Incoming Central Bank chief must accept he acted ‘unreasonably’ on leak, FF says

Fianna Fáil has called on the incoming governor of the Central Bank to fully accept the findings of a report which found he acted “unreasonably” in relation to a leak of budget information in New Zealand.

The party’s finance spokesman Michael McGrath said Gabriel Makhlouf made “an error of judgement” when he said the information was “deliberately and systematically hacked”.

The outgoing New Zealand treasury secretary, who is due to start his new role in Ireland in September, was criticised by the country’s public service watchdog on Thursday for his “clumsy” response to the issue. He blamed hackers for the leak, but it subsequently emerged the treasury department had accidentally made the information available online through a search tool.

Mr McGrath said Mr Makhlouf’s hacking comments were “inaccurate and inappropriate” and he called on Mr Makhlouf to reflect on them.

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While the issue was not a “red-card offence”, the incoming governor should “acknowledge where he has got it wrong as well as accepting where he has been vindicated”.

“There will be lingering questions unless he comes out and accepts the report in its entirety. I think in the early weeks of his tenure here, it is likely to come up and he is likely to face questions on it, so he should take the opportunity to close this off and acknowledge that he could have handled it better,” Mr McGrath said.

Fianna Fáil props up the minority Government through a confidence and supply deal.

Tánaiste Simon Coveney told the Dáil “the Government and I still have confidence in Mr Makhlouf”, after Sinn Féin’s Louise O’Reilly said “this would appear to be a case of seriously bad judgement in a crisis”.

Minister for Finance Paschal Donohoe said he wished the incident had not happened, but stood by his decision to appoint Mr Makhlouf.

“Mr Makhlouf has had a 30-year record in public service all over the world and during that 30 years he has had an unblemished record and has led very large organisations and dealt with very difficult policy matters, from New Zealand to the OECD, to the UK.

“He has been an exemplary public servant. I of course wish that the incident that has now been the subject of this report had not happened.”

September

Mr Donohoe said he has considered the report into the matter “in its entirety”. “I have noted that in the report it makes note of his integrity, his political neutrality and his desire to act in good faith at all times. The appointment has already been made by the Government and he will be taking up office now in September.”

Mr Makhlouf leaves his post as head of New Zealand’s treasury with a “major hit [to his] personal and professional reputation,” according to his current employer, the state services commissioner Peter Hughes.

However, Mr Hughes said according to legal advice the conduct did not constitute “a sackable offence”. He said Mr Makhlouf’s imminent departure made an official reprimand or other punitive action not practicable.

In a statement, Mr Makhlouf apologised that the budget information was not kept secure. “The report confirms I acted at all times in good faith and with political neutrality. It also confirms that I acted reasonably, other than in my descriptions of the incident.

“I am pleased that my honesty and integrity are not in question.”

The deputy commissioner of state services, John Ombler, who authored the review, said Mr Makhlouf responded to leaked budget data from treasury with insufficient consideration of his department’s deficiencies.