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Not exactly the low-key week the minister was expecting

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Minister for Finance Michael Noonan

Minister for Finance Michael Noonan

Minister for Finance Michael Noonan

So much for a low-key political week at Leinster House with neither Opposition TDs nor senators about the place to cause problems for the Government.

By 8.20pm last night, the Government were announcing a new Commission of Inquiry, fending off allegations of misleading the Dáil, and also trying to explain that a lost set of documents was largely technical and coincidental.

It is not exactly where you want to be when every politician in and around Leinster House is thinking about the upcoming general election.

This time last week, Michael Noonan would not have envisaged himself standing on front of Government Buildings explaining how he had widened the inquiry into the Irish Bank Resolution Corporation (IBRC).

The veteran politician called on all his reserves of calm and conciliation to explain the investigation into whether preferential interest rate deals were given to some large borrowers.

Mr Noonan said the review already in train had certain advantages, including a completion date of August 31. That August 31 deadline, realistic or not, has extended to at least December 31 next, for the as yet un-named judge who will take charge of things from here.

Anticipating the obvious question, Mr Noonan said what had changed now was that a new series of allegations had emerged under Dáil privilege from Deputy Catherine Murphy. Publication of these led to two High Court actions and prompted serious national debate.

"The essence of these allegations is not particularly just Denis O'Brien," Mr Noonan said. "It's that some clients may have had favourable treatment above over other clients. So that issue has to be explored.

"And there is a level of concern now and there are so many suggestions of perceived conflicts of interest that I have decided to use the 2004 Act," the Finance Minister continued.

Cabinet had earlier cleared his proposal to set up the Commission of Inquiry. Replying to questions, the minister said the decision was unanimous and there was no tension between Fine Gael and Labour on the issue.

The terms of reference of the investigation which will guide it were published in draft form. The minister is hoping for an input from all the other parties to refine those allegations. Then everything could be approved by the Dáil sitting again next Tuesday.

Ms Murphy told the Dáil last week that Mr O'Brien was paying 1.25pc interest to IBRC when he could have been expected to pay 7.5pc. Mr O'Brien denied this, and said Ms Murphy was "peddling" false material.

So this extended inquiry will examine whether "the interest rates or any extension to interest rates or any periods for repayments were given by IBRC on preferential terms".

The focus will be narrowed to differences which resulted in a difference of €4m in interest bill when compared with standard rates for similar loans.

Mr Noonan said essentially 32 large borrowers would be involved and ordinary small and medium business loans excluded.

The commission will also cover similar ground to the previous review which was begun by the IBRC liquidators and had a €10m ceiling on losses to the Irish taxpayer.

But this new Commission of Investigation will also examine "internal IBRC governance procedures and controls".

It will assess whether these "were fit for purpose".

Irish Independent