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Donal Lynch on Banking Inquiry: Kevin Cardiff the 'socialist' on €276,000 gravy train


OUTSPOKEN: Colleagues close to former Department of Finance chief Kevin Cardiff say his relationship with boss Brian Lenihan was testy as he wasn’t afraid to challenge the minister

OUTSPOKEN: Colleagues close to former Department of Finance chief Kevin Cardiff say his relationship with boss Brian Lenihan was testy as he wasn’t afraid to challenge the minister

OUTSPOKEN: Colleagues close to former Department of Finance chief Kevin Cardiff say his relationship with boss Brian Lenihan was testy as he wasn’t afraid to challenge the minister

Everyone who saw him agreed it had been an assured performance by Kevin Cardiff. As he went before the Banking Inquiry last week, the former Secretary General to the Department of Finance came across as cool, calm and collected. He set out in some detail the dramatic scenes inside Ireland's bailout bunker.

He talked candidly of the roles the banks, Jean-Claude Trichet of the ECB and the dark forces which had brought Ireland to the brink of bankruptcy. He spoke of his own and Brian Lenihan's opposition to the blanket quality of the 2008 guarantee on the night it was introduced.

He spoke of how he had become more "socialist" in recent years. He gave a colourful account of the lobbying from banking officials in the months leading up to the guarantee. He even made a little joke, quipping that it wasn't him who had leaked his evidence to media last weekend.

This was the personable, persuasive Cardiff that those who worked with him in government circles had all along assured us existed.

But what a contrast this all was to Cardiff's last turn on the public stage. Four years ago, when he went before the Public Accounts Committee to explain how a €3.6bn surplus had made its way into the public purse, Cardiff appeared tired and drawn as he gave his evidence. Back then, he and the other behind-the-scenes mandarins at the Department of Finance were running on empty, worn down by the endless long hours and four years of eviscerating media coverage.

Cardiff admitted he had been "dead on my feet" most of the time. Talk to some of those who worked with him at that time and they hardly remember the figure of €3.6bn. It must have seemed like inconsequential loose change amid the financial carnage of the previous years.

The marked difference in the two appearances might also be attributable to the fact that Cardiff was the principle fall guy during that first appearance, whereas this time around, as he well knows, everything else is merely a prelude to Brian Cowen's evidence. But if the former Taoiseach is the inquiry's 'Most Wanted', where should Cardiff fit into its tapestry of blame?

Answering that probably depends on which period you are looking at. Cardiff was a popular appointment when he was made Secretary of the Department of Finance and regarded as a breath of fresh air compared to his more brusque predecessor, David Doyle.

Years later, in the fraught moments leading up to the guarantee itself, Cardiff also displayed not inconsiderable grace under pressure and was reckoned by many in government circles to be a necessary check on Brian Lenihan, his rather dramatic finance minister.

Despite the fact that Lenihan had appointed him, the two men were said to have had a testy relationship.

"He wasn't afraid to challenge Lenihan," one person who worked closely with both men told me last week.

"This was particularly when the stress of the whole situation appeared to be getting to Lenihan. Cardiff was much more detail-oriented than Lenihan and he was always thought of as a calming influence. Sir Humphrey he wasn't."

But there is no getting away from the fact that Cardiff also headed up the Department of Finance in the years leading up to the crisis and that, when he dies, it will be this inescapable fact that looms largest in any obituary. He had the Central Bank and the regulator below him, and his department was not able to see what was wrong with the banks, even if it was dependent upon the Central Bank, which in turn was dependent upon the regulator.

The toxic interconnectedness of these institutions could be seen in how interchangeable their leaderships were. The head of the Central Bank up until 2009, John Hurley, was also the former Secretary General of the Department of Finance. The regulator, Patrick Neary, had come from the Central Bank. As one observer noted last week, "It was sort of like, shuffle the jobs around everyone."

Little wonder that Cardiff seemed somewhat taken aback when his appointment to a €276,000-a-year position on the European Court Of Auditors was challenged.

To many, the combination of his handling of the lead up to the banking crisis as well as the embarrassing €3.6bn accounting error should have only qualified him for early retirement.

That his appointment was eventually pushed through against considerable national and international objections and was viewed at the time, rightly or wrongly, as a testament to just how badly the new Fine Gael-led government wanted to get rid of him. But it may also have been an expression of the feeling that many shared: that there ought to be a second act for a man who was for so long regarded as one of the brightest civil servants in the country.

A Belvedere College old boy and former standout athlete at UCD and the University of Washington, where he won a scholarship for hammer throwing, Cardiff joined the civil service straight out of college in 1984 and held a variety of positions in the Departments of Public Service and Finance, which he joined in 1987. He had a short spell on the government bond-dealing desk before the establishment of the National Treasury Management Agency, and worked on monetary and exchange rate policy in the 1990s.

Subsequently he worked on pensions policy and organisational issues, such as Freedom of Information and Standards in Public Office.

All along, he was regarded as one of the best and brightest and was well-liked by his colleagues. "He's extremely understated. He seemed to belong to that class of civil servants who always stayed in the same house and drove the same type of car even as they earned six-figure pay packages," one former colleague recalls.

"There's a limited number of parking spaces in front of Government Buildings and he seemed to have the smallest and worst car. My abiding memory is of watching him squeeze his big frame into this little box of a thing. If you passed him on the street, you would have no idea he wielded the kind of power he had."

During the teeth of the banking crisis, Cardiff could be seen queuing in the Spar around the corner of Leinster House to get his lunch and he rented an apartment around the corner from Government Buildings when the almost round-the-clock working day meant going home to Malahide, where he has a home with his wife Yvonne White, was impractical.

Perhaps Cardiff's calm bearing last week showed that he knows the worst is over; no amount of grilling at the inquiry could be as bad as those long nights at his desk.

The focus of the last few days has been around a period for which history will not judge him too harshly.

He advocated against the guarantee, which, with the benefit of hindsight, might have been the wisest decision and he was the last man standing in favour of nationalising Anglo.

Those facts alone were enough to make last week somewhat redemptive for Kevin Cardiff. And as he finished his evidence last week, he wore the half-smile of the man who knows that this toothless show trial is actually as bad as it gets.

Sunday Independent