The Taoiseach will come under pressure in the Dail today to clarify whether any member of the current cabinet made representations to National Irish Bank to have debts written off for Mr John Ellis. The Fianna Fail TD for Sligo-Leitrim had a debt of a quarter of a million pounds settled for £20,000 by NIB in January 1990.
This follows the allegation by the Fine Gael spokesman on Finance, Mr Michael Noonan, yesterday that he had been "given the name of a current Government Minister" who made representations to NIB on behalf of Mr Ellis.
A spokesman for Mr Ahern said last night the Ellis debt write-off was before the Moriarty Tribunal so it was a matter for the tribunal to deal with.
Mr Ellis confirmed in a statement yesterday that the former Taoiseach, Mr Albert Reynolds, made representations to NIB on his behalf, "and in effect, pleaded for leniency for me".
He had total debts of approximately u£500,000 arising from a failed meat business in the mid-1980s. Bankruptcy proceedings were initiated by NIB against him in late 1989 for an outstanding debt of u£263,540. However, the matter was settled in January 1990 with Mr Ellis paying u£20,000 to the bank.
The Taoiseach stated last night that he never made representations to any financial institution on behalf of Mr Ellis. A spokesman for Mr Ellis described as "complete and utter rubbish" the claims that other Fianna Fail figures beyond Mr Reynolds made such representations.
Mr Reynolds, who was Minister for Finance at the time of the debt write-off, said last night he had "no specific recollection of making representations on behalf of Mr Ellis to National Irish Bank. If, however, the record shows that I did, then I fully accept that that is the case".
He also said: "any decision by the bank to mitigate Mr Ellis's circumstances would have been, using its own commercial judgement."
It is understood that Mr Ellis has no document to show the representations by Mr Reynolds, whom a Fianna Fail source said "spoke informally to someone high up in NIB".
Under the 1923 Electoral Act, a person can be disqualified from being a member of the Oireachtas if they are declared bankrupt. ail had just entered coalition for the first time. The then Fianna Fail-Progressive Democrat Government had a slender Dail majority.
It is understood the decision to write off the debt, which was built up at the NIB branch at Ballinamore in Co Leitrim, was taken by the then NIB chief executive, Mr Jim Lacey. Mr Lacey was not available for comment last night.
A spokesman for NIB said the bank was precluded from commenting on the affairs of individual customers. However, he added that if it was being alleged that "the then management of NIB responded to political pressure to write off debts, we have no knowledge of any communications between the then CEO and any political party. The bank has no political affiliations".
It is also understood that NIB suggested the figure of u£20,000 to settle the outstanding debt. The payment came from Mr Ellis' personal funds. Last week, the Moriarty Tribunal heard how former Taoiseach Mr Charles Haughey gave Mr Ellis almost £25,000 from the state-funded party leader's allowance to clear debts at two cattle marts.
The former PD leader Mr Des O'Malley, who was a member of the 1989-92 government, said there had been "vague rumours to the effect that Mr Ellis was having financial difficulties".
The PDs last night joined with Fine Gael and Labour in calling for Mr Reynolds and Mr Ellis to make personal statements on the matter to the Dail.
Solicitors for Mr Ellis gave the Moriarty Tribunal a statement on the NIB debt write-off just before the story was broadcast on RTE yesterday. However, legal sources said the issue was not a matter which would come within the terms of reference of the tribunal.