FIANNA FÁIL was boxed into a corner by the demands for an investigation into the banking catastrophe but, experienced political survivor that it is, it has not thrown in the towel. Yes, it has granted the demanded inquiry but it has continued to feint and weave with much of its old skill, thereby staying on its feet.
The Government took a blow when it had to agree to the investigation but it cleverly avoided knockout by ensuring that, to continue the boxing metaphor, this hit was taken to its body rather than its head.
That’s the essential difference between private and public investigations. A private inquiry may wear the Fianna Fáil element of the government down over time — although not definitely, depending on the handling of the publication of its findings — but a public one would have left its square jaw badly exposed to the likely killer punch. A private investigation has bought time too. Any public investigation would have started within months, heightening political tensions regularly.
Brian Cowen must remember well how the first government of which he was part — the FF/PD administration — was ended effectively by rows between Albert Reynolds and Des O’Malley over their respective evidence to the Beef Tribunal. Any damaging performance by himself at a public investigation — which almost certainly would result from repeated exposure of his dreadful performance as Minister for Finance — would run the risk of raising the pressure on John Gormley and the Greens to unbearable levels.
Instead, two reports have been sought for delivery by the end of May, which is a tight deadline. Finance Minister Brian Lenihan has committed to publishing them as soon as possible thereafter.
The Government plans then to establish a special statutory commission of investigation that will have its terms of reference dictated by the findings of the initial two reports. That is supposed to have its work done by the end of 2010, although there is no guarantee any of its work will be done in public either. The hope is being held out that its report then will be laid before the Oireachtas to facilitate debate.
This should be called hiding in plain sight. It is in some respects a brilliant wheeze. Here are a few predictions as to how the timeline envisaged will be extended. The initial reports will be delayed by legal challenges. Constitutional rights will be asserted by those who do not want to provide incriminating answers. Legal privilege will be claimed over written information that could provide enormous assistance. Even if the May deadline is met, the Government will claim it needs time to consider the legal implications of the publication of the reports. If the reports are published fully, which is unlikely, it may not be until the Dáil is enjoying its long summer holiday.
The establishment of the commission will be delayed while there is a row as to how it can be done without infringing legal rights and without prejudicing criminal investigations or prosecutions that might be underway. It will be an achievement if it starts its work before the end of the year, let alone finishes it. One can only guess as to when its report will be presented to the Oireachtas. My guess is we’ll have a general election first.
A truthful and comprehensive report — that is not denuded by the legal arguments of the still wealthy, privileged and well-connected — has the potential to be truly damning. All sorts of people have reason to be worried and much to lose.
The politicians are the obvious ones, although you might not have guessed that if you relied merely on Brian Lenihan’s speech to the Dáil on Tuesday. The failures of the Central Bank and Financial Regulator cannot be evaded by the Department of Finance or Cowen as its minister during the most relevant period.
Most pertinently, the failure of the regulator and the Central Bank to stop reckless lending by the banks during the crucial period of 2004-’07 is being explained by an absence of suitably empowering legislation from the Department of Finance.
Cowen sat by passively as banks doled out 100% loans, offered loans seven and eight times the true income of applicants and committed people to mortgages lasting up to 40 years, all designed to give property speculators and builders a better chance to recoup their own speculative investments. The department may have left matters to the Central Bank, but the reckless expansion by the banks themselves — funding their long-term lending by way of mortgages from money they borrowed on the short-term money markets — should have raised all sorts of alarm bells in government too.
While I suspect that wealthy businessmen and banks would resist disclosure where possible, the biggest pressure on the Government to limit the scope of any investigation will come from within the ranks of its public servants.
They may be prepared to argue they only followed instructions and believed their actions were required of them in the national interest — and that, even if legally wrong, were morally and practically justified. I also suspect this “support the green jersey” approach will be put forward as part of an argument that public exposure of their shortcomings, especially if illegality was involved, would be counterproductive to the national interest as it could make our borrowing more difficult to conduct and impact on the performance of the International Financial Services Centre.
Put bluntly, some would advocate, if not a cover-up, then nothing that could result in embarrassing revelations. Already efforts under the Freedom of Information Act to find out how and why the bank guarantee was introduced in September 2008 have been frustrated.
IN MANY respects we know what went wrong and why. We even know the identity of many of those responsible. What we want is people called to account. That can only be done in public, by questioning them in public, by making them squirm. It may not be pretty but in the absence of laws that would allow for punishment of those who ruined the economy, it would be the next best thing.
We are not getting what we need, however. Perversely, the expensive experience of the tribunals of inquiry into previous scandals has helped the Government get off the hook. There is no doubt the tribunals ran too long, but this does not mean they can’t be refined to work properly. Proper terms of reference, realistic deadlines and fairer rates of pay for those involved in its work would make a tribunal a realistic option. Let’s not forget that the McCracken and Moriarty tribunals provided a useful service in unmasking Charles Haughey. Further reports by Moriarty and Mahon (into Bertie Ahern’s finances) are awaited with considerable public interest.
Sections of the public have complained that the tribunals do not result in anyone suffering unduly as a result of adverse findings. But the public should examine its own responsibility: why do so many people treat Ben Dunne, for example, as some sort of “plain-speaking” national treasure given what the Moriarty tribunal found of his giving money to Michael Lowry and Haughey?
Matt Cooper, author of Who Really Runs Ireland?, will be appearing alongside Shane Ross, Pat Leahy and Fintan O’Toole in the “Four Angry Men” event at Cork Opera House this evening, organised by Penguin Ireland and supported by the Irish Examiner and Today FM.