly proper and correct request for a receipt, but I do not think it will bear the interpretation that it is an instruction to transfer money to bank accounts in Clones and Baggot Street. If any other communications from the Department to the Red Cross come to light in this context that we do not now possess, certainly for myself I would like to have them because it is clear from these two, from the press release of 30th October, 1970, by the Red Cross which I have been quoting and from this letter that, in fact, a great deal of what were obviously verbal communications had gone on between some officer of your Department and the Red Cross and that agreements had been entered into, or understandings entered into, and, from our point of view, we may be faced with circumstances in which we have two versions of that and we have to choose between the two. It would be to our advantage to have any more documentation which might help us to judge which version was the correct one because there is, in fact, a conflict at this moment between Mr. Fagan’s letter—in my view there is a conflict between Mr. Fagan’s letter and Mrs. Barry’s press release?

—To repeat what I have already said, all the documentation in our possession relating to the transactions with the Red Cross have been sent in copy form to the Committee and, in this particular case, this followed on an arrangement under which the Red Cross transferred moneys from their account to Clones and that was done following a meeting or contact between the Minister and the Red Cross. We do not know, you know, what took place at that meeting and it was some time after the meeting that we became aware of it, but I think we would regard this particular letter as having to be read in the context of these particular circumstances. Whether the chairman of the Red Cross is so reading them I could not say.

345. Yes, I appreciate that. We have your assurance then that there are no other written instructions from your Department to the Red Cross at or about this time in regard to the arrangement of the accounts in Clones and Baggot Street. Is that correct?

—That is so, yes.

346. Chairman.—Deputy McSharry, do you wish to begin questioning now or would you wish Mr. Murray to make some observations at this point? Which do you want to do?

Deputy McSharry.—I am in your hands, Mr. Chairman.

347. Chairman.—Very good. Mr. Murray, you want to give us some data arising from your previous evidence?

—Yes. Perhaps, first of all, to get some points on the record, one of the matters I was asked to consider was whether a copy of the Garda report of 2nd December, 1970, could be made available to the Committee and I just wanted to confirm that the Minister has since sent this on to the Committee: also, to confirm that, as requested, a copy of the letter which I sent to Colonel Hefferon has been sent on to the Committee. This was the letter in response to which he called into the Department and also sent me a letter in reply. At the meeting last week I mentioned that one of the individuals concerned with the payment to Mr. A. was calling to my Department on that day to indicate how he had spent that part of the moneys which Mr. A. had transferred to him. The amount in question was £1,000 out of a total of £2,000 given in two instalments to Mr. A. The man who called to my Department last week informed officials of the Department that £850 of that payment was spent on the purchase of food for people displaced as a result of the disturbances and he has furnished receipts which he obtained in or about that time covering this £850. These receipts, of course, bear the names of people resident in the North and I am not sure if there is any point in giving copies to the Committee. It is the alphabetical reference, but the receipts are available if the Committee requires them. The balance of £150 was, according to what I was informed, spent in connection with expenses incurred at the house which was used as a distributing depot for the food given out to the refugees. The next point I want to mention is that I touched on the recovery of the amount—of the balances in the bank accounts—and I want to confirm that we have, in fact, received a cheque for the balance in the Clones account. The cheque was some shillings short of the amount which we calculated on the basis of the information available to us, but this discrepancy is entirely due to a bank charge of which we had no record. We have also secured the recovery of the amount still outstanding to the credit of the main Baggot Street account. The amount recovered coincides exactly with the amount which we had calculated and shown in Appendix III of our submission of 9th December. Now we have also recovered from the bank in Clones the documents in their possession relating to the account. Copies of most of these have already been made available to the Committee because they were available to the Garda and formed part of the report of the Garda. That part of the documentation which the Committee has not got does not add anything to the information available about that account. All cheque transactions and lodgments relating to the bank account have already been furnished to the Committee and the additional new information merely covered certain formal things like the documentation which one signs in the case of opening a new account. It does not add anything but, again, if the Committee wish to have it, we can certainly let them have copies. We wrote to the Munster and Leinster Bank in Baggot Street forwarding an authority which we got signed by two of the main account holders in Baggot Street to release to us the documents relating to that account. The bank have, however, told us that they have a problem here since the committee has asked them to make available the documentation relating to that account. So we are not in a position to check whether that documentation adds to our information or not. I have also written to Captain Kelly asking for an account of the purposes for which the £500 received by him in October, 1969, was used. He has undertaken to supply this information but it has not come along yet. There is one other point I would like to mention. One of the individuals who received payment from the Grant-in-Aid is Mr. E. who has already given us information regarding the purposes on which he spent the money, a copy of his letter having been sent to the Committee, wrote to me to say that he would be glad to attend before the Committee if required, but he has said that he would not have anything to add to the information which he has already given me and which I have already given to the Committee. I told him that I would bring his remarks to the attention of the Committee. There is one point of clarification I would like to make. In the discussion on Thursday last when talking about Grants-in-Aid I took as an example the Grant-in-Aid to the National Science Council. In fact, I regret to say that I was confused here between two years, 1969-70 and 1970-71. What happened was that in 1969-70 the Grant-in-Aid was made available for the first time for the National Science Council and the Grant-in-Aid specified the grantee. In 1970-71 the ambit of the subhead was widened to read “Science and Technology”. The grantee was not specified and it was decided that as the National Science Council was an advisory body it would be more appropriate to pay the Grant-in-Aid into a departmental fund rather than to the council. I thought that the Grant-in-Aid was payable, as in 1969-70, in 1970-71 to the National Science Council. I apologise to the Committee for that mistake and regret any confusion that may have been caused. The discussion turned on the significance of payments to parties who were not named in the Grant-in-Aid and I will, of course, be glad to clarify any point arising on that general issue if the Committee so wish. The Committee also asked me to find out what the practice of the Department of Defence was in relation to the Grant-in-Aid which has been payable for many years by that Department to the Red Cross Society. I am informed by the Department of Defence that the Grant-in-Aid is in four parts. One is in respect of the normal activities of the Red Cross; the second is for the upkeep of North China refugees; the third is for Government contributions to the International Red Cross Committee and the fourth is for emergency relief. The methods of payment vary according to the purpose, according to which part is being financed. Very briefly, normal activities are payable quarterly in arrear on request from the Society and by reference to half-yearly accounts which the Society furnishes to the Department: North China refugees—there are three or four payments throughout the year to recoup the committee its actual expenditure. Somewhat the same applies in regard to the third category, Government contributions to the International Red Cross Society. Here the Society pays a contribution to the international body and is recouped the actual payment by the Department. In the case of emergency relief the aim here is to keep the fund, a separate fund operated by the Red Cross Society, to keep it in a reasonable balance, and the amounts paid out by the Department of Defence depend on circumstances. In some years no payment is made and payments are related to the expenditure incurred by the Society out of previous grant payments made by the Department to the Society. I will be happy to expand that if any member wishes. Another question that was addressed to me was in regard to the expenditure on air fares out of the Grant-in-Aid. I was asked to find out the names of the people who constituted the group. I have written for that information; it has not come along yet and I will make it available to the Committee as soon as it comes along. Another point raised by the Committee touched again on Grants-in-Aid, and on this question of Grants-in-Aid where the payee, the grantee, is not specified, I told the Committee that a count we made of Grants-in-Aid showed that there were 105 of these in 1970-71 and in 18 cases the grantee was not specified. There was a small error in our calculation. I think the number where a grantee was not specified was 19. But I was asked when did this practice arise of not specifying the grantee. All I can say here is that we know that as far back as 1922-23 there were eight Grants-in-Aid which did not specify the grantee, so one would surmise that this was a practice which we took over from the British Administration. Gentlemen, these were the supplementary points I wanted to raise. Sorry, there was one other point—I beg your pardon—I was asked whether I could indicate the advice given to the Taoiseach on the basis of which he made a certain statement in the Dáil in May last regarding the question of whether State moneys had been used to finance the purchase of Arms. I told the Committee that I would have to seek authority before I could give this information. The Taoiseach has been consulted and has stated that he has no objection to this information being made available to the committee. What happened was that some time towards the end of April or early in the first week in May the Taoiseach asked me whether public funds could have been used for the illegal purchase of arms. I told him that this could not be established without an investigation by Departments. The Taoiseach then asked me to have a look at the Book of Estimates and without getting in touch with the Departments to form a view, a broad general indication, regarding the possibility of whether State funds could have been used for the purchase of arms. I found out from the Book of Estimates that there was a long-standing provision in the Defence Estimate, for example, for the purchase of defence equipment but I assumed that the established and experienced accounting checks in the Department of Defence would have ensured that these moneys would not have been used for any irregular purchase of arms. Apart from that, an obvious posibility which occurred to me was the Secret Service Vote, but I had an analysis made of the payments made to Departments in recent years and in particular, of course, in 1969/70 and it was fairly clear that the amount available to any one Department was very, very far short of the amount at issue in the illegal purchase of arms. I reported these conclusions to the Taoiseach a day or two after his original approach to me. At that stage I had not consulted our Departmental files in relation to the Grant-in-Aid for Northern Ireland relief because at that stage, in fact, beyond being aware of the existence of the Grant-in-Aid, I was not aware of any papers relating to it, nor had any question been raised in any way regarding this Grant-in-Aid as a possible source for the payment and purchase of illegal arms. Some time after that, on 14th May, 1970, the Taoiseach again raised this matter with me. On this occasion I looked quickly through our papers relating to the Grant-in-Aid. On the information available at that time it was not possible to deduce from those papers that payments had been made from the Grant-in-Aid to finance directly or indirectly, legally or illegally, arms. Having regard to this and to the facts I have already mentioned, I prepared a form of words which the Taoiseach might consider using in reply to this point and the form of words was as follows:

