INDEPENDENT TD Mick Wallace received a €120,000 out-of-court settlement when he sued the then Minister for Justice and Garda Commissioner for wrongful arrest, the Irish Independent can reveal.
It emerged last night that the tax cheat, who has been locked in combat with Justice Minister Alan Shatter over penalty points for the past week, took the action after being arrested for a public-order offence in Dublin on September 27, 2000.
Sources have revealed that the State Claims Agency paid out a sum in the region of IR£100,000 at the time after settling Mr Wallace's claim – without the knowledge of the arresting garda.
Mr Wallace did not respond to requests for comment on the issue.
The new revelation comes a year after his role in under-declaring €1.4m of VAT in his construction company caused a storm and led to calls for him to resign his Dail seat.
Meanwhile, Mr Wallace has renewed his calls for a full public inquiry into the penalty points affair, insisting that his financial situation in no way inhibited him from highlighting the issue.
It is claimed that the incident involving wrongful arrest occurred when Mr Wallace, who was then a successful multi-millionaire developer, was directing traffic on the corner of Thomas Street and Meath Street in Dublin, where his company was involved in construction work.
It is understood that one of his machines had knocked out the traffic lights, causing an afternoon snarl-up on one of the busiest roads in the south inner city.
A garda from a northside station, who had been held up in the queue of traffic for half-an-hour, approached Mr Wallace and asked what he was doing.
According to sources, the officer initially suggested that he would call a uniformed unit from the local station to take control of the situation but Mr Wallace allegedly refused this.
It was claimed that Mr Wallace continued to direct the traffic and ignored repeated requests from the garda to stop.
The officer believed that Mr Wallace was making the traffic problem worse and that he potentially posed a safety risk to both himself and passing motorists.
At that stage it was alleged that the officer then directed the developer to stop or else he would be arrested for a public-order offence. It was further claimed that a scuffle ensued when Mr Wallace resisted the garda's attempt to arrest him.
Mr Wallace was formally arrested by the officer and two uniformed gardai brought him to Kilmainham station to be charged.
However, it has emerged that by the time the arresting garda arrived at Kilmainham to follow up the arrest the developer had been released without charge .
A file on the case was sent to the DPP containing a recommendation from a senior officer that no prosecution should be taken against Mr Wallace – again without the knowledge of the arresting garda.
The DPP duly decided that no action would be taken. Mr Wallace then started civil proceedings against the Minister for Justice, the Garda Commissioner and Ireland for alleged assault, wrongful arrest and detention.
It has also emerged that the arresting garda was warned by superiors that he would be investigated under the garda disciplinary regulations – but no such action was taken.
Mr Wallace's civil action and the case was subsequently settled out of court over a year later upon the advice of a senior garda.
It is understood that a senior officer agreed with Mr Wallace's claim that it had been "a bad arrest".
Separately, Mr Wallace now says he wants an independent public inquiry into the penalty points affair. Last year he was let off by officers for using his phone in his car.
Details on the incident were passed to Mr Shatter by Garda Commissioner Martin Callinan and Mr Shatter used them in a political attack on Mr Wallace on television last week.
Mr Wallace asked on 'Today FM' last night: "How in God's name could that incident reach the Garda Commissioner, reach the Minister for Justice just when it suited?"