Minister who fought to bring Ireland back from the brink

 

BRIAN LENIHAN, who has died aged 52, was an extremely likeable and able politician and lawyer, once seen as a future leader of Fianna Fáil. But he will be remembered mainly as the minister for finance who played a leading role in the controversial guarantee of banks in September 2008 and the EU-IMF rescue package two years later.

In June 2008 he had succeeded to the second highest post in government at a time when the Irish banks were concealing losses on loans to property developers which would bring the country to the verge of bankruptcy.

After four months in office, he and his predecessor at the Department of Finance, the taoiseach, Brian Cowen, would be confronted with an ultimatum to guarantee the depositors and bondholders of the Irish banks or face a run on these banks which would collapse the Irish economy.

For the next two and a half years, Brian Lenihan had the unpopular task of introducing budgets which imposed levies on pensions, cut incomes and reduced public expenditure and standards of living while bank debts spiralled to fearful heights. In the early stages he was admired for his no-nonsense stance but his last months in finance were a politician’s nightmare as he endured mounting criticism for key decisions while battling recently diagnosed pancreatic cancer.

Despite these handicaps he fought a tough campaign in March 2011 to retain his seat in Dublin West against the anti-Fianna Fáil tide and was the only candidate to win a seat for the party in the capital. The man who was once tipped as a future taoiseach now became deputy leader of a party which had been so humiliated at the polls that its survival was in doubt. It was a tough burden for the scion of a political dynasty that stretched back several generations.

Brian Joseph Lenihan was born in Dublin on May 21st, 1959. His father was Brian Lenihan, then a Fianna Fáil Senator, five years later appointed minister for justice, a post Brian jnr would himself hold 44 years later. It was the first time a father and son had held this post.

Young Brian went to Belvedere College in Dublin, where he was school captain in his final year. He went on to study law in Trinity College, where he obtained an LL.B (first class). He won a scholarship to Cambridge, where he was awarded an LL.M (first class).

He was called to the Bar in 1984 and began lecturing part-time in TCD. He had been active in local Fianna Fáil politics in his father’s constituency, Dublin County West, since the age of 15, when he helped his father in a local election campaign in 1974. Later, he said: “I was his permanent escort for four weeks and I learnt more in that time about politics than before or since.”

In 1996, his chance to go into politics full-time came when he won the byelection in Dublin West caused by the death of his father. Lenihan narrowly defeated the left candidate, Joe Higgins, by 252 votes; it was Fianna Fáil’s first win in a byelection for 12 years.

In the general election the following year, which brought Fianna Fáil back to power, he was elected on the seventh count. He was seen as potentially a minister of state but instead was chosen by the taoiseach, Bertie Ahern, to chair the new Constitutional Review Committee.

One of its main tasks was to study possible changes in the anti-abortion law following Supreme Court rulings on the 1982 protection of unborn life amendment to the Constitution.

In 1997, he became a senior counsel. In that year he married Patricia Ryan, who later became a Circuit Court judge. They would have two children.

In the 2002 general election, Lenihan topped the poll in Dublin West and was the first TD declared elected under the electronic voting system tried out in several constituencies. Again he was tipped for promotion, this time to the cabinet, but was appointed minister of state for children.

There was press comment that his talents were being overlooked and that he was a man the then taoiseach, Bertie Ahern, was said “not to like”. In 2005, his brief as minister of state for children was widened to cover several departments, not just health, and he was allowed to attend cabinet meetings. Much of his work involved preparing for a future referendum to strengthen the status of children in the Constitution.

The long-awaited promotion to the cabinet came following the 2007 general election, when he again topped the poll in Dublin West. This time Lenihan was appointed minister for justice, equality and law reform, the third member of the Lenihan dynasty to serve in cabinet, following his father and his aunt, Mary O’Rourke. His younger brother, Conor, was elected to the Dáil in 1997 and was appointed a minister of state in 2004. His grandfather, Patrick Lenihan, was a TD in Longford-Westmeath between 1965 and 1970.

Brian Lenihan was involved in the negotiations to cobble together a coalition of Fianna Fáil, the Greens and the much diminished Progressive Democrats. He was the only new Fianna Fáil face in the cabinet.

In his brief period in justice, Lenihan was faced with problems about the deportation of refugees, the shortage of staff in prisons and the increase in violent crime. He introduced new Bills on immigration and intoxicating liquor. He took over the processing of the Defamation Bill through the Seanad and the Dáil and agreed to postpone the Privacy Bill, criticised by the media, to see how the new Press Council system worked.

His career in justice ended abruptly in May 2008 when Ahern resigned amid critical reports on his personal finances from the Mahon tribunal. The new taoiseach, Brian Cowen, unexpectedly promoted Lenihan to succeed him in the Department of Finance after less than a year as a senior minister. There was comment that he lacked any economic qualifications but Lenihan described it as a “fantastic honour”. He soon realised that he had been handed a poisoned chalice as tax revenues plummeted and the construction industry went into nosedive.

