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

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Déardaoin, 22 Aibreán, 1971

Thursday, 22nd April, 1971

The Committee met at 11 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.

Examination of Deputy James Gibbons, Minister for Agriculture and Fisheries, continued.

11386. Deputy FitzGerald.—Before we begin, I wish to make one comment. At the end last night there was some discussion, and the newspapers this morning recorded certain comments of the Minister but did not record his subsequent statement that he regarded the questioning, though irrelevant, as impartial. I thanked him for that statement but it does not appear and I think it is of some importance that his acceptance of that should be publicly known.

11387. Deputy Treacy.—May I assure you first of my personal desire to be strictly fair and impartial. It would not be my wish to take a mean advantage of any witness, least of all, of a Minister of State. With regard to the moneys paid for the purchase of arms out of the £100,000, this was done, we understand, by an officer serving under you as the then Minister for Defence, and I am anxious to know what steps did you take or did your Department take to investigate in depth this transaction on the Continent, with particular reference not merely to the consignment itself but to all the moneys spent on that consignment, which we understand amounted to approximately £30,000, and whether you can enlighten us as to the exact amount of money spent on that transaction?

—I would refer the Deputy first to my statement of 19th January which states that it was on 30th April that I personally became aware of the use of money of any kind —presumably, of course, in order to purchase arms you would have to have money of some kind—but as my statement sets out, it was on that date that the evident use by a person who had been an Irish army officer of this fund became apparent. Immediately the Department became aware of Captain Kelly’s presence in Vienna, inquiries were instituted as to what precisely had been going on and was going on, and it was continuing, I presume, up to the time I left that Department.

11388. You appreciate my desire to try to secure a little more accuracy in regard to the amount of money actually spent in this fashion. In retrospect, can you now help us?

—I have no idea, nor did I ever have an idea, of the amount of money involved.

11389. Can you say of your personal knowledge what efforts have been made to try to recoup to the State the moneys so spent?

—No. It is outside my province.

11390. In the matter of accountability in respect of various State moneys, can you enlighten us in respect of bringing about a clear distinction about money spent your Department during this time for aid for the relief of refugees in the North?

—These accounts are available in the Department of Defence. Any assistance that was given, for instance in respect of the refugees in Gormanston and Finner, would be accounted for by the Army themselves and I would be personally responsible for every penny of that expenditure.

11391. The kind of expenditure incurred way very akin to expenditure for assistance provided from the Northern Relief Fund in respect of food and shelter. What kind of liaison existed between your Department then and the Red Cross who initially were trying to administer this fund?

—Speaking from memory, the Red Cross and other organisations such as the civil defence organisation which were directly under the Department of Defence, assisted very assidiously in this work. But this was official work done officially under the auspices of the Government with Government funds administered by my Department.

11392. Is the Minister certain that no moneys——

—I would be personally accountable for every penny held by the Department of Defence while I was Minister.

11393. Did any money from the £100,000 find its way at any stage to activities operated by the army?

—Not to my knowledge.

11394. In the matter of the training of certain civilians in arms—might I ask here where did this money come from?

—Is this relevant?

11395. Chairman.—If the Minister is satisfied that it did not come from the fund?

—I take it Deputy Treacy’s allusions to the fact that certain Derrymen were recruited into the FCA—this is not an unusual practice. They were recruited and attested as members of the FCA and trained as such in uniform.

11396. Deputy Treacy.—I was trying to ascertain what moneys from our fund, if any, might have been used for this purpose?

—They were members of the FCA trained by the army.

11397. And the money came from the Department of Defence?

—Yes, I would like to point out in connection with this that it is by no means unusual for young men from the Six Counties to join the FCA. The FCA is a military force and they recruit and the only stipulation made is that they be of good repute.

11398. Would you agree that this whole sorry episode might have been solved much earlier were it not for a clear lack of liaison or co-operation—and indeed suspicion and mistrust—which existed between the army intelligence and other detective agencies in the country under the aegis of the Minister for Justice?

