Central Bank refuses to reveal mounting legal bill for INBS inquiry

Revealing costs would undermine inquiry and raise privacy issues, regulator argues

The Central Bank has refused to disclose its mounting multimillion-euro legal bill for the ongoing inquiry into Irish Nationwide Building Society (INBS), as it would "undermine" the work of the examination and encroach on the right to privacy of lawyers involved.

The financial regulatory authority declined to provide this information on the back of a Freedom of Information (FoI) Act query from The Irish Times on fees paid to date to the three-member panel overseeing the investigation, as well as solicitors and counsel involved in the inquiry.

Public hearings adjourned last week until September, after six months of evidence into the first of seven alleged breaches of financial law by former executives at the lender, before it imploded during the financial crisis at a €5.4 billion cost to taxpayers.

The inquiry heard last December that it may take two years for all seven “suspected prescribed contraventions” to be covered.


“The issue of costs is directly relevant to the inquiry’s proceedings and were the cost to be released while it is ongoing, in my opinion, it could reasonably be expected to prejudice the effectiveness of the inquiry,” the Central Bank official dealing with the FoI query said.

“It could also be possible to deduce from the amounts paid to particular external legal service providers the level of work completed by the Central Bank on this module of the inquiry and possibly lead to the discovery of positions taken by the Central Bank on certain legal aspects of the inquiry.”


The Central Bank added that the issue of costs of the inquiry “is particularly sensitive” as the three-member panel overseeing the investigation has the power to direct that costs be passed on to individuals, if they are found to have participated in the commissioning of the regulatory breaches. The inquiry also has the power to impose maximum fines of €500,000 against individuals.

INBS's former managing director, Michael Fingleton, one-time finance director John Stanley Purcell, and former commercial lending manager Tom McMenamin have been subject to the first phase, or module, of the inquiry.

This concerns allegations that the lender’s credit committee failed to live up to its terms of reference. Another former executive, Gary McCollum, who once led the society’s UK lending activities, is also under investigation for other matters.

The Central Bank added in its decision to refuse the FoI request that the “public interest in openness and transparency” is outweighed by individual lawyers’ right to privacy.

Still, the Central Bank had previously disclosed that the three panel members overseeing the inquiry into INBS – solicitor Marian Shanley, barrister Ciara McGoldrick and former banker Geoffrey McEnery – are being paid €150 an hour, subject to a maximum of €750 per day.

The four barristers on the legal practitioner team assisting the inquiry and leading the questioning of witnesses include Niamh Hyland SC and Brian O’Moore SC. The Central Bank’s enforcement unit, which carried out an original investigation into issues at INBS, is represented by three barristers, including Ailbhe O’Neill, and Paul Anthony McDermott SC.

Law firm Arthur Cox is providing document support to the inquiry, which will not make any findings until all seven strands of investigation have been completed.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times