IBRC flaw should have been blindingly obvious to commission of investigation

The commission of investigation model has been a successful one but why didn’t alarm bells sound when it was asked to examine matters of privilege at IBRC , asks Michael Clifford
IBRC flaw should have been blindingly obvious to commission of investigation

IT’S ALL about dodging bullets from here to the election, and with the cock-up of the investigation into Siteserv, the Government has seen one bullet whizz by into eternity. The bullet in question may well have turned out to be a dummy, but nobody likes taking chances in a year of election.

A number of questions arise about the news that the Commission of Investigation into 37 transactions by the IBRC is in serious trouble.

The probe was designed to examine whether the exchequer got value for money in the transactions, all of which resulted in a loss of €10m or more to the State.

It all arose over a controversy around the Denis O’Brien-vehicle Siteserv after it was revealed that €100m was lost on the sale. Throw in the incendiary fact that one of Siteserv’s lines of business is the installation of water meters and the potential for political fallout heightens.

Back in April, after initially announcing a bit of a mocky-yah inquiry, Minister for Finance Michael Noonan finally threw in the towel and accepted that the full monty, a commission of investigation, was required to quell public concern.

“Given the scale of the banking crisis and the amount of taxpayer money involved, it is essential that the public concerns regarding certain transactions in, and issues raised relating to, IBRC are addressed in a comprehensive manner,” he told the Dáil on June 9.

“Let me be clear, in that there is no evidence of any wrongdoing in the various transactions. However, I recognise that there are genuine public concerns, which have grown significantly in recent weeks. A well-resourced commission of investigation with targeted terms of reference and an ambitious timeline is the best way to address public concerns.”

Now, it turns out, the ambitious deadline of December 31 will definitely be missed.

At issue is the inability of the inquiry to access documents that are covered by privilege or confidentiality. The chair of the inquiry, Judge Brian Cregan, wrote to Enda Kenny last Friday informing him of this impasse.

Fixing the matter will not be easy. From a political perspective, that means there isn’t a snowball’s chance in hell of a result from the inquiry this side of the general election. In one fell swoop, Noonan, Kenny, et al have swatted into the never-never another possible scandal that could cost votes.

This state of affairs is extremely convenient for the Government, giving rise to the question that has dogged this administration through a number of issues over the last few years. Conspiracy or cock-up? Or, to put it more benignly: Should it not have been blindingly obvious that this problem would arise?

The problem hangs on the legislation under which the inquiry is being conducted. The Commission of Investigation Act was passed in 2004 to save the country from any more tribunals. By then, a couple of serious gab-fests were under way down in Dublin Castle, providing a diet of merriment and outrage for the general populace, and some major euro for all legal personnel involved.

The minister for justice at the time Michael McDowell came up with a new model that would be conducted behind closed doors, with a stripped-down input from the legal people.

Over the last decade, the model has been used successfully on a dozen occasions. By and large, the outcomes have confirmed that the commission is an efficient and relatively cost-effective method of conducting inquiries.

Then along comes the exception. This is the first time the model has been used in investigating financial and banking matters. Any tuned-in brain around the cabinet table should have copped that this was going where no commission had gone before. Confidentiality is a cornerstone of banking. How come nobody spotted it?

The matter of privilege should have registered with any tuned-in legal brain.

Privilege is protected in the Constitution. No court has the power to order discovery of material that is privileged. How was a commission going to get past that matter?

Perhaps nobody in the cabinet was tuned in when it came before them. But then neither did anybody in the Oireachtas when the commission’s terms of reference were introduced on June 9 last.

A view might be taken that the Cabinet had precious little interest in the detail of the inquiry, considering it an irritant that had to be permitted in order to park a controversy.

A similar attitude may have informed the failure to spot potential problems in the Houses of the Oireachtas. Much political capital had been garnered by opposition parties in forcing the Government to set up the commission. With that already in the bag, there appears to have been little enthusiasm to parse the detail.

Máire Whelan
Máire Whelan

More serious by far is the failure of the Government’s legal adviser to spot a heretofore untouched issue. Surely that is the meat and drink of advising government of its legal duties. Unfortunately for the office holder, Máire Whelan, this is not the first controversy into which she has walked. Her role in the run-up to the departure of then Garda commissioner Martin Callinan last year came in for serious criticism on publication of the Fennelly commission report.

The commission did finally get around last week to concluding that the matters of privilege and confidentiality would impede a proper investigation. Why, it might well be asked, did it take so long? Surely it should have been obvious before now.

One factor that may be involved is that the commission is now on its third chairman, the first two having stepped down for personal reasons unconnected to the inquiry.

Conspiracy or cock up? On balance, the smart money says this whole farrago has resulted from a wanton cock-up on the Government’s part rather than conspiracy to turn a blind eye to an obvious shortcoming. This Government has shown itself to be quite adept at cock-ups over the last few years.

So don’t hold your breath. By the time this commission reports — if it gets that far — we will be well into a new Dáil term.

Judge Cregan and his team have an unenviable task. Effectively, they are being asked to judge whether commercial deals done by IBRC delivered an acceptable return for the exchequer. This amounts to a review of decisions taken in different economic times, in a bank that was destined to be wound down.

The inquiry has encountered its first major obstacle. It’s a good bet that there will be more.

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