Business Irish

Friday 19 October 2018

Cardiff and Boucher in clash on BoI bonus denial


Emmet Oliver , Deputy Business Editor

A TOP civil servant accused Bank of Ireland chief Richie Boucher of "hiding behind'' words and his bank of misleading the government during a blazing row over bank bonuses, confidential minutes show.

The attack on Mr Boucher at a heated meeting in February came after the bank admitted paying €66m in bonuses, even though it claimed in November it hadn't paid any bonuses.

Mr Boucher and the bank's chairman Pat Molloy were given an unprecedented dressing down at the private meeting by a clearly exasperated Department of Finance chief Kevin Cardiff, now the key adviser to Finance Minister Michael Noonan.

Sharp exchanges

The sharp exchanges became heated after Mr Boucher tried to explain why the bank did not reveal the bonuses the first time around in November.

Mr Boucher said the bank and the Government used different definitions, hence there was confusion. Mr Cardiff is recorded as saying: "Any hiding behind particular definitions would not be appropriate to a relationship of trust.

"The fact there are still discrepancies arising makes it difficult to believe there was not a deliberate attempt being made to mislead the department,'' Mr Cardiff told the bankers.

He also told the bank there was no reason why it should be treated any differently to AIB when it came to revealing full details on bonuses.

Mr Cardiff appeared to become impatient with Mr Boucher's explanations.

"Mr Cardiff stressed that the definitions in relation to performance-related pay were not the crucial issue," state the minutes.

He told the bankers trust had completely broken down between BoI and the Government and he demanded the bank change its ways.

"Mr Cardiff explained that this matter had the potential to damage relations between the state agencies and the bank.

"It was stressed that this relationship was based on a trust that has been damaged as a result of this incident."

Mr Cardiff demanded four key concessions from the two bankers in order for things to be patched up between the sides:

•A complete and accurate picture of all bonuses paid.

•A full apology from the bank.

•A payment to be made to the exchequer as a gesture of goodwill.

•A new system of reporting to government, signed off by Boucher himself.

Mr Molloy admitted the bank would have to work hard to rebuild the relationship with the State, but Mr Cardiff said he was also concerned about the amount of bonuses being paid to lower-paid staff which seemed to be expanding.

"Any increased payments must be aligned with the best interests of the bank," Mr Cardiff warned.

The whole saga of Bank of Ireland's bonuses started in November when Chris Andrews TD put down a question in the Dail, asking what level of bonuses the bank paid since the bank guarantee scheme was introduced in September 2008.

In response, Bank of Ireland stated that no performance-related bonuses were paid "with respect to the financial years to March 2009 and December 2009".

It subsequently emerged that the information provided by the bank was wrong and an investigation was launched. Finance chief Kevin Cardiff (left) has accused Bank of Ireland CEO Richie Boucher of 'hiding behind words'. Tom Burke/Damien Eagers

Irish Independent

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