The State's financial institutions appeared to adopt a cautious approach to the DIRT controversy yesterday, with many instructing their lawyers to refrain for the moment from making a public submission to the Oireachtas Public Accounts Committee (PAC). The PAC has meanwhile outlined the approach it will take in examining the evidence of widespread tax evasion through bogus non-resident accounts.

Last week, a report by the Comptroller & Auditor General (C&AG), Mr John Purcell, showed systematic abuse of non-resident accounts by residents of the State seeking to evade tax. At a meeting in Dublin yesterday, the chairman of the PAC, Mr Jim Mitchell TD, said that because of the magnitude of the report, the committee would be open to receive further submissions from interested parties until Saturday, August 21st.

He invited parties present to address the meeting; one by one, representatives of the Revenue Commissioners, the Department of Finance, Allied Irish Banks, ACC Bank, Irish Life & Permanent, and Ulster Bank said they did not wish to make any statement. Many of the lawyers speaking on behalf of these organisations added the words "at this time" to their statement.

Mr Mitchell said the PAC would examine the role of State agencies such as the Revenue Commissioners, the Central Bank and the Department of Finance, on:

the extent of their knowledge of the problem of bogus non-resident accounts, and what power each had to deal with it;

what they did about it;

what contacts they had, amongst each other and with the banks.

He said the PAC would question the relevant banks and building societies about the extent of bogus non-resident accounts within their own institutions, and in the sector in general. Other issues would include:

the extent of the knowledge of all appropriate boards, senior management and external auditors of the problem;

what these did about it;

where any such people or organisations were unaware of the problem, what were the reasons of this lack of awareness; and

the extent, if any, to which bodies representative of the sector contributed to the governance within the industry.

Mr Mitchell said it was not the PAC's job to determine how much, if anything, any individual or institution might owe the Revenue Commissioners.

"However, insofar as it may be necessary for the sub-committee to reach conclusions in general terms as to the scale of the problem, and the relative incidents of the problem in various institutions, it may be necessary to look at the extent of bogus non-resident accounts and related matters in particular institutions at a general level," he added.

He said all 37 financial institutions and the relevant State bodies had thus far co-operated fully with the investigation.

"It is our earnest hope that this continues," Mr Mitchell said.