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incomplete or incorrect forms. As the internal auditor of
Allied Irish Bank (AIB), Tony Spollen, put it, the ‘feeling was that once the declarations were complete or once the declarations were there, and in some instances even if they weren’t, that once the depositor said: “I am a non-resident”, then I think that was almost taken as good enough.’ As frauds go, this one was pathetically easy to pull off - it wasn’t even necessary to lie properly.
    Senior management in the banks knew that their branches were assisting in fraud, tax evasion and breaches of the exchange control laws. In AIB, for example, a senior executive, Henry O’Brien, wrote in an internal letter that sample audits in branches had shown that ‘In general there is not a major problem in Dublin or the East Coast Area, but from West Cork to Donegal the position is bad in a large number of Branches’ - meaning that it was clear at high levels within AIB that branches throughout the western half of the country were colluding in the fraud.
    The second largest bank, Bank of Ireland, does seem to have adopted a policy of complying with the tax laws when DIRT was first introduced. In the first year of the tax, it lost IR£120 million in so-called ‘non-resident’ deposits, primarily because it was insisting on evidence that account holders were actually non-residents. Bank of Ireland quickly got the message and joined the other banks in facilitating their customers’ crimes. When its chief executive, Mark Hely-Hutchinson, who suffered from the affliction of moral scruples, proposed to the Central Bank that there should be a common code of conduct among all the banks that would stop them undercutting each other’s standards to get business, he received, as he recalled it, ‘a very sort of warm, polite response, “What a pity these other people don’t have the same ethics as you do.” But the Central Bank simply didn’t
see it and it wasn’t, within the legislation, within its function to police these things.’ It says much about the ethical climate in Irish banking that a patently decent man like Hely-Hutchinson was left with little choice but to continue to oversee practices he clearly despised.
    As we have seen, it was in fact a key part of the Central Bank’s function to ensure that banks were behaving lawfully. The very existence of these bogus non-resident accounts, moreover, was itself a breach of the exchange control laws. The Central Bank, which was specifically charged with implementing those laws, as the PAC found, ‘took no action’.
    Even on an extremely conservative view of the role of the Central Bank - that it was there to ensure that the banks remained solvent - the fiddling of the DIRT tax should have been extremely alarming. In the case of AIB, the internal auditor, Tony Spollen, estimated in 1991 that the amount of money in bogus accounts was of the order of IR£300-400 million - which would mean that the unpaid tax was around IR£100 million. The chief executive of the bank, Gerry Scanlan, dismissed these calculations as ‘infantile’, but they were in fact a decent guesstimate. IR£100 million was, at the time, about the size of AIB’s annual profits - the liability could in principle have pushed the country’s biggest bank into the red.
    This massive fraud was so obvious that even the authorities could not help noticing. The official files of the Department of Finance are seasoned with statements like ‘half the non-resident accounts are thought to be bogus’ and ‘at least IR£1 billion of non-resident deposits are thought to be held by Irish residents’. By 1993, the Department’s own internal estimates were that the amount of money in bogus accounts was IR£2 billion.
    Why was nothing done? One reason is that the state saw
its job as supporting the banks rather than controlling them. The Public