Matter of expediency becomes a thorny question of principle


A GOVERNMENT decision based on expediency has landed Kevin Cardiff, the Coalition’s nominee to the EU Court of Auditors, in the middle of a political minefield.

Cardiff was eased out of his post as secretary general at the Department of Finance by Ministers of the two Coalition parties anxious to change the image of the department after three years of crisis.

Cardiff is now coming under attack from Labour and Fine Gael MEPs who appear to be vying with each other to score political points at his expense after a deeply embarrassing accounting error at the Department of Finance.

At home, though, Minister for Public Expenditure and Reform Brendan Howlin is adamant that Cardiff is eminently qualified for the job, and the Government’s nomination stands.

The position on the Court of Auditors, which oversees the spending of EU funds, is one of the plum jobs in the gift of a government.

It carries a gross salary of around €180,000 a year but, more importantly, a net salary of €140,000 due to the low tax rate on EU salaries.

The post, which is normally for a period of six years, also involves generous pension arrangements which amount to half salary for the three years immediately after serving in office and a pension of 26 per cent of salary after that.

In the past it has been given to prominent political figures, even though most other EU countries appoint a person from a legal or accounting background. This time around the initial focus was on whether a Fine Gael or Labour Party person would be appointed to the post.

It has sometimes been used as a reward for loyal service and at others times as a bargaining chip in sharing the spoils of office.

This time around, though, it was thought convenient to offer the post to Cardiff as a way of bringing in somebody new to head up the Department of Finance. Cardiff was appointed as secretary general of Finance by the late Brian Lenihan in February of last year. While there is no suggestion of serious tensions with the new Minister, Michael Noonan, it was an open secret that the Government wanted to appoint its own person to head the department.

Offering Cardiff the Court of Auditors post, which is based in Luxembourg, appeared to be an honourable way out for everybody. The €3.6 billion accounting error by an official in the department has changed all that. Cardiff now faces the prospect of having his record as head of the banking sector in the Department of Finance at the time of the crash being dragged up as an impediment to his appointment.

The Budget Control Committee of the European Parliament is due to consider Cardiff’s proposed appointment on November 23rd. There are no Irish members of the committee, which will question him to a large extent on a questionnaire already sent to him.

If the committee finds his answers unsatisfactory, it can refer the appointment to a full sitting of the parliament, which could vote on the issue.

A negative vote would not be binding but it would leave Cardiff and the Government, for that matter, in an impossible position.

The fact that Irish MEPs are attacking Cardiff’s appointment in Brussels, while it is being staunchly defended by Howlin, has the capacity to create confusion and upset the Government’s carefully calibrated plans.

One of the many ironies in the situation is that Cardiff is only the second ever non-political Irish appointment to the post, and he is actually one of the best-qualified people for the position ever appointed by an Irish government.

The first and last time a secretary general of Finance was appointed to the position was back in 1977, when the Court of Auditors was established.

Michael Murphy, the then head of the department, was asked by the Government to approach the Comptroller and Auditor General of the day about taking the position, but the CAG refused the offer.

Murphy then offered to take the post himself and the offer was accepted by the then minister for finance, Richie Ryan. Murphy was appointed to a second term in 1983, but due to illness he resigned in 1986 and Garret FitzGerald’s government turned to Ryan to serve out the remainder of the six-year term.

When Ryan’s term expired in 1988 he asked the then taoiseach Charles Haughey to reappoint him.

To the astonishment of most people in both Fianna Fáil and Fine Gael, Haughey obliged.

In 1994, former Labour Party minister for health Barry Desmond was appointed during the term of the Fianna Fáil-Labour government. To date Desmond is the only Labour politician to have been appointed to a senior EU post.

He was succeeded by Máire Geoghegan Quinn, who was appointed by Bertie Ahern in 2000 and reappointed in 2007.

When she was appointed EU commissioner by Brian Cowen, an accountant, Eoin O’Shea – a chartered accountant and a barrister with Fianna Fáil connections – was appointed to serve out the remainder of the term.