—That is a very complex question and it calls for comment and opinion—I do not look on it as a matter of fact. As I say, I think I have already said that judging from what Colonel Hefferon told me about the conditions that obtained between army intelligence and police intelligence—they left a good deal to be desired. This appeared to me to be the case. This is a matter of opinion rather than fact.

11399. Appreciating that this is not relevant, but perhaps in the matter of public interest could we say that this matter is now largely resolved?

—I should hope so.

11400. Deputy Tunney.—Do you know that from this fund army personnel drew a sume of £1,100?

—No. Again I would refer the Deputy to my previous statement of the 19th January in which I say that the first intimation that I got of the use of this fund for any irregular purpose was on the 30th April.

11401. Actually the expenditure of this money—I am not saying it was irregular but in so far as the case made by Colonel Hefferon, in respect of the office in Clones, was that it was on your request or interpreting your wishes that this office was being opened to interrogate refugees?

—I know of the office in Clones, and of its use by the Army but I did not know that any money from the £100,000 fund was being used for its expenses.

11402. In respect of that office, if such moneys had been requisitioned from your Department do you think that that would have been paid?

—I would, yes because Colonel Hefferon assured me that it was of vital importance to Army intelligence. In fact, I do not know whether it is in the national interest for me to disclose a certain small but significant piece of information. Possibly if I wrote it on a piece of paper for the Chairman he would understand and explain it to the Committee.

Witness handed in document.

11403. Chairman.—That is all right.

—I am not absolutely certain of the dates and the figures but I wanted you to know that. I think it would be well if the Committee knew it as well but it is for you to decide that.

11404. I will pass it around to the members of the Committee.

11405. Deputy Tunney.—In respect of any meetings which Captain Kelly in his capacity as Intelligence Officer might envisage it would have been in order for him to seek an imprest or moneys in respect of any anticipated expenditure which he felt might involve on himself?

—A meeting?

11406. Meetings or consultations which he was having in his capacity as Intelligence Officer.

—Are you referring to any particular one?

11407. Again, I am referring to the money which he got from this fund in respect of the meeting which he had in Bailieboro.

—As I have told the Committee I have no knowledge at all of the Bailieboro meeting. If this were an official operation obviously the expenditure of any money would have to be officially accounted for.

11408. Presumably if it could be shown as being appropriate to his duties your Department would have paid such moneys?

—Yes. My impression of Captain Kelly’s function at that time—incidentally I do not think he was a trained Intelligence Officer as he was Colonel Hefferon’s personal staff officer—was that he was ranging round the Six County area with Colonel Hefferon’s approval and with a great deal of a free leg collecting intelligence to Colonel Hefferon’s satisfaction and to mine as well because I assumed that Colonel Hefferon as Director of Intelligence knew what he was doing.

11409. In respect of the interviews and the conversations which you had with Captain Kelly or Colonel Hefferon in connection with the trips to the Continent, at any stage were you told that moneys from funds outside the Department of Defence were being used for this?

—No.

11410. Prior to the interview you had with Captain Kelly, to which you refer here, you never at any stage thought you might inquire as to where the money came from?

—The question of money did not occur to me. I think it is a question of one’s conception of the scale of the operation. I think I mentioned yesterday that my conception of the scale of the operation of the 25th of March, that did not in fact take place, was of some obscure person coming from a ship that had arrived from Antwerp with a suitcase or some small consignment and the mechanics or the financing of that operation did not occur to me. For instance, if I might draw a parallel, I have not the faintest idea where illegal organisations, as they now exist, draw their funds from or where they get their supplies from.

11411. That was the conception of the scale of the operation as you saw it and as would have been evidenced here before us?

—Again, there is an accumulative aspect in my building up of the picture. It begins with a suspicion that Captain Kelly is becoming more and more involved with people in the North. Accepting that in order to carry out his duties as an Intelligence Officer he must establish with people of various kinds, including members of illegal organisations, but it was becoming progressively more apparent that this liaison he had was becoming intolerable.

11412. Again, as far as I am concerned, I am trying to confine myself, as much as I can, to the question of money. I want to relate what would be said by you and what has already been said. The case has been made here by Captain Kelly that he kept you briefed all along directly or through Colonel Hefferon. The question I would like to ask now is whether or not in such a briefing you were told at any stage that Captain Kelly had brought £10,000 with him to the Continent.

