Ship of Fools by Fintan O'Toole Page B

for the [Moriarty] tribunal.’
    By the time of the High Court inquiry into Ansbacher in 2001, Adrian Byrne was declaring himself ‘very betrayed by a lot of people in Guinness and Mahon, particularly Mr Traynor’. There is no doubt that the complex mechanisms through which the fraud was operated were unknown to him and that he was lied to by Des Traynor, who had assured him that the scam would be wound down over time. It is clear that he was both skilled enough to detect the stench of corruption from the Guinness and Mahon accounts as early as 1976 and had the moral sensibility to know criminal tax evasion when he saw it. Byrne was a highly capable and moral public servant.
    The fact remains, however, that Byrne, as he became more senior at the Central Bank, never managed to take any effective action against what was in effect a multi-million-pound criminal conspiracy. That a decent and intelligent public servant could fail in this way is indicative of the culture of banking regulation in Ireland: if the good guys were so weak, it is hard to imagine that the banks had anything to fear from the time-servers. Byrne himself became a key figure in banking regulation during the Celtic Tiger years, firstly as the Central Bank’s head of banking supervision and then, until 2005, as the personal adviser to the chief executive of the Irish Financial Services Regulatory Authority. Even after his retirement from that role, he remained the confidant and golfing partner of the chief regulator, Pat Neary.
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    The DIRT and Ansbacher scandals had immediate implications for the way the subsequent economic boom unfolded and imploded. In the first place, their outcomes copper-fastened
a sense of impunity. Tens of thousands of people, including a large slice of the business elite, defrauded the Exchequer of hundreds of millions of pounds. The consequences ought to have been profound. Instead, they were simply non-existent. Although two huge criminal conspiracies had been uncovered, there were no prosecutions. The answer to the question asked by Michael McDowell in 1994, in relation to corruption in the beef industry - ‘Will any of these people hang their Armani jackets on the back of a cell door in Mountjoy [jail in Dublin]?’ - was still a resounding ‘No’.
    Not only was there no legal accountability, there was no managerial responsibility either. There was no clear-out of senior bank management. The blue chip accountancy firms whose audits had somehow missed the fact that their clients were colluding in large-scale fraud remained in business. The banking culture in which everyone raced towards the bottom of the ethical barrel for fear of losing business to a more unscrupulous rival remained entirely intact.
    There was not even a loss of prestige for those grand figures at the top of Irish banking who had failed to take the DIRT scandal seriously. One example was Peter Sutherland, who was chairman of Allied Irish Bank when it emerged internally that the bank held hundreds of millions of pounds in deposit in bogus accounts. Sutherland was, among other things, a former pillar of the state’s legal system, as attorney general from 1982 to 1984. Yet, as Sutherland told the PAC inquiry, he did not really see the DIRT fraud as a matter for him: ‘The issue of non-resident accounts and DIRT was an issue which was essentially one for management. Management, as I understand it, believed that the issue was under control . . .’ Sutherland passed the whole unpleasant business to the bank’s audit committee, headed by the man who
would succeed him as AIB chairman in 1993, Jim Culliton. Though Sutherland was presumably unaware of the fact, Culliton was the holder of an Ansbacher Cayman account. Yet this passivity on Sutherland’s part did him no harm at all. He continued to be a hugely admired figure in Irish business, the man most Irish bankers aspired to be.
    More broadly, Irish banking did nothing