NIB staff fear expectation of criminal case

A manager with National Irish Bank, representing more than 100 employees and former employees of the bank, told the High Court yesterday that the Minister for Enterprise, Trade and Employment and others had created a public expectation of prosecutions from the investigation into the bank.

Mr John O'Reilly, manager of the NIB branch at Patrick Street, Limerick, said NIB staff were extremely concerned that any answers they gave to questions from the inspectors investigating the bank could be used in future criminal proceedings against them.

"It is in the context of the deliberate creation of an expectation of prosecutions that, though firmly asserting our innocence of any dishonesty, we assert that we are entitled to a privilege against self-incrimination," he said in an affidavit.

The court was also told the inspectors had given a copy of their interim report to the court and to the Minister, Ms Harney. NIB chief executive, Mr Grahame Savage, said it was important and appropriate that the bank also be given a copy.

An application by the two inspectors appointed to National Irish Bank - Mr Tom Grace and Mr Justice John Blayney SC - for court clarification of the conditions under which they may interview employees and former employees of the bank opened in the High Court yesterday and is expected to last for up to four days.

The court's decision on whether the employees are obliged to answer questions put to them by the inspectors will have major implications for the conduct of the investigation into NIB.

The inspectors have proposed the interviewing process be divided into two phases. The first would be an information gathering exercise and the second involved reaching conclusions as to the facts. If there was a conflict of fact, and it was necessary to recall witnesses, affected persons would have the right to hear such witnesses and to cross-examine them, introduce rebutting evidence and address the inspectors in their own defence.

The inspectors said they planned to begin interviews on May 28th last but had received correspondence from solicitors representing 78 employees and former employees which, among other matters, sought confirmation that their clients were entitled to refuse to answer questions on the grounds of self incrimination. The solicitors also sought copies of all documents concerning their clients, advance copies of questions to be posed and draft copies of any interim or final reports from the inspectors for their clients prior to the reports being given to the court.

As a result, the inspectors applied to the High Court which directed there should be a hearing to clarify:

(1) whether interviewees, in the context of an investigation under Part II of the Companies Act 1990, have a right to refuse to answer the inspectors questions put on the grounds of possible

self-incrimination and;

(2) procedural safeguards to protect the reputation and character of the interviewees.

At the outset of the hearing yesterday, Mr John Gordon SC, for former NIB chief executive, Mr Jim Lacey, said his client did not wish to join the proceedings and was prepared to fully co-operate with the inspectors.

Mr Michael McDowell SC said he was, with Mr Adrian Hardiman SC, for Mr O'Reilly, who has been nominated by more than 100 NIB employees and former employees, in accordance with a court direction, as their representative in the proceedings.

Mr McDowell sought clear assurances the court would determine both whether there was a privilege against self-incrimination in relation to questions posed by the inspectors under Section 10 of the Companies Act 1990 and whether answers to such questions could be used in subsequent criminal proceedings. Mr Justice Shanley told counsel he could argue that Section 10 was not separate from other provisions of the 1990 Act.

In his submissions, Mr Donal O'Donnell SC, for the inspectors, said there was a well established privilege against self-incrimination in common law. Such privilege was not absolute and it had been varied, restricted or abrogated.

In the present application, he argued that the effect of Section 10 of the Companies Act 1990, creating a duty to answer questions, did effect an abrogation of the privilege against self incrimination and that abrogation was proportionate to the legitimate public interest involved.

In an affidavit, Mr O'Reilly, of Aisling Court, Cratloe, Co Clare, said he and others had been called before the inspectors pursuant to Section 10 of the Companies Act 1990 and were extremely concerned at the implications of the proposed questioning by the inspectors.

"This concern centres on, but is not limited to, the prospect that answers will be compelled from us on a compulsory process and subsequently used, directly or indirectly, in criminal proceedings against us."

It was clear gardai were conducting a criminal investigation into certain affairs of NIB on foot of unspecified complaints and that the criminal investigation was taking place in tandem with the inspectors' investigation.

"It is my apprehension and that of the other persons involved that there exists a determination in high official quarters to instigate criminal proceedings."

It was apparent the matters into which the NIB inspectors had been asked to inquire, including alleged improper removal of funds from customers' accounts, were clearly capable of amounting to criminal offences.

Mr O'Reilly said he wished to defend himself against all allegations which reflected on his good name or were capable of exposing him to criminal sanctions. He and his colleagues were persons of good reputation whose reputations were dear to them and to whom the prospect of being charged with, let alone convicted of, a criminal offence was absolutely abhorrent. "In this context, the generation of an expectation of prosecution and drastic penalties by political statements in the public domain, made before all the facts have been ascertained, is profoundly alarming."

The NIB staff were expected to answer questions about complex matters, going back over a long period of time, without notice of the questions and without information as to whether they were the subject of criminal complaints, were liable to be charged and, if so, with what, and as to whether the answers could be used in a criminal context.

In another affidavit, Mr Savage said he believed the NIB staff to be honest and well motivated and could understand their concern about the inspectors' application, given the manner in which the issues which had led to the investigation had been debated in public, in advance of due process.

Notwithstanding that, the bank had asked its staff to fully co-operate with the inspectors. The bank's concern was to see fair procedures which also ensured that the investigations were carried out as quickly and as inexpensively as possible.

Mr Savage said the inspectors' proposals were clearly designed to elicit evidence capable of being tested in an adversarial system. This could only have the effect of setting bank employees against each other and the ramifications of this in the context of the bank's continuing business were disquieting. The hearing continues today.