Business Irish

Thursday 22 March 2018

Obituary: Gerald Scanlan

Former Allied Irish Banks chief who was embroiled in the Dirt scandal

LOW PROFILE: Gerald Scanlan
LOW PROFILE: Gerald Scanlan
Liam Collins

Liam Collins

The death of Gerald B Scanlan, known as Gerry, has gone largely unremarked outside his own family circle.

Scanlan went from a counter clerk to chief executive and deputy chairman of Allied Irish Banks (AIB), and presided over the bank when it overtook Bank of Ireland to become the largest financial institution in the State.

Unlike many of his predecessors, he was a Christian Brothers-educated boy at a time when the executive floor was populated by the products of private Catholic colleges.

Scanlan started work as a teller in a busy branch in Dame Street, Dublin, at the age of 18. His first job was to rubber-stamp cheques. He did this with such enthusiasm that the rat-a-tat-tat of his stamping gained him the nickname Bongo.

He worked his way up through the branch network to manager, before being elevated to the executive floor. He was there when the Munster & Leinster Bank merged with the Provincial Bank of Ireland and the Royal Bank of Ireland to become Allied Irish Banks. Scanlan was also a rising figure when the bank moved into its shiny new Bankcentre in Ballsbridge, Dublin, in 1977.

He was directly involved in trying to recover £1.4m that Fianna Fail politician Charlie Haughey had racked up as an overdraft in the 1970s.

Scanlan told the Moriarty Tribunal that Haughey was regarded in the bank as a key business influencer and was courted as a customer. However, Haughey refused to give back his chequebook when he was writing cheques to the value of £2,500 a week on a salary of £140. It was only when he became Taoiseach that a "dig-out" was organised by Haughey's accountant Des Traynor. Even then, a £350,000 debt of honour was never honoured.

Scanlan told the Moriarty Tribunal it was a "dream relationship which turned into a banker's nightmare".

He became chief executive of Allied Irish Banks in 1984 and within months had to deal with the first of several major crises to engulf the bank - the collapse of its insurance arm Insurance Corporation of Ireland.

With unsustainable losses threatening to bring down the bank, Scanlan and his deputy Dermot Egan, after careful preparation, approached the government on the Friday of a bank holiday weekend.

Shane Ross wrote in his book, The Bankers: How the Banks Brought Ireland to Its Knees: "Scanlan was the rough diamond of the pair - robust and brash." Then Taoiseach Garret FitzGerald and his minister for finance "blinked" and the government took over the liabilities of the Insurance Corporation of Ireland, in return for a levy imposed on all the banks.

AIB then astonished its saviour weeks later by posting profits of £85.4m and paying a hefty dividend to shareholders, including Scanlan.

Within a few years, AIB had overtaken its arch rival Bank of Ireland to become the country's biggest group.

Scanlan was, along with AIB's then chairman Peter Sutherland, embroiled in the Dirt scandal in the early 1980s when the bank's internal auditor, Anthony Spollen, conducted an investigation which revealed that the bank had £600m bogus non-resident accounts on its book.

This time it was Revenue Commissioners which blinked - and AIB assumed it had an amnesty if it promised to crack down on such illegal accounts in its branch network. Following an investigation by the Sunday Independent, and a report by the Comptroller & Auditor General, the Oireachtas Committee of Public Accounts conducted public hearings in 1999 that led to testy exchanges between Scanlan and Spollen.

Scanlan told Sean Doherty TD over Spollen's calculations: "It is a back-of-beyond calculation and not one on which I, as chief executive, would form a value judgement."

He added that in the corporate battle that followed "it was his job or mine".

Spollen left the bank with a settlement but told the committee that he was in no way the "troublemaker" portrayed by Scanlan.

Scanlan lived in Glenageary, Co Dublin, and never gave interviews. He kept a low profile and stayed away from the social scene.

His main interest outside his family and work was horse racing. When he retired from the bank in the early 1990s, aged 60, he became senior steward of the Turf Club, the governing body for racing.

Scanlan also became the first chairman of the newly independent Irish Stock Exchange, and was appointed to the boards of a number of public companies, including the fruit importer Fyffes.

He died in Dublin aged 82 after a long illness. His funeral took place prior to his death being made public. He is survived by his wife, Nora, and their three children.

Sunday Independent

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