I am perfectly satisfied as a result of inquiries which I have made that every penny of State funds has been spent for the purpose for which it was voted by the Dáil.

Perhaps I might re-read that statement:

I am perfectly satisfied as a result of inquiries which I have made that every penny of State funds has been spent for the purpose for which it was voted by the Dáil.

I handed a note on these lines to the Taoiseach on the same day.

348. Chairman.—That was on May 14th?

—That is so.

Chairman.—Gentlemen, a number of questions have been handed in to me from members but I think it would be unfair to Deputy McSharry not to let these questions remain over until members have continued asking their questions.

349. Deputy McSharry.—Mr. Murray, on the last point are you still satisfied?

—No, I am not, as the Committee will see from the hypothesis that I prepared, or at least a statement on the hypothesis. I was satisfied at the time, but I am sure the Committee appreciates that at that time my Department had no information on this point, on this question of the purchase of arms or what possible source of the finance was for it.

350. To start off, you mentioned the last day that a suspense account is defined very loosely as a technical bookkeeping procedure. That is on page 30 of the minutes of the meeting. You stated earlier that Grants-in-Aid that are not subject to the Comptroller and Auditor General are not necessarily kept in great detail. Could you tell me how suspense accounts are kept until such time as money is voted?

—The suspense account would contain a full record of all payments out of the Grant-in-Aid, out of what was subsequently to become the Grant-in-Aid.

351. But it is not a Grant-in-Aid as yet?

—No.

352. A suspense account?

—Yes. All I am saying is that the suspense account would indicate all the payments made by the Department.

353. To whom?

—To whomever they were made.

354. Is there an authority given to whom they are to be paid under a suspense account heading?

—Perhaps if we relate the question to this particular suspense account.

355. Yes, but this is not what I am getting at. I want to know what suspense accounts mean generally because, relating it to the Grant-in-Aid, all the questions were answered the last day. Not relating it to the Grant-in-Aid how do you decide who to pay the money to?

—A suspense account in itself does not convey authority to make payments. The authority will have been conveyed, in fact, before the suspense account is opened. It will have been conveyed by somebody outside our Accounts Branch. The suspense account is merely a technical record by the Accounts Branch of the payments which have been authorised by an administrative section of the Department. It is a recording device adopted to ensure that a full and complete record is made of the payments until they can be posted to the appropriate subhead.

356. Bringing us now to the Grant-in-Aid in question, it is consistently running through the evidence that the Minister was responsible for the administration or the decisions in relation to the administration——?

—Yes.

357. ——of this particular Grant-in-Aid as against other Grants-in-Aid?

—That is so.

358. So the suspense account was a different kind of suspense account just the same as this Grant-in-Aid was a different kind of Grant-in-Aid?

—Quite so, but that difference was not reflected in the form of the suspense account. Anybody looking at the suspense account as such, and not knowing the background, would not have known that the payments from the suspense account were made by ministerial direction. It is purely and simply a formal entry to ensure that information relating to the actual payments made is collected in one place.

359. These moneys were spent on the direction either oral or written of the former Minister for Finance?

—That is so.

360. And all you were concerned with was having a valid voucher, I think were your words, of the issue of the amounts?

—That is so.

361. These are the so-called valid vouchers, are they?

—Yes; of course there are also the payable orders, the paid payable orders.

361(a). I will come to those in a minute. You have got four or five of these with the OK and odd initials on them and they took place in October and November of 1969 only. There is no written or even scribbled request after that date?

—No, I think as I made clear——

362. Do I assume from that, that from there on in, the requests came or went orally to and from the Minister?

—Deputy, could I refer you to what we said in the addendum to our submission of 9th December? We said:

There was no significance in the fact that some of these items—

—that is the payments made out of the Grant-in-Aid—

—were covered by written submissions and others by oral submissions; the particular approach adopted would depend on the availabality of the Minister.

and by and large if the Minister was not available Mr. Fagan would send in a note which he would sign when the matter could be brought before him by his private secretary.

363. So that the Minister was not available. The Minister is available when it is oral——?

—In general, although I would not——?

364. He is not available when this——?

—Yes, I would not—at this point of time it would be difficult to be definite about that.

365. The point I am getting at is this, that in October and November of that year when this money began to be spent, or administered, these are the only documents that are related to it, requests from somebody or other to the Minister and all we see is “O.K.” on the bottom of it?

—Yes.

366. And this is because of the wide terms of the Government direction to the Minister for Finance, I think, in your own words?

—Yes, that is so.

367. That he had the sole responsibility for it. But I suggest that when November was past and none of these written requests came, that this Grant-in-Aid was being administered then as all former Grants-in-Aid, without the Minister having had to go through this procedure as in the beginning, as in the first instance?

—I can only repeat the statement which has been made in writing and re-affirmed here under oath, that my understanding is that all payments were authorised by the Minister either orally or in writing.

368. Yes, that is what you are giving to understand but I just wondered was this Grant-in-Aid, had it by November taken the same frame as any former Grant-in-Aid, that every specific pound had not to be vouched for by the Minister, or his O.K. being given?

—No, in this instance——

369. Once it was established?——

—The pattern——

370. ——that the committee in Belfast were the recipients through the Red Cross of this money, was it not as in former Grants-in-Aid, that the people concerned would get to the Minister’s Department, either through his Private Secretary or otherwise, and that money could have been, continued to flow to that Committee because even though they were not specified originally they had become the established grantees in so far as your Department was concerned?

—I am informed that that was not the case and I have no reason to doubt the information made available to me.

371. Fair enough. And money can only be given under Grant-in-Aid heading for the purpose for which the Grant-in-Aid was approved. Who is to check that purpose, in this case?

—Yes. In this case one must distinguish, I think, between payments that went to the Grant-in-Aid for the Belfast Committee and other payments. In the case of the payments to individuals, and indeed to the Belfast Refugee Committee, which was made through the Red Cross, we had in some instances, even at the time, we had information supplied by the recipients regarding the purposes for which the money was utilised.

372. Was it on your request that those were supplied at the time?

—No.

373. Or were they just supplied?

—We had no contact with the recipients at all.

374. And these documents came to you?

—Yes, they came to the Department. I think they were addressed to the Minister. I can check that if you like.

375. Yes?

—But in other cases we did not get that information until much later. But in some of these cases the payments were requested by another Minister, they were made at the time to areas that we knew were in the centre of disturbances, they were made to established reputable, religious organisations and I think that in the circumstances of the time it was not unreasonable to expect that the amounts in question were being used by these religious organisations for relief purposes.

