This story was first published in the Irish Mail on Sunday on 12/02/2012
By Michael O’Farrell
Investigations Editor
TO GENERATIONS of Irish people, the name Haughey has been synonymous with controversial and scandalous money matters thanks to the notorious financial affairs of family patriarch and former taoiseach Charles Haughey.
But today, the Irish Mail on Sunday can reveal a new chapter in the family saga as we disclose that a multimillion-euro loan related to the helicopter business of his son, Ciarán, has been taken over by NAMA.
The ex-taoiseach may have been able to have his own bank debts quietly swept under the carpet for much of his indulged and corrupt life but the company set up by his son – which was used to funnel €600,000 to his father – has now landed the family name in the ‘toxic bank’.
The loan in question is related to Medeva Properties Ltd, a firm jointly owned by Ciarán Haughey and John Barnicle, a Vietnam War helicopter pilot. Now though, in an unfortunate twist of fate, his business dealings with Mr Haughey have crashed to earth.
Medeva has close connections to Celtic Helicopters, which was set up by Mr Haughey in 1985 and has featured extensively in various tribunal inquiries into payments to his father.
Mr Haughey and Mr Barnicle are fellow directors of both firms and Celtic Helicopters is part-owned by Medeva. Other shareholders in Celtic Helicopters include Larchfield Securities – the Haughey family firm that controls assets such as the island of Inishvickillaune off the Kerry coast as well as seaside properties in Co. Wexford.
The MoS has discovered that Medeva’s NAMA loan is a €3m Irish Nationwide advance secured against the land and aircraft hangers at the Celtic Helicopters headquarters in Knocksedan near Dublin Airport.
Only the largest of the 850 property developers whose loans have been taken over by NAMA are directly managed by the agency itself.
The Knocksedan heliport is the only property registered to Medeva and land registry documents reveal several back-to-back Irish Nationwide loans secured against the asset.
The first Irish Nationwide loan is dated February 1996, when Medeva bought the land from Celtic Helicopters with the intention of renting the hangers and facilities out.
But the initial loan is followed by seven further advances from Irish Nationwide, which increased in frequency between 2000 and 2008.
In all, company documents reveal that Medeva has seven outstanding mortgages with Irish Nationwide, many of them for helicopters.
The latest accounts for Medeva, filed to the Company Registrations Office just this week, reveal that the company had a bank loan of €3.1m in 2011, the balance of which had increased by more than €100,000 from the previous year rather than being reduced by repayments. Meanwhile, the accounts value the company’s property asset at less than €2m.
When approached by the MoS at his Malahide home this week, Mr Barnicle admitted that the debt had been taken over by NAMA.
Mr Barnicle said: ‘That’s because the whole bank was taken in. Either you had a loan or you didn’t. If you were in Irish Nationwide, regardless of if you were making repayments or not, NAMA had it.’ However, when he was asked if the company had defaulted or missed payments on the loan, meaning it could face enforcement by NAMA, he admitted that it had. Asked whether Medeva was still in default and would be able to pay the loan back, Mr Barnicle said it depended on how things went.
When asked how things were going for Medeva, he replied: ‘Same as everything else in the country at the moment.’ The situation at Celtic Helicopters appears no better. The company has failed to file accounts for more than a year and Mr Haughey and Barnicle have received enforcement warnings from the Company Registrations Office.
A spokesman for the CRO said: ‘They have had notices from our enforcement section and they are following up on that at the moment. They are open to prosecution and strikeoff if they don’t file.’ Celtic Helicopters did attempt to file an annual return on January 26 but that was sent back as it was deemed to be not in order.
The MoS made several attempts to speak to Mr Haughey about the NAMA loan and other matters at his palatial home in Kinsealy, Co. Dublin, and his place of work, as well as through emails and phone messages to colleagues at Celtic Helicopters.
He did not respond to any of these approaches.
Mr Haughey’s journey into NAMA is merely the latest twist in a frequently controversial business career dominated and overshadowed from the very beginning by his late father.
