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

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Déardaoin, 14 Eanáir, 1971

Thursday, 14th January, 1971

The Committee met at 10 a.m.

DEPUTY P. HOGAN in the chair.

ORDER OF DÁIL OF 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.

480. Deputy FitzGerald.—Before putting questions to Mr. Murray I should like to make a point about the record of yesterday’s meeting. At the end of the meeting, as is shown by the minutes of the evidence in front of us today, Mr. Murray referred to a document and said it was to be provided to us on the distinct understanding that it was for the Committee’s private information and that it was not to be used in connection with the report. I immediately, within a matter of two seconds, spoke on this point but the stenographers had risen from their places and the recording was off already, with remarkable promptness and my comment was not recorded. I think it is a matter of some public importance to record that I put it and I think, Sir, you agree that before accepting this report on those terms the Committee would need in their private deliberations to consider whether such an arrangement is acceptable. We are entitled to any information for use in the report because of the powers given to us, and the matter of receiving information is something we would need to consider privately. I was afraid, therefore, that we might prejudice our position by receiving this information before we had time to consider those conditions. I mentioned that and you agreed this was a point proper to raise and you said we would consider it in our private deliberations. As it is not recorded in yesterday’s minutes I should like to put it on record this morning.

—I should like to comment. I heard Deputy FitzGerald making that point but as the Committee were rising and as the stenographers had left I did not reply. When this issue was raised earlier yesterday by Deputy Keating I made it clear that the objections to making this document available were on the supposition that the document would be publicised. It was then that Deputy Keating enquired as to the possibility of it being made available to the Committee in another way. I will not recite the references he made. It was on the basis of that alternative proposal that I sought the Minister’s approval. I should like to clarify the point that I thought I was acting in accordance with the Committee’s wishes.

481. I entirely accept Mr. Murray’s good faith on that. He was doing what was put to him as a possibility. Nevertheless, I think we should consider it further in private. Mr. Murray, we had your assurance yesterday and on an earlier occasion at paragraph 209 of the Committee’s proceedings, that all the papers in your possession have been given to us. You repeated that several times. I am puzzled by one point but it may simply be that on my part I have failed to track down a document. I should like to refer you to page 53 of the pink book, the document book, to the letter at the top of the page which starts off:

Dear Mr. Fagan,

In reference to your letter of 29th inst.

I wonder could you point to me where in this pink book is Mr. Fagan’s letter of 29th instant, because I have not been able to find it?

—We could check up as to whether we have that letter. All of those letters were written on a day when typists were not available and they were sent in manuscript.

482. On an occasion like this when the existence of a letter is evidenced in documents themselves, would it not have been possible for Mr. Murray to have asked the Red Cross for a photostat copy of the letter rather than leave us without what could be a very vital piece of evidence, for the reason that there are only two transactions on the Clones account in the Department of Finance? In the first case, as was established yesterday, Mr. Fagan’s letter made no reference to Clones. The missing letter is the other one and on the basis of that letter the whole question arises as to the veracity of the statement by the Chairman of the Red Cross that in transferring moneys to Clones she acted on written instructions. It seems to me that when there is a conflict of evidence of that kind and there is a document which is known to the Department to exist, which is the Department’s property, it should have been possible to ask the Red Cross for that document rather than to leave us in the position that we might not have picked up this——

—I am not saying this happened in this case but I know it happened in one or two cases. I am not saying this was the explanation here and I will check up as to whether in fact we had this letter but omitted to send it or whether there was some other explanation.

483. If you have not got it in your files could you ask for a photostat copy of it from the Red Cross and let us have it? An awful lot depends on it.

—Certainly.

484. Right. I want to come now to the question of the assurance given by the Taoiseach to the Dáil on 14th May last. First of all I should like to ask you whether in your view the Taoiseach’s statement, somewhat differently worded from the assurance you suggested to him, is a fair and accurate representation of the purport of the assurance you suggested?

—I do not think I should be asked to comment on that.

485. We are in a difficulty here because a good deal hinges on this. If I may put my own view, it seems to me the Taoiseach was entitled, on the basis of the assurance Mr. Murray gave to him, to give the Dáil the assurance he did, but it is of some importance to me, to us, as to whether Mr. Murray would agree with that proposition.

—I suggest that you have now available the form of words which I suggested the Taoiseach might use, you know what the Taoiseach said, and I think the Committee will draw their own conclusion. I am in the embarrassment that in hesitating like this I am seeming to suggest a reservation, but my reservation stems from a reluctance to comment on a statement made by the Taoiseach.

486. Chairman.—I think, Deputy, that Mr. Murray should not be asked to give an opinion on a matter like this. He is here as a witness of facts and I think it would be unfair to ask him to comment. He has given us the statement he gave to the Taoiseach, we are able to read the Taoiseach’s statement in the Dáil Reports, and I do not think it is fair to press Mr. Murray too much on this point.

487. Deputy FitzGerald.—At least may I say that the reason why I pressed it is because it seemed to me that the question of the engagement of Mr. Murray’s responsibility in the matter of the Dáil being misled depends on the answer to that question. In my view the Taoiseach was entitled to give the assurance he did on the basis of what Mr. Murray had suggested to him and therefore it seems to me Mr. Murray’s responsibility is engaged in misleading the Dáil. I wish to give Mr. Murray an opportunity of rebutting that presumption. He may be in a difficulty about proceeding to rebut it but I think it is only fair to give him the opportunity. Proceeding from there, there was a reply given in the Dáil to a question raised by me on the 18th November: I will read the question which was addressed to the Minister for Finance:

Dr. FitzGerald asked the Minister for Finance whether the inquiries conducted by officials of the Department of Finance prior to 14th May last into the possible use of public funds for the illegal purchase of arms included an inquiry to the principal private secretary to the Minister who had control over the issue of sums from the Northern Relief Fund; if so, what these inquiries elicited; and, if not, how these officials were able to assure the Taoiseach that no public funds had been used for arms purchases.

The reply given to that question by the Minister for Finance was:

The assurance given to the Taoiseach that no public funds had been used for arms purchases followed discussions with the official described in the question and an examination of the relevant departmental papers.

It goes on to say that the papers give no indication that the money had been used. Could I ask Mr. Murray whether that reply to that question was one of which he had knowledge or of which he approved?

It was on the 18th November?

488. Yes.

—I should like to check on that. I think I was out of the country on that occasion.

489. I see. Perhaps you could come back again to this point. Could I ask by whom was Mr. Fagan consulted in relation to this matter? I would refer you to the statement contained in paragraph 416, page 49, of the report of the proceedings of the Committee. To the question:

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

The reply given was:

—Not in any detailed way and certainly not in regard to the question of the financing of the importation of arms.

490. You went on to say that your discussions with Mr. Fagan referred generally to the importation of arms, irrespective of the financing of them, covering such matters as the position of the Revenue Commissioners in regard to the alleged importation, in other words, non-financing aspects of it. It would appear from that that you did not consult Mr. Fagan on this question —it was a most explicit denial of consulting him on the question of financing of the arms. Yet, the Minister for Finance told the Dáil on the 18th November that the assurance given was following discussions with the official described. Can you say who had discussions with the official described in this matter, if you did not, and how you incorporated these indirect discussions with him into your assurance to the Taoiseach, as Mr. Colley has said?

—This is a matter I would suggest could be taken up with Mr. Fagan. However, perhaps I could give you this interim indication—Mr. Fagan had discussions with the Taoiseach at the Taoiseach’s request before 14th May.

491. I see. So the position is that the Taoiseach may have secured a direct assurance from Mr. Fagan on this matter that you did not know about?

—I am not saying that.

492. The point is we have here a reply by the Minister for Finance which, presumably, was based on information furnished to him by the Department which specifically says that discussions had taken place prior to this assurance. While I shall put a question to Mr. Fagan in due course, I would ask if you could furnish us in due course, when you have looked into the matter, with a statement as to the basis for this reply.

—I am just refreshing myself on the terms of the reply. It was the 18th November?

493. Yes. It is at the bottom of column 1591 and the top of 1592.

—Yes. I am reading from the first part of the reply. “The assurance given to the Taoiseach that no public funds had been used for arms purchases followed discussions with the official described in the question …” I would say, however, that might possibly read “following discussions which the Taoiseach had with the official described in the question”. That was what was intended to be conveyed, I think, but I will check up on the matter.

494. Yes. But we are clear that your categorical assurance provided to the Taoiseach did not follow any discussion with Mr. Fagan on this matter?

—That is so.

495. If Mr. Fagan was consulted, would you not have expected him on 14th May, knowing at that stage that Captain Kelly was suspected of involvement in this arms conspiracy and having himself been involved in the communication with the Minister about the attempted imporation in March through Dublin port, would you not have expected him to have mentioned the fact that it had been known to him at the end of March or April of Captain Kelly opening the subsidiary account? Here we have the position where Mr. Fagan knows, as everybody in the country knows, Captain Kelly is suspected of importing arms; he has known before he knew that, of course, that he had control of a subsidiary account. The question arises where did the money come from for the arms? Would you not have expected him, if asked by you or indeed by the Taoiseach, immediately to have pointed that out?

—I think you started that rather long question by asking would I not have expected that on the 14th May——

496. Yes.

—I think I have made it clear to the Committee that on the 14th May, 1970, Mr. Fagan was not available to me for consultation; he was being interviewed by the Gardaí. That is point 1—he was so engaged all that day. The second point I should like to comment on—and again this is a matter which I can only tell you what Mr. Fagan told me; I think he will be able to be more precise about this—on the basis of that information, certainly I would have reservations about the term you used that he was aware that Captain Kelly had control of a subsidiary account.

497. We have evidence in relation to that. My wording may be imprecise in some respects but we have at two points evidence in relation to this.

—May I interrupt the Deputy to say that I am not denying the fact that there was some knowledge of a subsidiary account but the fact that Captain Kelly had control of it is quite another matter?

498. This is the statement in evidence which you submitted to us. On page 5 in the pink book, paragraph 22, he (Mr. Fagan) states that it was only about April, 1970, that he gathered from a conversation with the manager of the Munster and Leinster Bank, Baggot Street, and that he inferred from a conversation with Captain Kelly, that the latter operated an account other than the main account in the bank. What do the words “operated an account” mean if they do not mean having control of it?

—Yes, I think I will put this in another way to you. Are you suggesting that Captain Kelly controlled the main account in Baggot Street?

499. You are making a distinction. You are saying that my use of words was loose in saying “controlled” the account—I should have said “operated”. The position is that Mr. Fagan knew in April, and I think in verbal evidence you suggested in March, that Captain Kelly operated an additional account over and above the main account, implying that he operated the main account also. That was known and understood by Mr. Fagan.

—I would suggest that you are reading too much into this particular word “operated”. We knew he operated in relation to the main account because lodgments into the main account were made following approaches made by Captain Kelly. At that stage we had no knowledge that he operated, shall we say, in regard to withdrawals from the main account. We knew he had a relationship with the main account and, as far as I know, certainly my understanding was that what happened in April—it was April, by the way; my reference to March-April was a generalisation—was that in April one of our officials became aware that there was another account in Baggot Street and that Captain Kelly had a certain relationship to it.

500. A word you have used in the evidence submitted to me is that Mr. Fagan said that in April he inferred that Captain Kelly operated an account, not “operated in relation to an account”?

—No. I am stressing the fact that we used this word in a phrase—and the word must not be taken out of its context— that he operated an account other than the main account in the bank.

501. Yes. Knowing that Captain Kelly was operating an account other than the main account in the bank, would you not have expected Mr. Fagan, if the Taoiseach put the question to him, as is implied by your Department’s reply, your Minister’s reply, to the question by the Member— when the Taoiseach put the question to him had he any idea where the money could have come from, would you not have expected him at that point to say to the Taoiseach “There is a curious feature about this Northern Aid Fund. First of all, Captain Kelly is the person whom I introduced to the bank. He is the person who has made the requests for all the money and he is operating an account additional to the main account?” Would it not be surprising if Mr. Fagan had failed to make these points to the Taoiseach if the Taoiseach had asked him could he offer guidance as to where the money had come from?

—I think this depends on the precise question and general purport of the question that the Taoiseach put to him.