376. If it were a normal Grant-in-Aid, not being solely administered, as is said, by the Minister, would these payments have been made in the way that they were made, under this?

—Well, I have a little difficulty in answering that because at the risk of being misunderstood, perhaps I should say that the abnormality of this Grant-in-Aid was not solely indicated by the fact that all payments were approved by the Minister. There were many other abnormal factors about the circumstances and if one attempts to generalise then and say what are the procedures adopted in regard to payments out of Grants-in-Aid in general to ensure that the money is spent on the purposes for which it was voted by the Dáil, you find that you are dealing with over 100 cases. I attempted to summarise this in my own mind since I met the Committee last week and I find that there is no single statement that one can make. In some instances Grants-in-Aid payments are only made on foot of expenditure that has been incurred and is a recoupment of expenditure. In other instances it is made on account of expenditure to be incurred in the immediate future. In other instances it is made at regular monthly intervals. The procedure adopted depends on how well established the body is and what our experience of it has been, on the purposes for which it is intended and a variety of other factors. I am sorry, Deputy, I cannot give you a short unequivocal answer on that point.

I do not know whether you answered this before or not, Mr. Murray, who decides whether Grants-in-Aid will come under the Comptroller and Auditor General or not?

—This is primarily a matter for the Department of Finance, generally in consultation with the Department concerned. I think it is true to say that we would not press for the audit of a Grant-in-Aid by the Comptroller and Auditor General without the agreement of the Comptroller and Auditor General.

378. The directions of the Government to the Minister that the money be spent at his discretion and in the described way, of unusual type of operation which is here before us—was it because of the nature of events in the North at the time, in your opinion?

—Yes, and I think I told the Committee that I regarded that as one of the factors, amongst others, which satisfied me that the procedures that were adopted at the time were not such as to render the course of payments incorrect or inappropriate. Perhaps I could amplify that by mentioning another aspect. In or about that time we were of course involved in a somewhat different aspect of affairs, resulting from the disturbances in the North, and that was the actual resettlement of refugees down here and those of us who had even marginal contact with that will well recall the state of uncertainty and lack of information, difficulty of finding out what was happening, even down here. So that was very much in my mind in considering that, or rather in accepting that the normal channels of payment would have been inappropriate in this particular case.

379. At one stage last Thursday it was mentioned that Captain Kelly just came and made a request and it was mentioned to the Minister. No information was requested at any time by an official from Captain Kelly as to the purpose for which he required money?

—No, beyond the fact that in general it was required for Northern relief, the particular purpose was not asked.

380. In your opinion at this stage had the Department of Finance accepted that Captain Kelly was some sort of liaison between the Defence Committee in Belfast and the Department of Finance?

—I think not. I think that our official dealings with Captain Kelly were quite restricted. We were not privy to whatever understandings may have been reached at ministerial level. He was regarded as a man involved in Army intelligence work who had contacts with the North in the course of his duties and, therefore, we did not find it surprising that this man was conveying requests from the North for money for relief. That is my understanding of it but I would prefer if somebody else from the Department answered that particular question.

381. I was just coming to a question answered by you the other day that at no time did Mr. Fagan tell the bank manager that Captain Kelly was on official duties. You said that Mr. Fagan even doubted the bank manager’s words. We have a signed statement from Mr. Fagan in which he stated that Captain Kelly was on official duties when dealing with these matters. The statement is signed by Mr. Fagan?

—What is the date of that?

382. It is page three of the Garda report?

—Mr. Fagan made two submissions and the first was without reference to any documentation. The second was made when he had the official documentation available to him.

383. In your opinion, Captain Kelly was not acting in an official capacity?

—We have no information or intimation that he was acting otherwise than as a contact between the people up North and the fund, which was an official fund, or at least a Grant-in-Aid which was an official Grant-in-Aid.

384. I have no further questions to submit.

Chairman.—Deputy Nolan.

385. Deputy Nolan.—Coming back to the question of the valid voucher, on page 48 of this document book there is a letter written to Deputy Haughey by the chairman of the committee, a clergyman, in which he says in the second paragraph:

Over 8,000 people have been rendered homeless as a result of the recent violence in Belfast, and the re-establishment of these innocent victims is a most urgent and compelling task, which requires a massive fund.…

At the bottom of the letter Deputy Haughey in a note to Mr. Fagan said that he had met a deputation from this committee. Would you consider that a valid voucher for the payment of £30,000 if you were administering the fund?

—I have commented on the earlier reference to a valid voucher. The issue here is in reference to a valid voucher or authority. It is a small point. A voucher would be a payable order or something like that, but certainly I would regard that as a valid authority.

386. In the case of smaller amounts, on page 46 we have a note from Mr. A.J.F., who we presume is Mr. Fagan, and there is a request from Mr. E. This asks: “Can I pay £1,000.” There is then a break down to £700 as a deposit on two houses and £300 for renovation and decoration. Would you consider that to be a sufficient request for aid?

—Yes.

387. On page 26 of the Minutes of Evidence taken on 1st December, you mentioned that it might take more money on the advice of the Attorney General to recover some of the money that appeared to have been spent on arms—that it might cost more than the amount outstanding. Have you any estimate of how much money appeared to have been spent on arms out of this £100,000?

—I based my statement on the figure of £20,000 to £30,000 which was mentioned by Captain Kelly in the course of the Arms Trial. We have no information as to the amount that has spent on arms through the subsidiary accounts. We know that in all about £45,000 was withdrawn from these accounts, and one of the points still undecided is whether the figure of £20,000 to £30,000 mentioned by Captain Kelly was correct, and what happened to the difference between that—even taking the maximum figure of £30,000—and the £45,000 that was withdrawn from the two subsidiaries. We have got some indication to account for the difference but it is far from satisfactory.

388. Are investigations still going on?

—Not actively. I think further discussion on the matter might help to clear up this particular point.

The Committee adjourned at 4.30 p.m. until 5.0 p.m.

Examination of Mr. C. H. Murray continued.

389. Chairman.—The letter from Colonel Hefferon which you gave us yesterday, you have no objection to that being published?

—None whatever.

390. Deputy Treacy.—You were kind enough to tell us some of the answers to the questions posed at the last session. You had been telling us that in respect of those persons who are referred to as A, B, C et cetera that some worthwhile progress was being made in respect of explaining away the moneys which they received. Mr. A. accounted for quite a considerable amount of the money he had received; likewise you mentioned Mr. E. that he had nothing to add to a statement already made. What about the other persons involved here? We have persons from A to K in alphabetical order. Could you furnish us with further details in respect of the explanations, if any, which the others have made concerning amounts they received?

—In our statement of 9th December we stated that these individuals had, in fact, given us information regarding the purposes for which they spent the money. If I might refer you to paragraph 7, page 2, of our submission of 9th December. The last three sentences of paragraph 7 in regard to individuals C and D give information of the purposes for which they spent the money.

391. To what extent has the situation improved? What is the up-to-date position as regards moneys still outstanding to these various sources?

—These individuals have told us that they spent the moneys in full. The only cases where there were balances outstanding was in the case of Colonel Hefferon who has refunded £350 out of one of the payments made available to him. The only other aspect of recovery is the balance we received from the Red Cross, the two refunds we have received from the banks, so that we would regard at the moment, on the basis of the information available to us, that the only recoveries that are open to us are the recoveries of the small balances in the two subsidiary accounts at Baggot Street and whatever may be recovered in respect of the payments out of the subsidiary accounts themselves or in respect of the goods purchased with those moneys. In that latter connection, I would refer you to the legal advice we got which suggested that recovery of payments made out of the subsidiary accounts or of goods purchased with them was a very doubtful matter indeed.

392. Could you put a figure on how much money is still outstanding in the accounts in this bank?

—Subject to leaving aside the last point I mentioned, we are hopeful that we will get the money unspent out of the two subsidiary accounts which comes to about £250. We have already recovered about £4,000.

393. Where do you consider your greatest difficulty lies in searching out in greater detail, and as quickly as possible, the balance?

