Committee Reports > List of Committees > Dáil > 1972 > Committee of Public Accounts > Final Report - Northern Ireland Relief Expenditure

FINAL REPORT

PART 1

PROCEDURES AND POWERS

Order of Dáil of 1 December 1970

1. On 1 December 1970 it was ordered by Dáil Éireann as follows:—

“That the Committee of Public Accounts shall examine specially the expenditure of the Grant-in-Aid for Northern Ireland Relief issued from subhead J, Vote 16 (Miscellaneous Expenses) for 1969-70 and any moneys transferred by the Irish Red Cross Society to a bank account into which moneys from this Vote were or may have been lodged, and shall furnish a separate report on this expenditure as soon as possible.”

2. This was the first occasion that the Committee of Public Accounts was requested by Dáil Éireann to examine in detail Grant-in-Aid expenditure, which hitherto in most cases had merely to be certified to the Committee by appropriate Departmental Accounting Officer.

Meetings of the Committee

3. 92 meetings of the Committee were held to carry out the examination ordered by the Dáil. The business carried out at these meetings is recorded in the Proceedings of the Committee (Pages 70 to 178).

Witnesses

4. At thirty-three meeting evidence was taken in public from thirty-seven witnesses. The unrevised Minutes of Evidence have already been published in booklet form—one for each meeting at which evidence was taken. Witnesses and Members were allowed to submit corrections to the printed evidence. The corrections received are set out in Appendix 1. Evidence was taken in private (see paragraph 13 below) at eleven meetings from thirteen witnesses. In addition, the Committee consulted in private with eight persons. Appendix 2 contains the names of all persons whose evidence was taken in public together with references to the appropriate booklets. Appendix 2 also lists, by code letter or number in some cases, the persons from whom evidence was taken in private and the persons consulted in private.

Preliminary Statements

5. The Committee invited witnesses to furnish preliminary statements. Appendix 3 contains the statements received.

Correspondence

6. Correspondence of the Committee is contained in Appendix 4.

Documents

7. Documents sent to the Committee (other than “Pink Book” documents and confidential documents—see paragraph 8 below) are contained in Appendix 5. The “Pink Book” documents which were published at the start of the Committee’s work are reproduced, for convenience, in Appendix 10.

8. Some documents, such Garda Reports, were made available to the committee on the basis that they would be confidential to the Committee. As the publication of such documents was, in any event, not necessary to the Committee’s Report, the Committee decided not to include them in the published documentation. It also decided not to publish certain documents relating to persons outside the jurisdiction. Copies of each of the documents referred to in this paragraph will be deposited with the Clerk of the Dáil for safekeeping.

Powers of the Committee

9. At the beginning of its examination the Committee encountered difficulties as to the extent of the application of Constitutional privilege to the utterances in the Committee of its members and of witnesses, and to its documents and to documents sent to it. There was also uncertainty as to its power to compel the attendance of persons whose evidence would be necessary to enable it to discharge the duty placed on it by the Dáil.

10. The Committee reported on these matters to the Dáil in an Interim Report of 15 December 1970. On 16 December the Minister for Finance introduced in the Dáil the Committee of Public Accounts of Dáil Éireann (Privilege and Procedure) Bill, 1970 which following consideration by the Dáil and Seanad was enacted.

11. This act (Number 22 of 1970) prescribed the privileges and immunities applicable to members, witnesses and documents. It specified the powers of the Committee in relation to the summoning of witnesses and the requisition of documents. It also provided, inter alia, that where a witness made default in attending, or refused to answer any question to which the Committee legally required an answer, the Committee might certify the offence of that person to the High Court and that the High Court might, after such inquiry as it thought proper to make, punish or take steps for the punishment of that person in like manner as if he had been guilty of contempt of the High Court.

Procedures of the Committee

12. The Committee adopted a number of procedures which were set out in Appendix 3 of its Interim Report. Is was provided, inter alia, that witnesses could be accompanied by counsel, solicitors or advisers. Legal advocacy by way of cross-examination or address to the Committee was excluded. The Committee regarded itself as a fact-finding body charged to make a report to Dáil Éireann and not a judicial body or tribunal .It felt that the stringent rules of Court procedure appropriate to judicial proceeding were not necessarily those most suitable to an essentially investigative body. Witnesses were re-called for examination as the Committee considered necessary. Each witness was provided with a printed copy of his verbatim evidence. Witnesses were entitled to forward submissions and allowed to testify to these, and to make submissions oral or written during the proceeding. No witness was required to incriminate himself, and every witness was given full facilities to reject, rebut or comment on any previous evidence.

Evidence in private

13. In the investigation, the committee was faced with faced with the difficulty that (a) the persons to whom some of the money had been paid, with a view to distribution as relief to people who had lost their homes or were in distress because of civil strife in Northern Ireland, and (b) some of the persons who operated the bank accounts supplied either directly or indirectly from the Grant-in-Aid, and from whom the Committee would be expecting evidence, were outside the jurisdiction of the State. To avoid putting such persons at risk and in the interests of national security, and to procure the fullest evidence, the Committee deemed it necessary to hold private sessions, and to utilise code names for those outside the jurisdiction. This report takes accounts of these considerations. Copies of each of the booklets of evidence taken in private will be deposited with the Clerk of the Dáil for safekeeping.

Difficulties regarding evidence

14. The Committee was handicapped from the beginning by (a) the destruction or non-availability to it of documentary evidence, (b) the fact that some key witnesses were domiciled outside the jurisdiction of the State, (c) the refusal of witnesses within the jurisdiction to give evidence on the basis that some persons outside the jurisdiction might be put at risk, and (d) non-cooperation of some witnesses. The evidence received contained much that was irrelevant, hearsay or personal opinion. The “Arms Trial” and its consequences seemed to have coloured and polarised the attitudes of some witnesses.

PART III

HIGH COURT AND SUPREME COURT DESICIONS

High Court

February 1971

15. Mr. Paraic Haughey attended as a witness on 17 February 1971. Contrary to the provisions of subsection 4 (b) of section 3 of the Committee of Public accounts of Dáil Éireann (Privilege and Procedure) Act, 1970, he refused to answer questions to which the Committee legally required answers, and the Committee in accordance with subsection (4) of section 3 certified to the High Court that an offence under the Act had been committed by Mr. Haughey. The High Court found Mr. Haughey guilty of the offence.

Supreme Court

16. Mr. Haughey appealed to the Supreme Court against order of the High Court. In a judgment delivered on 24 June 1971 the Supreme Court ruled that subsection (4) of section 3 of the Act, which contained the provisions under which the offence had been certified to the High Court, violated Article 38 of the Constitution and was, therefore, invalid. This judgment deprived the Committee of any effective powers in the event of a witness refusing to attend, to produce documents or to answer questions.

Proceedings of the Committee 29 June 1971

17. The supreme Court also ruled that there should be provisions in the Committee’s procedures for cross-examination and address by counsel in certain circumstances. The Committee immediately made appropriate provision in its procedures. On a vote the Committee, however, rejected a proposal to seek amendment of the Act so as to restore to the Committee powers of certification to the Courts of a witness who refused to attend, produce documents, or give evidence.

Evidence 17, Feb.1971.

Appendix 4 (12, 16, 7)

18. A number of people, e.g. Mr. Paraic Haughey, Mr. John Kelly, Mr. Paddy Devlin, M.P., whom the Committee regarded as key witnesses were not examined or, in some cases, further examined by the Committee in view of their attitude before the Committee or in correspondence with the Committee. The evidence taken by the Committee is incomplete on this account.