502. The assurance the Taoiseach gave and the question he put to you related to the question: “Could it have been possible”—I think I recall you putting his question to you in these terms yesterday. Yes, “Was there any way in which the money could have come from any account?” On the assumption that he put the same question to Mr. Fagan, an assumption warranted by the fact that the assurance given was so explicit and is explicitly stated by your Minister to be based on discussions with Mr. Fagan, on that basis would you not have expected Mr. Fagan to refer to these matters?

—I think that you had better put this question to Mr. Fagan because you are making assumptions——

503. I only assume that the replies given in the Dáil were correct statements?

—I think that if you look at the reply given it says: “The assurance given to the Taoiseach that no public funds had been used followed discussions …”

504. Yes?

—It followed discussions, that there had been a discussion with the officer in question but it did not say anything about the scope and nature of these discussions, in other words, the precise questions that were put and whether in fact the Taoiseach put to Mr. Fagan the same question that he put to me.

505. Would you not have considered it would be rather odd if reference to discussions in that reply related to any discussions other than arising from a question: “Could the money have come from any public source”?

—I refuse to comment on that because I was not a party to these discussions.

506. But you have some responsibility, though perhaps not direct personal responsibility, for replies given in the Dáil by your Minister.

—I am not commenting on that either. I think that the gloss to be put on that answer, shall we say, or the inferences that you draw from it in this particular context must relate to the information which Mr. Fagan will give you regarding the substance of his discussions with the Taoiseach.

507. Perhaps we will come back to that again when we have heard Mr. Fagan. In your evidence yesterday you mentioned in relation to your investigation of the Defence Department Vote—and I refer you to paragraph 410, page 48, half way down the second column, you say:

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 of 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.

508. This qualification of yours about the application of normal accounting checks is mentioned by you specifically in relation to the Department of Defence Vote. In other words while you assumed throughout that they would apply you only say that you indicated to the Taoiseach that your indication to the Taoiseach was based on this assumption in relation to one Vote, the Defence Vote. Could I ask you whether in talking to the Taoiseach on 14th May and in giving him the material for his categorical assurance you included the same qualification?

—I conveyed to the Taoiseach on 14th May as a suggested form of wording, the wording that I have conveyed to the Taoiseach. There was no other communication to the Taoiseach on 14th May.

509. Do you not think that in view of the nature of the check which you had to make on the 14th May, you have told us in relation to it that it had to be made in a very short period. You say on the same page, a little further down that it was made clear that a reply was required that day, and you have told us that your inquiries that day consisted of simply looking at the correspondence in the file, at least one item of which we hear this morning was actually missing. In the light of that do you not think that a similar qualification should not have been put in the assurance you drafted for the Taoiseach on 14th May to that which you put in relation to the Defence Vote?

—It has yet to be established that one item was missing from the file. That is point number one. I just take you up on your aside there.

510. It is missing at this stage, because you say you have given us every document, and you assured us yesterday you numbered all the documents, so I assume that it was on the file at that stage. If it had not been on the file you would have noticed it was missing with the numbering?

—If you want to get into that could I just check on one point?

511. I felt I was justified in assuming it was missing from the file.

—Could we proceed on the basis then that the question of whether or not a document was missing has yet to be proved?

512. Yes.

—The net point is, should I have put in a qualification. This may well have been the case, yes, on hindsight. I perhaps should have put in that qualification which applies of course. I was using the qualification in the earlier approach to the Taoiseach or rather in response to the first approach to the Taoiseach in regard to what was a fairly obvious question, a rather obvious subhead through which arms might have been purchased illegally. I think that it is true to say that if you do not assume that normal accounting checks apply, then there is no subhead in all in the Book of Estimates that would not be open for suspicion in this context. What I am suggesting is that certainly in my mind this qualification, in so far as it related to expenditure generally would be an implied qualification.

513. And you think that when the Dáil receive an assurance—as categorical it did receive or as categorical as the one you suggested: “I am perfectly certain as a result of inquiries made on my behalf that every penny of State funds has been spent for purposes which were voted in the Dáil”, the Dáil must take it that subject to qualification that the money was checked?

—No, that the normal accounting checks would apply. There is a well-established system in operation for 50 years now and the implication is that during the period in question this system did not cease in its totality.

514. But you are expecting Members of the Dáil to read that qualification into that categorical assurance?

—No, I did not say that.

515. If you do not expect them to, would it not be desirable that that qualification should be made?

—It may well have been. All I am saying is that it certainly was present in my mind.

516. Could I recap as to what seems to me must have been in that file when you examined it and ask you whether these things were there? The file would have contained or did it contain these various notes about “Kelly’s people want more money” and so on?

—That is so.

517. So that here is a situation in which Captain Kelly is involved in attempted arms importation—this has been discussed at length in the Dáil during several debates and it is public knowledge that he is under suspicion for this—you look at a file in which there are a number of notes saying that Kelly’s people want more money. Having read that file and without discussion with Mr. Fagan—you were not able to discuss it with him because he was not there— and without further investigation you gave the Taoiseach this form of words: “I am perfectly certain that every penny of State funds was spent for the purpose for which it was voted by the Dáil.” Do you not think that was a very rash assurance?

—No.

518. Would you like to elaborate on that and to tell us why you think it was not a rash assurance?

—The information on the file also indicated that the payments were paid into an account that was subject to the control of three reputable people in Northern Ireland.

519. Known as Kelly’s people?

—That was a colloquialism; it was a shorthand expression.

520. Even though they were identified in these terms and although Captain Kelly was then suspected of involvement in arms importation, it did not suggest to you the need to inquire any further as to what Kelly’s people had done with the money?

—One assumed as of that date, which was the 14th May, that reputable people would exercise normal general control over bank accounts under their jurisdiction.

521. You did not say to the Taoiseach that you assumed the money was spent all right. You offered to him the wording: “I am perfectly certain that every penny was spent for the purposes for which the Dáil voted it.” You offered the Taoiseach this assurance although you had evidence that Captain Kelly was involved in this money. You opened a file and found that Captain Kelly was looking for and getting money which he was putting into an account and which was to be spent in Northern Ireland and under control of people in Northern Ireland. Could I ask you whether you told the Taoiseach what you found in the file?

—Could I take you up on an earlier point? You talked about the evidence that I had on the 14th May of Captain Kelly’s involvement——

522. Could you have been in any doubt that he was suspected of involvement?

—You qualified your statement immediately. First of all you referred to the evidence of Captain Kelly’s involvement and then you asked whether I could have been in any doubt.

523. There was evidence at that stage which was offered in court but which did not secure a conviction?

—That was not available to me on the 14th May, 1970.

524. So that on the 14th May, Captain Kelly to you was an innocent bystander, an Army officer of repute and his name meant nothing more to you than that? I think that is naïve.

—I must protest against this form of questioning. I questioned the use of the word “evidence” and when that is put aside I am asked whether I regarded Captain Kelly as innocent. This is springing from one extreme to another.

525. Deputy FitzGerald.—That was not actually what I asked.

526. Chairman.—Perhaps the Deputy would rephrase his question in a less contentious manner in order to get the information he requires.

527. Deputy FitzGerald.—Could I ask how you regarded Captain Kelly on the 14th May in the light of the information then published in the three Dáil debates?

—I could not recall that exactly at this stage. Certainly, I was amazed at the proceedings. I had not formed a view as to what was the truth of the matter.

528. But you knew that his name had been mentioned in public in connection with this matter and that he was under suspicion?

—I presume I did. At this stage I cannot recall.

529. It would be difficult for any of us to recall precisely what we knew at that point. I appreciate that difficulty but I think if we read back on what was then public knowledge—my recollection of what happened during those three debates is that his name came up frequently and that the fact that he might be involved was widely known. I am wondering whether you told the Taoiseach that on this particular file you found that money was being passed to people known as Kelly’s people?

—I would like to reiterate again and I have said this a number of times that the totality of what I communicated to the Taoiseach on the 14th May has been conveyed to this Committee. Secondly, I would suggest that too much is being read into the way in which were described people looking for Northern relief.

530. Did you question Mr. Fagan later on about the question of the money?

—He and I had discussions as I came to involve myself more in ascertaining what had happened.

531. During these discussions, at what stage did he tell you about his knowledge of Captain Kelly operating another account?

—It was some little time after; I cannot say exactly when.

532. You told us yesterday that after you examined the file carefully and referred to the statements which an officer of the Department had made to the Garda authorities, quite a different light was thrown on things. I take it you were referring to Mr. Fagan. Could you tell us what different light did he throw on things by these statements?

—It came out in discussions between Mr. Fagan and the gardaí, for example, that the accounts in Baggot Street were in fictitious names.

533. It came out from his evidence?

—No, in discussions between the gardaí and Mr. Fagan because, in fact, part of Mr. Fagan’s evidence was to deny any knowledge of these names and to deny that he had given instructions that inquiries relating to the accounts were to be addressed to him.

534. I understand that. I found it a puzzling reference but that explains it fully. In your evidence of the first day at paragraph 220 you were asked:

But the method adopted was one which you do not regard as being incompatible with the Irish Red Cross Society’s international obligations?

You replied:

I do not, no.

The Irish Red Cross handbook includes a chapter, No. 4, Organisation of National Societies which has been referred to. Among other statements in it are that it goes without saying that foreign sections should, in the same way as the national Red Cross, respect legislation and administrative measures of the country in which they are working and operate always in agreement with the national Red Cross which, in the case of Northern Ireland, is presumably the British Red Cross. Would you like to comment on that in the light of your reply that you did not regard it as incompatible with their obligations?

—I regarded it as no more incompatible than the activities in relation to relief in Northern Ireland which the Red Cross were financing out of the subscriptions which they had received themselves.

535. Well, that was not quite the point. The question put to you was: “But the method adopted was one which you do not regard as being incompatible with the Irish Red Cross Society’s international obligations?” and the previous question makes it clear that this is the method of providing finance through the Irish Red Cross and you did not say you did not regard it as no more incompatible than something else; you simply said: “I do not, no.”?

—Perhaps I could put it another way and I might have been wiser in reply to Question 219 to have said that I do not regard myself as an expert on the restrictions relating to the Red Cross but we knew that the Red Cross had got moneys directly, non-Exchequer moneys, and were using these moneys to provide relief in Northern Ireland and we assumed that, since this was a matter entirely within their own discretion, they regarded those activities as consistent with their international obligations and it was a fair inference that the method in which the Red Cross was used to channel moneys from the Grant-in-Aid for Northern Ireland Relief was in the same position.

536. But in speaking now you seem to be speaking of the view you then formed. You use the past tense?

—No, sorry, that was——

537. You still hold this view, that there is nothing incompatible with their obligations in the way in which finance was provided through the Red Cross, using the Red Cross for this purpose?

—As I said, our view on this would not be a direct view. It would not be a matter that we would form from direct contact with the Red Cross from experience of their operations. What I am saying is that my reply to this particular question was influenced by the fact that I was aware that the Red Cross was financing Northern Ireland relief from its own funds and did not regard that as incompatible with any international restrictions on its activities.

538. Yes?

—And we drew attention to that aspect of its activities in, I think, the final Appendix of our submission of 9th December, 1970.

539. But the question put to you at this stage is whether you now, in the light of all you know, regard this method of proceeding as compatible with their obligations as set out in this handbook?

—I was not aware of the handbook. I was aware of this reference to the 1921 Convention contained in our Appendix VI but I would not add anything to the previous reply.

540. I am sorry. I am quoting, in fact, from the account of that Convention in the handbook. I should have made that clear.

—Quite so. I see.

541. It is a Convention. I take it it is a correct quotation of the Convention?

—No, I would not add anything to the replies I have just now given on this subject.

542. Finally, Mr. Murray, I want to put to you just a couple of things you said the first day on the whole question of whether the procedure adopted is satisfactory or needs to be improved. The quotations I am taking come from paragraphs 178 to 187, pages 20 and 21. At page 20 you were asked:

You took account of many factors. You concluded that you were satisfied with the method adopted despite its unique character. On hindsight, is that still your view?

You replied:

—This view was formed on hindsight.

Half-way down the first column on the next page you say:

We have given some thought to that in the Department and we think that whatever problems or issues arise in relation to this Grant-in-Aid do not arise because of a deficiency in the system, having regard to the very specific—at least not so much specific—but to the particular terms of the Government decision …

You were asked in the next paragraph:

What is at fault then?

And you replied:

I do not know.