—This investigation raises quite a number of issues but in one sense one could say that looked at from a narrow, departmental aspect our concern is to establish or to disprove the statement that all these moneys, no matter what the form of payment or how indirectly the channel of payment was, all these moneys were, in fact, spent on Northern Ireland relief. We have formed certain views on that suggestion and I have made these views available to the Committee. I would say that it is in this particular area that our inquiries would have been concentrated had we been investigating this matter without regard to any other inquiry that was continuing but, as I mentioned earlier, our view is that subject to the views of this Committee our continuing inquiries had better be held in suspense for the moment.

394. In suspense for the moment?

—Subject to the specific suggestion that was made in the last paragraph of what I call my hypothesis document, that is, that we take certain specific steps to check at what I might call the receiving end of the expenditure. I could just say that one of the account holders in Clones who called into the Department last week when I was attending last week’s session of the Committee and who handed us in the cheque by means of which we recovered the account, the balance in the main account, on that occasion it was put to him that the Department did wish to see to what extent it could check at the receiving end whether the money had been spent on the purposes indicated in the approximate statement put in by the Belfast Committee, and he has undertaken to see what arrangements could be made to facilitate that check.

395. Do you feel then that, however long or short the duration of our inquiries here, there would be very little information you can give us in the interim period? May I take it that inquiries are continuing? You mentioned the word “suspense” or suspend the inquiry for the time being. How much further information could we expect to receive from you in the course of our deliberations here?

—Leaving aside information that might come in to us without our requesting it, I would say that the only further specific step that we have in mind is this check at the receiving end of this expenditure.

396. If I might revert back to the Red Cross for my own information, what were the relations between the British Red Cross and the Irish Red Cross, say, prior to the troubles of last August or thereabouts?

—I am sorry, I cannot answer that. I have not that information, but could I perhaps take this opportunity just to clarify one point; I think it was Deputy Keating asked me at what stage was it known officially that the British would not co-operate in this matter, and my problem was to establish at what time did my Department know. In fact I find, looking at the papers, that the information came to us in the form of an appendix to a report submitted by the chairman of the Society at an executive committee meeting to be held on 30th September, 1969. With papers relating to that committee which included a statement of the steps she had taken in regard to Northern Ireland Relief, and it was clear from that statement that she was informed on the 27th August that the British would not co-operate. So the clear inference is that it was not until some time close to the end of September that a document came into my Department conveying the results of the approach to the British. I do not know, of course, whether anybody in the Red Cross informed the previous Minister about the results of their approach to the British.

397. Surely it could have been foreseen that the Irish Red Cross would not be an acceptable body to fund the Northern relief at the time in the political climate prevailing. Was it not strange therefore that the Red Cross was used as a channel to fund this money for the relief of Northern refugees at that time and the utilisation of the two accounts at Clones?

—The information I have is that the decision to use the Red Cross for this purpose was not taken at official level; it was taken at Ministerial level.

398. Even though it was known then that it could not be an effective source for distribution?

—No. The point I was making previously was that it was not at official level. It was not until some time close to 30th September, 1969, over a month after the original decision, it was not until a month had elapsed that we knew definitely at official level the British would not co-operate.

399. Can it be said with some accuracy who gave the instruction to establish the two bank accounts in question? On whose instructions specifically were they created?

—If you take first the bank account in Clones, we comment on this in our submission on 9th September, paragraph 12, from which you will see the establishment of this bank account and the use for the receipt of moneys channelled through the Red Cross came as a fait accompli to the officials dealing with this. It was arranged between the then Minister and the Red Cross and/or the representatives of the Belfast committee. We do not know the exact chain of communication here.

400. Even at this juncture you do not know the exact chain of communication?

—No, we do not.

400(a). Do we ever hope to solve that riddle?

—Far be it from me to suggest a limit to the Committee’s powers.

401. You refer to the Grant-in-Aid in respect of how it is administered. I think it is fair to say it is administered in four parts: the Defence Grant-in-Aid. One part would be normal, the other would be to North China; then the International Red Cross would get their allocation, and there would also be provision for emergency relief. Can you elaborate in respect of the four portions mentioned? What would be the normal allocation?

—I am sorry I have not the precise figures but I would be surprised if the normal allocation did not absorb most of the Grant-in-Aid.

402. What percentage?

—I am only guessing.

403. Approximately?

—Even there, I would hesitate to guess. It is only a hunch. I could get that information quite readily.

404. Then, the allocations would be in cash but sometimes in foodstuffs and perhaps clothing. Is this not so? Would it be all cash?

—It would be all cash that was allocated from Exchequer sources to the Society. That would be in cash.

405. Solely?

—Yes. We do refer, if I might just clarify a point, to this emergency relief fund in the note at Appendix VI to our submission of 9th September and there we say, for example, that the last payment from the Grant-in-Aid into the Emergency Relief Fund from the Department of Defence Grant-in-Aid prior to October, 1969, was £6,300 on 28th March, 1969.

406. Where did that expenditure go?

—It went to a variety of places. In fact, there were here specific payments from the Grant-in-Aid administered by the Department of Defence to the Red Cross Society in 1969/70, payments of £7,000 in January, 1970, and £20,000 in March, 1970, both for Nigeria-Biafra relief but there were subsequent claims for the Peru earthquake disaster. It takes a wide variety of forms and the Red Cross distinguish in their accounts the payments in the normal course and payments for special relief.

407. I was interested to hear you say that certain of these grants are not specified. Of some 175 referred to, 18 or 19 are not specified. You told us that this was rather a carry-over from the old British regulations. Can you tell us why it might be decided not to specify a grant in any given circumstances?

—Certainly. Again, for the record—there are so many figures mentioned that it is easy to confuse some of them—the number of Grants-in-Aid payable in 1970/71 is 105. Of these, 19 do not specify the grantee. However, an analysis of that 19 shows that in 13 of the cases the grantee is a Department or a departmental account where the emphasis is really on the non-surrender aspect of the Grant-in-Aid. A typical example there would be payments to the Department of Lands for the acquisition of land for forestry where it is paid into a special account and audited in the normal way but where the balance remaining at the end of the year is not subject to surrender. There are other examples of that sort. We find that 13 of the 19 are really departmental accounts. In the other six there are special circumstances but the Committee might be interested to know that so far as I can see there were only two cases where there is more than one grantee. This is the sort of issue that one member of the Committee was exploring with me—how do we determine, in those cases, how much goes to one payee as distinct from another. The two instances are the new Grant-in-Aid for sporting organisations administered by the Department of Education. Clearly, it would be impracticable to specify the grantees. There are quite a number of them. It is a matter for the Department of Education to decide, in consultation with us, what organisations will get the money. A query has been raised on the administration of that Grant-in-Aid for 1969/70. This is being dealt with at the moment but the other example is grants to Irish publications. Here again there are a number of publications, roughly half-a-dozen which get the portion of the Grant-in-Aid.

408. Are you satisfied completely that money so allocated is spent for the proper purposes?

—Speaking generally, there are a number of different checks that are applied in the case of Grants-in-Aid to ensure that the money is spent for the purpose for which it is voted. In many cases, for example, the accounts of the body in question are audited by the Comptroller and Auditor-General. Even where they are not so audited, the administering Department receives copies of the auditors’ accounts and can satisfy itself in that way. There is the further check in some other cases that the payments are not made except by reference to a statement of expenditure incurred or a statement of expenditure likely to be incurred. Over time, the Departments concerned have built up some experience in dealing with these bodies. They know whether the expenditure forms a certain pattern so that they can give out monthly payments, for example, on account. This would be particularly in the case where the Grant-in-Aid does not account for 100 per cent of the expenditure by the body in question. In that case, there is built-in control

409. Where would you say the real difference lay between the grants we are talking about now, non-specified grants, and this £100,000 special grant for relief in Northern Ireland? Where, would you say, the big difference lies in the administration of these grants?

