Report exposes Irish banking 'charade'

An unauthorised banking system used by some of Ireland's political and business elite to evade tax payments for more than 20 years was exposed as "little more than a charade, a sham and a legal fiction" in a report published yesterday.

The former Irish Prime Minister Charles Haughey was listed among fellow former members of the Irish parliament, the landed and the wealthy, who used Ansbacher (Cayman) bank between the 1970s and 1990s.

After five years of investigations into Ansbacher, the names of nearly 200 clients – individuals and companies – were published in the report.

The inspectors, appointed by the High Court, detailed evidence "tending to show that Ansbacher was guilty of a number of criminal offences", including conspiracy to defraud tax authorities.

Deputy Prime Minister Mary Harney, one of the main instigators of the report, said its "damning" findings had lifted "a veil of secrecy", marking "a watershed in Irish life."

She said: "It is a damning insight into a world of conspiracy, fraud and tax evasion over a long number of years.

"The report has described the activities of Ansbacher (Cayman) Ltd, as little more than a charade, a sham and a legal fiction."

Paul Appleby, Director of Corporate Enforcement, said that he would support efforts to recover the €3.2 million (£2m) cost of the report from some of those named.

One leading industrialist in the UK, along with doctors, bankers, architects, solicitors and former Irish company executives were also named. The report stressed that not all clients of the bank – which was established by the late Des Traynor, once Mr Haughey's financial adviser – were evading tax.

Despite efforts by some clients to remain anonymous, the president of Ireland's High Court, Mr Justice Finnegan, ruled last month that it was in the public interest for the report to be published in full.

The Ansbacher scandal began in the early 1970s when Mr Traynor set about establishing offshore subsidiaries in the Channel Islands and the Cayman Islands. The Cayman subsidiary was later bought by the Henry Ansbacher group. Tens of millions of pounds were deposited with Ansbacher, which was treated for tax purposes as being lodged offshore. But Mr Traynor was holding the cash in Ireland.