At paragraph 187 you say:

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

I am concerned from the point of view of the Committee of Public Accounts first of all that you regard the method as satisfactory and, secondly, that you do not see what can be done or how it can be improved. I want to put it to you simply do you not feel that in the light of the fact that it is now clear that quite apart from any question of subsidiary accounts, of which the Department had no knowledge until a later stage, and quite apart from the money being used for arms purchases, there is one basic fact and that is that the money was lodged not into the account into which it was meant to be lodged, that is, the names of F, G and H, but into an account in three false names and do you not feel there is something wrong with a method under which Grant-in-Aid money can be so lodged and that some kind of check could ensure that it is at least lodged into the account it is intended to be lodged into, whatever happens to it after that?

—This turns in large part on whether we were right or reasonable or prudent in accepting the bona fides of a reputable Army officer who had close contact with the people in question and who was regarded, in fact, and whom we were informed by our Minister was our contact with the people requiring relief.

543. But surely in most operations of Government, while you accept the bona fides of the people you deal with inside and outside the Government service it is the normal practice to proceed in important matters by way of written communication and formal check and do you not think in the light of hindsight that a method of opening an account so loose that money goes into a quite different account under false names is one which suggests the need for some improvement in the system so that the verbal communications which led to this would be replaced, perhaps, by written communications?

—With whom? Written communications with whom?

544. With whoever, either with the bank if the money is being lodged directly or written communications to whatever intermediary is lodging the money. In this case two things happened. First of all, the account was opened in different names and, secondly, the money was sent to an intermediary to lodge in the account without the account ever being specified in terms of those names. It is the double error, if I may use the word, which has led to the situation?

—No. I asked a question because the answer to it was important from our point of view as I think Mr. Fagan will, if required, make it clearer than I can because I was not directly concerned with these operations. My understanding is that the Minister had repeatedly emphasised that we were to minimise, if not omit, written communications to anybody in the North in regard to these payments so as to avoid possibly jeopardising the position. This related not only, on my understanding, to the Belfast fund but also to the other payments that were made direct out of the Grant-in-Aid. I think this certainly coloured our approach to these payments but apart from that I think one must distinguish between a situation in which we would have been instrumental in opening an account or rather arranging for the opening of an account and the question would then have arisen what would have been the reasonable arrangements to ensure that public moneys did not go astray. We must distinguish between that and the decision that did face us. This account was established in Clones in the first instance. When officials first became involved in this matter the account had been completed. It was established, as I said earlier, I am not sure of the exact sequence, but clearly the Minister and these Northern people were involved in it. The Red Cross was involved to some extent— whether on the basis of being informed about it, I could not say—but all this followed in our understanding the rather unusual terms of the Government decision which went out of its way, most unusually, to say that the channel of disbursement of these moneys was to be determined by the Minister for Finance; and I think it was reasonable at the time to say that that particular phrase in the Government decision and the method adopted by the Minister did take account of the fact that the normal methods available for paying out moneys, for insuring checks and all that, were not available in this case. I am speaking of Clones in this connection and I take it that any questions that arise in this connection apply to Clones as much as to Baggot Street—if these questions arise. That is why I commented on the Clones account. It could well have been that the Baggot Street account would have been established without any approach to us. I still am puzzled as to why we were approached. I think that this is a point that I might have elaborated on at our final meeting yesterday as I have some suspicions as to why we were approached. But I am puzzled. If one regards this as an above board transaction, it seems odd that we were approached in connection with Baggot Street and not in connection with Clones. The reason I am mentioning this is that, if these people had been able to establish an account away from Clones, as they had been able to establish an account in Clones, then we would have been as little involved in the establishment of the new account as we had been in Clones. We regarded our connection with the establishment of the Baggot Street account as entirely fortuitous and almost accidental.

545. The net point here is that the Minister directed moneys to be lodged in the names of Messrs. F, G and H. The fact is most of the money was lodged in an account in three false names, in respect of which it is quite possible, in fact likely, that Mr. G had no knowledge of its existence. It seems to me you must be concerned that such a thing happened and there must be some method of ensuring that it does not happen again. It is a minimum requirement surely of any accounting system that money paid is paid to the people to whom it is intended to be paid and not to different people?

—I did not intend my unfortunately long answer to get away from that particular aspect of it, but there are a number of relevant factors in considering what happened. The first is that this particular instance was very much sui generis. This was unusual, as it developed to our knowledge during the year, but of course we now know it was more unusual still and I should imagine it would not be very difficult to devise a system which would trap, if that is not an inappropriate word, any irregularities that could arise in future in similar circumstances. But I do not think that is the answer because——

546. Deputy Briscoe.—I was going to ask, if the same thing was to happen tomorrow would we go along on the same lines?

—Certainly not. But this is too easy because I would think very poorly of people who would try this thing on a second time. They are going to try it in another way, you see, and our problem is we then come back to the second point: you have got to strike a balance between the reasonable transaction of public business with reasonable efficiency and, at the same time, with reasonable counterchecks and it was this aspect of it that was puzzling us. In other words, what changes would we want to make in the system to avoid this because, unless the system is general, it will not catch the unusual.

547. Deputy FitzGerald.—It seems to me that what is required is a general system in which, if money is voted to a particular account, person or organisation, or if it is voted openly but an administrative decision is taken, either by the Government or by officials, that the money is to be paid to a person, persons or organisation, that steps should be taken to ensure that it is paid to them and not to somebody else. This seems to me a good general principle and I do not know why it was not adhered to in this case. Of course the people who get the money may use the money for purposes for which it was not intended. That raises the question of Grants-in-Aid. Money should be paid to those to whom it is intended to be paid and for the purposes for which it is intended. This was not done in this instance. There was a breakdown in the system, a serious breakdown, that should not have occurred?

—I take it your point is in regard to Clones.

548. In Clones the money was paid precisely as it was intended to be paid?

—But how do we know that? We were told that.

549. Would you explain what you mean by you were “told that”?

—Yes. We were told this account was operated in Clones by Messrs. F, G and H. As far as we know, it could have been operated by people who forged the signatures of Messrs. F, G and H.

550. Any account could be operated in that way, but you were instructed to pay money to the Red Cross into an account in the names of F, G and H in the Bank of Ireland in Clones. Your primary responsibility was to ensure that was done. I am not, in fact, satisfied that you took steps to ensure that, although it did, in fact, happen because we have only one of the two relevant letters and it never mentions Clones. It may well be that the procedure you adopted there was defective but did not, in fact, lead to any unfortunate result. But your minimum obligation surely is, given the instruction by the Minister, who is the authority, as you said, in this matter, as to where the money is to be paid to, to pay it into that account. If the account happens to be held in the names of people who forge names that may be unfortunate. It may be a matter for police investigation; it may even be a matter for us in some way, but you would at least have fulfilled your minimal primary responsibility. This was not fulfilled in relation to the Baggot Street account and this is where the difficulty arises.

—I am still not quite clear regarding the complete distinction, or the full distinction, between Clones and Baggot Street.

551. The Clones account is the one in the names of F, Gand H, three known people, as you say, public figures. It was, in fact, operated by them and you lodged the money to an account in three false names, two of whom may have been amongst the Clones account holders and one of whom may not, in fact, have been and it may well turn out that one of the Clones account holders knew nothing about it and that the purpose of the exercise was to bypass him and you contributed to that by failing to lodge the money to the account to which you were directed to lodge it?

—Now I think it will be clear from what I said yesterday evening that it is more than doubtful whether one of the account holders was ignorant about Baggot Sstret. I do not think that is at issue. At least, it has to be established whether it is at issue. But my point is this, that short of—we did not inspect the Baggot Street—the Clones account. We took it that it was operated by these people. There was nothing in the arrangements—I speak subject to correction on this—made in regard to Clones which, as I see it, copperfastened the lodgment of the moneys to these people. This is why I do not see——

552. Should there not have been?

—This is my point. If you are raising this matter you are relating it both to Clones and Baggot Street——

553. I said that.

—No, I was not quite sure if you had.

554. There are two separate points here. One is that in the case of Clones the money was, in fact, lodged in the right account. You may not have ensured this because your directions to the Red Cross did not specify that account and I think it was defective not to have ensured it but it did, in fact, happen. In the second case you did not ensure it and it did not happen. I would think that in both cases the system was defective.

—You mean our written instructions to the Red Cross? I think that a lot of these transactions did take place over the phone. Very often, money was required at very short notice and we followed it up with a letter but I do not think that the Red Cross ever put it to us that they were uncertain about the directions so I would not—again, it is no more than the reference to Kelly’s people, the various references to this account, were used colloquially. I notice, for example, that on one occasion the Red Cross, they say, they do not even use the wrong title of the account; they say “for the usual Six County relief” or words to that effect.

555. Does some of the difficulty not arise because—my recollection may be at fault here—the first payment was sent to the Red Cross with instructions to send it to the bank, not to any account, and they did, in fact, send it to the bank and the bank receiving the money lodged it to the account opened by Captain Kelly who they had been told was the official person and is that not why the money started being lodged in the wrong account—the Red Cross were not in fact told at the beginning to lodge it into an account in the names of F, G and H?

—Well, yes there is a point there. I would not deny that.

556. Have you any idea as to why the procedure of saying it should be sent to the bank was adopted instead of saying it should be lodged to the account which was being transferred from Clones, as far as you people were concerned?

—No, I cannot beyond surmising that at this stage, matters had settled down now that it was almost a routine transaction. But that is only surmise.

557. It was not routine. This was the opening of an account, the first payment into a new account just opened which was a transfer from an account in Clones, as far as you were concerned. Surely, the natural thing to do would be to make the cheque out to the names of Messrs. F, G and H of the Belfast Committee, or whatever it is called, Bank of Ireland, Baggot Street and have it paid in? It seems curious, and, you know, something that we have to investigate as to why, instead of that, the procedure was adopted of sending it anonymously to the bank. I mean anonymously in the sense of having no instructions to the bank as to where it was to go. Is it just coincidence that that happened? Because if it was a coincidence it was a singularly unfortunate one because that is where everything started to go wrong. It is a suspicious coincidence, on the face of it.

—Well, I would like to check up on that, that is, to check up on the manner in which this was lodged in Baggot Street, the lodgment slip, for example, what was on the lodgment slip. We should have that information.

558. I think we have it.

559. Deputy H. Gibbons.—To get back to the Taoiseach’s direction to you, Mr. Murray, as to where the money might have come from, at that time there would have been three possibilities, this particular fund, No. 1; No. 2, moneys from the North and No. 3, moneys from the south of Ireland. Any of those sources could have been used to purchase arms. At that time, did you give any thought to the possibility of the other two sources or were you just concerned with what the Taoiseach asked?

—I was concerned primarily with the question of whether public moneys could have been used.

560. Also, another thing that strikes me, at this time did you feel free to consult with the people directly concerned with the account? You have pointed out that Mr. Fagan was not available to you. I take it Captain Kelly would not have been available to you at that time either?

—Well, I think not, but it did not occur to me to consult because I would like to repeat that a reading of the file—and it was no more than a reading—certainly did not create any suspicion in my mind. I think, Deputy, a point I have been mentioning a number of times, it is difficult for some of us to think back to the circumstances of that time and put ourselves in the position of the knowledge that was available to us at that time. As I mentioned in another connection, the matter that was in my mind primarily was the involvement of people— “involvement” may be too strong a word— the part, if any, which any public servants might have played in the actual importation of arms.

561. Another question, Mr. Chairman. Would a pay order be considered sufficient documentation or authorisation for a payment from a Grant-in-Aid if there was no requisition for the particular money?

—Oh, no, no. The payable order is the end product as far as our accounts branch is concerned. They have to have some indication of authorisation.

562. A final question or questions, then: I take it that in payment of all Grants-in-Aid you depend on the bona fides of the recipients or you have, up to this, in administering them and I take it that in this particular case you depended on the bona fides of Captain Kelly who assured you that the account was going into the names of F, G and H and you were depending on their bona fides to administer the account?

—Yes, that is so.

