AIB inquiry with court powers an option

An inquiry with the powers similar to the High Court is one of three options to be considered by the Dail Committee on Public Accounts when it meets today to discuss the controversy surrounding Allied Irish Banks.

The chairman of the committee, Mr Jim Mitchell, yesterday met Mr Frank Clarke SC to receive legal advice. Mr Clarke is to attend today's hearing.

The chairman of the Revenue Commissioners, Mr Dermot Quigley, is to appear before the committee. A decision is likely to ask the governor of the Central Bank, Mr Maurice O'Connell, to appear on Thursday.

Asked if the committee would be requesting witnesses from AIB, Mr Mitchell said this would "depend on the parameters of the inquiry which we call. We might want to look at a class of cases rather than on one instance".

Since earlier this year the committee has held three hearings on "tax evasion by financial institutions and the lack of prosecutions," Mr Mitchell said. "Some of the replies in those hearings look distinctly odd in the light of what we now know."

Mr Clarke, whose advice was offered free of charge by the Bar Council "as a public service", met Mr Mitchell and officials yesterday to discuss the possibilities available to the committee. These options are:

To continue with the present practice of requesting persons to appear before the committee and seeking relevant papers

To decide that an inquiry under the Committees of the Houses of the Oireachtas (Compellibility, Privileges and Immunity of Witnesses) Act 1997 is needed. However a Dail motion requesting such an inquiry, which would have powers similar to the High Court, would be needed. Witnesses and papers could then be summoned

To decide that an inquiry under the Comptroller and Auditor General Act 1927 should be initiated. Again a resolution of the Dail would be required.

The 1997 compellibility law, which came into effect this August and has never been used before, would need to be amended if it was to be used to inquire into the AIB controversy, Mr Mitchell said. One of its sections seems to preclude the summoning of documents in relation to an individual taxpayer's affairs. No such restraint applies with the 1927 act.

"There are extensive confidentiality stipulations in the tax laws and they are there for good reasons. We have to square the compelling reasons for confidentiality with the need for accountability and I believe we can."

Mr Mitchell, who during the last Dail was chairman of the Finance and General Affairs Committee, which spent over two years working on the compellibility law, said that any inquiry established under the law would most likely be a long, drawn out affair, probably involving a number of legal challenges.

"The law goes down a very new constitutional road by giving a political forum a quasi-judicial role," he said.

Meanwhile the Fine Gael leader, Mr John Bruton, has called on "those who know about large sums of uncollected taxes in the financial system in the late 1980s and early 1990s to come clean".

Major financial institutions knew that, like AIB, they too had liabilities for unpaid DIRT tax and should own up and pay up, he said.

He said the Revenue's "excessive sympathy" for some business interests must be properly investigated. The public are entitled to know of all tax write-offs in excess of £1 million "especially in the late 1980s and early 1990s when the double tax culture ruled".

Mr Bruton suggested that the Revenue could list such settlements without listing the names of the companies involved, and disclose whether any political representations were involved.