Evidence 4 and 5 August 3, 9 and 30 Nov. 1971.

Appendix 4 (10).

19. The Supreme Court decision led to several demands for cross-examination facilities by past witnesses which the Committee endeavoured to meet. The Minister for Agriculture and Fisheries, Deputy James Gibbons, who had already given evidence on 21 and 22 April 1971, refused on two subsequent occasions to attend for the purpose of being cross-examined.

PART III

ORIGIN OF GRANT-IN-AID

Government decision

Appendix 10, page 352 (1).

20. The Government at a meeting on 19 August 1969 decided that “a sum of money—the amount and the channel of the disbursement of which would be determined by the Minister for Finance—should be made available from the Exchequer to provide aid for the victims of the current unrest in the Six Counties.”

Payments by Department of Finance

21. Payments were made by the Department of Finance as follows and these payments were charged to a suspense account in the Vote for Miscellaneous Expenses:—

Appendix 10, pages 352-7

Appendix 10, pages 358 (40) and 364 (4)

Questions 156, 596, 3110, 9126, 9196-7, 9331, 9341-2.

22. The officials of the Department of Finance stated that all payments were individually authorised either in writing or orally both as to amount and payee by the then Minister for Finance, Deputy Charles J. Haughey, personally, and the Committee accepts that this was the case.

Official Report Vol. 245, cols. 622-3

Supplementary Estimate

23. On 18 March 1970 the Dáil passed a supplementary estimate for the Vote for Miscellaneous Expenses, which provided inter alia a sum of £100,000 by way of Grant-in-aid for Northern Ireland Relief Expenditure, details of the expenditure out of the Grant-in-Aid not to be subject to audit by the Comptroller and Auditor General. There was no reference to this Grant-in-Aid by the Minister in presenting this Supplementary Estimate to the Dáil nor was there a discussion in the Dáil on this part of the Supplementary Estimate.

PART IV

PAYMENTS TO INDIVIDUALS

Mr. A

Appendix 10 pages 352 (5) 356 (28) and 389-90.

Questions 98, 347, 3111-5, 10957-64.

24. Two payments of £1,000 each were made on the recommendation of the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney, to the credit of the account of Mr. A, one on 20 August 1969 and the other on 29 January 1970. Mar. A was not available to give evidence to the Committee but evidence in private was given on his behalf by one of the principal people involved in relief work in Derry to the effect that most of this money was used to provide food for the people of the Bogside and the balance of about £150 to refurbish Mr.A’s house which had been used as the main relief centre.

Appendix 10, pages 352 (6) and 391-2.

Questions 231-4, 3116.

Mr. B

25. £5,000 was paid to Mr. B on 20 August 1969 as result of a personal interview between Mr. B and the Minister for Finance, Deputy Charles J.Haughey. Mr. B in evidence in private before the Committee stated that all of this money was used in the relief of Northern Ireland refugees in London. He stated that he had kept no separate accounts of the disbursement of the money but that the total amount of money which his organisation had distributed far exceeded the £5,000 received from voted money. He subsequently furnished to the Committee extensive lists ( not published) of names and addresses of Northern Ireland refugees who, he stated, had been assisted by his organisation.

Mr. C

Appendix 10, pages 352 (7) and 393-4

Questions 235, 390-1, 3117-8

26. £500 was paid to Mr. C on 26 August 1969 on recommendation of the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney. Mr. C explained to the Committee in evidence in private that he and a number of other local people in his area in Belfast examined every case brought before them and expended this money and other money available to them to supply clothing, furniture, and other necessities to those in need.

Appendix 10, pages 352 (7) and 393-4

Questions 235, 390-1, 3117-8.

Mr. D

27. £500 was paid to Mr. D on 26 August 1969 on the recommendation of the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney. Mr. D stated in evidence in private that it was used by him to assist 12 families in his area in Belfast.

Appendix 10 pages 353 (8, 10, 14), 366-370 and 404.

Appendix 3 (8)

Questions 430-2, 2933 4102, 4208-24

Colonel Hefferon and Captain Kelly

28. three sums were paid to Colonel Michael J. Hefferon, the then Director oh Intelligence in the Army, £100 on 9 September 1969, £500 on 3 October 1969 and £500 on 15 October 1969. Colonel Hefferon gave the first £500 to Captain James J. Kelly, his personal staff officer. In December 1970, after the termination of the Bank strike which had begun in the previous May, Colonel Hefferon refunded the sum of £350 to the Department of Finance.

Appendix 10, pages 353 (9), 370and 407,

Questions 152, 246-8. 2922, 9044-55, 9178-81,

Mr. Richard Murnane

29. On 15 September 1969, £166.12.1 was paid to Mr. Richard Murnane. Mr. Murnane stated in evidence in private that he and four others, namely, Mr. Paraic Haughey, Mr. J. Teeling, Mr. Desmond Francis and Mr. Eamonn Francis, travelled to London on 17 August 1969 on tickets obtained by Mr. Murnane from Aer Lingus in the name of C. J. Haughey. One of the party returned to Dublin on the same day and the other four people on 18 August 1969. The object of the journey was stated to be to contact people and organisations in London who might help with relief in the North and such contacts were stated by Mr. Murnane to have been made. Subsequently, two members of the party, namely Mr. Paraic Haughey and Mr. J. Teeling made a second trip to London. The Committee received copies of seven Aer Lingus coupons relating to the account for £166.12.0. Two of these coupons are in respect of Mr. Paraic Haughey and Mr. Teeling and are dated 22 August 1969. The remainder relate to the first journey to London already referred to. Mr. Murnane stated that he received the payment of £166.12.0. from the Department of Finance with a request that he pay a similar amount to Aer Lingus, which he did.

Appendix 10, pages 353 (11) and 395-7

Questions 250-6, 386

Mr. E

30. £1,000 was paid to Mr. E in England on 8 October 1969. In evidence in private Mr. E informed he Committee that his organisation in England suggested to him that he approach the Department of Finance for assistance in dealing with Northern Ireland refugees in his area. He helped in all about 80 families, providing them with food, clothing and shelter at a total cost of £3,000 to about £4,000. He himself paid out all of the money and was in no doubt but that it was fully expended on the relief of refugees from Northern Ireland.

PART V

PAYMENYS TO IRISH RED CEOSS SOCIETY

Role of Society

Appendix 10, pages 352 (3) and 362 (2, 4).

Questions 310, 443-6, 8719-21, 8827-42.

31. On 21 August 1969 the Government Information Bureau announced that the funds for the relief of distress in the North would be administered mainly by the Irish Red Cross Society. The Ireland Red Cross Society could not operate directly in Northern Ireland without the consent of the British Red Cross Society and this consent was refused at the end of August 1969. The Society did, however, make donations to persons or bodies in Northern Ireland from moneys receives by it other than from the Grant-in-Aid.

Belfast Refugee Re-Establishment Committee

Appendix 10, pages 353 (13) and 398-401.

Appendix 3 (16).

Questions 385 2750, 8700-5.

Questions 10416-83.

