Brian Cowen ‘ignored’ Lenihan’s guarantee concerns

Former taoiseach Brian Cowen “already had a preference” for a “broad” bank guarantee before the infamous September 29, 2008, meeting which led to the multi-billion euro deal — and overruled then finance minister Brian Lenihan’s concerns.

Brian Cowen ‘ignored’ Lenihan’s guarantee concerns

The claim will be made by the Department of Finance’s then secretary general Kevin Cardiff at the banking inquiry on Thursday.

In 380 pages of witness evidence leaked to the Sunday Business Post — a move some have claimed has the potential to bring down the investigation due to its legal standing — Mr Cardiff insists Mr Cowen was always in favour of the deeply divisive plan.

The evidence of Mr Cardiff, who was in the room on the night, states Mr Cowen ignored Mr Lenihan’s misgivings about including all banks — including Anglo Irish — and that after a private discussion with the then taoiseach, the late finance minister changed his views.

“The [then] taoiseach raised the issue of a broad pre-emptive guarantee very early in the discussion. It seemed to me he already had a preference for this approach going into the meeting,” Mr Cardiff’s written evidence will state.

While stopping short of agreeing with outgoing Central Bank governor Patrick Honohan that Mr Lenihan was “overruled” on the measure, Mr Cardiff’s information will pose significant questions for Mr Cowen when he attends the inquiry on Wednesday, July 2, and Thursday, July 8.

It is also likely to sharpen concerns on how and why the blanket guarantee decision was made, a move that Mr Cardiff said, in the first half of 2008, was considered as a vague theory, rather than a genuine option.

Mr Cardiff’s evidence will also state that AIB and Bank of Ireland came to the meeting with a clear plan for a blanket guarantee.

The banks’ former chief executives Eugene Sheehy and Brian Goggin have denied this.

Mr Cardiff will also state that “anti-democratic” elements of the G20 international group — then ECB president Jean Claude Trichet and US treasury secretary Timothy Geithner — effectively forced Ireland into the 2010 bailout with “or else” advice.

He will also say they prevented the country from burning bondholders and that “the message from the ECB [in 2008] was more or less save your banks yourselves”, and that Mr Trichet’s inquiry evidence had “fallacies”.

Mr Cardiff — who will attend the inquiry alongside other former Department of Finance general secretaries Tom Considine, David Doyle and John Moran, and current general secretary Derek Moran — last night said the evidence must be seen in context.

He said he did not leak the information, however some individuals close to the inquiry have privately noted the perspective appears to clear Mr Lenihan and his department, in which Mr Cardiff was head of financial services in the lead-up to the crash.

Meanwhile, sources close to the inquiry have warned the leaking of evidence before it has been stated in public hearings has the potential to bring down the multi-million euro investigation before it completes its work.

Yesterday’s publication of Mr Cardiff’s leaked evidence is the first time such information was released before a public hearing.

This is because, as the inquiry has a legal standing, releasing records before a witness appears means they may be unable to get a fair hearing.

However, other sources said while the development is of concern, it is unlikely to cause “fatal damage”. The matter will be raised at the inquiry’s weekly private meeting tomorrow evening.

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