Dáil Éireann debate -
Thursday, 26 Mar 1998

Vol. 489 No. 2

National Irish Bank: Statements.

Tánaiste and Minister for Enterprise, Trade and Employment (Miss Harney)

The revelations last night on the RTE 6 o'clock evening news contained the most alarming allegations ever made against a bank here, particularly a clearing bank. The fact that National Irish Bank has confirmed the substance of the charges made against it is disturbing in the extreme. Banking is built on trust between banks and their customers. Any suggestion that that trust has been abused by one of our leading financial institutions is extremely damaging for the banking industry, Irish business and the international image of this country which it has taken years of effort to build and enhance. The International Financial Services Centre is marketed throughout the world on the basis of the reputation of the Irish banking system.

The Government is determined that all aspects of the National Irish Bank allegations will be fully investigated by every means at its disposal. We are determined to ensure that any wrongdoing will be fully exposed. We are determined that those responsible for such wrongdoing will be named and treated with the severity their actions justify. We have moved on several fronts to ensure a full and comprehensive investigation is carried out. The fraud squad has opened an office this morning and wants to receive complaints from the public in relation to this matter. The Director of Consumer Affairs is carrying out an investigation in relation to bank charges and is currently involved in meetings with the banking institutions. We have asked RTE to make the information at its disposal available. I am making preparations, in conjunction with my legal advisers, to petition the High Court for the appointment of an inspector.

When the allegations in relation to National Irish Bank first came into the public domain towards the end of January, the State acted in a number of ways. The Central Bank immediately began to carry out an investigation. As Deputies are aware, the Central Bank is the regulatory authority for banking and acts independently of Government. The Revenue Commissioners were involved in an investigation in relation to tax fraud. My Department wrote to the bank to seek information in relation to insurance matters for which we have responsibility. When we received a reply, we immediately made contact with the Attorney General and sought outside legal advice which was made available to us about ten days ago. On foot of this advice we appointed an authorised officer under the insurance Acts to carry out an investigation. The authorised officer went into the bank last Monday. If we succeed in getting the High Court to agree to our petition to have an inspector appointed under section 8 of the Companies Act, it will be the first time an inspector has been appointed without a preliminary investigation. In all, it will be only the third time an inspector has been appointed under the legislation.

I am determined, as I have been from the outset, to act with the best legal advice to ensure we are successful. The customers of National Irish Bank and the people demand no less. The Government is determined that, if there are deficiencies in the legislation which might prevent a thorough investigation and these matters getting into the public domain, we will address those issues. The Minister for Finance will deal with the matters which affect his Department and the Central Bank.

While I cannot say with certainty that the court will agree to my request to appoint an inspector — the terms on which it might agree are a matter for the court — the following are the matters I would like the inspector to address. I would like him to establish the nature and extent of the practices which came to light by National Irish Bank and which customers were involved. I would like him to establish the role played by the bank's internal and external auditors in identifying the problem and bringing it to notice and the role, if any, played by National Irish Bank management in encouraging such surcharging practices. I would like him to establish whether National Irish Bank management acted effectively to terminate these practices when they came to its attention. For instance, were staff disciplined and new control systems and procedures put in place to ensure such practices were not repeated? I would like him to establish why the misappropriated funds were not repaid and who was responsible for this decision. I would like him to establish the role, if any, played by the chairman, directors and members of National Irish Bank in encouraging, condoning or ignoring these practices and in supervising the activities of National Irish Bank management.

We are determined to ensure the investigation does not run into the sand like two other investigations under section 8 of the Companies Act. On foot of those investigations nobody was ever prosecuted. One investigation cost £1.2 million and the other in excess of £200,000. In moving cautiously but with determination the Government wants to ensure we are successful. We have to take the best legal advice to ensure we are successful.

The statement from National Irish Bank will be of great assistance in helping us to have an inspector appointed. After the Government became aware of the allegations on the 6 o'clock news — nobody in the House knew anything about the matter before then — we were in discussion with the Attorney General, the governor of the Central Bank and others on the best way to proceed. We had to be satisfied that we had sufficient evidence to convince the court that the company was run in such a way that it might defraud creditors or any other person or that it was run in an unlawful manner.

They are the circumstances under which an inspector would be appointed. Given that National Irish Bank made a statement, it should make it easier for that inspector to be appointed. The statement reads: "the incidents RTE referred to go back many years and do not reflect the current policies or practices of the bank". National Irish Bank is clearly acknowledging that what was contained in the RTE revelations is correct. It goes on to say that "this practice occurred in a small number of branches and in a limited number of accounts in the late 1980s and early 1990s". It continues: "We accept that customers affected by the unauthorised practice were not advised of it and were not offered recompense at that time". It is extraordinary that although these practices were detected seven, eight or nine years ago, it is only now that the bank will identify the customers involved and reimburse them. That is not good enough. It is a disgraceful response by National Irish Bank.

We will take questions later but if we succeed in having an inspector appointed to National Irish Bank, it will be the tenth inquiry with which I have been involved in eight months in office. That is an extraordinary indictment of the manner in which our company law has been enforced. We are determined that the laws which apply in this country are enforced fairly and evenly, regardless of who is involved. Those who do business in and with Ireland are entitled to expect no less.

Those who put their money in the bank are entitled to expect that it is safe and to have trust and confidence in the bank. As I said earlier, when trust and confidence in a banking institution breaks down, it is not just serious for the customers and bank involved but also for the country. That is why the Government is taking this issue seriously. The Cabinet meeting yesterday evening after we became aware of these facts and which lasted approximately an hour and a half was probably unprecedented. Meetings were held with the Governor of the Central Bank and the Attorney General late into the evening. We did that because of our concern and determination to ensure that we leave no stone unturned in bringing these matters into the public domain and in dealing with the severity which such actions justify with those responsible, whether by condoning, ignoring or encouraging them.

Mr. Noonan

I wish to share my time with Deputy Owen.

Acting Chairman (Mr. Kirk)

Is that agreed? Agreed.

Mr. Noonan

I thank the Tánaiste for sharing her thoughts with us. She is a public speaker of repute and ability, but it is unacceptable and bounds on the scandalous for her to come into the House without a script. This is one of the most important issues to occur in the banking industry. To ad lib her way through a statement in the manner in which she has done is totally unacceptable and not part of a proper process of accountability to this House. The Tánaiste presides over one of the major Departments. If I, with no resources or backup, could prepare a script since the Order of Business, the Tánaiste should also have one from her Department. I served in that Department and I know the ability of its civil servants to produce proper scripts if policy decisions are taken. However, it is clear that the Government has been floundering since last night and is unable to act or to give clear policy directions to the relevant Departments which are then unable to provide the necessary written statements for the Tánaiste.

Mr. D. Ahern

That is absolute nonsense.

Mr. Noonan

The allegations made by RTE yesterday evening about National Irish Bank were deeply disturbing. They accuse NIB of theft and fraud. Over a number of years NIB had an organised system in place which loaded interest on accounts of certain customers. The loading was arbitrary, motivated by a desire to maximise NIB profits and was applied without the knowledge or agreement of its customers. A second allegation that an arbitrary system was also in place to load bank fees on certain accounts to accumulate further profits is also disturbing.

These extra fees were totally unjustified and their imposition amounts to theft and-or fraud.

NIB has stated that it will repay customers the interest charges which were wrongly applied. This amounts to an admission that the allegations made by RTE are true. A clear prima facie case now exists that persons at senior level in NIB were involved in a conspiracy to defraud their customers and to steal from their accounts to increase the profitability of NIB. In the final analysis, fraud and theft are matters for the Garda Síochána. If the evidence now before us applied to the theft of a bicycle by a young man, the squad car would be outside his door. I hope the general inability of the criminal justice system to deal with white collar crime will not prevail in this case and that the gardaí are given every encouragement, support and co-operation to proceed to a successful prosecution. I also hope that whatever other action the Government proposes to take will not inhibit the gardaí or lead to further procrastination.

The Government, particularly the Minister for Finance and the Tánaiste, dealt with the original allegations that NIB was involved in organised tax evasion in a tardy, casual and offhand manner. They did not afford the issue the seriousness it merited. I was not surprised at the panic and ineffectiveness of the Government last night when faced with this emerging scandal. The Minister for Finance dismissed the original allegations as matters of little consequence. On RTE he remarked that the issue was unimportant as it applied only to a minuscule percentage of NIB's deposit accounts. The Tánaiste failed to act until she was aware that this latest scandal was about to break.

The hapless Minister of State at the Department of Enterprise, Trade and Employment, Mr. Treacy, appointed an inspector under the Insurance Acts to investigate a matter which was self-evident and could be established in a five minute telephone call — that National Irish Bank was in breach of European Union and domestic law when it marketed a life insurance product in this jurisdiction which was sourced in the Isle of Man, a non-EU jurisdiction. Everyone in the banking and insurance industries knew that if they operated without a licence they were in breach of that law. This was a codology response by the Minister of State, in consultation with the Tánaiste, to a major scandal and the Tánaiste should be ashamed of herself. The Tánaiste and the Minister for Finance must convince this House and the public that their inability to act when the original allegations were made was due to nothing more than their inability to make decisions, to managerial incompetence and to a general layer of doziness which is the hallmark of so many Ministers in this Government.

This Administration is close to National Irish Bank. Deputy Cooper-Flynn is a former employee and had some role in the sale and marketing of the broker bond product which gave rise to the original allegations of tax evasion. The former chief executive of NIB, Mr. Jim Lacey, is reputed to be a close associate of the Taoiseach. I understand he is chairman of Forum 2000, the main fund raising vehicle of the Fianna Fáil Party which was set up by the Taoiseach in 1995 to target business people in each constituency to raise £3 million in three years. Mr. Lacey was appointed by the Government as chairman of the Irish Aviation Authority and as a member of the executive board of the Dublin Docklands Development Authority. He was also chairman of the Local Government Reorganisation Commission. I have little doubt that Mr. Lacey is well suited to these State appointments on grounds of ability and experience. However, when the Tánaiste is going to the High Court to appoint an inspector to NIB to investigate alleged fraud at a time when Mr. Lacey was chief executive, would it not be appropriate for the Taoiseach to ask Mr. Lacey to step aside from these State appointments while the Tánaiste's inspector is carrying out his investigations?