32. The then Minister for Finance, Deputy Charles J. Haughey, was approached by the Belfast Refugee Re-Establishment Committee for assistance in the re-housing of refugees, and on his direction £20,000 was paid on 9 October 1969 to the Irish Red Cross Society which had agreed to the transfer this sum to the Committee. This amount was transferred to the Committee by the Irish Red Cross society on 9 October 1969 by means of a lodgment in the Munster and Leinster Bank, Hugh Street, Belfast. Mr. James Fitzpatrick, a representative of this Committee gave evidence and produced a copy of its bank account (not published) and a statement (not published) giving details of all persons assisted and of the amounts of the individual payments. Total payment amounting to £53,000 were made by the Committee from its own resources which, apart from the sum of £20,000 from the Grant-in-Aid, included £25,000 donated to the Committee by the Gaelic Athletic Association and a donated from Cardinal Conway. Mr. Fitzpatrick confirmed that all moneys received by his Committee were expended on the relief of distress.

Clones account

Appendix 10, pages 353 (12, 15, 16), 364 (1-4), 365 (5) 371, 397, 402 and 403.

Appendix 3(4, 16).

Questions 1721-4, 1875-82. 2749, 8699, 8706-8, 9327-48.

Appendix 10, page 354 (17)

Question 1725, 1736-1862, 1905-35.

Appendix 10, pages 355 (21) and 359 (note).

Appendix 10, pages 355 (21) and 359 (note).

33. In October 1969 at the suggestion of the then Minister for Finance, Deputy Charles J. Haughey, the Irish Red Cross Society transferred £5,000 of their own funds to an account the Belfast Fund for the Relief of Distress, at the Bank of Ireland, Clones (hereinafter referred to as the Clones account) in the names of three citizens of Northern Ireland, Messrs. F, g and H. Two further sums of £5,000 each were paid to or through the Society from the Grant-in-Aid on 15 and 30 October 1969 which they had agreed to transfer to the account in Clones ( on the question of the basis to these and other payments subsequently referred to as having been paid to or through the Society, see paragraphs 64 to 68). These two payment were arranged by Mr. A. J. Fagan, Department of Finance, on instructions of the then Minister for Finance, Deputy Haughey. Sums of £2,000 each were drawn in cash from this account on 10, 17 and 24 October and 6 November. £2,500 was drawn in cash from the account on 10 November 1969 and an account, the Ann O’Brien account, was opened at the Munster & Leinster Bank, Lr. Baggot St. Dublin (see paragraph 37) with a similar sum on 14 November. It appears that the £2,500 drawn form the & Clones account was used to open the Ann O’Brien account. Similarly £ 4,450 drawn from the Clones account appears to have been used to form part of the opening lodgment on 14 November 1969 to an account, the George Dixon account, in the Munster & Leinster Bank, Lr. Baggot St. (see paragraph 36). The Clones account was not used after mid-November and a balance of £49 1.8 (i.e. £49 11. 8. less 10/- bank charges) remaining was recovered by the Department of Finance.

Baggot Street main account

Appendix 10, pages 354 (19, 20), 355 (21, 22), 360, 372, 374, 376-80.

Appendix 3 (14, 19).

Questions 1105, 2794-7, 3151-58, 3178, 4058, 4596-4602, 4828.

Questions 2877-84 2913-5, 3110, 3255, 3837-8.

Appendix 3 (16).

Appendix 10, pages 354 (19), 372-74, 376, 377 and 379-84.

Appendix 10, pages 356 (27) and 378. Appendix 5 (1, 8).

Questions 435-7-580-9, 1284-92. 2870-1.

34. On 11 November 1969 an account in the names John White, John Loughran and Roger Murphy, the “Relief Committee of Belfast Fund for the Relief of Distress”, hereinafter referred to as the Baggot St. main account, was opened in the Munster & Leinster Bank, Lr. Baggot St. Dublin. The account was variously described in the documents relating to the transfer of moneys as “Belfast Fund for the Relief of Distress”, “Relief Committee of Belfast Fund for the Relief of Distress”, “Belfast Relief Fund”, “Belfast Aid Account”, “Six County Relief”, “Usual Belfast Aid Account”, and “Belief Refugee Aid Fund”, Despite the obscurity and contradictory character of much of the evidence regarding the opening of the account and a denial by Captain Kelly that he was responsible for the opening, it would appear from the evidence of the bank officials and of Mr. Fagan and Miss M. Morrissey of the Department of Finance that Captain Kelly was instrumental in the opening of this account. Evidence was received indicating the system of lodgment of moneys in the account. This was that Captain Kelly who was known to Mr. Fagan as an Army Officer on intelligence work involving Northern Ireland and as liaison between the Department of Finance and the Belfast committee informed Mr. Fagan from time to time that specific sums were required. Mr. Fagan then with the authority of the Minister arranged for the issue by the Department of Finance of the approved sums. These moneys were issued to the Irish Red Cross Society which immediately transferred similar amount in each case to the credit of the account in Baggot St. £59,000 was transferred in this way from the Department of Finance through the Irish Red Cross Society account in the period 12 November 1969 to 9 April 1970. A cheque for 12,000 dollars received by the then Minister for Finance, Deputy Charles J. Haughey, from the Irish Institute, New York for Northern Ireland relief was sent by Mr. Fagan on 5 January 1970 on the then Minister’s instructions for lodgment to the account of the Belfast Fund for Relief of Distress. The proceeds, £4,993.10., were lodged to the account and the lodgment docket was completed by the bank officials in the names of John White, John Loughran and Roger Murphy, but the lodgment counterfoil which was returned to the Department of Finance showed the name of the account as “Committee of Belfast Fund for Relief of Distress”.

Appendix 10, page 354 (19).

Questions 2764-5, 2794-7 2838, 3168.

Questions 2758, 3047, 87908800.

Appendix 10, page 354 (20).

Question 765, 900, 2837, 3284, 4873-84.

Appendix 3 (13). Question 2006-23.

35. During the period of these transactions, Mr. Fagan believed that the account in Baggot St. was similar to the account in Clones, and was operated by the same three individuals and that the change to Baggot St. was only for convenience sake. He had had an assurance to this effect from Captain Kelly which the latter confirmed in evidence, The Irish Red Cross Society also believed that the account was similar although it seems that they may not have been told the names of the account holders in Baggot St. It did not become known until after the money had been expended that the names of John White, John Loughran and Roger Murphy were fictitious, being apparently designed to protect the identity of the Clones account holders. Messrs. F and H have stated in evidence in private that they signed the mandate and Mr. G has informed the Committee that he signed a from which it is presumed was the mandate. The mandate was signed in the three fictitious names and authorised the drawings by cheque on the account in any two of these names. There is evidence that the mandate was presented to the bank by Mr. F Messrs. F and H also stated in evidence in private that the cheques drawn on the account were signed in these three fictitious names by various people, including themselves. The Committee is of opinion that there is some evidence to support this in the differences in some of the signatures. A balance of £2,842.17.6 remaining in this account has since been recovered by the Department of Finance.

George Dixon account

Appendix 10, pages 355 (21, 22), 357 (35) and 361.

Questions 937, 1020-9, 2788-9 4842-5, 7124-9 9386-95, 9414-20.

Questions 3341 (n)-2, 5108, 6627-32, 7027.

Questions 913, 929, 1512, 2112, 2538, 2596, 9435, 9526, 9531.

36. An account in the name of “George Dixon” was opened in the Munster & Leinster Bank, Lower Baggot Street, on 14 November 1969 with a lodgment of £11,450 consisting apparently of £4,450 drawn from the Clones account (paragraph 33) and £7,000 drawn from the Baggot Street main account. Further sums amounting to £30,000 were transferred from the main account to this account during January, February and March 1970. It would appear from the evidence that Captain Kelly was associated with the opening of this account. It has not been possible to identify George Dixon. Captain Kelly stated in evidence that he knew who George Dixon was but he refused to identify him. The bank officials were unable to identify him. A balance of £200 remaining on this account has since been recovered by the Department of Finance.

