IRISH NATIONWIDE chief executive Michael Fingleton personally authorised a fast-tracked loan of €40,000 from the building society last year to Celia Larkin, former partner of ex-taoiseach Bertie Ahern. The payment was connected to transactions investigated by the Mahon tribunal as part of its inquiry into Mr Ahern's personal finances.
Mr Fingleton approved a loan of €40,000 to Ms Larkin on March 4th, 2008 without the standard criteria being fulfilled initially on the loan application. Ms Larkin did not provide documents normally required by customers borrowing such loans when she applied for the money.
The loan was provided to Ms Larkin without showing proof of her income, identification, current account statements or details of other loans she had drawn down. Mr Fingleton personally signed off on the loan and no documentation was received by the lender when Ms Larkin's loan was approved.
Last year the Mahon tribunal conducted inquiries into an account with the Irish Permanent Building Society in Drumcondra called the B/T account from which Ms Larkin received €30,000 in March 1993, and which was used for the purchase of a house in Phibsborough.
The tribunal was told the account held political contributions donated to Mr Ahern’s political operation in the Dublin Central constituency.
Mr Ahern's disclosure in the witness box in February 2008, when he was still taoiseach, that money from the B/T account had gone to his former partner, caused a huge political controversy. The tribunal was subsequently told by Ms Larkin that she had repaid the money in early February, using a €40,000 loan she had received from Mr Ahern.
Ms Larkin left a signed blank cheque into Mr Ahern's constituency office in St Luke's. He later supplied her with a figure for the repayment of the money with interest, and a secretary in St Luke's filled in the cheque, completing the transaction. A spokesman for Irish Nationwide said that it did not discuss the affairs of customers.
Ms Larkin could not be reached for comment. Ms Larkin used a mortgage from Irish Nationwide to purchase a home in Co Clare. She told the tribunal last year she took out a second mortgage on her home to repay Mr Ahern.
Mr Fingleton bowed to mounting pressure yesterday evening and agreed to return the €1 million bonus paid by Irish Nationwide last November, weeks after the Government protected the banking system with the €440 billion guarantee.
Mr Fingleton agreed to repay the bonus two weeks after the payment was publicly revealed. He said in a statement that the bonus was a contractual and binding agreement which he was "legally entitled to receive and was entered into long before the implementation of the guarantee scheme".
He said he had "no obligation to be beholden to any other third parties in this regard" but wished to repay the money to conclude the matter. He said he had decided "to voluntarily return" the bonus "because of the effect on his family with a continuing 24-hour media siege on his home and also because of his concern for the effect it may have on the society".
A Department of Finance spokesman said: "The Minister for Finance notes the return by Mr Fingleton of his bonus payment to the society and considers it the correct course of action and in the best interests of the society."
Irish Nationwide's board met yesterday and discussed Mr Fingleton's future in the society ahead of the board reporting back to the Minister on their review of the management and board structure on Monday.