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

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Dé Céadaoin, 27 Eanáir, 1971

Wednesday, 27th January, 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 tArd-Reachtaire Cuntas agus Ciste) was in attendance in an advisory capacity.

Chairman: I call Mr. Fagan.

Mr. Anthony James Fagan recalled and further examined.

3820. Deputy H. Gibbons.—Of what part of the country are you a native, Mr. Fagan?

—Dublin City.

3821. Have you been to Belfast on many occasions?

—No, only twice in my life.

3822. Are you aware that there is such a place as Cooke Street in Belfast?

—I am not.

3823. When you were dealing with Captain Kelly, he seems to have had a double office, as an Intelligence Officer and as a liaison officer or perhaps as both——

—Yes.

3824. ——had you any particular view as to his capacity when he was dealing with you?

—I was first introduced to him—met him physically—with the Minister for Finance. I knew of him from Colonel Hefferon as an Army Intelligence Officer who was involved in the Northern Ireland front. My feeling all along was that he was wholly and solely an Army Intelligence Officer but that he was doing this other thing, helping out in regard to the Northern Ireland aid as a kind of—not exactly a sideline but peripherally to his main duties as Army Intelligence Officer, whatever they might be.

3825. To come back to the three names of White, Loughran and Murphy, we had information that those came from Belfast. Captain Kelly gave us information last night to the effect that he had brought them from Belfast. My recollection is that in the court he made the point that even though those were fictitious names they still represented the people who held the account in Clones?

—Yes.

3826. You have denied that those names were mentioned to you?

—Yes.

3827. It did not arise at any time that those fictitious names were the names of those people—that, in fact, the same people in the North were using fictitious names to cover them. He never put that to you?

—Never.

3828. To get back to your discussions with the Taoiseach, these took place, I gather, before the 14th May?

—Yes, I think it was on April 28th.

3829. At this time you had no suspicion whatsoever that those moneys were used to buy arms?

—No.

3830. In fact you said your suspicions were aroused in, perhaps, April or June?

—On the 26th June when——

3831. When you discussed it with the Special Branch?

—With the Special Branch. Exactly.

3832. In fact you had no concrete information on this point until the Arms Trial?

—No.

3833. When Captain Kelly indicated moneys were used to purchase arms?

—Yes.

3834. So that, in fact, when you were discussing this situation with the Taoiseach this was one of the things that would never have struck you, at the time?

—Yes.

3835. You had no suspicion?

—No suspicion, no.

3836. And at this stage the banks were closed subsequent to the 28th April or the 1st May, I think?

—Yes.

3837. You stated that you were introduced to Captain Kelly by the Minister for Finance at the time?

—Yes, well, perhaps introduced is possibly not the right word. I knew of him from Colonel Hefferon but I first met him physically in the Minister’s room in the Minister’s presence. It may not have been a formal introduction as such.

3838. Was it represented to you at any stage that Captain Kelly’s activities was an intelligence operation?

—No. I take it, Deputy, you mean in regard to the Northern Ireland Aid. I knew from Colonel Hefferon that Captain Kelly was on intelligence work involving Northern Ireland, that he had a special role of liaison with people in the North but, as I think I have said already, I did not know myself until the Arms Trial that in fact he did not go into Northern Ireland but I did regard him as an Army Intlligence Officer. The Minister himself never spelt out specifically to me what his precise role was nor did Captain Kelly ever volunteer information to me as to precisely what he did other than coming to me seeking money on behalf of the Northern Ireland people.

3839. Deputy H. Gibbons.—Right, Mr. Chairman I have finished. Thank you, Mr. Fagan.

—Thank you, Deputy.

3840. Deputy Keating.—Mr. Fagan, in the original submission of the Department of Finance the first paragraph outlines a decision of a Government meeting on the 16th August?

—Yes.

3841-42. Now, is this the only basis, in your view, from which the whole Grant-in-Aid operation stems?

—Yes, Deputy.

3843. Now, the intention as expressed in that Government decision, circulated as a minute, is that a sum of money should be made available to provide aid for the victims of the current unrest?

—Yes.

3844. I wonder would you amplify, and would you also tell us if it was amplified in discussion before the whole operation got under way, as to what was understood by the terms “to provide for the victims of the current unrest?” What would such provision consist of?

—I take it you mean understood after the decision?

3845. After the decision had been taken?

—And not after the decision had reached the Department of Finance.

3846. Yes. I am trying, in fact, to be clear in my own mind what would validly come as an action that was aimed at carrying out this Government intention and what would be invalid as being outside of the intention. Therefore we need to amplify and interpret that intention a little bit?

—Yes. Well, I think that following this Government decision, as far as the Minister for Finance was concerned, the first thing he did was he discussed this situation in the North with the Chairman of the Irish Red Cross. I am not aware of what really emerged from that discussion, but it would appear that possibly a doubt came up as to whether or not the Irish Red Cross could operate in Northern Ireland and this was ultimately found to be correct. I think also—and, of course, not being at the meeting a lot of this is partly hearsay—but it would appear to emerge that the Minister and the Red Cross people did thresh out, or try to thresh out, how aid for the victims of the unrest could be dealt with and, again, as far as I know, this led to the situation of the Minister thinking, or possibly the Red Cross thinking, that the better thing to do in the event of the Red Cross not being able to go in there would be to have a committee set up north of the Border which would do this thing, distribute aid, as the Red Cross could not.

3847. Mr. Fagan, I appreciate this and I think we will come to it perhaps a little but, in fact, you are telling me more than I am really seeking to find at this moment?

—Sorry.

3848. I am concerned with perhaps, to put it this way, a list of the categories of the activities, of the sorts of activities, which in your view would properly carry out that Government decision. Do I make myself clear?

—Yes, you do, but I find it difficult to throw myself back to that particular week and say what this list of categories should be. The basic requirements was to get aid to the victims.

3849. What should that aid consist of?

—It should consist of presumably money and possibly food in a disaster situation, clothes, baby stuff for infants and so on, that general category.

3850. Could I ask you then if at any stage it entered your head that the purchase of arms could possibly be interpreted as aid for the victims of the current unrest?

—No. It would not have entered my head under any circumstances.

3851. That may seem to you, in fact, a foolish question?

—No.

3852. You will appreciate that it has been presented that the provision of arms for self-defence was validly a part of the intention of providing aid for the victims of current unrest?

—No, I would not accept that.

3853. Could I ask you if you have ever seen a copy of the Voice of the North?

—I do not think I have.

3854. Well then, perhaps, I cannot ask you specifically about it but would you consider that the production of a newspaper outside the Six County area was validly a part of the Government’s declared intention to provide aid for the victims of the current unrest?

—No. I would not regard it as a valid part stemming from this decision.

3855. Were you aware that simultaneously with the provision of these moneys by special vote money were also provided for the carrying out of a propaganda campaign in the autumn of 1969 in many parts of the world?

—No. I was not so aware.

3856. Am I right in thinking that there was, in fact, the voting of special moneys for carrying out such a campaign?

—There was as separate and distinct from the Grant-in-Aid.

3857. Completely distinct?

—Completely distinct, yes. It came into the same Vote, the Miscellaneous Expenses Vote, but certainly not part and parcel of it.

3858. It was completely distinct. In your opinion, as a senior civil servant, would it therefore be natural to expect that if moneys were to be expended on the Voice of the North it should have come from the Vote, from the moneys specifically designated for the carrying on of information and propaganda work and not from the moneys designated as being for aid to the victims of the current unrest?

—Yes, it would appear more germane to that than to this.

3859. Yes. Thank you, Mr. Fagan. When did you discover that the Baggot Street account was not in the names of Messrs. F, G and H?

—On the 26th June, 1970.

3860. Yes. Have you got a copy there, Mr. Fagan, of the transcript of the first trial? If you have, I would like to refer you to page 3 of that transcript. Have you got that?

—Yes I have, Deputy, I think. The first trial.

3861. The first trial. Sorry. It is the first trial. Page nine is the reference. Have you got that reference?

—Page nine.

3862. 23rd September?

—Yes.

3863. You were re-examined by Mr. Walsh?

—Yes.

3864. I refer you to the lower half of the page. You are talking about the account which was moved from Clones to Baggot Street and the judge said, “Under what title was this account opened?” and you said, “It was known as, to the best of my recollection, the Belfast Fund for the Relief of Distress”?

—Yes.

3865. And then the judge said, “Who had drawing authority on this?” and your answer was, “Two Northern MPs and another gentleman”—on the 23rd September?

—Yes.

3866. You told me a moment ago that you became aware on the 26th June, three months previously, that the Baggot Street account was not in certain names. How do you reconcile those two things, one three months after the other?

—First of all, Deputy, my strict understanding from Captain Kelly was that these gentlemen mentioned there were the holders of the account. Secondly, the statement produced to me by the guards indicated that there were three other names. The charge in regard to this which led up to the Arms Conspiracy Trial had nothing whatsoever to do with money whatsoever. Before I went to this trial I had to seek a direction that if the question of money comes into this trial what will I do. Do I claim privilege or not? Now, I was told that if the matter is raised at the trial answer the questions put to you but you do not have to expand on this. This is what I did. What the judge was talking about was, as I understood it, the situation at the time and for me to start saying, and I do not know whether the Deputy has ever appeared as a witness in court, but it is a most difficult thing to start introducing bits and pieces outside the question asked. In fact, there was one thing I wanted particularly to say in regard to the money thing, I do not know that it appears in this particular piece of transcript, but when I started to say it there were three counsel on their feet at the one time saying, “We object to this,” and I could not get it out. What I was doing at the time in reply to the judge was indicating that at that stage, at the change from Clones to Baggot Street, these were the people. It would be outside, I feel, my terms of reference on this to start saying, “But these, my lord, being subsequent to this on the 26th June a situation was discovered by the Special Branch which seemed to me that maybe they were or maybe they were not.” So what I had very strongly in mind was that these were the gentlemen involved. This is what I was answering.

3867. You said just now, Mr. Fagan, when the question of the trial came up, and I jotted it down in longhand, unfortunately I cannot write it down more accurately and more rapidly, you said, “I had to seek a decision”?

3868. From whom had you to seek that decision?

—From my Minister.

3869. I see.

—Maybe I should explain that under the Official Secrets Act, that to say anything even in a court of law I would contravene the Act as I understand it unless I have a release from my Minister to speak on official matters, as I had to get to appear before this Committee, despite all the privileges attached to it, that a civil servant cannot. So in this I did seek and get authority from the Minister for release under the Official Secrets Act. Apart from that then there was the question of claiming privilege in certain areas that a witness can claim privilege. I wished to know that if money came up, because the matter was still under examination by the Special Branch and by the law officers and in that sense could possibly be sub judice or under examination, and any release of information might hinder police action. So, on that aspect then I sought release on that. I was just told, “Answer the questions you are asked. You do not have to volunteer.”

3870. You also wrote down, Mr. Fagan, while you have had to answer the questions, I wrote down the phrase where you said just now “You do not have to expand on this”.

—No.

3871. I appreciate that under oath one is not compelled to volunteer information.

—Yes.

3872. I think it is a truism. I do not have to ask you whether you agree or not——

—I would agree.

3873. ——that under oath neither is one permitted to mislead. Now in the passage I have quoted it starts with the transfer, the account was moved from Clones to Baggot Street. There is mention of Captain Kelly which arose in connection with Baggot Street, with Mr. Walsh who was Deputy Manager, with the fact that Mr. Deacon was there, not there at the time was on leave, and with the question of the title of the account. From all that I am absolutely clear that it was the account in Baggot Street that was being referred to. You were then asked about the Baggot Street account in my contention by the judge under oath, “Who had drawing authority on this?” You said, “Two Northern Ireland MPs and another gentleman”. That, I contend, Mr. Fagan, in your knowledge on the 23rd September, 1970, was not true?

—Deputy, I cannot accept that.

3874. You have not explained how it was true and you took some length indicating that you had discussions with the Minister and that you did not have to volunteer information that you were not asked and things like that. But you knew, Mr. Fagan, that it was very important on 23rd September. You might have given people a totally false impression by that, and I believe you did. You might simply have said, “There is confusion about it, I do not know.” You might have said, “It is being investigated and I do not know the outcome of the investigations”. But you did not. I have made my observation on it and I do not propose to press it further now.