It has been publicly stated, and not denied, that NIB is the main banker of the Progressive Democrats. An overdraft figure of £300,000 has been mentioned in the media. I hope the Tánaiste has requested her party trustees to establish that no interest loading or excessive fees applied to the accounts of the Progressive Democrats.

I do not believe that any of these personal friendships or business relationships with NIB has led the Government or any Minister to act improperly in this affair. There is a general inability in Cabinet to take resolute action, but it must be taken now. The Tánaiste, who has failed to do that, and the Minister for Finance must make it absolutely clear that resolute action will be taken.

I suggest the following programme of action. The investigation into allegations of tax evasion being made by the Central Bank, the Revenue Commissioners and the Tánaiste's insurance investigator must be brought to a conclusion immediately. The reports must be brought before the House, debated in full and their recommendations implemented. The Garda should be encouraged to investigate the latest scandal and any other action taken by the Government should not be used as an excuse to delay a Garda inquiry. The Tánaiste should proceed, as she stated she would to the High Court, to put an inspector in place, with the consent of the High Court, at the earliest possible date. We do not need her to read out terms of reference. The function of the inspector is to investigate the allegations of fraud under the insurance Acts and to make recommendations. The Minister for Finance should request all internal audit reports from NIB and report to the House on how widespread was the practice of interest loading. The Minister for Finance should appoint an outside firm of auditors to examine all relevant NIB accounts to make recommendations on the amounts that should be repaid to NIB customers and those amounts should include interest and compensation payments. NIB now lacks the credibility to carry out this work and a helpline service should be organised for aggrieved customers. All costs of latter two proposals should be borne not by the Exchequer but by National Irish Bank.

The Director of Consumer Affairs should take whatever steps he is empowered to take to establish if fraudulent practices, similar to those in NIB, were carried out in other banks. I have no evidence that such practices were common or in place in other banks, but the suggestion is being widely made this morning, privately and publicly, principally by bank customers. Credibility in the banking system must be restored. I do not believe the Minister for Finance has an adequate portfolio of powers through the Central Bank to restore such credibility and to allay the fears of the public. I recommend the Minister for Finance should set up an independent banking inspectorate answerable to the Central Bank which would visit and examine on a random basis any branch, Department or section of a bank to investigate all its proceedings and report on them to the Central Bank. Unless there is an inspectorate in place which can thoroughly examine the proceedings of any branch, section or department of a bank on a random basis, credibility will not be restored in the Irish banking system. The Central Bank should be made accountable to Dáil Éireann in respect of its regulatory and supervisory powers in relation to banks. Justice must not only be done but be seen to be done. I have heard the Minister for Finance say here on at least two occasions that the Central Bank will investigate and report to him but he is bound by reasons of confidentiality not to reveal the contents of its report and not to share its recommendations with us. That is not acceptable. The primary role of the Central Bank will shortly pass to the new European Bank in Frankfurt. Its main role from now on will be a regulatory function in respect of the financial industry and the banking sector in particular. There must be accountability to the people through the Houses of the Oireachtas. If the Minister decides he needs to legislate to put that accountability in place this side of the House will support him.

The Central Bank must immediately inspect the computer software systems of all banks by which interest and fees are applied. If there is fraud in other banks we can take it for granted it is done by rigging the software. Customers' transactions are run through the computer and the software will dictate what fees or interest they are charged on particular transactions and types of accounts. The Central Bank must immediately give an assurance that everything in regard to software is in accordance with law and best practice and subject the systems to subsequent random inspection. That is absolutely vital as all our wages, salaries, overdrafts and deposits will be transferred into Euro shortly.

This scandal goes to the heart of the banking system. If it is not dealt with in an upright and resolute manner by the Government it will damage our economic prospects. Fine Gael will support any action the Government is willing to take to restore credibility to the banking system and get to the bottom of this scandal.

Mrs. Owen

I will try not to repeat what my colleague Deputy Noonan said other than to say the information RTE disclosed last night is profoundly damaging not only to the National Irish Bank but to customers' credibility in our banking system. I reiterate what Deputy Noonan said. It is important that the Taoiseach or one of the Ministers should clarify the position of former Chief Executive of the National Irish Bank, Mr. Jim Lacey, and his continuance in the public positions he holds. Section 10 of the Companies Act clearly allows an inspector once appointed to interview anybody or persons relevant to the investigation irrespective of whether they are officers of the company being investigated. The inspector will have to investigate the actions of the former chief executive and others. It is doubly extraordinary that in the early 1990s the chief executive wrote a letter to his staff telling them that the practice of skimming people's accounts for fraudulent reasons must stop immediately, but that did not seem to happen. His instructions were not taken up immediately and questions must be asked about why his authority did not rule.

I regret to say this is another element of the Tánaiste's unsteady handling of a number of issues since she took office. I refer to the Seagate affair when she said she knew nothing about its closure, her tardiness in setting up an inquiry into the Ryanair matter and the fact that in January this same bank came up for questioning over using insurance bonds as a tax evasion measure. I call on the Tánaiste to ensure that when she gets power from the courts to appoint an inspector she will include in that inspector's remit an investigation into the use of insurance bonds as a tax evasion measure. That is something she should have done last January when this story broke.

Miss Harney

I cannot do that; the court has to decide that.

Mrs. Owen

The Tánaiste must make sure that the inspector's full measures are brought to bear on all activities.

Miss Harney

That is a matter for the courts.

Mrs. Owen

I know this is a matter for the courts——

Mr. B. Ahern

Then the Deputy should not tell the Tánaiste to do that.

Mrs. Owen

——but I am amazed the Tánaiste cannot tell us now that she has prepared the documentation for court and has a court hearing fixed. That is what the Tánaiste should be coming in here to tell us. She may have to take legal advice——

Miss Harney

We will have to.

Mrs. Owen

——but it is possible for her to do that through the night and make sure that the confidence people require in our banking system will be restored immediately. I hope the Tánaiste will show more surefootedness in her handling of this matter——

Mr. O'Dea

Than the Deputy did.

Mrs. Owen

——than she did in her handling of the last number of issues.

Mr. McDowell

It is difficult to overstate the importance of the revelations made yesterday evening by RTE. It is probably fair to say that most people believe bank charges are too high and it is certainly fair to say that most people, myself included, believe bank interest is too high. However, few of us would have suspected that one of the big four banks would have set out systematically to defraud its customers. The banking system is built on trust and confidence. Customers lodge their money in banks because they have confidence in the system. They may have a particular choice because they have been offered a good deal or they may get on well with a particular bank manager, but the bottom line is they have confidence in the system managing their money. They believe that when they lodge money they will be able to withdraw it whenever they want to. They believe in the system. Without that trust in the system it cannot work.

By engaging in improper activities, which were almost certainly illegal, National Irish Bank has posed a serious threat to public confidence in the banking system. It is not difficult to imagine the reaction of ordinary bank customers yesterday evening when they saw the report on RTE. The truth of the matter is very few of us pay much attention to our bank statements. We do not scrutinise them carefully, most of us do not have the wherewithal to do so and some of the charging arrangements are so complex that ordinary people would find it difficult to do it anyway.

For example, bank interest is charged on a daily basis. Few customers, if any, are in a position to assess whether they have been charged the correct rate of interest. We rely on and trust the bank to get it right and NIB has betrayed that trust through its actions.

We need to find out what happened. RTE has evidence that malpractice occurred in at least four branches of the bank — Carndonagh, Walkinstown, Cork and Carrick-on-Shannon. It relates to the late 1980s and early 1990s but how can we be sure such practices were not more widespread and that they have now ceased? A full and immediate investigation of the bank's activities is necessary but it must not be confined simply to the allegations made by RTE. We must go much further and look at the full range of activities of NIB since it commenced business under its current management in this country.

The decisions to load charges on individual customers were implemented by local bank managers who were later given bonuses despite, or perhaps because of, their diligence in increasing the bank's profit margins. Senior head office management was told what was happening. The impression given is of a bank divided between those who wanted to make profits at all costs and those who wanted to enforce normal banking standards. The public is entitled to know who authorised what happened, who know about these malpractices and who was ultimately responsible. In a sense the answer to the last question is clear. If senior management did not know what was happening, then it should have known. There is no way out and it must take responsibility and the consequences.

The statement made by NIB yesterday is amazing as it admits to gross irregularities and then goes on to state blandly "the bank regrets this. " Does it seriously believe a one sentence statement of regret is an adequate response? There is no indication the bank will make a full disclosure on what happened or even explain how it came to happen; that it will discipline those responsible for the fraud or that it has the remotest appreciation of the serious nature of what it has done. The statement is worse than that because having given a one sentence statement of regret it goes on to make an extraordinary attack on RTE for having the cheek to make the revelations initially. I am quoting from the last paragraph of the statement:

RTE has again allowed itself to be used by disaffected parties to promote out of date information about the bank in a manner designed to inflict maximum damage on NIB. NIB is gravely concerned that RTE continues to present highly selective information leaked to it to undermine the bank and to misrepresent the bank's management and its staff.

The effrontery of this attack is breathtaking but is entirely consistent with the approach of the bank over these last weeks. The bank first attempted to deny what happened and then went on to organise an internal investigation with no commitment to make the results public. It then panicked and decided to go to court to attempt to muzzle RTE. We should reflect on this. The bank admits to its inadequacy in its systems but then goes to court to prevent RTE from highlighting them. It is like saying "I admit I stole something but how dare you call me a thief?" The Supreme Court decision is hugely important. All of us acknowledge that confidentiality is at the heart of the banking system. It is important that a customer should be able to deal with his or her bank in the confident knowledge that it will go no further, but it is equally important that the system is not used for illegal or improper purposes. The court set out to strike a balance between the public interest and that of the bank and individual customers. In doing that, it has done a good day's work for the general public. It is right that journalists and others should be allowed or encouraged to reveal wrongdoing wherever they find it. We owe a debt of gratitude to RTE for the work it has done over the past few weeks.