563. Deputy Keating.—I wanted to ask Mr. Murray—the question came up again this morning in a question—of the position of the Revenue Commissioners in regard to the importation of arms. I asked Mr. Murray yesterday about the possibility of a Minister either accidentally through ignorance or deliberately giving an instruction to his servants which was contrary to law and Mr. Murray replied: “… it had never arisen as far as I was concerned and I was not aware of any one where it had arisen.” Then I made it specific, in regard to the next question, to the ex-Minister for Finance——

564. Deputy Briscoe.—What page are you reading from?

565. Deputy Keating.—I am reading from page 34 of yesterday’s transactions. I am now reading from paragraph 313. I asked if Mr. Murray considered it possible that Deputy Haughey had given any improper instruction to any civil servant in the Department of Finance and Mr. Murray’s reply to me was in the negative. Now I wanted, therefore, to ask Mr. Murray: does the Minister for Finance, in Mr. Murray’s understanding of the law, possess the power to instruct the Revenue Commissioners to import arms without a customs examination in circumstances where the request has not come from the Minister for Defence and where the arms are not intended for the use of the armed forces? Does the Minister for Finance possess that power, Mr. Murray?

—This is not a matter with which I am closely familiar. I would certainly like to consider that. I am not sure about the relevance of that to this particular inquiry, Mr. Chairman. I take it you are satisfied that it is relevant to the inquiry?

566. Chairman.—Perhaps the Deputy would try to show me its relevance to our present inquiry. I do not see it, offhand.

567. Deputy Keating.—We are investigating an expenditure which may be an improper use of funds voted by the Dáil or may in some circuitous way turn out to have been perfectly proper. Therefore, the power of the Minister for Finance to instruct the Revenue Commissioners seems to me to have a bearing on the possible propriety of transactions which may yet be proven to have existed and which there was enough supposition that they existed after all for legal proceedings to be mounted and, though there was not a conviction in those proceedings, there was a great deal of evidence that many transactions, some of them para-legal or extra-legal, had taken place.

568. Chairman.—Mr. Murray may want to attempt to answer the question to you but I certainly feel disposed not to press him on this point.

569. Deputy Keating.—I am certainly happy to accept your view on that, Mr. Chairman. I asked him, of course, not simply out of the blue but because firstly, he is, of course, the Secretary of the Department of Finance and, secondly, he is the Head of the Civil Service. The question had come up, I understand, for discussion between the Taoiseach and himself as to the position of the Revenue Commissioners in regard to the importation of arms?

—No, Deputy, sorry, it did not.

570. I see?

—Although it was in my mind.

571. Yes. You told us earlier, Mr. Murray, leaving that subject entirely, you told us—and I am quoting you accurately, I hope—in April one of our officials became aware that there was another account in Baggot Street. I would like if you could if you would be a little more specific. Last year April was a wicked month. It was a month of 30 days. Would it be possible to be more precise than simply to say “in April”. It would be, I think, of some importance to us to know when this awareness of the second Baggot Street or, in fact, more than one Baggot Street account came into the knowledge or the possession of one of your officers or officials. Secondly, I think we might ask who the official was specifically. Was it Mr. Fagan?

—Knowledge of more than one account in Baggot Street in or about April, 1970, related just to a second account. That is point No. 1. Secondly, my understanding is that it was in or about the last week of April but that is only an understanding, a recollection. Thirdly, it was Mr. Fagan.

572. Thank you. Finally, I share the difficulty you mentioned of thinking back to the extraordinary atmosphere of the days immediately following the 6th May. I am bound to say also, I think, that I am a little surprised at the exchanges between yourself and the Taoiseach—we do not know the details obviously—of the 14th May as elicited in your reply to Deputy FitzGerald. I feel I ought to say that. Can I ask you if the discussions on that day were in order that the Taoiseach might be prepared to deal with questions in the Dáil at Question Time on that day?

—I could not say. I was not aware that the matter had been raised in questions.

573. Deputy FitzGerald.—May I help? I think it was to enable the Taoiseach to reply to the debate and it was in reply to the debate on the 14th May that he gave the assurances, I think?

—I was not unaware, Deputy, that that debate was concluding. I could not recall at this stage whether I was aware that the Taoiseach wanted this for some public utterance but I would strongly suspect that I was so aware because, in fact, I passed him in a note, or had it passed in to him, in the form of a statement which he might consider using.

574. Deputy Keating.—You are sure that the Taoiseach’s first approach or the first time that his second approach took place was in fact on the 14th and not earlier?

—Quite definite.

575. It was on the Thursday and not earlier in the week?

—I am fairly positive about it because I have a recollection that this was required before lunch and that I had to set aside what I was doing at the time.

576. Can I then ask you, Mr. Murray, in view of the fact that it was the closing of a quite extraordinary and momentous debate and that you realised the significance of the closing speech the Taoiseach would have to make, did you also realise the immense importance of the categorical denial by the Taoiseach that any public moneys had been improperly used at that time?

—If we are attaching importance to it, Deputy, I think we must use the words I used. I am not suggesting that you are attaching any importance to the different gloss you put on it. I did realise that this was an important matter. Any question of the improper use of public moneys is important. The amount involved here, or at least that could have been involved, was substantial which made it even more important and the general background, of course, made it even more important still. I would not pretend to be ignorant of any of these factors.

577. Thank you, Mr. Murray.

578. Chairman.—I have been asked, gentlemen, that we adjourn for some short period for coffee if the rest of the members are agreeable.

The Committee adjourned at 11.40 a.m. until 12 noon.

Examination of Mr. C. H. Murray continued.

Chairman.—Deputy MacSharry.

579. Deputy MacSharry.—Through the Chair, Mr. Murray, do I understand that you did say that nobody, yourself nor your Department nor anybody in it knew anything of the existence of the fictitious names in the Baggot Street account until the middle of last year, or April/June last year?

—Oh, it was after April, certainly. I cannot recall at the moment the date on which Mr. Fagan became aware of them through his investigations, at least his discussions with the guards. It was certainly May/June. I think it was June/July.

580. Well, the 12,000 dollars that came from America and lodged by, I understand, Mr. Fagan in the Baggot Street account——

—Yes.

581. We have the lodgment return which is made out in the names of White, Loughran and Murphy and it is dated sometime early January and must have been either received there and then by Mr. Fagan or by some official in the Department.

582. Deputy FitzGerald.—Which lodgment docket is this? What amount?

583. Deputy MacSharry.—For the 12,000 dollars, £4,993 10s?

—That is—you are referring to the document that was in the bank?

584. Yes?

—In relation to that?

585. Yes? Is there any reason to think that the document, the receipt would be made out in different names?

—Oh, I have no—I can throw no light on that at all. What happened was that a dollar draft was received for 12,000 and this was lodged in the bank and the counterfoil of the lodgment docket that we got and that was on our file at that time, was made out in the names of the committee of the Belfast Fund for the Relief of Distress. I would refer you, Deputy, to page 28 of the booklet containing the documents we sent to the Committee.

586. Yes. But I mean, this was—I mean it is very hard to understand that a lodgment is sent other than from public funds down to the bank and it is being, I suppose it is somebody in the bank that actually wrote out the lodgment slip but they had no hesitation seemingly in writing out the names of White, Loughran and Murphy and the address “Belfast Fund for the Relief of Distress”. This is the receipt you have here. Surely the individual who went to the bank saw what was being written on this lodgment slip, on both sides of it?

—My understanding is that that was sent on to the bank with a manuscript note so that it was not a question of somebody going to the bank with it. I wish to confirm that the document in our file is the document reproduced on page 28. I am looking at the documentation in the bank to which you are referring. The three names are mentioned.

587. The names are specifically there. This is in early January, six months later, and the Department were directly concerned with this.

—That is so.

588. This was made out by the bank manager in front of some Department representative. A manuscript had gone down. It had come directly from the Department and it was made out in three names.

—That is so. If one takes this bank document at its face value and accepts that the three names were entered at the same time, if the counterfoil docket was sent to us——

589. We have got to take it at its face value.

—Quite so, but inspection of our papers showed that the names were not entered on the counterfoil we got nor did we get any indication from the bank at the time that the names were entered.

590. To bring you to a point I raised yesterday in relation to the question of whether the bank were aware of Captain Kelly acting in an official capacity or otherwise, last week you said it was the bank manager’s statement. I refer you to page 17 of the report of the proceedings of the Committee for 7th January last, half way down the page, in which you replied: “It certainly was not Mr. Fagan’s statement.” As I said yesterday, on 6th June Mr. Fagan said in a conversation with the bank manager that Captain Kelly was acting on official duties?

—That is the statement he made.

591. On 6th June. You answered me yesterday saying he made one statement earlier without reference to documentation. I assume that his statement of 6th June was after reference to documentation?

—It was 26th, June, I think. I commented on that yesterday and said that certainly it was not intended to convey that this was an official contact. It was intended to convey that Captain Kelly was an unofficial contact with the Department, that he was an officer of the Army, that he was not a private individual acting privately.

592. Apart from that, I asked you yesterday if he had become the established liaison between the Committee in Belfast and the Department and you stated that he was not.

—Could you refer me to that question and answer?

593. It is on page 44 of the report of the Committee’s proceedings for yesterday. It is on the second column. Your reply to my question was:

I think not. I think that our official dealings with Captain Kelly were quite restricted.

—Your reference was to Defence. Could I have the precise question you put to me?

594. I will put the question differently. At that stage had Captain Kelly become the established official go-between between the Belfast Committee for aid in the North and the Department of Finance in relation to the Grant-in-Aid?

—In so far as requests for withdrawals from the Grant-in-Aid were conveyed to us from Captain Kelly, yes.

595. A point I was trying to make yesterday was that once the OK documents, the four or five in October and November, were written orders by the Minister for funds for these accounts in Clones and Baggot Street, and after that there were oral requests that enabled the money to be diverted from the Department through the Red Cross, I was trying to make the point that at that stage this was not unusual as it had become ordinary Grant-in-Aid practice because the fund was being administered by officers of the Department of Finance. What I mean is that there was no documentation, that they were oral requests. The established liaison was Captain Kelly and he went to the established man in the Department of Finance, Mr. Fagan, and thereby got the money, and that this was normal Grant-in-Aid business. Is that not so?

—I hesitate as to what is normal Grant-in-Aid practice. There are hundreds of ways. The practice varies.

596. I should like to clarify it in relation to this matter. You said it was solely on request from the Minister that this money was distributed. In relation to normal Grants-in-Aid, it differs?

—In general that would be true, though there might be exceptions. Whatever about that, I think that when you put this point to me before, I said there was no doubt in our minds that every request for moneys from the Grant-in-Aid was cleared by the Minister, orally or in writing. I said there was no particular significance to be attached to the fact that some requests were oral and some were in writing. In fact, the first payment out of the Grant-in-Aid to the Belfast Committee was made on an oral instruction from the Minister, and that was followed by a written instruction in regard to the second payment. There were a further couple of written directions and then there were oral directions. As I have said, there was an oral direction first.

597. To bring you to another point relating to this, in another statement Mr. Fagan said that on one occasion when the Minister was going abroad he asked him if Captain Kelly’s people would be looking for more money what would he do and he said it was OK to pay him. That would immediately suggest to me that Mr. Fagan had the authority to deal directly with Captain Kelly in relation to whatever he wanted?

—I would take the contrary view. I would suggest that that indicated that Mr. Fagan would not feel empowered to make payments to Captain Kelly in the Minister’s absence and was seeking a general authority to do this when the Minister was away.

598. Which he got?

—Yes, which he got.

599. This is the point. The general authority may have been given at the stage earlier when Captain Kelly had been recognised as the official go-between for Belfast and the Department?

—I am sorry, I am not making my meaning clear. First of all, I want to repeat categorically that all payments were cleared with the Minister beforehand, that the form of clearance depended on the Minister’s availability, that the general authority which Mr. Fagan got when the Minister was away bears out my contention and that after the Minister came back specific payments were cleared specifically with the Minister. I understand, although I would not like to be definite on this, no payments were made to Captain Kelly while the Minister was away although Mr. Fagan had the Minister’s authority to make payments had they been required during the Minister’s absence.

600. Deputy Tunney.—I should like to ask one or two questions. First, regarding your words with the Taoiseach on 14th May, or the statement you prepared, at this stage you would have had access to the documentation which we have here in connection with the lodgments to the Belfast Fund for Relief of Distress?

—The ones that we forwarded from our files, not from the Garda reports.