To change the subject completely, in your evidence to us—volume 5 of the transcript, page 197—you were being asked about the use of the Red Cross and you made the analogy in reply that the use of the Red Cross as what one might call a postbox in this instance was comparable to its use, you say, “I have in mind the Peruvian earthquake disaster last year”. I do not want to go over this again at great length but, you know, we are investigating the propriety of these expenditures. It says in this reprint from the introduction to the Handbook of the International Red Cross, which is in fact a paraphrase, I think, or else perhaps the full text, but it is from Resolution XI of the Geneva Conference of the Red Cross in 1921: “No Red Cross Society shall … have any activity in a foreign country without the consent of the Central Committee of the National Society of that country”; and then it says that in case of disagreement—which apparently there was, you see, because the British Red Cross said they were entirely equipped to handle the situation and the Irish Red Cross thought not or did not accept that—in case of disagreement it is possible to refer to the supreme authority of the International Red Cross. That was not done? The position is here you see, that the Red Cross has been put in an extremely invidious position. Then at the end it says: “Such undertakings must be exclusively humanitarian and must be recognised and approved by the foreign Red Cross Society. Now I accept it that in your view at that time the expenditures of this Grant-in-Aid were originally organised at the time the Irish Red Cross was being used as a channel for transmission, I accept that you understood that the undertakings were exclusively humanitarian, but you must have known that they were not recognised and approved by the foreign Red Cross Society. Are we correct in thinking that you must have known it was not recognised and approved by the foreign Red Cross Society?

—No, I would not have known.

3875. Did you know any of the money was going outside the State, outside this State?

—No—meaning the Grant-in-Aid money?

—3876. Yes?

—I knew it was going to Northern Ireland, or understood it was going to Northern Ireland; otherwise, no.

3877. But did you know it was going without the approval of the foreign Red Cross Society?

—No.

3878. I see. I have examined that aspect of it enough. I want now to turn again to a totally different topic. In the same Volume 5 of your evidence here on 21st January, on page 199, I am concerned with the matter of the Customs examination. You say—this is at the top of the first column on page 200—

As I was the officer, on the instructions of the Minister for Finance, who had directed, in the Minister’s name, the customs official to allow a consignment in without customs examination…

and then you went on to list your decision, that you saw the Taoiseach, but when you instructed this customs official were you satisfied that you were in fact carrying out an action which was legal and for which there was statutory provision?

—When I consulted——

3879. When you instructed this customs official to allow a consignment in without examination, were you satisfied you were acting legally?

—I was. One day the senior customs official, one of the Revenue Commissioners in the South, had assured me that the Minister had the legal power to do this. He did not quote it to me at the time but he said he had. I took it to the Minister, who directed that it should be done.

3880. You discussed it with the Revenue Commissioner prior to doing it?

—I did.

3881. Were you aware a question was asked in the Dáil about this on 8th November, 1970.

—Yes. I cannot recall precisely the detail, but I recall that there was a question.

3882. A question in the name of Deputy Dr. O’Connell who asked the Minister for Finance under what authority a Minister was empowered to waive customs regulations on the importation of goods— volume 249—and the reply was that under the Revenue Commissioners Order, 1923, which was made under section 7 of the Adaptation of the Enactments Act, 1922 —it refers back in fact to the Customs Consolidation Act of 1876 and from all this it is quite clear that the Minister has power to instruct a customs official to carry out this action provided—and there is a proviso, and that proviso was spelled out in the Dáil by the present Minister for Finance when he said:

provided the exemption … does not amount to or aid or facilitate a breach of the law of the State.

In other words, Mr. Fagan, if the instruction were to permit the importation of marijuana without customs examination, that would be illegal?

—I take it so.

3883. Or, let us say, under the present law of Ireland, or contraceptives? That would be illegal?

—I take it so.

3884. Would it at that stage—the date is the 18th or 19th April—in any way cross your mind that the contents of this cargo might have been bracketed with marijuana or contraceptives as being something illegal to import?

—Certainly not.

3885. Would you have any thought as to what might be in the cargo?

—On 18th, 19th April?

3886. Yes?

—As I have said in court, when Captain Kelly came with the original request I asked him should I tell the Minister. He said: “You do not have to tell him anything. He knows about this.” The Minister directed me to tell the Revenue Commissioner that this was all right so, therefore, I was acting on a Ministerial direction with, presumably, the Minister being aware of or knowing what was involved; and if I failed to carry out the Ministerial direction then I would be guilty of insubordination, because I undertake in writing to carry out the duties assigned to me by the Minister of my Department.

3887. Yes. I asked Mr. Murray on, I think, the 1st day, certainly very early on in this investigation, about the position of the public servant ordered to do something illegal by his Minister and he told me he had never known it to happen. I recognise that a public servant is bound, under pain of being insubordinate, to carry out the instructions of his Minister. We will probe subsequently in fact as to whether this was a legal instruction or not. Can I ask you finally on this subject whether you know of any enactment which would permit, without the sanction of the Minister for Defence, without any special arrangements being made, the importation of firearms?

—No, other than with the Department of Justice’s or the Minister for Justice’s approval.

3888. Had you no suspicion on 18th-19th April that these might be firearms?

—Yes, indeed. That again came out in court, that when Captain Kelly made this request he told me, when I said “What do I tell the Minister?”, “The Minister knows about it; you do not have to explain to him.” But as he left my room I said conversationally “What are you talking about?”, because it was a rather mysterious approach. He kind of smiled knowingly and I put my hand up and said, “I do not want to know”—that kind of thing. Naturally, with an Army intelligence officer coming and talking about consignments of mild steel plate, and all that kind of thing, I would want to be an idiot——

3889. Yes, you would, but you are not.

—May I go a little further? After all, I knew this might have been a sub rosa Government operation. Governments do things. It might have been with the agreement of the Minister for Defence. But so far as I was concerned at that particular point of time there was no question at all of anything illegal.

3890. From the previous August many groups from Northern Ireland had been in Dublin. Did you know of any requests by any of these groups for assistance from the Government or from any Minister in the obtaining of arms for use for defence in Northern Ireland?

—No, not to my personal knowledge.

3891. Did you know this as a matter of general conversation around Dublin as distinct from in your official capacity as a senior civil servant?

—As I have already said, I never met any of these people at all, anywhere, either privately or officially. In the post-crisis period a lot of this information came out in the Dáil and, as you say, around Dublin. It was only then that I got to hear of these people as having said to Ministers and others that they were looking for arms. But at that time, up to April, I never heard arms being mentioned at all by anybody, which includes the Minister for Finance.

3892. Have you at any time up to the present become aware of any account prior to the Clones account, any account that might originally have been established perhaps with a view to provision of relief, perhaps with another view? Any account established for the use of persons in Northern Ireland in a town other than Clones and at the time of or prior to the time of the Clones account?

—No. You say “up to the present” and I have just referred the Deputy to the private session the other night when that information emerged.

3893. Yes, but I was asking you if you had any other knowledge apart from the knowledge the Committee possesses?

—No, none whatsoever.

3894. How long have you known Deputy Haughey?

—Since October, 1964. I met him for the first time when he became Minister for Agriculture. I had never met him before that.

3895. What was your rank at that time?

—Assistant Principal in the Department of Agriculture.

3896. Assistant Principals would have various tasks. Did you have tasks that brought you into fairly close contact with him right from then, from October, 1964?

—Well, it started off with my doing work for him—I was protocol officer of the Department at the time—to get myself involved in the Kennedy Memorial Library, which the Minister was dealing with. As protocol officer I was in the personnel division of the Department and he gave me assignments from time to time, but after eight or nine months I was working for him full time in the capacity of public relations and protocol officer, et cetera.

3897. Apart from your official connection with him, was there any social connection? Sometimes friendships arise and people see each other outside the office and the routine?

—No. To give you an indication of that, in the five years I was with the Minister I never had a meal in his house except once on the occasion of an official meal. It was a television occasion, people crossed from London, and we had a working lunch before we started with television. Other than that I never had a meal or any social relationship, but we had a good working relationship.

3898. We have been furnished, and you have heard a great deal about this, with these photostats of the—what are these called? The sheets from the banks?

—Bank statements.

3899. Yes. We have started, I think, to get some clarity as to the way in which these accounts were operated and it certainly differs from my original concepts. This has been widely publicised; it is in the pink book, No. 1 documents book, and the rest of it. On these three bank statements your name occurs. “Anne O’Brien,” it says, “introduced by A. J. Fagan” and “George Dixon, all inquiries to A. J. Fagan”. It says exactly the same thing “All inquiries to A. J. Fagan” on the White, Loughran and Murphy bank statements. You have said consistently that you knew that there was one account in Baggot Street, that you believed it was in the names of the same people as the Clones account, that you did not know of the other two accounts. Now, in addition to that documentary evidence we also have a photostat of the piece of paper with the Anne O’Brien signature cellotaped to it, and again there is the name “A. J. Fagan” on that, underneath the Anne O’Brien specimen. I cannot turn it up at the moment in this welter of papers, but it is there too. Have you any idea, other than the fact of your introduction of Captain Kelly to the bank, as to why your name should appear there so consistently when, in fact, it appears from your contention and from other sources that the dealings were directly between the last Minister for Finance, Deputy Haughey, and Captain Kelly? In the case of Anne O’Brien—I now have the papers—it says under the specimen signature, which is taped on, “Introduced by A. J. Kelly”. No doubt it has been a source of anguish for you and even for other people that this keeps cropping up, but is it pure accident or, in your view, is there any other explanation? Have you any reason to offer us why, in view of the fact that you had no knowledge of any of these things, according to your evidence, it should keep on being there? In other words, were you in fact being used as a cover?

—This is a possibility—in other words, that I was being misled—but I think Mr. Walsh of the bank, at the end of his evidence or near the end, made it quite clear, to me anyhow, listening to him, that this was an internal bank matter, a cross-reference as regards the introduction by me of Captain Kelly, that presumably Captain Kelly was involved in the opening of the two accounts you were talking about and it was an internal bank reference system. He made that quite clear. Now whether Captain Kelly or another person asked the bank to do this specifically I cannot say, but I got the message clear and loud from the bank that this was their own system and that they certainly did not get it from me, but whether it came from Captain Kelly or somebody else they were not too clear on that. So in the bank, if they do this as a cross-reference system for their own purposes, well, that is the only explanation I can give to you.

3900. Did you know that Captain Kelly and Mr. Walsh knew each other prior to the establishment of this account?

—No, I did not.

3901. Did you believe that when Captain Kelly met Mr. Walsh it was because you knew Mr. Walsh and you suggested that bank?

—Yes, after we talked about——

3902: After some discussion, yes. No, I asked that because it is possible I misunderstood him, but I apprehended Captain Kelly to say last night that he knew Mr. Walsh?

—I see.

3903. I may have been wrong about that.

—I was not aware of that.

3904. That was the reason for asking and it may have been a total misapprehension on my part. On April 18th, 1970, you said that—that was a Saturday and that at 3 p.m. you got a message from a customs officer?

—Yes.

3905. If there is any reason for doing it by writing it down, Mr. Fagan, I think I would certainly be happy and I feel the Committee would be quite happy if you wrote down his name if you felt that for any reason you did not want to give it, but I would like to know who that customs officer was.

—There is no problem because, as far as the Committee are concerned, it came out in court. His name is Mr. Tom Tobin, Chief Customs Supervisor for the Dublin area.

3906. He phoned you at 3 o’clock on a Saturday afternoon?

—Yes.

3907. Were you at home?

—I was.

3908. And it was fairly, not perhaps a very drastic action but a fairly drastic action to ring you at your home. It indicated something certainly out of the ordinary?

—I would not say it was a drastic action, People phone at my home day and night. Saturday, Sundays as a Public Relations Officer, no peace at home.

3909. What was his source of information?

—That I do not know. I am just intrigued at it and I felt that in the circumstances that, I did not go asking questions while the matter was under investigation, and I do not think, subject to correction, Deputy, I do not think it ever emerged in court what he was acting on.

3910. I do not think it did either.

—I am still in the dark. I never met the man physically until I saw him in court nor have I met him since, so I just do not know.

3911. Well, this is something we can pursue?

—Yes.

3912. And then on the following day, on the 19th, the Sunday, Captain Kelly phoned you from Vienna?

—Yes.

3913. Were you at home then?

—I was.

3914. And he could not have got an Irish telephone directory in Vienna, so he took your home phone number with him to Vienna. Would that be the proper inference?

—It would be. Well, I would not say he took it. He may have had it in his notebook.

3915. Yes. Had he been in the habit of ringing you at home?

—To my knowledge I do not think he ever phoned me at home before, but I think that in the general emergency situation from the previous October everybody exchanged private office lines and home numbers, Colonel Hefferon’s, Captain Kelly’s too, as also had the Minister.

3916. That was in the afternoon also, I think I wrote down, but it may be wrong.

—Yes, late in the afternoon. I cannot, it was in the 3-4 area or shortly after.

3917. And it came as a surprise to you that he was in Vienna?

—A complete surprise.

