Ex-Anglo man 'briefed Cardiff on banks crisis'
Secret meeting took place days before guarantee
Published 29/01/2012 | 05:00
Kevin Cardiff, the civil servant in charge of banking in September 2008 had a late-night briefing on how to solve the financial crisis from Tiernan O'Mahony, the former head of treasury at Anglo Irish Bank -- just days before the State introduced a blanket guarantee for Ireland's banks.
The meeting, which has never been disclosed before, took place between Mr Cardiff and Mr O'Mahony inside the Department of Finance after 8.30pm on September 25, just four days before the decision was made to blanket guarantee €440bn in liabilities associated with Ireland's reckless banks.
Mr O'Mahony at the time of his meeting with Mr Cardiff was chief executive of ISTC, a debt finance specialist, which was the first Irish victim of the credit crunch when it collapsed with debts of €850m in November 2007, losing millions for investors including Peter Sutherland, Johnny Ronan, and Sean Quinn.
Mr O'Mahony led Anglo Irish Bank's treasury division from 1985 to 2005 when he left after failing to become CEO after Sean FitzPatrick.
Mr O'Mahony told Mr Cardiff, according to well-placed sources, that the State needed to consider some form of a guarantee to restore confidence to the market and halt the flow of billions in deposits out of Irish banks.
Bernard Allen, the former chairman of the Public Accounts Committee, which quizzed Mr Cardiff on the events running up to the guarantee in July 2010 said it was "worrying to say the least," that the civil servant had failed to disclose his meeting with the former Anglo banker.
"We should have been made aware of this," Mr Allen said, "We would have liked to question [Cardiff] about it if we'd known about it."
"I don't believe we got to the bottom of what happened [in relation to the guarantee]," Mr Allen said. "We didn't have the powers to summon witnesses and obtain the documents that we needed."
Mr Allen said he regretted that the public voted against giving Oireachtas Committee's more powers to carry out investigations as he believed this would have allowed more light be shed on the guarantee.
"I am not in a position to comment on any advice I give anyone. It is private and confidential," Mr O'Mahony said.
"There was a meeting," a spokesperson for the Department of Finance confirmed. "Tiernan requested the meeting. Kevin listened to what he had to say but that was it. He gave no indication as to government policy."
The spokesperson said Mr O'Mahony was one of a number of individuals who were granted "listening briefs", in the run-up to the guarantee but insisted the "real decision" was made by the government, Merrill Lynch, the investment bank, and the National Treasury Management Agency.
No notes were kept of the meeting and the spokesperson said he did not know who else gave a "listening brief" to Mr Cardiff who takes up a high-paying job in the European Court of Auditors worth €1.6m next month.
The department's claims contradict the Merrill Lynch report which does not come down in favour of a State guarantee but merely lists it as an option. Michael Somers, the then chief executive of the NTMA, has said he was not consulted on the night of the guarantee.
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