Workers Solidarity Movement

National Irish Bank used to have an advertising slogan which said "We're different because we care". Following recent revelations about tax-dodging offshore accounts and their robbing of money from customers' accounts, perhaps they should change it to "We're different because we got caught". Or maybe even "We're not different at all because we care (about our profits)".

The nightmare for NIB began in late January. An RTE news report claimed that the bank had facilitated tax evasion by some of its favoured customers. The customers' money had been shuffled from Irish accounts offshore into investment bonds operated by an Isle of Man company, Clerical Medical International (CMI). CMI, in turn, returned this money to NIB accounts where it could be accessed by the depositors - without the pesky business of having to pay tax on it!! To date a total of £50million in approximately 500 accounts has been uncovered.

Naturally NIB were none too happy at this report and the interference by nosy journalists. Through a combination of court injunctions and bullying statements (accusing RTE of pillorying and harassing the bank), they attempted to keep the lid on something even more damning.

The whistle was about to be blown on something that NIB had been attempting to cover up since the early 1990s. NIB had been operating a relatively simple but yet ingenious scam. As the computer printed out customers' statements each quarter, an official would examine the interest due on each one and select certain customers for overcharging.

Bogus interest charges and fees were then taken from these accounts, the statement amended and the original destroyed. NIB have admitted to this stealing having taken place in "a small number of branches". However so widespread was the practice that a special software package had been developed for the task.

Nor was it the case that senior management was unaware of the goings-on.

In fact in 1990 Jim Lacey, then chief executive and subsequent Fianna Fáil fundraiser (he was chair of Forum 2000 - a fundraising committee set up by Bertie Ahern in 1995 to tap the business community for donations to the party), wrote to the managers of two banks in which "interest loading" had been carried out instructing that the practice should be halted.

In the full knowledge, however, that sums of money had been stolen from customers' accounts, no attempt was made to re-pay the stolen money. It seems as if the bank had hoped to rely on customers' ignorance. As one bank manager wrote at the time "..we were certain that we were safe in applying the additional interest charges. No queries ever came back from customers whose interest was loaded".

The revelations about NIB shocked and horrified a great many people - even if elements of the media and politicians attempted to play the ramifications down in the initial stages. The Irish Times, for example, on the day after the initial revelations headlined its report "NIB admits improperly taking money from customers' accounts". (Has anyone ever seen a report entitled "Shoplifter admits improperly taking bread from shop"?)

The question which was avoided by practically all commentators, however, was whether NIB was unique in the sense that it was the only bank engaged in such shady dealings or whether banks in general were Robin Hoods in reverse - robbing the poor to pay the rich. And indeed when it was revealed that AIB was also operating offshore tax-dodging accounts for favoured customers - this time involving sums of up to £600million - this was hardly commented on. On the ground, however, working class people's faith in the banking system has been damaged if not shattered.

It seems that in the age of the Celtic Tiger anything goes. While the Bank of Ireland makes £1.5million profit every single day, the government reduces the amount of tax it is liable to pay by cutting corporation tax. While the purring and soft fur of the same Celtic Tiger comforts and cossets the wealthy in our society, the sharpness of its claws and teeth are felt by the disadvantaged - working class communities ravaged by unemployment and drugs, PAYE workers tied to "social partnership" while profits soar, union-busting bosses allowed free rein to stamp all over people's rights.

They must think we're fools. But what they should remember is - we only have to win once.

Gregor Kerr

This article is from Workers Solidarity No 54 published in June 1998