Finance officials ‘furious’

FURIOUS Department of Finance officials are contemplating legal action over leaked Anglo Irish Bank documents that imply the department backed the bank’s use of staged multi-billion euro transfers to prop up its accounts before audits.

Sources described the suggestions as a disgrace and said officials who dealt with the bank on the department’s behalf were considering defamation proceedings, fearing their integrity had been brought into question.

The contents of the internal papers were published by the Sunday Tribune newspaper, which quoted from memos, phone conversation transcripts and audit documents recording discussions between the bank and representatives of both the Department of Finance and the Financial Regulator.

One document recalls a conversation last September when the bank’s then finance director Willie McAteer told the then financial regulator Patrick Neary that he would be “managing” the bank’s balance sheets. The document records Mr Neary’s response as “Fair play to you, Willie.” Mr McAteer resigned and Mr Neary retired since the extent of the now nationalised bank’s problems came to light late last year.

A separate transcript of a phone call between the bank and the regulator’s office records bank officials explaining what they were doing to “manipulate our balance sheet” and make sure it “looks as good as possible” to which a regulator’s official replies: “OK, that’s grand.”

Another document carries an account of discussions between the Irish Life & Permanent building society, which provided the e8.2 billion in temporary transfers, and a senior official in the Department of Finance in which the official seems to approve the nature of the transactions and accept the reasons for it. The department said yesterday it was disputing entirely the suggestions in the leaked papers and stressed they were only one side’s account of a series of exchanges with the bank.

In a statement it said: “At no time did the Department of Finance approve of the transaction in question. As previously stated, when this matter came to the department’s attention during the PriceWaterhouseCoopers review, it was referred to the Financial Regulator for further investigation. The department never approved of this transaction.”

The Financial Regulator also denied backing the transaction, insisting it only ever discussed with the bank the normal inter-bank funding that was going on within the domestic financial sector because funding from international sources had dried up. “These transactions [with Irish Life & Permanent] are inconsistent with the substance of the discussions that the Central Bank and Financial Regulator have had with our domestic institutions,” it said.

“There is no question of anyone having any prior knowledge of this nor is there any question of the Financial Regulator giving endorsement of this.”

Anglo declined to comment when contacted yesterday.


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