—In the normal case, there would have been a ministerial decision approving of the general purpose of this expenditure and payments out of the Grant-in-Aid would have been justified by the payee. They would have submitted some documentation to indicate in some detail the purposes of the proposed expenditure. That is, if the purpose had been a less difficult one to administer than the present one. I emphasised the point more than once that it is difficult to apply ordinary tests to this particular Grant-in-Aid. Had it been a Grant-in-Aid for scenic improvement, just to take an example out of the air, the Departments in question would not have given out money unless the spending bodies had given some indication of the purposes for which they wanted the money and had given some proof that they had, in fact, spent the money for those purposes.

410. You tell us that in late April or early May of last year, the Taoiseach asked you specifically to carry out an investigation and to ascertain whether public funds had been spent for the purchase of arms and you did, in fact, so carry out an investigation. I understand that your initial investigation proved abortive and not only abortive but you were able to satisfy the Taoiseach in very cogent, very clear terms, that you were perfectly satisfied from the inquiries you made that every penny of State funds had been spent for the purpose instructed by the Dáil, or words to that effect. The kind of investigation which you carried out was in respect of the Book of Estimates for the Department of Defence I take it and also the Secret Service Vote and I would presume the Grant-in-Aid itself of £100,000? Were there any further steps, Sir, at this juncture you can think of? Can you elaborate, please, on this important aspect of things and tell us of any further steps you took at that time to ease the mind of the Taoiseach who was so greatly disturbed and obviously had some suspicion that something was afoot to say the least? Can you please elaborate then on the steps you took at that stage to satisfy yourself that public moneys were not so spent for the purpose of buying arms?

—I think, Deputy, it might be an exaggeration to term what I did on that occasion an investigation. The Taoiseach asked me a general question in a general way whether public moneys could have been used for the illegal purchase of arms. I gave him a general answer that this could not be established definitively without a detailed investigation by Departments which would have to cover all Departments if one wanted to be fully satisfied. The Taoiseach made it clear that at that stage he did not want this detailed investigation in Departments and I said I would have a look through the Book of Estimates for all Departments to see did any headings occur to me which might suggest, shall we say, areas where one might concentrate. I assumed throughout that normal accounting checks would apply and this was why, when I looked at the most obvious head of all maybe, the subhead in the Department of Defence Estimate for the purchase of defensive equipment, I indicated to the Taoiseach that provided that normal accounting checks were applied I could not see this being used for this purpose. I then had a look, as I said, at the Secret Service Vote and knowing the amounts involved in the present instance it was clear that since the total amount of that Vote was of the order of £11,000 and since it was split between three Departments this was an unlikely source. The Taoiseach had asked me for a quick view and I gave him a quick view and the matter rested there for a fortnight roughly. I was then asked on the 14th of May to have another look at this but it was made clear that a reply was required that day so the time and scope for an investigation was limited; but on this occasion, knowing a little more about the matter than I knew when the Taoiseach first mentioned it to me, and that was the first mention I had, the first indication I had, of what was afoot, I thought it better to look as this Grant-in-Aid for Northern Ireland Relief but I did not go beyond what was indicated on the file and, as I said, the file itself gave no indication of arms purchases, legal or illegal, directly or indirectly. I let the matter rest there, and then as soon as possible thereafter I examined the file carefully and referred to the statements which an officer of the Department had made to the Garda authorities which threw quite a different light on things and on the statements which the Garda were receiving from other people so it was an accumulative and gradual process thereafter that I came to know more about these particular transactions.

411. When the Taoiseach first came to you and mentioned this probability of public funds being used for the purchase of arms did he give you any lead at all in the matter?

—I am not sure what you have in mind, Deputy.

412. Did he give you any indication at all as to what might be afoot? Did he reveal his suspicions to you in any detail?

—No. He put the question to me more or less in the form that I have repeated it to the Committee.

413. And gave you no inkling at all as to what was in his mind, what was worrying him at the time?

—I am at a loss to know what—it was clear he would not have raised this matter unless the question of the illegal importation of arms was worrying him and he revealed that. It was clear from the question he put to me that he regarded the possibility of the illegal importation of arms as a very lively possibility and was wondering whether the importation could have been financed from public sources.

414. He was unable to give you any assistance in leading off tracking it down at that stage in any event?

—I got no indication from him.

415. In your preliminary inquiries did you perhaps discuss this matter with the Minister for Finance himself or any other Minister?

—The Minister for Finance, the previous Minister, was not available at the time. This was, as I said, towards the end of April or the early days of May—I am not quite sure of the exact date—and of course as you recall the previous Minister had had an accident the previous week.

416. So you were not able to get any assistance from the then Minister for Finance? Did you perhaps discuss the matter with Mr. Fagan?

—Not in any detailed way and certainly not in regard to the question of the financing of the importation of arms. My discussions with Mr. Fagan, which again took place I think after the Taoiseach had raised this with me—I am not terribly clear on that at the moment—but referred generally to the importation of arms, irrespective of the financing of them, covered such matters as the position of the Revenue Commissioners in regard to the alleged importation, in other words non-financing aspects of it. I should explain that on the day that the Taoiseach asked me to have another look at this matter Mr. Fagan was engaged all the day in answering questions put to him by the guards.

417. Yes, I was coming to that, Mr. Murray. The Taoiseach came to you again on the 14th of May and asked you to continue your endeavours in this search. When, then, exactly did you ascertain that quite a sizeable amount of money had in fact, been spent, varying between £20,000 and £30,000? It might even be £40,000. It is very, very vague altogether. About that time, Sir, would it not be true to say that the country was agog with the talk of gun running, names were bandied about and figures had been mentioned? Are we to take it that your investigations Sir, your two efforts to track down the expenditure of public funds on arms were completely abortive and it was only when the matter was fully ventilated in the Dáil and in the country that you really cottoned on to the proper sources? Is this the position, Mr. Murray?

—I would not accept that presentation of the Deputy. The source of the moneys used in the alleged importation was far from clear for quite some time and I think it is interesting—I am speaking subject to correction here—that in the first series of questions posed by the guards to Mr. Fagan they barely touched at all on his contacts with this normal Grant-in-Aid. It was not until the Arms Trial that some more light was thrown on the source of the moneys alleged to be used because the position is that, up to then, despite knowledge of the existence of the subsidiary accounts, knowledge which only gradually became available, there was no means of establishing and, as yet, no means of establishing, whether these subsidiary accounts were used for the purchase of arms, apart from the unsupported statement of certain people.

418. What do you think went wrong that, you know, you were not able to pinpoint this problem earlier? What was your real difficulty?

—I find it very difficult to address myself to that aspect of it. I have already said that, you know, on the basis of the information available to the officials concerned and having regard to a number of factors, which I mentioned, I simply took the line that it was reasonable for them to proceed as they did so that, on that basis, on the basis of what is done cannot be undone, it is not very easy to speculate now as to what could have been done at the time to have identified what was going on, apart from the fact that, even now, we are far from clear as to what went on, as will be clear from the statement or hypothesis I put in to the Committee.

419. Briefly, Mr. Murray, when did you find out about the expenditure of this large amount of money on the purchase of arms and how?

—The first definite statement that came my way was the statement during the recent Arms Trial but, of course, once information started to become available to us about the subsidiary accounts and the fact that fictitious names were used, not alone in the main account but also in the subsidiary accounts—this emerged from the garda inquiries and could only emerge on the basis of their inspection of the documents on foot of court orders—it was a process that we could not have followed—as soon as that information became available, then a number of questions began to arise.

420. At this point of time we know there was some £45,000 withdrawn from the fund. We have reason to think that some £20,000 or £30,000 was spent on the purchase of arms. Have we been as yet able to narrow these figures down? For instance, was Captain Kelly as yet asked specifically to state whether it was £20,000 or £40,000 or precisely how much money was spent on arms? Has this position been improved as a result of inquiries being carried out up to now or is it still the position that this vague figure is the only one?

—We put this point to Captain Kelly. He was not any clearer as to whether the amount was £20,000 or £30,000, but we put it to him that, even if it was £30,000, there was this difference between that amount and the £45,000 and he gave us an answer which might explain part of the difference and we are following this up and I would suggest that we leave it at that at the moment; if we hear anything further I will inform the Committee. I do not think we are going to hear anything more about it, but we are taking the obvious steps that we can to follow this up.