Extraordinary though it seems the effrontery of the bank did not even stop when it lost the court case. It went on to issue a statement earlier this week which was presumably intended to preempt yesterday's RTE report. These people have done nothing to earn our trust or respect. On the contrary, the action of the bank's management at every turn smacks of cynicism of a despicable kind.

I turn to the response of Government. Issues relating to NIB have been in the public domain for eight weeks. I was struck, as were many others, by the extraordinarily blasé response of the Minister for Finance, in particular. The frenzied reaction of Government over the past 12 hours——

The Taoiseach

Efficient not frenzied.

Mr. McDowell

——is in stark contrast to the nonchalant attitude the Minister has taken up for most of the past two months. It is about time he started acting as a Minister rather than as an accountant who shows a quaint awareness of the practices some customers wish to carry on.

I agree with what the Tánaiste has done and that the right approach is to apply to court for the appointment of an inspector. It is about time but this should have been done weeks ago. However, it is the right way to go. It is extraordinary that the governor of the Central Bank is meeting Mr. Spain this morning. There were a number of opportunities in recent weeks to discuss the role of the Central Bank and I have been struck by the inadequacy of the response from the bank and the Minister for Finance in defending its role. The governor and the bank have consistently said they will look only to the prudential supervision of the banking system. Their role, as they see it, is simply to ensure the ratios are right and the system is not about to collapse.

The bank must go one step further and realise that when customers of a bank cease to trust it, the system is under threat. Public cynicism poses the greatest potential threat to the system. The role of the Central Bank must ensure the practices that have been revealed over the past while do not continue. It must take a more proactive, interactive role in going into individual banks and ensuring that activities, such as tax evasion or those which have been revealed over the past 12 hours, simply do not happen. If the bank does not currently see this as its role, then it must be told, and if necessary legislation must be amended to ensure it is given such a role.

The potential consequences for the banking system as a whole are grave. My office has taken a number of telephone calls from customers of other banks suggesting that activities such as these were happening in their branches also. It has been specifically suggested that in another bank a directive was given a number of years ago that loading should be introduced in a systemised way on certain customers. I have no way of verifying that but hope it is not true. However, there is no doubt there is widespread distrust among the public about what is happening in the banking system which must be confronted and set aside. Mr. Fagan, the Director of Consumer Affairs, must be given authority if he does not already have it to go into banks and ensure their practices are up to best standards. We must be assured these activities are not widespread, but if they are the information must be revealed. The public is entitled to be told the first step is to obtain information and then take action. There must be action against the individuals responsible in NIB for these practices and elsewhere if it is more widespread. The allegations border on, if not amount to, fraud. They are illegal, improper activities; it is stealing. If that is the case, the DPP and the Garda have a role and should investigate without delay. The Government has been excessively tardy in reaction to this. It has misread the public mood which is one of anger, cynicism and a lack of confidence in the banking system. Ultimately, it is the responsibility of Government to confront this and restore confidence. I want to have confidence in the Government's ability to do so but nothing it has done over the past eight weeks gives me such confidence. I hope it does better in the next while.

Mr. Rabbitte

What has been revealed by two RTE journalists to have transpired at NIB strikes at the basis of the trust that is the foundation of the banking system. We do not know yet if there are grounds for believing that the practice of raiding the accounts of their customers extended to other banks. If it is found that the practice of bank profits being swollen arising from the NIB practice of helping itself to its customers' money is replicated elsewhere then the integrity of the banking system itself is at issue.

This raises the fundamental question of the actions — or rather, the failure to act — of those with political responsibility to move speedily to restore confidence in the banking system. The performance of the Government to date, for whatever reason, has been characterised by uncertainty, prevarication, diversion and above all a determination that whatever has been going on will be kept quiet.

The House will recall that this crisis did not suddenly blow up last night on the "RTE News". The Government cannot feign shock or surprise and pretend to be taking speedy action. This story goes back to the extraordinary revelations of 23 January by the same two journalists, Mr. Charlie Bird and Mr. George Lee, who alleged, as summarised by the Supreme Court, that the bank knowingly facilitated the targeting of high net worth customers, including hot money, for the purposes of tax evasion. Could there be a more serious allegation? Is stealing on a large scale from the Exchequer acceptable but stealing from the bank's customers provokes an emergency Cabinet meeting? These two charges are so serious that if established they raise questions about whether this bank should continue to be licensed to trade as a bank.

Why did the Tánaiste not move to appoint an inspector? Over eight weeks I have repeatedly sought to explain to the public the difference in the powers of a section 8 appointed inspector and those of an authorised officer. For today's purposes, the main difference is that the report of an authorised officer may not be published. An organised scheme to facilitate tax evasion is a criminal offence and does not meet the obligation of directors in terms of compliance with company law.

We knew about the RTE allegations of large scale tax evasion and the lengths to which the bank went to obfuscate and conceal the truth. The bank incurred the costs — which will no doubt be passed on to its customers in due course — of going to the Supreme Court to suppress further disclosures. The Tánaiste knew all this; why did she think the bank went to the court in the first place? She knew RTE had made no secret of the fact that they had further, grave, reliable information concerning the conduct of the bank, yet she resisted all appeals to have an inspector appointed. Why? She tells us now she has to take advice concerning whether the circumstances obtaining permit her to petition the High Court to have a section 8 inspector appointed but why did she not take this advice over the last eight weeks?

Miss Harney

For the same reason the Deputy did not do it in respect of Clonmannon.

Mr. Treacy

They were being neglected and Deputy Rabbitte stood idly by. He is the national wind generator.

Mr. Rabbitte

Is tax evasion less serious than stealing from customers' accounts? No citizens of the State were defrauded when I was in that Department.

The maintenance of secrecy sits uneasily with the Tánaiste's honourable record as an Opposition Deputy, yet that is the common theme running through this saga since 23 January in all the inquiries, whether instituted by the Revenue Commissioners, the Central Bank or NIB itself — whatever the outcome of the inquiry, it must be concealed from the public. Only this week, when the dogs in the street knew that RTE was coming back for a second time, did the Tánaiste move to appoint to NIB what RTE erroneously but understandably called an inspector. She appointed not an inspector but rather an authorised officer under the Insurance Act, 1989 to establish whether CMI was authorised to do business here.

This is so incidental to what has occurred at NIB that if I did not know the Tánaiste to be a politician of integrity I could only conclude that this decision was a smokescreen to avoid the real issue and maintain secrecy. Whether CMI was or was not authorised to do business in this jurisdiction — and I am puzzled as to why that is not available in the Department's records — is incidental to the main issue here, which is a bank raiding its customers' accounts and being accused of facilitating tax evasion.

As Deputies Noonan and McDowell said, the Minister for Finance in his inimitable fashion pooh-poohed the RTE story of 23 January — he said the money involved was small in the context of the amount of tax collected every year. In any other EU member state, if a Minister for Finance made that statement he would find himself allocated to other duties. Has the Tánaiste been subjected to such arguments for not acting and hoping the Supreme Court would gag RTE?

In this scandal the role of the former chief executive of NIB must be examined. It is not sufficient to say, as he did in his letter, that "this practice must cease for obvious reasons". Why did he not ensure that the practice terminated or that the findings of the internal audit committee were implemented? Why did he not direct that the property stolen from customers be restored to them? Is it true, as I have been advised, that he personally drove this unquestioning culture of profit maximisation before he was relieved of his duties as chief executive officer? The one Deputy who can answer that question has left the House, unfortunately. I note that Mr. Lacey has powerful political connections which are entirely a matter for himself and whoever wants to associate with him but the Tánaiste should reassure the House that these known political connections played no parts in the unwillingness to date to properly investigate the RTE revelations in a manner which can be subjected to proper scrutiny in this House and the public domain.

Deputy Noonan referred to the almost unprecedented response of the Tánaiste, who came into this House without a script and ad libbed her way through a crisis which poses questions about the entire banking system, thus making it impossible for Opposition spokespersons to look at what precisely has been said. However, she made one extraordinary statement, mentioned by neither of my colleagues — she is examining a remit for the inspector, if he is appointed by the High Court, which will have him deal with the events of last evening.

Miss Harney

I did not say that, I said what I would like him to deal with.

Mr. Rabbitte

Will the Tánaiste say whether he is dealing with the story reported by Charlie Bird and George Lee on 23 January——

Mrs. Owen

He should cover that.

Mr. Rabbitte

——because that is just as important as this issue? Raiding customers' accounts is extraordinary behaviour for a bank but facilitating organised tax evasion is just as serious. I want her to assure the House that is one issue which will be put before the High Court when she petitions it, because it will be necessary to include it to successfully petition the court. That is a critical point.

Mrs. Owen

I asked her that a few minutes ago and she heckled me. She does not know what she is doing.

Mr. Rabbitte

That is right — the Tánaiste asked Deputy Owen whether she wanted her to take advice through the night but she had eight weeks to take advice.

Miss Harney

I took lots of advice.

Mr. Rabbitte

Considerable expertise is available to her in the Department. There is no point saying the two previous cases ran aground because they did not. The Telecom inquiry, conducted by Mr. John Glackin and set up by her former party leader, was successful.

Miss Harney

That was not a section 8 inquiry.

Mr. Rabbitte

In any event, to imply that there is a jurisprudence in this area since 1990 is a nonsense, it has happened on only two occasions. If the Minister does not appoint an inspector in a case where the integrity of the banking system is at issue, when does she opt to appoint one? The little old ladies who thought it was safe to take money out of their mattresses and put it into the bank now have serious cause for reflection. Myles na gCopaleen said banking was the second oldest profession but more profitable than the oldest.

