Inquiry into DIRT issue to cover 37 institutions

THE controversy surrounding AIB and DIRT payments has led to a much wider than expected investigation of the financial system by the Comptroller and Auditor general, Mr John Purcell. It will conclude with the largest Dail committee hearing in decades. The investigation by the Comptroller and Auditor General, at the request of the Dail Public Accounts Committee, is now looking into the affairs of each of the 37 financial institutions registered to collect DIRT, a much wider probe than had been anticipated. His report to the Dail committee is expected to be ready by the beginning of June.

Mr Purcell was asked to conduct the inquiry following public hearings in October 1998 concerning bogus non-resident accounts held in AIB. After hearing evidence from AIB and the Revenue - in which the two sides disagreed on the outcome of negotiations between them in 1991 - the committee decided to ask Mr Purcell to conduct a confidential inquiry into the affair and report back.

It is understood Mr Purcell may have felt uncomfortable about conducting an inquiry into just one bank, and so the exercise was extended to all financial institutions registered for DIRT collection.

It is further understood that an outside auditor, perhaps from outside the state, has been engaged to view a number of individual bank accounts in relation to DIRT, and will report back to Mr Purcell.

Six members of the Dail Committee on Public Accounts are to form a sub-committee which is likely to hear evidence in public in July or possibly September. The hearings are likely to be televised and may be broadcast live.

If it is successful then other similar inquiries by Dail or Oireachtas committees may be used in the future, in cases where a tribunal would otherwise be established.

All twelve members of the committee are likely to be interviewed by senior counsel, as part of an exercise designed to ensure that no conflict exists which would prevent them from joining the sub-committee.

It is considered unlikely that one member of the committee, Ms Beverley Cooper-Flynn, who is a former employee of National Irish Bank and who is not currently subject to the Fianna Fail whip, will form part of the sub-committee.

The sub-committee will be made up from three Fianna Fail members, two Fine Gael, and one Labour. The Fine Gael members are likely to be Mr Jim Mitchell, who will act as chairman, and Mr Bernard Durkan. The Labour member is likely to be Mr Pat Rabbitte. The Fianna Fail members have not yet been decided on.

Three senior counsel, including Mr Frank Clarke SC, are assisting the committee and are being paid by the Bar Council.

A large room in Kildare House, opposite Leinster House, is being renovated for the public hearings. The walls have been painted colours suitable for TV backdrops and overhead monitors are likely to be used.