The Public Accounts Committee's report on the DIRT scandal is about much more than tax evasion. Though its subject may be the complicity of the major banks with many of their clients in withholding money that was due to the State, it reveals many other things.

It opens up a culture of corporate greed. It shows a contempt for the law among many members of the elite of Irish society. It shines a harsh light on the links between big business and the State. It compels a fundamental re-evaluation of the crisis in the public finances in the late 1980s and how it was solved.

It paints a shocking picture of the way crucial institutions of the State such as the Revenue Commissioners, the Central Bank and the Department of Finance went about their business. And, although it does not raise this question directly itself, it forces us to ask whether there will now be impunity for the deliberate crimes and the massive failures that it highlights.

At one level, the report can be read as a scathing commentary on the way the State as a whole, at a time of crisis, dealt with the interests of ordinary citizens.

At the time the DIRT scam was in full swing, the public finances were in chaos and there was serious talk of the IMF being called in to sort them out. The policy-making elite in the Department of Finance and the Central Bank was intensely aware of these problems and spent much of its time urging politicians and the public to tackle them.

Yet, we can now see from the report, that same elite was actually adding to the crisis by its refusal to tackle what it knew to be widespread tax evasion. "The failure to tackle the DIRT problem," as the report puts it, "was a contributing factor to the fiscal crisis of the time and delayed the process of restoring order to the public finances".

Indeed, it is clear from the report that the elite made a collective decision that the burden of fiscal adjustment would be borne by the most vulnerable in society, while those with money would not merely not have to bear their share, but would actually be allowed to make the problem worse.

What the report calls "the official mind" was dominated by a fear of upsetting people with money lest they take that money out of the State. Yet this fear was based on nothing more than unexamined assumptions or what might charitably be called conventional wisdom.

No actual analysis appears ever to have been done by the Department of Finance. The PAC, as the report puts it, "is struck by an absence in the discovered papers and in the oral evidence of rigorous debate on and analysis of currency pressures and the resulting policy options open to the Department."

This failure of the official mind wasn't merely passive. It involved an extraordinarily serious challenge to the functioning of Irish democracy. The basic democratic principle that the institutions of State apply the laws passed by parliament and apply them equally to all citizens was flouted.

That the banks and their customers broke the law by colluding in tax evasion is obvious. That many directors of financial institutions failed to meet obligations under the Companies Acts is highlighted by the report. The report concludes: "boards of directors of financial institutions generally betrayed an overly relaxed attitude towards discharging their statutory . . . duties."

But that the Central Bank and the Revenue Commissioners failed to apply the law is perhaps the most disturbing aspect of the whole scandal. According to the report, the Exchange Control Act, which was supposed to be applied by the Central Bank, was "routinely flouted".

At the same time, "tax administration in Ireland during the latter half of the 1980s and certainly through to the early 1990s was not implemented fairly under the law. Revenue was not applying the law fairly."

Some of this failure to apply laws that were passed by the representatives of the people can be put down to institutional mismanagement on a frightening scale. The Central Bank adopted "an inappropriate and outmoded approach to supervision" of the banks.

The Revenue, meanwhile, is revealed to have been a shambles. It had "no proper management structure, no institutionalised procedures and there was no effective management from the top of the organisation." During what the report rightly describes as "a most critical period in the fight against tax evasion and in the fiscal and economic history of contemporary Ireland, the Office of the Revenue Commissioners . . . cannot be said to have been functioning coherently in any real sense".

But it is important to remember that more was going on than a dreadful institutional failure. Side by side with rank bad management, there was also a strong inclination to protect the interests of the bankers.

One of the most important aspects of the report indeed is that it represents one of the first official acknowledgements of the power that wealthy companies and their lobbyists could exercise behind the scenes.

"There was", the report states, "a particularly close and inappropriate relationship between banking and the State and its agencies. The evidence suggests that the State and its agencies were perhaps too mindful of the concerns of the banks, and too attentive to their pleas and lobbying."

Tentatively put as this is, its implications are huge. For what is being implied is quite simply that the law was flouted and the public finances were undermined in the interests of a number of powerful financial institutions. The State paid far more attention to their lobbying than to the urgent needs of ordinary citizens.

While primary school classes were getting larger and people were dying on the waiting lists for vital operations, the pleas of the rich were heard and their prayers were answered. And if there is a hole in the report, it is that it does not address the extent to which political donations by the banks may have played a role in all of this.

The banks, meanwhile, had little concern for the health of the State that showed them so much attention. That the report is a disaster for the financial institutions involved is quite obvious.

Their complicity in a huge tax scam is made mercilessly plain and, presumably after one or more court cases, it seems inevitable that they will have to repay substantial amounts of money to the State. In particular, AIB's failure to convince the committee that it had in effect an informal amnesty from the Revenue is a major defeat for the institution.

But it may not be obvious at first glance just how serious the implications of the report are for a number of senior AIB staff. In the final days of the PAC's hearings, counsel for the Revenue Commissioners, Eoghan Fitzsimons SC, upped the ante very considerably by suggesting explicitly that the supposed amnesty was invented, and that the bank's internal files were arranged to make it look as if this alleged invention was real. The AIB witnesses completely and unwaveringly rejected this allegation. Each of them maintained that the documentary record that the bank compiled was an accurate account of real discussions.

The key issue on which Mr Fitzsimons attacked the credibility of AIB's documentation was that of a phone call which allegedly took place on February 26th 1991 in which the Revenue allegedly confirmed the supposed amnesty. The only record of this call is a tiny memo dictated by Jimmy O'Mahoney, group taxation manager, to another senior official, Deirdre Fullen, on February 26th 1991. For AIB everything hinged on these few lines of type.

In the hearings, Mr Fitzsimons suggested that "the telephone conversation had not taken place at all and that the memo is in fact a, well, not to put too fine a tooth on it, a fiction". Mr O'Mahoney replied: "I disagree totally with you." In his final submission on behalf of AIB, Dermot Gleeson SC, called on the committee to reject explicitly the contention that bank staff had invented a fictional account of what transpired between themselves and the Revenue.

Instead, the report seems to uphold this very serious allegation. It states that "no reliance whatsoever can be placed on AIB's alleged telephone call to Mr D.A. MacCarthaigh of February 26th 1991". This finding clearly raises the most uncomfortable questions, not just about AIB's actions, but about its evidence to the hearings.

The danger now is that, after the report's revelation of massive unfairness in the operation of the State, the law and the financial institutions, insult will be added to injury by allowing those responsible to retain their hitherto well-justified sense of impunity. Crimes which would result in the prosecution of any ordinary individual have been revealed. Failures which would result in the sacking of any ordinary worker have been exposed. If nothing happens as a result, the feeling that two systems of law and two sets of rules continue to operate in 1999 will be greatly enhanced.