Now we know why the profits are so high. It is not enough that one has to pay a plethora of charges, one is subjected to the bank helping itself to one's account whenever a manager is under pressure to produce results in that particular bank branch. That is a fundamentally serious issue.

On the question of charges, the Consumer Credit Act, which I introduced, for the first time gives the Director of Consumer Affairs authority in respect of bank charges. The Director of Consumer Affairs now must have the commercial justification made out to him by any bank seeking to impose a new or additional charge. Each such application must be accompanied by a fee of £20,000. My purpose in doing that was to deter additional charges. I well recall the lobbying the banking industry engaged in at that time to kill that particular change in the Bill. I am glad it is now law. In the context of the euro it will be especially effective. The £20,000 contributes revenue to the Director of Consumer Affairs to enable him to ensure he has the technology and staffing available to him to supervise the question of bank charges. In a low inflation environment, where banks cannot make the kind of killing on interest rates they made previously, they are more reliant than ever on bank charges of one kind or another. Therefore, this particular power to the Director of Consumer Affairs ought to be examined in terms of its efficacy. If it needs to be strengthened that should be done and the Government should give support speedily to that area.

I ask the Tánaiste also to tell us what she knows about the situation in the other banks. I am advised that this procedure of loading of interest charges was not unusual in the late 1980s and early 1990s. Another associated bank apparently categorised their customers in categories of one to five. Category three accounts, which were generally regarded as troublesome or time consuming, were singled out and were the subject of loading of up to 3 per cent. We need to examine if there is any basis for that claim.

I am advised also that a different associated bank operates the practice known as "shadow permissioning". I will explain that to the Tánaiste so that she will be enabled to respond to it without a script. If a person gets permission to run up an overdraft of, say, £1,000 he or she is given, but not told of, shadow permission for an overdraft of up to £2,000. If that person goes over the £1,000 limit the cheque will be honoured but the balance between £1,000 and £2,000 will be loaded through extra interest and charges. That allegation has to be investigated to see if there is basis for it.

I am not being critical of the Tánaiste personally — I know she has many responsibilities — but the RTE story of 23 January is mind-boggling. Why was action not taken? The Tánaiste knew RTE would come back with more allegations. Why were the pieces not put in place to petition the High Court over that period? The Tánaiste knew well that RTE did not go to the High Court and the Supreme Court because it had shot its bolt, so to speak. She knew there was more coming. We still do not know, except what the bank tells us, about the scale of this matter. I do not know why the Tánaiste should pick Carndonagh, Carrick-on-Shannon, etc. As I understand it, managers are now regarded as profit centres in their own right, they are required to perform and the relentless drive for profit maximisation produces this kind of pressure.

It is not good enough that the regulatory authority is only now wakening up to a scam like this. The Central Bank has a responsibility. How did it not know there was organised tax evasion and that this latest scam was going on? I am concerned about that and it ought to be dealt with in the contribution from the Minister for Finance.

Mr. Sargent

Ba mhaith liom mo chuid ama a roinnt le mo comhailte, an Teachta Joe Higgins.

Acting Chairman

Go maith.

Mr. Sargent

On 3 March my colleague, Deputy Gormley, asked a question of the Minister for Finance as to whether any consideration was being given by the Government to the establishment of a commission on banking. Sadly, the Minister was not satisfied that such a commission was necessary. I wonder if the Government is still of that opinion as it scans the illegal practices of National Irish Bank now being revealed on almost a daily basis. The Green Party considers that a commission on banking has been necessary for some time. Recent revelations regarding National Irish Bank have merely entrenched us in that position.

The still unanswered scandal of offshore banking being used for tax evasion purposes has now been added to by the revelations that the bank has engaged in hidden charges and underpayments of interests. We should be grateful to RTE for making this information available and wonder whether such information would have been made available by the Department of Finance or by the Central Bank. We can now that the protracted court actions involving National Irish Bank and RTE had little to do with the spurious reasoning of protecting customer confidentiality and everything to do with ensuring this information was never made public.

The questions that now need to be asked are: what was known, by which Government Department, when, what action was taken and what action is it intended now to take? These are questions that the Tánaiste and the Minister for Finance have to answer in a credible manner. Other members of the Government need to ask questions of themselves and eventually they may be required to answer questions in this House.

National Irish Bank, as an institution and as a grouping of individuals who make up its decision making body, is not unknown to this Government, as already mentioned. Prominent individuals in this bank have been closely identified as key supporters and providers of resources to the Fianna Fáil Party. We now know that the Progressive Democrats also bank with National Irish Bank. So close have such relationships been that the Taoiseach can claim to have close personal knowledge of the key individuals who have been involved with National Irish Bank. The fact that such individuals have been appointed to boards of State agencies seems to indicate that confidence existed in their abilities and the performance of the agencies with which they have been associated. Those who have made these decisions now need, at the very least, to have their judgment questioned.

A serious question that needs to be answered immediately is whether donations were made to political parties or individual politicians by National Irish Bank and, if so, should such donations not be made public and perhaps returned given that we now know about the activities of National Irish Bank? It should be self-evident by now that there is a need to appoint, through the High Court, an inspector with the strongest possible powers to investigate the activities of National Irish Bank. Failure to do anything else would indicate that the Government, as well as NIB, have something to hide.

Returning to the wider issues to which this controversy gives rise, there is also a need to investigate whether any such dubious banking practices are in any other financial institutions in the country. The need to discover whether NIB represented the exception rather than the rule is something a commission on banking could legitimately and effectively determine.

We need to address the philosophy that underlines Irish banking as well as the conduct of the Central Bank on this issue. The clumsy approach adopted by the Minister for Finance in relation to credit unions in the recent Finance Bill seems to indicate an attitude that all financial institutions have a single-minded approach to the creation of money whereas responsibility, if it exists at all, is rarely directed to the good of society in general.

The issues that now need to be addressed represent a catalogue of tax evasion, hidden charges and non-payment of charges which can be added to the list bank customers have long held as part and parcel of a system which does little to assist, inform or benefit. The inexplicable language of banking needs to be reinterpreted. The activities of all financial institutions should be standardised in terms of charges. Banking legislation, as well as legislation on data and consumer protection, needs to be examined.

The veil of secrecy sorely needs to be lifted. However, whether a Government that has been willing to hide behind that veil is able to bring about that openness is strongly open to question. Other mechanisms must be put in place. There is a need to establish an office of financial ombudsman, which would be independent of the banking and insurance industries.

It is, of course, natural and necessary for the Government to exercise a close monitoring role on national and international monetary systems. It is now clear the banking system has not been accountable. In the short term, the Minister and the Government must ensure this investigation into theft and tax evasion is conducted clearly and thoroughly and whatever crime is revealed must not escape unpunished, as happened with white collar crime. However, the Government must focus in the longer term on banking systems which concentrate on community development and which avoid complex and exorbitant charges. Such banks must be supported and learned from. I cite in that regard the LETS, the Local Exchange Trading Systems, which must be given credibility and support in the longer term as an important means of benefiting the unemployed and low waged and developing the community.

Mr. Higgins

(Dublin West): The extraordinary revelations of what took place in National Irish Bank branches puts a whole new construction on the concept of bank robbery. Our image of bank robbers has been of violent men in balaclavas with guns in one hand and swag bags in the other; it must now include sober suited bank executives with fountain pens in one hand and altered balance sheets in the other.

Of all the recent scandals in our society, it must mark a new low in the workings of the present system when a pillar of the economic capitalist establishment in this State indulges in blatant and blind robbery of unsuspecting citizens, most of whom are undoubtedly on incomes substantially lower than those enjoyed by National Irish Bank executives. If the fourth largest bank in this State acts in this way, it begs the question whether other banks have indulged in similar practices. Will the Government tell us what measures it will take to see if that is the case?

Devastating as these revelations are on first hearing, on second thoughts perhaps it is not so surprising because the banking system generally has been guilty of overweening arrogance in the way it has imposed charges on customers, quite legally apparently, for many years. I equate the charging system of the banking establishment to the taxation raising powers of the State.

The banks have been encouraged in this by the failure of successive Governments to challenge them in their lust for super profits. Indeed, the banks have been consistently encouraged by successive Governments in the kinds of tax breaks and other incentives they have been allowed to offer. Is it any wonder, therefore, that the two largest banks had profits approaching £1 billion in the past 12 months? Look how successive Governments have treated the income of ordinary workers in comparison with the banks. Ordinary workers have had their wage increases hammered to only 1 per cent per annum in real terms over the past ten years. In the 12 months to September 1997, National Irish Bank had a massive 19 per cent increase in pre-tax profits to £25.5 million — no restraint there.

Other questions must be asked. The largest banks in this State have said at their annual meetings in the past few years that they have made substantial financial donations to the major political parties represented in this House. If National Irish Bank has made donations to any political parties they should be declared in this debate and, as Deputy Sargent said, returned.

Banks are now very much a part of the economic structure of this society and they carry massive power, which is exercised by unelected boards and faceless men and women. I call for the public ownership of the banking system, which should be run for social aims and the benefit of ordinary people and not to bloat the profits of a few individuals, which gives rise to scandals such as we have just seen.

Minister for Finance (Mr. McCreevy)

The Government is gravely concerned at the recent serious allegations concerning certain practices in National Irish Bank. It is also concerned that bank customers should be able to rely on the fact that the charges levied by their bank, whether these charges are made up of interest or fees, are no higher than the standard charges which that bank applies to that particular type of account. Customers have a right to expect that higher charges will not be imposed without their knowledge. Customers also have a right to expect that where genuine errors are made by their bank, corrective action is taken as soon as possible after the error comes to light. These are basic minimum standards which every customer is entitled to expect their bank to abide by.

The information available to the Government in relation to these allegations is no greater than that in the public domain. The allegations being made relate to transactions which took place a number of years ago. These transactions predate important legislation on consumer protection, notably the Consumer Credit Act, 1995, and the introduction of greater transparency in relation to bank charges. I have no reason to believe the alleged practices have taken place within this new regulatory environment.