Ann O’Brien account

Appendix 10, pages 355 (21, 22) 357 (35) and 361.

Questions 937 3788-9, 4845-6 9396.

Questions 3784, 37751-5, 5107-9, 6644, 7104-5,

Questions 716, 913, 926-9 1230, 2066, 2537, 9527, 9531, 9546.

37. An account in the name of “Ann O’Brien” was opened in the Munster & Leinster Bank, Lower Baggot Street on 14 November 1969 with a lodgment of £2,500 drawn apparently from the Clones account (Paragraph 33). Three sums of £1,000 each were transferred from the George Dixon account to this account, two in December 1969 and one in February 1970. A further £1,000 was lodged to this account in March 1970, apparently being part of £4,000 drawn from the Baggot Street main account. It would appear from the evidence that Captain Kelly was associated with the opening of this account. It was not possible to identify Ann O’Brien. Captain Kelly stated in evidence that he knew who Ann O’Brien was but he refused to identify her. The bank officials were unable to identify her. A balance of £49.13.9 remaining on this account has since been recovered by the department of Finance.

PART VI

TOTAL MONEYS EXPENDED

Analysis of movements through the accounts

38. An analysis of the movement through the account referred to of the moneys made available for the relief of distress is given in Appendix 6.

Summary of money expended

39. The preceding paragraphs show that the total amount of money expended was made up as follows:—

Less

PART VII

CONCLUSIONS RE MONEY DEFINITELY EXPENDED ON RELIEF OF DISTRESS

Money definitely expended on relief of distress

40. Of the sum of £105,766.5.9 the only amounts, which on the basis of the oral and documentary evidence, the Committee can definitely conclude were expended on or in connection with the relief of distress are £20,000 expended by the Belfast Refugee Re-Establishment Committee (paragraph 32), £9,000 expended by Messrs. A, B, C, D and E (paragraphs 24-27, 30) and £166.12.0 expended on seven Dublin-London return air fares (paragraph 29). These amounts totalled £29,166.12.0.

PART VIII

OTHER MONEY EXPENDED

Sums dealt with in this Part

41. It remains to trace what happened to the balance of £76,599.13.9 made up as follows:—

Payments to Colonel Hefferon

Questions 430-2 2933, 4208-11, 4212-24, 9138-43.

Appendix 4 (8) page 253.

Appendix 4 (13), page 266.

42. As has been stated in paragraph 28, of the total sum of £1,100 paid to Colonel Hefferon in September and October 1969, he gave £500 to Captain Kelly and in December 1970 refunded £350 to the Department of Finance as unexpended. The net balance of £250 had, he stated, been used for the running expenses of an office at Monaghan at which refugees from the North were interviewed and statements taken from them. He further stated that that office had “folded up” about the end of October or the beginning of November 1969.

Payment to Captain Kelly

Questions 2933, 4102, 4225-9, 9000-6, 9144-8, 9788-95.

43. The sum of £500 was given to Captain Kelly to cover, as agreed with the then Minister for Finance, the expenses of a meeting or meetings, at which people from Northern Ireland were to be present, which Captain Kelly had arranged or was to arrange.

Documentation and other difficulties in relation to the bank accounts

Appendix 10, pages 354 (20) and 355 (22).

Appendix 3 (13).

Questions 2822-7, 2845-50.

Questions 751-4, 1011, 1069-74, 1095, 1105, 1344-6, 1374, 1477, 1999, 2073, 2151.

Questions 2794, 2803-17, 2836, 3042-5, 3053.

Appendix 3 (19).

Questions 663-8, 738-43, 810, 894, 959-66, 1063-68, 1118, 1123, 1276, 1322, 1331, 1557, 1704, 2619-20.

44. The account sheets in the Baggot Street bank were all annotated that no correspondence was to be sent out and that all inquiries were to go to Mr. A. J. Fagan. Mr. Fagan has stated in evidence that these notations on the account sheets were completely outside his knowledge and had been made without his authority and that no correspondence or documents were received by him from the bank. The bank officials could not recollect having sent correspondence or documents to him and it appears from their evidence that the notations were for internal bank reference. Mr. Fagan stated that he had a number of telephone conversations with officials of the bank but from his evidence it appears that he was never given to understand that there was in fact more than one accounts in the bank. There is no clear evidence from the bank officials as to whether more than one accounts was mentioned in these conversations.

Appendix 3 (13).

Questions 709-12, 2024-36. 2051-3, 2359-61, 2544, 9519, 9537-8.

Appendix 3 (11),

Questions, 7503-5, 7515-6, 7562-70,

Questions 2024-36, 2051-3, 10202-5, 10281-93, 10316-9.

45. The names of the account holders were in all cases fictitious (paragraph 35) and the bank officials failed to identify anyone dealing with the accounts other than Captain Kelly and two other persons— Mr. Gearóid Mac Eoin and Mr. F. Mr. Mac Eoin, in evidence, stated that at the end of April 1970, Mr. F with whom he was acquainted, told him that he wished to cash a cheque for £1,200, that the banks were closed and that he needed the money urgently for relief purposes in the North. Mr. Mac Eoin was able to give Mr. F £1,000. Within a day or two he cashed the cheque in the bank and gave the balance to Mr. F. He did not recall who signed the cheque or the number of people who signed it nor did he have any knowledge of the account. The copy of the cheque put in in evidence by the bank is for £1,200 payable to cash and bears the signatures John Loughran and Roger Murphy, Mr. F accepted the evidence of Mr. Mac Eoin in this matter, but he did not personally recall the cheque. A bank official also testified that he had paid cash to Mr. F on foot of a cheque for £1,000 on 17 April 1970 drawn on the Baggot Street main account. Other bank officials stated, moreover, that they had cashes cheques for Mr. F but could not be specific as to the circumstances.

Questions 1165-72,2230-76, 2277-2308.

Appendix 5 (1, 2, 4, 5, 17, 21, 22).

Questions 3221-33.

46. Cashed cheques and copies of the bank statements were handed out to some unidentified individuals in the case of the Baggot Street main account and the George Dixon account on 22 January 1970 and again in respect of the three accounts on 16 March 1970. These documents are not available although the original bank statements were made available to the Committee. In evidence, Captain Kelly stated that he had received bank documents from a person whom he refused to identify and who, he stated, had colleted these documents from the bank. Captain Kelly stated that he had destroyed these documents.

Questions 4431-33.

Appendix 10. pages 356 (34) and 360.

Appendix 10. pages 356 (34) and 360.

Appendix 10. pages 357 (36) and 361.

Questions 7594-6.

47. Most of the cheques were drawn against cash and so no record of the payees in these cases is available from the bank. However, one cheque on the Baggot Street main account was drawn in favour of “J. J. Kelly” for £2, 000, another for £4,000 was drawn on the same account in favour of cash (Mr. F) and three totalling £1.900 were drawn on the Ann O’Brien account in favour of Mr. Séamus Brady.

Appendix 10, page 405.

48. Evidence was given to the Committee in private that all papers and documents in Belfast dealing with the relief of distress by Messrs. F, G and H, the account holders in Clones, and their associates were destroyed for, as was claimed, “security reasons”.

Withdrawals from Clones account and Baggot Street main account

Appendix 10, pages 359-60.

