Bank inquiry won't hear evidence for up to a year
TAXPAYERS saddled with €64bn of bank debt will get a much curtailed inquiry into the banking system collapse in 2008.
Public hearings will not take place until next Easter at the earliest, leaving a maximum of one year for the inquiry committee to complete its work and compile a report before the general election due by March 2016.
The tight timeframe means the scope of the inquiry by TDs and senators will now be largely confined to the controversial government bank guarantee of September 2008 – which left taxpayers open to liabilities of up to €400bn at the time.
The Taoiseach's pledge that the inquiry would also investigate the role of the banks and their auditors, and the role of the state institutions, cannot be achieved in the current timeframe.
There is no question of looking at this Government's handling of the resultant crisis from March 2011 onwards, which many economists have called for.
The news comes as the Government was left reeling yesterday by the decision of Independent TD Stephen Donnelly to resign from the committee of inquiry in protest at Government efforts to control the investigation and its outcome.
The resignation is seen as a heavy blow to the credibility of the inquiry process, which is already damaged by allegations of party political bias.
Taoiseach Enda Kenny and Tanaiste Eamon Gilmore held urgent talks yesterday in a bid to quell growing unrest about the process.
A government spokeswoman said they had decided not to impose the "whip" obliging Fine Gael and Labour TDs and senators on the committee to vote in line with government instructions.
"The decision recognises the unique nature of the inquiry," the government spokeswoman said.
Meanwhile, the Technical Group of 16 TDs said it would meet tomorrow to decide whether to nominate a replacement for Mr Donnelly, who is aligned to this loose grouping of deputies.
His colleague in the group, Independent TD Finian McGrath, said he understood Mr Donnelly's frustration and now believed that they should discuss the whole issue of future involvement with the inquiry.
"But I will wait to hear my colleagues' views," Mr McGrath said.
The Oireachtas banking inquiry is scheduled to have its first meeting on Thursday and the chairman, Ciaran Lynch of Labour, is expected to lead a discussion about an investigation plan and timeframe.
A well-placed source said it was hoped to have full terms of reference allowing it to begin operations in September.
"But realistically the committee will not be able to hear evidence until the end of the first quarter or the start of the second quarter of next year – basically some time around next Easter," the source told the Irish Independent.
This will leave less than a year for the inquiry to play out. There is already speculation at Leinster House about the stability of the Government – with the junior partner, Labour, locked in a leadership election, which will continue until July 4.
But even if the Government weathers its storms, the latest date for a general election is March 2016 – and the inquiry must report before then. Sources say that this means that the inquiry must become very focused on what it can achieve.
"We are talking about a timeframe of 12 to 18 months to achieve this work – we must focus on the most important issues like the bank guarantee," one source added.
But this is likely to add to Fianna Fail's assertions that the entire inquiry is about denigrating it ahead of the next election.
The source insisted that the bank guarantee focus does not confine inquiries to the Fianna Fail-Green Party decision on September 30, 2008.
The issue of the quality and accuracy of the information given the Government by the banks is expected to be explored, along with the banks' insistence in autumn 2008 that they were solvent but had cash-flow problems.
Fianna Fail finance spokesman Micheal McGrath has already re-doubled his party's criticisms of the inquiry process. He said Mr Donnelly was a respected nominee to the committee, and his resignation added to the mess, which had been intensified by ham-fisted efforts last week to keep a government controlling majority.
Mr McGrath urged the Government to set up an independent investigation headed by somebody like a High Court judge.
But Transport Minister Leo Varadkar said that he was disappointed to hear that Mr Donnelly was resigning from the inquiry. He said Mr Donnelly was well qualified, and exactly the type of person who should be involved in the inquiry.
Mr Donnelly's decision came following the government move to retain an overall majority to the committee last week.
On Thursday, the Government added Fine Gael senator Michael D'Arcy and Labour senator Susan O'Keeffe to the committee, sparking angry scenes in the Dail and Seanad.
Ms O'Keeffe's absence from a nomination meeting at Leinster House the previous week led to the selection of Fianna Fail's senator Marc MacSharry and left the Government without a majority on the committee.
Yesterday, Mr Donnelly said that decision should have stood. He also said that Mr Kenny had made a very politicised attack on Fianna Fail, and had subverted the will of the Oireachtas.