The AIB chief executive, Mr Tom Mulcahy, gave a strong, if not wholly convincing, performance before the Dail Committee of Public Accounts yesterday. The main charge levelled against the bank - that it paid just £14 million on a DIRT tax liability of £100 million - was curtly dismissed by Mr Mulcahy. Instead, he sought to convey the impression that the bank was more sinned against than sinning: it simply responded to an initiative from the Revenue Commissioners in 1991 to clear up the messy business of DIRT owed on bogus non-resident accounts, an industry-wide problem at the time. While disputing the £600 million value placed on the bogus non-resident accounts by AIB's own internal estimates at the time and mentioned in the media, Mr Mulcahy gave no figures of his own as to the extent of the bank's DIRT liability nor the number of bogus accounts. And while he presented a credible chronology of events, this tended to obscure the salient fact that the onus rests on the banks to provide the Revenue with all the information in its possession to fully discharge its tax liability - on behalf of its depositors in this case - and not least, to obey the laws of this State.
At week's end, the full truth of this murky affair remains elusive. It is still unclear how much tax is due to the State and whether it is recoverable. On one central point, there is now a fundamental conflict of evidence between AIB and the Revenue. AIB believed that what amounted to an "amnesty" had been offered by the Revenue on unpaid DIRT tax up to 1990. Mr Dermot Quigley, the chairman of the Revenue Commissioners, who last night accused AIB of not providing the Revenue with all the information it required, has denied that any "sweet deal" was done. Certainly, some negotiation took place on issues - the payment of tax due to the State - which should be non-negotiable.
In the shorter term, despite the valiant efforts of some members, the inquiry by the Public Accounts Committee into the affair may shortly run into the sand. The Committee, as currently constituted, has neither the legal powers, the expertise nor the back-up to probe much deeper. It is also clear that the banks and the other financial institutions require much closer scrutiny and the Revenue needs to be more accountable to the people its serves. In his evidence to the Committee, the Governor of the Central Bank, Mr Maurice O'Connell, made it clear that he gives priority to its prudential role (ensuring that banks are properly capitalised and operate sound lending and funding policies). The Central Bank does not see itself as a protector of the consumer's rights or as a tax collector. In this vacuum, there is much for policy-makers to consider: the case for additional regulatory and supervisory measures for the financial institutions is now beyond dispute. And a Government intent on establishing the truth of the current scandal has several options. It could move swiftly, amend the law and allow the Public Accounts Committee compel witnesses and investigate tax liabilities - dealing with any constitutional difficulties as they arise. Alternatively, the office of the Comptroller and Auditor General could be given any additional resources it requires to investigate the AIB/Revenue affair on behalf of the Committee. But has this Government the stomach for what is required?