Repayments did not begin for 18 months

Mahon tribunal:  Repayments on a loan of almost £20,000 given to Taoiseach Bertie Ahern by AIB bank in 1993 were not made until 18 months after the loan was issued, the Mahon tribunal was told yesterday.

The application form filled out for the loan is missing from the bank, the tribunal also heard. Meanwhile, bank records show that Mr Ahern applied to open a special savings account with £22,500 on the same day as the loan was applied for.

Philip Murphy, assistant bank manager at AIB O'Connell Street in 1993, told the tribunal that he thought he had filled out an application for Mr Ahern's loan, of £19,115.97, but he could not find it.

He said Mr Ahern, who was then minister for finance, phoned him some time during Christmas week of 1993 and explained that he needed a loan to cover the cost of legal expenses related to his separation. An appointment was arranged and Mr Ahern came to the bank on December 23rd.

He was introduced to bank manager Michael Burns and then negotiated the loan with Mr Murphy. Mr Murphy said he was delighted to look after Mr Ahern and was not going to refuse him.

"There was no question that we were not going to give it," Mr Murphy said. "On the basis of who he was . . . he was deemed a good risk." If he had asked for £50,000 he probably would have got it, he added.

Counsel for the tribunal, Henry Murphy SC, pressed Mr Murphy in relation to whether or not a loan application form was filled out. In a formal statement sent to the tribunal earlier this month, Mr Murphy had said he did not recall that a formal application was completed.

However, yesterday Mr Murphy said he was nearly sure he filled it out.

"I think it's about time we got real here," tribunal counsel said. "It's about time that you faced up to the fact that you are giving evidence on oath."

"I'm nearly sure I filled out an application form, but it can't be found," Mr Murphy responded. He said he had searched through two boxes of documents.

Although it was the bank's practice to send a letter setting out the terms to a person who has taken out a loan, none was sent to Mr Ahern at the time, the tribunal heard.

Mr Murphy was asked what would have happened to the loan if something happened to Mr Ahern, given that there was no documentation at that time.

"The bank would have been in an awkward position maybe . . . I'd say that I would have got in trouble," he replied.

The tribunal heard that the loan was drawn down in three separate payments; a credit transfer of £1,302.36 to a joint loan account based in Finglas held by Mr Ahern and his estranged wife Miriam, and two bank drafts, of £5,000 and £12,813.61.

Repayments on the loan did not begin until June 2nd, 1995, by which time the amount had reached almost £22,000. The loan was cleared by January 30th, 1996.

Counsel also asked Mr Murphy what he would have thought if Mr Ahern had told him he had savings of £50,000, accumulated in his safe between 1987 and 1993.

"You would question why," Mr Murphy said. "It might be cheaper to use your own money than borrowing money from the bank."

An application relating to the opening of a special savings account was also read into the record. The tribunal was told that AIB bank had only provided the form, apparently signed by Mr Ahern on the same day as the loan, to the tribunal yesterday morning.

Mr Murphy acknowledged that the form was filled out in his hand, but said he "genuinely did not remember" filling it out on the same day as the loan.

Mr Murphy's evidence will continue today.