—No.

11413. You were not told?

—In fact I was never told that Captain Kelly had gone to the continent at all. I was told by Colonel Hefferon that he had applied to go to Frankfurt to visit his sister and that is the only knowledge I had of any intended trip. I had no subsequent confirmation of the fact that he did in fact make the trip and I still do not know whether he made the trip or not.

11414. Well, he tells us that he did. He also tells us that to facilitate him in the operation of what to him was an authorised, I think he described it as an unofficial intelligence operation, he brought with him an interpreter. Moneys were paid in respect of that interpreter. You know nothing about that?

—Nothing whatever, no.

11415. Finally, Mr. Minister, there is one question I would like to ask you. Captain Kelly did in evidence say that he told you, he did not say on what date, the source of the money.

—Yes.

11416. I think he described your reaction as one of laughter?

—No.

11417. You laughed it off, I think that is what he said?

—No, I tell the Committee the date on which Captain Kelly told me. I saw nothing amusing at all in it. In fact my reaction, speaking from memory, was extreme shock especially when it was taken in association with the other piece of information which I imparted to the Committee yesterday as to the final destination of the arms if they had come in.

11418. Finally, in your statement where you say that he replied that it came from the Fund for the Relief of Distress in Northern Ireland. I am wondering if on the day following his interview with you or his chat with you you would have described it in that fashion. I thought that maybe here, well, you might have said from moneys that could be related to … but this is a rather definite statement here of what he said to you?

—Yes, I have thought about this and I think I must say that I realised that this was money that had been procured in some illicit manner from the grant-in-aid.

11419. Yes, but as far as I think people generally would be concerned—I must confess that at the time I did not know the name of the fund was the Relief of Distress?

—Well, I had long since forgotten, at least it had receded in my memory, the decision of the Government to provide this money. I had not any idea as to precisely how it was being used in the North. I was not thinking about it at all in fact. Until that date I had no idea that any of it was being used for any purpose other than that for which it was intended and I had no idea until much later indeed of the mechanism by which it was procured, by which it appears to have been procured for illegal purposes.

11420. That is all I have to ask you, Mr. Minister. Thank you, Mr. Chairman.

11421. Chairman.—Deputy Nolan.

11422. Deputy Nolan.—No questions.

11423. Chairman.—I want to try and clarify one point about which I am a bit confused. You mentioned Mr. Kearney of Defence telling you that Captain Kelly was in Vienna on April 17th. Who is Mr. Kearney?

—He is the Permanent Secretary of the Department of Defence.

11424. Colonel Hefferon had resigned, I think it was April 9th or some date like that?

11425. Deputy Nolan.—Retired.

11426. Chairman.—Retired. I am trying to find out who gave Captain Kelly permission to go. You were not aware of it. The new Director of Intelligence had not been briefed by Colonel Hefferon. Mr. Kearney just apparently found it out some way?

—Yes, Mr. Kearney came in in a state of great agitation to tell me that his Department—is this live? Can you hear me, Mr. Chairman?

11427. I think it is gone dead.

—In a state of considerable agitation to tell me that certain telephone calls had come, I think, through Aer Lingus to the Department of Transport and Power and from there to the Department of Defence.

11428. Deputy FitzGerald.—I am afraid it is not working and people cannot hear.

—I will speak louder.

11429. Chairman.—We will wait for a few minutes.

11430. Deputy FitzGerald.—There is a problem in the other room as well.

The Committee waited for the sound reinforcement to be repaired.

11431. Chairman.—The thing I am trying to establish is the question of Captain Kelly’s permission to go to the continent on April 17th. We had evidence, of course, that he went, from Mr. Luykx. He went with Mr. Luykx and they went to Frankfurt. They flew to Frankfurt and from there they went to Vienna where they were joined by Mr. J?

—So it appears.

11432. In view of the fact that Colonel Hefferon had retired and that Colonel Delaney had not apparently been briefed as to Captain Kelly’s particular position by Colonel Hefferon, I was trying to establish how he got permission. Did he take French leave or has anyone established how he got permission?

