All the Tánaiste's men

When the Good Friday settlement was concluded there was a national exhalation of relief, as hope replaced foreboding, if not occasional despair. The announcement did much to restore the primacy of politics and to renovate the standing of politicians. However, in the boardrooms of the banks there was a rejoicing that had little enough to do with the birth of hope and a great deal to do with the media focus being elsewhere.

Not even a Clinton second coming or a papal revisitation could have been guaranteed to remove the Great Bank Robberies from the front pages. But the extraordinary drama and see-saw at Castle Buildings, as the nation (the people, not the territory) held its breath, gave the hard-pressed guardians of the people's savings a breather from Charlie Bird's prying lenses. The bankers, of course, were way ahead of Bertie. For them the nation was always (some of) its people, while the territory is whatever you are having yourself. If you want to remain on the national territory but don't want to be separated from your dough offshore, please have a quiet word with your local bank manager. He can produce the “green form” which guarantees that your money is offshore for tax purposes while, in reality, you and it remain safely on the old sod.
Well, “safely” may be stretching it a bit. Your few bob may well be raided by your own bank manager—if he comes under pressure to perform. Bank branches nowadays, you see, are “profit centres” in their own right! Tough luck if your profit centre isn't making enough profit. Have a look at the customer base, think of a number and add it on in interest or charges. Chances are that 95 per cent of the punters won't notice. To question your bank manager's facility with arithmetic would be like demanding your local parish priest to demonstrate his familiarity with the Ten Commandments.
Given the metaphysical propensities of the modern bank manager—remember your money is offshore, although you know it's still in the land of the shamrock—it's only fair that he should help himself (within reason) to a few bob, and it's still cheaper than giving it to the tax man. And, as Damien Kiberd would say, we all know the shamrock grows as green in Armagh as it does in Donegal, where apparently they have a very healthy proportion of offshore accounts.
Meanwhile, the financial savants say that the dogs in the street knew they were all at it. This is all news, or may be, news to the Revenue Commissioners, but we'll never know, because of course they are precluded from commenting on citizens' confidential tax affairs. Even those citizens who are offshore while attending marts in Tipperary or fumbling in the greasy till in Offaly or slapping 5 pence on the pint in Dublin.
The government knows even less about the whole affair than the Revenue Commissioners. From a position of entangling themselves in various NIB enquiries, government ministers have taken a vow of silence since the dramatic Liam Collins story about AIB in the Sunday Independent. The one heroic exception is Minister Joe Jacob, whose attempt at playing the poor man's Brian Lenihan on Questions and Answers was not a pretty sight. At about the same time, a senior banker emerged to test the water with a “we are being treated unfairly in the media” speech. This was delivered with the kind of aplomb that could only be mustered by a man facing the prospect of a hefty wedge of share options.
In truth, the banks have not at all been treated unfairly in the media. In fact, the role of the media since the AIB story has been distinctly curious. RTÉ News, having quite properly gorged itself on the splendid story by Charlie Bird and George Lee, their own Woodward and Bernstein, failed to even mention the extraordinary Liam Collins story for 36 hours. Eventually, Monday night's news ran a timid understatement of its significance, with the emphasis on assurances from a senior banker that the phenomenon was not “widespread.” This was distinctly odd given that Morning Ireland, the only RTÉ programme to cover the issue, heard from a senior AIB banker whose main defence that very morning was that the practice of bogus accounts for tax evasion purposes was “industry-wide.”
Can RTÉ's loss of interest be put down to Charlie Bird and George Lee taking a well earned day or two off? I doubt it. The Liam Collins story is arguably more significant in banking, political and economic terms than—and no doubt derives from—the fine work of the two RTÉ journalists. Remember: Bird and Lee's mould-breaking story concerned a bank with a 3 per cent market share. It immediately gave rise to questions concerning whether some of the practices they exposed were going on in the other banks. Liam Collins's story confirmed that indeed they were, but the sheer scale of the practices relating to tax evasion—with an admitted £600 million held in 53,000 bogus accounts in the country's biggest bank—shocked even the bank's own internal personnel, who described it as “staggering.” In short, what was going on in AIB was a parallel tax system where chosen clients had the option of a Pay As You Like system while the majority of the country's taxpayers were on a Pay As You Earn system.
Is it possible that RTÉ and others didn't appreciate the significance of these revelations? Equality before the law is a fundamental precept of democracy. It is now clear that there was not equality before the law in this republic in the matter of tax collection. The great and the good of middle Ireland salted away countless millions out of sight of the tax man while hundreds of thousands of ordinary, tax-compliant citizens flooded onto the streets of our cities and towns in the great tax marches.
The hapless spokesman for the Bankers' Federation was wrong. NIB was not alone. Now we know that AIB operated its own portfolio of 53,000 Ansbachers. The Bank of Ireland solemnly sought to leave the impression that it knew nothing of such goings-on. A week later, exploiting the inexplicable collapse of media interest, the Bank of Ireland dripped out the news that it too operated the bogus-accounts system, but refused to indicate the scale of the scam.
Why the suspension of a normal media analysis of these extraordinary events following the AIB disclosures? Why has no single Cabinet minister commented on the significance of the AIB story? A number of conclusions are inescapable. Firstly, having one's bank account raided by one's own bank is something that, quite properly, neither the media nor the government will tolerate. However, a distinctly separate reaction is provoked by revelations of stealing from the Exchequer, in the guise of tax evasion.
This produces a government black-out and a number of media “think pieces” explaining away the phenomenon in terms of the very high tax rates at the time, the need for sensitivity lest capital takes flight, the country's reputation abroad and so on. Very high tax rates should not really be enforced against people of “comfortable means” but are quite appropriate for people on middling incomes.
The minister for finance has reverted to the buttoned lip, having been scalded for his derisory dismissal of the original RTÉ story on January 23. For eight weeks thereafter, the tánaiste sat on her hands, moving to appoint an authorised officer only when word reached her that Woodward and Bernstein were about to break an even more sensational story. The second RTÉ story finally pushed her into the High Court to have an inspector appointed to investigate the substantive issues. There will, it appears, be no such investigation of AIB and “the wider industry.” Why not?
The Central Bank has made it plain that its preoccupation has been with prudential matters and not with the consumer dimension or the nature of the relationship between a bank and its customers. The discovery of revenue powers to get at the CMI names simultaneously with the second RTÉ story was “pure coincidence.”
Meanwhile, the rehabilitation of the banks' image proceeds apace. The new kid at the top of the AIB block, the able and affable Walter Coakley, made the most of a prestigious Irish Independent profiling opportunity. If you want to read about John Maughan and the Mayo team, Liverpool's fading prospects in the Premiership or AIB's philanthropic activities, including support for the arts and, notably, the “funding for a homeless boys' project,” then this profile is for you. But if you want the inside story on what is quaintly described as “the current environment (NIB et al)” then look elsewhere. Having broken this staggering story about the parallel system being run by and for the great and good of middle Ireland, the media have yet to prove that the story is not too big for them.