CHAMPIONS of good corporate governance will have been disillusioned by what two of the State's banks and a major accounting firm have told the committee about bogus non-resident accounts.
Yesterday the former chairman of National Irish Bank, Mr Alex Spain, conveyed that during his term of office he was privy to audit reports highlighting difficulties the bank had with bogus non-resident accounts, but never ensured that the bank got to grips with the problem.
Questioned on why a bank memo had suggested that they would consider moving some "major non-resident deposits" into offshore accounts, he said that there was a "simple" answer, but that he could not provide it. This task will fall next week to the chief executive, Mr Don Price.
On Tuesday the committee had heard a former chairwoman of ACC Bank, Ms Gary Joyce, say that information had been withheld from her by the bank's management team.
On Wednesday, the committee established that ACC's auditors, Ernst & Young, failed to bring a potential £17.5 million DIRT liability to the attention of the State-owned bank's board of directors at a time when the bank itself was worth only £20 million.
Yesterday Mr Sean Ardagh TD asked Mr Spain if it would be reasonable to suggest that the chairman of a bank would set the ethos and culture for that organisation. Mr Spain was reluctant to accept this premise, suggesting such responsibilities would sit better on the shoulders of the bank's chief executive.
The chairman's role is important, but it is the responsibility of the board of directors to act collectively in the best interests of the company, he explained. The committee members found it hard to reconcile Mr Spain's assertions given the wide non-compliance with DIRT legislation throughout NIB's operations between 1986 and 1998.
Document after document showed NIB's branch managers consistently ignored head office instructions not to open bogus non-resident accounts and showed complete disregard for filling out documents relating to customer accounts.
As far back as 1993 the bank's internal audit reports expressed alarm at the pace at which non-resident accounts were being opened and the growing number which held "care of" an NIB branch or unusual addresses.
One memo from the bank's head of finance warned the chief executive, Mr Jim Lacey, and his management team that it was "essential to advise all managers of the immediate risks and the personal penalties" arising out of opening bogus non-resident accounts. "There can no longer be excuses for sloppiness in this area."
Yet five years later internal audit reports continued to highlight a litany of non-compliance and incidences of bogus accounts throughout the branch network. It was only in the last 18 months that NIB seems to have taken comprehensive action to put its house in order.
The committee chairman, Mr Jim Mitchell TD, surmised this might have something to do with a visit from RTE correspondent Charlie Bird and a subsequent call from the Revenue.
As non-executive chairman, Mr Spain sat on the bank's audit committee, which was regularly briefed on the findings of internal and external auditors. But the disturbing findings contained in these reports never made their way to the boardroom.
The committee members were clearly frustrated at Mr Spain's insistence that such practices were relatively minor matters in the overall scale of things for the bank, reminding him that NIB has made a £1 million provision to cover the potential tax liability on its bogus non-resident accounts.
Next week they will hear from the current and former executives of AIB and Bank of Ireland, who will have to explain what they knew and did about bogus non-resident accounts. Judging by the proceedings so far the committee is in no mood to tolerate excuses.