Ansbacher report names 200 clients

A long-awaited report into the biggest financial and political scandal to hit Ireland was published today, exposing the names of 200 clients who held accounts with a ‘‘sham’’ bank.

Former Taoiseach Charles Haughey was listed among other former members of the Dail, the landed and the wealthy, who used Ansbacher (Cayman) bank between the 1970s and 1990s.

The clandestine bank, which was unauthorised to operate in Ireland, was used by many of its clients to evade tax.

Publishing the High Court-ordered report in Dublin today, Paul Appleby, director of corporate enforcement said: ‘‘The company, now known as Ansbacher (Cayman) Ltd, secretly operated in this jurisdiction for over 20 years and conducted business which, the inspectors have found, amounts to evidence tending to show that it contravened prevailing banking, tax, company and other legislation.

‘‘When its activities came to light in 1997, the nation was shocked that such activity had occurred and had remained effectively hidden from official authorities for so long.’’

He said his office would now be supporting efforts to recover the €3.2m cost of the report, which runs to 10,000 pages, weighs 25 kilos and stacks more than a metre high.

He added: ‘‘I have no doubt that other relevant state authorities such as the Central Bank, the Revenue Commissioners and the Director of Public Prosecutions, will closely evaluate their own legal options in the light of the information contained in this report.’’

Among those named today were Sir John Derek Birkin, now retired, a former leading industrialist in the UK, and John Byrne, a well-known property developer in Ireland and the UK.

Among the political clients were former Irish politicians Hugh Coveney and Denis Foley.

Others listed include the late John Guinness and his widow Jennifer. Mr Guinness was formerly director and chairman of Guinness and Mahon bank.

Doctors, architects, solicitors, company directors and chairmen - particularly from the company Cement Roadstone Holdings (CRH) - and bankers.

However, the report pointed out that not all clients of the bank, which was established by Des Traynor, the late financial adviser to Mr Haughey, were evading tax.

Some of the high society clients fought to keep their names secret but last month the president of the High Court, Mr Justice Finnegan, ruled it was in the public interest for the report to be published in full.

More than 200 witnesses were interviewed for the report which should have been published last Monday, but the printer said it was impossible to run off the 10 million pages in time.

The Ansbacher scandal started in the early 1970s when Traynor used his position on the board of Guinness and Mahon to set about establishing offshore subsidiaries in the Channel Islands and the Cayman Islands.

The Cayman subsidiary was eventually bought by the Henry Ansbacher group and renamed Ansbacher (Cayman).

Clients deposited tens of millions of pounds with Ansbacher which was treated, for tax purposes, as if it were lodged offshore. But Traynor was holding the cash in Ireland and ran the business from his central Dublin headquarters.

The scam also involved offshore trusts, foreign-registered companies and complicated financial manoeuvring.

Account holders retrieved cash and received loans from Traynor who was chairman of CRH, one of the largest Irish companies during the period.

Today’s report found: ‘‘Mr Traynor facilitated the operation of sham trusts on behalf of Ansbacher’s clients.

‘‘There is also evidence to show that the discretionary trust scheme facilitated widespread tax evasion.

‘‘The Inspectors are satisfied that there is evidence tending to show that some of the clients of Ansbacher availed of its services for that purpose and did so with Ansbacher’s knowledge.’’

It added: ‘‘The inspectors are satisfied therefore that there is evidence tending to show that the affairs of Ansbacher were conducted with intent to defraud a creditor of some of its clients, namely the Revenue authorities.’’

However, the report added that a finding by the inspectors that a person was an Ansbacher client was ‘‘not to be taken as a finding that that person has evaded tax’’.

Some clients borrowed money from Ansbacher which gave rise to no tax liability. Others set up trusts which they never used.

Ansbacher’s cover was blown when an inquiry into the affairs of businessman Ben Dunne discovered payments of more than £1m to Mr Haughey.

It led to the biggest political scandal Ireland has ever seen and set in train the inquiries into Ansbacher.

The report said that a payment of £10,000 was made from an Ansbacher account to Mr Haughey’s son, Conor, in September 1992.

The report said: ‘‘Mr Conor Haughey is of the view that this was assistance from his father in the building of his house.’’

But the inspectors added: ‘‘There is no evidence to suggest that Mr Charles Haughey played any part of the management of the Ansbacher.

‘‘The inspectors limited their investigation of him to the extent only that he was a client of the company.’’

An Tanaiste Mary Harney - one of the most high-level instigators of the potentially explosive report - today said its findings were damning, but had lifted ‘‘a veil of secrecy.’’

Ms Harney, who is also Enterprise, Trade and Employment Minister, called the report ‘‘a watershed in Irish life.’’

She declared: ‘‘It is a damning insight into a world of conspiracy, fraud and tax evasion over a long number of years.

‘‘The report concludes unambiguously that a variety of individuals and corporations knowingly promoted widespread tax evasion.

‘‘The inspectors have uncovered evidence that tends to show that individuals and corporations:

* Conducted their affairs with intent to defraud the revenue

* May have committed a number of criminal offences, including conspiracy

* Were in breach of company law and various sections of the tax code

* And engaged in unlicensed banking.’’

Ms Harney said: ‘‘The report has described the activities of Ansbacher (Cayman) Ltd, as ‘little more than a charade, a sham and a legal fiction.’

‘‘It states clearly and explains in some detail the extent to which secrecy or concealment was an essential element of the schemes.

‘‘Secrecy was the lifeblood without which these activities could not have endured.’’

The Irish government number two, who has consistently urged that the report should be submitted to the Revenue Commissioners, added: ‘‘That is the reason why I am pleased that the court has ordered the publication of this report.

‘‘I believe the public has a right to know what went on, and I believe that making the report available best serves the public interest.

‘‘It is right to reveal what others have fought to conceal over many years.

‘‘It is important for our society that all citizens should feel confident that there is a fair and equal application of the rules.

‘‘The report is important because it demonstrates that we in Ireland now have the capacity and the courage to lift the veil of secrecy - and the determination to enforce the law.’’

Ms Harney said Irish society deserved a coherent and comprehensive body of law that was actively enforced without fear or favour.

‘‘We should aim, not only to meet the highest international standards, but to set them.

‘‘We should show leadership in ensuring that our society is a fair and just place in which to live and do business.’’