—I think this must be the case because, as I told the Committee yesterday, on the 9th, I think it was, of April, Colonel Delaney took over as Director of Intelligence and he announced very firmly that he was bringing in his own methods and his own men. Now I think that left Captain Kelly in a state of suspended animation as it were up to the 17th. The first knowledge that I had of his presence abroad was when Mr. Kearney came in with hurriedly jotted notes that he had obviously taken down as he listened to a telephone about a man representing himself as Commandant Kelly of the Irish Army making Irish Army purchases and various other things as well.

11433. Deputy MacSharry.—I cannot get it clear in my mind why knowledge of Captain Kelly’s activities was apparent to somebody, maybe not to all, in the Army from February until April and why it was 30th April before he was finally out of the Army. Is it not usual in the case of superior officers to transfer them to somewhere or other, to take them off the duties they are on, when they are known to have been doing something which is allegedly illegal?

—This was more or less suspicion. As far as army discipline is concerned, this would be a matter for the Army itself.

11434. Can you explain or give any reason? Captain Kelly’s evidence to us was that he purchased guns or tried to purchase guns from this Grant-in-Aid while still a serving officer of the Irish Army and this was known in Army circles from February until April?

—That he was purchasing arms?

11435. That he was visiting the Continent to vet arms?

—I did not know it was known. I knew it was suspected.

11436. Well, if it was suspected?

—Colonel Hefferon told me towards the end of February. We have had it all before.

11437. I know we have had it all before but it is not clear in the country’s mind or in the Committee’s mind why anybody serving in any kind of State employment for two or three months, even with the hint of suspicion—this I cannot understand. Maybe you are not the person to answer that but it is one which is very hard to understand. Long before he came before you——

—In your absence yesterday we dealt with this particular question at some length and I told the Committee that I considered it the prudent thing to do in this case——

11438. I know what you told the Committee?

—Then what are you asking?

11439. I understand that prudence was used so that the Army would not be involved, but a man involving himself in this kind of activities, wherever he was stationed, surely he could be transferred somewhere?

—I had no firm evidence first of all. When he went to Frankfurt I knew he had applied for leave to visit his sister in Frankfurt and I learned from Colonel Hefferon that the real purpose of his visit might be to vet arms and when I put it to Colonel Hefferon that the visit might be bona fides he readily agreed. I do not think that suspicion at that time would be sufficient to take disciplinary action.

11440. The point may not be relevant to this inquiry at all, but he has admitted being involved in vetting arms and that the money was out of this fund, but apart from that water under the bridge, one might say, surely if this thing occurred tomorrow morning, or anything like it, one would not adopt the attitude of trying to get him into other employment in the State service. One would immediately transfer him from where he was so that he could not continue these activities?

—I think that this particular case demanded special treatment in the interests of national security. I was conscious of the fact that Captain Kelly, by the nature of his work, was in possession of a great deal of highly confidential information.

11441. You said that yesterday in my absence and in my presence but I still say that if this confidential information——

—It is not very confidential any more.

11442. You said in your evidence and in your submission to the Committee that you had no knowledge at all of the mechanics of how the £100,000 was administered, so you have no knowledge of how the money was spent?

—No.

11443. Deputy Nolan.—When Captain Kelly told you that some money from the fund was used for the purchase of arms, did he tell you the amount?

—No.

11444. Did he ever mention it?

—I can reconstruct the conversation but it would be a reconstruction rather than a verbatim assertion. I would have asked: “Where did the money for this thing come from?” and he would have replied, rather laconically: “Either the Red Cross or the Northern Relief Money”.

11445. He did not indicate the quantity of arms?

—No. There was no further elaboration.

11446. Chairman.—To come back again to Captain Kelly’s absence on 17th April, you have told us you had a growing suspicion of Captain Kelly during the spring of 1970. Kearney came to you to say there was a Commandant Kelly in Vienna purporting to purchase arms for the Irish Army. Did you make any inquiries there and then if he had to get permission from the Army?

—Obviously.

11447. Did you make inquiries?

—I did not need to. I knew perfectly well who this man was.

