Former bank auditor denies bid to discredit

A former senior executive of AIB described as "scurrilous" suggestions that he was "rattling cages" to embarrass the bank because of attempts to transfer him.

Mr Tony Spollen, head of group internal audit for five years until 1991 and now an independent internal audit consultant, said his "oldest friend", Mr Peter Sutherland, then AIB chairman, told him during a phone call in December 1990 that the role of the group's internal audit department was being "uplifted", which was very good news for him.

In January the chairman of the audit committee, Mr Jim Culliton, told a board meeting Mr Spollen was "a great chap".

Two days later he was told he was being moved, that the group chief executive wanted him to "fold his tent".

But Mr Spollen, the author of the book Corporate Fraud - The Danger From Within, said it was scurrilous to suggest that after 22 "very pleasant years" with AIB he would suddenly stir up an issue such as DIRT liability "to embarrass people or whatever".

Mr Spollen had told the committee that he did not know of a DIRT problem until late January 1991. In a series of internal letters, he referred to £600 million in 53,000 non-resident accounts with a six-month DIRT liability of £10 million.

He was told there was a problem with one-third of the Northern Ireland non-resident accounts and documentation problems in the Republic could run into hundreds of millions of pounds.

He told Mr Sean Ardagh, TD for Dublin Central, that the first time he discussed a transfer with his boss, group chief executive Mr Gerry Scanlan, was in early February 1991, when they had a "full and frank" conversation, during which he was told he would be moved in 14 days.

Two days later Mr Scallon called him to say the move had been dropped.

When he subsequently wrote a series of letters on his concerns about the bank's potential DIRT liability the question of a transfer was "all history".

Outlining the sequence of events leading to the discussion of his transfer, he said that in the middle of December 1990 Mr Sutherland phoned him and said he had discussed the group internal auditor and his rank with Mr Jim Culliton, the chair of the bank's audit committee.

It was "totally out of character" for Mr Sutherland to make such a phone call, Mr Spollen said.

"We were friends literally since I was the age of eight. He was my oldest friend. We were educated in Gonzaga College, we were terrific friends all our lives and whenever he had difficulties in his life, I was there and vice versa."

When Mr Sutherland became chairman of the bank they had an "understanding" to not discuss bank matters on social occasions.

Mr Sutherland told him he had spoken to Mr Culliton, then chairman of the internal audit committee. It had been decided that the role of group internal audit would be "uplifted".

Mr Sutherland later told the committee he did not remember the call to Mr Spollen but he believed he would have been "clapping Tony on the back and saying well done".

He had not known of a reshuffle and he believed the enhancement of the internal audit function was something Mr Culliton would have been anxious about. At a board meeting on January 10th, 1991, Mr Culliton raised the issue of "uplifting" the group internal audit department. He described Mr Spollen as "a great fellow" and praised the job he was doing.

Mr Keogh came in a week later, on a Friday evening at 5 p.m., to tell him it had been decided to make him head of corporate lending at the same rank. Mr Spollen said he told Mr Keogh: "I wouldn't be pleased with that and I spoke to Mr Sutherland."

Then Mr Brian Wilson, group general manager, called to his house on a Sunday afternoon and, as Mr Ardagh put it, "tried to persuade you to take this transfer". The following day, Mr Dermot Egan, head of human resources, also encouraged him to take the transfer.

Mr Spollen claimed Mr Wilson, a friend, said: "Look, if the executive want to move you around, they're entitled to do it. Come on in peace." Mr Wilson later told the inquiry he was trying to stop Mr Spollen "painting himself into a corner". But he said he had no idea about the "uplifting" of the internal group auditing function.