The worst nightmare of people who had money in the Ansbacher deposits is now up and running as they contemplate public exposure, tax bills with interest and penalties, legal and other expenses, and the possibility of imprisonment.
The Moriarty tribunal, the Revenue Commissioners and three High Court inspectors are currently carrying on investigations into the deposits, while an authorised officer with the Department of Enterprise, Trade and Employment continues to carry out other related investigations.
The inspectors, who were appointed by the High Court last September, have taken temporary offices in Blackrock, been supplied with back-up staff, and have already begun interviewing people believed to have had money lodged in the clandestine accounts.
Later this year, the investigation team will move to more permanent office space at Upper Ormond Quay, close to the Four Courts. The building includes interview rooms capable of accommodating eight people as well as offices for the inspectors, accountants and secretarial staff.
State-of-the-art document-retrieval equipment is being installed. This equipment was used by the Public Accounts Committee DIRT inquiry and allows all the documentation collected by the inspectors to be scanned into the system, so that any particular reference can be pulled up on screen simply by entering the correct command.
The investigation has been allocated up to £65,000 (€82,533) which it may spend establishing such a system, according to Department of Enterprise, Trade and Employment documents released following a Freedom of Information request.
The inspectors have a copy of the report of Mr Gerry Ryan, an accountant and civil servant who, as an authorised officer appointed by the Tanaiste, Ms Harney, to Ansbacher (Cayman) Ltd in January 1998, knows more than most about the clandestine bank. Mr Ryan's report lists 120 alleged depositors, 100 of whom are Irish residents and many of whom may have had money lodged in the deposits which had not been declared to the Revenue Commissioners.
Mr Ryan's 18-month investigation cost the Exchequer £9,000. The inspectors' inquiry is going to cost significantly more than that, though it seems the possibility may exist of recouping the cost from Ansbacher (Cayman) or even from the bank's Irish depositors.
The Act allows a "body corporate" dealt with in an inspector's report to be ordered to pay the costs of the investigation. It also allows the court to make "any order" it deems fit, a power which could open the way for depositors found to have been guilty of an offence, being ordered to bear some of the costs of the inquiry.
Whether Ansbacher (Cayman) has any assets here is not clear. Money in a number of accounts held with Irish Intercontinental Bank, Dublin, has been frozen for the past two years. Some of this may be Ansbacher money although other Cayman companies, Hamilton Ross and Poinciana Fund, are understood to be more heavily represented. However, these companies may well eventually be included in the inspectors' inquiries.
A legal argument has been made by the Cayman companies that the money on deposit in Dublin is legally theirs, as against belonging to the depositors with whom it is linked. The idea behind the argument is that the accounts are not, therefore, liable for DIRT. However, the argument opens up the possibility of the money being seized to pay for the inspectors' inquiries. Money belonging to the former Taoiseach, Mr Haughey, is understood to form part of the frozen deposits.
The three inspectors appointed by the High Court are: the retired President of the High Court, Mr Justice Declan Costello; Ms Noreen Mackay, BL; and Mr Paul Rowan. Mr Justice Costello is being paid at the full rate of President of the High Court, i.e. £100,137. Ms Mackay, who works in the Attorney General's office, is being paid her normal salary plus a special allowance of £6,331 for the duration of the appointment. Mr Rowan, an accountant, is being paid £180 per hour (excluding VAT) with a maximum daily rate of £1,305 (excluding VAT).
Mr Rowan will also be paid travel and subsistence costs. He lives in Belfast and is a former partner in PricewaterhouseCoopers. He was involved in the liquidation of the Northern Ireland arm of Merchant Banking, Merbro Finance, an inquiry which led to the jailing of Mr Patrick Gallagher for fraud.
The Department of Finance was unhappy with the fees agreed with Mr Rowan, according to the Department of Enterprise, Trade and Employment documentation. However, the Department of Enterprise, Trade and Employment said given that "a number of high net worth individuals" are involved in the Ansbacher deposits, it was "of the upmost importance, both from substance and perception points of view, that the accounting inspector be acknowledged to be independent in the performance of his duties".
A solicitor has been assigned from the chief state solicitor's office and the inspectors have been authorised to make use of a senior counsel when necessary. Two higher executive officers, both accountants, and two clerical officers have been assigned to the inspectors' office, with the former receiving special allowances of £5,000 per annum and the latter receiving £1,250 per annum in addition to their normal salaries. An assistant principal has been assigned to act as secretary to the inspectors.
When the inspectors' inquiries will be completed is unclear. The Dail has been told the inquiry should be completed within six months, though this seems unlikely. While it is known that tens of millions of pounds were deposited here, it may also be the case that hundreds of millions of pounds were deposited by Irish residents in Cayman and Channel Island trusts as part of the same clandestine system. Whether this turns out to be the case will be one of the more interesting aspects of the inspectors' findings.
The reports of High Court inspectors may be published. The inspectors' terms of reference require them to identify all the Irish clients of Ansbacher (Cayman) since 1971, offences which may have been committed, and who may have committed those offences. If, as expected, some of the most powerful business people in Irish society are so named, the next question will be the extent to which they will be punished.
