Rabbitte accuses banks of collusion in tracker scandal
‘All had the same bright idea’
FORMER Labour leader Pat Rabbitte has said he believes the banks must have colluded in the tracker mortgage scandal due to a pattern of identical previous behaviour.
Mr Rabbitte, a former communications minister, said the banks had previously acted in concert to avoid the collection of Deposit Interest Retention Tax (Dirt) and its transfer to the Exchequer.
This was because, in the 1980s, the banks were worried about deposits being moved to Northern Ireland – and wanted them on their own balance sheets.
Mr Rabbitte, who took part in the Dáil’s Dirt inquiry in the early 1990s, remarked yesterday on its similarity to the tracker scandal.
He told the Irish Daily Mail last night: ‘I don’t think that looking at the Dirt example and the tracker mortgage scandal that one can come to any conclusion but that there ‘Corporate veil’: Rabbitte was collusion.’ He added: ‘So long as senior bank executives can hide behind the corporate veil, there won’t be any correction to their behaviour, and I think the Central Bank has to point the finger as to who made these decisions.’
Speaking on RTÉ’s The Week In Politics, Mr Rabbitte said: ‘In the case of Dirt, it is important to remember that it was an industry-wide scandal. Each bank at the same time had the same bright idea.’
And Fianna Fáil TD Timmy Dooley said yesterday: ‘Pat Rabbitte is right when he says it can’t be the case that 11 institutions all came to the same conclusion on tracker mortgages.
‘They all came to the same conclusion to the benefit of the banks instead of the consumers. It doesn’t take a rocket scientist to figure out that there was collusion here.
‘Unless, and until, you hold people personally accountable, the next generation of bankers will see a laissez-faire attitude and act in the same way, collect their bonuses and move on.’
Sinn Féin deputy Eoin Ó Broin said: ‘We are not hearing from the Government what they intend to do so that this kind of stuff cannot happen again. If there was legislation for class action, that would at least be a powerful signal to ensure that it can never happen again.
‘We also need to know who took these decisions. Did they do it with the full knowledge that they were stealing from people, with devastating consequences? If so, they need to be prosecuted. And if legislation needs to be changed, then it should be changed.
‘They have been let alone to get away with daylight robbery.’
But Fine Gael’s junior finance minister, Michael D’Arcy said any new legislation would be a red herring, as it could not apply retrospectively. ‘If we end up being legalistic, we will be in court for years, and the people due to be paid by Christmas will not be repaid.’
He said: ‘We really won’t know if we trust the banks or not, and if 12,000 out of 13,000 affected customers have not been repaid by Christmas, as promised – then Minister Donohoe will be in a position where he knows he has to deal with the banks in a different way. That is only a few weeks away.’
The Irish Daily Mail contacted the five main banks – AIB, Bank of Ireland, Permanent TSB, KBC and Ulster Bank – for comment. Representatives from KBC and Permanent TSB did not wish to comment while the other banks did not respond.