The Department of Finance did not give its imprimatur to the transfer of more than €7.45 billion from Irish Life & Permanent to Anglo Irish Bank last year, Taoiseach Brian Cowen has told the Dáil.
Mr Cowen was asked during leaders' questions today about media reports that the Department of Finance raised no concerns when told about the controversial transfers.
A report at the weekend, based on internal memos and other material, said Anglo claimed that a senior civil servant, who works closely with Minister for Finance Brian Lenihan, assured IL&P he understood why it was necessary to carry out the transactions and there was no need for concern over the arrangements.
Responding to questions from Labour Party leader Eamon Gilmore, the Taoiseach said there was now a "thorough" investigation going on into matters at Anglo Irish Bank and that he was "constrained" in what he could say.
"The Department has no role in approving transactions of this kind between banks, much less, four months after the fact. And... when the Department of Finance became aware in October that such transactions did take place, as a result of the initial [PricewaterhouseCoopers] report, reference on Anglo, the matter was immediately drawn to the attention of the Financial Regulator."
Mr Cowen said an internal Anglo memo quoted in the weekend newspaper report was an account of a meeting that had taken place on January 22nd this year. The transactions in question took place last September, Mr Cowen said.
The report in the Sunday Tribunewas based on "the newspaper's interpretation of a document which is at least a third hand account of the impressions of persons who are supposed to have attended the meeting".
Mr Cowen said, however, there were "interested persons" seeking "retrospective approval on matters which were not given the imprimatur of the Department of Finance in any shape or form".
"I am satisfied of that, knowing the official concerned."
The Taoiseach said he did not believe the matter should be dealt with "other than through the proper investigative channels" and that it should not be dealt with "based on surmise, based on interpretation, recollection or based on a post-dated memo which is dated January 22nd referring back to something that happened in September". He had not attended the meeting referred to in the report and did not know anyone who attended.
“Let the investigators deal with the matter, because that is the only way we are going to get to the truth of these issues," Mr Cowen said.
Mr Gilmore asked the Taoiseach to address the questions a second time, but said he did not "want to be adversarial" about it.
The question was not whether the Department gave an imprimatur to the transactions, Mr Gilmore said. "The question is whether they gave the nod to it.”
He asked Mr Cowen to address whether the Financial Regulator had been told in October that Anglo Irish Bank was "managing its balance sheet and that effectively they were given the nod, as well, for that".
"This is a case not of light regulation. This is blind-eye regulation," he said.
"The reputation of the country, the reputation of our banks and all the economic consequences that draw from that, are at stake here. And yes, what went on at Anglo has to be investigated...but there is also an issue of reputation about our regulatory regime and about the political supervision of that regulation."
The Taoiseach said he could tell the House that the Department of Finance official concerned gave "no imprimatur whatsoever to these transactions" and was "a person of the highest integrity".
He said he also had no reason to believe that the office of the Financial Regulator was not also seeking to discharge its duties conscientiously.