3918. And then he said to you: “He asked me to inquire from the Minister what his instructions were.”

—Yes, I think he started off by saying: “I have had a message. Would you ask himself—the boss man I think was the phrase we used—what my instructions are.”

3919. Yes. At this point, Mr. Fagan, he was firstly indicating that he was in Vienna, which you did not know?

—Yes.

3920. And secondly that he was doing something for the Minister in Vienna or something of which the Minister knew?

—Yes.

3921. And this was part of a process which they both knew but hitherto which had been concealed from you?

—Yes, but——

3922. Is that fair?

—Yes, in regard to, yes in regard to the Continent yes, or just in case, the fact that on the 19th March he had come in talking about a consignment on the high seas and that during the interim period that he had been in contact about Waterford Port and matters of that kind, Dublin Port, Alexandra Basin and so on.

3923. Yes, but was he then indicating to you, was he then making your party to more information about the situation than you had hitherto had or was he simply using you as a source of the passage of information?

—Oh, as a passage of information.

3924. Let me put it this way. Why did he not ring Mr. Haughey directly? He may have had your phone number. Presumably if he had yours he would have had Mr. Haughey’s?

—Yes.

3925. Why bring you into it on that Sunday afternoon?

—Well now that I cannot say, why he did, but I do recall in court that he was asked why did he not in fact ring Mr. Haughey, why did he not in fact ring the Minister for Defence, why did he not ring the Chief of Staff.

3926. There were a whole lot of alternatives. Why you in fact.

—Why me? Well he gave some reason that, first, I think he said the Minister for Defence was down the country, would normally be down the country. He did not know whether Mr. Haughey would be available on a Sunday afternoon and he just plucked my name out of the air. This is the explanation he gave.

3927. You know it is a problem. We have to decide, putting it bluntly, the extent to which you knew what was going on. In your contention you did not know at all. You were acting in complete bona fides as a senior civil servant acting on Ministerial instructions with absolute correctness. There is some evidence which we have to evaluate

—Naturally.

3928. Which suggests it may have been otherwise. So I am intrigued by the fact that he should have plucked your name out of the air on that Sunday afternoon when he was a long way from Ireland and things were in a bit of a crisis for him, and I am asking you again have you any idea yourself, apart from what he said in court, as to why, with a variety of opportunities open to him, including his own superior and the whole mechanism of Army Intelligence open to him, he should have telephoned you?

—In fact, it took me completely by surprise to have this phone call from Vienna, just out of the blue as it were.

3929. He gave you his number in Vienna?

—Yes.

3930. Do you have that number?

—No. I wrote it down on my telephone pad at home but that would have long gone the way of all waste paper.

3931. Presumably he was in his hotel at the time since it would be much easier to telephone from there rather than from a public phone box?

—Yes. Getting back to where Deputy FitzGerald was yesterday I would suggest that possibly the international exchange in Dublin may have a record for that particular day indicating the time, my number, and where the call came from. I am not saying they have but I offer it as a suggestion.

3932. In relation to the 26th you have referred to someone—“He was the man appointed by the Revenue Commissioners to deal with me in this matter”—this is the man you have referred to already?

—Yes, the same person.

3933. Can I take it that there was some involvement of one or more Revenue Commissioners and discussion of the matter by them?

—Not meaning Revenue Commissioners. There are three, a chairman and two commissioners; there was only one commissioner who spoke to me and that was the man in charge of customs then. What we are talking about now are subordinate officers or officials of the Revenue Commissioners as distinct from Commissioners.

3934. It was one of the three Commissioners who had been in discussion (a) about the propriety of the Minister’s instructions at all as to whether the Minister could do this——

—Not the propriety but the legality.

3935. Yes and then there was the actual designation of a customs officer to deal with you?

—Yes.

3936. I have written down this quotation but quite honestly I do not know what it refers to?

—Yes, that is so but I think this Commissioner himself, if I remember correctly, was going on holidays or leave and said: “In my absence deal with …” the man I have mentioned already.

3937. Did you take it that all of Captain Kelly’s requests for money were made with the knowledge of Colonel Hefferon?

—No, I would not think so. Again, going back to the court case, I think that it was Colonel Hefferon who indicated to Captain Kelly that there was money available. These are Captain Kelly’s own words but when pressed on this he said he may have got that information from Mr. Haughey or Mr. Blaney. But in regard to specific requisitions for money from Captain Kelly, they came direct to me from Captain Kelly and I would not know what he had told Colonel Hefferon. But I would assume from the way they came that Colonel Hefferon would not be aware of them. I may well be wrong on this. Perhaps it is something that Colonel Hefferon could be asked. I just say that in Captain Kelly’s main telephonic contacts he would telephone from GHQ from a common direct line shared by himself and Colonel Hefferon. If he wanted a message back on this I would get him on the line and very often Colonel Hefferon would answer so in what sense as a senior Army officer and subordinate that Colonel Hefferon knew, I just would not know.

3938. It was his contention that at all times he was acting in his normal position in the chain of authority that started with the Minister for Defence and came through the Chief of Staff to Colonel Hefferon and to himself and that at all stages he was acting with total propriety and rectitude in that capacity. There were other capacities in which he might have acted with propriety and rectitude but he did not claim that. He said he was acting as Coloney Hefferon’s subordinate with his knowledge. The question was did you understand him to be so acting and you said “No”, that you understood he was acting in some other way; that you did not treat these requests as if they emanated from Colonel Hefferon?

—No, but I would treat Captain Kelly as an Army intelligence officer whose official duties were not necessarily through the straight chain of command.

3939. Do I understand it correctly that coming towards the end of the financial year when there was discussion between yourself and the Minister as to the question of drawing out what was left so that it would not have to be surrendered——

—Yes, about £12,000.

3940. I am going over your evidence but I want to be clear in my mind. Was it clearly your understanding that the Minister did not propose coming to the Oireachtas again for any further moneys and that the £100,000 was the end of it?

—Yes.

3941. And that he knew by then that the expenditure of the moneys, wherever they were going, were substantially over?

—He did say in relation to the balance of £5,000: “Keep it with the Red Cross in case something else arises but I do not want to repeat this operation next year”.

3942. Would you regard the financing of the Voice of the North as coming within the intention of this Grant-in-Aid?

—I would not regard it as coming within the intention of it.

3943. Do you accept—this may not be totally true to the last pound—that substantially the George Dixon account was for arms and that the Anne O’Brien account was for the Voice of the North?

—As we see it now. From the knowledge we have got from the previous witness it would appear so.

3944. This is my own feeling without being certain down to the last pound. It answers the question as to why there were two subsidiaries rather than one, one subsidiarly with a larger expenditure for arms and the smaller expenditure, £6,500, for the Voice of the North. When did you become aware that moneys from this Grant-in-Aid were being used to subsidise the Voice of the North?

—If we start with the specific fact of a cheque payable to Seamus Brady for an account, then, that indicated or seemed to indicate that Seamus Brady was getting £1,000. Why I tied that in with the Voice of the North was, as I reiterated here last week, because Seamus Brady had written to the Director of the Government Information Bureau, some time in the autumn or early winter of 1969, I think, with a claim—it was an account so far as I recall—setting out the expenditure involved in getting this publication underway. Perhaps “underway” is the wrong term. It was in connection with the publication and I first got it from the Minister for Finance who said “Ask somebody in the Department of the Taoiseach can this be paid from the Vote for the Department of the Taoiseach?” And he gave me the document. When I saw that the document was addressed to Mr. Neeson, the Director of the Government Information Bureau, I took it to him to ask him what it was about and he told me that when he got it he gave it to the Taoiseach. So presumably the Minister for Finance got it from the Taoiseach. I discussed it then with an officer of the Department of the Taoiseach who told me some days later, quite categorically, that the Taoiseach said this was not to be paid from his Department’s Vote, public funds. I took it back to the Minister and he said that he would talk to the Taoiseach himself about it.

It was kicking around his table for quite a while and one day I came across it and I said something like: “What is being done about this?” and he said: “Oh, that is being looked after” or something to that effect. So I think it was after a visit of Seamus Brady to Mr. Haughey sometime later, and I cannot give dates for this because it goes over a period, he said: “Ask Kelly how Brady’s affairs stand?” or something to that effect, and I got in touch with Captain Kelly who said: “Tell the Minister he is OK” or something to that effect. So, maybe wrongly, I associated those things and then when the Seamus Brady cheque for £1,000, they had a problem in the bank on this, that I tied the two things.

3945. Yes. I wanted to talk again about your discussions with Mr. Gibbons which took place——

—What?

3946. Your discussions with Mr. Gibbons. It was on the Monday morning after the Sunday when you got the phone call from Vienna?

—I had no discussion at all with Mr. Gibbons, Deputy, at any stage.

3947. I see?

—I think possibly what you are trying to recollect is that on the Monday morning when I acquainted the Minister of Captain Kelly’s phone call from Vienna what the Minister said was that he, the Minister, had discussed it with Mr. Gibbons, but not with me. I was not involved, did not even know Mr. Gibbons was there.

3948. I see, but you called back following your discussion with Mr. Haughey, you called back the Vienna number that had been given to you by Captain Kelly?

—Yes.

3949. In the morning?

—In the morning, yes, about elevenish, I would say, because Captain Kelly had said on the Sunday afternoon that he had to leave Vienna by noon. This is what copperfastens this in my mind.

3950. Did you call back to Vienna after —you might not be in a position to know this—after the discussion between Mr. Gibbons and Mr. Haughey?

—All I can say is that Mr. Haughey said: “I have discussed this with Mr. Gibbons”. Now——

3951. I have discussed it with Mr. Gibbons?

—“I have”. Past tense. “I have discussed it with Mr. Gibbons and arising from it this is called off. Tell Kelly so.”

3952. Yes. Which must have been before noon?

—Which must have been before noon but as you probably read from the court proceedings there was great to-ing and fro-ing on whether Mr. Gibbons had seen Mr. Haughey on the previous Friday or on the Monday or the Monday afternoon. All I can testify is that this is what the Minister said. At what stage or state he had been talking to Mr. Gibbons I do not know but there was a lot of cross talking in court on that particular point but I am adament about my—all I know—but I did not speak to Mr. Gibbons at all.

3953. I think there is no point in going over the Walsh and Deacon statements with you?

—No.

3954. I think this has been dealt with fairly fully?

—Pretty well flogged.

3955. We have in fact two versions and I doubt that we could illuminate them any more. On the 21st January, Mr. Fagan, again it is volume 5 of our transactions, at page 201, in the second column, you were talking about this question of Mr. Murray’s probe and you say and I am quoting:

I certainly did not and could not have told him of any suspicions of mine of how these arms could have been financed because that thought did not strike me in any way——

We have already talked about that aspect of it. Then you say:

——because that would seem to me to possibly involve the knowledge or the agreement of the Minister for Finance and that would be the last thing I would have thought of or accepted or suspected.

Can we just for the record pinpoint the date? Am I right in thinking that it was around the 14th May that this first rapid probe, it was in fact a second probe but it was a rapid one made by Mr. Murray at the Taoiseach’s request on a day when you were, in fact, in Dublin Castle talking to the Special Branch. Is that correct?

—Well, first of all, I do not think at that particular stage and what I was at there involved a probe of any kind. The Taoiseach’s discussions with me took place on April 28th. It was late in the evening. I am sure that it must have been April 29th, possibly April 30th, that I put Mr. Murray in the picture of what was happening in so far as I knew it.

3956. Can I take it that in the sentence that I quoted you were referring to your state of mind as of April 28th?

—Yes.

3957. I will tell you why Mr. Fagan. Because we have already in today’s evidence and in other evidence, you have talked about holding up your hand to Captain Kelly and not wanting to be told. You have talked about consignments of iron plate. You have talked about various things like that and then you say of your state of mind on April 28th:

that would seem to me to possibly involve the knowledge or the agreement of the Minister for Finance——

and that that was something, on April 28th, inconceivable to you. I am paraphrasing?

—I am sorry the noise outside——

3958. You did not say inconceivable but that even the knowledge of the Minister for Finance would have been the last thing you would have thought of or accepted or suspected on April 28th.

—Would you rephrase that? Sorry, the noise outside.

3959. It was not really a question. I was asking for a comment. You see here was April 28th and at that time the Minister for Finance had not been dismissed but events were already in train; you had had conversations with Captain Kelly when he was in Vienna; there were the smiles and the raised hands and the mention of iron plate, stuff like that, and yet after all those things, even the knowledge of the Minister for Finance would have been the last thing you would have thought of or accepted or suspected. That seems to me, I am bound to say, a little strange, Mr. Fagan?

—Well, this followed my discussion with the Taoiseach which was on the 28th.