11448. And you were satisfied he did not have permission?

—Yes.

11449. Did you take disciplinary action?

—I spoke to Colonel Delaney on the Monday. This was the Friday afternoon. On Monday I asked Colonel Delaney to prepare a full report about the whole affair. This took from Monday to Friday to prepare. I asked Colonel Delaney on the Wednesday if he had it ready and he said he had some details to collect.

11450. You did not suspend him during the preparation of the report?

—No.

11451. Deputy R. Burke.—The name given by Kearney was Commandant Kelly. Can you tell the Committee how he came into possession of this information?

—Yes. It was as a result of a series of telephone calls. The precise nature of them I cannot relate. A person somewhere in Europe got through to the Department of Transport and Power about a consignment of weapons for the Irish Army, a query as to whether one was expected. This was passed on to the Department of Defence.

11452. The reason I asked that—I do not wish to express a valued judgment—if there had been illegality in relation to this matter would it not have been natural to expect that the word “Kelly” would not have been used, that the man would have gone under Commandant Burke or Smith. It is only a thought that occurs to me. There was no concealment of name involved here. Can you offer any suggestions as to why this name which was openly known came back to the Department?

—No. The only change obviously is the change in rank.

11453. One final point: you have mentioned in evidence that in your view Captain Kelly was becoming more and more involved and that his involvement was becoming intolerable. We have to balance the evidence given to us. Captain Kelly has given evidence that on the occasion of the visits of the Northern delegates you showed vehemence in support of their demands. I am not saying that he is true or right, but I want to give you the opportunity of explaining or counteracting that statement.

—I was introduced to the Northern delegation by Mr. Blaney and they talked about the conditions in the North and I expressed great sympathy with the privations under which they suffered, but I left them under no illusions whatever about the impossibility of their being supplied with weapons by the Irish Army.

11454. Deputy Collins.—Are you aware that your evidence is in conflict with that given by Captain Kelly and Colonel Hefferon?

—Yes, it would appear to be.

11455. Deputy FitzGerald.—I understood you to say yesterday that your report to the Taoiseach went after the meeting of the 23rd April with Mr. Blaney, Colonel Hefferon and Captain Kelly. It is reported in this morning’s papers that you said that the report had already gone before that meeting. Is that your recollection on that?

—Could I ask the Deputy to repeat that question?

11456. I understood you to say yesterday that you had instructed Colonel Delaney to prepare a report on the 20th and that on the 23rd you had this meeting with Mr. Blaney when he asked you to come to his office, but the report you had to the Taoiseach went on the 24th?

—That is right. I brought it myself personally.

11457. The newspapers report you this morning as saying—incorrectly, I think— that the report had gone to the Taoiseach before you went to that meeting on the 23rd.

—My recollection is—and I am pretty sure of this—that I brought Colonel Delaney’s report of the affair to the Taoiseach personally. In fact, I recall ringing the Taoiseach’s office and saying to him that I had a document of considerable importance that I wished him to see immediately and he said to come over to the office there and then which I duly did.

11458. That was after the meeting of the 23rd?

—Yes, that was the 24th.

11459. Did you report to the Taoiseach on the approaches by Mr. Blaney to you with a view to seeing if you would authorise the importation of arms for his purposes?

—The Taoiseach and I at that stage had a conversation about the general situation and thereafter we had conversations on one or two other occasions but the details of these conversations I cannot recall.

11460. Could I put the question another way? Had you reported to the Taoiseach before that on Mr. Blaney’s approaches to you?

—No.

11461. Finally, from your account of your discussions with Captain Kelly I have formed the impression that he could have been under the impression that you did not disapprove of these activities, not that you approved of them but you did not disapprove——

—Yes.

11462. ——because of the fact that you felt that this had to be played very carefully and you did not want to alert him. He had no indication from you which would make him feel that his activities were disapproved of by you.

—No, I did not think it expedient for me to reveal my opinions to Captain Kelly. I was as dispassionate as I could be about it.

11463. It would have been possible for Captain Kelly to have misunderstood the position and in the absence of disapproval to have gone ahead and that might explain why he used his own name and did not attempt to hide the position. Is that a possible explanation?

