Business Banking Inquiry

Wednesday 26 October 2016

Lenihans go to war over Trichet 'slur'

Bank Inquiry to examine records of calls from ECB chief

Published 03/05/2015 | 02:30

Brian Lenihan
Brian Lenihan

The family of the late finance minister Brian Lenihan has insisted that former European Central Bank president Jean-Claude Trichet did order him to "save your banks at all costs" days before the bank guarantee was announced in 2008.

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The Lenihan family has strongly rejected Mr Trichet's denial that he had made any such call to Mr Lenihan.

Now the Banking Inquiry is expected to examine Mr Lenihan's telephone records to establish whether he had received a call from the former ECB president at the time.

The Lenihan family is demanding a right of reply to any evidence which may cast a slur or cause damage to the reputation or legacy of the former finance minister.

Another former finance minister, Ray MacSharry, this weekend also blasted a further denial by Mr Trichet that he stopped Mr Lenihan from burning bondholders in 2010.

The backlash against the former ECB president comes as a furious row has broken out in private among members of the Banking Inquiry over whether Taoiseach Enda Kenny should be called as a witness.

Members of the Lenihan family have said they absolutely believe the ex-ECB head did telephone Mr Lenihan on September 20, 2008, to warn him to save Irish banks "at all costs". In Dublin, last week, Mr Trichet denied any such call took place.

Last night, Mary O'Rourke, a former government minister and aunt of Mr Lenihan, strongly rejected any implication that her nephew had misled the public.

She said: "I believe Brian Lenihan, of course I do." As to Mr Trichet's version of events, she suggested he was being economical with the truth. "The man was not under oath, therefore - unlike everyone else, who all take an oath, and we all know it is a crime to lie under oath - he was not under oath. You can take that as it is meant," she said.

Ms O'Rourke said Mr Lenihan had been very specific as to when the call from Mr Trichet came in.

"He was at a Fianna Fail event in Kilkenny, at the racecourse. Brian went into specifics as to when he got the call, got the message. He wasn't talking to him that day, Brian was clear, and he took a message. Trichet has no recall. But we have the visual recall of Brian's voice saying clearly that the call happened."

Given the clear disparity between Mr Lenihan and Mr Trichet, it has emerged that the Banking Inquiry is seeking to examine telecommunication records of some key players at the time.

Should the inquiry obtain Mr Lenihan's phone records, it would assist in adjudicating on both versions of events. "We had considered this matter even before Mr Trichet's comments on Thursday," said an inquiry source.

Mr MacSharry, meanwhile, is also "annoyed" at Mr Trichet's dismissal of claims he made in a book last year.

In that book, Brian Lenihan: In Calm and Crisis, Mr MacSharry recounted two phone calls he had had with Mr Lenihan in mid-2010, just before Ireland was forced into the Troika bailout.

He wrote: "One morning I got a call about a quarter-past eight and it was Brian. He told me that he was able to burn the bondholders and he was very happy because the European Central Bank president, Jean-Claude Trichet, had told him he could do it. This would have improved Ireland's position significantly and it was going to be a big story, but later that day a now despondent Brian rang me back. He said Trichet had changed his mind because he realised that the main casualty if the bondholders were burnt would be big German and French banks."

Mr Trichet rubbished Mr MacSharry's claims as "totally absurd". However, Mr MacSharry has this weekend hit back strongly, saying he "stands over everything he said and wrote in the book."

Speaking to the Sunday Independent, he said: "I completely stand over what Brian Lenihan told me - completely and entirely. I would advise you to speak to Eamon Ryan. He also said that when that book was published that he and Brian Lenihan spoke and discussed the matter and Lenihan told him exactly the same thing.

"I am bit annoyed at Mr Trichet, at what he is trying to say, and some journalists who would, no matter what Trichet or the ECB say, take their side over the Irish side," he said.

"The fact of the matter is this: the Irish taxpayers are still and will be still paying for the bondholders that were not burned for years to come. Those are facts. The late Brian Lenihan had no reason to make up this story and tell it to me. I have no reason whatsoever to make it up myself had Brian not said it to me himself," Mr MacSharry said.

Green Party leader, Eamon Ryan yesterday confirmed that Mr Lenihan had also relayed this version of events to him, expressing "surprise" at Mr Trichet's comments last Thursday at an event in Dublin.

In today's Sunday Independent, leading economist Colm McCarthy asks if Mr Trichet was telling the truth why Mr MacSharry, who had written a positive but also critical account of these events, would "gratuitously" invent the tale about the telephone calls.

He concludes that Mr Trichet's account last week was "less than candid".

At the private meeting of the Banking Inquiry last Tuesday, a major row erupted between opposition members of the inquiry and Government members as to whether Mr Kenny should be called in before the inquiry to give evidence.

It is understood that Fianna Fail's Michael McGrath and Marc MacSharry, as well as other opposition members, pushed for Mr Kenny to be hauled in to account for his time as leader of Fine Gael in the run-up to the 2007 General Election.

Mr McGrath had written to the committee calling for Mr Kenny's inclusion, along with Pat Rabbitte, who was leader of the Labour Party at the time.

Mr McGrath was said to have been annoyed when it was suggested that only the party's then finance spokespersons - Richard Bruton and Joan Burton - be invited to appear.

He pressed the point and later Mr MacSharry and inquiry chairman Ciaran Lynch became involved in a "very heated discussion" in relation to Mr Kenny's inclusion.

Given the major disagreement, the committee was forced to defer a final decision until a meeting this week. "This is a highly unusual situation as we always deal with matters immediately," said one inquiry source.

Sunday Independent

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