421. In the case of the investigations and the two inquiries you carried out at the specific request of the Taoiseach, may I take it you were given the fullest cooperation by all concerned whom you had occasion to call on for advice and assistance in the matter?

—No, for the simple reason that I did not consult anybody. I was asked for a verbal immediate view as to what the possibilities were and it was plain I was not to conduct an interdepartmental investigation or, indeed, talk to anybody about it so that —I mentioned this earlier—I would not personally call my efforts in April/May last an investigation.

422. And you had no information at all as to the amount of money involved at the time—£20,000 or £30,000?

—Well, I must have had some indication because I knew that it was not a couple of thousand, the sort that could have been financed, shall we say, out of the payments made to three Departments from the £11,000 available, the Secret Service Vote—I knew it was more than that.

423. This is what I meant earlier when I submitted to you that the Taoiseach, or someone else, might have given you a lead as to what they felt had gone wrong, but you cannot elaborate on that now?

—No. I must have been given some indication that it was more than a couple of thousand.

424. Deputy Tunney.—Mr. Murray, I hope I will not delay you too long. There are one or two points I should like to satisfy myself on. In the circumstances where the Clones account was transferred to Baggot Street and, to date, we are given as the reason for that that Captain Kelly said it would be more convenient, was that statement accepted from him or was he asked to elaborate on it?

—As far as I can recall it was accepted. We now know it was security as much as convenience that was in the minds of the people who were operating the Clones account—their own security, I should say.

425. That would indicate that at that time you were putting, or the Department was putting, absolute faith in Captain Kelly?

—Yes, that is so, absolute faith. We knew he had been in contact with the Minister; we knew that he was an officer in the Army engaged in intelligence duties in contact with the North and it was not as if he was a private individual, you know.

426. Tell me, would it be part of the duties of any civil servant, apart from doing as directed by his Minister or senior officer, to harbour on the part of the Minister any suspicions or to advise or, perhaps, acquaint him of feelings he might have?

—This would depend on the strength of the feelings and how well they were based.

427. In the matter of submissions made to the Minister in respect of moneys that were being sought, would you see any difference, or is it just that it happened that in one statement it would be said to him “This looks OK” while in another it would be said, as was said in respect of a requisition by Captain Kelly, “Kelly 1s looking for another £5,000”.

—I think that in those cases there would be a question put to the Minister, you know: “Can I pay this?” or “Is it all right?” or “This looks ok?” so that there is something——

428. Again looking at them here, there are several of them: “Kelly wants another £3,500. Is this OK please” while in respect of another payment of £1,000 to Mr. E., I think, we start on the premise: “This looks OK”?

—Yes. Of course in the case of Mr. E we had a fairly long indication of what he wanted the money for. It was not a payment to the Belfast account or anything like that and I think in that case there was a brief indication given, even apart from submitting the letter to the Minster, there was a brief indication in the submission of what the money was for. I think that is my recollection but I would like to check this.

429. It was only in that list of moneys I thought myself there was a subtle difference in the manner of the submission and I wondered whether or not the submission was made with reservations in one case as against another. If it was not, then, that is OK.

—I do not think there was any difference.

430. In the light of your letter to Colonel Hefferon, Colonel Hefferon we know received £1,100, £500 of which was handed automatically to Captain Kelly, but then in respect of the £600 which he obtained himself and which apparently he lodged to an account opened in his own name and again, bearing in mind that it is said that payments being made, that the purpose—we must be satisfied that the purpose, the bona fide purpose in circumstances where £600 paid in late 1969, that in December, 1970 we get back a cheque for £350 out of that. The error of the requisition there—would that be inclined to startle you because if we applied the same error to other moneys we should be in a rather extraordinary position?

—Yes, I think I made some comment on this in reply to previous questions. There is a difference between the two payments or at least the purposes of the two payments made to Colonel Hefferon. They both related to the same office and the reason they were paid—that is the justification—was the same, you know, that this office provided useful information to the Army in their administration of the relief for refugees but they differed in one respect, that the first was for moneys that were immediately required to meet the running expenses of the office. The second payment of £500 was to provide some equipment in the office, chairs, typewriters, equipment like that. What happened was that very shortly after the money was made available to Colonel Hefferon he told us in December that shortly after the £500 was made available to him that the office folded up; there was internal disagreement and other factors, so that in the event he only spent £150. The questiton that really arises is: why was it that it was not until some time in the year afterwards that we got the refund. This was put to Colonel Hefferon in a general way and what he said in effect was that he did not know exactly during the currency of the go-clow in the banks and the subsequent bank strike what the exact balance was. This leaves unexplained, if you wish, the period from October-November, 1969 up to March-April, 1970 when the banking system was functioning in the normal way. We did not press Colonel Hefferon on that aspect of it.

431. My concern was that if the same error in over-requisitioning—we have proven that it occurred here, but can we be sure that it has not occurred elsewhere where initially the case for the requisition was perhaps as worthwhile as this particular one?

—Yes, but it was not specific in many of the other cases—I am talking of the payments to the individuals. They were dealing with an existing need as distinct from a prospective need in the case of Colonel Hefferon but I would not disguise the fact that the only way one could be fully satisfied in the case of the clergymen and others concerned would be to try to go to the people who actually received the relief from them in the form of food, in the form of payment for rail fares back to Belfast and all that. One would require that sort of investigation before one could be fully satisfied.

432. One final questiton, Mr. Murray. Is it normal in Government, in accountancy that the person to whom money is paid, that he himself is accepted as the certifying officer that it was paid correctly? I refer here to the note of 3rd December, 1970 where Colonel Hefferon said that “I certify that the sum of £250 advanced to me by an tAire Airgeadais was properly expended.” Is it normal that we take the statement of the person to whom money is paid a certifying that it was spent properly?

—I would say so, yes.

433. Thank you. There are one or two questions, Mr. Murray, that I would like to ask in connection with the bank account in Baggot Street, in what I see to be an absence of recorded liaison between the Department and the bank authorities. Would it be customary for a civil servant to have any memo of telephone conversations with the bank?

—That is a question at large, Deputy. It depends on the importance of the subject matter and the action resulting from the telephone conversation. If I were speaking to the Bank of Ireland, shall we say, about the amount they would provide by way of Exchequer Bills towards Exchequer financing I might do this by telephone and make a note of it if they agreed or disagreed. That is just one example of the difficulty of generalising which I find myself in constantly at this Committee but in the particular case in question the officer concerned was facilitating a transfer of an account. The account in question was not one over which we had any control. Admittedly, we would be paying money into it but it was not an account for which we were responsible.

434. My problem, Mr. Murray, was that I was trying to get a line through the clash of evidence with which we will be dealing subsequently and I thought at this stage that I might get some foundation information from yourself. That, and I thought that if, perhaps, you had a memo of telephone conversations it might help because I see here that, say, on 10th November in a letter to the Red Cross asking them to transfer a sum of £7,500 to the Munster and Leinster Bank, Baggot Street we said the cheque should be made payable to the Bank and the covering note addressed to Mr. William Walsh, Deputy Manager. On the 20th November, ten days later, we have a note saying that the cheque might be made payable to the Bank and sent to Mr. H. T. Deacon. There is not anything here to help us and obviously there must have been some information in the Department that whereas Mr. Walsh was the appropriate officer on the 10th, Mr. Deacon was the appropriate officer on the 20th. From that I would gather that there must have been a cross-play between the Department and the Bank which is not noted here and which might be of some use to the Committee?

—It is certainly not recorded in our files because, once again, I would like to assure the Committee that any information on our files which relates to these payments has been made available to the Committee. I should imagine that what happened in this instance was that Mr. Deacon was probably not available at the time of the first letter and that we found out in the normal way that he was available on the second occasion. The point is that that might have been found out in a number of ways. The official in question banked at that place himself and he could have found out, or he could have found out by a telephone call. We would not necessarily record that particular conversation.

435. In respect of the lodgment of the moneys obtained from the Irish Institute, the lodgment of 12,000 dollars, £4,993 10s, that was lodged by an officer of the Department?

—Yes, that is so.

