Appointment of Gabriel Makhlouf as Central Bank Governor shrouded in controversy

Several Government ministers have said they would like to revoke the appointment of incoming Central Bank Governor but have conceded there is no way to do so.

Appointment of Gabriel Makhlouf as Central Bank Governor shrouded in controversy

Several Government ministers have said they would like to revoke the appointment of incoming Central Bank Governor but have conceded there is no way to do so.

Gabriel Makhlouf's appointment as Governor, which commands a salary of €260,000 a year, has been shrouded in controversy after he was severely criticised for his handling of a budget leak in New Zealand.

Taoiseach Leo Varadkar has demanded that the incoming Central Bank governor should make a statement on the controversy of his handling of the budget leak.

Mr Makhlouf is under fire as a State inquiry found that he failed to take responsibility for a leak of sensitive budget information.

Mr Makhlouf, due to commence his role on September 1, is being called to publicly address criticisms that he acted unreasonably by claiming the leak of sensitive material was a result of New Zealand's treasury department's website being "deliberately and systematically hacked". It has since emerged that the release of the data was accidental.

The Taoiseach, speaking at the British-Irish Council in Manchester, said Mr Makhlouf came through a rigorous selection process: "There was an international competition, there was a set of interviews and he was the sole candidate put forward to cabinet and at that point we made his appointment and we’ve no plans to revoke his appointment.

The report that you have seen from New Zealand says that he acted in good faith and didn’t act in a political way at all, but it was critical of some aspects of how he handled that and I am sure he will want to make a statement on that before he takes up office and I think that it would be appropriate.

Pressure is mounting on Finance Minister Paschal Donohoe, whose reputation is tied to Mr Makhlouf's appointment.

Behind the scenes, Government sources have expressed their anger at the controversy and having to defend a man they have not even met.

One minister said: "We are all in on this guy. We went with the recommendation at Cabinet. But he can't be sacked so we are stuck with him. Not a great way to start a new job."

A number of other ministers echoed those comments saying that were they to know what they know now, his appointment should not have gone ahead.

Despite calls for the process to be paused, it has been confirmed that it cannot be unwound.

He has already been appointed by the President and can only be removed if found guilty of a grievous error.

An inquiry has found outgoing New Zealand treasury secretary Gabriel Makhlouf failed to take responsibility for the leak of sensitive budget information last month and fell short of expectations in how it was handled. Police dismissed Mr Makhlouf's claim that the website was "deliberately and systematically hacked", saying nothing illegal happened.

New Zealand's State Services Commissioner Peter Hughes, who led the inquiry, said the security breach around budget documents should never have happened: "The right thing to do here was to take personal responsibility for the failure irrespective of the actions of others and to do so publicly. He [Mr Makhlouf] did not do that."

The investigation, however, concluded that Mr Makhlouf's decision to refer the matter to the police was made in good faith. There were also no grounds to support allegations Mr Makhlouf's public statements or actions were politically biased, Mr Hughes said: "It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive."

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