3960. No, but even if you had gone into the Taoiseach’s room before the discussions is that—I know that he must have told you things that put the whole world in a different light and the suggestion here is that it was a thunderclap for you?

—Yes.

3961. And that you had no previous even hint or thought or dream of it?

—Of an irregularity.

3962. Yes. Well I just wanted to be clear that that was——

—Is it the word “knowledge” or the whole thing?

3963. What surprises me is that even before your discussion with the Taoiseach on April 28th with the many little clues, far short I admit, from the evidence we have, far short of total certainty but still there were lots of little clues which for a senior person like yourself with all the knowledge you possess, with all the calls, public and private, that had been made by all the organisations for arms, with all the knowledge that you had of your Minister, that this suspicion should not have crossed your mind does seem to me very odd, I am bound to say?

—I cannot accept that. It may be——

3964. Hindsight is hindsight. I appreciate how different it looks from this?

—I believe—and Caesar’s wife and that kind of thing.

3965. Are you comparing Mr. Haughey to Caesar’s wife?

—Please, Deputy. I am just trying to indicate an attitude of mind.

3966. That was not fair. Well, I think, you see, that we are now in the complex situation, in fact, at the end of our investigations of having to evaluate and, therefore, I think one is permitted to talk a little about states of mind?

—Yes.

3967. I just wanted to be clear and I am now finished, in fact. I wanted to be clear on your contention that until your discussion with the Taoiseach on April 28th, not just that you had no suspicions of the Minister but that the thought that there could be suspicions was not to be accepted or sustained at all and I wanted to be clear that that——?

—Absolutely. Deputy you may accept that assurance.

3968. Thank you Chairman. Thank you Mr. Fagan.

—Thank you Deputy. With reference to Deputy Keating’s earlier remark about my evidence in court I would certainly like to come back on that either in private or in public at the soonest opportunity, please.

3969. Chairman.—If you wish to come back to it now.

3970. Deputy H. Gibbons.—May I put something to Mr. Fagan arising out of that as one who in the past had to attend court very frequently.

3971. Chairman.—Deputy, we will go around again?

—I feel there is a very simple, easy explanation which in the way it was put to me, Deputy, did knock me off my stride a bit.

3972. Deputy Keating.—In the circumstances if it is agreeable to Mr. Fagan it is certainly agreeable to me to go on about this and if there is a satisfactory way out of it I am perfectly happy, but if you have any reasons for preferring a private session I would be perfectly happy to have it there?

—In regard to court matters and things like that I am prepared to say it in open session but it maybe desirable to hear what I have to say privately and then resume in public session. The whole thing as far as I recollect was due to a misunderstanding on my part.

3973. Deputy Keating.—I am talking about procedure now, Mr. Fagan, because this is a slightly sensitive area. Chairman, would it be acceptable to do it this way that we now proceed in private session not knowing whether our results are for publication or not and that if they are capable of being published we should immediately do so because, in fact, my suggestion that I was not satisfied with Mr. Fagan’s answer and that his statement was not true is public. If he satisfies me, it is fair to him that my acceptance of his explanation should be public also and should be public preferably on the same day. I would therefore suggest that we might adopt the procedure that we clear the room now and listen for a few minutes to Mr. Fagan and then decide what we do.

3974. Deputy Briscoe.—Before that may I ask a question of Mr. Fagan? Are you recommending that we go into private session?

—No, I am not recommending anything. I am just putting it to the Committee.

3975. Deputy Briscoe.—I understand from Mr. Fagan that whether we discuss it in private or in public it is of no difference to him but the impression was gained when he said private or public that he felt it was more advisable for the Committee to consider whether or not it should be public but that he can see no objection to discussing it in public.

3976. Deputy Nolan.—I think Deputy Keating’s suggestion should be accepted and that we should now go into private session and after dealing with the matter in private session we will then decide whether or not to make it public.

3977. Deputy Keating.—I think this would be quite agreeable if I understand you rightly, Mr. Fagan. You want to explain something about this which will take of the order of five minutes?

—Or less. Why I would prefer to do it, Deputy, is naturally you appreciate that I have had no time to go think about this and I want to say straight off, truthfully, on oath, what in my view happened.

3978. Deputy Keating.—I appreciate your wish to do that, Mr. Fagan.

3979. Chairman.—Very good. We will adjourn into private session.

The following evidence was taken in private. The witness concurring, the Committee decided to publish this evidence.

3980. Chairman.—Yes, Mr. Fagan?

—I am sorry, Chairman, about this upset. As Deputy Keating and everybody else would be aware in this particular circumstance of appearing in the Central Criminal Court for the first time ever on oath, I was the first witness with all the tension that that would have on a person, that this judge’s summation came at the end of my evidence or the end of my re-examination by Mr. Walsh for the State. Now, Judge or Justice Andreas Ó Cuiv was in the Judge’s bench and as I was getting down out of the box these supplementaries came along. He put these questions to me almost in an aside. I was myself pretty horror stricken, I must say, Deputy, next day to read this. I said, “Gosh, I made a terrible bloomer in this way”. I thought the man the judge was talking about was Clones and it came out. Of course, I should not have mentioned two Northern Ireland MPs and another gentleman. No direction had been given at all at that stage about putting people at risk, and I just being slipshod, perhaps a bit tired after being in the box all day, I thought what the man said was, “Clones”, or felt it was Clones we were talking about and not Baggot Street. That is why I want to offer you this straight away, because I remember next day being terribly shocked. If it were going to be important or anything else there could possibly have been a way of correcting it. That is precisely, honestly and factually what happened, Deputy Keating.

3981. Deputy Keating.—In the light of what Mr. Fagan has said I think that my seizing on it and the words I used were justified, let us put it that way. If you felt some shock the next day then I was not entirely off the beam in indicating that this was an answer——

—I fact I am almost certain, Deputy, that I did write out what I felt did happen because this did not appear in the papers, except down to two Northern Ireland MP’s. In my own recollection of it I had Clones and I am sure I can produce that document if you wish to show that Clones was in my mind. Sometimes when something is in your mind people come to you, and you realise this as Dáil Deputies, that you do get the wrong end through tiredness or exhaustion, but please let me assure the Chair and every Deputy here that I did not deliberately cover up on this, that I had information on the 26th June applicable to Baggot Street and that I deliberately withheld that from the court. I would be glad to know personally and privately if Deputy Keating does accept that explanation and my apologies for this.

3982. I understand exactly how this could have happened in the terms Mr. Fagan says. I do not really feel as he explained it that it is a matter for his apology. The point that was important to me was that it was an answer that in fact probably had some bearing on the ultimate outcome and the ultimate decision and did lead in my mind at the time, and I think in plenty of other people’s minds, to some confusion. I am very glad to have this explanation of it.

—Thank you, Deputy.

3983. Deputy Keating.—I think it should be published straight away.

3984. Chairman.—I do not know what we are in private session about this for.

—I am sorry about this, Mr. Chairman, it was just in case——

3985. Chairman.—Of legal stuff.

—Yes. That is my fault. I am sorry about it.

3986. Deputy H. Gibbons.—It may be little stuff now but at the time this discussion was going on it was not. I think in fairness to Mr. Fagan his attention must be drawn to his statement on page 3 in the court, and on page 2. The question was, “Subsequently were there not subsidiary accounts opened in the Munster and Leinster Bank in Baggot Street to that main account?” Mr. Fagan said, “My lord, I am in difficulty here in answering that. At the time I wasn’t so aware. Subsequent to this matter arising I became aware of it.” The judge says immediately, “You have become aware now …?” Now, in the past I found it an unpleasant duty to have to attend courts very frequently. When I read this document first this struck me as a curt disconcerting reply by the judge which fortunately we do not hear from many judges. This was my immediate reaction to it on reading it. To get back to Deputy Keating’s statement that it was important to find out or establish attitudes of mind in relation to this. Mr. Fagan then said, “I have become aware since …” Mr. Darcy said, “But there were other accounts opened …” Mr. Fagan said, “Since April.” Mr. Darcy, “You have only become aware of that since April?” Mr. Fagan said, “Yes.” This is the attitude of mind I take it that the witness was facing the other problem and enlarging on anything he might have to say to the judge but apart from that taking this statement in its context on page 9 as put by Deputy Keating to Mr. Fagan I would like to go on record that I take this whole statement as a reference to the transfer of the account at the time it was transferred. Mr. Fagan mentioned this but he did not expand it. The judge asked, “Under what title was this account opened?” Mr. Fagan said, “It was known as, to the best of my recollection, the Belfast Fund for the Relief of Distress”. The judge asked, “Who had drawing authority on this?” Now I take it that the judge’s question at that point was: who had the drawing authority on this account at this point of time? Mr. Fagan stated what he has stated all the time, “Two Northern Ireland MP’s and another gentleman”. It was put to Mr. Fagan that he should have expanded that. My interpretation is that in this attitude of mind, following what I have quoted on page 3, that he had not a very pleasant invitation from the judge to expand on anything.

—No, in fact I was getting down from the box when he brought this back. This is provable, Deputy.

3987. Deputy MacSharry.—I would accept that listening to the line of questioning this morning and the way it was deduced from the court, but on page 3 when Mr. D’Arcy was examining you in relation to knowledge of subsidiary accounts——

3988. Deputy FitzGerald.—Should we continue in private session? Is there a reason for not publishing it now?

3989. Deputy MacSharry.—This has been published, I understand.

3990. Deputy Briscoe.—In other words there is no need to go into private session for it.

3991. Deputy MacSharry.—It is the same kind of question and the same kind of clarification.

3992. Deputy FitzGerald.—We should not be in private session anyway.

—I am sorry.

3993. Deputy FitzGerald.—I can understand Mr. Fagan thinking it is better to do so, but as we should not be in private session anyway should we not continue in public session and clarify this point?

3994. Deputy Nolan.—We should go into public session, get this point clarified and then adjourn.

3995. Deputy FitzGerald.—And take his consequent point afterwards and then adjourn.

3996. Deputy Nolan.—I think, Mr. Chairman, what we should do now is let Mr. Fagan explain the position in public session and then adjourn for lunch and take it up again.

3997. Chairman.—Will you recap what you have stated here in as short a version as you can?

—My only problem there is the judge and references to him.

3998. Deputy FitzGerald.—Do not worry too much about that.

3999. Deputy E. Collins.—You should not worry too much about the judge.

4000. Deputy Keating.—Is there any procedure of simply making this available? Of course, they were not here to write it down and there would be a bit of delay in the journalists getting it.

The Committee deliberated.

Public admitted.

4001. Chairman.—The evidence we have just taken in private will be printed and will be available as soon as it is printed. We wish now to recapitulate in public what took place in private.

4002. Mr. Fagan.—I would like to refer to Deputy Keating’s reference earlier to my court evidence and explain that what I took the judge in the first Arms Trial to refer to when he was re-examining me after my cross-examination was the Clones account and my answer to his lordship was intended to indicate the position in regard to this account. If I may just read part of the court transcript of my cross-examination which took place earlier, it will I think indicate pretty clearly that that was what was in my mind. Mr. D’Arcy for Captain Kelly in cross-examining me said:

Subsequently were there not subsidiary accounts opened in the Munster and Leinster Bank in Baggot Street to that main account?

I replied:

My Lord, I am in difficulty here in answering that. At the time I was not so aware. Subsequent to this matter arising I became aware of it.

The judge said:

You have become aware now? and I replied:

I have become aware since.

The judge, later on in his re-examination of me, as I was leaving the witness box— I had actually stood up to leave the box I think—said:

Just a moment, Mr. Fagan, I am not quite clear about these accounts.

and then started this. I understood that what he was talking about, or read into what he was talking about, was the Clones position, and my answer to the judge was in reference to that and not Baggot Street and the subsequent thing, which I had already said I had difficulty about earlier in my cross-examination, to the judge, because these things had only come to my knowledge subsequently.

4003. Chairman.—Deputy Keating, are you continuing?

4004. Deputy Keating.—I do not want to continue, Chairman. I have finished everything I wanted to ask Mr. Fagan. I would just say that the explanation that he has given in the light of the events of the trial is to me a comprehensible one. Thank you.

The Committee adjourned at 1.20 p.m. and resumed at 4.15 p.m.

Examination of Anthony James Fagan continued.

4005. Deputy MacSharry.—Just to clear up one other matter in my mind about the evidence that was given before us in court—it is on page 3 of the first trial. You were asked by Mr. D’Arcy about any knowledge you might have about subsidiary accounts and you were positive that you had not any knowledge. I understand from previous evidence that this is the conversation that your secretary in the office, Miss Morrissey, had with somebody from the bank; that at that time you did not have any knowledge of its contents in relation to subsidiary accounts?