—As I told you I only met the man on two occasions up to the 17th. On the first of these occasions the view that I took of Captain Kelly was that he was an officer who was acting in a very honest and honourable way in declaring his intention and the reason for his intention—his intention was to leave the Army to assist the people in the North—and while I did not pretend to Captain Kelly at all that this was a thing that could be done by an army officer, this did not arise—I was stricken by what I took to be his forthright declaration of his reason for resignation and I took the resaon for his visit as being one to discuss the procurement of future employment for him.

11464. In the light of hindsight, would you agree that by not making your disapproval clear to him he could have been encouraged to go ahead with thinking he had your approval?

—I do not think this would hold water. We are talking about a bit of speculation. My judgment was this this was an officer who was in such a key position that he wished to leave the army and that he should be so facilitated without exciting any feeling of hostility in him because if such a feeling of hostility were excited it might have undesirable results.

11465. Did you not feel that in adopting that tactic there was a danger not alone that he would continue the activities but that he would continue them under the impression and perhaps conveying the impression to others that they were not disapproved of?

—No, on the occasion of my first interview with Captain Kelly I was not unduly alarmed about the situation at all. He appeared to me that he was an officer who had become emotionally involved with a situation in the North and whose presence in the army could be no longer maintained, but I did not feel there was any element of urgency in the timing of it although I got cracking on it immediately.

11466. Deputy H. Gibbons.—One thing I would like to put on the record is the question of the administration of the Army. I understand that the Chief of Staff, the Adjutant General and the Director of Intelligence are members of the Department of Defence and that they are not as intimate in running the army as would be the Commissioner of the Garda, and that the day-to-day running of the army is done by the Colonels in charge of each section.

—No, the Chief of Staff, the Quarter Master General and the Adjutant General are all soldiers but the link between the Department of Defence as such and the Army as such is made through that channel. This is the way it works.

11467. The relation between the Minister for Defence will be no nearer the members of the army than would be the relation of the Minister for Justice say and the Guards and his officers.

—Would you repeat that?

11468. What is running through this is that the intimacy of a Minister in your case and Captain Kelly and the officers—

—There was no intimacy. Intimacy does not arise after two casual meetings.

11469. That is a bad choice of words. The suggestion is that you had been in contact with each other?

—Yes, at the request of a colleague. I would not have seen Captain Kelly or any other Army Captain if it were not at the request of a colleague.

11470. This is the point I wanted to bring out that it was not in the ordinary Army administration that you met him?

—No, it was irregular.

11471. That is the point. There is another thing which I wonder if you would be able to express any opinion on. Can a person be charged with the contemplation of importing arms? I am told that the person cannot.

—Contemplating it? I do not know how you can tell what a fellow is contemplating.

11472. I am using the word “contemplating” deliberately because I am told you cannot be charged, that it is only suspicion. I want to point out that you have made the case here that you had a suspicion, that you thought in March that Captain Kelly should be removed from the Army, that in fact on the 9th April he ceased to be a member of the Intelligence Section?

—Yes, but he was still a serving army officer.

11473. I appreciate that.

11474. Deputy Nolan.—Did you tell any of your colleagues what Captain Kelly told you about the finances for the purchase of those arms on the 30th April?

—Yes, it came up in conversation afterwards.

11475. How soon afterwards?

—I was asked this yesterday but I could not pin down any date.

11476. Weeks, months, days?

—I could not really say but it may be ascertainable.

11477. Did you discuss it with Deputy Blaney or Deputy Haughey?

—I do not think so. I intended this morning, if I had time to check with the Department of Justice to find out if I could establish when I got in touch with them about it. I cannot tell you, with any kind of accuracy, when I communicated this thing officially to the proper authorities.

11478. Deputy FitzGerald.—Perhaps if the Minister establishes that with the Department of Justice he could let us know?

—Yes. I could do that today I suppose.

11479. Chairman.—Thank you very much.

Deputy J. Gibbons withdrew.

The Committee adjourned at 12.5 p.m. until 4 p.m. on Tuesday, 27th April, 1971.