601. In circumstances where we know that this money was voted initially, that moneys should be made available for the victims of current unrest in the Six Counties—that was in August of that year—the graph of the withdrawal of the money did not strike anyone as peculiar? It seems to me as we moved away from the particular unrest for which the money was voted, the amount of money being withdrawn was increasing. You have circumstances from December 31st to the end of February, including March 5th, where the sum of £34,000 had been lodged. We will assume that a case has been made that this was required. It did not strike anyone as strange that, at times removed from the actual time for which the money had been voted, so much money was now being requisitioned?

—It did not at the time because we were not in a position to be familiar with the particular cases and problems being dealt with. However, I put this general point to the Clones account holders when I met them. I said as far as they were concerned relief in this way came to an end in March or April of 1970 and was this because they had ceased looking for moneys; although they said the need was still there, they had ceased looking for moneys when the arms case broke. I think they were making the point—this was their presentation of the position—that there were still a number of people who could not go back to work even then and this was the main source of expenditure.

602. There is another point I should like to make. In connection with the submissions made to the Minister for moneys, I refer specifically to one of 27/11—this was “Kelly wants another £3,500 … .” I notice at the bottom of that is a note “Receipt reqd.” Was there any special reason why that note was made? I do not see it figuring in any other submissions. This is on page 25 of the pink book.

—I will check on the actual——

603. On the original it is in longhand but on page 25 “Receipt reqd.” is typed.

—It was puzzling me why it was typed in this copy. In the document we sent to the Committee it was in longhand.

604. I am not concerned as to why the alteration occurred; possibly it occurred because of technical difficulties, but why was the notation made in respect of this particular one?

—The reason I was checking to see if it was in manuscript or not, was to see who wrote it. It was in Mr. Fagan’s writing and, subject to check, I think sometimes the Red Cross may not have sent back a receipt for a particular payment when it was given to them and this could well have been a notation by Mr. Fagan that he had not got a receipt for this. I am just trying to check up on that. I think, in fact, that was the case because if you turn overleaf, on page 26 of this booklet, in the second paragraph of the letter of 9th December, 1969, it is stated:

I enclose receipt … .

—I think it really means a form of receipt to a signature—

and also a receipt for the £3,500, which I transferred to the No. 2 a/c on 28th Nov. I dealt with this latter one verbally and I omitted to send a receipt form to you.

It is merely a notation by Mr. Fagan.

605. In the matter of where we get references such as “Captain Kelly is prepared to discuss this with you” and where we know that Captain Kelly was sent for, I am wondering whether in these cases was it in circumstances where Captain Kelly himself offered to explain, whether an official of the Department thought it was necessary that he should explain, whether the Minister was anxious that explanations might be given, or was it a combination of all three?

—It could be, but I was going to make this qualification in my reply. Again, I think I would prefer if Mr. Fagan answered this because there were quite a number of contacts with Mr. Kelly and I have not a precise picture of them all. However, my understanding is that it was not Mr. Fagan who suggested that there was a need for justification because he proceeded on the basis that since the authority was given by the Minister, the Minister would be in a position to know whether or not a justification was required.

606. Finally, and I hope you will accept this as a relevant question because I would see some relevance in it, there was a Grant-in-Aid in respect of Biafra?

—I think there were payments. I speak subject to correction that payments were made to the Red Cross which noted their Grant-in-Aid administered by the Department of Defence which they used for Biafra relief. That is my understanding of it but I am not quite sure of the facts. I know that Government money was made available for Biafra, the form I am not quite sure.

607. This may be a shot in the dark but do you know whether or not any of that money went towards the purchase of arms? Is that a matter that might be pursued?

—This would be a matter for the Red Cross and for the Department of Defence, who received the audited accounts of the Red Cross.

608. Chairman.—I want to ask you a few questions about the Clones account. This is in general to round off what we have covered already and I expect the other members will ask perhaps further questions on the same lines.

609. Deputy MacSharry.—No. You sum up.

610. Chairman.—From your submission it appears that £15,000 was paid into the Clones bank and lodged to the credit of Messrs. F, G and H.

—That is our understanding.

611. And this was withdrawn, I understand, in six instalments leaving a balance of £49 11s 8d. Have investigations as yet established how the four withdrawals of £2,000 each were spent?

—The Belfast people who held this account have stated that they spent this on relief in Northern Ireland. The limited extent to which one can prove this will, I think, be shown or disproved when I take the further steps that I mentioned to the Committee regarding proving the statement by the committee that it had spent up to a certain amount on Northern Ireland relief.

612. Have investigations made any further progress towards the identification of the persons who drew cash for £2,500 on November 10th and for £4,450 on November 18th, apparently without endorsement?

—No. I think I told the Committee that when I put this point to the account holders they could not answer me. I was particularly interested in these two payments since it seems to me that they had been used to start up the subsidiary accounts. They could not answer me and this would be one of the points I would have pursued in continuing discussions with them and will when I take the next step in my contacts with them. I think I mentioned that it was only in the last week or less that we actually got the returned cheques in respect of the transactions on the Clones account and that they certainly did not disprove our assumption that these moneys had been lodged in the subsidiary accounts. One of them proved it definitely: There was a Munster and Leinster stamp on it. The other one was withdrawn in cash. There is no endorsement on these two cheques and I am only surmising that the fact that there were endorsements on the others which were drawn in cash by people other than the people who signed the cheques, that this suggests to me that the people who presented the cheque that was drawn in cash was one or other of the two people who signed the cheque. It is only a surmise.

613. You may not be able to help us on this point, but my understanding was that it was not usual for a bank to pay out money on a cheque without endorsement?

—I am not able to help you on that.

614. The main Baggot Street account was opened on November 12th by the lodgment of £7,500 through the Red Cross from the Department of Finance. Now on November 14th £7,000 of this was withdrawn in cash and on the same date two subsidiary accounts were opened in Baggot Street with a lodgment of £11,450 to Mr. Dixon and £2,500 to Anne O’Brien. Would you agree with me that this would appear to suggest that extra money came in from outside?

—No. I do not draw that inference at all. As regards the £11,450 lodged to the Dixon account our assumption was, and I think we have noted it in this Appendices, that it came as to £7,000 from the main account and as to £4,450 from the Clones account.

615. That is what I meant by “outside”, outside Baggot Street?

—Yes, and perhaps if I might just check up on one point. No. It was the £2,500 cheque which bears the, no, I beg your pardon, yes, it is in fact the £4,450 cheque drawn from Clones which bears the Munster and Leinster stamp, so this confirms our hypothesis that the moneys which started up the Dixon account came in part from Clones.

616. Now if the withdrawals from Clones had been genuine withdrawals for the relief of distress would you expect that these withdrawals should be passed on directly to the relief committee rather than be brought down to Dublin for lodgment in a subsidiary Dixon-O’Brien account?

—Yes, I would, and in fact whatever view one forms about the amount of money the Belfast Committee got from the Grant-in-Aid for relief purposes and even whatever view one forms about the transactions on the Clones account, I think there is a prima facie reason for suspecting that the second last and last payments from the Clones account did not follow the normal course of the other payments.

617. You would regard the non-endorsement of the two last cheques drawn from the Clones account as bordering on the irregular?

—Vis-à-vis what organisation, vis-à-vis the banks?

618. Vis-à-vis the developments from Clones to Baggot Street?

—Yes, I would regard them as suggesting that the moneys were not used in the same way as the other four withdrawals from the Clones account. I do not know whether that answers your question. I am not sure whether I am catching your questions?

619. I think it does. I think that is what I was after.

—Could I also say on that, that it seems to me that the fact that the bigger cheque from Clones was lodged into the subsidiary account without endorsement suggests that it was so lodged by one of the two people whose signatures appear on it?

620/621. There was one point further. In your submission of the 9th of the 12th you make the assumption in respect of there Clones account that the withdrawals on November 10th and November 18th were used to open the Dixon-O’Brien account in Baggot Street on November 14th. On first thoughts one says to oneself, how could withdrawal on November 18th be used to open an account on November 14th? Perhaps, in public session, you would give us your explanation for that?

—I think it is entirely due to the delay in clearance. The sequence of events, as I see it, is that this cheque for £4,450 which was dated 10th November was lodged to the subsidiary account in Baggot Street in or about 14th November. That is the date stamped on it of the Munster and Leinster Bank. Then it was passed through the clearing and reached Clones on 18th. We have here on this a paid date stamp of Clones of 18th November. It was on that date that it was debited to the Clones account. The fact that we now have this paid cheque available clears up that apparent date discrepancy. Have I made myself clear?

622. Yes. In respect of Messrs F, G and H, in whose names the Clones account was kept, have they submitted any documentation to you in respect of this account?

—None whatever.

623. Have they disclosed or have they been asked to disclose the identity of the two or three people whose names are not known and who received money on cheques signed by them from the Clones account?

—We know, of course, the identity of two of these, Mr. F and Mr. J. That leaves one other individual who made two withdrawals. We asked them about him and they said he was a North of Ireland resident whom they had used solely for the purpose of withdrawing moneys. They know him but we did not press it any further than that at that stage.

624. Have photostatic copies of all returned cheques drawn on the Clones bank account been secured by the Garda and submitted to your Department?

—No, for the simple reason that because of the slowing up of bank operations and then the banks closure, the Garda had only available to them the cheques which had been returned as paid at the time when they got power to inspect the accounts. Furthermore, my recollection is that at that stage some of the paid cheques had been cleared, had been taken away by the operators of the accounts, so at the time when we were preparing our submission to the Committee we had not got all the cheques in question. But we would expect, now that we have the authorisation in relation to the main Baggot Street account—now that we are authorised ourselves to approach the banks—that they would make this available to us after they have appeared here before the Committee. They will want that documentation when they appear before the Committee but that will still leave as missing the returned cheques which had been actually handed out during the course of the time when these accounts were in operation which had been returned to the people who were operating the accounts.

625. I take it then that such copies of cheques that have been procured have been procured merely from the bank and that none has been procured from the people who operated the account?

—That is so and certainly in so far as the people who operated the Clones account are concerned and so far as they admit operating on the main Baggot Street account, they said they had destroyed all documents in their possession relating to these accounts.

626. Would many persons be privy to the amount of money paid out from your Department through the Red Cross into the accounts at Clones and at Baggot Street?

—Not very many, I would say. Within my Department the papers, as I mentioned earlier, were not in general circulation and, of course, the people in the Department who were making out the payable orders would have known.

627. The Red Cross would know?

—Yes.

628. Captain Kelly would know?

—Yes.

629. The bankers would know?

—Yes.

630. And Messrs. F, G and H would know?

—That remains to be proven. In fact, if they did know then the question would be raised how did they relate that total to the total of the payments that went directly to them from the main account which was a much smaller figure. This is why I say it remains to be proven that they did know.

631. The total amount paid out from the Clones and Baggot Street account amounted to £76,000. Is that correct?

—Yes, that is so.

632. We had a submission made to us— the one that has been published in the papers—from the Belfast Commitee and I think the amount is £74,000?

—That is so.

633. Would you like to express an opinion as to whether these two figures are reconcilable?

—I would say yes in so far as orders of magnitude are concerned. By that I mean clearly there is a gap between the two but if one accepts the statement that was put in and accepts the way in which it was constructed, then it is a close enough approximation to the other figure but there are a lot of ifs in that comment.

634. You must also accept that all the money from the other figure went for the relief of distress and for that alone?

—You mean in the statement supplied by the Northern Ireland people?

635. No, in the £76,000 paid into the banks at Baggot Street and Clones?

—Yes, but here we are back on what I call the switching operation.

636. Deputy FitzGerald.—One query arising out of the questions which were asked —the second lodgment in the Clones account was on October 17th, £5,000 but in the relevant paragraph explaining that, paragraph 15, it is implied that the Red Cross said they regretted they could not meet the request because they were rather low in funds at the time——

—Yes.

637. The then Minister instructed Mr. Fagan to pay £5,000 to the Red Cross with the request to transfer it in turn to the Clones account. That occurred on the 20th October?

—Yes.

638. It looks as if the Red Cross must have paid the money in in advance of receiving it from the Department but that is not clear from paragraph 15.

—If that is what happened, yes. It is not the information that is available to us. I accept there is this discrepancy between the dates.

