The Taoiseach has confirmed that 91 employees of AIB initiated legal proceedings about bonuses in October of this year. The first to be heard was the case of trader John Foy, who was successful and will now be paid his bonus.
Mr Cowen was responding to Labour leader Eamon Gilmore, who asked if Minister Lenihan's decision not to pay the bonuses to more than 2,000 AIB staff was now too late.
Mr Gilmore cited the Buckley case of 1950 which stated that the Oireachtas could not intervene in a case which had already proceeded. He said bonuses would probably end up having to be paid despite the letter from the Minister to AIB.
Deputy Gilmore suggested the Minister was 'shutting the door after the bonuses had bolted' and that action should have been taken during the recapitalisation of the banks.
The Taoiseach said the weekend decision still stood as the Minister had indicated to the bank that recapitalisation would be at risk if the payment of bonuses proceeded.
Finance Minister Brian Lenihan told RTE earlier he found it 'galling' that AIB was to pay €40m in bonuses at a time when everyone in the country is having to make sacrifices.
To this end he discussed the situation with the Attorney General and the Taoiseach and provided a reason for AIB not to pay the bonuses.
Last night, he sent a letter to the AIB board saying that State funding could be withheld if staff bonuses of €40m were paid.
Mr Lenihan also said that the Garda investigation into Anglo Irish Bank is coming to a conclusion with a large number of Garda personnel involved.
He said that as he understood the position, the DPP had taken a keen interest in the matter and that the matter is being proceeded with 'great expedition'.
AIB embarrassed by bonus row
AIB'S director of corporate services, Alan Kelly, told RTÉ Radio that the bank was clearly uncomfortable with the bonus issue and had delayed paying them for as long as it could. However, he adds that the bank's legal advice had now been overtaken by the Minister's letter which 'stated the obvious'.
Mr Kelly said the issue had embarrassed the bank, but added that it believed it could not fly in the face of the legal advice it had received from two separate parties. He said that AIB was very much in sympathy with the public perception and is relieved that the bonuses will now not be paid.
On AIB's bonus culture, Mr Kelly said that the bank is working now and will continue to work on its pay and benefits package, which will reflect a different way of doing things in the bank. He added that AIB's bonus culture is over.
He says that while the move may face a legal challenge, the legislation Mr Lenihan is due to publish will put the bank in a stronger position.
