Ms Mary Walsh, the PWC tax partner, said she realised her note of an AIB meeting on October 30th, 1998, was incorrect "during the course of testimony" from Mr Philip Brennan, AIB's head of group taxation, and Mr Noel Glennon, chief manager of corporate tax. "Subsequent to my realisation of that, Mr Brennan telephoned me and said he also thought that my note was wrong and that the bank would be giving evidence to that effect."
That was within the last few days, she confirmed, in response to questioning by Mr Pat Rabbitte. She had discussed the matter with no one since giving evidence for the first time on Friday, apart from her barrister, she said, in response to the committee chairman, Mr Jim Mitchell. Mr Brennan had told her that the discussions between the bank and Revenue were with Mr Tom Tiuit in the investigation branch and not with the Revenue chairman.
These discussions with the Revenue had taken place following publication of a report in the Sun- day Independent, on April 5th, 1998, which had said AIB had a potential liability for DIRT tax of £100 million on the basis of around 53,000 bogus non-resident accounts for the period 1986-1991 - equivalent to about a full year's profit at the time.
Ms Walsh was asked to examine independently the methodology behind the so-called "look-back" calculations devised by Mr Glennon to rebut this £100 million figure, originally put forward by AIB's former group head of internal audit, Mr Tony Spollen. It was not an audit, however, she emphasised, and she was broadly in agreement with the methodology used and the resulting calculations.
The timing of this exercise was significant, the inquiry heard. It had been prompted in response to concerns raised by the Revenue after publication of the £100 million potential liability figure in the media and also in preparation for the Public Accounts Committee hearing.
But, regardless of the purposes of the "look-back" exercise, AIB did not concede at any stage that a liability for DIRT existed on its part, because of its belief that an amnesty-type agreement was in place with the Revenue for the period under review, the inquiry heard. The question as to whether or not the matter of the bank's liability had been "satisfactorily resolved" with the Revenue received particular attention on Saturday.
In response to Mr Rabbitte, Mr Brennan said he could not agree with the following words in Ms Walsh's note, either, as attributed to him: "Discussions and meetings with Revenue led to the conclusion that we felt the matter had been satisfactorily resolved."
"So is Ms Walsh wrong about that, too?" He hesitated to say Ms Walsh was wrong, he replied. The note was "a synopsis of a lot of information" that he had imparted to her: "Whether we would have said why we were happy or not, I just don't know." There were two issues bound together in the sentence which were not necessarily connected, he added.
Mr Brennan asked to see the sentence in Ms Walsh's file note again. "You agree with that?" asked Mr Rabbitte. "Mr Glennon agreed with it but I don't want to influence you."
The meetings with Revenue, Mr Brennan explained, did not make him conclude that matters had been satisfactorily resolved. This impression had been gleaned from talks he had had with Dr de Buitleir, the group head of taxation (and a former senior official of the Revenue before his recruitment to AIB). He had briefed Ms Walsh that the matter had been "satisfactorily resolved", he conceded, on the basis of what Dr de Buitleir had told him.
Pressed by Mr Rabbitte, he said he understood that "Dr de Buitleir may have had some discussions" with somebody in the office of the chief inspector of taxes. That, and the fact that there had been no follow-up by the Revenue to previous correspondence on the issue for several months, had led him to conclude that the matter was satisfactorily resolved: "In the intervening period I would have spoken to Dr de Buitleir and he would have indicated to me that the Revenue wouldn't be in contact with us, either."
"So it would look like he changed Mr Tiuit's mind?"
Mr Brennan said he had never received any indication from Mr Tiuit "then or afterwards" that he had changed his mind. Later, Mr Sean Ardagh TD asked Dr de Buitleir to clarify whether Mr Brennan had been able to tell Ms Walsh that the matter had been satisfactorily resolved "as a result of you saying that this was so". "I'm not sure that I went as far as saying it was satisfactorily resolved," replied Dr de Buitleir. He had had discussions with his friend, Mr Sean Moriarty of the Revenue Commissioners, a former superintending inspector of taxes, when they met, socially, sometime in June or July, "when we discussed this matter, and perhaps other matters - it was very current at the time". Mr Moriarty's view was "that the matter would probably be OK. I don't think he was definitive about it".
Mr Moriarty gave evidence that he and Dr de Buitleir "had a long-term friendship over 20 or 25 years" and met for lunch on a regular basis. Now in human resources, he had had no contact whatsoever with "the investigative side" of the Revenue since he left that section in January 1997.
When the investigation began, certainly he was asked by colleagues for his "memory of the thing at the time" and he told them what he remembered.
"I certainly was not in a position, nor did I offer any comfort to Dr de Buitleir or AIB. I just wasn't in a position to."
Neither had he gone back to the investigators to tell them that he had given Dr de Buitleir an assurance. "The investigation took its normal course from there on, without any influence from me."