AIB executive stands over amnesty claim

The former group taxation manager of AIB denied strongly an assertion by counsel for the Revenue Commissioners, Mr Eoghan Fitzsimons…

The former group taxation manager of AIB denied strongly an assertion by counsel for the Revenue Commissioners, Mr Eoghan Fitzsimons, that the bank's claim to have an amnesty-type agreement in respect of DIRT was based on two alleged phone conversations with Mr Jimmy O'Mahony "and nobody else".

In his cross-examination of Mr O'Mahony, Mr Fitzsimons concentrated on a short memorandum by the former group taxation manager. This was dated February 26th, 1991, and read: "J. O'Mahony telephoned D.A. McCarthy (senior tax inspector Mr Tony Mac Carthaigh) for clarification re the penultimate paragraph of his letter dated 15th February 1991.

"D.A. McCarthy confirmed that, if relevant, any DIRT payment to be negotiated would relate only to that on interest paid subsequent to 5th April."

It was established that the note had been dictated by Mr O'Mahony after his phone call to Mr Mac Carthaigh.

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Mr O'Mahony explained that his 11-day delay in phoning the senior tax inspector to clarify that there was no mention of an amnesty-type agreement was on the grounds that the bank was considering how best to approach the problem.

Asked why he had not written the note himself, he explained that he was stuck for time and that he was called away to a meeting that afternoon with the group general manager, Mr Brian Wilson.

In preparation for the meeting, Mr O'Mahony had done a "lengthy manuscript memo." In it there was no mention of the morning phone call and the confirmation that he received from Mr Mac Carthaigh that any DIRT payment to be negotiated would relate only to that on interest paid subsequent to April 5th, 1990.

"Why did you not put that in this hand-written memo which you sent to Mr Brian Wilson, a very important man in the bank?" asked Mr Fitzsimons. Mr O'Mahony did not know, he said.

"The only logical explanation is that the telephone conversation had not taken place at all, the memo of it is - well, not to put a tooth in it - a fiction," Mr Fitzsimons suggested.

Mr O'Mahony said he disagreed totally.

The cross-examination focused next on a report prepared by Mr Tony Spollen. In it the former group internal auditor had noted, in respect of a sum of £583.1 million in the bank's retail deposit centre in February 1991: "Jimmy O'Mahony maintains that 75 per cent of this is `funny money'."

Mr O'Mahony explained: "I would have referred to `funny money' at that stage with a question mark as to whether it was bogus or non-bogus."

It was difficult, said Mr Fitzsimons, to reconcile his assertion at the meeting with the Revenue on February 13th - that he did not know whether there was a large amount of money in non-resident accounts in the retail deposit centre - with this position as expressed to Mr Spollen on the phone two weeks later.

Much of the work was done since that meeting, Mr O'Mahony said. "I would have ascertained certain figures at that stage. I wouldn't have known the split, but suspected that 75 per cent may not have been kosher."

This work, Mr Fitzsimons suggested, would have taken place before the telephone conversation with Mr Mac Carthaigh on February 26th. Arising from this, Mr Fitzsimons said, Mr Spollen knew that "he had to get a document which did not indicate to him that there had been non-disclosure by the bank to the Revenue" of important information.

Since he was seeking clarification, should Mr O'Mahony not have told the senior tax inspector that there was a "huge amount" of "funny money" - if he had had a telephone conversation with Mr Mac Carthaigh?

"I did have the telephone conversation, but why would I tell him at that stage when we had an ongoing arrangement which we felt we had in place?"

Mr Fitzsimons asked: "Isn't it normal when one makes memos of telephone conversations that one starts with the important items and finishes with the ancillary items?"

"In the context that I was trying to satisfy Mr Spollen on that word `authenticity', I felt the other thing was more important."