Republican News · Thursday 11 July 2002

What the Inspectors found

Secret Banks

For 20 years, Des Traynor, John Furze and others conspired to defraud the 26-County state. They were knowingly breaking the tax code, banking and company law of the 26 Counties by running a secret bank in Ireland. For years, the bank was run from the offices of one of Ireland's leading companies, Cement Roadstone Holdings (CRH). Traynor was chairperson of CRH. Many of CRH's directors used the Ansbacher accounts to hold their money hidden from the Irish tax authorities

The Inspectors conclude that CRH assisted Ansbacher in carrying out its activities in Ireland, many of which we know to be fraudulent. Amazingly, the report also concludes that even though seven directors of CRH had Ansbacher accounts, it was unclear whether the company "knowingly" gave that assistance to Ansbacher.

Traynor was Ansbacher's chief spider at the centre of a large and complex web of accounts, trusts and shell companies. He looms large in the life and financial affairs of Charles Haughey, who claimed at the Moriarty tribunal that Traynor was in complete control of his financial affairs. It was Traynor who lobbied for Ben Dunne and others to give money to Haughey. It was he who laundered Haughey's plundered millions offshore.

Irish Business

The Ansbacher report gives a stunning insight into just a few examples of how Irish companies conducted their affairs. In many cases, it was commonly accepted practice for business entrepreneurs to hide the profits of their business in illegal offshore accounts.

In many examples, the tax consultants and auditors to these companies were active enabling board members and shareholders, siphoning money out of the Irish economy.

Traynor and others regularly set up a battery of shelf companies and trusts to hide the name of the true beneficial owners of the companies.

Neil McCann, Fyffes' chief executive, admitted to the Inspector that the company deliberately understated its profits and moved the money through a subsidiary company based in the Cayman Islands. Some of the money was used to make bonus payments to staff as well as paying suppliers.

Ignorance and forgetfulness

Many people who had secret bank accounts and shares in shelf companies told the inspector that either they didn't know the accounts were held offshore or that they had forgotten the details.

Take for example Ronald Chambers, who set up a discretionary trust with Des Traynor in 1972 but did not hear of Anbacher until the 1997 McCracken Tribunal. He could not remember a £90,000 loan he took out in 1974.

The already mentioned McCann could not remember if his company had funds in Ansbacher, but he has agreed that this must have been the case.

The Central Bank

The institution that is supposed to regulate the banking sector was found by the Inspector to have failed to "test, appraise and gather the information available to it". This resulted in the "true nature of Ansbacher's activities going undetected". Officials at the Central Bank raised their concerns about the Guinness and Mahon Cayman Trust, which was later renamed Ansbacher Cayman in 1976. The true activities of Ansbacher remained hidden for a further 21 years.

One of the Ansbacher names, Ken O'Reilly Hyland, was a former board member of the Central bank. O'Reilly Hyland had an offshore trust in the Bahamas which he moved into Ansbacher.

In his interview with the Inspectors, O'Reilly Hyland could not remember a company called Beresford Investments in which documentation names him as a major shareholder and with which the Inspectors had documentation showing six-figure loans secured by his Ansbacher deposits.

The Irish Banks

If you are wealthy enough you can forsake the banking queues and the erratic service. All the major banks have specialised services for their "high net value" clients. You get not just the cup of coffee in luxurious surroundings - when you are at your special branch you also get special cheque books, credit cards etc and expert advice.

The Ansbacher Report gives an example of just one of these banks, Bank of Ireland Private Banking (BOIPB). Des Traynor opened accounts in BOIPB in 1992. The accounts were in the names of two Cayman-registered companies.

The inspectors conclude that BOIPB failed to question Traynor about the residential status of the beneficial owners of the accounts and that BOIPB assisted Ansbacher in concealing the Irish identity of some of the beneficiaries. Finally, the inspectors conclude that Bank of Ireland "perhaps unwittingly" assisted Ansbacher in defrauding the Revenue Commissioners".

It leaves a big question as to whether there were other similar cases of fraud happening in Bank of Ireland and calls into question the activities of the other banks, who offer specialised banking services for their richer clients".

IIB Bank, formerly called Irish Intercontinental Bank, is also cited by the Inspectors for providing assistance to Ansbacher between 1991 and 1997.

Advisers and Evasion

If you trawl through the statements of Ansbacher account holders, two things become clear. The first is that among the professional classes it was deemed entirely acceptable to defraud the state and hide your money in offshore tax shelters. The rich clearly felt that they could avoid paying tax.

Also clear is that in many cases their advisers and accountants felt this too and advised their clients to open offshore accounts out of sight of the Revenue Commissioners, even though they knew this was a breach of the tax code on which they were acknowledged experts.

Two names that crop up in the report are those of Don Reid and Alex Spain, in the context of advising people to set up offshore accounts. Spain is current chairperson of DCC, a large industrial conglomerate on the Irish stock exchange, while Reid has held and still holds many directorships. He was chairperson of the Irish Times.

The Builders and Developers

While not at all a Who's Who of the wealthy in Ireland, the Ansbacher names do show common threads between one economic sector, that of housing and property developers. The Ansbacher accounts are filled with relevant names of people from this sector, including architects Arthur Gibney and Sam Stephenson.

Other builders and developers included George Crampton, as well as many other Crampton executives; John Finnegan of Finnegan Menton estate agents; Thomas Jackson a director of Monarch Properties; property developer Clayton Love Junior; builder Edward Lynam; and builder Sean McKeon, who was as a partner in Sheelin Homes.

This snapshot clearly shows how one sector of the economy, which is vitally important to the state in terms of housing and building the offices, shops, roads and other physical infrastructure needed in a modern economy, is also hugely profitable to those involved. It seems that everyone, from architects to investors, builders and vendors, was reaping the substantial rewards.

The real question is, who was paying for these profits?