Former Taoiseach Mr Charles Haughey insisted to the tribunal that he did not get preferential treatment from AIB when settling his debt with the bank shortly after becoming Taoiseach.
"No particular preference was given to me," he said. "At that particular time, substantial settlements of that nature were being made by banks with companies and individuals."
The tribunal heard that Mr Haughey's debt was £1.143 million and interest was not added. If it had been, the debt could have amounted to £1.3 million.
"The bank allowed £110,000 to stand in its books free of interest, and effectively with no way of legally enforcing that indebtedness; £750,000 was paid and the rest, which would have been interest, was written off," counsel for the tribunal, Mr John Coughlan SC, said.
"To my knowledge substantial settlements were being made by the banks with companies and individuals at that time," Mr Haughey said. The former AIB chief executive, Mr Gerry Scanlan, had indicated that his debt was "not out of keeping with the general sort of commercial settlements that the bank made".
There was particular concern at the time with farmers, Mr Haughey added.
Mr Coughlan said, however, that there were some very substantial write-offs for farmers, but that those were "where there were not enough assets to meet the debt".
Mr Coughlan pointed out that the land agreement with the Gallagher Group to buy 35 acres at £35,000 an acre would have been "more than adequate assets" fully to discharge the debt to AIB. The bank never attempted to call in any securities and never indicated to Mr Haughey that they would go after any assets of his to pay the debt.
Counsel said that the first time the bank agreed to write off a substantial part of the debt, and leave £110,000 on the books with no legal enforceability, was when Mr Haughey's financial adviser, Mr Des Traynor, entered the negotiations and concluded the deal, when Mr Haughey became Taoiseach.
Mr Haughey pointed out that at one point the Dame Street bank manager, Mr Phelan, suggested that part of the debt could be written off.
Mr Coughlan replied that Mr Phelan had said it might be written off, but he could not guarantee that.
"The settlement which gave rise to a benefit to you was connected with the public office you held. The deal was done by reason of the fact that you were now Taoiseach," he said.
Mr Haughey said, however: "That's not so." The bank had been anxious for some years to get this account settled and would have settled any time Mr Haughey could have.
Mr Coughlan asked him if he had ever heard of a situation where a bank allowed a debt to stand, legally unenforceable and without interest.
Mr Haughey said he was sure he had. He had a feeling that sometimes settlements were made with companies or individuals and an amount was left outstanding, simply on the books.