As Members are aware, the Central Bank of Ireland is the supervisory authority in Ireland in relation to banks. The Central Bank has available to it a modern legal framework to support its supervisory activities. This statutory framework is based on EU legislation for the most part and it is, therefore, up to best international practice. As Minister for Finance, I have been assured by the Governor of the Central Bank that he is satisfied the regulatory powers available to him are generally adequate to enable him to discharge his regulatory duties in a satisfactory manner. He has also assured me the bank is in a position to implement these supervisory duties in the way it is required to do by law.

In fact, the Governor has already completed an investigation into earlier allegations concerning National Irish Bank. He wrote to me confirming this on 19 March 1998, and confirming again the general satisfaction of the board of the bank with the legal framework for bank supervision. I will now read this letter to the House:

Dear Minister,

I refer to your letter of 26 January requesting a report on the implications, if any, for all aspects of banking supervision of the allegations made against National Irish Bank. I can confirm your understanding that the Central Bank officers who inspected National Irish Bank were acting solely as banking supervisors. Their report is completed. I am precluded by law from informing any third party of the outcome of their inspection.

I wrote to you on 11 November last at some length about supervisory issues arising from the Tribunal of Inquiry (Dunnes Payments). In my letter, l confirmed to you that the board was satisfied with its legal powers which are generally adequate to enable the bank to discharge satisfactorily its statutory functions. I also told you that the board keeps supervisory procedures and practices under review, and tries to ensure that these are in line with best international practice. I elaborated both on the statutory and procedural questions and I will not repeat the detail here.

Nothing in the Bank's recent inquiries into National Irish Bank leads me to change any of the conclusions which I reported last November. The Bank's powers governing inspections are extensive. More generally, both legal requirements and procedures are adequate to deal with the issues involved. I do not see, at present, any need to change legislation dealing with banking supervision, other than in the detail I mentioned in my November letter.

There is a general point about the legislative framework touching on the area covered by the NIB allegations that I would like to bring to your attention. The Criminal Justice Act, 1994, introduced new obligations covering money laundering, both for the Central Bank and for most financial institutions, including all credit institutions, from May 1995.

Credit institutions are obliged to report any suspicion of money laundering (including that arising from tax evasion) on the part of their clients to the Garda authorities. Banks have in place detailed and extensive procedures and guidance rules, inter alia, to ensure proper client identification. They have also appointed compliance officers and a large number of reports have been sent to the Garda. We do not know what number of these might relate to taxation. For our part, the Central Bank has to report to the Gardai suspicions of money laundering by the financial institutions we supervise. So far we have not had cause to file a report. We have monitored consistently the implementation of the Criminal Justice Act in financial institutions, both in meetings and in inspections, over the last three years. I can report that institutions across the board now seriously address the issue of money laundering.

Looking to the future, the Moriarty Tribunal has been requested to make whatever broad recommendations it considers necessary or expedient for enhancing the role and performance of the Central Bank as regulator of the banks and of the financial services sector generally. The Bank looks forward to continued co-operation with the Tribunal in this matter. We have already made a lengthy submission on supervisory matters generally to the Tribunal. We welcome the prospect of expanding on our submission and clarifying any issues arising, as the Tribunal may see fit.

I am aware of some concern that the conditions of confidentiality imposed on us in relation to our supervisory duties allow the Central Bank to disclose findings only in a very limited range of circumstances. Obviously, in such a well publicised case as that of National Irish Bank, public questioning of the position arises again. However, you are fully aware of the rationale for the current position and the fact that it reflects faithfully our EU obligations. I have dealt with this extensively in correspondence with you and in information furnished to Oireachtas Committees. I told the Oireachtas Committee on Finance and the Public Service recently that these requirements derive from and are consistent with European Union laws. Other banking supervisors in the European Union are subject to similar confidentiality requirements. Our situation is in no sense unique. If the Irish authorities attempted to abandon these requirements, not only would we be in breach of EU law but we would forfeit the co-operation of other supervisors in exchanging information. This exchange of information is vital. Without it, we simply could not operate as a competent supervisory authority and operations by Irish banks abroad would be called into question'.

With regard to the Governor's reference to changes in some of the details in the current legislation, this relates to amendments to the Investment Intermediaries Act, and these are being addressed in the draft Investor Compensation Bill.

Turning again to the latest allegations concerning National Irish Bank, I have been informed by the Governor of the Central Bank that he has decided to raise these further allegations concerning National Irish Bank with the chairman of that bank today. I have also been informed by the Governor that he intends to ask RTE to make available to the Central Bank all the information which it has at its disposal in relation to these allegations concerning National Irish Bank. I strongly urge both National Irish Bank and RTE to co-operate fully with the Governor in his efforts to establish the facts of this case.

It is important that the Central Bank as regulator of the banking system be in a position to quickly establish the facts of a case and for National Irish Bank to make these available to the public. It is particularly important that National Irish Bank establish what amounts were overcharged to its customers and notify the customers of the amounts involved and how it proposes to make good the loss. It is essential that the bank clear as soon as possible how it is going to approach this task and when it expects to be able to inform customers of the outcome of its investigation. I expect the bank to give this task the highest priority.

Turning to a more general approach to the question of consumer confidence, I impress upon the banking sector that it is in its own best interest to increase, to the maximum possible extent, transparency in relation to charges of all kinds. I am sure that everyone in the banking sector would agree that as we enter the more competitive world of EMU it is essential that customers are satisfied with the service being provided to them by the domestic banking sector. In the same way it goes without saying that customers must be able to have confidence in the standards of service provided by their banks at all times. I would, therefore, urge the banking industry in general to make a special effort to ensure that the customers fully understand their system of charges and interest so that they can be confident that they will be informed whenever charges are levied by the bank or whenever charges are varied.

There is no evidence whatever that any other bank or credit institution has engaged in the practices which are alleged to have taken place in National Irish Bank. It is also important to keep in mind that it has not been established that the alleged practices took place outside a limited area of National Irish Bank. It is essential that in our debate today we do not make allegations for which there is no evidence and which could damage the banking system. The Government is determined to establish the facts and to act only on the basis of facts. That is why it has asked the Director of Consumer Affairs to examine the implications of the allegations being made for the protection of bank customers, particularly in the area of bank charges.

The Irish banking system has always been considered to have good systems of internal control and external audit. It would appear from the reports in the public domain that they worked in this case. They worked in the sense that the first line of defence so to speak, internal audit, identified these issues but the corrective action seems to have fallen well short of what was required in the circumstances.

Mr. Rabbitte

That is even more serious.

Mr. McCreevy

The boards and managements of banks have a serious responsibility to satisfy themselves that there is a clear understanding at all levels within their organisations that rules and procedures and good practice must be followed and that in circumstances where it is discovered that these have not been adhered to, whether inadvertently or otherwise, corrective action is taken immediately, and that any loss to customers is made good at the earliest possible opportunity.

The Government appreciates that bank customers are anxious for reassurance about the current state of affairs. We are anxious to do what we can to give that reassurance. I would again emphasise the considerable strengthening of the legal framework for consumer protection over recent years and the more recent extension of the remit of the Director of Consumer Affairs to cover bank charges other than interest. Notwithstanding these advances, as I have earlier indicated, the Government has specifically asked the Director of Consumer Affairs to examine the implications of the alleged wrongdoing in this case for the general issue of the protection of bank customers, particularly in the area of bank charges. I stress that we see this as a preliminary step and, if the conclusions reached by the Director of Consumer Affairs suggests a need to further strengthen existing arrangements, the necessary changes will be considered by Government as a matter of urgency.

Mr. Rabbitte

Where do the Minister and his Department stand on the question of appointing a section 8 inspector?

Mr. McCreevy

That is a matter for the Companies Acts and, in the first instance, for my colleague, the Minister for Enterprise, Trade and Employment.

Mr. Rabbitte

Does the Minister support it?

Mr. McCreevy

If, having considered all the facts, the Minister for Enterprise, Trade and Employment considers it necessary, that is what the Government will do. As Deputies will be aware, and as mentioned in the Governor's letter, the terms of reference of the Moriarty tribunal include a remit to make whatever broad recommendations the tribunal considers necessary or expedient for enhancing the role and performance of the Central Bank as regulator of banks and of the financial services sector generally. I await the tribunal's report on the matter and will, of course, give careful and urgent consideration to any recommendation it might make in this regard. My colleague, the Minister for Enterprise, Trade and Employment, has already spoken about the company law elements of this case, and I do not propose to repeat what she had to say in this regard.

An Leas-Cheann Comhairle

In accordance with the revised Standing Order, the Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Finance shall now take questions for a period not exceeding 35 minutes.

Mrs. Owen

Will the Minister for Enterprise, Trade and Employment give a commitment to the House that, in her application to the High Court for the appointment of an inspector, she will include in the inspector's remit the issue of the use of insurance bonds as a tax evasion measure and not just the allegations made yesterday? Can she tell the House when she or her Department either knew or got an inkling of this latest scandal involving National Irish Bank? When did she hear that there may have been a skimming of accounts? Was it only at 6 p.m. yesterday and, if so, is that not an indictment of the system she put in place since information on the bank was made known last January? If she knew before that time, will she indicate when and why she did not prepare for a High Court application on that occasion?

Miss Harney

The section 8 procedure is an exceptional procedure and has been used on only two previous occasions. In using the procedure it is necessary to convince the court that there is evidence to suggest wrongdoing. It is not good enough for somebody else to have the evidence. Until National Irish Bank issued a statement last night confirming that what RTE had alleged was correct we were still in a difficulty as to whether or not we could succeed in having an inspector appointed. We would have been seeking, and have sought, from RTE the information at its disposal because we have to get all the information we can before we can convince the court.

The last thing I want is to be rebuffed by the court. When Deputy Quinn, as Minister, went to the High Court to have an authorised officer from the Department appointed as an inspector, he did not succeed; the court felt that some other person should be appointed.