—Yes, that is so, and of course it was only an inference at the end of April from the reference to the £1,000 cheque.

4006. So the April business came into it as a result of the conversation you had with Mr. Deacon down at the bank?

—Yes, with Mr. Gleeson and Mr. Deacon.

4007. Deputy Treacy.—You heard the evidence of Mr. Murray to the effect that the Taoiseach asked him in early April to carry out an investigation. He was asked to carry out such an investigation as regards the expenditure of public moneys for the importation of arms. Did Mr. Murray consult with you at any time during these investigations?

—Well, after the Taoiseach’s discussions with me on 28th April I put Mr. Murray into the picture generally during that week. I think possibly it was the next day, certainly within a day or two. It was on the same basis as the Taoiseach’s discussion with me. It dealt basically with the events that subsequently led up to the arms trial. I told Mr. Murray about how I first met Captain Kelly but I did not discuss with Mr. Murray at all, nor did he with me, the possibility of arms being bought from public funds. It just did not arise. As I said yesterday, this information was only coming out piece by piece and it was not until we saw the bank accounts on 26th June that this possibility or suspicion or whatever was there, when we saw the Dixon account and when we saw this fairly massive transfer of funds from what is being called the Belfast Distress Fund to the Dixon account. Then suspicions arose as to whether this money could have been used for the purpose of arms. But that was not made fully clear until Captain Kelly said so in the Central Criminal Court on 14th October.

4008. You will agree that you were the officer charged by the then Minister for Finance to set up the accounts at Clones and Baggot Street. Did you not consider it rather startling that a senior officer of yours could have made two endeavours to track down these funds and failed to do so? And that he could, in fact, have informed the Taoiseach in most dogmatic terms that he was satisfied—that is Mr. Murray—that public funds had not been spent for purposes other than those directed by the Dáil?

—No.

4009. I take it, sir, you were not involved in the investigations Mr. Murray carried out at that time?

—No, other than what I have said, that I put the Secretary in the picture with the information I had at the time. And with reference to what you said at the beginning of your question, about me being the officer who set up these accounts at Clones and subsequently at Baggot Street, of course this is not so. I did not set up any accounts anywhere. The Clones account was in existence and I was just asked by the Minister to arrange with the Red Cross to get the Red cross to put £5,000 into it, and when they felt they could not do that the Minister instructed me to put £5,000 through the Red Cross into the account; but the account was certainly in existence. In regard to Baggot Street, I think I have made it clear on a number of occasions that the only function I performed in this was to perform an introductory service at the request of Captain Kelly who, I undrstood at the time, was acting for Mr. F, Mr. G and Mr. H, to have the account transferred to Dublin.

4010. “Set up” may not have been the proper words to use, but you did have overall responsibility for the operation of the fund?

—Of the Northern Ireland Aid Fund. After that, no.

4011. Certainly references were to be made to you directly, as such. Could I ask you, Mr. Fagan, for some further information with regard to the operation of the fund in Northern Ireland? Can you throw any light on the matter of how certain personalities or organisations, perhaps, were chosen for the provision of this aid? Was there any sectarian or political significance in the choice of the personalities involved, whom we now know very largely by code names?

—No. As Deputy Fitzgerald went through with me last night, each payment to A, B, C, right down to the end, I explained how each of them came into the picture. If the Deputy so wishes I will go through it again. It is on the record.

4012. No, I was just curious myself as to why certain quite well-known personalities, influential personalities in that part of the world, were not part of the picture at all. I would like to be satisfied that in respect of the expenditure of such a very large amount of money for the relief of distress in Northern Ireland it should be clear at least that there was no differentiation between classes of relief. It was for the relief of Irish men and women irrespective of religion, class or creed?

—In regard to that, I would be fully certain that any class, any creed, any religion or any person who made application would not be turned down on a sectarian or political or other basis.

4013. Deputy Tunney.—Just one question, Mr. Fagan. This probably would not have arisen except for other evidence that has come before us. I was looking at page 2 of your evidence on Wednesday, 7th October, 1970.

—Yes, 7th October.

4014. Page 2. I know it is unwise to take anything in isolation, but we see at the middle of the page a question put to you:

These two bank accounts were funded from the Government Grant?

A. Yes. but not entirely. Other sums went into these accounts.

—Yes.

4015. Where we know that the Clones account and the Baggot Street account did not operate simultaneously, the reference there to “accounts” might be misleading, and in circumstances where it could, someone might make the point that Mr. Fagan said that some other sums went into these accounts. Would you please explain what, exactly, you had in mind when you talked about these sums in question and the accounts in question?

—Yes. I think it follows from earlier on the page. Mr. Darcy asked me about the Government allocation of money for relief, for aid, in Northern Ireland. I replied in the affirmative to that. Then he asked me:

…you also told him about bank accounts which were opened first in Clones and subsequently in the Munster and Leinster Bank in Baggot Street.

So the reference that you refer to, these two banks, obviously follows—(1) Clones, (2) Baggot Street. My answer to the question:

. . . .were funded from this Government grant?”

A. Yes, but not entirely

meant that I was aware that in the Clones account the sum of £5,000 had been paid directly from the funds of the Irish Red Cross. With regard to the Baggot Street account a sum of 12,000 dollars which had been presented by the Irish Institute in New York had gone into that account. That was the reference to accounts, plural, and sums, plural.

4016. Deputy Tunney.—They were the only sums you had in mind?

—Absolutely.

4017. Deputy Tunney.—Thank you.

4018. Deputy E. Collins.—Did you at any time have a discussion with Mr. Haughey, your Minister, about the importation of arms?

—Not as such. No—I mentioned the customs matter this morning several times but the word “arms” in connection with the importation or any other thing was never mentioned by the Minister for Finance to me in any way at anytime. I am quite emphatic on that. He never mentioned arms in any connection to me.

4019. Deputy FitzGerald.—There is just one point I raised yesterday. You may not have been in a position to do something about it?

—I am not. I am sorry. I have it in train. I sent a note to my superior and I could not see him personally. I sent him a note on that point. I will be happy to come back on it.

4020. It is not urgent.

—Thank you.

4021. Chairman.—Thank you very much.

Mr. Fagan withdrew.

Miss Mary Morrissey duly sworn and examined.

4022. Chairman.—Miss Morrissey, you are in the Civil Service?

—Yes, Chairman.

4023. What is your exact position?

—I am an executive officer in the Department of Finance.

4024. At present you are in Mr. Fagan’s office?

—No. I am not in Mr. Fagan’s office now. I am in the Information Section attached to the Minister’s office.

4025. During the time when these matters which we are discussing took place you were in Mr. Fagan’s office?

—Yes. I was in Mr. Fagan’s office.

4026. In a confidential capacity?

—Yes.

4027. All his correspondence was open to you?

—Yes, that is right.

4028. Letters coming in, going out, and files?

—Yes, that is right.

4029. You never saw any bank books or returned cheques or mandates or these things?

—Nothing of that nature.

4030. You had occasion to have at least one call from the bank?

—It initiated with a message to me from Mr. Fagan, not from the bank.

4031. Tell us about it.

—Mr. Fagan was leaving the office at one stage. I do not remember where he was going. I cannot remember. He had a call from the bank about the Northern Ireland account. He asked me, following the call, to get in touch with the Red Cross to say—to ask them if they could speed up the lodgement of a payment we had made a few days earlier. We had made the payment to the Red Cross and he asked me to get them to speed it up in the bank. Mr. Fagan went and I rang the Red Cross. They checked and rang me back and told me the payment had, in fact, been made to the bank, I think it was a few days previously. I rang the bank. I cannot remember the name of the official I spoke to. I explained that the Red Cross had made the actual lodgement. Then he said that somebody was under some misapprehension, that they were not worried about the fact that the Red Cross had not lodged a cheque but that a transfer had not been made in the bank between two accounts. At that stage I had no knowledge of any other account except the one into which we used to lodge money—at least we used to ask the Red Cross to lodge money. I told him I would make some inquiries and come back to him on it. Mr. Fagan was out of the office for a few days at that stage. I was not able to reach him. I tried to contact Captain Kelly by telephone. I rang his home a few times and the office—his direct line—and was not able to reach him. I left a message for him to call me back. He did not call me back. Maybe two or three days later I rang the bank once more to explain the delay, to say I had not been able to get in touch with the person concerned. The official I spoke to said it did not matter any more, that everything had been fixed up, that Mr. Blank—I cannot remember the name—had been in and that everything was OK.

4032. Was that the only time you were in communication with the bank by phone?

—I would not say that certainly, Chairman. I cannot remember any other specific occasion but I think I probably have spoken to them on more than one occasion. I have a vague recollection of speaking to Mr. Gleeson at some stage—on what particular point I do not remember. Maybe Mr. Gleeson called and Mr. Fagan was not there and I told him I would get him to call Mr. Gleeson back, or something like that.

4033. With regard to the particular phone call we are discussing, have you any idea of the date or the approximate date?

—From my own recollection I would say early last year. I really cannot from my own recollection be any more specific than that.

4034. You cannot tie it up to Mr. Fagan’s absence from sickness?

—This I could do—Mr. Fagan was out of the office for a few days at that time. Around the middle of February Mr. Haughey was in hospital, and Mr. Fagan was also out for a few days. It could relate to that period.

4035. Did you take a telephone call from Vienna?

—I put through a call to Vienna.

4036. What time was that?

—I think it was in the morning. I honestly could not swear to it. I think it was in the morning. I remember Mr. Fagan asking me to put the call through. I put the call through and left the room when Mr. Fagan took the call.

4037. It was to Captain Kelly?

—It was to Captain Kelly. Mr. Fagan gave me a number and asked me to ask for Captain Kelly at that number. I had Captain Kelly on the line before I called Mr. Fagan.

4038. That is all you know about it?

—Yes, I am afraid so.

4039. The number would not be recorded in the office at that time?

—I do not honestly think so. I can check that. I have a book with phone numbers, but I do not think I would have put it in because it was just an occasion of one call. I can check that.

4040. Would it be a hotel, do you know?

—I do not know. My impression at the time was it was an office of some sort but I do not know why I should have got such an impression. If it was a hotel I would perhaps have had a room number or something. I did not. I just asked for Captain Kelly, as soon as I got the particular number.

4041. Deputy Treacy.—I will not detain you very long. You tell us here all these files and letters including the one on the Northern Ireland Relief Fund were kept very largely in your custody. With the exception perhaps of Mr. Fagan no one else had access to these files?

—Yes.

4042. You are quite satisfied in retrospect that no one did in fact have access to them?

—Yes. I am quite satisfied.

4043. You mentioned in your statement that towards the end of 1969 you put through a call to the Munster and Leinster Bank, Baggot Street, for Mr. Fagan, and you had a conversation with an official there. Can you recollect who that official was?

—I did not have any conversation. Mr. Fagan had the conversation.

4044. You put through a call for Mr. Fagan?

—Yes.

4045. But you did not know who the official was?

—I cannot remember, no.

4046. No name was mentioned? You were not specifically asked to get a particular official?

—Yes, I expect I was, but I cannot remember the particular name now.

4047. You say that you never met the various fictitious characters—George Dixon, O’Brien, White, Loughran and Murphy?

—No, I never did.

4048. Would you please tell us how many of the personalities involved in this whole matter, especially those persons who are identified here by letters, visited your office from time to time?

—I do not have a list of the names.

4049. Deputy Treacy.—Would the Chairman allow Miss Morrissey to see the code?

Code handed to the witness.

Miss Morrisey.—To my knowledge I have not met any of the people on that list. I do recall an occasion when Captain Kelly called at the office when he was accompanied by another gentleman, but I honestly cannot identify that other gentleman.

4050. Deputy Treacy.—I see. We have been told that the then Minister for Finance, Deputy Haughey, was not always satisfied about demands being made to him by Mr. Fagan or Captain Kelly for funds from time to time. Were you personally present when the Minister declined to give money on any given occasion?

—No. In fact, I was never present when Captain Kelly discussed these things with Mr. Fagan. Mr. Fagan usually saw Captain Kelly in the waiting room next to the office, so I would never know when Captain Kelly made a specific request. I was certainly never present when the Minister had discussions with Mr. Fagan, Captain Kelly or anybody.

4051. You say that you never heard these various names I have adverted to, but Dixon seemed to be a rather familiar one. You said it kept cropping up from time to time and you had heard reference made to a Dixon account.

—I did not say it was cropping up from time to time. When Mr. Fagan mentioned these names to me I had no recollection of any of them except Dixon. This struck a bell. I have tried since to remember where I heard it, but I cannot remember, I cannot associate it with anything; but I have the impression that I heard the two words “Dixon account” together and the only conclusion I can draw is that it may have been in conversation with the official of the bank.

