NIB: no penalty for its wrongdoers
In July of last year a report by High Court Inspectors into the affairs of National Irish Bank (NIB) was published. The Inspectors were former Supreme Court judge, John Blaney, and former Irish rugby international and accountant, Tom Grace.
The Inspectors found a practice of criminality on an extensive scale. This included the following:
^Bogus non-resident accounts were opened and maintained in the Bank's branches, enabling customers to evade tax through concealment of funds from the Revenue Commissioners.
^Fictitiously named accounts were opened and maintained in the branches, enabling customers to evade tax through concealment of funds from the Revenue Commissioners.
^Clerical Medical Insurance (CMI) policies were promoted as a secure investment for funds undisclosed to the Revenue Commissioners.
^Special Savings Accounts had DIRT deducted at the reduced rate.
^There was improper charging of interest to customers.
^There was improper charging of fees to customers.
The Inspectors found that responsibility for this criminality (they did not use the word criminality but, clearly, this is what it was) lay not with the branch managers who were the operators of these practices but with senior management in the bank. The Inspectors wrote: "It was their (ie senior managers) duty to ensure the business of the Bank was so conducted that such practices did not occur and, if they did, that they were stopped immediately". The Inspectors went on: "We have also concluded that the head of the Bank's Financial Advice and Services Division, and a number of the financial services managers in that division, were responsible for the promotion of CMI policies as a secure investment for funds undisclosed to the Revenue".
As is the practice of those engaged in criminality, they withheld cooperation from the Inspectors until such time as they had no option.
In a response to the Inspectors report, NIB did not take issue with the findings and apologised to all those affected by the overcharging and the other improper conduct.
In a comment on the report The Irish Financial Services Regulatory Authority (IFSRA) welcomed the report. Liam O Reilly, chief executive of IFSRA said the type of activity reported by the Inspectors was "utterly unacceptable".
IFSRA stated it "expects and demands high levels and fitness and probity at board and senior management levels. We will ensure that these standards are met. The fitness and probity of individuals named in the report is now being considered by the Financial Services Regulator and appropriate action will be taken".
On Wednesday, 6 April, representatives of NIB, now under new ownership, came before the Oireachtas Finance Committee. They were asked if anybody responsible for the criminality that had occurred (again the word criminality was not used by the Oireachtas members) had suffered any financial or other penalties, such as loss of pension rights. The answer was although some people had left the bank nobody had suffered any such penalties. Asked if any of those responsible were still working in the banking sector, there was equivocation. Independently of the Oireachtas Committee hearings, it has been reported that several of those identified as culpable by the Inspectors still work in the banking sector, although not at NIB.
No criminal prosecutions have been taken against anyone responsible for this large scale criminality – the amount of money involved far exceeded the money stolen in the Northern Bank robbery in Belfast on 20 December, which was €38m. Neither is there any clamour for these to be prosecuted.
And as for the IFSRA commitment to ensure "high levels of fitness and probity at … management level"? What has been done even on that minimal scale?