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In 2004, Kathryn Nelson was a high-flying property advisor. But then the Northern Bank robbery occurred and she was wrongly implicated in money laundering. Caroline O’Doherty reports on her efforts to clear her name
By Caroline O’Doherty
THERE have been numerous laugh or cry moments in the two years since Kathryn Nelson won a lengthy battle to clear her name of involvement in what was at the time the biggest and most audacious bank robbery ever in Britain or Ireland.
One came just before last Christmas when she queried why the transfer of a sizeable sum of money had not yet made it into its designated savings scheme.
The bank she had sent it to weeks earlier told her she would have to wait a bit longer. Six to eight weeks longer, in fact. Safeguards against money laundering, they helpfully informed her.
Nelson didn’t need to be told anything about money laundering. The money she was trying to deposit was part of a High Court award for defamation after she’d been wrongly accused of being a money launderer and she’d been careful to include the court documents explaining all of this.
She could have laughed or cried but she did neither. She ordered the return of the money and when the bank said it wasn’t possible to do so mid-transaction, she stood firm, used her knowledge of the law, got her money back and is taking her business elsewhere.
“Who do they think they’re dealing with? Do they not realise the bold creature that I am?” she says.
A bold creature is a term she uses with affection to describe other people of spirit and strength but the Athy, Co Kildare native has had to draw on both qualities within herself in the period that followed the events of Dec 20, 2004.
Now she’s writing a book about her experiences and hoping others might take inspiration from the never-say-die attitude that got her through. On the other hand, she says she’ll be equally happy if readers just enjoy the intrigue of an indisputably fascinating tale that still has no ending. That tale began five days before Christmas 2004 when robbers walked out of the Donegall Square headquarters of the Northern Bank in Belfast with £26.5m in cash.
It was the biggest robbery in British or Irish history though it has since been overtaken in the rankings by the £53m Securitas depot raid in England in 2006.
But the details that emerged about the Belfast heist put the scale of the operation behind it beyond compare. Two families had been taken hostage, a test run in removing money from the bank had taken place and the eventual after-hours swoop was so cleanly executed, the Police Service of Northern Ireland said it must have taken up to 30 well-coordinated individuals to pull it off.
The PSNI, Northern unionists and the British and Irish governments had little hesitation in pointing the finger of responsibility at the IRA. That theory never waned despite vigorous denials from both the organisation itself and Sinn Féin.
The initial reason it was of concern to the Irish Government was because the peace process was at a delicate stage and the robbery would frustrate for a further three years the already beleaguered attempts to get the suspended power-sharing Northern Assembly back on track. But within weeks the significance was felt even closer to home after a bizarre series of cash discoveries in Dublin and Cork.
Detectives found €94,000 hidden in a Daz washing powder box after searching the belongings of a man stopped at Heuston Station. That led them to the home of a man in Cork who had £66,000 in unexplained sterling notes.
Acting on a tip-off they would also find the charred remains of what they believed to have been £1.5m that another man had burned in panic, unaware that scraps of the notes were floating up his chimney and fluttering down on nearby gardens.
Several worried business people also turned up at Garda stations with thousands in cash they believed they had legitimately borrowed from the man who was, up to the dramatic quashing of his conviction last May, the only person to be put behind bars for anything to do with the robbery.
And crucially, detectives found some £2.4m hidden in a wheelie bin at the home in Farran, Co Cork, of this man, Ted Cunningham. It was the Cunningham connection that dragged Kathryn Nelson into the saga.
Nelson had been working as a diplomatic liaison officer, a career the former VEC English and drama teacher had fallen into by accident after spending six years teaching in Libya.
She had adored Libya, soaked up the Arabic language and culture and readily accepted an offer of training in diplomacy from a European embassy which kept a panel of ex-pats to be called upon as lay diplomats if trouble arose in the Middle East.
She never imagined it would lead her into trouble rather than away from it. When her teaching contract finished in Libya, she moved to London, where she had originally trained as a teacher, to consider her next career move.
While there, friends introduced her to an enterprising architect who saw opportunities in working for foreign financial institutions looking to locate in what was then boom-time London.
They needed to find and fit out suitable properties while avoiding getting strangled in the red tape of planning, purchasing and leasing laws.
Meeting Nelson, he saw scope to expand his services further by helping clients navigate the wider regulatory environment — the tax system, company law, licence and permit requirements, banking procedures, quality control standards, import and export restrictions and so on.
At times it would be useful or even essential for investors to meet with officials in the various financial and regulatory bodies and government departments, and someone who could establish those relationships and set up introductions could prove invaluable.
Once perfected, the service could work two ways — assisting incoming investors to Britain and Ireland, but also smoothing the path for British and Irish investors interested in exploring opportunities abroad.
