TD: €31bn Anglo deal presented as ‘fait accompli’
Ms Collins’ case is an “enormous” one with “enormous implications”, her counsel John Rogers said. It was about the “very hub” of the financial running of the State, “the gearbox whose fine synchronisation is critical to the running of the State”.
Her core argument is that the 2008 Credit Institutions (Financial Stabilisation) Act impermissibly gave the minister power to decide, without Dáil approval, how much the banks needed to meet the regulatory requirements necessary to keep trading. It is not constitutionally permissible for the Oireachtas to empower the minister to enter into “effectively unlimited” commitments on behalf of the State without any, or any meaningful, constraint or oversight.
This issue cannot be determined on the basis of a view, given the scale of the crisis facing the State from 2008, there was “no option”, Mr Rogers said in reply to Mr Justice Donal O’Donnell.
The 2010 notes were an “appropriation” of public money in breach of Article 11 of the Constitution, which deals with appropriation of public resources, he said. The Dáil was given no opportunity to approve the promissory notes prior to the minister making a legally binding commitment to issue those and its elected members, including Ms Collins, TD for Dublin South–Central, were presented with “a fait accompli”.
Ms Collins, accompanied by several supporters, including Social Democrats TD Catherine Murphy and Idependent MEP Luke ‘Ming’ Flanagan, was in court when her appeal opened yesterday against the High Court’s rejection of her case.
The appeal, which continues on Monday, is being heard by a seven-judge Supreme Court, presided over by Chief Justice Susan Denham, due to the importance of the issues raised.
In November 2013, a three-judge High Court ruled the promissory notes issued in 2010 were validly issued under the 2008 Act and also found that Act was constitutional. Mr Lenihan’s provision of financial assistance via the notes did not require either a separate Dáil vote or defined upper limit on that assistance, it ruled.
The case concerned two promissory notes of 2010 under which the State agreed to pay some €31bn to Anglo, Irish Nationwide Building Society and Educational Building Society over 15 years to 2025.
The notes allowed the institutions get emergency liquidity assistance from the Central Bank. After the winding-up in 2013 of Irish Bank Resolution Corporation, successor in title of Anglo/INBS, the Anglo note, on which €25bn was then outstanding, was converted into long-term Irish government bonds.
The Supreme Court heard, following reorganisation of the finances of AIB (owner of EBS), the EBS note is no longer in existence.
Mr Rogers argued the High Court had erred in finding the 2008 Act specified the necessary adequate principles and policies to render the delegation of such power to the minister constitutionally permissible. No meaningful principles and policies restrain the actions of the minister, it was argued.
The High Court was told the decision to issue these promissory notes was made when the troika was putting pressure on the government to support financial institutions here, he said.
While it was significant the 2008 Act said financial support “shall” not be provided for any period beyond September 2010, that provision was later amended and that two-year limitation became “meaningless”.
The issuing of the promissory notes conflicted with Article 11 of the Constitution which provides “all revenues of the State shall, subject to such exception as may be provided by law, form one fund and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law”.
The court must consider what is meant by the phrase “charges and liabilities determined and imposed by law”, he said.
The 2010 budget made no reference to a €3.1bn expected instalment payment to Anglo in March 2011, he added. The Dáil could not revisit the matter later because the minister’s commitment to pay the notes was made as a matter of law and could not be reversed.
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