Questions 10456-83.

49. In the period of 29 weeks between 10 October 1969—the day after the opening of the Clones account—and 28 April 1970—the date of the last withdrawal from Baggot Street main account—there was a series of twenty withdrawals totalling £31,150 viz., £8,000 from the Clones account and £23,150 from the Baggot Street main account. These withdrawals were made at approximately weekly intervals (with one major gap of 7 weeks) and consisted of sums ranging from £1,000 to £2,000 with, exceptionally, one withdrawal of £5000 and another of £650. Evidence was given to the Committee in private regarding the amount and frequency of payments stated to have been made in Belfast from these drawings and claimed to have been for the relief of distress. However, evidence from other source concerned with relief in Belfast provided no confirmation of the existence of a relief operation on the scale suggested. Moreover, the destruction of documents has resulted in no corroborative documentary evidence being available to the Committee that this sum of £31,150 was in fact used for the relief distress.

Evidence on expenditure from George Dixon account

Questions 3277, 3778-80.

Questions 6689, 6728-48, 7240.

Questions 3779 6712, 6724-25.

Questions 6414, 6719-22.

Questions 6731, 6737-38, 6743-44.

50. Captain Kelly in his evidence sated that moneys drawn from the George Dixon account were used mainly in connection with the purchase of arms, Of the £38,249.13.9 accounted for directly through the accounts (paragraph 41), Captain Kelly indicated sums totalling £32,500 which he stated were used for the purchase of arms in Germany, of which £26,000 to £28,000 had been paid for arms, the balance being accounted for by expenses. The Committee is aware that efforts are being made by the Department of Finance to recover as much as possible of the moneys paid to an arms dealer in West Germany (see also paragraph 81b). Captain Kelly also stated that £849.13.9 was used to finance a trip to the United States for general assistance and arms, and £1,600 for an abortive arms purchase in Britain. In regard to the latter sum, the Committee were eventually informed (paragraph 72) by representatives of the Munster & Leinster Bank that cheques in the name of George Dixon and drawn on the George Dixon. account for £1,500 and £100 were cashed by the National Provincial Bank, Piccadilly, London on the foot of an advice note sent to that bank by the Munster & Leinster Bank, Lr. Baggot St. Of the remaining £3.300 from the George Dixon account, Captain Kelly believed £200 might have been used for expenses and perhaps £3,100 sent North. As some of this £3,100 was drawn during a period when the normal weekly drawings on the Baggot St. main account were suspended, it is possible that some of it may have been used in the same way as these normal weekly drawings.

Evidence on expenditure from Ann O’Brien account

Questions 3777, 6459.

Appendix 10, pages 357 (36), 363, (2, 3, 4), 384-6.

Questions 6459 6761, 7583, 7594-6.

Questions 5143, 6459, 6761.

51. Captain Kelly stated in evidence that the moneys drawn from the Ann O’Brien account were used mainly to finance the publication and circulation by Mr. Seamus Brady of the paper “The Voice of the North”. On the basis of the evidence of Captain Kelly and Mr. Brady it appears that £4,500 was paid from the account to Mr. Brady in connection with “The Voice of the North” of which £1,900 was transferred by cheque to Mr. Brady.(In addition Mr. Brady received £600 in cash from Captain Kelly on 6 or 7 November 1969). In addition to the £2,600 stated to have been drawn in cash for Mr. Brady further sums totalling £1,950 withdrawn from the Ann O’Brien account have not been accounted for, but Captain Kelly stated that this account was drawn on for expenses in connection with visits to Germany, and that at one stage £600 was withdrawn from the account, and sent North. There is no evidence that this sum of £600 is related to the £600 received by Mr. Brady from Captain Kelly.

PART IX

CONCLUSIONS RE OTHER MONEY EXPENDED

Sum dealt with in this Part

52. The Committee’s conclusions in relation to the sum of £76,599.13.9 referred to in paragraph 41 can now be dealt with.

“The Voice of the North”

53. On the basis of the oral and documentary evidence it concludes that the sums totalling £4,500 stated to have been paid to Mr. Seamus Brady from the Ann O’Brien account were expended in respect of “The Voice of the North” but that they cannot be regarded as having been expended on the relief of distress.

Balance of Expenditure

54. In relation to the remaining sum of £72,099.13.9 the Committee has not had available to it evidence, including documentation, of such a nature as would enable it to come definite conclusions.

55. In these circumstances it is possible to give only a view on this sum and the Committee’s view is (1) that based on the considerations set out in the paragraphs specified, the sum indicated in paragraph 49, viz. £31,150, made up of £8,000 on the Clones account and £23,150 on the Baggot Street main account, the sum (referred to in paragraph 50) of £3,100 on the George Dixon account and the sum (referred to in paragraph 51) of £600 on the Ann O’Brien account may have been spent in Belfast but the Committee, on the evidence available to it, is unable to say whether any f this money was spent on the relief of distress, (2) that the sum of £250 stated by Colonel Hefferon to have been used for the running expenses of an office at Monaghan was spent on purpose possibly related to the relief of distress and (3) that £36,000.13.9 made up of £500 paid to Captain Kelly, £35,149.13.9 on the George Dixon account and £1,350 on the Ann O’Brien account (a balance of £4,500 on this account is deal with in paragraph 53), was not expended on the relief of distress.

PART X

SUMMARY OF CONCLUSIONS RE EXPENDITURE

Summary of Conclusions re Expenditure

56. The conclusions stated in Part IX and in paragraph 40 may now be summarised by stating that of the £105,766.5.9¹ spent, £29,166.12.0.² was spent on relief of distress, £34,850³ was possibly spent in Belfast, but on undetermined purposes, £250 was spent on purposes possibly related to the relief of distress, and £41,499 13s. 9d.⁴ was not spent on the relief of distress.

TABLE

Possibly spent in Belfast but on undetermined purposes

PART XI

OBSERVATIONS ON MATTERS ARISING FROM THE EXAMINATION

Switch Hypothesis

Appendix 10. pages 405.

57. In a statement handed to the Department of Finance by two of the Clones accounts holders on 12 December 1970 on behalf of the Belfast Committee for the Relief of Distress it was stated that approximately £72,250 was received by the Belfast Committee from the Grant-in-Aid and was expended on the relief of distress in the Belfast area.* This sum purports to account more or less for all the money transferred to the Clones account and the Baggot Street main account from the Grant-in-Aid. Thus, on the one hand, the total sum available to the Belfast Committee is stated to have been spent on relief of distress while, on the other hand, a sum amounting to more than half of it seems to have been spent for other purposes.

Questions 3257-58, 3413. 6577, 6605,7288.

58. It has been suggested to the Committee that both propositions may be reconciled on the basis that there might have been what was called a “switching” of money ,that is, that while the money transferred to the George Dixon and Ann O’Brien accounts was spent other than on relief, an equivalent amount might have been made good to the Belfast Committee for the Relief of Distress from other moneys available in Northern Ireland. No first hand evidence of a switch was, however, received by the Committee. Even if the moneys transferred to the George Dixon and Ann O’Brien accounts had been reimbursed to the Belfast Committee for the Relief of Distress from funds outside the jurisdiction of the State it would be irrelevant to and could not make legitimate the expenditure of the Grant-in-Aid moneys for purposes other than those intended by the Dáil.

