The European Parliament's Budgetary Control Committee has rejected by one vote the appointment of Kevin Cardiff to the European Court of Auditors.
Mr Cardiff had been in the running for the plum role despite huge controversy over a €3.6bn accounting blunder on Government debt.
After a public interview in Brussels where he took a grilling from some MEPs, the career civil servant was rejected 12-11 in a secret ballot.
Defeat for the Department of Finance secretary general will be seen as a major snub to Taoiseach Enda Kenny and Finance Minister Michael Noonan.
Before the vote Minister Noonan said: “I think of all the people who are nominated to serve as European auditors over the years by Ireland, Kevin Cardiff was the most qualified for the job.”
Mr Cardiff was interviewed before the Committee on Budgetary Control where he answered for his involvement in the €440bn bank guarantee scheme and the recently admitted accounting error.
Mr Cardiff was the only one of eight nominees from across Europe not to make it through the interview process.
German MEP Ingeborg Grassle – part of the European People’s Party (EPP) which the Taoiseach and Fine Gael are affiliated to – claimed committee members had been hit by an unprecedented amount of emails from Ireland lobbying over the nomination.
The EEP MEP had announced she was voting against Mr Cardiff.
There are eight EPP members who voted on the budgetary committee but the group’s chief spokesman Bob Fitzhenry said he did not know how they voted.
“But you can deduct what way people vote from what they said beforehand, and certainly Mrs Grassle said several times that she had concerns,” he said.
Sean Kelly, Fine Gael MEP and member of the EPP – the European Parliament’s biggest group – spoke at the committee but does not hold voting rights.
“The decision is a shock,” he said.
One of Mr Cardiff’s most outspoken critics, former EU chief accountant and UK Independence Party MEP Marta Andreasen said common sense had prevailed.
“I was not holding my breath about my colleagues rejecting Ireland’s nominee for the European Court of Auditors. But I am glad,” she said.
“If his department’s mistake had not been spotted, Ireland’s debt would have been incorrectly reported, putting the country under greater banking and market pressure.”
The job competition now goes before a full plenary meeting of the European Parliament on December 13. It is thought unlikely the decision would be overturned.
In the interview Mr Cardiff said an internal and external review had been launched into why the accounting blunder misreported Ireland’s debt.
Mr Cardiff was in charge of finance when the National Treasury Management Agency (NTMA) repeatedly warned over the risk of an accounting error on the way national debt was being recorded.
The post in the Luxembourg-based court, which oversees the EU’s accounts, carries a pay packet of about €276,000.
Mr Cardiff’s job as secretary general of the Department of Finance has already been advertised, with tomorrow the closing date for applications.
The advert says the €200,000 a year post was to replace Mr Cardiff after his nomination to a role in a European institution.
It said the vacancy was expected to arise in the New Year and the appointment would last for seven years.
Mr Cardiff was one of a small number of senior civil servants present on the night of September 30 2008 when the blanket bank guarantee was introduced.
The career civil servant said he gave his personal opinions that night.
Marian Harkin, the only Irish MEP with voting rights after she represented her colleagues Jorgo Chatzimarkakis, confirmed she voted in favour of Mr Cardiff.
“I came to the meeting with an open mind and based on his written answers and his answers in the Committee I considered that he was a suitable candidate for the Court of Auditors,” she said.
“I think this is a disappointing outcome for Ireland and for Mr Cardiff personally.”
Meanwhile Dublin Labour MEP Proinsias De Rossa, revealed the committee rapporteur will still be recommending Mr Cardiff’s nomination.
“I have spoken to the Rapporteur who is preparing the report for Parliament and she has informed me that she will be recommending acceptance of his nomination and that she regards the vote as not an accurate reflection of the hearing itself,” he said.
“Her report will go to the political groups for consideration by all the members of the Parliament who will discuss it and decide their position.”
Mr De Rossa praised Mr Cardiff’s ability and qualifications, but claimed matters unrelated to the job of auditor came into play, generated by negative and ill-judged public comments and a negative email campaign based on innuendo.
“The Parliament as a whole often reverses committee decisions which don’t reflect the broad consensus of the parliament and is obliged in this case, in justice to every nominee, to ensure fairness for all of them,” he added.
“I will do everything I can to ensure that the Parliament supports him.”