4052. Deputy Tunney.—I am interested in the question of the £12,000 and that particular phone call. You said, “When I called the bank to say I had been unable to contact the person concerned”. Who was the person you had in mind.

—Captain Kelly.

4053. So far as you are concerned, Captain Kelly was the man who was looking after this account in the bank?

—He was the only person of whom I was aware and had any contact with at the time, and in Mr. Fagan’s absence he was the only person I could think of contacting.

4054. I am interested in what you said subsequently in so far as yesterday I was inclined to theorise on this point. You said that whoever else it was at the bank said that a Mr. Blank had been in, and you are sure that it was not Captain Kelly?

—Yes, that is so.

4055. Again, as a matter of interest, if you can be sure it was not Captain Kelly, how can you be sure it was somebody slse? My theory is that it possibly was somebody else, but I am wondering if you can think who the somebody else was?

—Why I am sure it was not Captain Kelly is because at the time it struck me; as I say, the only person I knew who had any contact with the Baggot Street account was Captain Kelly and when the bank official mentioned another name it struck me as unusual because I was not aware of any other name.

4056. I do appreciate that in the capacity in which you serve you would meet hundreds of names every day, but because of the point you make, that here was a situation where until now you had been assuming that Captain Kelly was the man, the only man, connected with these accounts and now the bank names to you a new man, I imagine that if I were in your shoes that name would register and possibly stay with me, and that perhaps in a day or two’s time I might mention casually to my associates in the office that I did not know that a Mr. So-and-So had any connection with that bank account.

—Yes. Well, the only person I might have mentioned it to, casually or otherwise, was Mr. Fagan because this work was confidential and I never discussed it at any stage with anybody else. At the time Mr. Fagan was out of the office and I do not remember if, when he came back, I discussed it. I may have done so but as there were other problems by that time I may not have. I am sorry, I have tried but I honestly cannot remember.

4057. Deputy Tunney.—I understand the difficulty. At the time you had nobody else in the office with you, Mr. Fagan was absent, and then more urgent business cropped up, and you would not mention it.

4058. Deputy Barrett.—With regard to opening an account in Baggot Street, you clearly recollect Mr. Fagan speaking to the bank official and making arrangements for Captain Kelly to go over and open the account and you are also quite clear that Captain Kelly was in the office?

—Yes, I am quite clear on that.

4059. Do you recollect him ringing later saying he needed £7,500 to keep the account going.

No. It is possible he did, but I do not recall it.

4060. Further on in your statement you mention that on ringing the bank again the official told you there must have been some misunderstanding; that their problem was not that the Red Cross cheque had not been lodged but that a transfer had not been made between two accounts. The official mentioned accounts on that occasion?

—Yes, he must have done.

4061. And you were only aware of one account? Did you ever discuss this matter with Mr. Fagan—the matter of accounts rather than one account?

—This again I have tried to remember. I honestly cannot say whether I did or not because when Mr. Fagan came back the matter had been cleared up and there was no problem as far as I was concerned. I may have done, but I may not have.

4062. Deputy R. Burke.—How long have you worked for Mr. Fagan?

—Approximately five years.

4063. Did you transfer from the Department of Agriculture when he moved over?

—I did, yes, but not when he moved over; it was possibly almost a year afterwards.

4064. You were personal secretary to Mr. Fagan in both places—Agriculture and Finance?

—In Agriculture I was not a personal secretary; I assisted Mr. Fagan but I also worked for other persons as well.

4065-6. How did you first learn about the Belfast Fund for the Relief of Distress?

—I think my first knowledge of it would have been a telephone call to the bank, a call that I put through and was present while Mr. Fagan spoke to the official of the bank asking him if he could facilitate Captain Kelly in opening an account.

4067. So that the Government minute indicating the setting up of this, which we have in our pink book, would not have been transmitted to Mr. Fagan through you?

—No, Deputy. It is possible that it may have done but I do not think so. I certainly did not write it down.

4068. You referred to “the office”—I presume this is the office in Merrion Street?

—Yes.

4069. Would it have been part of your duty at any stage to offer secretarial assistance either to Mr. Fagan or to the Minister in his office in Leinster House?

—No.

4070. At no stage?

—At no stage.

4071. You mentioned that this Grant-in-Aid to the best of your knowledge was confidential. How did you come to that conclusion?

—Well, practically all the work I did for Mr. Fagan was confidential—a lot of it. In the particular thing I imagined that he must have told me at the time that it was confidential and I treated it as such.

4072. You say that on a number of occasions you phoned Miss M. Murphy of the Irish Red Cross?

—Yes, certainly.

4073. The first you learned about the Belfast Fund for the Relief of Distress was the phone call you mentioned just a moment ago. How can you tie up these two things? What was the substance of your phone call to Miss Murphy of the Red Cross? What matters were discussed in regard to payments?

—I would ring Miss Murphy and ask her if she would allot a certain amount to this account and say that we would confirm it in writing, which we always did. That would be subsequent to Mr. Fagan’s phone call to the bank.

4074. Did you ever do secretarial work for Mr. Haughey in person?

—No.

4075. During the period August, 1969, to June, 1970?

—No, Deputy.

4076. Deputy FitzGerald.—Just one question, Miss Morrissey—in a sense you have answered it but this is just one last try. Given the list in front of you, look at the names on it and see do any of them remind you of Mr. Blank who was said to come into the bank, and in particular, F, G, H, J and K?

—My recollection, Deputy, is that it was a very ordinary Irish name so that the nearest I can come to it is possibly F or J but this is pure supposition. I think it was a very ordinary name. For instance, H—I would consider unusual. I do not think it was that.

4077. Just a last question: is there anything you know other than what you have told us so far—anything else you can think of that might be in any way relevant to our inquiries? You followed the inquiry obviously, and the evidence, and you have seen the various lines we are trying to pursue and you know what we are trying to find out. Is there anything else you can recollect as being within your knowledge which you feel would help us?

—No, Deputy.

4078. Deputy Keating.—Miss Morrissey, I want to refer you to your statement of yesterday. This is something which in fact a few other Deputies have asked you— it is a matter of clarity. On page 3 of the statement which is dated yesterday, you say that “the only account dealing with Northern Ireland aid of which I had any knowledge was the one named the Belfast Fund for the Relief of Distress?”

—Yes, Deputy.

4079. And that the problem the bank explained to you was that a transfer had not been made between two accounts?

—Yes.

4080. “A transfer had not been made between two accounts”—that is a quotation. There seems to be some incompatability between saying that you only knew of one account and that somebody on whatever date—in mid-February said to you that a transfer had not been made between two accounts?

—Maybe I have not made it clear in the way I expressed it. I was aware that there was an account in Baggot Street called the Belfast Fund for the Relief of Distress. I was aware that the Red Cross on request from the Department lodged amounts to this particular account. Therefore I say that I had knowledge of this account. The reference was made by an official to accounts—I had no, if you understand, detailed knowledge of it. Obviously I knew of the existence of another account but I did not have any detailed knowledge of another account.

4081. And that knowledge would have dated from—the events we are talking about—the Dixon account was overdrawn for eight days between February 12th and February 20th so it would have been sometime between those two dates?

—I am assuming that because Mr. Fagan was out of the office during the time.

4082. You said mid-February which would be slap in the middle of that period?

—Yes.

4083. But in fact you had some reason to suppose that there was more than one account from the middle of February?

—I had heard reference in the middle of February to a second account. At a later stage it would have gone out of my mind— I would have no reason to associate it with anything.

4084. I want to leave that topic entirely but we would like—it may not prove possible—to be able to trace the various movements to various Continental cities. We would therefore like to know where Captain Kelly was on the morning—the Monday morning—when he was in Vienna and when he was telephoned from Dublin and you put through the call. You said “My impression was that it was an office of some kind?”

—Yes.

4085. It is clear that Captain Kelly gave Mr. Fagan a number that was phoned on the Monday morning when he talked from Vienna, to Mr. Fagan on the previous day?

—So I understand.

4086. I think it is clear. Mr. Fagan says that he has not got a record of that number and I understand that though you would have written it down—would have received it from Mr. Fagan, written it down, gone to the phone and sought the connection in Vienna and said that you had Captain Kelly on the line, is it the case that you have no way of now finding out what that number was?

—Not unless I recorded it in my telephone diary which I think is highly unlikely. As I said to the Chairman, I will check the point but I do not think I have.

4087. We have a way—probably if we look, the records of calls to Vienna may still exist in the Post Office and we may be able to get it that way. Is there anything else, thinking of that Monday morning and that call, than you have said, which I think is helpful, that you can think of. You said that your impression was—and we realise that it was only an impression—that it was an office rather than a hotel?

—Yes. Why I said that … when I made the call it was answered by a lady. I had no room number. I asked could I speak to Captain Kelly and I was asked to hold on.

4088. You said this in English and she answered in English without any difficulty?

—Without any difficulty.

4089. Did she evince any surprise that she should receive a phone call in English on that Monday morning or did she seem to expect it coming? Did she say promptly “I will get him” or anything like that—or “He is here”?

—She just asked me to hold and did not show any surprise. She didn’t show that she was expecting it and she just asked me to hold.

4090. Do you know how long you had to wait?

—I honestly cannot recall.

4091. Just before I leave you, is there anything else you can think of in connection with that call on that morning? This is really a more specific repetition of Deputy FitzGerald’s question. Is there anything in relationship to that call that would help us to trace it? You have already said you got the impression of an office, that it was answered by a lady who was neutral in her reaction to what was a sligthly surprising event for her presumably? Is there anything more than that?

—I do not think so, Deputy.

4092. Deputy MacSharry.—Just one question, Miss Morrissey. In your statement issued to us, on the first page you say “At this time I knew Colonel Hefferon as Director of Army Intelligence and Captain Kelly as an Army Intelligence Office”?

—Yes.

4093. “Both of whom telephoned or called to see Mr. Fagan from time to time.” Colonel Hefferon did not at any time discuss any of these requests to Mr. Fagan with you?

—No, Deputy. As I have said before, both Colonel Hefferon and Captain Kelly normally saw Mr. Fagan if they had something to discuss with him in the waiting room which was next to the office.

4094. Is it normal that they would contact—that the Director of Intelligence or an Army Intelligence Officer would be in contact with this office at any other time or for any other purpose?

—Not that I am aware of.

Miss Morrissey withdrew.

4095. Deputy MacSharry.—Before we go on to hear Colonel Hefferon, could I say a word in relation to the amount of time we have spent and held Mr. Fagan, how grateful we are for the way he co-operated with all of us in our questions and the information he gave to us. Taking into account the strain this man has been under for so many months, I think he did very well.

4096. Chairman.—Yes. We would all wish to be associated with that.

Colonel Michael Hefferon sworn and examined.

4097. Chairman.—Colonel Hefferon, what was your position in the Army during the time these matters were happening?

—I was Director of Intelligence from October, 1962, until my retirement on the grounds of having reached the age limit for my rank on 8th April, 1970.

4098. Could you give us the approximate time—the date?

—8th April.

4099. So that you were the Director of Intelligence covering most of this period?

—That is right.

4100. Could you tell us what exactly was Captain Kelly’s position?

—When I came to the Directorate he had been personal staff officer to my predecessor and I kept him on in that capacity and he remained in that capacity during the time I was there.

4101. What was his position or had he a special position vis-à-vis this Northern Relief Fund?

—Yes, he had. He made known to me about mid-August and that he had been in Derry and in Belfast during the troubles there and had come in contact with many of the people up there and he gave me a good deal of information about conditions as they existed at that time. Although we had been studying this situation for some time, the events of the 12th and 14th and 15th of August came very suddenly in the end, and indeed there was a tremendous amount of confusion at that time. It was rather difficult to get reliable reports as to what actually had been going on and there were quite a number of refugees streaming over the Border, so I was very glad to get his report in this way, and as he gave me to understand that he had contacts with many people in both these cities, I told him to carry on with that contact.

4102. Did he subsequently come to fulfill a kind of dual role of intelligence officer and relief agent?

—Yes. I suppose one could describe it as such. My main interest in his activities was intelligence of course and at some stage— I think it must have been about the end of September—I was asked by Mr. Haughey to see him at his residence and to bring Captain Kelly along. At this meeting Captain Kelly briefed him on the position in the North and told him that he had arranged to meet representatives of the various Defence Committees that had at that time been set up in the North and that he would require some expense for this meeting. There was no figure mentioned, I think, at this meeting—not as far as I can recollect at any rate—but on the 3rd October, I received a cheque for £500 from Mr. Fagan and my recollection is that I rang Mr. Fagan and said that this money … that I did not requisition this money and presumably it is for Captain Kelly, but I understand that he is leaving this evening to set up this meeting so perhaps I had better endorse it and hand it over to him. I did endorse the payable order and gave it to Captain Kelly.