The terms on which an inspector would be appointed, if we succeed, will be a matter for the court. At the moment we are collecting the necessary information. We want as wide as possible an investigation into National Irish Bank.

Mrs. Owen

Will the Tánaiste ask the court to include the insurance issue?

Miss Harney

My petition to the court will contain all the information at my disposal.

Mrs. Owen

Including that relating to the insurance issue?

Miss Harney

Including that. I want to make the strongest case and I want to win. I became aware that RTE had another story along these lines some time between 4 p.m. and 5 p.m. yesterday, although I did not know the details. When the insurance issue broke at the end of January, our legal advice was that we could not proceed with somebody else's information, that we had to have it. We wrote to the bank and it responded a couple of days later. Then we made contact with the Attorney General, and we got outside legal advice in relation to the matter. That advice became available on 10 March. I do not want to prejudice the present case by outlining the details of that advice. However, it is not dissimilar from the advice Deputy Rabbitte received when he decided not to seek an inspector in relation to the Clonmannon village issue. Deputy Rabbitte went on about old ladies — old ladies and old men were abused in that case. We did not seek the appointment of an inspector because we received the same kind of advice to the effect that we probably would not succeed. It would be a great PR stunt for me to go to court and to be rebuffed.

Proinsias De Rossa

That is typical of Fianna Fáil. Everybody is to blame.

Miss Harney

I have some experience of these matters because I am now involved in nine inquiries, notwithstanding the fact that I have been eight months in office. When I sought to appoint an authorised officer to another bank in January, that bank succeeded in getting an injunction to stop me. It further succeeded in getting the court to adjourn the hearing of the case. It was only when our affidavits were produced that the action could be proceeded with. So I have to tread carefully. I want a thorough examination, and it has to be based on sound legal advice. I was in my Department until close to 2 a.m. this morning. I was in RTÉ early this morning and I was in touch with people very early this morning. I apologise for not having a script, but when I left this House I was, again, in touch with the officials. We want to go to court, today if possible, but as quickly as we can with the best case, because these are the most serious allegations ever made against an Irish clearing bank. We want to win, and we want the truth to come out.

Mr. McDowell

The Minister for Finance seems to be focusing essentially on two different levels of investigation, both of which carry major difficulties. He refers to the role of the Central Bank in investigating National Irish Bank. It is right that he should do that. The Governor of the Central Bank has made it very clear in recent weeks that he sees the role of the Central Bank as being to regulate the sector to ensure that the system works. He is not approaching this from the point of view of individual customers but from the point of view of the safety of the system, to ensure that individual banks do not collapse. That is not what we are primarily concerned with. The role of the Central Bank and the way in which it defines its role is not best suited to what we need here.

An Leas-Cheann Comhairle

Members have already had an opportunity to make statements. In fairness to other Deputies, I ask Members just to ask questions.

Mr. McDowell

The Minister says it is important that the Central Bank as regulator of the system should be in a position to quickly establish the facts in the case and for National Irish Bank to make these available to the public. Surely it is an essential difficulty that we are relying on National Irish Bank to make the facts public — the Central Bank cannot. That must be a real problem because, from what we have seen of National Irish Bank in the past few weeks, we can have little faith in its willingness to do so. Am I right in thinking that the Director of Consumer Affairs does not have the power to go back before 1986 or to look at bank interest as opposed to bank charges? If the answer to both those questions is "yes", as I suspect it is, clearly he will be seriously constrained in what he can do.

Miss Harney

The last part of the question relating to the Director of Consumer Affairs is obviously addressed to me as Minister for Enterprise, Trade and Employment. We are seeking legal advice in relation to that matter. At the moment it is uncertain whether he can investigate events prior to when he got his powers in 1996. When we have that legal advice I will make it available to the Deputy. If he does not have such powers, we will seek to give them to him if we can legally do that.

Mr. McDowell

Does he have powers in relation to bank charges?

Miss Harney

Legal advice is being sought in relation to that. We can appoint an authorised officer under section 4 of the Consumer Credit Act, 1995. The following are his powers: to carry out investigations of any practices where he considers in the public interest such investigations are proper. Clearly it is in the public interest that his investigation would be as wide as possible.

Mr. McDowell

I asked the Minister for Finance a question to which he appears to want to respond.

Mr. McCreevy

I have read into the record my correspondence with the Governor of the Central Bank and his response to me some time ago on the adequacy of his powers. Deputy McDowell availed of an opportunity at the Select Committee on Finance and General Affairs to question the Governor of the Central Bank further on those and related matters. The role of the Central Bank is the same as in other EU countries. Its job is to regulate and supervise institutions under its control. However, no matter what regulatory authorities exist, and no matter what laws and rules there are, we can never guard against conspiracy to defraud people. It would appear from what RTE alleged last night that there was a concerted attempt by some people within National Irish Bank to defraud people. When people go to such extremes it is very difficult for any regulatory authority to tap into it. I have said in my reply and in previous replies at Question Time what the views of the Governor of the Central Bank are. Irish Central Bank legislation conforms with best practice in Europe in this regard.

Mr. Rabbitte

Would the Tánaiste agree that it is not helpful to spread confusion about the complex area of company law? There is no comparison with Clonmannon. Is it not the case that I put in an authorised officer, that I used a section of the Act for the first time to intrude into the private affairs of a company, that the company was liquidated and that what was involved was a small-time crook running a retirement village? It has no bearing, good, bad or indifferent on the present situation. The advice to me, which the Tánaiste will find on file, and with which I agreed, was that there was nothing an inspector could establish that the very efficient authorised officer had not established. Did the Tánaiste not think, after the story on 23 January, that something was rotten in National Irish Bank? Did she not consider the Charlie Bird-George Lee story concerning organised tax evasion to be of sufficient seriousness to warrant her taking action? Can she explain why she took no action? Was the matter considered by Government? Did the Tánaiste discuss the matter with the Taoiseach or with the Minister for Finance? Will she unequivocally put on the record the answer to the question I raised in my formal contribution, which Deputy Owen put, and to which she did not give a reply?

Will the petition the Minister presents to the High Court contain the request that the alleged organised tax evasion by National Irish Bank should come within the remit of the inspector?

Miss Harney

Deputy Rabbitte was not the first to use section 19. I understand Deputy Quinn was the first to use that power when he was Minister in relation to Countyglen.

Mr. Rabbitte

I did not refer to section 19.

Miss Harney

The Deputy said he used a provision of the Companies Act to appoint an authorised officer which had not been used before.

Mr. Rabbitte

The Minister does not understand. Her officials will give her a note on it. She should stick with the bank.

Miss Harney

The Deputy said it was the case that he was the first to use a particular provision of the Companies Act to have an authorised officer appointed.

Mr. Rabbitte

That is not section 19.

Miss Harney

The Deputy said section 19. On foot of his inquiry and others that were carried out under the Companies Act——

Mr. M. Smith

The Deputy was not the first to use it.

Mr. Treacy

Deputy Rabbitte's memory is bad.

Mr. Rabbitte

The Tánaiste should stick to broad strokes; she is weak on detail.

Miss Harney

I wish to put the facts on record.

Proinsias De Rossa

The Government side should accept the facts about the bank.

An Leas-Cheann Comhairle

The Tánaiste without interruption.

Miss Harney

There was the sugar company inquiry.

Proinsias De Rossa

The Tánaiste is doing nothing.

Miss Harney

Do the Deputies want me to answer their questions? The sugar company inquiry cost £1.2 million and nobody was prosecuted. The Telecom Éireann inquiry cost £800,000 and nobody was prosecuted. Nobody was prosecuted after Deputy Rabbitte's inquiry and nobody was prosecuted after the Countyglen inquiry which cost £220,000. I want to ensure that people are prosecuted. I want to do things properly and I will follow procedures and sound legal advice.

Regarding Deputy Rabbitte's question, all the ammunition that can be put together will be included, subject to legal advice, in the affidavits and petition that will be presented to the court. I must subject myself to legal advice with regard to all my actions and I must follow correct procedures. It would have been easy to rush off to the court six weeks ago or last night and have been rebuffed. It might have made me look good but it would have done nothing for the consumer, the customers of National Irish Bank or anybody else.

I was asked with whom I discussed the matter. I presume this refers to the period since the end of January. I discussed the matter with officials in my Department and the Minister of State, Deputy Treacy, who has, as did Deputy Rabbitte, responsibility for industry and insurance. He handled the case from beginning to end. I was in the United States until last Saturday and he came to me last Monday with a recommendation to appoint an authorised officer under the Insurance Acts. Deputy Gilmore is smiling but Deputy Rabbitte had exactly the same powers.

Mr. Gilmore

The Minister is shifting responsibility.

Miss Harney

I am not shifting anything.

Mr. Treacy

We did not write a letter saying that action should not be taken.

Miss Harney

The Minister of State could not sign the warrant to appoint the authorised officer because the power had not been devolved. He came to discuss the matter with me on Monday.

I discussed the matter with officials in my Department, including the Secretary General and others, and we were in contact with the Office of the Attorney General. I also discussed the matter with the Minister of State, Deputy Treacy. I discussed with the Taoiseach the fact that we intended to appoint an authorised officer. I did not have discussions about this matter with the Minister for Finance before the most recent revelations.

Mr. Noonan

I wish to put a question to the Minister for Finance but I note that the Tánaiste and Minister for Enterprise, Trade and Employment, has, for the third time, refused to state that she will include in her petition to the High Court a request that the issue of tax evasion be investigated.

Mr. Treacy

She said she would present all the ammunition.

Mr. Noonan

She did not specify that the issue of tax evasion would be included.

The Minister for Finance informed the House that he received a letter from the Governor of the Central Bank, dated 19 March, stating that its investigation into the tax evasion activities of NIB has been completed. The Minister also said he had been informed by the Governor of the Central Bank last night or this morning that the bank had decided to raise further allegations concerning National Irish Bank with the chairman of the bank today and he has requested RTE to provide him with all the information. It appears it came as a surprise to the Governor of the Central Bank that further allegations were made.

