The former group taxation manager of AIB was challenged by the chairman of the DIRT inquiry yesterday as to how he could reconcile his belief that legislation was required with the fact that no amnesty existed.
"As far as I was concerned, there was an agreement on the table and I was satisfied with that," said Mr James O'Mahony.
There was no agreement on the table, Mr Bernard Durkan TD interjected. The relevant paragraph in a letter dated February 15th, 1991, from Mr Tony Mac Carthaigh, the senior inspector with the Revenue Commissioners, was quite clear that there was no agreement, he argued.
Mr O'Mahony agreed that the paragraph was quite clear, but said he had phoned Mr Mac Carthaigh to clarify the issue.
"What evidence have we to the contrary?" Mr Durkan asked. "That's the one piece of evidence that we have which is critical to the whole matter and is only contradicted by reference to your note of a telephone call, and we don't think that there's any other evidence to support your theory. Is there?"
Mr O'Mahony sought to clarify the position for the committee. He had disagreed with what the tax inspector had put in writing, "in the light of what we had discussed at our meeting of February 13th and sought to go back and get clarification".
The chairman, Mr Mitchell, asked him to comment on a memo he had written in 1989 which noted concerns raised by the bank's internal audit department about non-resident accounts. Lack of documentation appeared to be the main problem, despite efforts made since 1986 legislation had come into force "to alert managers on the requirements of the law". It represented a "very serious threat to the bank in the event of an audit by the Revenue Commissioners into the operations of DIRT", the memo said.
The extent of non-resident deposits in the Republic was: branch banking, £430 million, 18,000 accounts; retail deposit centre, £324 million, 10,323 accounts.
"Now, you were able to get a lot of information in 1989 and you promised, in fact, to get more," the chairman told Mr O'Mahony.
"Which I doubt if I did," he replied.