Dáil responsibility

59. In the year 1969-70 there were 120 Grants-in-Aid covering expenditure of £54 million, and, of these, fifty grants covering £47 million were accounted for in detail to the Comptroller and Auditor General but, in general, were not subject to examination by the Public Accounts Committee. There were seven cases of grants in which the grantee was not specified covering a total expenditure of £230,000. In his report on the Appropriation Accounts 1969-70 the Comptroller and Auditor General, referring to Subhead J of Vote 16 which included provision for the £100,000 stated:

“Grants-in-Aid are generally voted to specified grantees but in this instance the grantees were not named. As indicated in the Book of Estimates for the Public Services expenditure of sums issued out of this grant-in-aid was not liable to be accounted for in detail to me”

In the case of the £100,000, in the Government announcement in August 1969 that the funds be would be made available, no particular person or persons were named. As stated in paragraph 21 above, the technical procedure adopted was the opening of a suspense account in the Department of Finance. At first some payments were made directly to individuals. Then on 21 August the Government announced that the funds would be administered mainly by the Irish Red Cross Society and about this time were directed through the Red Cross to the Munster & Leinster Bank, High Street, Belfast, later to the Bank of Ireland in Clones and ultimately to the Munster & Leinster Bank in Baggot Street.

60. In the Dáil Debate on 18 March 1970 on the Supplementary Estimate for Vote 16 no mention was made of the new subhead providing for the Grant-in-Aid, the largest of four items in the Supplementary Estimate under subhead J, which at that time had been largely expended. In the event expenditure of £100,000 which began in the Autumn of 1969 and was nearly completed in Spring 1970, received retrospective sanction, without a division, in the Dáil (a) without a single specific reference to the subhead by the Minister, (b) without discussion or question in the Dáil, (c) in the form of a Grant-in-Aid to unspecified grantees and (d) excluding audit by the Comptroller and Auditor General.

61. It may also be noted that Supplementary Estimates which are circulated to Deputies at varying periods before coming up for consideration, and which there over 50 in 1969/70, are not recirculated to Deputies at the time of the debate. Moreover, where more than one Supplementary Estimate is introduced in respect of the same Vote, these different Supplementary Estimates are not distinguished from each other—a practice which in the case of the Supplementary Estimate for Vote 16 containing the Grant-in-Aid provision led to an error in the unrevised report of the Dáil Debates for the day in question viz. 18 March 1970, which recorded approval by the Dáil of a previous Supplementary Estimate for Vote 16 which had in fact been already approved in July 1969 rather than that of the second Supplementary Estimate containing the Grant-in-Aid provision.

Matters concerning payments to the Clones account and the Baggot Street main account

Appendix 10, pages 372-4, 376-84.

Appendix 5 (7, 8, 9).

62. The Department of Finance understood from Caption Kelly paragraph 35) that the Baggot Street account would be in the same three names as the Clones accounts, viz. Messrs. F, G and H and that what was involved was a transfer of the account. In these circumstances, they may not have specifically informed the Irish Red Cross Society of the names of the holders of the accounts but a firm conclusion cannot be drawn on this point from the evidence (paragraph 35). The written communication connected with the arrangements for lodging money to Baggot Street do not contain any reference to the three names. The Society, however, believed that Messrs. F, G and H were the holders.

63. in fact, the change to Baggot Street was not a transfer but the opening of a new account (paragraph 34) and the money came to be lodged to an account, “Belfast Fund for Relief of Distress” in three fictitious names.

64. In connection with this aspect of the matter it is necessary to advert to the respective responsibilities of the Departments and the Society. As noted in paragraph 31, the fund was to be administered mainly by the Society. The question arises from this whether technically the money was paid to the Society in the form of assistance under section 2 of the Red Cross Act 1938, in which case the Society would be responsible for ensuring that it was properly expended in accordance with the purposes of the Society. If, on the other hand, the Society was merely a channel, responsibility would be retained by the Accounting Officer of the Department for ensuring that the money went to an account in the names of those understood by the Department to be the account holders viz. Messrs. F, G and H.

Questions 8780-1.

65. The Chairman of the Society in evidence initially stated that the Society did not administer the funds, but she subsequently stated that the money was in fact paid in the form of assistance under Section 2.

66. The conclusion may drawn from this that the Minister’s intention as to the precise function of Society was not clear to the Society which in actual fact did not go beyond complying with the requests of the Department of Finance to transmit sums to the Baggot Street Bank. The written requests (paragraph 62) in relation to the Baggot Street (main) account were that the sums be made payable to the Bank or to the account for the Fund in the Bank.

67. The Committee concludes that the combination of circumstances outlined above resulted in the Department and the Society being unaware that the account in Clones had not been transferred, and that, instead, a new account had been opened in the Munster & Leinster Bank, Baggot Street, nor had they occasion to learn of the existence of the two subsidiary accounts. The use of the fictitious names made possible the arrangement (paragraph 35) under which various people signed cheques in these names and this arrangement in turn made it possible for money to be drawn from the account not necessarily, if at all, with the knowledge of Messrs. F, G and H and lodged in the George Dixon and Ann O’Brien accounts which were then used for purposes other than the relief of distress.

68. In the preceding paragraphs (62 to 67) account has not been taken of the circumstances of the time. The Irish Red Cross Society had sought and been refused permission to operate directly in Northern Ireland. It was, therefore, necessary to devise other means to achieve the object of providing funds urgently for the relief of distress arising from the situation of civil strife and turmoil in Northern Ireland and to achieve this in as flexible a manner as possible and with the minimum of formality. Possible risk to the citizens of Northern Ireland who had agreed to be account holders for the Fund had also to be guarded against. In the Committee’s view these exceptional factors may explain how the situation described above arose. However, it must be stated that had the recommendations made by the Committee (paragraph 81) re Grants-in-Aid been in force at that time this situation would not have arisen.

Dáil statement of 14 May 1970

Questions 202-7, 347, 410-23, 484-529, 559-60, 572-6, 600.

69. The Secretary of the Department of Finance, Mr. C. H. Murray, submitted to the Taoiseach on 14 May 1970 a from of words which the Taoiseach might use in reply to a query as to the possibility of public funds having been used for the purchase of arms. This form of words was:—

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

Appendix 10, 373, 375, 402.

Questions 516-20, 544-554.

Questions 290, 318-21, 562.

This unqualified assurance was suggested to the Taoiseach following an examination of the file by Mr. Murray. The file showed that on three occasions moneys were issued from the Grant-in-Aid to the Red Cross at the instance of (Captain) Kelly whose name had been publicly linked during the course of the preceding week with alleged attempted importation of arms. There were reference in the file to “Kelly’s people” and “Jim Kelly’s friends”. It appears from Mr. Murray’s evidence that such phrases were colloquialisms used deliberately to avoid identifying people in Northern Ireland involved in the relief operation. Furthermore, according to the information then available to him, the bank account into which the payments in question were lodged was held in the names of there reputable Northern Ireland residents; the file did not indicate that in fact this bank account was held in fictitious names and that there were subsidiary accounts.

70. The actual words used by the Taoiseach in the Dáil were somewhat different from those suggested by Mr. Murray:—

“I do not think the House could expect nor could I give any more information about the disposal of Service funds. However, I want to add that I made specific inquiries as to whether any moneys could been voted or could have been paid out of Exchequer funds or out of any public funds in respect of a consignment of arms of the size we have been dealing with and I am assured that there was not nor could not have been.” (Dáil Debates (Unrevised), 14 May 1970, Volume 1757, column 1757.)

Questions 439-40. 4007.

