Inquiry chairman says DIRT receipts `will more than cover' inquiry costs

Exchequer revenue since the Public Accounts Committee inquiry was initiated last year would cover the cost of the investigation "many times over", according to committee chairman, Mr Jim Mitchell.

During a break in proceedings he said that when the committee completed its report, expected by Christmas, it would include the cost of the inquiry.

He believed income from Deposit Interest Retention Tax, already received in the past year, would more than cover the inquiry costs.

They are expected to include overtime for officials, as well as legal costs. Additional staff appointed to assist the committee have been redeployed from other sections within the public service.

The 10th day of public hearings was taken up with ACC bank, and Mr Mitchell said during the inquiry that it would be a "shocking indictment" of the ACC if nothing were done about an incident in the Tallaght branch where a member of head-office staff had a non-resident account.

Mr John McCloskey, former chief executive of the bank, who was questioned about it, said the person who had the account was involved in the support side of the organisation and not the business side.

He conceded no disciplinary action was taken "because at the time there was inconclusive evidence to take disciplinary action".

Mr Mitchell said that here was somebody from head office colluding with the local manager in Tallaght, and neither was disciplined. When Mr McCloskey said he could not recall the details of the case, the chairman asked him to look at it again and they would address it today at the inquiry.

ACC's acting chief executive, Mr Colm Darling, said that the bank could have a potential DIRT liability of £17.5 million never reflected the true position. The figure was drawn up by accountants Ernst & Young, who reviewed ACC operations as part of the process to prepare the bank to move out of the State sector.

In his opening statement he said this was never intended to be treated as an actual measure of the bank's liability and that was confirmed by the fact that ACC's statutory accounts were subsequently approved by the accountancy company without any provision for such a liability. Following this review a number of accounts were reclassified from non-resident to resident accounts, making them liable for DIRT.

Mr Darling also pointed out that the Revenue Commissioners met the bank's external auditors and a meeting took place in February 1993.

After that meeting the bank understood that the Revenue "would not seek to exact arrears of DIRT in respect of irregular, non-resident accounts for the period prior to the end of 1992 provided they were regularised at that stage. That is still the position of the bank".