EIB board to examine O'Flaherty file ahead of voting

Spare a thought for the 25 members of the board of directors of the European Investment Bank. The Irish public has had almost 18 months to get to grips with what has become known as the "Sheedy affair" and the role of the former Supreme Court judge, Mr Hugh O'Flaherty.

There has been the tragic death of a young mother; the infamous chance encounter while a dog was walked in Herbert Park; the resignation of two judges; and the political fall-out from the Government's choice for the post of EIB vice-president.

It is now the task of the directors - senior civil servants and private bankers - to make sense of all of this before voting on Mr O'Flaherty's appointment. In the past week they have received a letter telling them that the Minister for Finance, Mr McCreevy, has chosen Mr O'Flaherty for the job "by common accord" with Denmark and Greece, the countries with which Ireland traditionally has rotated the post.

That letter also contained a bulging file containing all the correspondence from the irate Irish public, hundreds of letters and emails, and the details of what the bank describes as the 17 other "spontaneous" Irish applicants. The EIB was created in 1958, and this is apparently the first time that such a step has been taken concerning any nominee to an EIB post.

Whatever eventually transpires it has been a good example of people power. It has certainly caused raised eyebrows at the EIB headquarters in Luxembourg, although hardly amounting to the "international fiasco" mentioned by Fine Gael's Mr Michael Noonan yesterday.

On Thursday a spokesman for the Department of Finance told The Irish Times that the bank's board of directors was voting this week and, all going according to plan, Mr O'Flaherty could be appointed within weeks.

However, a very different signal was being sent from Luxembourg. The bank's spokesman emphasised that while such controversy surrounding an appointment might be unfamiliar territory for the bank, it was determined to "act responsibly", taking into account the debate which had raged in Ireland.

The EIB management has been receiving daily clippings from the Irish media since the controversy began. "I would like to make this absolutely clear that this is not a routine affair for us," he said.

On the basis of the file, he said, the board would "exercise its statutory responsibility to decide whether or not it will give a negative or positive to the proposal made by the Irish Government."

While the bank had no control over who was proposed for such a post, which was the territory of a member-state, it did have the power to reject it. There is no formal deadline for a decision, although it would take only one member of the board to say he did not want to take a vote on the nomination now, but wanted to wait and discuss it at a full meeting of the board.

Ireland's representative on the board is Mr Noel O'Gorman, Second Secretary General of the Department of Finance.

The bank's statutes provide for a simple majority vote, requiring 13 votes to either accept or reject the candidate. If accepted it then becomes a nomination, a matter which has been causing some confusion, and the name would go forward to the board of governors, made up of the EU economic and finance ministers. But even then, the spokesman said, it would be a case of "wait and see".

However, if it is rejected, and again it is veering into uncharted territory, the spokesman said: "I guess then it is for the Irish Government to take into consideration the decision by the board."

The Department of Finance believes there is no danger of Mr O'Flaherty being refused the job but that the EIB wishes to be seen to be going through the motions and examining all correspondence from the Irish public and the CVs of all other applicants.

However, it should not be forgotten that banks, discreet beasts by nature, hate nothing more than bad publicity. The EIB, an autonomous body, set up to finance capital investment furthering European integration by promoting EU economic policies, does not have to bow to political diktat. The saga continues.