Nevertheless, the Committee is satisfied that the words used by the Taoiseach were justified by the form of words suggested to him and that the Taoiseach acted in good faith in giving the assurance to the Dáil, but does not feel that the terms of the assurance suggested to the Taoiseach were justified. Moreover, the Committee feels that when shortly afterwards, suspicions were aroused that money for the purchase of arms might have come from the fund, the Taoiseach’s attention should have drawn to the implications of this so far as the assurance given to the Dáil was concerned.

Questions 10799-10807.

71. It should be added that had the then Minister for Defence, Deputy James Gibbons, informed the Taoiseach on or immediately after 30 April of the information about financing of the attempted arms importation from this fund which he received from Captain Kelly on that date, the Taoiseach would not have been put into the position of unintentionally giving wrong information on this matter to the Dáil on 14 May 1970.

The Munster and Leinster Bank, Lower Baggot Street, Dublin

Questions 1162-72, 2230-2308.

72. The Munster & Leinster Bank officials handed over bank statements and cheques to people who could not have identified themselves as the account holders as the accounts were in fact in false names. By so doing the officials rendered the Committee’s task almost impossible. Moreover, the evidence given on behalf of this bank was unsatisfactory and the Committee did not receive from this bank the assistance it had a right to expect in tracing the money that passed through these accounts.*

Captain Kelly and the Arms Financing

Questions 3467, 4512-9, 4925, 5161-3, 5261, 5287-95, 6263, 7470-82, 7827.

Questions 3164-6, 3671-74, 4459-66, 4639-55, 5175-83, 6196, 6312, 6398-6403, 7200-3.

73. As was stated earlier (paragraph 50) Captain Kelly was the only witness to admit any connection with the use of this money for the attempted purchase of arms or the financing of “The Voice of the North”. He endeavoured to justify his actions in relation to this money, appearing to claim authority for them from his superiors viz., Colonel Hefferon and the then Minister for Defence, Deputy Gibbons. He also claimed to be acting as liaison officer with people in Northern Ireland to a Northern Ireland Committee of the Government or to the only two members of it whom he met, viz., the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney, and the then Minister for Finance, Deputy Charles J. Haughey. Because of his manner of giving evidence a disproportionate share of the Committee’s time was absorbed in trying to establish the nature and possible justification of these claims. The making of these claims by Captain Kelly necessitated the calling of Colonel Hefferon and the three Deputies in question. Before considering in turn his relations with these people it must be made clear that none of them had, or claimed to have had, any authority to authorise withdrawals from Baggot Street, however much Captain Kelly may have imagined otherwise.

Captain Kelly and Colonel Hefferon

Questions 8083-4.

Questions 5161-3, 5287-95.

Questions 3467, 4512, 5151-61, 5187-93, 5286-7, 6242, 6908-21.

Appendix 8, references 14 to 22.

Appendix 8, reference 4.

74. Colonel Hefferon’s evidence on his knowledge of this fund and of Captain Kelly’s connection with it was unsatisfactory.* But while Colonel Hefferon would appear from part of his evidence to have had knowledge of Captain Kelly’s use of money from the fund to finance arms purchase, and while Captain Kelly stated in general terms that he was authorised by the Director of Intelligence in this matter, no evidence was presented to the Committee even by Captain Kelly himself, that this operation was initiated on Colonel Hefferon’s authority or orders, nor, in the view of the Committee, did his detailed account of his communications with Colonel Hefferon justify his statement that he was authorised by Colonel Hefferon in this matter. Moreover, it may be noted that Colonel Hefferon in Court has said that Captain Kelly had told him that in “bringing in” arms he was acting with the knowledge and approval of two Government Ministers, the then Minister for Agriculture and Fisheries, Deputy Nile T. Blaney, and the then Minister for Finance, Deputy Charles J. Haughey, and that he (Colonel Hefferon) was not giving him any orders in relation to this course of conduct.

Captain Kelly and former Ministers

Question 3671-4 4459-65.

Appendix 8, references 28-31.

Questions 5168, 5278.

Question 4891-5. 6197-6237, 6883, 7019-21.

75. Captain Kelly claimed to have been operating as liaison officer between the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney, and the then Minister for Finance, Deputy Charles J. Haughey, as members of a Northern Ireland Committee of the Government, and people in Northern Ireland (paragraph 73). He dated this activity from October but later he amended this to August or September. The then Minister for Finance in his evidence in Court named Captain Kelly as an Individual concerned in creating a link between him (the Minister) and his fellow members of the Government and “the people in the North”. However, Captain Kelly denied being under their orders and, although apparently claiming to be acting with their knowledge, did not claim to have sought or secured their authority to disburse money from the Bank accounts for the purchase of arms or the financing of “The Voice of the North”.

Captain Kelly and the then Minister for Defence

Questions 11053-6, 11196-11205.

76. With regard to the then Minister for Defence, Deputy James Gibbons, Captain Kelly’s first contact with him was not until March 1970, several months after the process of withdrawing money from the account for arms purposes had begun. Clearly, therefore, there was no question of these withdrawals being authorised in direct contact with Captain Kelly by Mr. Gibbons, who stated in evidence that the first he heard of the accounts was on 30 April and no suggestion that he was so authorised was made by Captain Kelly.

Captain Kelly and the financing of “The Voice of the North”

77. With regard to the payment amounting to £4,500 to Mr. Seamus Brady for “The Voice of the North” from the Ann O’Brien account, no positive evidence was submitted by Captain Kelly to suggest that he had authority—or even the consent—of Minister or his superior officer for these transactions.

Captain Kelly and Authority—Summary

78. Captain Kelly may have assumed that he had the consent of some person or persons in authority who may have had knowledge of the arms importation although, of course, such consent even if it had been given could not have authorised the withdrawal of money from Baggot Street over which only the account holder had control. At the same time, Captain Kelly himself at no stage suggested in evidence that he had sought the consent of any person in authority for the use of money from Baggot Street for the purchase or arms. The possibility cannot, however, be excluded that a desire to avoid implicating some person or person in authority within the jurisdiction and/or some person or person outside the jurisdiction with whom he was in contact at the relevant period might have influenced Captain Kelly in giving his evidence.

Failure of Colonel Hefferon and Minister to take action

Questions 4133 5,8076-84.

Question 11553-60, 11065-69.

Questions 9071, 11068-70, 11154, 11259-74.

Questions 10923-7, 11052, 11134, 11220-43.

79. It must be added that had Colonel Hefferon taken appropriate action when he learned from Captain Kelly about the proposed arms importation and his drawing from the account, much of the money might not have been misappropriated. Had the then Minister for Agriculture and Fisheries, Deputy Neil T. Blaney, the then Minister for Finance, Deputy Charles J. Haughey, and the then Minister for Defence, Deputy James Gibbons, passed on to the Taoiseach their suspicion or knowledge of the proposed arms importation the misappropriation of part of the money which is now known to have been spent on arms might have avoided.

The payment of £500 to Captain Kelly

Appendix 5 (15).

Questions 4434-35 4891-3, 5026-32, 6820-4.

80. with respect to the £500 paid to Captain Kelly (paragraphs 28, 43), the Committee is not satisfied that the decision of the then Minister for Finance, Deputy Charles J. Haughey, to make available this sum from fund was justified under the terms of the Fund. Moreover, the Committee has failed to secure a satisfactory account of the expenditure of this sum from Captain Kelly.

