Let every pillar of society fall and a single truth remains: money talks.

One midlands farmer, after an icy stand-off with his bank in the mid-1980s, recalls the dramatic rise in temperature once he had taken the decision to sell up. The bank manager who just days before had been bouncing the man's cheques at the local shop and feed merchants and lecturing him on his legal obligations, suddenly turned seducer. Endearments were murmured about "safe" places where any sale proceeds could be "protected" once the bank had taken its cut.

Clearly, in the bank manager's view, legal obligations were a consideration only for struggling customers, not for the cash-rich kind - and certainly not, perish the thought, for the bank.

Predictably, the farmer flounced off to another bank armed with a small nest egg and the new information that it could be "protected", which it duly was. Is he at all ashamed of himself? He tries defiance.

"I'm told there are 200,000 non-resident account holders here. Are you trying to tell me that they're all farmers or shopkeepers. It looks to me like everyone's at it."

As for his own situation, he seeks understanding by recalling the humiliation of the bounced cheques, the near-broken marriage, the sense of hopelessness that prevailed during those years and turns the question back on the questioner.

How many ordinary self-employed, people, sometimes unable to put bread on the table, taking risks, sweating long hours in bleak times when the top tax rate was 65 per cent, would have found the strength to resist?

Those were the days when Gay Byrne - who with Charles Haughey, was the closest we had to a father of the nation - was only one of the public commentators regularly flailing out at the enterprise-sapping nature of the tax regime. And if the bank manager - who still shared the town pedestal with the priest, the doctor and the TD - was suggesting that to thwart the taxman you had only to file the money under your American cousin's address or, simpler still, in your own name but as Gaeilge, well, what was a man to do?

No doubt, sneered one embittered PAYE worker, someone will yet emerge to explain that it was some deeply entrenched anti-colonial spirit, that old impulse to cock a snook at authority and the law, that made them do it. In any event, it all added up to a culture; only saints, fools and PAYE drones paid taxes.

The week's big surprise is that all those suspicions turned out to be true. The PAYE workers who took to the streets in their hundreds of thousands 20 years ago to protest against a grossly uneven burden were right in the main. The Government, the bankers, the Revenue Commissioners were in thrall to the monied classes. More shocking still, they feared them, living in daily terror that these de facto criminals would move their money out of this fragile little country altogether and sink the exchange rate entirely, along with everyone depending on it.

Maurice O'Connell, the Governor of the Central Bank who had previously served in a senior capacity with the Department of Finance, was upfront about it: "We were broadly aware of the fact that people were avoiding tax. Everybody agreed it was wrong . . . " And there was no shortage of suspicion.

As long ago as 1985, a building society official had alleged to the Central Bank that clearing banks were breaching exchange control regulations and that English addresses were being "literally supplied to order" for accounts involving substantial sums.

In the run-up to the introduction of DIRT tax (Deposit Interest Retention Tax) in 198687, the number of "non-resident" accounts" suddenly trebled. Department memoranda from 1993 suggested that more than £2 billion (a figure which some believe may be closer to £10 billion) could be lying in bogus non-resident accounts. But the official attitude was: "For God's sake, whatever you do, don't rock the boat, the boat being the exchange rate."

That was the culture.

The Revenue Commissioners had also been very upfront about their lack of activity in the early 1980s. They knew they were not fulfilling their duty, a failing which they attributed to a lack of resources. They had to rely on the banks to make the returns and these returns were huge, so huge, said the Governor, that an army would have been needed to go through them. No army was forthcoming however, for obvious reasons. Why would the Government give the Revenue the resources, the powers and the motivation it needed when the end result would be to scare all that hot money out of the country?

There was some attempted tinkering around the margins. In the 1983 Finance Bill, for example, it was proposed that non-resident account holders should provide a sworn affadavit attesting to the truth of the declaration when seeking non-taxable status. But even this provision was amended during its passage though the Dail. In a move that must have struck bankers everywhere as hilarious, it was left up to the banks themselves to judge whether such an affadavit was required.

Then again, given the evidence that has been accumulating over recent years, no doubt they took it simply as their due. What made particularly infuriating reading for many this week, as the full implications of the Comptroller and Auditor General's report weighed in, was the sheer contempt and disdain of the financial institutions in their attitude towards the State's laws and statutory authorities.

Many had never even attempted to conceal the scale of their illegal practices while the cover stories and the quality of the paperwork suggested that even keeping up appearances was simply to troublesome.

A new study of non-resident' accounts carried out on behalf of the CAG showed that more than a quarter of all the forms examined carried a reportable deficiency and that even to the untrained eye, 18 per cent of the accounts indicated a risk that the holder was really resident in the State. Large tell-tale signs included mail being held at the branch for the holder; where the holder used a "care of" address in the State; where the care of address being in the bank branch itself or even where the address given was within the State.

Some of the most startling evidence to emerge this week related to the enthusiastic hands-on involvement of bank employees (themselves PAYE workers presumably) in the State-wide scam. Tullamore boasted two such institutions - the ACC and the Bank of Ireland. At the first, a member of staff was operating accounts with fictitious names and addresses, with the knowledge of the manager and assistant manager.

At the Bank of Ireland, a year after an assistant manager was found to be personally involved in the operation of fictitious accounts, "serious irregularities in the status of a small number of sizeable customer deposits . . . as a result of actions by both the current and former manager", were uncovered.

In Claremorris, where non-resident accounts were generally opened in the Irish version of the customer's name, the manager was fired after the bank was rated "seriously deficient" in its control procedures.

In the west Clare town of Miltown Malbay, a Bank of Ireland branch manager was adjudged to have known about and assisted with the operation of accounts owned by a range of traders in the town, which resulted in £2 million due in outstanding tax and interest. At the Quay branch of Waterford's AIB, the most senior member of staff resigned after it was discovered that over £1 million was owed to the Revenue as a result of such accounts being uncovered.

Sometimes, the involvement by staff members was of a more personal nature. In ACC Tallaght, for example, a bogus account was found to belong to a member of head office staff. At ACC Tuam, another was uncovered belonging to a staff member at the branch.

The report notes that there is no record of action having been taken in either case. In fact, the absence of action characterises much of this story. Banks in general are not known for wiping out a customer's irregularly acquired overdraft in exchange for future good behaviour.

But this is what the AIB is demanding of the taxpayer. Far from coming into the "manager" with its hands up and shamefaced promises to sell the second car/the children/the back garden to pay back the money, the bank is contending that the Revenue knew the scale of the bogus accounts and had agreed to a deal, allowing the bank to write off vast amounts of money due to the Exchequer providing it observed the law in future. The Revenue flatly denies this.

This is just one element of the ground to be covered in a major political inquiry into the banking system to take place in September. The report comes in a week when the Consumer Affairs Director, Ms Carmel Foley, told a joint Oireachtas committee that there was still an enormous imbalance of power between consumers and the financial institutions.

They still manage to make customers kow-tow to them, she said, " . . . but it is the consumers, rather than the institutions, who have been the victims of all-too-common malpractices in this country".

Consumers will be watching what comes next with uncommon interest. Teilifis na Gaeilge is believed to be planning to broadcast the inquiry proceedings live.

The full text of the Comptroller & Auditor General's report can be accessed from read on The Irish Times on the Web (www.irish-times.com).