639. You might get a little more information on that for us?

—I will try to clarify that if I can. On that point Deputy FitzGerald’s intervention reminded me of the point he made earlier this morning as to whether we had a letter in relation to the payment made into Clones, the third payment into Clones, that is the second from the Grant-in-Aid. There was some question as to whether there was a document missing from our papers or whether it was on our papers but had not been given to the Committee. We have checked up in the interval with the Red Cross and they have confirmed what I thought might have been the case that this was a manuscript letter that was sent to the Red Cross and I have copies of it here. The Red Cross have made copies of it available which I will make available to the Committee if they wish.

640. Chairman.—Thank you. Does that meet your point, Deputy?

641. Deputy FitzGerald.—Yes. Could we see it now?

Copies of the document circulated.

642. Deputy FitzGerald.—This letter does, in fact, refer to the bank account in Clones, establishes that in this case they were so instructed but not in the case of the first £5,000. Is that right?

—That is so.

643. We can ask the Red Cross to give us a photostat of the original in due course?

—Yes. I am sure Mr. Fagan will be able to comment on the circumstances in which some of these letters were in manuscript but you will have noted from the document we have already sent in that this is, in fact, I think the third letter that was in manuscript. He will be able to comment on that.

644. Chairman.—Any questions? Deputy Keating?

645. Deputy Keating.—No.

646. Deputies.—No.

647. Chairman.—Thank you very much, Mr. Murray. You have been very, very patient with us and you have been very helpful. I hope you will be available to us later on if we require you.

—I am at the Committee’s disposal. Could I just say this? I have been in touch with the Department of Justice about this question relating to the Garda report and the use of it by the Committee in cross-examination. I have not, unfortunately, heard from them yet but I will try to get word to the Committee as soon as possible, during the course of the afternoon, if this was relevant.

648. Chairman.—There is one other point. I do not know whether Deputy Keating has forgotten it or not. It is the question of the briefing which may have been given at the time of the introduction of Subhead J.

649. Deputy Keating.—Yes, my understanding of this was that we were grateful for the offer to make it available to the Commitee but we wished, in fact, to deliberate as to whether we would receive it or not on the conditions on which it was offered. I think this is, perhaps, something we might do in private.

Mr. Murray withdrew.

The Committee deliberated.

The Committee adjourned at 1 p.m. until 2 p.m.

Examination of Mr. C. H. Murray continued.

650. Chairman.—Gentlemen, Mr. Murray wants to clarify a couple of points.

Mr. Murray.—I want to deal with two points I was asked to deal with, one raised this morning and one raised yesterday. As regards this morning, the question was whether the Committee could refer to the first Garda report made available to it in the course of its examination of witnesses appearing before it. I think that was the substance of the point that was put to me. I have consulted the Department of Justice and I am authorised to convey their approval to that course.

651. Chairman.—Thank you.

Mr. Murray.—The second point relates to a question put to me yesterday by Deputy Burke, question No. 464 and the immediately following questions at page 55 of the record issued this morning. The question relates to the practice of the Department regarding the destruction of official records. I have checked up on that and I am informed that there is, in fact, no statutory authority for the destruction of official records since the end of the war. There was an Emergency Powers Order in 1939 which empowered the Minister to authorise the destruction of records and documents which were not of continuing importance. That was done to conserve paper. That power lapsed with the lapsing of the Order made under the Emergency Powers Act and since then there is no statutory authority for the destruction of official records. One must distinguish however in the case of the destruction of what is known as “confidential waste”. This is material which has been used in the preparation of, for example, memoranda for the Government, copies or stencils of memoranda that have served their purpose, and material of that nature which is secret or confidential is termed “confidential waste” and, generally, in my Department there are arrangements for the destruction of that confidential waste material either in the central heating station or, if it is very bulky, by the Stationery Office. That is the general position. I was also asked if disposal of papers in the Department were to take place it would not normally take place between the hours of 7 p.m. and midnight. I am told that normally it would not take place during those hours. Normally it takes place during official hours. My remarks so far have been general and not related to the papers dealing with the Grant-in-Aid. I pointed out yesterday before I was allowed to deal with this particular question that I have taken the precaution of numbering the papers on the file dealing with the Grant-in-Aid. I said I was not sure when I did that; I said I thought it was around October. In fact, I find it was done earlier. It was done in May last, some time in or about May or the first week in June, but certainly three or four months before the date I mentioned. I was confused because what happened in October was I found the papers were not in strict date order and, being anxious to put them in strict date order, I put them in strict date order and changed the numbering. If, in fact, the members care to look at the copies which have been made available to them from the records they will find there are two numbers on them. I would like to confirm that to my knowledge no document relating to these papers has been destroyed or removed from the file. This point received some publicity in the communications media and I trust that this statement of the position will receive equal publicity.

652. Chairman.—Thank you, Mr. Murray. We have agreed in deference to other witnesses not to discuss it. If any point arises from it we may communicate with you later.

Mr. Murray.—I shall certainly be glad to answer any problem.

Mr. Murray withdrew.

The Committee deliberated.

Mr. William Christopher Walsh, Sworn and examined.

653. Chairman.—Mr. Walsh, you are presently a bank official, where?

—At the Munster and Leinster Bank, Crumlin Cross.

654. And you were in the autumn of 1969 Assistant Manager in Baggot Street?

—Deputy Manager.

655. Deputy Manager. I understand that at that time you opened an account in the names of John White, John Loughran and Roger Murphy which was designated Committee of Belfast Fund for Relief of Distress and this account was opened at your branch in pursuance of instructions received by you from Mr. A. J. Fagan of the Department of Finance?

—That is correct.

656. That was on what date?

—The account was opened on the 12th November, 1969.

657. Yes. Was it on a written communication or what was the nature of the instructions?

—The instructions came originally in a telephone discussion with Mr. Fagan requesting that an account be opened.

658. Yes. Will you tell us in your own words the nature of this telephone call?

—Mr. Fagan rang and said that certain moneys had become available to the Government for distribution in Belfast to relieve distress in that area and that the Government could not be directly concerned with the disbursement of these funds, and subsequently the account was opened. I suggested that an account in three names could be opened and the moneys disbursed through this.

659. What was the date of that telephone call?

—I could not give you the precise date. I cannot remember the precise date. We have no records of it but it was subsequent to the 11th November, sorry, the 12th November.

660. Deputy Keating.—Prior?

—I beg your pardon. Prior to.

661. Chairman.—The bank had not as yet been funded through the Red Cross at that stage?

—No. Mr. Fagan said at the time that the funds for this account would come through the Red Cross account.

662. Was the name of Captain Kelly mentioned in that first call?

—No.

663. Was that the only telephone call you had with Mr. Fagan?

—At that time. Two days later there was a further telephone call from Mr. Fagan who said, to the best of my recollection, that a Mr. Kelly would introduce himself to me and that further accounts would be opened for ease of disbursement of the fund.

664. Further accounts?

—Yes.

665. Were the names in which these further accounts were opened given to you at that stage?

—No, not at that stage.

666. Who did you get these names from?

—When Mr. Kelly made himself known to me, introduced himself to me, he said that further accounts would be required and I made signature cards available to him and he produced the names.

667. So I take it then that in the second telephone call—your evidence is to the effect that Mr. Fagan mentioned the opening of two further accounts and he stated that Mr. Kelly would call on you and Mr. Kelly called that day and introduced the names of O’Brien and Dixon?

—Now, I cannot be exactly precise whether Mr. Kelly produced the names at his first call.

668. Yes?

—I think, and my memory is possibly not perfect on this, I think that he merely discussed that further accounts would require to be opened and the signature cards were made available and it was at a subsequent visit, possibly the next day—I cannot be precise on this either, unfortunately—that the names were made known to us.

669. You never met the persons White, Loughran or Murphy?

—No.

670. Did you know they were ficticious names?

—No, not at the time. It did not occur to me that they may have been ficticious.

671. When did it occur to you?

—To be quite candid it did not occur to me at all until some time in May when the whole thing appeared in the newspaper.

672. But you are the official who opened the accounts in the names of White, Loughran and Murphy?

—That is true.

673. You handed, from your submission here I understand that you handed signature cards to Mr. Kelly for completion?

—That is right.

674. By that you mean Captain Kelly?

—At that time I knew him only as Mr. Kelly.

675. As Mr. Kelly. You got signatures of the names White, Loughran and Murphy?

—Yes.

676. You got signatures of the names George Dixon and Anne O’Brien?

—Yes.

677. Were these signatures appended in your presence?

—No.

678. Are they—who were they witnessed by?

—The signatures of John White, John Loughran and Roger Murphy are not witnessed at all. The signature of George Dixon on the signature card is witnessed by a John Lynch. The other signature, the Anne O’Brien one, was a specimen signature which Mr. Kelly brought with him on paper and which we attached to this signature card.

679. I am not a banker but what is the custom in practice as regards taking specimen signatures for people opening accounts in a bank?

—Well, it would very much depend on who you were dealing with and by whom they were introduced. I could not say to my knowledge that there is any hard and fast rule about it.

680. Would the customary practice be that a bank official would witness the signature?

—We like to get everything witnessed if possible but in my opinion it would not be 100 per cent necessary. But again it would depend on with whom you were dealing.

681. Well, is it unusual practice to hand a card for a specimen signature to some person to take away with them and come back with the specimen signature?

—No, I would not say it was unusual.

682. Then if a person afterwards comes to draw money on that account how is the bank official paying out the money, how is he sure he is giving it to the correct person?

—Provided the signature on the card coincides with the signature on the instrument withdrawing the money, he can be reasonably sure.

683. But he has not witnessed the signature?

—Well, I do not think that really matters, who witnesses it or if anybody witnesses it. This is just my opinion of course. A suggestion now—if a club were opening an account, the Dáil Éireann Bridge Club, and a client rang up who was a member of Dáil Éireann and said: “Look we are forming a club, we would like to open an account”, we would send out the mandate to him and he would send it back with three names whom we possibly would not know at all. We are dealing with a reputable person and we accept that these names are people authorised by the club to operate the account.

684. These names could be of fictitious persons?

—I do not think that is the concern of the bank. There is no obligation on anybody to use his own name.

685. Is it correct that you cashed or assisted in cashing a few cheques for Captain Kelly drawn on the subsidiary account in the names of George Dixon and Ann O’Brien?

—It could be true. I have a specific recollection of one and I could have been involved in others.

686. You mentioned in your submission that last April a cheque was drawn on the account for £300 in the name of Ann O’Brien, payable cash and negotiated in the name of Captain James Kelly at, I understand, Crumlin.

—Crumlin Cross.

687. Could you tell us the circumstances?

—Captain Kelly called in one morning and said he wanted to cash a cheque in one of the accounts in Baggot Street. I said “fine”. He produced the cheque and we cashed it for him. That is all that was involved.

688. Deputy Briscoe.—I wish to put one question about the cheque just referred to by the Chairman, the cheque you cashed for £300. This was later returned marked RD?

—Yes.

689. Was this made good?

—No, it has not been made good so far.

690. In your submission you say you have known Mr. Fagan for a number of years and regard him as a person of the highest integrity. You state also that in the course of a telephone conversation with Mr. Fagan on or about 11th November, 1969, he said funds were being made available for relief of distress in the North and that the Government did not wish to be involved in the distribution of these funds. He discussed the opening of accounts in Baggot Street and said that the Government should not be involved in any way. You suggested that an account be opened in the names of three persons and that the moneys would be designated for relief in Belfast?

—Correct.

691. Mr. Fagan agreed to this, according to your submission, and he submitted to you the three names of White, Loughran and Roger Murphy. You are aware that Mr. Fagan denies having had any knowledge of those people at that time?

—I am not aware of that.

692. In a statement he said he never heard of the names of John White, John Loughran or Roger Murphy and that he had never heard of those names until mentioned to him that day, which was 26th June, 1970. As far as you knew, Mr. Fagan was aware of those names?

—My recollection is that the names were conveyed to me by Mr. Fagan. I cannot think of anybody else who would convey them to me at that time.

693. There is no possibility that Captain Kelly would have done so?

—Absolutely not. Again, as far as I am aware—it is 15 months ago—this account had been set up and in operation before Captain Kelly called at all.

694. In your submission you go on to state that Mr. Fagan explained the funds would be credited to such an account and would be diverted through the Red Cross. You said you prepared a form of mandate governing the conduct of the account in the name of the Belfast Fund for the Relief of Distress. Is this the document?

