Allied Irish Banks investigates itself

The latest in a long line of scandals involving Allied Irish Banks was reported by the Irish Times as earlier this week.

It emerged yesterday that AIB has been investigating new claims that AIB deliberately and repeatedly overcharged foreign exchange customers in its branches during the 1980s and the 1990s

Those unfamiliar with how things are done in the Banana Republic of Ireland may be surprised to learn that AIB, the largest financial institution in the country, is allowed to investigate itself with very little interference from the State. The full situation, however, is even more bizarre. The Sunday Business Post, who broke the story relates how AIB compliance officers from its business ethics unit grilled several staff members for hours.

The methods used by this unit are what one would expect in a… well, in a banana republic.
Those grilled were given no legal or union representation, warned (threatened?) about possible future consequences arising from the matter, sworn to secrecy and pressurised into informing on their colleagues.

It should be kept in mind that the Gardai, (the official state police force) have no involvement whatsoever in this matter. The Financial Regulator seems to play only a peripheral role in so far as AIB keeps the body informed of its activities. Indeed, a spokeswoman for the regulator said that its main priority in any investigation is (merely) to identify the customers involved. (My italics)

It is also likely that AIB will be permitted to act as judge and jury on staff members based on the results of its investigation. Last year, after a similar scandal, AIB handed down ‘punishment’ on several staff members for their misdeeds. One man, however, had the temerity to challenge his ‘sentence’ and took AIB to a ‘real’ court. He won his case and claimed he was very happy with the outcome. AIB, however, insisted that no special deal was done. Who do we believe? Was he paid off or did he suddenly realise that AIB was really only concerned with his best interests? The Financial Regulator, of course, had no comment to make.

To give a better perspective on how things are done in the Banana Republic of Ireland it can be useful to make comparisons with how other jurisdictions handle these cases. At the moment a case not unlike the AIB matter is under way in Australia. So far, two men have been sentenced, one to 16 months and the other to two and a half years in jail.

In real democracies, when white collar crime is detected, the following procedures usually ensue – Police investigation, arrests and trial if enough evidence is found, appropriate punishment including jail sentences for the guilty. In the Banana Republic of Ireland?… Ah,sure, you know yourself!