An Leas-Cheann Comhairle

I ask the Deputy to put a question.

Mr. Noonan

I will get there.

An Leas-Cheann Comhairle

In fairness to other Deputies, there is a limited opportunity for questions.

Mr. Noonan

It is my first question but I must ask it in the context in which it arises. I will not delay the House.

It was self-evident from the RTE reports, as the Minister will appreciate, that anybody who read the internal audit reports would be aware that National Irish Bank was involved——

An Leas-Cheann Comhairle

In fairness to other Deputies, I ask the Deputy to put a question. Six Members are offering. There was an opportunity for statements earlier.

Mr. Noonan

I am asking a question but the Leas-Cheann Comhairle is obstructing me. He has succeeded in wrecking the sequence of the logic I was putting before the House.

Mr. Dennehy

That is some achievement.

An Leas-Cheann Comhairle

The Deputy is making a statement.

Mr. Noonan

I am not making a statement. I am putting a question. Anybody who read the internal audit reports knew that NIB was involved in malpractice. Is the Minister for Finance suggesting that the people from the Central Bank who investigated the allegations of tax evasion did not read the internal audit reports? This is the inference of the Minister's statement. If representatives from the Central Bank investigated allegations of tax evasion without reading the internal audit reports, their investigation is worth nothing.

Mr. McCreevy

When the National Irish Bank matter came to light some months ago, I wrote to the Governor of the Central Bank and asked him to investigate possible exchange control breaches on the part of National Irish Bank. The Central Bank is not investigating tax matters; it is investigating exchange control matters as a result of the allegations made some months ago.

I and the Governor of the Central Bank have pointed out previously that the definition of money laundering includes tax evasion. If the Central Bank came across money laundering during the operation of its normal supervisory and regulatory role, it would be reported to the Garda. This is a function of the Central Bank in relation to its constituent bodies and regulations.

Mr. Noonan

Did they look at the audit reports?

Mr. McCreevy

As I pointed out previously, if matters are discovered by officers in the course of the supervisory role of the Central Bank of Ireland in relation to financial institutions, the bank is precluded under legislation from telling anybody about them. This was made clear by the Governor of the Central Bank in reply to questions at a meeting of the Oireachtas Committee on Finance and the Public Service. I also made it clear in the House on this and other occasions.

I first learned about the new allegations during the division yesterday afternoon in the House on the Amsterdam Treaty legislation. The Secretary General of the Department of Finance called to Leinster House and I met him outside the Chamber. He told me he understood that more allegations concerning National Irish Bank would be made on the RTE 6 p.m. news. That was the first I knew about it.

I met the Governor of the Central Bank last night, together with the Tánaiste and Minister for Enterprise, Trade and Employment, and the matter was discussed further. As I said, the Governor of the Central Bank is due to meet the chairman of National Irish Bank today to discuss these allegations and to consider his role in that regard.

I wish to make clear, to avoid misapprehension in the House, the role of the Central Bank relating to financial institutions and its role in relation to the Department of Finance and the Minister. This matter has been discussed in detail during replies to many parliamentary questions from Deputy McDowell and others. Banking is built on trust and confidence. People must have trust and confidence in the system. It is obvious in the case of National Irish Bank that the trust and confidence of customers has been totally misplaced. Action must be taken by the Government for the common good.

Mr. Noonan

This is a filibuster.

Mr. McCreevy

My colleague, the Tánaiste and Minister for Enterprise, Trade and Employment, is considering her approach under the Companies Act.

Mr. Roche

The Ministers should be aware that the concerns expressed by the Opposition also exist on the Government benches. I am concerned that the Central Bank has not fulfilled its role very well.

If an inspector is appointed, will the Tánaiste ensure he or she has the appropriate skills and knowledge? Previous inspectors have been specialists in law. In this case, however, inspectors will have to be specialists in accounting, particularly in banking systems.

An Leas-Cheann Comhairle

A question, Deputy, please.

Mrs. Owen

Is the Deputy lobbying for a job?

Mr. Roche

Will the Tánaiste ensure we do not go down the road of simply employing a barrister or a solicitor, but that we seek people with the necessary skills in this area?

Mrs. Owen

Send in Deputy O'Dea.

Proinsias De Rossa

Deputy Roche is wasting time.

Mr. D. Ahern

Every Member is entitled to speak.

Mr. Roche

I am not wasting time. Will the Tánaiste ensure the necessary IT skills are available for the inspectorate? I understand there is evidence of fraud in other banks in the associated banking system. Deputy Noonan touched on that matter. This is not a time wasting issue, it is fundamentally important. We need to carry out a thorough investigation into the matter.

Miss Harney

I have no difficulty extending the time for questions if all questions are not answered in the time allocated. Whatever about Members being satisfied with the answers, I am prepared to take as many questions as possible.

I discussed the matter to which the Deputy referred with my officials this morning. We may appoint up to three inspectors so that there will be a team of people with the necessary legal and accounting skills. We want the investigation to be as thorough as possible.

Deputy Noonan said I did not cover tax evasion. I have to act on the basis of the advice available to me. The intention is to include everything, but a legal dispute is taking place about the issue that came to light in January as to whether the promoter of the products or the people who availed of them are at fault. The law is not certain in that respect. Subject to the law and legal advice, we will include everything we can because we want the fullest possible investigation into the National Irish Bank.

Mr. Sargent

Is the Minister for Finance satisfied with the procedures followed by the Central Bank inspectorate to date, given that it appears from his statement that a problem has not yet been found with the bank? Has the inspectorate ever found wrongdoing in its investigations? That would be of interest to this investigation. In what way is the Central Bank accountable to the Dáil and the people? Does the Minister agree changes are necessary to make it properly accountable and to ensure this investigation is successful?

Mr. McCreevy

As I stated earlier, the Central Bank has extensive investigation powers in its supervisory role and it carries them out on a daily basis. I have relied on the report submitted to me by the Governor of the Central Bank on this matter. Arising from the McCracken Tribunal report, I raised the question of the adequacy of the supervisory and regulatory powers with the Governor some months ago. I read his reply into the record in reply to a parliamentary question at that time and I read a further reply into the record today. The Governor has assured me — I am satisfied with his assurance — that the regulatory powers of the Central Bank are adequate and conform with best international practice. I am satisfied in that regard.

The Deputy also asked if the inspectorate ever found wrongdoing in its investigations. In the law of probability, I am sure it has, but the Central Bank is precluded in law from reporting its findings to anybody. That is the position under Central Bank Acts here and in other countries. However, evidence of money laundering can be reported to the Garda.

The Deputy's final question related to the Central Bank's accountability to the Dáil. The Central Bank Bill, which I recently brought before the House, related mainly to the compatibility of Irish legislation with economic and monetary union. However, I included a section that will make it possible to bring the Governor of the Central Bank before the Committee on Finance and the Public Service. The Governor appeared before that committee of his own volition some time ago but he is limited in what he may tell the Minister for Finance or the committee because he is precluded by law from relating his findings to others.

Proinsias De Rossa

I want a simple yes or no answer to a question I will put to the Tánaiste. Is she saying to the House that she will not put before the courts the tax evasion scam operated by the NIB because she has not yet established who is directly responsible? In seeking the appointment of an inspector, will she put the matter before the courts?

The Minister for Finance said the Irish regulatory procedures carried out by the Central Bank are in accordance with best practice. He stated it would appear from reports in the public domain that the control and audit systems of the banks worked in this case. How can he say that when this scam occurred in the late 1980s and early 1990s and is only now coming to the attention of the public? Presumably the Central Bank was responsible for examining the internal audits of the banks concerned, but no steps were taken to force the NIB to refund the money taken out of customers' accounts.

Does the Minister propose to undertake an investigation into the other banks operating in the State to find out if similar scams have operated or continue to operate in them? Does he intend to ask Mr. Jim Lacey to step aside from his positions on various State bodies, at least until the investigations have been completed? That would at least establish that the Government is not constrained by other considerations in regard to Mr. Lacey. He should be asked to step aside.

Mr. McCreevy

I stated earlier that the Irish banking system, like other banking systems, has control over its internal and external audits and that it would appear from the allegations in last night's news programmes that the internal audit system worked because these matters were brought to the attention of the bank on foot of that system. However, the follow-up procedures seem to have broken down. The Deputy may not be aware that in large organisations, banking and otherwise, external auditors rely heavily on the internal audit and control procedures. That is what happens in all institutions.

Proinsias De Rossa

Will the Minister clarify the role of the Central Bank. Why did it do nothing?

Mr. McCreevy

I am not in a position to say what the Central Bank did because I am not told by the Governor of the Central Bank what it does in respect of any of these matters, arising from its supervisory role. I have said on previous occasions that the Central Bank is precluded from telling the Minister what it finds out. Therefore, I cannot tell the Deputy, simply because I do not know.

Proinsias De Rossa

Even if there is a trawl.

Mr. McCreevy

Under the money laundering legislation — tax evasion is regarded as money laundering — that can be reported to the Garda. In reply to parliamentary questions I have dealt with this point at some length. The Deputy asked about any proposals I might have to inquire into other banks. I have no evidence that these practices have taken place in any of the other banks. These allegations relate to National Irish Bank. It would not be correct or proper to give the impression that, in the absence of specific evidence, other financial institutions have been involved in this type of activity. If in the future such activities come to light, the Government will consider the matter further.

The Deputy referred to Mr. Jim Lacey. So far as I am aware Mr. Lacey has been the chairman of a Fianna Fáil organisation, Forum 2000, for the past three years since its foundation. This is an unpaid position and it has meetings approximately once a month. Members pay an annual subscription and in return attend business events which attract a number of non-party keynote speakers. I have attended a number of these events in the past three or four years. Some of those who have attended and spoken have no connections with the Fianna Fáil Party.