During the recession of the Eighties, it was joked that the best way to get a job was to be the taoiseach’s son.
In 1985 when, at the age of 25, Ciarán Haughey wanted to establish Celtic Helicopters, it was his father’s bagman, Des Traynor, who stepped up to the mark to help him out.
The result was that the first two loans the company received came from Guinness & Mahon Ltd and Ansbacher Ltd, which would feature endlessly as the McCracken and Moriarty Tribunals investigated payments to Charles Haughey.
The initial capital for Celtic Helicopters was a combination of £80,000 collected by Des Traynor, who ran the Guinness & Mahon private bank, and a loan from Guinness & Mahon itself.
Some £50,000 of this was found to have been transferred through the now notorious Cayman Islands Ansbacher account. When the company found itself in dire financial straits in the early Nineties, a further £290,000 was raised by Mr Traynor.
This money was contributed by a number of businessmen, including Xavier McAuliffe, a Fianna Fáil supporter who two years ago was awarded the lucrative contract to roll out speed detector vans across the country.
The tribunals would also uncover other instances of businessmen going out of their way to help in order to keep on good terms with Charles Haughey.
For example, Mike Murphy, of Mike Murphy Insurance Brokers, organised a loan to help Celtic Helicopters pay for the insurance he was providing – then proceeded to pay off the loan himself. The Moriarty Tribunal found that Mr Murphy’s actions had been motivated by his ‘desire not to fall foul of what was perceived to be Mr Haughey’s enormous power’.
It added: ‘The payment was on the face of it the straightforward discharge of a debt owed by a company, Celtic Helicopters, associated with Mr Haughey.
‘Mr Murphy emphasised that he did not want to have made an enemy of the son of the most powerful man in the State; that the risk to which his own business might be exposed in the event of Mr Haughey’s son’s business failing.’ In all, Charles Haughey was found to have received indirect payments of more then £600,000 through his son’s helicopter company.
The tribunal also found that Charles Haughey ‘had used Celtic Helicopters as a vehicle for the transmission of other funds, in themselves unrelated to Celtic Helicopters, so as to enable them to be applied to his own use, while removing traces of the identity of the providers of the funds’.
There would be other skirmishes between Ciarán Haughey and the tribunals.
In 2006, the Mahon Tribunal criticised him and Mr Barnicle for failing to tell the inquiry that a significant amount of the proceeds from the sale of a share in a land holding near Dublin Airport had been transferred to the Isle of Man.
A lot of money had been spent ‘wandering around the globe trying to work out where the money had gone’, complained tribunal chairman Alan Mahon when Haughey Jr and Barnicle retracted evidence.
The pair had originally told the tribunal that the proceeds for the sale of the lands owned by a consortium called Cargobridge, which the tribunal was investigating, had gone to Ben Dunne.
But they later changed their evidence and conceded that Medeva had received, via an Isle of Man account, most of the proceeds.
That same year, Celtic Helicopters made a settlement of almost €700,000 with the Revenue Commissioners.
The payment was made after it emerged the company had under declared its VAT when it was audited by the Revenue.
Celtic Helicopters was found to owe tax of €333,989 and had to pay interest and penalties of €355,956. The total settlement was €689,945.
But despite mounting debts at his companies and the pressure of paying off tax settlements, Mr Haughey showed no outward signs of financial stress in recent years.
In 2007, he applied for planning permission to Fingal County Council to renovate and extend his home extensively, adding a new recreation room, conservatory and threecar garage.
That same year, on September 13, he bought a Fifth Avenue apartment in New York. Documents obtained by the MoS reveal Mr Haughey used a $765,000 (€580,000) Anglo Irish Bank loan to buy the $969,000 property.
The one-bedroom apartment in the Grand Madison building is now worth $765,000.
In his early days, Ciarán Haughey’s business woes were eclipsed by his father’s scandals.
Now he is on the radar of our ‘toxic bank’… all thanks to his controversial chopper firm
‘Nama took you over if you were in Irish Nationwide”They are open to prosecution”Didn’t want to make an enemy of powerful man’
ENDS
