FORMER NATIONAL Irish Bank chief executive Jim Lacey has told the High Court he operated the bank under systems designed to run it to the highest standards and, unlike the then chiefs of other banks, he actually read some internal audit reports related to bank branches.

Mr Lacey denied either know-ledge of or responsibility for six improper practices at NIB identified by inspectors who investigated the tax evasion scandal in the bank in the 1990s, and suggested branch managers bore responsibility for the failures.

Some managers may not have been attending to the job as much as they should have, or were at the golf club with people they wished to facilitate, he said.

The NIB business was run “to the best standards we could” and there were “no secrets about what we were doing”, Mr Lacey said. The Revenue could have tested the systems at any time by seeking to open a false non-resident account, but it never examined the bank during his tenure. He was “surprised” it never did so.

Neither the internal nor external auditors of the bank, nor the Central Bank, had regarded issues about non-resident accounts or the other matters raised by the inspectors as serious, Mr Lacey added.

Asked by Maurice Collins SC, for the Director of Corporate Enforcement, whether it was not remarkable that several senior employees at the bank were sending memos to each other about customers who should be targeted because they had “hot money” – with no apparent fear of disclosure – while the chief executive did not know about it, Mr Lacey said he did not know.

Mr Lacey was being cross-examined in the continuing application by the Director of Corporate Enforcement for an order disqualifying him from involvement in the management of any company, on grounds of unfitness.

The director wants the order arising from the July 2004 report of the NIB inspectors which found senior management at NIB, including Mr Lacey, bore ultimate responsibility for practices indicative of “a widespread culture of non-compliance” at NIB.

Yesterday, Mr Lacey agreed he was responsible for managing and operating the bank, and had a duty to understand how the bank operated. There were omissions in the inspectors’ report, and he did not accept all their conclusions. The inspectors had information available to them which he never had, but they also did not have information which he considered supportive of his claims.

He agreed the practices identified by the inspectors were serious but said he was unaware of these and, had he been aware, would have ensured measures were taken to stop them.

He said he himself only read internal audit reports categorised as unsatisfactory or poor, but a subordinate in his office would read all the reports and draw his attention to any unusual matters. He denied he had a responsibility to read all the reports.

He had heard the expression “bogus non-resident accounts” in the late 1970s and early 1980s when many people were trying to avoid paying tax. The onus then was on customers to complete non-residency declarations, and it was widely known that a lot of depositors falsely completed such declarations.