He told a conference of the industry that he had “the misfortune to have become minister for finance a few weeks ago as the building boom was coming to a shuddering end”. Shock was expressed at the flippancy of this remark but an Economic and Social Research Institute report revealed the State was in recession for the first time since the mid-1980s. The €3 billion deficit the minister was forecasting for 2008 had ballooned to €7 billion several months later and there was serious concern about the situation of the Irish banks following the collapse of Lehman Brothers.

The economist and journalist David McWilliams, in his 2009 book Follow the Money, described receiving a visit late at night on September 17th, 2008, at his home from the minister, who arrived chewing garlic.

Lenihan for several hours asked McWilliams for advice about the worsening situation. McWilliams related that he (McWilliams) recommended a guarantee on bank deposits and funding but apparently not on subordinated debt. The minister indicated that his civil servants were nervous about offering a full guarantee.

Following a crisis meeting in Government Buildings on the night of September 29th, the government decided to guarantee all deposits and “certain debt” of the six Irish banks and building societies. This was estimated as totalling €440 billion of liabilities.

The first reaction from the British and some other governments in Europe was one of anger at the lack of consultation and the likelihood of deposits being diverted into guaranteed Irish banks.

Lenihan described the guarantee, which other countries soon copied, as “the cheapest bailout in the world so far”, words that would come back to haunt him.

Lenihan’s first budget for 2009 was marked by tax increases, levies on Civil Service pensions and the controversial income ceiling for medical cards for the over-70s. This ceiling caused such an outcry from pensioners that it was hastily revised to more than double the original amount.

As the economic situation continued to worsen, Lenihan was forced to bring in an emergency budget in April 2009. He also announced the setting up of the National Asset Management Agency, into which Irish banks would transfer €77 billion in loans to property developers for €54 billion in return.

Presenting the 2010 budget, which he described as “the harshest in decades”, Lenihan confidently asserted “the worst is over”. But for him personally there was soon to be the shock of a diagnosis of pancreatic cancer.

There was some public criticism at the manner in which TV3 disclosed this news the day after Christmas. The minister said some days later that, having discussed the matter with his doctors and the taoiseach, he would continue in his finance post while also having treatment for his illness.

He was particularly proud to have been asked to deliver the annual Michael Collins commemorative address at Béal na mBláth in Co Cork, which he did on August 22nd, 2010, the first Fianna Fáil cabinet minister to have been so honoured.

At traditionally an exclusively Fine Gael event, Lenihan said the spirit of Collins was the spirit of the nation and it must continue to inspire all in public life, irrespective of party or tradition.

He said the invitation to make the address was generous and could be seen as a further public act of historical reconciliation, at one of Irish history’s sacred places. If this was so, he said, he was proud to have played his part.

Unfortunately, on the economic front, the worst was far from over. International disquiet at the size of Ireland’s bank debts and the effect on the public finances of zero economic growth drove the cost of borrowing ever higher. Lenihan was obliged to deny in October 2010 that Ireland would soon need an EU-IMF bailout as the interest rate on Irish government bonds surged over 8 per cent.

Following a spate of further denials by various ministers, Lenihan returned from a meeting of EU finance ministers in Brussels on November 16th to announce that the EU-IMF team was arriving in Dublin. He and the taoiseach, Brian Cowen, tried to minimise the implications.

The governor of the Central Bank, Patrick Honohan, was less coy and from a meeting in Basle said it would be a “very substantial loan” of tens of billions of euro rather than a bailout.

It turned out to be a €85 billion bailout package with a 5½ per cent interest rate. Lenihan defended the government’s reticence, saying it was necessary “to protect the taxpayer”.

It was some months later, after Fianna Fáil had been driven out of government in the February 2011 general election, that Lenihan revealed his feelings on the bailout saga. He was especially bitter about the role of the European Central Bank, which he virtually accused of forcing Ireland to accept the bailout.

Of his own role, he said: “I believed that I had fought the good fight and taken every measure possible to delay such an eventuality and now hell was at the gates.”

Another painful recollection stayed with him.

“I’ve a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport and looking at the snow gradually thawing and thinking to myself: ‘This is terrible. No Irish minister has ever had to do this before’.”

By the time of these revelations, his world had greatly changed. In January 2011 he had been defeated by Micheál Martin in the contest for the leadership of Fianna Fáil by 33 votes to 14 but had become deputy leader of a shrunken parliamentary party.

He is survived by his wife, Patricia, and their children, Tom and Clare; his mother, Ann; and his siblings, Anita, Conor, Niall and Paul.