Mandate for inquiry crucial
The Government’s priority at this stage should be to ensure that criminal charges arising from the collapse of Anglo Irish Bank are dealt with promptly. It should then embark on detailed inquiries into gross mismanagement of the wider financial sector and the contributions made by senior bankers, officials and politicians to a slow-motion economic collapse. Focusing attention on the night the roof caved in will serve little purpose if the many causes leading to it remain unexplored.
The release of the Anglo tapes has damaged the country’s reputation and enraged the public. The courts are now being asked to find that, because of public rage, individuals on criminal charges will not get a fair trial. In today’s changing world with instant communications, such an outcome would be appalling and would negate the role of trial judges in directing a jury.
Delay and apparent immunity are the elements that cause most upset to the electorate. It voted out the last government in a rage, but is unhappy with the pace of change. Because criminal prosecutions could last another year or more, preparations for a long-promised parliamentary inquiry should begin now.
To be effective, it could use the DIRT inquiry template, involving preliminary private investigations, followed by public Oireachtas hearings. The Comptroller and Auditor General provided the material on which that inquiry was based and his office could be involved again with outside financial experts or an experienced commercial court judge.
The Nyberg and Honohan reports which blamed bank boards, senior managers, auditors and successive governments for the crash have been published. But the roles played by ministers, Central Bank officials, the Department of Finance and the Office of the Financial Regulator should also come under scrutiny, along with tape recordings from those institutions and the bailed-out banks.
Speed is important. But the terms of reference will be crucial. If the State is to restrain the financial sector and prevent future abuses, it must establish what went wrong, and where; identify fault lines and bring in legislative and structural reform. Unfortunately, the Government appears to be following a political agenda. Taoiseach Enda Kenny spoke of establishing an “axis of collusion” between Anglo bankers and Fianna Fáil, as if such an anticipated outcome was either appropriate or sufficient.
Government failed to respond robustly to the DIRT inquiry findings. Bankers who encouraged widespread tax fraud and officials and politicians who ignored it were slapped on the wrist and went off, confirmed in their omnipotence and invulnerability, an invitation to further abuse. An investigation into the banking bailout should establish what went wrong; how individuals contributed to it and whether their subsequent actions were appropriate.