—That would appear to be a copy of the document which was sent to Mr. Fagan. As far as I can recall, it would have been sent to Mr. Fagan.

695. You stated in your submission that to the best of your recollection the three names were furnished in the course of a telephone conversation with Mr. Fagan. Did you phone him or did he phone you?

—He phoned me.

696. Were statements sent out by you?

—I left Baggot Street on Christmas Eve, 1969, and up to that time no statements had been sent out.

697. For any particular reason?

—There was no occasion to send them out then.

698. You go on to say that in your recollection some days after the account was opened—the account which you referred to as the main account—you received a further telephone call from Mr. Fagan about the opening of separate accounts and it was stated that a Mr. Kelly would call to see you later and that, having introduced himself later that day a Mr. James Kelly, whom you now know to be Captain Kelly, had spoken to you about the arrangements and about furnishing him with specimen signature cards. You have no doubt it was Mr. Fagan who spoke to you about the proposed visit of Captain Kelly?

—I have no doubt I was speaking to Mr. Fagan. I do not think I would mistake his voice.

699. You handed two signature cards to Captain Kelly for completion. One of them was returned with the name George Dixon and the other with the name Anne O’Brien?

—Captain Kelly said he had the O’Brien signature on a paper. He produced the paper as containing one of the names for which he wanted an account opened. I am not sure whether it was at the first meeting or later in the day.

700. He brought them to you with the signatures. You know there is some doubt as to who Dixon and O’Brien are?

—I do now.

701. Could you tell us, either in private or in public, if you have any idea who you think these people are?

—I have not the slightest idea.

702. Are you familiar with Captain Kelly’s signature?

—No.

703. Is it part of your work to be able to compare signatures? You might not describe yourself as a handwriting expert, but if you were suspicious——

—We would compare the signatures. It is something that happens quite regularly.

704. Would I be in order in asking the witness to compare two signatures here and to tell me whether they were written by the same person?

705. Chairman.—He does not pose to be a handwriting expert.

—It would be only an opinion.

706. Deputy Briscoe.—I should like you to look at the signature of John Lynch there.

—The J’s are very alike but apart from that I am afraid I could not give an opinion.

707. And the formation of any of the other letters?

—The Y is the only letter that is common to both.

708. There is a message on the piece of paper you are looking at. Are there any letters there.

—I am sorry I had not looked at that. I would not like to say.

709. All right. I was just curious. You say that on several occasions prior to your departure from the branch on December 24th you saw Captain Kelly conducting business at the branch?

—That is correct.

710. You know anyone from the North of Ireland must not be named here in public.

—I do.

711. How many other people would you say cashed cheques besides Captain Kelly?

—I really could not say because I was not on the counter. I was in an office at the time and I would not see the people coming in and out.

712. I see. Were ever any cheques brought in to you by the officials or did they know him there.

—They knew him. On occasions if I happened to be in the office when he came in I would speak to him and deal with whatever business he was dealing with.

713. Deputy Burke.—You said in your statement that you suggested to Mr. Fagan that the main account be opened in the names of three persons.

—Yes.

714. What did you mean by this?

—It is a normal precautionary procedure where funds are, to a certain extent, trust funds that they be put in a number of names. It is a normal precaution to make sure they are under proper control.

715. Did you intend that they be real persons and not fictitious persons as subsequently transpired?

—It really was not my business what names they were in, I did not mind. They could have been anyone’s names so long as the account was properly controlled and that any two of these three signed the cheques.

716. In the case of the Anne O’Brien account, did a female appear at any stage at the bank?

—Not to my knowledge.

717. I have here a cheque—you probably have the original yourself—in which the number has been struck out and a new number put in. It is marked “returned to Grafton Street”. What has Grafton Street got to do with this?

—That happened after I left Baggot Street. It is this one, is it not—number 925412?

718. That is correct.

—This happened after I had left Baggot Street so I do not really know what connection this has.

719. You are not in a position to state whether the money was ever returned?

—No.

720. We can find out at a later stage. Some of these accounts were overdrawn from time to time. On whose authority were these facilities granted?

—Again, this happened after I had left Baggot Street.

721. Was the bank at all times aware of the association of the Minister for Finance with these accounts?

—So far as I was concerned—and presumably so far as the bank was concerned—the Minister for Finance directly had no involvement with the account.

722. Was there any direct correspondence between the bank and the Department of Finance?

—I do not think so, but I would not be at all sure what happened subsequent to Christmas, 1969.

723. Within your tenure of office there was no such correspondence?

—I do not think so.

724. Had the bank officials any discussions with officials of the Department in regard to these, other than the telephone conversation between Mr. Fagan and yourself?

—Myself and Mr. Fagan discussed them but, again, this is a question I could not answer, I am afraid. It is possible.

725. In a number of cases withdrawals from the main account were apparently lodged in the subsidiary accounts. Were these operations apparent to the cashiers?

—This was the reason the subsidiary accounts were opened as far as I saw it. The money would be properly withdrawn from the main account and given to some agent to disburse through separate accounts.

726. In the original telephone call where Mr. Kelly was made known to you, in what terms was he made known to you?

—That he would call to make arrangements.

727. As to his standing, was his particular standing explained?

—I cannot recall that he was designated as anything. I took it that he was an accredited agent of Mr. Fagan’s, with whom I was dealing, and I accepted Mr. Fagan as an accredited agent of the Department of Finance.

728. I see. Did Mr. Fagan tell you this, or did you ask Mr. Fagan?

—No. Mr. Fagan just said Mr. Kelly would call.

729. Deputy Collins.—Are you aware of the Government announcement about the Grant-in-Aid relief for distress in Northern Ireland?

—I am now.

730. Were you aware of it in 1969?

—No, I was not.

731. When Mr. Fagan rang you on the first occasion, did he give you any indication as to the origin of the fund that had been made available for the relief of distress in the North?

—Apart from saying that the account that was to be opened would be funded through the Red Cross, and apart from saying that it was money available to the Government, he did not make any further comment.

732. You did not conclude that it was actually Government money?

—I did not, in fact. It was money that was available to the Government. I suppose my comment may be superfluous, but in fact it occurred to me that it might have been the money Bernadette Devlin had collected in America but I was not involved particularly.

733. Did you think it unusual that the money should be going through the Red Cross first and then to accounts in your bank?

—No, I did not, because there were extraordinary circumstances at the time and from the point of view of discussion it did not strike me as peculiar.

734. You say it is not unusual that a person be allowed to take away a specimen signature card?

—It is not unusual.

735. Did it not occur to you at the time, since your initial information indicated that there were possibly State funds involved, that it would have been important to take every care to ensure the identification of the people operating the account?

—We like to think we take care with every account. I did not pay any particular attention to this account. It did not have any particular significance for me above any other.

736. Since you were first contacted by a very high civil servant, did it not occur to you that it might be important to meet the people who were going to operate the account? After all, there were moneys coming through the Red Cross Society from somewhere or other, possibly from the State. Would it not have been better to try to meet the people to be sure of their integrity?

—No, it did not occur to me at the time, I must say.

737. From a banking practice point of view, in your opinion what would be the reasons for opening the subsidiary accounts?

—As I saw it at the time, it required two signatures to draw on the main account —any two of the three. It may have been difficult or impractical to get two of these people together when funds were required, and the opening of the individual accounts were merely extensions of the main account, in that any moneys coming into the individual accounts had to come from the main account and be properly withdrawn from the main account by the proper signatories.

738. You state in your submission to us that you received a further phone call from Mr. Fagan in relation to the subsidiary accounts. Are you quite sure about that?

—Well, I have apologised to the Chairman about memory. I think I am. I am quite sure about the telephone call, but——

739. You are quite sure about the telephone call?

—About the telephone call. I know you are worried about whether Mr. Fagan mentioned the accounts or not. I think so, to the best of my memory.

740. It is very important.

—I can see that.

741. Because the evidence we have in written submission from Mr. Fagan is in direct conflict with what you say and it is important to us that we should try and establish either conflicts or eliminate conflicts. We prefer to eliminate conflicts.

—I am aware of that completely. That is my problem at the moment. My recollection, dim thought it may be, is that the accounts were mentioned.

742. You also state that the names White, Loughran and Murphy were also given to you by Mr. Fagan?

—This is also my recollection.

743. Again it is very important for the purposes of our Committee?

—I know, and I am sorry I cannot be more specific. At the time it really meant nothing; it was just another account. The significance of the whole thing has only come up since.

744. In relation to the subsidiary accounts, do you not feel that since neither the name White, Loughran or Murphy were used as the name of the subsidiary account—instead you had Dixon and Anne O’Brien—do you not agree that this was unusual?

—Not necessarily.

745. Would you not have expected the name John White or John Loughran or Roger Murphy?

—No, I would not, not necessarily.

746. And you do not think it might be better to meet George Dixon and Anne O’Brien?

—Well, we like to meet our clients but if it is not possible——

747. It certainly was not possible in this case. Is there a person on your staff by the name of “Barney”?

—There was at that time, Barney?

748. Yes, B-a-r-n-e-y.

—Yes, there was.

749. Can you give us his name?

—Gleeson, Bernard J. Gleeson.

750. When do you usually send out statements in relation to accounts?

—Normally we receive instructions about statements. The usual client will say: “I want a statement every month” or at regular intervals. If we do not receive specific instructions they are usually sent out when one statement sheet is full.

751. In relation to the instructions concerning the main account, who gave you those instructions?

—Nobody. These are my own instructions to our ledger department.

752. Did you not seek any instructions from either Mr. Fagan or Captain Kelly?

—Captain Kelly had no involvement in this account as far as I was concerned, the original account. I did not, no. It struck me as being a reasonable precaution to put this on it, particularly when we did not know any of the three signatories. It would seem to me to be reasonable to send any statements or correspondence back to the person who caused the account to be opened.

753. Which was Mr. Fagan?

—Mr. Fagan, yes.

754. Was any account sent to Mr. Fagan at any stage?

—Not while I was there.

755. When the account went into the overdraft position—it did so, I suppose on the 5th February, 1970, you were not in the bank. You were transferred?

—No. I left the branch on Christmas Eve, 1969.

756. On the copy which I have of the statement of your bank the word “Cork” appears, 13th February under “particulars”.

—Yes.

757. Can you indicate what that refers to?

—From my own reading of this I would suggest that should be cash but I might be wrong. It would have no other significance to me, I must say.

758. In relation to the subsidiary accounts, who operated them mostly?

—Well, while I was there, as far as I was concerned I think it was Captain Kelly whom I saw dealing with them.

759. And Captain Kelly did not operate the main account at all?

—As far as I know, he had no connection with the main account beyond the fact that he would bring in a cheque drawn on the main account to lodge it to one of the subsidiary accounts.

760. Would that not be within the phrase “operate”?

—Not really. He was holding this document for cash. He could have done anything he liked with it, lodged it anywhere or taken cash.

761. Did you have any conversation with Mr. Deakin about operating of the accounts at any stage?

—Not while I was in Baggot Street except general conversation about the new account that was being opened, et cetera, nothing specific really.

762. You did not discuss with him instructions or lack of instructions in the matter of the accounts?

—No, I do not think so. I cannot recall doing it.

763. Did you get in contact at any time with the Irish Red Cross Society?

—No, I did not.

764. Deputy FitzGerald.—In the first telephone conversation that you had, from what you have told us about it it sounds as if you were asked simply to open an account. We have another version which seems to suggest that what was involved was the transfer of an account in Clones rather than the opening of an account, and in fact the whole purpose of this, as understood in the Department of Finance apparently, was that the Clones account be transferred and an account opened in precisely the same names so that the money that they were instructed to lodge to these names would be correctly lodged in Baggot Street to these names. Can you reconcile your conversation with Mr. Fagan about the opening of an account with those circumstances? Was anything said, that suggested the account was to be transferred or about the names?

—No, my recollection is that this was an account to accommodate moneys that became, that was at the availability of the Government at the time. I cannot recall any suggestion about the transfer from Clones.

765. In your statement you say:

To the best of my recollection the three names inserted in this mandate furnished to me in the course of my telephone conversation with Mr. Fagan …

This is the first conversation?

—Yes, presumably. I just cannot recollect precisely.

766. If we look at the dates of these things, when do you think the first conversation took place? Did you say at the beginning that it was about the 12th November?