4103. Colonel Hefferon, when you brought Captain Kelly to Mr. Haughey’s residence—I understand that that is what you said?

—Yes.

4104. Who suggested who—was it you suggested Captain Kelly or was it Mr. Haughey requested Captain Kelly?

—My recollection—a firm recollection indeed—is that I was requested to bring Captain Kelly there. I am not too sure whether it was Mr. Fagan who rang to say —but my recollection is that it was—“you are to bring Captain Kelly with you”.

4105. Was this a surprise to you that Captain Kelly was already known and looked for by either Mr. Fagan or Mr. Haughey?

—Not entirely a surprise because I was aware that he had by this time established very good contacts in the North and no doubt would have been speaking to people down here about it.

4106. Anyway, I take it that Captain Kelly’s appearance on the scene originated not from you but from requests other than from you?

—From the Minister for Finance to bring him along.

4107. Captain Kelly has spoken frequently of his position as a liaison officer or liaison agent—would that be a correct description of his position?

—Well, on that score, he had a very special position with regard to the Northern people because I got the impression at a fairly early stage that he was trusted by them, and if I may go back to the court case, I think Mr. Haughey there stated in his evidence—this is a matter of memory; I am not too sure, but I think it was when the jury was out—that he had been appointed by the Cabinet as liaison officer. This is not something I knew at that time and in fact I did not know this firmly until during the trial, but I did know that he had a special position.

4108. Could that position be described as liaison officer between Ministers here and Northern Committees—would that be a fair description?

—Yes, a link between the Northern Committee and the Minister for Finance especially.

4109. But the actual details of that link were something that you were not absolutely familiar with?

—That is true, yes.

4110. Therefore, would it be correct to say that some of his operations, some of Captain Kelly’s operations, were independent of you?

—I do not think that this would be quite accurate because he reported to me on many occasions about his meetings with Northern people and in a general way what he was doing, and I got the understanding from that that he was a link to pass requests from Northern Committees to the Minister for Finance and give his views on the people making them.

4111. In his position as a link, did he report to you in respect of intelligence and also in respect of the operation of the relief funds?

—Intelligence was what I was mainly interested in, chiefly interested in. I regarded the operation of these accounts as a matter between himself and the Minister for Finance.

4112. Did he report that to you?

—He reported to me on a number of occasions—one I remember was that the Northern people wished the account to be taken from Clones to Baggot Street. This was certainly one occasion he reported to me, but I was not very concerned with him regarding the position that he had with the Minister—I did not want to probe too much into these matters.

4113. Colonel Hefferon, you have appeared in the arms trial and have read a considerable amount of reporting in this matter. Would you agree that in respect of all this matter Captain Kelly reported to you everything as he claims to have done?

—Well, certainly if you are talking about the setting up of accounts and subsidiary accounts—this I did not know until afterwards, but on the intelligence line and on people coming down—the various delegations who came down here—and the views of the Northern people on certain matters and the general state of affairs up there, he reported to me in detail.

4114. Did he report to you orally or in writing, or in both?

—It was mostly oral. In the early stages I got some written reports but later it was largely oral reports.

4115. You keep records of all these reports?

—His views would be considered in association with intelligence coming in from other sources and they would be presented from time to time to the Minister or to the General Staff in a briefing, but not specifically these particular views.

4116. As an intelligence officer operating in Northern Ireland, would Captain Kelly be going outside his legitimate field of activity if he offered advice to individuals or groups in Northern Ireland as to how to obtain arms?

—It is difficult to say. An intelligence officer must be, by virtue of the job he is doing, allowed a good deal of latitude in these matters. No doubt he discussed with them this obtaining of arms. In fact from the very beginning requests were coming from all sorts of sources. We became aware that requests were being made for arms for the then minority in case they were set upon again and no doubt he would have discussed with them this question of arms and from time to time but in common with other intelligence officers, he would be reporting to me, would have filled me in on the picture of the desire of these people to get arms, and no doubt, they would have discussed with him certain difficulties in any way of getting them because we took the line from an early date that the arms could not be given out except by special permission of the Government and we did not see that as being very feasible.

4117. You appreciate that there is a very fundamental difference between intelligence work as such and the offering of advice by an Army officer—let’s face it, a relatively junior officer—as to how arms could be imported into the North. Was that advice given with your knowledge?

—No. They never gave any advice as to how arms could be imported into the North.

4118. Did any other intelligence officer as far as you are aware give similar advice?

—No.

4119. Were you aware of a bank account at Clones?

—Yes, I was aware of it when it was closed. Captain Kelly reported that the Northern people had made a request to him —it was too inconvenient for them and they wanted to open an account in Dublin and there was something about the Minister for Finance—Mr. Fagan or the Minister for Finance; I am not too sure—arranging this.

4120. At that stage you became aware of the Baggot Street account?

—Yes. At some later stage Captain Kelly told me that an account was opened in Baggot Street.

4121. Did you become aware of an account or accounts?

—An account—the same kind, in my understanding, as the one that had existed.

4122. Captain Kelly actually told you that?

—Yes.

4123. Did he tell you that subsidiary accounts were opened at the same time or within a few days of the main account?

—No.

4124. You have subsequently become aware of the subsidiary accounts?

—Yes, in the arms trial.

4125. That was the first time?

—I believe so, although in my interview with the police officers at the time before the trial, I may have become aware of it at that time. I did not know anything firm about it until during the arms trial.

4126. You were aware that Captain Kelly had access to the Baggot Street account— to use the Baggot Street account?

—My understanding of this was that Captain Kelly would get requests that would be made on the Minister for Finance for money and that this money would be lodged in this account in Baggot Street or that this money would be lodged by the Department of Finance. I certainly did not get the impression that he was drawing the money and lodging the money.

4127. Were you aware that he was in a position to go in with a cheque, hand it over the counter and come out with money in his pocket?

—No, I was not so aware, although I would not have been surprised if the Northern people had asked him to convey money to them, that in the position he was in as a link between the Minister for Finance and the Northern Committees he could do this —that he could cash cheques for them.

4128. But you were not aware that he was in a position to do that or was actually doing it?

—At what time?

4129. Were you aware that he was in a position to do that or was actually doing it?

—No.

4130. And when did you become so aware?

—This is difficult to say because in, I think, January—mid-January—Captain Kelly told me for the first time that the Northern people were interested in importing arms. He did not say—there was no question of where they would be imported into, but that they were interested in importing arms and that they had asked him to assist. I understood that the assistance was to be more or less in the nature of technical assistance, in the sense that they would know a good deal about weapons and he would be presumed to know about the type of weapons and all that. On this occasion I advised him that he could not continue—that he could not do this as an Army officer and then he said that if he could not do it, he felt he would have to retire, so at this stage I did advise him not to do anything hastily, that his family had to be considered and so on and to go away and think about it for a few days. This he did and perhaps a week or ten days later he came back and said he had made up his mind, and indeed he handed me his resignation—not his resignation but his application for retirement, the forms for it—and at this stage we had a further conversation and I advised him in the interests of his family and all that and that if he were determined to go ahead with it—I felt that he had done a pretty good job up to then—he should go back to the Ministers with whom I knew he was dealing, Mr. Haughey and Mr. Blaney, and tell them that I had turned down his request to help the Northern people in this way, and that at the same time, having done such a good job, as I believed he had, some consideration should be given to providing him with a post or position which would make up the difference at least between what his pension would be and his then pay in the Army.

4131. Did you know that the money in the account in Baggot Street was voted money—voted specifically for Northern Ireland relief?

—Yes.

4132. You would be aware and would appreciate that that money would be improperly used if it was used for the purchase of arms?

—It was not my understanding that this money—any time the question of money came up it was that the Northern Committees had funds at their disposal. Whether these funds came from this source or from other sources which we knew and had reports about—money from collections in various places, in England and in America —there were contributions from various sources—the question at that stage certainly never arose as to where the money was coming from.

4133. Were you aware of Captatin Kelly’s drawing of money from the Baggot Street funds for the purchase of arms as he claims?

—Not in any detail. I was aware that funds at the disposal of the Northern Committees were being used for the purchase of arms.

4134. When were you aware of that?

—Oh, I would say from the time he told me about the purchase of arms, about their firm intention to purchase arms.

4135. You mean mid-January?

—About mid-January, yes.

4136. Were you aware that funds were being drawn by Captain Kelly from the Baggot Street account at that time?

—In a general way what I was aware of at that time was that he had in his capacity as a link between the Minister for Finance and the Northern Committees—that he had drawn money, and I think he told me so, on occasions to give to the Northern Committees. By the way, I think you mentioned Northern Ireland and Captain Kelly going to Northern Ireland. I would like to correct that because at a certain stage—I think it must have been October—I had occasion, the need arose for me, to forbid any intelligence officer to go into Northern Ireland without permission, without my specific permission. This included Captain Kelly, so that any dealings he had with them were in this part of the country.

4137. You are satisfied that after you issued these instructions they were obeyed?

—I am. As far as I know they were obeyed.

4138. You regarded Captain Kelly as a link man between persons in the North and in the South. Who in the North did you understand from him he was associated with?

—Well, in the North he had this meeting in Bailieboro at which he met these representatives from quite a number of areas in the North, and the main areas concerned were of course Derry and Belfast. At this stage in both cities there were large areas behind barricades and so on. I became aware then and later that delegations had come down from the North to visit Government Ministers and others here so that in this sense he was a link between the committees and the Minister for Finance here.

4139. And whom did you regard him as having links with specifically here in the South? You will remember that there was a special sub-cabinet set up?

—Yes, I have heard about that but I heard very little about it after the first … I do not know whether they met.

4140. What Ministers would he have links with?

—The Minister for Finance and the then Minister for Agriculture.

4141. And the Minister for Defence?

—Not until later.

4142. Were you aware of Captain Kelly’s visits to the Continent?

—Yes.

4143. Did he seek your permission before going?

—He did.

4144. Did he explain the purpose of his missions?

—He did.

4145. What did he say?

—Well, to go back again to the submission of the retirement, when he did send it in, which would be, I should say, about the third week in January, maybe later, he did ask first of all that the retirement, if possible, be made effective from 13th February, on which date he would have had, I gathered, 21 years’ Army service, which would mean something extra to whatever pension he would get.

4146. What date was that?

—13th February. And I did see Mr. Gibbons about this and told him that I had Captain Kelly’s retirement form on my desk and that I could not see how he could possibly carry on with the Northern committees for arms now while he was an Army officer. I asked Captain Kelly to see Mr. Haughey or Mr. Blaney, or both, on this and to make known my views on this matter to them; and I also did say to Mr. Gibbons that I felt some endowment might be provided for him, for compensation for loss of earnings he would have in leaving the Army. So this would be, possibly, early February. The time he went to the Continent, the first time, would be about 14th February, sometime around that date, and I told Mr. Gibbons that he said he was going to the Continent and I suspected he was going to “vet” arms—that was the expression I used, I think—but that he had a sister on the Continent and that this was the ostensible reason that he was going, a sister in West Germany, I believe, married to some service man. This was the first occasion which I knew that he went to the Continent. So far as I know this is the first occasion on which he went to the Continent.

4147. How many times did he go altogether?

—He went then. He went, I think, in early March—I am not too sure about that. He was certainly there sometime prior to 25th March, which is the date of the City of Limerick. He was there certainly at the weekend of the end of March and early April. I remember this very distinctly because the way the order was given to change rifles to 7,500 rifles in Dublin.

4148. Have you got records? Did he have to report?

—Yes, he did.

4149. Have you documents, records, of when he came back or what he reported?

—No, I have not any documents; but approximately it would be around the dates I have given.

4150. You say three or four times?

—I would say three or four times. I am not too sure.

4151. Where did he go on the first occasion?

—My understanding is he was going to Frankfurt.

4152. Did he look for any travelling expenses for these visits?

—No.

4153. There was no sanction of his journeys?

—No.

4154. Now you may be able to help us in this matter. Captain Kelly explained last night that he did not look for travelling expenses on these ventures. Would he be entitled to such if he applied for them?

—No, he would not. To be entitled to travelling expenses he would have to be travelling on duty and this would have to be sent in in the normal way as a claim, to show where he went to and what he was doing.

4155. Of course, in the ordinary way of furnishing a claim, as regards Intelligence the details of the claim would, I take it, come to you?

—This is true; yes.

4156. The actual details, then, would be an Intelligence matter? The full details would not go beyond you, would they?

—Yes; but in this particular case he was going with the Northern committees, at their request, and my understanding is that they were paying reasonable expenses of the trip.

