Mr Wallace walked into their weekly meeting in Leinster House today, even though numerous members do not want him back.
This led Mr McGrath to resign as chairman, and to walk out of the meeting. The Dublin Bay North TD had vowed to resign if Mr Wallace returned.
The Wexford TD does not need permission from the others to rejoin the group, which gives him more Dail speaking rights.
Under Dail rules, the group did not have the power to force him out in the first place, and there is nothing they can do to prevent him from rejoining. He initially left when controversy over his tax cheating first erupted in June.
In a statement, Mr McGrath said he is “fed up” with Mr Wallace.
“I am also appalled at the procedures in Dail Eireann, where rules force a group of Independent TDs to have a member that the vast majority don’t want,” Mr McGrath said.
He also took issue with Mr Wallace’s recent comments on loyalty within Leinster House, asking: “Loyalty to what? Tax evasion?”
He said when he went to collect the debt, he was told by the contracts manager at the company to “go to hell”.
Mr Wallace said he looked at getting the money through the legal process but was told by his solicitor it would take up to two years and he would be lucky to get €13,000, after costs.
He said the following night, he coincidentally met a debt collector in a pub and asked him how he might recover the money.
Mr Wallace said the man told him that for a fee of €4,000, he would “go out to his [the company owner’s] house at eight or nine o’clock at night and knock on his door. ‘I’d put my foot in the door and I’d have a gun with me and I’d give him seven days to pay and generally they pay.’”
Shortly after the incident, the Wexford TD said he arranged to meet a former employee who had moved to the company that owed him money.
“I said, ‘by the way I’m going to get my money from the contractor’.
“‘That’s great’ he says, ‘how did you do it?’
“I said, ‘I haven’t got it yet but I’m going to get it, this guy has guaranteed me I’m going to get it.’”
“I said, ‘well I hired a hitman and I explained to him how he was going to get the money,’” the Wexford TD said.
Mr Wallace recalled how two days later he received a phone call from the owner of the company to discuss the outstanding debt.
“I went to the office and I was there for about five minutes on my own, next thing he came in with the contracts manager – ‘will you take €15,000?’ and I said I’ll take €16,000.
“’’OK’ he said, and I got my €16,000.”
Mr Wallace concluded the interview by saying he would never have “sent a gunman” to the contractor’s door.