The job title of ‘diplomatic liaison officer’ could be hard to define but sometimes it simply meant arranging a translator and transport for a visiting potential investor, while at other times it meant securing private meetings with government ministers. Either way, it was a job Nelson loved.
Through her work she caught up with Phil Flynn, the former Sinn Féin vice-president and Irish Congress of Trade Unions president whom she had first met when she was teaching. He took up her case in a dispute with the VEC when her British qualifications prevented her getting a permanent post.
In the 1990s he became chairman of the Industrial Credit Corporation and Nelson did some work on an investment proposal in north Africa for him. When ICC was taken over by Bank of Scotland and Flynn became its chairman, their paths crossed again.
It was 2004 and Nelson was exploring opportunities in Bulgaria which was on its way to becoming an EU member. Foreign property speculators were circling overhead and Bulgarians themselves, who were traditionally renters, were beginning to earn money and think about buying their own homes, yet mortgage providers were thin on the ground.
Bank of Scotland had been busy wrestling mortgage business away from the traditional lenders in Ireland and was on the look-out for new business in growing markets. Bulgaria seemed worth a look.
Flynn approached the idea from a personal investment perspective rather than as an official Bank of Scotland venture and gathered a group of interested investors, among them Ted Cunningham of whose main money-lending company, Chesterton Finance, Flynn was a director.
Nelson arranged a trip to Bulgaria for them in late January 2005, a decision she quickly regretted because she felt her clients embarrassed her professionally by treating the outing as a jaunt rather than a genuine fact-finding expedition.
Back in Ireland in mid-February, she had other reasons for regrets when she rang Cunningham’s number to see if he was serious about pursuing further inquiries in Bulgaria. It was then she was told Cunningham had been arrested.
On the radio, she heard to her surprise that it was one of a series of arrests to do with an investigation into the laundering of proceeds from a bank robbery. Then, to her horror, she heard Michael McDowell, Minister for Justice at the time, voice his belief that the IRA had been trying to buy a bank in Bulgaria.
Nelson has always been adamant that she heard nothing about the robbery up to then. She had been in Bulgaria at the time, working a light schedule while recovering from hip surgery, and then spent Christmas with friends in Malta.
“I was told when I was arrested here [in Ireland] that this wasn’t possible — the whole word knows there’s been a robbery. There’s something people have to realise. It’s something I know from living abroad and viewing Ireland from a distance. The world does not stop when something happens here.
“The world did not know there had been a robbery and the world did not care. I was looking at them [the gardaí] like I had fallen out of another planet. Do you really believe that if I was involved, I would have boarded a plane for Dublin and walked straight into it?”
Nelson’s arrest and questioning was hard enough to take but it was when she saw her arrest extensively reported in the Sunday World newspaper along with photographs of herself and Cunningham that panic really gripped her.
She read the headlines “Busted”, “Sinn Féin/IRA Crime Machine” and “the mystery woman at the centre of the Sinn Féin/IRA multi-million euro money laundering scandal” and felt her world falling apart.
“When I saw the first page, the front page, honestly I thought that I was going to die, and I did die a little and ever since that I have died a little more.”
It was then that the unconventional — she calls it independent — nature of her life worked against her.
“I had furniture in Malta, belongings in the UK, books in Bulgaria, papers in Montenegro. I was like the Palestinians — stateless,” she says.
Nelson had been out of Ireland for 20 years, had no permanent home or immediate family as her parents and only brother had passed away and her early marriage had been annulled more than 30 years previously.
She had good friends and valued colleagues who she credits, along with God, with pulling her through. But while they provided moral support, she says she could not expect them to put their own reputations in jeopardy by standing beside her publicly.
“The embassies I dealt with held the matter in contempt but they could not touch me and I could not ask them to.
“They knew the truth and I knew the truth and there was no problem between us personally, but professionally they could not associate with me.”
She literally didn’t know where to turn, but eventually decided on the Isle of Man and moved to a rental house there in mid-2005 to await the conclusion of the Garda and PSNI investigations and the clearance of her name.
At the end of 2005, the PSNI charged three men in the North in connection with the robbery. Nelson felt that was the start of the truth emerging, but progress both sides of the border was painfully slow throughout 2006 and in early January 2007 all charges were dropped against two of the men. The third would later be acquitted when his case came to trial in 2008.
In the meantime Nelson began to despair. She had been in limbo for almost two years and there was no sign of normal life being able to resume any time soon.
It was then that she decided to go public in dramatic fashion, announcing she was going on hunger strike until the Irish State made a formal declaration of her innocence.