4157. The reason offered by Captain Kelly was that this was a security operation?

—Yes.

4158. Therefore, for security reasons, no application for expenses was made here. I am asking you if, in effect, that is a valid explanation. I am asking you, in effect, if such an application was made here by an Intelligence officer is that relatively confidential?

—Oh, yes.

4159. And it would not put anybody at risk?

—Well, this is true, yes; but, as I say, my understanding was that the Northern people were meeting the expenses in this case and the question did not arise.

4160. He was still an Army officer and you were still his commanding officer?

—That is true.

4161. Is there anything unusual about having an Army officer in the pay of this Government, under your control, going also outside the jurisdiction and engaging in activities outside the jurisdiction and drawing money for services rendered ouside the jurisdiction?

—But he did not draw any money from me.

4162. He drew it?

—You mean from the Northern accounts? Yes. Well this was my understanding, that the Northern committees had asked him to help them out in this matter and that they were providing the funds.

4163. But this is a usual operation?

—Oh no, an unusual operation, I would say.

4164. Would you regard it as irregular?

—In the climate of the time, I had made my position clear to the then Minister for Defence on this matter on two occasions and had not been told to stop it. I did not feel it was my job to stop it. The directive of 6th February to some extent probably put a different complexion on matters than there had been previous to that.

4165. Captain Kelly, while engaged in these activities outside the State, was being financed from day-to-day as an Army officer?

—Oh yes, he was on full pay.

4166. He was on full pay. He informed you on each occasion that he was going?

—He did.

4167. Did you in due course go to the Secretary of your Department, to the Ministry of Captain Kelly’s?

—I did not catch the first part——

4168. Did you in due course inform the Secretary of your Department, the Department of the Minister, as to these visits?

—I did not have any dealing with the Secretary of the Department of Defence on Intelligence matters, just routine ones, but I did inform the Minister.

4169. You did inform the Minister of each visit?

—Yes.

4170. Did Captain Kelly draw travelling expenses up to that time in the ordinary way?

—No. He had not drawn any expenses up to that time. He had not drawn any expenses since, I should say, the previous September. From the date on which he was funded from the Bailieboro meeting I received no claims for expenses from him.

4171. Is there any reason why Captain Kelly should not present his continental expenses to you, having already acquainted you with his going and having apparently secured permission to go?

—As I have already stated he had not applied for any expenses from me from the previous September, I think, and this visit that he was making with the Northern people made it quite clear that it was at their request and my presumption when he did not ask for it it meant they were funding it and that he was not meeting it out of his own pocket.

4172. Is an Army officer a full-time officer?

—He is.

4173. In the ordinary course of events he does not draw funds or emoluments of any sort from any other source?

—In the ordinary course of events, yes.

4174. Are there any specific occasions or are there any categories or any specific instances you can tell us about where funds may be drawn by an officer from other sources than the State?

—It does not occur to me. No instance occurs to me at the moment.

4175. Deputy Nolan.—There is United Nations Fund for service.

4176. Chairman.—But as an individual?

—As an individual, no.

4177. Are you satisfied, Colonel Hefferon, now with hindsight that Captain Kelly gave you at all times and at reasonably regular intervals a full and frank briefing of all his activities?

—Yes. I am. In so far as I required him to give me such briefing I am satisfied that he did so.

4178. What do you mean by “in so far as I required him”?

—I made it—I did not go and ask him directly about every single transaction that he carried out in the matter of his dealings between the Northern people and the Department of Finance. I regarded that as a matter that directly concerned the Minister for Finance himself. Therefore, as it did not have a large Intelligence interest I did not probe into it.

4179. In general, Colonel Hefferon, what degree of supervision was exercised over Captain Kelly? Did he have regular office hours? Was there a daily record kept of his movements? Had he specific duties laid down? Was he as well supervised as an ordinary Army officer?

—In the early part of this operation, in the months of August, September and part of October, he was quite regularly at his office seat and he carried out the duties there and except for such occasions on which he would ask permission to go because he had to meet somebody, which I would know about and which he would mention about somebody from the North and so on, he was quite regularly in the office. From the time that the Minister for Finance—this was about mid-September, I am not too sure of the date, or the end of September—from that date I understood that he had a great deal more to do in his liaison work with the Northern committees. Therefore, he was not as regular in his attendance as had been but he did report regularly when required. The type of work he was on was such that you could not tie him to office hours. I required reports from time to time.

4180. There is a code on the table in front of you on which there are names. Can you identify any of these personalities? Have you met them? Would you just give us a letter?

—Yes. I can recognise on this list one whom I have met. That is letter J.

4181. Can you tell us in what context and circumstances you met Mr. J?

—Some time in late March or early April I had occasion to call at Captain Kelly’s house to see him about something and J was there and was introduced to me. I think I met him very briefly once later before the court trial.

4182. Could you specify if there was any activity in which Captain Kelly as an officer became involved without your knowledge or without your permission?

—I cannot recollect anything now in which he became involved that he had not told me about.

4183. Colonel Hefferon, in your experience as Director of Intelligence can you tell us was there ever any Intelligence Officer in your experience who had become involved in the operation of such a large State fund as this particular one?

—Mr. Chairman, the situation which we were faced with there was indeed very explosive and something that came out of the blue on us. I am not aware that any large fund was made available, certainly not in my time—I cannot speak for my predecessors—such as the Northern Ireland Aid Fund.

4184. I take it that in intelligence work sometimes special bank drawing arrangements may be made for Intelligence officers? Is that so?

—This is possible. I did not have any occasion to do it myself—except maybe on one occasion.

4185. Very rarely?

—Very rarely.

4186. Deputy Tunney.—Colonel Hefferon, you said earlier on that Captain Kelly made known to you that he had been in Derry and Belfast in August last?

—Yes.

4187. Had you sent him there?

—No. I had not. The position about Captain Kelly was that during the previous —practically twelves months in fact—he had been on a command and staff course at the Curragh. When I say twelve months I think the course lasts nine months plus, and then they get some leave after that. In fact he was on leave, so far as I remember, at the time when these troubles boiled up in the North. And it was during that period of leave that he was in Derry and in Belfast, where I did not send him at that time.

4188. Normally, would you have considered it an appropriate place for an Army officer to have spent his leave?

—I do not think he spent his leave there. I meant that he was there for some days, but I believe he knew some people in both cities. When I heard about it at the time I did not consider it entirely inappropriate.

4189. What I am trying to establish for myself at this stage is whether or not you, as Director of Intelligence, sent Captain Kelly out on work or whether he went out looking for it?

—I think this is over-simplifying the matter because I did not send him.

4190. But it applies. I am only asking this as a foundation for something I shall subsequently pursue. It would seem to me, reading the evidence, that we might switch the names; it would seem that more appropriately Captain Kelly could be called Director of Intelligence and Coloney Hefferon captain?

—I am afraid that I cannot accept that proposition at all. At the time that this trouble boiled up we had needed to set up a very sizable, for us, intelligence operation and to recruit hastily a number of people to the small peace-time staff, which was geared not to deal with this matter but more to deal with purely military intelligence in the sense of studies and all that kind of thing. We were suddenly faced with this situation of an involvement of some kind in Northern Ireland. Certainly where our troops were a few miles from the Border we had tremendous problems, and not only in the North of Ireland but also in the south here. You will probably recollect that there was tremendous excitement even in the city of Dublin. We had a situation in the third week of August where we had a thousand people outside the gates of the barracks screaming for weapons, and that sort of thing. There was a state of high public exuberance for which our troops were not prepared.

4191. I am not talking exclusively about August. I am talking subsequently about the month of January, which was five or six months past the events which had taken place. You said in evidence that Captain Kelly came to you and told you that at this stage he was now involved himself in the purchase of arms. I would direct you to page 23 of the evidence, where Captain Kelly says that at the request of people from Northern Ireland he went and drew £3,000. That was before Christmas. Subsequently, I do not know whether it was at that stage, he says again that he told you in detail, he reported to you in detail, everything he was doing. Again, I am wondering whether or not you had detailed him to carry out these duties or whether he was reporting to you having engaged in the duties.

—About this matter that he came to me in January, my recollection is that the Northern people had asked him to help, and my reaction was to tell him that he could not do it as an Army officer and that he would have to retire from the Army.

4192. Did he tell you he had withdrawn £3,000 from the bank account?

—I have no recollection of that.

4193. So therefore he was not reporting in detail to you what he was doing?

—As I said earlier in the evidence, I felt that his manner of dealing with these moneys was directly between himself and the Minister for Finance.

4194. I have had experience with Army gentlemen and one thing of which I am very aware is that Army gentlemen are very conscious of what they are. I have even found a colonel who was responsible for a certain duty being offended if some other colonel had, so to speak, put his nose into his duties. Did you not take umbrage at the fact that a captain was moving above your head?

—No, I certainly did not because I think you are equating the rank consciousness which exists in the Army with a situation in which a good deal of scope must be given to officers if they are to operate properly. If you have sufficient confidence in the officer concerned you do give this scope.

4195. Do you have many more captains on your staff?

—This is rather difficult to assess at the moment. In the beginning I think I had three others, and this was very much pushed up by the events of August. A number of officers were added.

4196. And these would all be men in whom you had the same faith as in Captain Kelly?

—No, because I would not know them quite as well. They were officers drafted in to deal with a certain situation which had arisen there, and where it was necessary to get Intelligence back from the Border area very quickly.

4197. Normally you would have subjected them to more discipline than you would Captain Kelly?

—I gave them a good deal of scope too, but in dealing with this matter some people are able to make contacts. In Intelligence matters I do not think the element of rank enters very largely into it very often. Sometimes people are able to make contacts with people who trust them. A lot of the people who would trust Captain Kelly would not trust me as far as I could throw them. Intelligence people are not as suspect in this way. The fact is that Captain Kelly had formed a certain liaison with the Northern people; he had their confidence. At least, this was my assessment at the time and everything I heard from other sources led me to believe this was so.

4198. Again, the fact that you have mentioned the word “Intelligence” twice in the last sentence leads me to, I will not say define, but to refer to an attempt at a definition by Captain Kelly in court. He said:

As an Intelligence officer one comes across many things, knows of many things, and straight away one does not take action upon them; one waits and will see what develops.

Is that a general principle of Intelligence?

—Well, I would say it is a fair enough general definition of what Intelligence, a certain type of Intelligence, may be.

4199. Therefore, if we apply that to Captain Kelly’s involvement in the arms, could we assume that he was doing what he was doing and hoping for the best?

—I do not think that. This is certainly not my idea. I was going to develop the other matter about waiting and seeing first. Quite obviously, if you get some story you have to check and countercheck it, and if it involves people who take fright at that kind of thing which is going on, you may lose the whole thing. You just wait and see. There may be nothing in the story or it may be quite true.

4200. Captain Kelly made the point, and would you accept this, that he was briefing you more or less as he went along?

—Yes.

4201. Did Captain Kelly tell you that two subsidiary accounts had been opened, the Baggot Street one that would be used to finance the Voice of the North and the other which would be used for the importation of arms?

—No, I have no recollection of being told that.

4202. And that was a fairly important part of the work he would be doing?

—Yes.

4203. In circumstances where he kept that from you, would you then be inclined to accept everything else which he told you, or did not tell you?

—I do not think it was a question of keeping it from me. I did not ask him about the internal disposition of funds which had been allotted by the Ministry of Finance, on behalf of the Government, to Northern relief.

4204. I am sorry, but you have already told us that Captain Kelly did tell you that he was involved in the importation of arms, that he was counselling the people in the North, and he did discuss with you the question of bringing in arms?

—Oh yes, he did.

4205. In the circumstances, do you not think it would be a natural sequel to that discussion that he would say to you how this importation was being financed?

—I do not think so, because he gave me the impression that the Northern people were buying the arms from funds at their disposal.

4206. Then we have the incongruity of the situation of an Officer in the Irish Army apparently with your, I would not say approval, but with your not rejecting it, concerned with these people in the proposed illegal importation of arms?

—When he did make this clear to me in January my reaction was that he should retire from the Army.

4207. I thought you said that when he subsequently indicated to you that he was going to retire you suggested he might have second thoughts about it?

—Oh yes, I did, immediately, because among the second thoughts would be that he would naturally reconsider leaving the Army. That is as far as I was concerned I could allot him to certain other duties, and that kind of thing, but that as an Army officer he could not carry on while he was directly involved in purchasing arms.

Chairman.—Yes. I think we said we would adjourn at six o’clock.

Colonel Hefferon withdrew.

The Committee deliberated.

The Committee adjourned at 6.45 p.m. until 11 a.m. on Tuesday, 2nd February, 1971.