There were angry scenes in the Dáil today after it emerged Minister for Finance Brian Lenihan was unaware for two-and-a-half months about multi-billion euro loan deals between Anglo Irish Bank and Irish Life & Permanent (ILP).
Even though Mr Lenihan’s officials knew about massive ILP deposits in late October, and immediately informed the Financial Regulator, the Minister claimed he was not informed until Anglo was bailed out last month.
Auditors from PricewaterhouseCoopers spotted the payments on the bank’s loan books and notified government officials in October. The loans totalled €7 billion.
Mr Lenihan explained: “[Last month] it would not have been appropriate for me to publicly disclose partial information which was, and remains, the subject of investigation by the Financial Regulator.”
Providing further detail of the payments, he said: “Anglo Irish placed funds with ILP. A non-bank subsidiary company of ILP then deposited a similar amount in Anglo as a customer deposit.”
During an angry Dáil row over the information gap, the Opposition called for Mr Lenihan to resign and the Labour Party walked out in protest claiming the Minister wasn’t properly answering questions.
Mr Lenihan reiterated that several internal and external inquiries were ongoing into Anglo’s dealings and insisted any misconduct would be punished.
The Government nationalised Anglo Irish on January 15th after a controversy over hidden directors’ loans led to several resignations and a collapse in its share.
Speaking this evening, Fine Gael finance spokesman Richard Bruton said he was "astonished" that Mr Lenihan had not read the full PricewaterhouseCooper report, which had contained details of the deposit, which went to Anglo before its financial year ended
"It's bewildering to be honest . . . the whole Dáil was in shock," Mr Bruton said, adding it was difficult to have confidence in the Minister as a result.
"To the extent the State was going to be exposed [in the banking plan], I'm astonished at what has been revealed," the Fine Gael frontbencher said.
Earlier in the Dáil, the Taoiseach rejected as “innuendo” suggestions that the Government was aware that Irish Life & Permanent had deposited up to €7 billion in Anglo Irish Bank last September, when the bank guarantee scheme was introduced.
During fractious scenes in the Dáil this morning, Brian Cowen also insisted that the decisions the Government had made in relation to the banks were done so entirely on the basis of what was in the public interest at all times.
He rejected a suggestion by Labour Party leader Eamon Gilmore that he was aware ILP had placed the deposits with Anglo at the time. Mr Cowen declined to confirm, however, on what exact date he did find out about the transfer of the funds.
Mr Gilmore accused the Taoiseach of handing over the deeds of the country to bail out the banks in a guarantee scheme without having complete information.
“If the banks weren’t telling you what was really going on in the banks at the time you were coming in here, they were making a monkey out of you,” he told Mr Cowen. “And they were making a monkey of the public that was being asked to put up the State guarantee.”
Fine Gael leader Enda Kenny told the Dáil: “We’re in this mess, not because Fianna Fail policies have failed, but because they have succeeded.”
The Dáil will hold a special debate on the recapitalisation issue tomorrow.
It is the second time controversial Anglo money deals have been followed by lapses in communication. Outgoing Financial Regulator Patrick Neary resigned in December in the wake of a loans fiasco involving former Anglo chief Sean FitzPatrick but insisted he was not told for nearly a year about the €129 million secret deals.