Department learned of retirement gift just days ago
Published 04/08/2011 | 05:00
THE Department of Finance only found out about Michael Fingleton's €11,500 retirement gift on Tuesday -- the same day the media learned of efforts to wrest the designer watch back from the disgraced banker.
The news means that the department was still in the dark about events at Irish Nationwide in April 2009, despite having agreed to guarantee the building society's balance sheet the previous September.
The Government also had two public interest directors on Nationwide's board at the time of the watch debacle in April 2009, Adrian Kearns and Rory O'Ferrell, but sources close to another member of the then-board say the watch was not discussed at directors' meetings.
The department yesterday branded the gift as "disgraceful", but a spokesman confirmed that there were "no immediate plans" to try to establish how the gift could have been made without the Government's knowledge.
Mr Fingleton's successor Danny Kitchen is also coming under pressure to explain how the watch's purchase was approved. Mr Kitchen, who was chairman of Irish Nationwide until the society's recent merger with Anglo Irish Bank, could not be reached for comment last night.
Gerry McGinn, the building society's chief executive since summer 2009, is on holidays and failed to return calls for clarification about when he became aware of the watch.
Repeated attempts to contact Mr Fingleton were also unsuccessful, but it is understood that he has not yet made any response to this week's demand to return both the watch and a €1m bonus he received in the run-up to his retirement.
Anglo Irish Bank, which now has responsibility for Nationwide's "legacy issues", has deemed the gift "entirely inappropriate" in light of the dire financial straits the building society had already suffered at the time.
The gift cost the building society a total of €21,150, since the building society also paid €9,650 of 'benefit in kind' tax that would otherwise have fallen on Mr Fingleton.
Anglo is now pressing Mr Fingleton to return the watch or €11,500 in cash, and is also upping the pressure on the former Nationwide boss to return a €1m bonus he infamously promised to give back more than two years ago.
"Quite frankly, we could do without an issue of this kind, but, given its nature, it's something we have to follow up," Anglo chairman Alan Dukes said yesterday, adding that his team was "extremely taken aback" to learn of the gift.
The Department of Finance yesterday weighed in behind Anglo's attempts to recover the watch, handed over just weeks after the society announced losses of €243m for 2008.
"It is a disgrace that the building society spent funds in that manner, especially given the cost to the taxpayer from Nationwide's failure," a spokesman said, a veiled reference to the €5.4bn in public funds that have been poured into the defunct lender.
He admitted the Department of Finance had only become aware of the issue on Tuesday, even though Nationwide had previously raised the issue of the watch with Mr Fingleton.
The issue is understood to have been raised as part of a broader exchange around Mr Fingleton's expenses.
It is unclear whether senior executives at Irish Nationwide were made aware of the watch situation at that point.
Asked whether the department would make efforts to establish how the gift could have avoided Government scrutiny, the spokesman said there were "no immediate plans" to pursue such inquiries.
Officials are understood to be waiting to see how Mr Fingleton responds to Tuesday's letter.
Sources last night confirmed Mr Fingleton had not yet responded to the bank.
The department also echoed Anglo's calls for Mr Fingleton to repay the controversial €1m bonus.