Wednesday 28 September 2016

Bank Inquiry has been hit by Kenny's bad judgment

Published 27/07/2015 | 02:30


Ciarán Lynch was always hurling uphill and into a gale-force wind. And now he faces a members' revolt over video evidence by David Drumm, and whistleblower claims that the banking inquiry is compromised.

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The Banking Inquiry committee chairman and his colleagues will need some luck to keep this Oireachtas inquiry on track to deliver its report in November.

The Government generally, and Enda Kenny specifically, have done this process no favours from the very start. The three-year plus delay in getting it off the ground cannot all be explained by the rejection in October 2011 of a referendum on strengthening parliamentary inquiry powers and the need for specially crafted legislation.

But even if you leave aside the delays, the Taoiseach's behaviour on the issue has been extremely ill-judged. In the Dáil chamber in June 2013, he pledged to uncover the truth behind "the axis of collusion" between Anglo bankers and Fianna Fáil, as he rejected calls for an independent banking probe.

Those comments added to the view that politicians could not rise above the partisan game and deliver a dispassionate investigation report on how Ireland's banking system fell asunder in autumn 2008, driving the country deeper into recession. Come to that, the Taoiseach's behaviour last week was equally questionable.

Did we need to hear him say at hearings last Thursday that Fianna Fáil drove the nation under economically? Did we need reminding that things came good again on his watch? Does he expect to gain voter credibility by this behaviour?

The reality is that we were also very forcibly reminded last Thursday that neither Fine Gael nor Labour offered anything more prudent in the boom years which would have left the country better fixed when global recession struck in 2008.

The public have not forgotten about how calamity struck after a decade of Fianna Fáil-led governments. But they have also moved on to make a more nuanced judgment about a complex series of interlinked events. Crucially, voters will choose the next government with a greater focus on their future hopes rather than who was to blame for past events.

The best outcome from this committee process, likely to cost taxpayers some €6m, is that it can give us serviceable advice on how to avoid a recurrence of the disaster that befell us in autumn 2008. Can we, for example, ensure somebody is watching the watchers - that is the Central Bank, Financial Regulator and the Finance Department - when the boom madness kicks in again? Nobody was the last time and they allowed the banks to drag us on the road to ruin.

Since it began operations, the seven TDs and four senators on this inquiry committee have been walking a legal tightrope. Against the odds, and with judicious attention to legal advice, they have avoided some obstacles, like the dead-hand of Cabinet confidentiality and a formula to get useable testimony from former European Central Bank (ECB) governor Jean-Claude Trichet.

The prospect of former Anglo Irish Bank boss David Drumm giving video-linked evidence is a particular conundrum. Mr Drumm has been in the US since soon after the bank collapsed in 2008, costing taxpayers some €30bn. He has refused to return to Ireland to answer questions and the Irish authorities are seeking his extradition.

But Mr Drumm has filed a written witness statement and offered to give evidence via video to the inquiry. The committee expects to get legal advice and an opinion from the Director of Public Prosecutions (DPP) on the legality of the video evidence and whether it risks ongoing trials.

At least two members have indicated that they cannot stay with the inquiry process if Mr Drumm gets the go-ahead to give video-link evidence - even if they get clearance from the committee's lawyers and the DPP. So, the best outcome for Mr Lynch would be if this video business was shot down by the committee lawyers, or the DPP, or both.

It would, however, also leave a certain air of dissatisfaction. There are many people, including some key committee members such as Fine Gael's John Paul Phelan, who believe Mr Drumm's evidence would be an important element of any report. They are aware of reservations about the wider legal picture but would like to see Mr Drumm's account contrasted with that of other witnesses who were closely involved with the 2008 bank crisis.

The whistleblower allegations are being reviewed by a senior counsel, Colm Allen, whose deliberations will be awaited with interest. Here the conflict turns on the allegation that the Finance Department and the Central Bank were given favourable treatment at preliminary private hearings. The general riposte to these allegations is that such preliminary hearings were necessary to consider how sensitive confidential information should be handled.

We understand Mr Allen is expected to report by the end of August, all going well. Here again, his findings could have serious implications for the process.

Irish Independent

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