436. And this is in circumstances where again I am at a loss to know or to accept the absence of what I call liaison between the Department and the Bank. When the officer arrived with that money there was not any question at all but that it was lodged to the account. We must remember at this stage the subsidiary accounts were in operation. Did the Bank Manager at that stage say nothing at all about the other accounts? He did not say: “Do you want this lodged to account 1, 2 or 3?”?

—The short answer is that my information is he did not but I would be surprised if he did because this was a payment to the Committee of the Belfast Fund for the Relief of Distress and that was the main account. The other accounts were quite separate. It would be a different matter if they were formally quite separate.

437. On the other hand the Bank Manager would say that he was aware of the fact that they were and had instructions that there should be three at that time?

—I would not accept that, Deputy. They were not three accounts held by the Committee of the Belfast Fund for the Relief of Distress. There was one account in their name, at least with that title. The other two accounts were held by distinct persons and furthermore, of course, we knew nothing about them. I have no information which would suggest that when that lodgment was being made the Bank Manager made any reference to the other two accounts. The officer in question in my Department has said that it was not until late March or April that he heard incidentally of the existence of another account.

438. The second last question, Mr. Murray. So far as Captain Kelly would have been concerned and remembering that at this stage he was being accepted as the official officer, in circumstances where Captain Kelly may have indicated that he would require to make visits shall we say to England, supposing he had gone there and subsequently submitted a claim for travelling expenses in the ordinary way would they have been paid by his Department?

—I would imagine so, if he stated they were for official purposes and if his superior was in a position to confirm that.

439. Finally, Mr. Murray, in circumstances where Captain Kelly would not have revealed the fact that moneys were spent on the purchase of arms do you think the Department itself might subsequently have been ill at ease as to how the Grant-in-Aid was handled and might itself have instituted these inquiries?

—We had instituted inquiries ourselves.

440. Prior to the announcement by Captain Kelly?

—I should like to check on that. It was in or about the same time. I am fairly satisfied it was. My recollection is that it was the middle of September that I instituted formal inquiries and I think that was before the Arms Trial, before Captain Kelly made any reference to it. At that stage, as I mentioned in reply to an earlier question, we were getting some indication from the Garda inquiries, fictitious names, subsidiary accounts that we knew nothing about, and we certainly saw that there was a need for an inquiry.

Deputy Tunney.—That is all I should like to ask. Thank you.

441. Chairman.—Mr. Murray, to get one thing clarified—it is perhaps a side issue— in respect of one grant here, one open-ended grant, shall we call the grant where the people are not specified, where the recipients are not specified, you mentioned a sporting grant and you stated that the allocation would lie with the Department of Education in consultation with the Department of Finance. Is that correct?

—I would hesitate to say my Department would specify who the grantees should be, but I would be surprised if there was not some contact between the two Departments regarding, in general terms, the type of organisation that would get it. I would be surprised if the Department of Education would turn around and give a payment out of that Grant-in-Aid to a Department that had no connection with sport or with youth development.

442. I am putting it to you to get your views on it. Would it not rather lie with the Minister than with the Department as such?

—I take that point and I certainly would be surprised if the Minister would not be consulted in a case like that.

443. This question of the Red Cross. In your submission here of the 9th December, Appendix VI, paragraph 2 you state:

The Tenth International Red Cross Conference, Geneva, 1921, prescribed by Resolution that no Red Cross Society should operate in an area outside its own area of responsibility without the consent of the Central Committee of the Society responsible for the second area.

I gather from your evidence that information of non-co-operation was available to Mrs. Barry about August 27th and that your Department was aware of it on September 30th. Is that correct?

—I cannot say definitely when we were aware. As I said there was no date put on the documentation received and I am only surmising that it came in close to the 30th September because they related to—papers related to a meeting being held on that day.

444. I take it that it was known at official level in your Department towards the end of September, 1969, that the Irish Red Cross Society could not operate in Northern Ireland?

—Yes.

445. And do you not think then, as Accounting Officer, it was rather strange that payments out of the Grant-in-Aid were made to the Irish Red Cross Society?

—No, because it was clearly indicated that the Red Cross was only a channel of payment. It was not intended to be the ultimate payee. At that stage the arrangements had been made that the payments would be re-routed to the Belfast Committee through the Red Cross and this applied not alone in regard to the Belfast Committee for the Relief of Distress but also in regard to a large payment of £20,000 to the Belfast Refugee Committee.

446. Yes but, Mr. Murray, both the Act governing the Red Cross and also Government Information Bureau announcements all gave the impression that the Red Cross was to administer this fund, meant to largely administer this fund, that it was largely to be administered through the Red Cross. Now you are speaking of it being channelled through the Red Cross as if this was the answer, as if this was an acceptable interpretation?

—I am not saying that it was an acceptable interpretation, Chairman. I am merely saying that this is what was done and that this was done in accordance with a decision taken by the Minister who had met the people from the North who were going to be the recipients of the relief and it was reasonable to deduce that these arrangements had been made to avoid prejudicing the recipients of the relief in the North.

Chairman.—Very good. Are there any further questions?

447. Deputy Barrett.—Mr. Murray, could I refer to paragraph 19 on page 4, line 5 which states:

Mr. Fagan states that the change from the Clones account to the Munster and Leinster Bank, Baggot Street, was made because Captain Kelly had explained that Clones was too inconvenient and that he wished to have the bank account transferred to a Dublin bank. Captain Kelly confirmed that it was the same account and in the same names as the Clones account.

If we could now go to page 37, Captain Kelly’s letter, dated the 18th December, 1970. He states in the first paragraph on that page:

I had no direct knowledge of, or did I take any part in the operation of that account, …

Now, Mr. Murray, you are quite satisfied that your statement in paragraph 19 is a correct statement of the facts, that it was at Captain Kelly’s request that this account was transferred, No. 1, and that he assured you it would be operated by the same people?

—I have no reservations on that point whatsoever and furthermore I do not know if Captain Kelly himself would intend to convey, by the statement you read out from his letter, that he had no part in the transfer of the account from Clones to Baggot Street. In our discussions with him in fact he has not denied this.

448. I see. Yes—?

—In other words I think that, if I might say so with respect, you may be drawing too much from that particular statement.

449. Well, of course, it is a letter that has been published?

—Quite so, yes.

450. Apart from your discussions with him?

—Quite so, yes. But I just wanted to emphasise the point that in our discussions with him, subsequent to this letter, he did not deny that he was a party, let us put it that way, to the transfer from Clones to Baggot Street.

451. In other words, he left no doubt in your mind but that he knew all about the Clones account?

—Well, when I say all about—

452. Well—?

—He knew about its existence.

453. Well, he had direct knowledge of this account, is not that it?

—Well, no, I hesitate to comment on terms which might seem to convey more knowledge on Captain Kelly’s part than I was aware of. He was aware of its existence. Whether he was aware of all the transactions therein is another matter.

454. He was aware of its existence to the extent that he held it to be inconvenient, is not that correct?

—No.

455. Well it says so——?

—It says so?

456. It says so in paragraph 19 of your submission?

—That is what he said but I mean it is another matter as to whether the decision, or the verdict, if you like, that this was inconvenient was his alone.

457. I see. Yes?

—In fact the Belfast people are in some doubt amongst themselves. We asked them about this and they would not deny that it could have been that they raised this with Captain Kelly. They have given reasons, by the way, which you know are not implausible for its being inconsistent, using “inconvenient” in a very wide sense.

458. I appreciate it may have been inconvenient for them but what I am trying to establish is that you made one statement in your submission and Captain Kelly published another statement and what I am trying to do is to establish which is the correct one?

—Quite so and it is for this reason that I am anxious to make it clear that whatever meaning Captain Kelly intended to convey in this letter he has not denied that he was instrumental in the transfer. In fact we did not take that particular, we did not think it necessary to challenge him on that particular reference.

459. Further down, Mr. Murray, in the fourth paragraph when referring to the moneys being used for the purchase of arms he says that he understood that these moneys were to be reimbursed from another source, namely from moneys available in the Six Counties. Did he ever give you— your Department—any official intimation that this was what was intended? He never——?

—Oh no.

