Concern about advice given in private interviews

One of the concerns there are about the off-the-record discussions during private interviews arises from what is known about the on-the-record discussions. The following is part of one of the transcripts arising from one of the interviews between two barristers then representing the tribunal, Pat Hanratty SC and John Gallagher SC, and Frank Dunlop, who was accompanied by his own counsel, Senan Allen.

“Pat Hanratty: We were interested in the Revenue files, to be totally frank with you, we were interested in your Revenue files which we have got, in the context of it you were receiving money for the purpose of dispersement to councillors, then you would be made to, if I may say so, to declare it as an income because it is not, in fact, income.

Senan Allen (counsel for Frank Dunlop): You were be even madder to claim it as an allowance.

Pat Hanratty: Yes, so what we were looking for, is there an indication on the Revenue file as to whether you gave an explanation to them that this is not in fact income and, therefore, not liable to tax on it? {Without having analysed it in any detail, that explanation does not appear to have been given}.

Senan Allen: To outlay to county councillors for bonus 50?

Pat Hanratty: That is none of the Revenue's business, it is just like the revenue is none of our business. You do not pay tax on money as income that is not, in fact, tax on bonus.
Senan Allen: They are not deductible (for tax purposes), that is the point, even if you did tell them.

Pat Hanratty: It is not a question of being deductible, Senan. In Shefran (Frank Dunlop's company), for example, you have £175,000. A portion, let us say 50 per cent, 50 per cent for the sake of the argument, let us say 50 per cent of that was, in fact, treated as income, you are therefore... (interjection).

Frank Dunlop: It was not treated as income at the time, as I said to you in public session.

Pat Hanratty: You told us in the public session that you spent all of it, initially you said you spent all of it and that that is treating it as income, but if you just take a hypothetical argument. You get £175,000, you spend half of it on yourself, therefore, from a Revenue perspective, they would regard that as income. You spend half of it by passing it on, on behalf of your client to someone else. Therefore, it could not be income and could not be liable to tax penalties or interest or anything else obviously.

Frank Dunlop: Yes you could not say to the Revenue Commissioners, even though your own accountants or personally in a self declaration that I got £175,000, I spent £82,500 of it on myself and the rest I passed to politicians. I do not mean to be offensive but it mean... (Interjection).

Pat Hanratty: From another point of view, I am not – but what I am saying to you is if the Revenue were told, whether they believe it or not, that this money was passed on by way of politician donation or whatever, provided they were satisfied that you did not have it as income, then you are not liable to tax on it.

Frank Dunlop: Maybe as a result of what we are not going through and what we will have to deal with in the Revenue Commissioners, this will become an even easier exercise for the Revenue Commissioners, when I was stating the monies (interjection).

Senan Allen: It would be in the tax reports, is it a deductible expense?

Frank Dunlop: Is it a deductible expense? You see I know exactly what – I have no difficulty – I know exactly what you are asking me.

Pat Hanratty: I do not know anything about tax. I am not saying it is a deductible expense, it clearly could not be a deductible expense. I am simply saying it is tax neutral. It is not income, therefore, its not liable to income tax and because it is not fee for services rendered, it is not liable for VAT.

Frank Dunlop: If you are fast forwarding to ask me was that the reason why there is no VAT (interjection).

Pat Hanratty: That is why we were coming from looking at this invoices essentially, that is I am explaining but what you are saying to me is that there were, in fact, for goods or outlay or services plus a profit element?

Frank Dunlop: Plus a mark up, exactly.

Pat Hanratty: All of which could be liable to income tax.”

Aside from concerns about what could be construed as tax advice, advice that might encourage Frank Dunlop to exaggerate the amounts paid to politicians to assist him to reduce his tax exposure, there are other concerns.

Frank Dunlop having admitted he had given perjured evidence over several days to the tribunal was afforded private interviews with tribunal lawyers, in the course of one of this there was a discussion with one of the lawyers about their mutual satisfaction in that the media had failed to latch on to the series of private meetings that were taking place.

He was then afforded a considerable range of assistance by the tribunal privately in composing his narrative statement concerning the corruption in which he engaged. This assistance included the tribunal making available to him the dates and times of council meetings in the early 1990s, the names of councillors who served on the council, now they voted on rezoning motions and other material. Meanwhile he was allowed retain his personal diaries, giving rise to an apprehension that he might have used this material to fabricate accounts of meetings with councillors and payments to them in return for their support for rezoning motions.