A senior tax inspector was unhappy with the conduct of managers at AIB headquarters when he confronted them with what he believed to be irregularities at two branches, a senior inspector told the committee.
Mr Tony Mac Carthaigh, formerly of the investigation branch, said that while he received co-operation from Bank of Ireland and Ansbacher bank when he raised potential problems with them, he could never "get on" with AIB managers.
After one incident he discovered in 1990, he told the bank that "it was time that they had another look at their relation with the Revenue and their obligations in law".
Having found two suspect accounts in the Templemore, Co Tipperary, branch and the Skerries, Co Dublin, branch, he found it reasonable to assume there were others and asked the bank to look for them.
The then tax compliance manager of AIB, Ms Deirdre Fullen, replied that there were "no `improper' non-resident accounts" held at either branch referred to by Mr Mac Carthaigh.
Mr Mac Carthaigh wrote back to Ms Fullen that it seemed "extraordinary that the AIB group are not prepared to admit to wrongdoings or to take any action about them when discovered.
"The only inference I can draw from this is that irrespective of what internal documentation might be issued, or the operation of Revenue legislation, the AIB group condoned and continued to condone abuses of the legislation and embark on a policy of damage limitation when these malpractices are discovered.
"This situation is not acceptable and will not be allowed to continue."
He also recalled a "courtesy visit" to an AIB branch in Galway in 1987.
"I wasn't using any powers but I did get a phone call from the appropriate taxation manager [of the bank] the following morning telling me in no uncertain terms that should I stray again that the matter would be brought immediately to the Minister's attention."
On the subject of how he dealt with banks in general, Mr Mac Carthaigh said the strength of his approach to them "lay in psychology, not in legislation".
Asked whether the courts were used by the Revenue Commissioners as a means of dealing with banks, he said: "You must be standing over the body and ready to put in the knife before you can go to the High Court. Otherwise, with a lack of precise information, you won't make any progress . . . One doesn't always have to rely on law to achieve something, one can achieve it with co-operation and one can always ask a civil question."
