The Minister for Finance has admitted that both he and the Government have been politically damaged by the O'Flaherty controversy, saying that time would tell whether the coalition parties would suffer at the next general election.
Speaking for the first time since Mr O'Flaherty's dramatic withdrawal from the nomination as a vice-president of the European Investment Bank, Mr Mc Creevy conceded yesterday that he had "got it wrong" in relation to the nomination. He apologised to the O'Flaherty family for the distress caused to them in recent months, saying his action in nominating Mr O'Flaherty was responsible for this.
However, he rejected calls on him to quit the Cabinet, saying he was not the resigning type. "I come from a breed of people who don't resign," he said. "We get fired, thrown out, everything, but we never resign. If I'm ever going to do it, I'll do it myself in my own time, but those things never ever crossed my mind."
The second secretary at the Department of Finance, Mr Michael Tutty, is now seen as favourite for the £147,000-a-year post following Mr O'Flaherty's withdrawal. The Cabinet will discuss whom to recommend next Wednesday but, according to Mr McCreevy, is not certain to decide on a nominee at that meeting.
It has also emerged that late last month Mr McCreevy began a political campaign to have Mr O'Flaherty appointed, despite resistance from senior bank executives and directors.
While the directors were slow to respond positively to calls on them to agree to appoint the former judge, Mr McCreevy wrote to all 14 of his EU ministerial colleagues asking them to support him. The EU finance ministers are the bank's governors and have the ultimate say on the matter. This letter is among documentation released to The Irish Times under the Freedom of Information Act.
Mr McCreevy said he would have lobbied the other EU finance ministers on behalf of Mr O'Flaherty, and he believed this would have overridden the reservations of directors and bank executives. However, he thought Mr O'Flaherty had withdrawn because he had had enough of the controversy and attention.
Questioned by political journalists for 45 minutes in Leinster House yesterday, Mr McCreevy said he could not predict whether the controversy would be an issue at the next general election. "I'm sure the Government in the short term has been damaged. What the longer term will bring we just don't know."
Mr McCreevy insisted he had come up with the idea of nominating Mr O'Flaherty on his own, and that it had not been suggested to him by the Taoiseach or anyone else.
While accepting he was "personally responsible" for the controversy, he also said three times that none of his Cabinet colleagues had anticipated the level of public controversy. "They all thought it was a very humane thing to do," he said.
He agreed he had got it wrong. He felt "very sorry about what happened to Mr O'Flaherty and his family which could be directly attributed to me. Mr O'Flaherty and his family suffered a fair deal in 1999. "Due to my asking him to do this, I brought an awful lot of trouble on him, his wife and family."
He added: "If you could wind the clock back and know what would happen to everyone . . . no, I wouldn't do it again. If I had anticipated that, I wouldn't have proceeded with the nomination."
Asked had he been politically damaged by the affair, and if it had damaged his position within Fianna Fail, he said: "Certainly I won't be advertising it on my CV . . . The honest answer to that is, of course it has."