The
RTÉ journalist
Charlie Bird claimed in a report that, while an employee of
National Irish Bank, Flynn had assisted clients of the bank in
evading tax by funnelling undeclared income to
Clerical Medical schemes based in the
Isle of Man. She denied the claims and sued RTÉ, Bird and retired farmer James Howard for
libel in the
High Court in 2001. The jury found that although RTÉ had not proved its case (it was a different employee who had handled Howard's account), the allegations were found to be substantially true (that RTÉ had proved Flynn had encouraged others to avail of illegal investment schemes). Thus, despite Flynn technically winning the case, she was awarded no damages as her reputation was not materially damaged), along with costs being awarded against her. Flynn appealed against the decision to the
Supreme Court, where she lost.
Delay in paying costs Flynn at first offered to settle with RTÉ for €590,000. RTÉ rejected this and moved to have her declared bankrupt. When the
bankruptcy action against her opened in the High Court in June 2007, her lawyers were granted a postponement to allow her to challenge the constitutionality of legislation which bars bankrupts from Dáil membership. Lawyers for RTÉ accused Flynn of embarking on a "litigious frolic in her own interest". She subsequently abandoned plans to challenge the legislation, which was eventually changed in 2014 with
Mick Wallace, a bankrupt TD, sitting from 2016 to 2019. On 24 June 2007, Flynn announced that she had reached a final settlement with RTÉ, paying €1.24 million of the outstanding €2.4 million The settlement created a major outcry from the public, the print media and by some TDs as RTÉ, Ireland's public service broadcaster, is part-funded by a television license fee. The then
Taoiseach,
Bertie Ahern, "rejected as "contemptuous" and "sinister" any implication that he was involved in the settlement [between Flynn and RTÉ]". Ahern issued the denial after allegations made by Fine Gael and the
Labour Party that RTÉ bowed to pressure from him to reach a settlement with Flynn. RTÉ also denied this took place. ==Relationship with Fianna Fáil==