A senior AIB official was told by a superior to hand over his file on the Haughey accounts and "not to ask" why it was being taken, the tribunal was told yesterday.
Mr Gerard O'Donnell, a former advances manager, said Mr Michael Kennedy, the then regional manager for Dublin west, asked for the file to be removed from his office just months before the bank reached a settlement with Mr Charles Haughey over his £1.14 million debt.
Mr O'Donnell said he had "no doubt about the commercial justification" for the agreement with Mr Haughey.
In his statement, Mr O'Donnell said Mr Kennedy had approached him in late-1979 or early 1980 and asked him to remove the Haughey file from his records. Mr Kennedy said he was taking custody of the file and made a remark to the effect that he was not telling Mr O'Donnell why the file was being removed and he was not to ask.
Mr O'Donnell said: "One has to have regard to the particular circumstances . . . Obviously the request indicated the matter was moving out of the level of figures delegated for me for control. It was being taken away from that area for other purposes of which I was not aware either then or subsequently."
Later, Mr Gerry Scanlon, a former AIB group chief executive, said he had received the file on the Haughey accounts from Mr J. J. McAuliffe upon his retirement as assistant chief executive in March 1987. Mr Scanlon said he kept it locked in his safe thereafter.
Mr O'Donnell said he would have dealt with figures between £100,000 and £500,000 at the time. In the case of the Haughey accounts, he would have been constantly consulting his superiors. He added the accounts were "being handled at the highest level of the bank and, in my position, I would have been entirely happy as a bank official that . . . this was undoubtedly a commercially justified decision by AIB."
Mr O'Donnell said "there was no policy" on how debts should be repaid and each had to be judged on its own merits. But he agreed Mr Haughey's £1.14 million debt was "considerable", given AIB's banking profits were £24 million in 1978 and £26 million in 1979.
Mr Eoin McGonigal SC, counsel for Mr and Mrs Haughey, objected to Mr O'Donnell being asked to compare his client's debt with that of others within the bank. Mr McGonigal said if such comparisons were made, the bank should make available details on "the many accounts which may have been in difficulty" at the time, and should show how they were dealt with.
Mr Justice Moriarty, however, allowed Mr O'Donnell to make some general observations on the Haughey debt.
Mr Justice Moriarty said he had to bear in mind an Oireachtas instruction to keep the tribunal expeditious and cost-effective. He said engaging in a detailed comparative study of AIB debtors would give rise to privacy implications and deviate from that instruction.
Mr O'Donnell was shown an official bank document from February 5th, 1981, showing the £110,000 debit balance on Mr Haughey's account being described as "covered by suspense interest". Mr O'Donnell confirmed this meant the sum was not being taken into the bank's profits.
He went on to accept the document indicated the bank did not have full confidence the sum would be repaid.
Mr O'Donnell, who retired from AIB in January 1996, was advances manager with responsibility for the Dublin west region in the late 1970s. He said he would have reported to the late Mr Richard Barrow, advances controller for area east, who in turn would have reported to the late Mr James Denvir, general manager for area east, who in turn would have reported to Mr Patrick O'Keeffe, deputy chief executive of the bank.
Mr O'Donnell added the Haughey accounts were "always of concern to the bank" and were "extremely difficult to control". Monitoring of them required constant reference to Mr Barrow and Mr Denvir, and, through them, to Mr O'Keeffe.
