Plan to give bank inquiry new powers

The Attorney General will bring proposals to the Cabinet on Tuesday giving the Dail's Public Accounts Committee the powers it wants to inquire into bogus non-resident accounts in AIB.

This sudden change follows a breakfast meeting between the AG, Mr David Byrne, and the PAC's legal adviser, Mr Frank Clarke SC, yesterday when the Government dropped its objection to the Comptroller and Auditor General, Mr John Purcell, conducting a fact-finding inquiry into the use of bogus accounts to evade DIRT tax.

The Government's objection to that proposal was raised by the Taoiseach in the Dail on Tuesday. Mr Ahern said there could be legal difficulties "marrying" two investigatory systems, where the CAG, an independent constitutional officer, could be seen to be an agent of a Dail committee. A Government source later suggested that they did not want "a Ken Starr-type" investigation.

Sources confirmed that "all matters of substance" had been agreed between the Attorney General and Mr Clarke at yesterday's meeting. The heads and sections of a new composite Bill will be presented to Cabinet next week with a view to its passage by the Dail before Christmas.

The new powers being sought by the Dail committee would enable Mr Purcell to carry out a fact-finding inquiry into the use of bogus non-resident accounts in all financial institutions. His report would be submitted to the PAC. The committee would then have full powers of compellability and privilege to call witnesses.

Instead of two or three pieces of amending legislation, as requested by the Dail Committee, the Government is considering publishing one Bill which would amend the Comptroller and Auditor General Acts and the Compellability of Witnesses Act, 1997, and give legal protection to the chairman of the PAC, Mr Jim Mitchell TD.

Passage of this legislation would enable a High Court-type investigation into the operation of bogus accounts.