—It was before the 12th November.

767. How long before?

—I have no idea. It could have been a day or two days.

768. The number of days could be quite important. Have you anything to go on? Would there not be some documentation? If you were asked to open an account, presumably you would take some action about it within a reasonable space of time. We know from the account itself that the account was opened on the 11th November. I do not know what day of the week was the 11th November. If somebody could advise us of that, it might help you but the question I am asking is how long before would that telephone conversation have taken place on the assumption that when you get such instruction you would normally act on it fairly promptly?

—One would, indeed. I notice that the mandate is dated the 10th.

769. That is my point.

—This would suggest that the ’phone conversation occurred on the 10th or on the 9th.

770. This is the problem because I would have thought that you would have acted fairly promptly after the telephone conversation?

—I would assume so.

771. It seems to me probable that a telephone conversation, if not on the 11th would have been on the 10th but now we have a sequence of events which is a little hard to explain because in the conversation you say that the names were suggested to you by Mr. Fagan. You send a mandate to him subsequently. He has to get the name signed and it is handed back to you in person by some one from Northern Ireland whose name we will not identify. How did all that happen on the 10th or even, indeed, if you got the instructions on the 9th and had delayed two days in opening the account, it would have been rather difficult for all that to happen?

—It would, yes.

772. Could you suggest any way in which these things could have happened, given the dates involved?

—I have no idea of precise dates. I have no idea of the precise date of the telephone call but several days could have elapsed between the date of the telephone conversation and the date of opening the account. I have absolutely no recollection of the date.

773. Have you any means of checking that? Would there be notes in the bank that were taken at the time?

—No, we have absolutely nothing to check it.

774. When you are asked a thing like that would you not make a note of the names or would you rely on memory and, some days later, get around to telling someone to open an account in two strange names that you had remembered during that period?

—The names would have been written down at the time.

775. On what?

—On this, presumably, or on a scrap of paper which would be afterwards discarded.

776. Opening an account involved issuing a cheque book. A cheque book was issued on the 11th November. In the bank someone must have got an instruction from you to open an account and issue that cheque book?

—True.

777. Would that instruction have been written?

—No.

778. It would have been verbal? You would dictate the three names?

—I am just now assuming this is possibly what happened—I made out this mandate, sent it outside to somebody and said “Send that down to Mr. Fagan’s office with the cheque book” but I have absolutely no recollection. That would strike me as being the usual procedure.

779. You say you sent the mandate. Therefore, you told somebody to send it?

—Yes.

780. Would it be possible for you to make inquiries as to who did that because it is very important as to whether the mandate or the cheque book were sent to Mr. Fagan because, if they were, the whole question of his knowledge of these three names comes up at this point. We are not relying solely on ’phone conversations. You allege that a document with these names was sent to him and, with what appears like some extraordinary promptitude, the three names which are understood to be people in Northern Ireland, are signed and the whole thing is delivered back to you almost before you have sent it. So that the process of sending it and the question of whom you instructed to send it is quite important. Do you think you could get further information on this?

—Mr. Moore may be able to give further information on this.

781. If one were sending out a cheque book and a mandate to somebody to be signed, would one send the cheque book with the mandate?

—To some people.

782. If you sent those two together I presume a letter would go with them?

—Not necessarily.

783. You might just send a mandate with names written on it for signature and a cheque book but no letter?

—Yes.

784. But there might be a letter?

—Yes. In some instances there might be a letter, but if you were just sending it around the corner——

785. You can see the importance of establishing whom your instruction went to and who sent it. That person’s evidence would be of great importance to us?

—In the light of logical sequence I would have said to Mr. Moore—he was head ledger keeper—“Send this down.” This is normal procedure but I cannot specifically remember saying it.

786. We can ask Mr. Moore but if it transpires he was not the person, perhaps further inquiries could be made as to who the person might have been and whether a letter went with it in which case there might be a copy?

—I think Mr. Deegan has copies of all the correspondence we have.

787. We could ask him about it too, perhaps. With respect to the second telephone conversation—how well known to you personally is Mr. Fagan? I am raising the question of the possibility of somebody having imitated his voice. You thought this unlikely but this would depend to some degree on the intimacy of your knowledge of him.

—I knew Mr. Fagan for several years on a client-banker relationship. I knew him personally for quite a while. I suppose it is possible for these expert imitators to imitate a voice but in this instance I do not think I was mistaken.

788. One point that was raised and on which there might be a simple explanation —you were asked why two cheques were returned R/D to Grafton Street. Could that be because they were cashed through Grafton Street?

—Negotiated through Grafton Street I presume. The amount paid goes back to the branch at which it was negotiated.

789. That is a simple enough explanation. Probably you cannot answer this offhand but perhaps either you or Mr. Deegan would find out—it is an interesting feature of two of these three cheques we are talking about which were R/D’d that one is made out for £8,500 to Wellux Ltd and another for £1,000 to Séamus Brady. Both of these have printed numbers which are crossed out and they have numbers written in?

—These are copies of the actual cheque. The actual cheque, when it is being returned has to go back physically——

790. I appreciate that copies of the original cheques must go back. Have you copies of the original cheques there?

—No. That is our problem. The branch put in the number on a blank cheque form. The cheque that was dishonoured was number 925412.

791. What I have here purports to be a photostat of the cheque signed by Anne O’Brien?

—It is a photograph of a copy of a cheque.

792. This is a printed signature?

—It is just a copy of the cheque that was dishonoured by the branch, for the information of the Committee. The actual cheque is gone. Once a cheque is dishonoured it has to go back to the Branch it was negotiated through.

793. When was it dishonoured?

—This I could not tell you because I was not in the Branch.

794. Will we be able to get these cheques?

—It was sent back to the bank that presented it but whether it is still in their possession or gone back to the client, we do not know.

795. Have inquiries been made to get the originals?

—I do not know. I am not in the Branch at the moment.

796. This document has no significance. It simply means writing on some other cheque the name of the firm and the name of the person who signed it but the printed number on the cheque has no significance. They just happen to be cheques which the bank had and which they used in order to write in the blank copy.

—Exactly, yes.

797. I see. Well, we will have to pursue the question perhaps through Mr. Deacon, who is Manager of the Branch, of getting the originals. It would be very disturbing if, as late as last November, vital documents of that kind disappeared six months after the event. You said earlier that it did not occur to you that the names were fictitious until May when the whole thing was in the newspapers. Could you be more precise about when it occurred to you that the names were fictitious or are you sure it was May?

—It was, yes. The fact of whether the names were fictitious or not never occurred to me. It just did not arise as far as I was concerned at any stage.

798. Before that?

—Until suddenly the newspapers had all the things and we realised that these must be the accounts which were being referred to, at least I did. Sorry.

799. How soon did you realise that, in fact?

—Well the moment I saw, I think, it was an evening paper with Captain Kelly’s photograph on it et cetera.

800. And you realised these were the accounts?

—I realised that there must be some involvement.

801. And that the arms money might well have come from these accounts.

—Alleged, yes.

802. I see. Did you take any action about that?

—No.

803. It did not occur to you to get in touch with the police or get Mr. Deacon to do so?

—No, we were locked out at the time.

804. I had forgotten that very relevant fact. It did mean you had more time to go to the police, of course. So you never took any action to draw the attention of the police to the fact that this account might be one from which arms money might be drawn?

—Again I was not directly connected with the branch at the time and I was probably being a bit——

805. Yes. I think they are all my questions. Thanks very much.

806. Deputy H. Gibbons.—Mr. Walsh, you made a statement on the 1st July, 1970. Do you recall that?

—Would that be the one to Chief Superintendent Fleming?

807. Yes. In this it is stated:

I cannot say what official dealt with the person or persons who opened the account but I did not.

Would that be correct now, looking back on it?

—No, this is not correct.

808. Well, do you recollect who opened the account, looking back?

—The main account was opened by me in so much as that the lead up to the opening, the actual physical opening of the account was dealt with by me.

809. This was following the first conversation with Mr. Fagan?

—Yes.

810. I think, Mr. Walsh, it is correct to say that you have given evidence that Mr. Fagan suggested the names of the people in whose names the account would be opened?

—Well, it is the only way that I can recollect that they were given to me.

811. I take it then that had you opened the account yourself you would, in fact, have written down the names some place, those three names?

—I do not quite follow the question.

812. I understand you to have said that you personally opened the account?

—Yes. I dealt with the business and the lead-up to opening the account, yes.

813. What exactly would this consist of?

—The conversation with Mr. Fagan, the preparation of the mandate.

814. In preparation of the mandate had you to write in the names of Murphy and——

—I did, yes.

815. And your recollection is that on this first occasion you wrote in those names?

—Well, that is my problem. I cannot recollect precisely whether it was on the first occasion or how exactly the names were conveyed to me.

816. Well then we can take it that this statement of the 1st of July is not a correct one?

—I would like to hear the rest of the context of that.

817. Deputy H. Gibbons.—I cannot say what official dealt with the person or persons who opened the account but I did not. To my knowledge I never met John White, John Loughran or Roger Murphy and I have no knowledge of such persons. I have been shown the instructions on the ledger heading of this account which reads: “Do not send out statement; No correspondence to be sent out. All correspondence to A. J. Fagan.” I could not specifically say how the instructions were received or by whom. Some days later I received a second telephone call from Tony Fagan and he said that for easier withdrawal or disbursement of moneys in the joint account which required two signatures at all times, it was intended to open separate accounts in individual names. He said that a Mr. Kelly would call and introduce himself and make the necessary arrangements. Later on the same day Mr. Kelly called. …

Mr. Chairman, I hope I am fair to the witness in suggesting that there is some conflict between this statement and the statement today. If it is possible to resolve the conflict I accept that it is a long time and recollection may not be clear.

—Well, if it may help you the heading on the ledger cards about statements was following further thought by myself and discussion with Tom Moore. It seems quite clear that I did give the instruction for these at the time.

818. Mr. Chairman, we are concerned with finding out who actually opened the particular account. What I would feel that this would consist of would be that in your ledgers somebody for the first time in your book wrote in those three names. Would it be fair to put it that way?

—I certainly completed the mandate.

819. You would not be in a position then to state who, in fact, opened the account in the ledger?

—That would be just one of the ledger people who would open the account when the cheque book debit presented itself.

820. I expect he could be made available to the Committee if the Committee so desired?

—It would be a girl. I am sure she could, yes.

821. Looking at those cheques and other documents there are initials of various people on them, for example on this one. Mr. Chairman, some of those documents have initials and others have not. Would it be possible to have the writers of those initials identified? I am asking the question in a general way.

—I will help you all I can. I probably will recognise most of the initials.

822. Then we can take it that those people will be identified and made available to the Committee if the Committee so desires?

—I am quite sure they can be. I am sorry. I did not realise you were addressing me. I thought you were addressing the Chairman.

823. There is a document here in connection with the institute, the lodgments to the Committee of Belfast Fund for Relief of Distress covering 12,000 dollars. This may be after your time but there is an initial on it. Would it be possible to have the writer of that initial identified?

—I am sure it would, yes.

824. Mr. Chairman, I would also ask would it be possible to have him made available to the Committee if necessary?

825. Deputy FitzGerald.—Might I clarify one point?

826. Chairman.—One second. The Committee has agreed to adjourn at 4 o’clock but I think Deputy FitzGerald wants to make some correction.

827. Deputy H. Gibbons.—Just one other question. Who collected the cheque books?

—I know that Captain Kelly had the cheque books, or accepted the cheque books, or received the cheque books for Anne O’Brien and George Dixon.

828. What about the other one then?

—The other one is where I cannot recollect precisely how the cheque book was sent out or delivered.

829. Deputy FitzGerald.—You said you filled out the mandate. I realise now that the date of the mandate is in the same capital letters as the rest of the filling-out and what must have happened was that you filled it out and put a date on it?

—Yes.

830. It was then sent out and returned with the signatures but the date of the return with the signatures could have been some days later?

—It could, yes.

831. My problem as to the time sequence is, I think, resolved in part by that. I thought I would just clarify that.

832. Chairman.—At this stage the Committee concludes the taking of evidence for today and I would ask Mr. Walsh if he would be available again at 11.15 a.m. on Wednesday next.

—Yes.

The Committee adjourned at 4 p.m. until 11.15 a.m. on Wednesday, 20th January, 1971.