PART XII

RECOMMENDATIONS

(a) Grants-in-Aid

81. Having taken into consideration the new instructions regarding Grants-in-Aid issued by direction of the Minister for Finance, the Committee recommends:—

(1) That, apart from moneys available to the Contingency Fund, no money be expended on new services prior to being voted by Dáil Éireann and that any such vote be preceded by a full statement by the appropriate Minister as to how the money is to be spent.

(2) That where provision is made for the issue of vote money to any person or body, adequate steps be taken by the Accounting Officer of the responsible Department to ensure that the sums concerned are lodged to the account of, or are paid directly to, the person or body specified in the Vote.

(3) That where moneys are issued to a person or body, the Accounting Officer of the Department concerned should notify the person or body of the purposes and conditions under which the money is issued, to ensure that the person or body is fully aware of the responsibility for subsequent disposal of such moneys.

(4) That the Comptroller and Auditor General e empowered to examine all Grants-in-Aid to satisfy himself that the money was used for the purpose intended by the Dáil.

(5) That the Comptroller and Auditor General have the right to inspect the books of a person or body which receives a Grant-in Aid unless a clear statement to the contrary is contained in the Estimate presented to and agreed to by the Dáil.

(b) Recovery of moneys

The Committee recommends that when the Department of Finance has brought to a conclusion the steps being taken by it to recover as much as possible of moneys paid to an arms dealer in West Germany (paragraph 50), a full report thereon should be made to the Dáil by the Minister for Finance.

(c) General

Arising from evidence given to the Committee of a lack of clarity in the chain of responsibility, and of confusion with respect to the question of authority, in the Public Services, including the Defence Forces, the Committee recommends that the Government examine the position in these respects, and take whatever remedial measures that may be called for.

The Work of the Committee

82. The Committee also feels that it should raise some points arising from its experience of its work in this matter. It is desirable that the Dáil decide on an appropriate method of operation for Committees of this kind under the Constitution.

83. The Committee decided to hear as much evidence as possible in public. It believes that this procedure was in the public interest as, if the Committee had worked entirely in private, public confidence in its ability and willingness to ensure the fullest possible enquiry into the events it was concerned with, might not have been sustained. Nevertheless, it is clear that this decision carried with it implication which were not fully appreciated at the tome. Some witnesses considered that evidence given about them in public session reflected on them, and this led to legal and constitutional problems.

84. The Act under which the Committee sought to require witnesses to give evidence was impugned in the Courts, and was found be to in part unconstitutional (paragraphs 15 to 17). The Committee was handicapped by the refusal of some witnesses to give evidence and also by the non-cooperation of some witnesses.

85. The extent to which an investigative Committee of this kind should be bound by the rules of evidence of the Courts of Justice, or should have power to establish its own rules within the general principles of natural justice, needs further consideration.

Appendix 4 (8). page 251.

86. The Committee from time to time required expert advice on legal matters. Existing practice required that, on each such occasion, it was necessary for the Committee to seek the separate sanction of the Minister for Finance for the expenditure involved, and this process was onerous and unsatisfactory.

Dáil Debates, Volume 251, columns 735-6.

87. The Committee also found difficulty in securing adequate stenographic services. When steps had to be taken by Dáil authorities at one stage to recruit additional stenographic staff because the number of staff normally available was insufficient to cope with the work of the Dáil, the Seanad and the Committee, this resulted in misdirected criticism of the Committee in the Dáil.

88. All these matter should in the Committee’s view be examined forthwith and the Dáil should decide on the provisions to be made for Committee of this kind. Moreover, while providing safeguards for the rights of citizens and ensuring that the principles of natural justice are upheld, steps should be taken to introduce whatever legislation may be necessary to ensure the satisfactory working of such Committees. This should include legislation to enable such Committees to require in a constitutional manner the attendance of witnesses and the production of documents.

Acknowledgements

89. The Committee wishes to express its sincere thanks to Mr. E. F. Suttle, the Comptroller and Auditor General, for his attendance in an advisory capacity and for his expert advice to the Committee.

90. The Committee wishes to express its sincere appreciation of the ability and work of its Secretary, Mr. J. R. Tobin. His assistance and advice were invaluable to the Committee whose task could not have been completed successfully without the unstinting help given to it by him and by Mr. F. Murray who so ably assisted him. Our thanks are also due to Miss J. Maher who, among many other duties, carried out all the typing work of the Committee.

(Signed) PATRICK HOGAN

Chairman.

13 July, 1972.

* Apportioned in paragraph 56.

* These are net amounts, that is, the amounts lodged in each account less transfers and balances. Details of the transfers and balances are given in the analysis in Appendix 6.

1. Plus bank charges £2.14.4.

2. Plus bank charges 11.0.

3. Plus bank charges 17.8.

4. Plus bank charges £1.5.8.v

* A report by the Secretary, Department of Finance, on a visit to Belfast in connection with this matter will be in Appendix 7.

Appendix 5 (1, 2, 4, 5, 7, 8, 9, 17, 21, 22).

Questions 2644-7.

Questions 2611-3.

* The matter of the cheques for a total of £1,600 cashed at the National Provincial Bank, Piccadilly London (paragraph 50) may illustrate the difficulties of the Committee in this respect. The manager of the Baggot Street Bank, following the Committee’s request for the production of all relevant documents, purported to produce to the Committee on 14 January 1971 all relevant accounts, dockets and vouchers in his possession. These documents were photostats, not original documents. They included a photostat of the George Dixon account on which there appeared to have been written “cashed NPB 21/11/69”. A statement in writing by another official of the Bank dated 20 January 1971 stated that he had been instructed to telephone the National Provincial Bank in London requesting them to cash cheques up to a maximum of £6, 000 for George Dixon if required on specific date. At the request of the Committee the original account was produced by the bank and on this document there were indecipherable traces of handwriting not apparent on the photostat copy. The Committee caused a technical test to be made of the original which showed among other manuscript noted brought to light, including a reference to “Kelly”, the following, viz. “note sent to NPB Piccadilly for £11,450”. Following an examination by the Bank of its correspondence at the request of the Committee, copies of letters issued to the Manager, National Provincial Bank, Piccadilly, were produced to the Committee on 1 February, 1971. These indicated that the Piccadilly bank had been requested on 17 November 1969 to facilitate George Dixon by cashing his cheques up to a maximum of £11,450 on 18 November, extended by letter of 21 November to “the next week”. A third letter of 27 November stated that the client no longer required facilities. On 2 March the Manager of the Baggot Street bank when asked if a cheque was cashed at the Piccadilly bank replied: “No, I do not think so. I think the final letter says ‘no longer requires facilities’ so apparently there was no cheque cashed there”. The Committee then requested that the originals of the letters be obtained. These were received on 15 March. On the back of the first letter (dated 17 November 1969) signed by the Manager of the Baggot Street bank, the following initialled entries appeared:—

On 14 April 1971 a letter of 6 April 1971 from the Piccadilly Bank to the Baggot Street Bank was transmitted to the Committee confirming that the two dates and amounts related to payments effected.

The Committee considers that the initial request by it to the manager of the bank to produce all relevant documents should have resulted in a through examination by the bank of all its papers and the consequent presentation to the Committee of all the facts at the commencement of its examination of the bank officials.

* At one point he stated that he did not get the impression that Captain Kelly was drawing and lodging the money, and that he was not aware that Captain Kelly was in a position to go in with a cheque, hand it over the counter and come out with money in his pocket, but, later he said that he was aware that Captain Kelly had access to this account and that he drew money from it and gave it to “the northern people”.