Saturday 17 August 2019

Taoiseach at odds with Donohoe on bank chief

Gabriel Makhlouf will take up his role as Central Bank governor on September 1 under a cloud of controversy. Photo: Vivek Prakash/Bloomberg
Gabriel Makhlouf will take up his role as Central Bank governor on September 1 under a cloud of controversy. Photo: Vivek Prakash/Bloomberg
Hugh O'Connell

Hugh O'Connell

Taoiseach Leo Varadkar says the incoming Central Bank governor should make a statement on the findings of an inquiry which criticised his handling of a recent budget leak in New Zealand.

A day after Finance Minister Paschal Donohoe unequivocally backed Gabriel Makhlouf and staked his personal reputation on him, Mr Varadkar took a subtly different stance.

The Taoiseach believes it would be appropriate for the outgoing New Zealand treasury secretary to make a statement on the budget leaks controversy that has overshadowed his appointment to the Central Bank's top job.

Mr Varadkar's comments will put pressure on Mr Makhlouf, who is facing calls to accept that he acted unreasonably by initially claiming the leak of sensitive budget documents was a result of the New Zealand treasury department's website being "deliberately and systematically hacked".

In fact, the budget documents had been inadvertently posted online, and New Zealand's state services commissioner Peter Hughes found that Mr Makhlouf sought to blame others and poorly managed the incident.

Mr Hughes said there had been a "clumsy response to a serious issue" by Mr Makhlouf, but also dismissed allegations the civil servant was politically biased in his approach.

Speaking at the end of a British-Irish Council meeting in Manchester, Mr Varadkar said the appointment of Mr Makhlouf would not be revoked and that it was important to bear in mind how he had been appointed to the role.

"There was an international competition, there was a set of interviews and he was the sole candidate put forward to Cabinet and at that point we made his appointment and we've no plans to revoke his appointment," Mr Varadkar said.

"The report that you have seen from New Zealand says that he acted in good faith and didn't act in a political way at all, but it was critical of some aspects of how he handled that and I am sure he will want to make a statement on that before he takes up office and I think that it would be appropriate."

Mr Makhlouf was appointed by the Government in May following a worldwide search that cost the State some €70,000 in recruitment fees. The appointment came shortly before the budget leaks controversy broke in New Zealand.

Unblemished

Mr Makhlouf received the backing of Mr Donohoe on Thursday, who said he wished the incident had not happened but praised his hitherto "unblemished" record.

Asked whether it would hurt his own reputation if the new governor were to be at the centre of any controversy in Ireland, Mr Donohoe replied: "Of course, the responsibility does sit with me as Minister for Finance."

Responding to the inquiry findings, Mr Makhlouf said in a brief statement on Thursday that the inquiry had confirmed he had "acted at all times in good faith and with political neutrality".

"It also confirms that I acted reasonably, other than in my descriptions of the incident. I am pleased that my honesty and integrity are not in question," he added.

As Central Bank governor, Mr Makhlouf will also sit on the governing council of the European Central Bank after he takes up his role in Dublin on September 1.

Irish Independent

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