TD's roleFormer Fianna Fáil TD Ms Beverley Flynn sold offshore life assurance products as a secure investment for "hot" money, thereby facilitating tax evasion by customers of National Irish Bank, the inspectors' report finds.
Ms Flynn, who was expelled from Fianna Fáil last April, is one of 19 NIB executives who are criticised for their knowledge of and responsibility for improper practices at the bank.
According to the report, Ms Flynn was one of a number of executives who:
Sold the controversial Clerical Medical Insurance (CMI) policies, which were underwritten in the Isle of Man, as a secure investment for funds which had not been declared to the Revenue.
Gave an assurance to prospective investors that their investment would be confidential, and that the Revenue would not become aware of it.
Told prospective investors that if their investment was made the subject of a trust it would pass to the beneficiaries on the production of a death certificate. This avoided the necessity for probate, and made it possible for the funds invested to be kept hidden from the Revenue even after the investor's death.
There was no comment on the report last night from Ms Flynn, who is understood to be abroad on holidays.
The inspectors say the "clear inference" from letters sent by Ms Flynn to customers in 1991 was that the absence of probate meant their funds could be kept concealed from the Revenue. It quotes from Ms Flynn's explanation in the letters about the bank's Emerald Prosperity Fund that the money could be paid out to beneficiaries without going through probate, and that "this facility removes any risk involved in distributing [the customer's] money on death".
Ms Flynn worked as a financial services manager in the financial advice and services division of the bank from September 1989 to 1997. On being elected to the Dáil in Mayo, she took leave of absence, though the report notes she was still employed by NIB in June 1998. Throughout this time, the head of the division was Mr Nigel D'Arcy, who the inspectors find primarily responsible for the way in which CMI policies were being promoted. Ms Flynn and the other financial services managers operated with Mr D'Arcy's "tacit approval", the report says.
The report makes joint findings in relation to Ms Flynn and three other managers, Mr Charlie McCarthy, Ms Patricia Roche and Mr Alistair Stewart.
It says Ms Flynn, Ms Roche and Mr Stewart sold a "substantial number" of CMI policies.
All four managers were aware that monies being invested in CMI were undeclared to the Revenue. All four assured their customers that their investment was completely confidential from everyone, including the Revenue.
The inspectors say NIB managers told them they did not consider it "incumbent" on them to refuse business from people with undeclared money, and they considered CMI as a suitable investment for people with such money. By way of illustration, the report quotes extracts from the managers' interviews with the inspectors, including Ms Flynn's.
Inspector: "In relation to CMI Personal Portfolio policies... were you aware of the source of funds?"
Ms Cooper-Flynn: "Not generally but, at times, it did become apparent. But not generally. Source of funds really wasn't an issue for me. I was an investment adviser."
In their findings in relation to CMI products, the inspectors say customers' undeclared money, which was targeted by NIB staff for investment in the CMI policies, included funds held in bogus non-resident accounts and fictitious and incorrectly-named accounts. They say bank personnel facilitated tax evasion by third parties by promoting CMI policies as a secure investment for undeclared funds.
Ms Flynn took a libel action against RTÉ in 2001 for broadcasting that she encouraged tax evasion while working for NIB. She lost the action.
She recently gave evidence to the Mahon, formerly Flood, tribunal, which is investigating a payment of £50,000 given to her father, former EU commissioner and Fianna Fáil government minister Mr Padraig Flynn, by the property developer Mr Tom Gilmartin.
