Michael Lowry's refrigeration company was a front for large "clandestine" payments made personally to him by Ben Dunne, the tribunal has found. Mr Lowry's business relationship with Dunnes Stores created an "appalling situation" of a Government Minister being seen to have benefited from the black economy.
"If such a person can behave in this way without serious sanctions being imposed, it becomes very difficult to condemn others who similarly flout the law," the report states.
The payments by Mr Dunne enabled Mr Lowry to "cynically evade" tax, and Mr Dunne "knowingly assisted" him in evading tax.
Mr Lowry set up a company called Garuda Ltd in August 1988 which traded as Streamline Enterprises. After winning a contract with Dunnes Stores in 1989 "Streamline Enterprises existed for one purpose only, namely to perform the contract with Dunnes Stores group," the report says.
The relationship between Dunnes Stores, Michael Lowry and Streamline Enterprises is described as "extremely disturbing". First, because Mr Lowry "made himself vulnerable to all kinds of pressures from Dunnes Stores".
Second, Mr Lowry could have been blackmailed by any third party who found out about the arrangement, and, finally, the arrangement led to an "appalling situation that a Government Minister and chairman of a Parliamentary party can be seen to have been consistently benefiting from the black economy from shortly after he was first elected to Dail Eireann".
The report says Mr Lowry's motivation for accepting these methods of payment "was to enable him to evade tax".
"He operated his business on two levels, on one level through the company, which made a small profit and duly paid its taxes, and on a second level whereby large sums of money were paid to him personally in a clandestine manner."
Mr Lowry's defence that Streamline Enterprise made large savings for the Dunnes Stores group and the money paid to him represented these savings is rejected as "totally flawed".
"The additional monies would have been paid to Streamline Enterprises and not to Mr Michael Lowry personally, with all the taxation consequences which that would have entailed."
Mr Lowry's company was "virtually subsumed into the Dunnes Stores group and was regarded by them, and probably by Mr Michael Lowry, as being in effect a division of the Dunnes Stores group".
Two sets of payments totalling more than £200,000 to Mr Lowry and his company are detailed, as are payments of more than £150,000 sterling as bonuses to offshore accounts.
The report rejects Mr Dunne's excuse that Mr Lowry was "old enough and mature enough" to look after his own tax affairs as "a completely naive and unacceptable explanation". The payments were deliberately made in this way as "very large bonuses" being paid "in effect, under the counter".
Mr Lowry's evidence to the tribunal that he was paid some of the money for consultancy fees by Ben Dunne is rejected as unacceptable.
These payments in nine cheques made out to Streamline Enterprises between November 1988 and March 1993 were cashed by Mr Lowry or lodged by him to his own bank accounts.
The payment by Dunnes Stores for Mr Lowry's company site and building of a warehouse in Thurles is described as a "sham". "It could be said that this whole transaction was a sham, and that in fact Dunnes Stores simply contributed some £165,000 to Streamline Enterprises in the same way as they would have contributed it to a division of their own company."
On the question of Mr Lowry's house in Holycross it says that Ben Dunne appeared to have the "clear intention" of paying Mr Lowry almost £400,000 for the refurbishment of his house in a way that no record would be made of them.
The report calls Mr Lowry's reference to offshore accounts in his Dail statement of December 1996 "astonishing". In his statement Mr Lowry said if someone wanted to hide payments they would do it through offshore accounts. As the tribunal later discovered, Mr Lowry had two offshore accounts in his own name.
"It is not for this tribunal to determine whether Mr Michael Lowry deliberately misled the Dail . . . However, the tribunal is entitled to take into account his apparent lack of candour in assessing the motives behind the financial arrangements which he had with Dunnes Stores and with Mr Ben Dunne in particular."
Dealing with allegations that Mr Lowry did favours for Dunnes Stores the tribunal found no supporting evidence. In the first case Mr Lowry's intervention with Fine Gael TD, Mr Paul McGrath, over a shopping centre development in Mullingar could not have influenced the outcome of the planning decision. And in the second case, where Mr Lowry got advice on behalf of a Dunnes Stores manager in Cork, "there was nothing improper in what took place".
The tribunal is satisfied there was no political impropriety on the part of Mr Lowry.
