Cowen warns of serious consequences over bonus payments

THE SCALE of undisclosed bonus payments to Bank of Ireland staff since the introduction of the bank guarantee will be known when an “intensive investigation” is completed, the Dáil has heard.

Taoiseach Brian Cowen warned that there would be “serious consequences” if “wrongdoing is found to have occurred” and he “would condemn” any non-compliance with Government directives on the issue.

Mr Cowen said, however, about the amounts involved that “we sought detailed information by way of investigation and we are now going to ensure that the details are provided to the House and the public”.

It has been estimated that millions of euro were paid out in bonuses to an as yet undisclosed number of employees.

Mr Cowen, however, failed to respond to a question from Fine Gael leader Enda Kenny about “the responsibility and role of the public interest directors.

Has the Taoiseach ascertained from them whether any information was given about these bonuses? Were they asleep when this information was given to the Minister for Finance?”

Minister for Finance Brian Lenihan launched an investigation after it emerged that bonus payments were made to the bank’s staff even though last year it said no bonuses had been paid since the bank guarantee in September 2008.

Further queries from the Department of Finance revealed that substantial funds were spent on contractual bonuses.

Mr Kenny described the “bonus culture” being “alive and well in the banks”. He said the Minister had given misleading information to the Dáil about Bank of Ireland bonuses, which had been given to him “falsely”. The issue initially emerged in a response to a parliamentary question from Labour finance spokeswoman Joan Burton.

Mr Kenny asked Mr Cowen who authorised the payments. “The Taoiseach is aware that €3.5 billion already has been paid to this bank with more to follow.” The “increased taxes, levies and charges being paid by each worker in the country go exclusively to pay these bonuses and this is not right”. Claiming “these banks are running rings around the Government”, he asked if Mr Cowen intended to claw the money back through a 90 per cent tax rate.

Mr Cowen said “the bank has apologised to the department for this and the Minister for Finance views this issue very seriously. An intensive investigation of the additional payments made by Bank of Ireland since the introduction of the guarantee scheme is under way. The Minister is eager to see this investigation concluded as quickly as possible and if wrongdoing is found to have occurred there will be consequences”.

Mr Kenny said, however, that “the bonus culture is not simply confined to the banks. The chief executive of Nama gets a salary of €430,000, plus a 60 per cent bonus. The chief executive of the NTMA earns almost half a million euro and receives an 80 per cent bonus. Moreover, no public service pay cuts have been applied to the NTMA. This must end,” he said.

Mr Cowen told him “the issue has been taken up at the highest level. The Government indicated it was not acceptable”. An investigation was under way, he said.