Haughey, Dunne and the Revenue: how Moriarty got it so badly wrong

IN THE concluding paragraph of my book, Haughey’s 40 Years of Controversy, I wrote that in the end he “probably destroyed his political legacy. It was a great pity because he was unquestionably a very talented politician”.

Taking the totality of the report of the Moriarty Tribunal this week, there is no longer any “probably” about it — Haughey did destroy his political legacy. He was a serial perjurer, having perjured himself during the Arms Trial and in obstructing both the McCracken and Moriarty tribunals. He ritualistically evaded taxes and shamelessly stole money while enforcing a savage regime of cuts that hurt the poorest segments of society.

He was an amoral individual who repeatedly bucked the system and got away with it — in this life at any rate. He can now justly be described as the greatest Irish bucker of all time.

He played the role of Robin Hood in reverse. He robbed the poor to help the rich, especially himself. But while he may have amassed enormous wealth, he could hardly be described as rich because he destroyed even his own reputation.

The more than £9.1m that he begged, borrowed and stole in the difficult economic times during which his government was “championing austerity can only be said to have devalued the quality of a modern democracy,” in the opinion of Judge Michael Moriarty.

There are, however, aspects of the report that are suspect, and the reaction of some of the media is even more suspect. The Irish Independent’s bold front-page headline — ‘Haughey stole 45m’ — was grossly misleading. The use of the current value of the money could well have been given within the story, but it was a distortion the way it was used in the headline.

Haughey was given some of the money for himself, so that was not stealing. The story was bad enough without exaggeration.

In a sense, there was little new in the report because the evidence given to the tribunal had already been published. The really new aspects were the judge’s opinions and conclusions.

Last year the media distorted the testimony of Seamus Paircéir, the former chairman of the Revenue Commissioners, when he testified that he offered to settle the capital gains tax aspect of the Dunne Trust for 16m. This was widely depicted as a saving of £22.8m for the Dunnes.

Judge Moriarty would appear to have been influenced by the media’s distortion.

In the mid-1980s, the Dunne Trust was assessed for £38.8m in capital gains tax. This amounted to up to half of the company’s value at the time. Ben Dunne’s legal advice was that there was no tax liability in the matter. He went to Charles Haughey, who asked Seamus Paircéir to meet Dunne to discuss the situation. There was nothing wrong with that.

Paircéir had already met Dunne at the behest of Alan Dukes while he was Minister for Finance in the previous government. Nobody has suggested there was anything improper with the Fine Gael minister’s conduct in this regard. But Haughey’s conduct is depicted as perverse because the judge concluded that Paircéir seemed ready to adopt a more facilitating attitude towards Dunne due to the influence of Haughey.

The Revenue soon seemed ready to cut the bill to £23.6m, but Ben Dunne said it was still too much for the company to pay at the time. Paircéir eventually offered to settle for £16m, confident this would be accepted, but Dunne rejected it.

Paircéir retired shortly afterwards and was hired by Ben Dunne as a part-time tax consultant.

This is depicted as “entirely inappropriate” in the report, but it was perfectly legal.

Haughey next arranged for Dunne to met Paircéir’s successor, Philip Curran, who said he would have been happy to meet Dunne without the Taoiseach’s intervention. The offer to settle for £16m was renewed, but Dunne again rejected it.

In September 1988, the formal appeal against the capital gains tax assessment went ahead with full representation on both sides, and the findings were in favour of the Dunnes. There was no capital gains tax liability on the trust. On the advice of senior counsel, the Revenue Commissioners decided it would be futile to appeal the ruling to the High Court.

Curran’s successor, Cathal MacDomhnaill, recalled that “he and his follow Revenue Commissioners had all agreed it was not warranted to appeal the outcome”, according to the report. “Had they felt there were real prospects of success in taking the matter to the High Court, they would have done so,” he explained.

SO, in short, the Revenue Commissioners got it wrong both when they tried to tax the Dunnes to the tune of £38.8m, and even when they offered to settle for £16m because the Dunnes did not owe any money in the matter.

“What had initially been assessed as a strong case for Revenue had in fact turned out to be a weak one in the context of the relevant trust law”, MacDomhnaill explained, according to the judge. Instead of offering to save Ben Dunne £22.8m, Seamus Paircéir and Philip Curran tried to screw the Dunnes of £16m on behalf of the State. Charlie Haughey tried to help Dunne when he was being wronged. That is the bottom line.

Of course, the report questions Haughey’s motives. Dunne responded generously by giving Charlie some £2m. If he thought he was buying the Taoiseach, however, he was buying a pup because in this matter he only got what he was entitled to in relation to capital gains tax. The material dealing with this aspect of the report is seriously distorted. As such, it detracts from the overall report, which is generally based on demonstrable evidence rather than mere speculation or supposition.

Is there anyone out there who thinks it was wrong of Ben Dunne to seek Haughey’s help when the Revenue was essentially trying to take half the value of the family business? If somebody as wealthy as Ben Dunne could not get justice from the Revenue Commissioners, what chance would the rest of us have?

In the circumstances, it probably was inappropriate for Paircéir to work for Ben Dunne as a tax consultant on retiring from the Revenue service, but this was neither improper nor illegal at the time.

The judge jumped to the conclusion, however, that Dunne’s decision to provide an advance payment “was nothing more than a gesture of recompense to Mr Paircéir for such assistance as he had furnished the previous year”.

What assistance — trying to screw him out of only £16m instead of £38.8m? “The terms of settlement offered by Mr Paircéir to Mr Dunne constituted a real and tangible benefit to Mr Dunne”, Moriarty continued. It is utterly absurd to suggest that anyone benefited from the Revenue Commissioners trying to screw the Dunnes out of only £16m. Moriarty lost the plot in this instance.

If Haughey did intimidate the Revenue Commissioners, as the report seems to suggest, surely he should be commended, rather than condemned in this instance, because they were wrong.

They were abusing their powers.

We need a more responsive civil service. Haughey did enough wrong without exaggerating his misdeeds and blaming him for things that he got right.