460. He never gave any intimation at all that this was intended?

—No. Any contacts between my Department and Captain Kelly in regard to Grant-in-Aid moneys were, as you know, generally indicated in our submision of the 9th December. He asked for money; he said it was for Northern Ireland relief; this was cleared with the Minister and there was nothing more to it than that, no indication; the word “arms” was never mentioned nor was the question of diversion of moneys and their recoupment ever mentioned.

461. Deputy Briscoe.—I have just one simple question to ask you, Mr. Murray. You referred to the amount of money that was spent on the equipment in the office, like typewriters. Has this equipment been returned to the Department? Where is this equipment?

—I think I mentioned this already in reply to a somewhat silmilar question. The office broke up in circumstances which suggested to Colonel Hefferon that it would be tactful not to intervene too openly in the matter and he made such discreet moves as were open to him to recover some equipment, and did in fact recover some of it, but at that stage it was considered that more active steps might appear to associate the Army too openly with the situation which was a deteriorating one as far as the office was concerned.

462. You mentioned in the later points which you have brought out that, I think you said you have written to Captain Kelly to give some accounting for £500?

—That is right.

463. When did you—when was that letter sent off—was it just recently?

—Fairly recently, but he was in touch with me about it and said that he would give me some information.

Thank you, Mr. Murray.

Chairman.—Deputy Burke.

464. Deputy Burke.—You stated that all the documents in the Department’s possession relevant to this investigation have been placed before the Committee?

—Yes, that is so.

465. This would not rule out the possibility that some documents existed which no longer exist which would be of help to the Committee?

—That might be. I am not aware of any documents that were in existence at one stage and are no longer in existence in relation to this Grant-in-Aid. I have no reason to suspect that any documents were removed or destroyed relating to the official file. I would make the distinction that I do not know of papers in the possession of anybody who had no official function.

466. What is the normal Department practice in regard to the disposal of files? I presume that if one allows a mountain of papers to accumulate in the Department it has to be governed in some way. What is the normal practice?

—Beyond telling you that Department files are usually kept for too long I cannot tell you anything. They are kept for years and years. They are certainly not destroyed within months, if you like, of the event to which they relate.

467. Would I be right in understanding that an incinerator is usually used to dispose of these things?

—I could not really say. If you wish, I will check up on our practice on this.

468. I should like you to do so for the reason that within the last six to seven months there is the possibility that on one occasion a number of people may have been engaged in the Department in destroying papers and that not alone were people engaged in destroying papers but people were there supervising the people who were incinerating and people were there also supervising the supervisors of those engaged in incinerating certain papers. I suggest that Mr. Murray might investigate this possibility because by inference members of the Committee have decided, I have decided, that there must be some documents which could be regarded as the documents referred to by Mrs. Barry when she said that the society received written instructions from the Department in regard to the transfer of moneys to the bank accounts in Clones and Baggot Street. Could you undertake to investigate whether such an event took place?

—You are speaking of an act of destruction which would have taken place in the normal event? You are not saying it was specially directed towards those papers?

469. I am not in a position to say whether this was normal or abnormal not being in possession of knowledge of the practice in the Department?

—I will certainly check it. I can say two things straight away. The first is that in or about October—certainly it was at the time of the Arms Trial—after I first read through the papers I took the precaution of numbering every paper, every document. I know only the approximate date. It was round about October, I know. The second point is that the papers relating to this Grant-in-Aid did not get into general circulation—it was not a question of their being filed in a registry.

470. My final question: if disposal of papers in the Department were to take place it would not normally take place, say, between the hours of 7 p.m. and midnight?

—I will have to check on this. I do not know about it.

471. Deputy E. Collins.—In the matter of the Grant-in-Aid, when a new Grant-in-Aid is established are you consulted about the methods, about the system in which the money is to be distributed?

—Not generally. This would be a matter for the officers in the Department handling that particular business.

472. It seems there were instructions from the Minister to transfer funds in this Grant-in-Aid through the Red Cross to Baggot Street. Would you not think that proper supervision should have been maintained to ensure that the money went into the proper account?

—Yes and I would add that such supervision did take place. We had statements generally from the bank concerned that those moneys were lodged into the bank account. I am speaking subject to correction on that. In some instances there was communication with the bank which indicated that the moneys were being lodged into these bank accounts.

473. The only interference from the Department was by Mr. Fagan who merely introduced Captain Kelly to the bank. What I am speaking about is should there not be standard procedure of supervision by the Department concerned, in this case the Department of Finance, to ensure that where, as in this case, there was a most unusual request from the Minister to transfer moneys through a society to an account, care should be taken to see that a proper account was established? This was apparently not done?

—I do not know what you mean by a proper account.

474. In point of fact I am of the opinion that the Department of Finance should have established the account rather than leaving it to someone else. I will be more specific still. The money which we are talking about was for Northern Ireland distress and I feel there was some laxity within the Department in this matter?

—If the Department had established the account how would amounts have been withdrawn from that account?

475. I am not speaking so much of the actual administration but of the establishment of the account?

—You made a fairly strong statement. I asked a question and you said in reply that the Department should have established an account. That would have involved the Department in administering the relief and that was not the Minister’s decision. The Minister’s decision was that the relief was to be administered in another way. The only people who could draw on the account were the people who established the account. If we had established the account the Belfast people could not have drawn on it. Furthermore, this question arises, in so far as it arises, in relation to the Clones account. That was when the bank account was established first. It was established following a discussion between the Minister, the Red Cross and the representatives of the Belfast Committee. In what sequence I do not know, but it was following discussions of that nature that the Clones account was established and the first payment into that account was a payment by the Red Cross following a discussion between them and the Minister. It had nothing to do with this Grant-in-Aid. When we came on the scene there was an arrangement already in operation.

476. I am still of the opinion that your Department should have supervised or kept in touch with the workings of the Baggot Street account, even with the co-operation of Captain Kelly who, I accept, was given a specific instruction in the whole matter over a long period. There should have been more co-operation, more cross-talking between the Department and Captain Kelly at various stages in the matter of operation of this account.

—That would have been inconsistent with the treatment of these payments as Grants-in-Aid, where the precise channels or mechanism of disbursement is a matter for the recipient.

477. I think you will accept that this was an exceptional Grant-in-Aid?

—I have stressed on a number of occasions that circumstances which came to light since the end of the last financial year have certainly underlined the exceptional nature of the Grant-in-Aid and I would not deny that there were exceptional features during the currency of the year which made it exceptional.

478. You mentioned that 19 of the 105 Grants-in-Aid operated without the grantee being specified, 13 of which you stated were going through other departmental accounts. Of the other six, two—in connection with sporting organisations and Irish publications —were not audited by the Comptroller and Auditor General. In that light, surely even at the commencement of this Grant-in-Aid you must accept that this was an extraordinary Grant-in-Aid?

—My recollection—although it is not important in relation to the point you are making—is that the Grant-in-Aid to the sporting organisations is, in fact, audited by the Comptroller and Auditor General. I am not clear as to the point you are making. I can only re-emphasise that we were dealing here with arrangements which had been agreed by the Minister with the people concerned, that these arrangements did not seem in any way suspicious other than that warranted by the particular needs of an exceptional situation. Insofar as this point arises, it arises in regard to the Clones account as well as to the Baggot Street account.

Chairman.—We have agreed to adjourn at 6.30 p.m.——

479. Deputy Collins.—If I may ask the witness one final question? Are you aware of the identity of Mr. George Dixon?

—Beyond the indications as to his identity contained in the second Garda report, I have no information at all. Any indications I have—which I would distinguish from information—are those contained in the document the Minister made available yesterday.

Chairman.—We have agreed to adjourn at 6.30 p.m. It is proposed to take further evidence in private session at 7.30 p.m.

Mr. C. H. Murray.—With your permission I should like to make one point on the question of making available the departmental brief on the Grant-in-Aid. I took occasion of the break at 4.30 p.m. to consult the Minister and, on the distinct understanding that this is being made available for the Committee’s private information and will not be used in connection with the report, he will be making copies of the brief available to the Committee.

Thank you very much.

The Committee adjourned at 6.35 p.m.