Unfortunately, there is no standard mechanism for doing so. Presidential pardons only apply to those wrongly charged and convicted of an offence and the gardaí, unlike their counterparts in Britain, do not routinely issue public, or even private, statements confirming that a suspect has been eliminated from their inquiries and that no further action will be taken against them.
Undeterred, Nelson sought through a solicitor, and received from Fachtna Murphy, then deputy commissioner An Garda Síochána, a letter in which he stated: “I am advised by officers in charge of this investigation that, as matters stand, there are no ongoing investigations in respect of your client.”
It was the closest thing she was going to get to a declaration of innocence, but it wasn’t close enough for Nelson. With the overall investigation ongoing and open-ended — as it remains eight years on from the robbery — she decided she still needed to do more to regain her reputation.
She stayed on hunger strike for five and a half weeks but called it off after being hospitalised for a second time, and decided to devote her energies to a defamation case against the Sunday World.
It finally came to hearing in November 2010, ending in a sudden apology and settlement offer only after all the evidence had been heard and the jury were deliberating on their verdict — an ending presiding judge Ms Justice Elizabeth Dunne described as “most unusual”.
Nelson accepted the financial offer which she is precluded from disclosing, but says it was “fair but not huge”. She has been trying to put her life back together since.
She had moved back to Ireland before the hearing, settling in rural Co Kilkenny where she is now working on her book and looking into projects where her diplomatic liaison skills might be put to use. The firm she worked with in London is now focused back on architecture but Nelson has no such fall-back and is not ready for retirement.
Nor is she ready to forgive for what happened to her and she openly admits the book will allow her vent some of her anger and frustration.
“People may question my motivations and say I’m only doing it out of vengeance but if I did it to get my revenge, would that be so wrong?”
Her targets for revenge are formidable — the press, the law and the State. She wants the replacement of the voluntary Press Council with a statutory press complaints commission with full legal powers to detect, investigate, rectify and punish breaches of standards.
She followed the Leveson Inquiry into press practice and ethics in Britain with interest and would like to see some similar soul-searching in the industry here.
She also wants plaintiffs to have the right to an automatic case review in matters where a defendant drags their feet or the court system fails to provide a timely trial date, believing her case should have been heard and settled long before it was.
She found herself almost envying Louis Walsh the relative speed with which his defamation case with The Sun was settled last month, 18 months after he was wrongly reported to have sexually assaulted a man in a nightclub.
“He talked about his year of pain [it was under a year before his accuser was convicted of making false allegations against him] and a year is a year too long, but I had nearly six years of it. Justice delayed is justice denied.”
She also wants the establishment of a mechanism whereby the State can publicly remove the cloud of suspicion over an individual who is arrested as part of a criminal investigation but is never charged.
Understandably, she’d also like to know who was really behind the Northern Bank robbery and the extensive money laundering operation that would have been required to disperse such a vast sum of money.
She’s not the only one. Eight years on with no one behind bars to show for intensive police investigations in two jurisdictions, the whole affair remains one giant puzzle.
Into the void have leapt numerous theories. One is that plans for the robbery were known about but ignored so as to allow the IRA a kind of pension fund or farewell gift. One suggests the robbery was staged to deliberately derail the peace process.
Another goes that little or no money ever left the safe, or perhaps that the full amount was stolen but most of it was destroyed after a worldwide recall of Northern Bank notes rendered it useless.
Nelson herself described some elements of the saga as “Harry Potteresque” when she gave evidence at the defamation hearing and she says she still isn’t sure what to believe.
“Sooner or later some old bird will die with a notebook under her bed or some lad’s bag will fall off a train and the truth will come tumbling out because there are just a few things in the world you can not hide and in the long run you can not hide fact.”
Nelson doesn’t intend hiding much in her book, of which the first 35,000 words are complete, and she is making it as honest and as detailed an account of her experiences as possible.
“I do know something about the defamation laws,” she says. “But there won’t be much I won’t say. I will go as far as the law allows me.”
Nelson had hoped that once the case was over, she would bounce back swiftly and resume her life as before, but she admits she has found the past two years more difficult than she expected. “I have changed and not in a way I like. I lack confidence. If I go to post a letter I think, did I put the right stamp on? I was getting worried about cooking [a lifelong passion] — did I measure that right, did I time it right?
“I lost faith in myself. For someone who travelled through airports and customs and security countless times without a bit of stress, now I would go to my knees wondering if I had everything in order.
“They took me to pieces and there are bits of those pieces that will never go back. One of the things that makes me sad is that I have extraordinary mental energy and good physical energy but emotional energy I have not.
“I retreat from extremes of emotion. I can not take great happiness or great sadness and people are inclined to look on me as a cold fish. I’d like that part of me back. I’d like to be able to laugh and cry as before.”