Plans by former taoiseach Albert Reynolds to buy north Dublin land through an offshore company "ended in tears" when the owner refused to sell, the tribunal heard.
Mr Reynolds and his business partner Patrick Russell were forced to repay £350,000 in sterling to builders and lost substantial sums when the deal collapsed, the inquiry was told.
Mr Russell, a businessman and barrister, told the tribunal yesterday how he and Mr Reynolds sought to buy the lands at Lissenhall between 1997 and 2001.
In 1992, the lands, which are controlled by builder Joe Moran, were rezoned for industry. The tribunal is currently investigating claims by lobbyist Frank Dunlop that he paid money to councillors to secure this rezoning.
Mr Russell said Mr Reynolds owned a Jersey-registered company Universal Management Consultants (UMC) which sought to develop the land as part of a joint venture with a Derry-based building company, O'Neill Brothers, in the late 1990s.
He said he was to benefit from the deal if UMC eventually developed the land. He agreed that he described himself in correspondence as a director and shareholder of the company.
Throughout this time, he dealt with Tim Collins, a land scout who introduced him to the deal. He never dealt with the owner, Mr Moran.
Mr Russell said if he didn't deal with Mr Collins "it would all end in tears, which it did". He was advised by another associate that if he went behind Mr Collins's back "you will be blown out of the water".
Ultimately, Mr Reynolds met Mr Moran, who told him he had no intention of selling the land without planning permission. As a result, Mr Reynolds and Mr Russell had to repay £350,000 to O'Neill Brothers and write off substantial costs.
Earlier, lawyers for deceased Fianna Fáil councillor Cyril Gallagher's estate said his family was unable to explain a number of substantial lodgements to his accounts. However, they believed the money came from savings and other legitimate sources. Thomas Montgomery, solicitor, for the estate, criticised media reports concerning £60,000 held by Mr Gallagher in an undisclosed An Post account at the time of his death in 2000.
Mr Montgomery said this sum represented the maturity value of Mr Gallagher's investments and the original sum lodged was £39,500. Mr Dunlop has claimed he paid Mr Gallagher and two other councillors £1,000 each for their vote on the rezoning of lands at Lissenhall near Swords in 1993.
Tribunal lawyers wrote to Mr Montgomery earlier this month seeking explanations for nine lodgements totalling over £10,000 to Mr Gallagher's accounts during this period.
Mr Montgomery told the tribunal yesterday that his client lived a very frugal life.
He would have saved a reasonable amount of money from his salary and pension, which was kept around the house until it was lodged with An Post.
The payments queried by the tribunal greatly exceeded the amounts Mr Dunlop claims to have given Mr Gallagher, Mr Montgomery pointed out.
While this could suggest that Mr Gallagher got money from someone else, this was unlikely.
As well as his savings, Mr Gallagher would have received money from Eircom on his retirement in 1992 and from the county council through the 1990s.
"These payments taken together total very nearly the full amount of the savings that Mr Gallagher had on his death, reflected in his various bank accounts and savings certificates."
