Banking Sector Investigations

Dáil Éireann Debate, Tuesday - 2 July 2013

Tuesday, 2 July 2013

Questions (64)

Shane Ross

Question:

64. Deputy Shane Ross asked the Minister for Finance if his attention has been drawn to any Government members or staff, advisers or associates of his Department who were aware of the existence of the Anglo Irish Bank tapes released and published in the media in recent days; if his attention has been drawn to any members of staff of the Central Bank or any State-owned banks with any knowledge of the tapes; if there are similar tapes in existence recording the activities of staff of other banks; and if he will make a statement on the matter. [32305/13]

Oral answers (5 contributions)

Deputy Michael Noonan

I confirm that neither I nor any official in the Department of Finance was aware of the contents of the tapes which have emerged in the media until now. The contents of the tapes were not raised with my Department by the board or management of IBRC and my attention has not been drawn to any Government member, staff, adviser or associate of the Department who was previously made aware of the content of the tapes. I am further advised that the Central Bank was not aware of the tapes or the content contained therein until the recent publication.

I am advised that the tapes have previously been provided by Anglo Irish Bank-IBRC to the Garda and a number of other authorities involved in investigations relating to Anglo Irish Bank. I also understand the recordings have been provided by way of discovery in certain legal proceedings involving IBRC.

From the date of the nationalisation of Anglo Irish Bank on 16 January 2009, the Minister for Finance directed the bank to co-operate fully with all regulatory investigations. I am advised by the bank that it is fully co-operating and in that context the bank has provided originals and copies of large data sets under compulsion and court order to the Chartered Accountants Regulatory Body, the Garda Bureau of Fraud Investigation, the Office of the Director of Corporate Enforcement, the then Financial Regulator and the Nyberg banking commission. In particular, the bank has informed me of the following matters.

In 2009, the ODCE seized under court search warrant approximately 3 million electronic documents and in excess of 5,000 original hard-copy documents. In 2009, the Financial Regulator compelled the production of approximately 45,000 hard copy documents and approximately 9 million electronic documents. The electronic material remains in the possession of the bank as the Financial Regulator investigation was deferred in 2009 pending DPP proceedings. In 2010, the Garda Bureau of Fraud Investigation under court order received significant quantities of electronic and hard-copy documents and recordings requested in respect of 18 employees of the bank whose lines were recorded. In 2010, the bank was compelled to provide large volumes of electronic and hard-copy material to the Nyberg banking commission. Minutes of meetings as requested were provided to CARB, the ODCE, the GBFI, the banking commission and the Financial Regulator. In civil litigation copies of various items including certain recordings were provided to parties to such litigation.

I am advised that the special liquidators are taking the leaking of this material very seriously and have written to the Garda and the Data Protection Commissioner in that respect. They have written to all parties whom they know have access to this material and I am also advised that the special liquidators intend to appoint an independent party to investigate if the leak came from IBRC or KPMG. These investigations are ongoing.

Deputy Shane Ross

I thank the Minister for his reply. I accept everything he says about who knew what, when they knew it and when these tapes were handed over. I am surprised about one aspect of his reply. It is well known that all conversations of this sort were recorded. I cannot understand why nobody in the Department and particularly in the Central Bank, which was the regulator at the time, knowing full well that the staff of Anglo Irish Bank, Bank of Ireland, Irish Life & Permanent and AIB recorded all conversations particularly in certain situations and particularly those involving the head of capital markets, who is the key figure in this, did not ask, immediately the crisis broke or immediately there was a question about solvency or liquidity for these tapes, to see what had been going on inside the bank if it had any doubt.

The Minister rightly said that when the former Minister for Finance, the late Mr. Brian Lenihan Jr., informed the Dáil that €7 billion was sought and in subsequent weeks advised that there was more sought and then more again, he could work out that there was something funny going on. At a minimum Anglo Irish Bank was putting out a teaser to the Central Bank to suck it in for more. In those circumstances, when anybody with knowledge of this matter could guess what was happening, is it not extraordinary that the regulator, which was being taken for a ride, did not ask for taped conversations of what was happening inside in Anglo Irish Bank?

Deputy Michael Noonan

Seemingly he did. As I said in my original reply, in 2009, the Financial Regulator compelled the production of approximately 45,000 hard copy documents and approximately 9 million electronic documents. The electronic material remains in the possession of the bank as the Financial Regulator investigation was deferred in 2009 pending DPP proceedings. As I understand it from the information provided to me, the DPP commenced an action. He compelled, I presume under court order or under his own authority, the production of all these data. However, his investigation did not then proceed because there was an indication that criminal proceedings would commence and his investigation was suspended because of the possibility of DPP proceedings.

Deputy Shane Ross

I thank the Minister and I accept what he has said. My quarrel is that the Financial Regulator did not ask for them far earlier. He did not ask for them in 2008 when the crisis broke. He did not ask for them at the time he was saying all the banks were solvent. He did not look for these tapes at the time although the tapes were obviously in existence. That is an extraordinary situation and to do it under pressure from court orders is a completely different matter. His job is to regulate.

Will the Minister answer the second part of the question? What is happening now in terms of Bank of Ireland and Allied Irish Banks at a similar time and since? Are there tapes in existence of which we should be aware? I am concerned, as are many Members of the Independent group, because the scope of the inquiry is limited up to the night of the guarantee. I cannot understand why that is essential. I can understand the reason the inquiry should concentrate on the guarantee when there are other matters which should be subject to investigation as well. There was one night here which all of us can remember, that is, the night of 7 February this year, to which the Minister referred, which saw the liquidation of Anglo Irish Bank. There was confusion and chaos that night because of what was happening and there were changes going on. I would have thought it would be helpful, balanced and less political if the Government was prepared for any inquiry to examine tapes and the facts and events that occurred on that night as well.

Deputy Michael Noonan

The question was whether tapes exist in the other banks, and I assume they do. If a customer rings a bank looking for a statement, there is usually a warning on the answering machine that tells the customer his conversation could be recorded. Anyway, what I was unaware of was that there were internal recordings of conversations between banking executives. I had thought only the calls from outside into the bank had been recorded. I inquired subsequently and I have been informed that it is always the practice to record calls in and out of the treasury department of the bank - for obvious reasons, when one thinks about it. I assume there are recordings of calls in and out of the treasury departments of the other main banks as well. The banks should be on alert, if they were not already before today, since Deputy Ross has raised the matter, that these electronic data may be required by the Oireachtas inquiry when it is put in place.