New Zealand to investigate incoming Irish Central Bank governor

Gabriel Makhlouf accused of misleading New Zealand authorities

Gabriel Makhlouf ‘believes that at all times he acted in good faith’. Photograph: Vivek Prakash/Bloomberg via Getty

Gabriel Makhlouf ‘believes that at all times he acted in good faith’. Photograph: Vivek Prakash/Bloomberg via Getty

 

A fresh investigation is to be held in New Zealand into charges that top official Gabriel Makhlouf, who is to be Ireland’s next Central Bank governor, misled authorities after claims that secret budget information was illegally released.

New Zealand’s main opposition party, the National Party, has led mounting demands for Mr Makhlouf’s resignation, saying he was “sitting on a lie” in a saga that is now to be investigated by the State Services Commission.

Last night Opposition politicians in Ireland reacted with concern, with Sinn Féin’s Pearse Doherty saying that Mr Makhlouf’s appointment to the Central Bank could not go ahead until the New Zealand inquiry reports.

“Let’s imagine Philip Lane [the former Governor of the Bank] made an accusation against Micheál Martin that he had illegally obtained information and put it in the public domain – and that turned out to be false. There would be no way he could continue as Governor of the Central Bank,” he said.

“This isn’t a small issue at all – these accusations are very serious. We need to make sure that someone in the highest position in the Central Bank has proper judgment,” declared Sinn Féin’s finance spokesman.

Meanwhile, Fianna Fáil’s Michael McGrath has expressed concern by letter to the Minister for Finance Paschal Donohoe: “[He] is entitled to the presumption of innocence, and it is important to allow due process to take its course.”

However, Mr McGrath went on: “The governor of the Central Bank is one of the most sensitive and important roles in our State. It is vital we have full confidence in the holder of the office.”

No hack

The controversy began after the National Party in New Zealand managed to access budget information through the New Zealand treasury website in advance of the official release date.

Mr Makhlouf first claimed the data had been “deliberately and systematically hacked, calling in cyber experts and police. One minister accused the National Party of using illegally acquired information.

However, New Zealand police quickly concluded that no hack took place; deciding instead that treasury officials had mistakenly uploaded sensitive budget day material ahead of publication in a way that could be read by anyone.

However, New Zealand’s Cyber Security Centre now says that it gave the treasury this same advice before Mr Makhlouf claimed that a hack had taken place. The National Party now claims the treasury tried to cover up its mistake.

On Tuesday the state services said it would probe Mr Makhlouf’s public statements; the advice he gave to the New Zealand minister for finance; the basis he had for such advice; and his decision to refer matters to the police.

Quick inquiry

Saying that the inquiry would report “as quickly as practicable”, state services commissioner Peter Hughes indicated that this would be before June 27th, when Mr Makhlouf is scheduled to leave his job ahead of his move to Ireland.

The Egyptian-born official has held the position for nine years, before which he held jobs in the UK civil service, as well as the Organisation for Economic Co-Operation and Development in Paris.

Both New Zealand prime minister Jacinda Ardern and minister for finance Grant Robertson have been dogged by embarrassing questions over the affair as they’ve struggled to focus on the details of their new budget.

Mr Makhlouf “believes that at all times he acted in good faith”, the commission emphasised, and he will remain in post pending the report from deputy State Services commissioner John Ombler.