Taoiseach has ‘nothing to hide’ in dealings with banks

THE Taoiseach was forced to insist he has “nothing to hide” in his dealings with the banks following accusations from the Labour Party that he had “tailor-made” laws to suit top bankers.

As more details emerged of bonuses and payments made to senior bank executives following state bail-outs, Brian Cowen told the Dáil: “ I hold no brief for any bank executive or bank,” adding that he did not “seek to justify” any of these payments.

Mr Cowen said the Government “fully supports” efforts by the Irish Nationwide board to recoup a €1 million bonus paid to former chief executive Michael Fingleton.

Revelations that Mr Fingleton was paid an additional €221,000 in the four months before he resigned came on top of news that Bank of Ireland chief executive Richie Boucher received a €1.45m pension top-up.

Labour leader Eamon Gilmore said the Building Societies Act introduced when Mr Cowen was Finance Minister in 2006 was “highly favourable to Mr Fingleton and some of his close friends in the society”.

The laws on demutualisation subsequently allowed building societies to be included in state bank rescues. But Mr Gilmore said it was “difficult to understand” how Mr Cowen allowed them to pass without knowing of the emerging problems at Irish Nationwide which will cost the taxpayer €2.7 billion.

Mr Gilmore said Nationwide “was giving out great buckets of money to approximately 30 people in a process of rolling enrichment” and that Mr Cowen could “hear no evil and see no evil” when the legislation was drawn up. But Mr Cowen dismissed this as another “conspiracy theory” by Mr Gilmore, who recently enraged the Taoiseach by accusing him of economic treason.

Fine Gael leader, Enda Kenny, said the Government was “powerless” to deal with a small number of senior bankers who have taken no pain in the economic crisis and “thumbed their noses” at the office of the Taoiseach.

During Leaders’ Questions in the Dáil, Mr Kenny said it was hard for public sector workers to take the pain for the national good “when the Government appears powerless to stand in the face of the juggernaut of bankers at senior level and the manner in which they have got their way.” Mr Cowen responded: “We all recognise the sensitivity about how... people will regard this in the context of their own particular challenges and difficulties,” he said.

While there was an “ongoing effort” to recoup Mr Fingleton’s bonus, there was little the Government could do about Mr Boucher’s pension top-up. “The Government took legal advice from the Office of the Attorney General and Section 50 does not empower the minister to intervene to prevent the bank from making a payment to its own pension fund,” said Mr Cowen.