Falling through the cracks
HERE comes another banking inquiry. Last Tuesday, as reported in this newspaper, Tánaiste Eamon Gilmore declared that if a referendum is passed on the powers of the Oireachtas to hold inquires, the first item on the agenda will be a probe of the banking collapse.
The details of the proposed referendum were published on Monday. It seeks to reverse the Supreme Court Abbeylara judgment, which brought to an end an Oireachtas inquiry into the shooting of John Carthy in 2000.
The court ruled that no Oireachtas inquiry could be pursued if the good name of any citizen might be affected.
Now, the people will be asked on October 27 to restore the power to the Oireachtas to inquire and report on matters of public importance, including the power to point the finger of blame.
The following day, Mr Gilmore backed a call to set up an Oireachtas inquiry into the banking collapse if the referendum is passed.
“That’s one of the most immediate reasons why we’re having the referendum,” he said. “The Government has been very clear from the time of our formation that we want to have a proper inquiry into the disaster that occurred in Irish banking.”
The Tánaiste may have missed it, but we have had a few of those. Firstly, there was the inquiry of Regling and Watson. That begat Nyberg, who reported earlier this year. His report covered 200,000 documents and 140 interviews. He did not tell a whole lot that was new, blaming “herd mentality”, and “a tendency to groupthink”.
“Large parts of Irish society were willing to let the good times roll on until the very last minute,” he reported. He didn’t name names, but we know most, if not all, of them. He left a few questions outstanding, such as who exactly knew what exactly when in the days, weeks and months before the big bang in September 2008.
But anybody who believes that a group of politicians asking questions in public could extract that information is living in cloud cuckoo land.
What Nyberg did do is put on record the malaise that affected the regulatory, banking and political systems, as well as the media, through the years of boom and bust. If that information could be put towards reform, it would have been worth the cost. But don’t hold your breath.
What would an inquiry by an Oireachtas committee achieve? Very little, apart from hauling some willing bodies into the public domain to answer for themselves. On Wednesday, Howlin revealed that inquiries would be in private, but it is unclear whether affected parties could be hauled before a public hearing, even after an inquiry is completed.
The legislation flowing from a successful change to the constitution would allow for an investigator to inquire initially and present findings to the Oireachtas committee. This model was pursued with some success into the DIRT inquiry in 1999, which followed a report from the Comptroller and Auditor General. Crucially, witnesses are not compelled to appear before the inquiry.
Would an investigator discover more than Nyberg, Regling or Watson?
Why would people such as Seanie Fitzpatrick, Michael “Fingers” Fingleton or retired regulator Patrick Neary co-operate with such an inquiry?
Why would the former members of bank boards do so, unless they felt confident that they could walk away without further blemish on their reputations? The only group who might succumb to public pressure to appear are former politicians, such as Bertie Ahern and Charlie McCreevy. And while it would be amusing to read about Ahern’s latest delusions, or hear McCreevy explain himself, would it really amount to a hill of beans?
To a large extent, an Oireachtas inquiry into the banking collapse would open the door to little more than posturing from committee members, some of whom may not even have a detailed grasp of the issues at hand.
Do we really need that at this stage of the game? For the Oireachtas members of the governing parties, the sideshow might also serve to remove them from dealing with what are expected to be horrendous decisions over the coming months.
The proposed referendum may have some merit, but its implications must be explored further before polling day. All debate on this usually refers back to the Public Accounts Committee (PAC) inquiry into the DIRT scandal in the banks, conducted in 1999. Rose-tinted glasses tend to be worn in this back-to-the-future exercise.
Most of the work had been conducted by the Comptroller and Auditor General, whose report was the basis for the PAC inquiry. It was the first time that major players in politics and banks had to answer for themselves in public. This has been repeated many times in the interim in tribunals, and its novelty has faded.
While some, like the late Jim Mitchell and Pat Rabbitte, managed to extract illuminating insights, others were of precious little use.
Both of the main parties had served in government over the timespan being investigated, so political point- scoring was kept to a minimum. And ultimately, the only outcome was a series of fines for banks, which were dwarfed by the profits the institutions were making at the time. The whole affair was a worthwhile exercise, but it was also of its time and the past is a different country. Since those heady days, the commission of inquiry model has been introduced and is regarded as an efficient instrument. Under the new legislation, it is yet unclear as to whether parliamentarians would have any meaningful input into an inquiry.
Acquiring new powers would serve the political classes well. In a system where the executive hoards power, it would provide those outside the inner circle with something of substance to do. A new system of inquiry might well be in the public interest. It could do some good work. On rare days, it might do some great work.
But vigilance is required if any new dispensation is not to be used as a route to posturing or point-scoring. Kicking off with what is likely to be a redundant and belated inquiry into the banking collapse hardly inspires confidence.
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