Free Ship of Fools by Fintan O'Toole Page A

act of unknowing by Byrne’s superiors. If the Central Bank knew that Des Traynor was operating a sophisticated tax fraud, there would have to be consequences. The Central Bank ‘knew’ instead that Traynor was just a clever banker, lawfully working the system to suit his clients.
    One reason for this tendency to call a crook a sheep-herding implement may have been the realisation that one of the
Central Bank’s own directors was implicated in the Ansbacher fraud. At least by 1978, the Central Bank knew that one of those directors, Ken O’Reilly-Hyland, was one of Traynor’s chosen few. At that stage, O’Reilly-Hyland, a Central Bank director from 1973 to 1983, had a ‘loan’ of IR£426,000 from Ansbacher Cayman. This knowledge, confirmed in the Central Bank’s 1978 inspection, remained entirely inert and unofficial: ‘There appears’, noted the High Court inspectors, ‘to be no documentary record within the Bank recording receipt or consideration of this information.’ By 1988, O’Reilly-Hyland’s Ansbacher ‘loan’ exceeded IR£1 million.
    Since the early 1960s, Ken O’Reilly-Hyland had been a pivotal figure in the nexus of connections between business and politics in Ireland. He was one of the directors of Taca, the controversial Fianna Fáil fundraising organisation associated with the young and ambitious new generation of politicians whose most prominent figure was Charles Haughey. At the time that the Central Bank discovered his involvement in the Ansbacher Cayman scam, O’Reilly-Hyland was chairman of Taca’s successor organisation, the so-called ‘general election fundraising committee’. This was a secret body, not under the control of the party leader and not given to publishing accounts. It operated, not from party headquarters, but from the discreet privacy of Room 547 in the Burlington Hotel in Dublin. As chairman of this committee, O’Reilly-Hyland was involved not merely in obtaining large donations from wealthy business people, but in securing loans from some of the very banks the Central Bank was meant to supervise.
    As well as being deeply embedded in Fianna Fáil’s financial dealings, however, O’Reilly-Hyland was also part of a network of business connections among fellow holders of Ansbacher Cayman accounts, including the architect Sam
Stephenson, the solicitor who had acted for G&M in establishing its Cayman operations, Liam McGonigal (both fellow members of the Taca committee), and the auctioneer John Finnegan. Finnegan in turn was connected through the builders Brennan and McGowan to another powerful Fianna Fáil politician, Ray Burke. In 1984, Finnegan, jointly with Brennan and McGowan, made what a tribunal of inquiry subsequently found to be a ‘corrupt payment’ to Burke.
    At the end of the 1970s and in the early 1980s, O’Reilly-Hyland was caught up in tensions between the secretary of his Fianna Fáil fundraising committee, Des Hanafin, and the new party leader, Charles Haughey. Haughey wanted direct control over the committee, and Hanafin, suspecting his motives, resisted. Haughey was particularly anxious to get hold of the committee’s so-called Black Book, a top-secret list of donors. Infuriated by Hanafin’s resistance, Haughey decided to disband the committee. A stand-off ensued until, shortly after Haughey was re-elected as Taoiseach in 1982, he summoned the committee members to his Georgian mansion at Kinsealy and got them to sign a document ordering Hanafin to hand over the secret fund-raising accounts into his own control.
    O’Reilly-Hyland told the Moriarty tribunal that at the time of his appointment to the board of the Central Bank in 1973, he informed the then minister for finance, George Colley, that he had an offshore trust in the Cayman Islands. That this was no barrier to a role as guarantor of the integrity of the country’s banking