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Emasculated banking inquiry

Prosecutions more important than another inquiry.


by Frank Connolly.


Expect much false confidence in advance of the promised Oireachtas inquiry into the failings of the banking system leading up to the disastrous guarantee of September 2008. Public expenditure and reform minister, Brendan Howlin, promised that the inquiry will provide “answers to fundamentally important questions” when the legislation for it came into effect in late September. The inquiry will have terms of reference that are “narrow and specific” and will deal with events leading to the guarantee five years ago, the role of banks and their auditors and the role of State institutions.

The powerful teeth of the inquiry…

We can expect that the politicians who convened into the early hours on 29th/30th September 2008 along with the officials from the various government departments, the Central Bank and regulators office, will be called to give evidence and that the hearings will be televised to maximise the impact on a citizenry desperately searching for the facts surrounding the decisions made in those crucial days that have wreaked such havoc in their lives.

Observers who can’t even remember what the Honohan, Regling and Watson, and Wright Commission reports found, won’t be holding their breath. In any event the wings of any forensic inquiry are being clipped – even if one could be adequately carried out by small number of Oireachtas members with little or no banking or finance experience. Firstly, it excludes any examination of Anglo Irish Bank, the sharp and reckless practices of which contributed greatly to the collapse, due to forthcoming criminal trials of three of their executives (in which Seán Quinn and his family are expected to appear as witnesses for the prosecution.)

Secondly, it will undoubtedly be hampered by the memory lapses and tantrums which in turn inspire legal advice which shifts the players and the audience every now and then to the Four Courts as we witnessed so often with the Dublin Castle tribunals.

And there is the overwhelming influence of the main banks which brought the mess upon us in the first place when they claimed to have liquidity problems at a time when they were hopelessly insolvent and exposing the Irish people to a €400 debt mountain.

It is evident from their (mainly) arrogant demeanour at the Oireachtas Finance committee a few weeks ago that senior bank executives have no intention of changing their fundamental purpose in life – which is to make as much profit as possible for their shareholders and for themselves in the process.

The biggest, and third, reason for scepticism, however, lies in the repeated failures of the authorities to deal with banking excess following scandals exposed in the 1980s (AIB-ICI/Irish Permanent), in the 1990s (DIRT/Ansbacher/AIB-Rusnak) and in the 2000/2010s (AIB-Faldor/Moriarty/Flood/ Mahon) when the practices that brought the country to its knees were so often exposed and then allowed to continue.

Only eighteen months ago, the Mahon report recorded how in the early 1990s AIB officials would collect wads of cash from Bertie Ahern at his St Luke’s office for deposit in the O’Connell Street branch and that the then finance minister would change tens of thousands in foreign currency in the same branch, without question. It reported that another AIB official helped Frank Dunlop open a secret Rathfarnham account through which hundreds of thousands flowed in corrupt political payments. Senior executives of the bank were accused of withholding information from its client, Tom Gilmartin, and in effect colluding with the illicit payments to councillors which were then reimbursed from Gilmartin’s personal account despite his ignorance of them. (The IPBS and Irish Nationwide did not emerge from the inquiry garlanded in roses either.)

In the aftermath of Mahon AIB chief executive , David Duffy, promised that the misbehaviour identified in the damning report would never be repeated in the bank. Yet nothing has been done to take action against those responsible for such misbehaviour.

Seeing politicians such as former Taoiseach Brian Cowen and his attorney general, civil servants David Doyle, Dermot McCarthy and Kevin Cardiff and former bankers Dermot Gleeson, Eugene Sheehy (ex-AIB), Brian Goggin, and Richie Burrows (ex-Bank of Ireland) on any sort of a public stand will provide some gratification, unless the protagonists acquit themselves better than envisaged, but it may achieve little. Only criminal prosecutions of central players who acted outside of the law to enrich themselves and others at the expense of the Irish people, based on evidence gathered through the forensic efforts of the Garda, accountants, lawyers and financial experts can satisfy the public appetite for justice. The roles of the DPP, the Central Bank and private prosecutors in such prosecutions need to attract much of the journalistic interest that is being diverted to the sideshow in inquiryland.