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Former finance ministers questioned in tax probe

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN – The size of a multi-million unpaid tax bill from financial institutions in Ireland and the reputation of some top Irish bankers and civil servants hangs in the balance as five TDs collate their findings after their extensive probe into the DIRT scandal.

DIRT is the acronym for deposit interest retention tax payable by those in Ireland who hold accounts in Irish banks and financial institutions. Those who live outside the country do not have to pay the tax.

As a sub-committee of the Oireachtas all-party committee on public accounts, the five TDs have completed a marathon series of hearings. They are now sifting through over 150,000 pages of evidence and the testimony of 142 witnesses.

These included five former finance ministers, three of whom became taoisigh, and two former Irish Euro-commissioners who had to account for their financial stewardship.

The hearings, transmitted live to an audience which sent the daytime ratings of the Irish language station TG4 soaring, have shown that there is an alternative investigation system to slow-moving judicial tribunals that cost tens of millions in legal costs for solicitors and barristers.

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The beef tribunal ran for two years and cost about £35 million and it is estimated that the sitting Flood and Moriarty tribunals probing allegations of planning corruption and payments to politicians will swallow up at least the same.

DIRT committee chairman, Fine Gael’s Jim Mitchell, said their investigation had already paid for itself as unpaid deposit interest retention tax has been paid into the coffers of the revenue commissioners since their probe started.

"Many millions of pounds have come into the exchequer since we started these proceedings. The flow will already cover many times the cost of the inquiry," Mitchell said.

What has emerged from the probe has caused widespread shock. About 300,000 people had bogus non-resident accounts, claiming they lived abroad to avoid millions in DIRT.

Banks colluded with the cheaters.

Officialdom knew what was happening but never tackled it.

Few of the people appearing before the committee have found it a comfortable experience.

Some of the most powerful people in the country, they have never before had intimate details of their behavior, decisions and running of their businesses under such a public spotlight.

There had been red faces from bank bosses, internal and external auditors, tax advisors, revenue inspectors and civil servants. Most have had their hands rapped at some stage before the committee and the public standing of the banks has been seriously damaged by revelations.

The committee’s investigation has been a pilot scheme for examining similar issues of public interest. The TD’s have played the role of lawyers questioning the witnesses, a jury assessing the evidence and now they will act as judges in reaching their conclusions. They can make findings of fact and recommendations.

While they will not directly estimate the outstanding tax liability of any of the banks involved, the TDs’ report is expected to make crucial findings on the still unresolved differences between the taxmen and the bankers.

These include the central question about whether an amnesty or understanding had been granted on back tax that is owed.

The committee hopes to finalize their report by Christmas following the 26 days of hearings in the last seven weeks.

"It has been very important that the public see that their money is being accounted for. We will make an honest and fair assessment of the situation. We will pull no punches and we will do it without fear or favour," Mitchell said.

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