The Deputy made some reference to the board of the aviation authority. I am not the Minister responsible for the aviation authority.

Mrs. Owen

The Government is responsible.

Mr. McCreevy

I am not responsible for the Docklands Development Authority either.

Proinsias De Rossa

I did not ask about his role in Fianna Fáil but I appreciate the information provided. What I asked was if Mr. Jim Lacey who was chief executive of National Irish Bank——

An Leas-Cheann Comhairle

The Minister has answered questions and he has no responsibility for the board.

Proinsias De Rossa

——would step aside from the positions to which he had been appointed.

An Leas-Cheann Comhairle

The Minister has already answered that question.

Proinsias De Rossa

He has not.

Mr. McCreevy

Although Deputy De Rossa's lack of knowledge in some of these areas is astounding he should be aware that that question would have to be considered by the relevant Minister in charge of the particular statutory body. So far as I am aware Mr. Lacey is not a member of any board for which I have responsibility. Should he be involved in some board for which I have responsibility I would certainly consider the matter in the light of these events.

Miss Harney

In response to Deputy De Rossa, subject to legal advice everything will be included in the investigation. In relation to the insurance products which were being promoted it is uncertain as to where the blame lies, whether with the promoter or those who availed of the products being promoted. When this issue came into the public domain we took legal advice from the Department. The advice was that in the interests of natural justice we should write to the bank since we did not have in our possession the information and give it an opportunity to respond to questions. We did that within two days and it responded a number of days later. On receipt of the response we took further legal advice. That legal advice suggested two courses of action — either that we write again to the bank or appoint an authorised officer since we needed more information. It also stated that if we wrote again to the bank and it responded it could not incriminate itself and, therefore, it could prejudice a future case. Therefore, it was decided not to write to it again but to appoint the authorised officer. We were further advised that, if one goes to a court without having first exhausted other channels, section 8 is a procedure of last resort. If one goes to the court in the first instance in relation to these matters the court may well say the correct procedures were not followed. Clearly, the bank would argue and would probably propose a section 8 investigation — and may still do so. It would argue that it is prepared to co-operate because it kept telling us so.

Deputy Rabbitte referred to Clonmannon as a holiday village. Clonmannon is a retirement home. It took 18 months from the time it came into the public domain that old people were being abused and six Seanad debates before the then Minister appointed an authorised officer. To act within six weeks and again last night within a matter of hours when this information came to our attention is the appropriate response from Government.

Mr. Rabbitte

I was not Minister when it came into the public domain.

Miss Harney

I did not say that. I said it took 18 months for the Minister, Deputy Quinn, to take action.

Mr. Noonan

I take it the Minister for Finance agrees that the issue of a clearing bank stealing from the deposits of its customers would be one which would fall within the remit of the Central Bank, in its role as licenser and supervisor of the banks.

Mr. McCreevy

It certainly would.

Mr. Noonan

Consequently, is the Minister concerned that the malpractice of stealing from the customers which was clearly recorded in the internal audit reports of NIB did not come to light when the Central Bank conducted its inquiry into NIB in the past five weeks?

Mr. McCreevy

It is a matter of the gravest concern for anybody dealing with a financial institution that incorrect charges are made to their accounts without their knowledge. I certainly look at my bank statements more diligently than some people because they have always been in the red. I have never taken too much trouble to look at interest or other charges and I am sure that could be said for 99.9 per cent of people because I assume it is done correctly. It is a matter of the gravest concern that a financial institution should abuse that trust. I am not saying that on bank statements errors are not made on both sides. That a financial institution would deliberately defraud customers is very serious. I have no doubt the Central Bank will take those matters into consideration in its deliberations and what it must do regarding this institution. I have every confidence it will act expeditiously and correctly. As my colleague has said in another context all facts will have to be on the table. It is necessary that these allegations be thoroughly investigated and that we do not make precipitative decisions. That applies to the Tánaiste and I am sure it applies also to the Central Bank.

Mrs. Owen

It shows up the weaknesses of the supervisory powers.

Cecilia Keaveney

Given the need for strong legal advice on how to advance this case and ensure the matter is fully investigated, will the Minister ensure that my constituents in Carndonagh receive immediate refunds with interest in respect of funds which were irregularly taken from their accounts? Is there a timescale in resolving this matter for the people affected?

An Leas-Cheann Comhairle

Before the Minister replies I will take a brief supplementary from Deputies Joe Higgins and Ó Caoláin, if the House agrees. Agreed.

Mr. Higgins

(Dublin West): Has either of the Government parties received financial contributions from National Irish Bank at any time before, during or after these practices occurred? If so, will they declare them? Has either party, in the event that they might have party accounts with these banks, received favourable treatment with regard to overdrafts or interest charges?

In view of the Tánaiste's statement that this is the ninth investigation she has been obliged to instigate, which she described as unprecedented, does she agree that there is something increasingly rotten in this State? Does she further agree that the lust for super profits and the glorification of those who pursue such profits is increasingly resulting in rules being bent at the expense of ordinary people?

Caoimhghín Ó Caoláin

Will the Government order a comprehensive investigation not only of the activities of National Irish Bank but also of the activities of all commercial banks in this jurisdiction? Will the Government ensure that such an investigation has the scope to probe the system of interest rates and bank charges? Most importantly, will the Government recognise that the Central Bank has failed in its role as financial regulator? Does the Minister recognise that the Central Bank's operations continue to be shrouded in secrecy and are, in effect, protecting those who are involved on the one hand in the systematic evasion of tax and on the other in ripping off bank customers, as was so dramatically revealed by RTÉ? Will the Government recognise that the system of self-regulation, under the Banking and Insurance Act, 1989, has now been exposed as discredited and must be replaced with new legislation?

Mr. Rabbitte

The Tánaiste informed the House that she did not discuss this matter with the Minister for Finance and only discussed it with the Taoiseach in respect of the appointment of the authorised officer after the Minister of State, Deputy Treacy, came to her to sign the warrant. Is that a fair summary of her responses today? Since 23 January, therefore, she has not discussed the allegations of tax evasion with her relevant Government colleagues. Did she ask RTE to supply her with information?

Is the Tánaiste seriously of the opinion that, irrespective of the mechanism used to siphon funds nominally offshore to evade tax, it might not be included in the remit of the inspector? Is she also serious when she informs the House that nothing can be done about residents of this jurisdiction who utilise a mechanism which is devised to enable them to evade tax, provided the mechanism is located outside this jurisdiction?

Miss Harney

I assure Deputy Higgins that I do not believe this is a corrupt society. The vast majority of people whether they are taxpayers or business people, who are also taxpayers, are honest and do not engage in practices of this nature. If this practice were to occur in other institutions, the majority of them would discipline the people involved.

The Director of Consumer Affairs can carry out an inquiry into bank charges under section 4 of the Consumer Credit Act, 1995. The Act is confusing in that one part provides that the director's functions apply only to bank charges while another part, on which we are seeking legal advice following Deputy McDowell's question earlier, provides that he may carry out investigations into any practices where he believes that such investigations are proper. I must clarify if the director can also carry out investigations into interest charges.

I am personally not aware of any donations to the Progressive Democrats from National Irish Bank. It is true the party banks with the National Irish Bank and that it has an overdraft from the bank. It is also true that our party pays the highest possible charges on that overdraft.

Mr. Rabbitte

The party will probably get a rebate now.

Mrs. Owen

The Minister should check the account.

Miss Harney

I am sure the trustees will examine the charges that were applied to our account. However, that is a separate matter. I do not have daily dealings with National Irish Bank or with the party's finances.

Deputy Ó Caoláin asked about a general investigation of bank charges. Is that correct?

Caoimhghín Ó Caoláin

It should not be confined to National Irish Bank. It should be extended to include all commercial institutions in the State.

Miss Harney

It is true that many bank funds went astray over the years and that they were not always properly investigated.

However, in so far as we can ensure the issue is investigated in a general way by the Director of Consumer Affairs, that is the intention. Many people probably believe that every bank has been engaged in these practices. Many of us also believe, from time to time, that the banks act unfairly. After all, they cannot be described as popular institutions. Nevertheless, it is important for confidence in the economy and for the confidence that customers should and must have in their banks that there be a thorough investigation. That is the intention.

If possible, and subject to legal constraint, everything we know will be put into the petition to the court. However, I must be constrained by legal advice and I cannot act irresponsibly. I want to ensure that we succeed and that we follow procedures in a thorough and fair fashion. As the Minister with statutory responsibility, I must be able to prove to the court that I have acted fairly in handling these matters.

Deputy Rabbitte asked if I had been in touch with RTE. I was in touch with RTE this morning, not earlier. A number of weeks ago when the Deputy made allegations in the House, I asked him to make them available. When people receive information——

Mr. Rabbitte

I will make them available to the inspector as soon as he is appointed. I also asked if the Minister had spoken to RTE since 23 January.

Miss Harney

The strong advice I have been given is that section 8 is a section of last resort. One must demonstrate that one has exhausted other procedures and that one has information in one's possession. It is not good enough to claim that something was on a radio or television programme or was featured in the media.

Mr. Rabbitte

It was when the Minister was on this side of the House.

Miss Harney

The fact that National Irish Bank confirmed the RTE story is the most significant information legally. We will act immediately on foot of it.

With regard to Deputy Keaveney's question, there is provision in the Companies Act for the court to make a restitution order to ensure that people are properly compensated. I cannot say that the bank's customers in Carndonagh will be singled out ahead of customers of other branches. I am seeking to ensure that all the affected customers are dealt with fairly and quickly, that their accounts are corrected and interest and compensation paid. All costs involved should be paid by National Irish Banks.

Deputy Noonan suggested that a helpline be established. That is a good suggestion and I will encourage National Irish Bank to establish it. In so far as possible, we wish to ensure that all affected customers are properly looked after.

Caoimhghín Ó Caoláin

I wish to ask another question.

An Leas-Cheann Comhairle

The Deputy must find another way to put his question. The Chair has been more than generous.