Tribunal best way to deal with inquiry into financial disaster

Wednesday, July 11, 2012

DO we really want a random collection of unqualified TDs investigating the most calamitous financial disaster in the history of the State?

The former head of Barclays Bank, Bob Diamond, appeared before a Commons Select Committee last week to answer questions on the rate-fixing scandal that has mired the bank in controversy.

Billed as a highly anticipated take-down of an arrogant bankster, the resulting damp squib was an embarrassment to watch as Mr Diamond ran rings around his inquisitor MPs, most of whom seemed more perturbed about the fact that the upstart American had the temerity to address them by their first names than the extraordinary financial scandal that rocked the UK’s financial services sector.

The questioning was stilted, repetitive, meandering and, in some cases, just plain stupid, with MPs employing all of the forensic interrogation nous of a drunk after a St. Patrick’s Day bender.

Several members of the Committee have subsequently sheepishly conceded that Mr Diamond’s “implausible” evidence was not sufficiently challenged and that, actually, less was known about dealings at the bank after his appearance than before.

One Tory MP moaned that the Barclays’ boss appeared to have been “briefed on how to avoid answering” and that he had engaged in relentless “prevarication” — as if he was ever going to meekly turn up to the Committee, burst into tears and voluntarily damn himself with his replies.

Mr Diamond’s masterclass in evasion is instructive from an Irish perspective as the Government considers handing over responsibility for one of the most important public inquiries in the State’s history to either the Public Accounts Committee (PAC) or the Finance Committee.

While a political turf war is currently being waged by both Committees regarding each one’s suitability to head the inquiry, the reality is that neither one is up to the task.

The PAC, in a report published last week, has itself admitted that a raft of measures, including a referendum to amend the rules on cabinet confidentiality and changes to Oireachtas procedures to allow it to compel witnesses to attend, would first need to be instigated before any inquiry could take place.

Communications Minister Pat Rabbitte has suggested the public would have little confidence in an inquiry headed by a former Fianna Fáil minister, PAC chairman John McGuinness, but failed to explain why there would be greater faith in a Department of Finance committee, considering its central role in beggaring the country. Mr Rabbitte has now called for a rerun of the failed referendum that sought to give the Oireachtas special powers of investigation — the one that eight former Attorneys General warned would “seriously weaken the rights of individual citizens, firstly to protect their good names, and secondly to have disputes between themselves and the Oireachtas concerning their constitutional rights (especially their rights to fair procedures) decided by an independent judiciary”.

Even if, by some miracle these issues were to be satisfactorily addressed and an Oireachtas inquiry did proceed, there would still remain the small matter that none of our politicians — with the possible exception of Fine Gael TD, and former banking and finance consultant, Peter Matthews and Labour TD, and former senior counsel, Alex White — are remotely qualified to carry out such an investigation.

Of the 166 TDs in Leinster House, 30 have a background in education, 23 were already full-time public representatives when they entered the Dáil, 15 are farmers, seven have a legal background and the rest have enjoyed careers as diverse as catering assistant, fisherman and roofer.

The inquiry into the banking fiasco will be charged with interrogating the biggest names in banking on some of the most complex, murky and damaging financial trading this country has witnessed and it is not credible that TDs with absolutely no competence in that area are up to the job.

Bankers and officials appearing before the tribunal, like Mr Diamond last week, will be using every trick to try to evade questions, and responsibility for the implosion of the sector, and it is simply inconceivable that politicians, with a reputation for bombast and a penchant for political point scoring, will be able to leave their egos at the door and conduct the forensic and painstaking inquiry that will patently be necessitated.

Of course, there is an obvious solution that glory-seeking politicians are loathe to countenance and that is to charge a tribunal of inquiry with investigating the entire matter.

Tribunals are supposed to be instituted to investigate “definite matter[s] of urgent public importance” and I, for one, can’t think of a more urgent matter than a banking collapse that has, thus far, cost a beleaguered state approximately €100bn.

The conventional wisdom, according to politicians, is that the public doesn’t want a tribunal and a parliamentary inquiry would be a far cheaper and effective method of investigating the banking debacle.

However, there is a Bill, that has already passed second stage and is currently awaiting report stage in the Dáil, which could remedy these concerns.

The Tribunals of Inquiry Bill 2005 was published after the Law Reform Commission examined the law relating to public inquiries and came up with over 50 recommendations of how to consolidate and modernise the law in the area.

Chief among the recommendations are provisions to clarify the process for setting and amending tribunals’ terms of reference, allow the minister for justice to set out the maximum amount of legal fees recoverable from the State, facilitate the hiring of expert staff by way of a competitive tendering process and allow tribunals’ reports be used in civil proceedings.

The Bill was inexplicably abandoned by the former government in 2009, but was restored by the current administration last year and, according to comments made by Enda Kenny in February, “it is just a matter of finding time to bring it to the House and deal with report stage”.

Largely based on the UK’s Inquiries Act, which was used to set up the Leveson Inquiry that has drawn praise from all quarters for the speed and efficacy of its investigations into the role of the press and the police into the infamous phone-hacking scandal, the Bill, if there was some political will to have its enactment speeded up, could address the myriad problems that an Oireachtas inquiry would implicitly entail.

It would be independent, seasoned counsel with a track record of expertly interrogating witnesses would be tasked with conducting the questioning, the civil liberties of witnesses, who could engage their own legal representation, would not be in question and costs would not be allowed to spiral out of control.

After all that has happened to this country — the hundreds of thousands of jobs that have been lost, the tens of thousands of people who have been forced to emigrate, the hundreds of thousands of families mired in negative equity and the loss of our economic sovereignty — any investigation that is now belatedly set up must be beyond reproach. A tribunal is the best way to do it.

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