Charles Flanagan (Laois-Offaly, Fine Gael)

This debate is crucial in the context of democracy in this country. Unfortunately, this opportunity is being squandered. Rather than providing decisive leadership, the Government is giving headless chickens a run for their money. The Government's focus is on blaming the Opposition and the media, rather than taking action. Sitting back and letting nature take its course may have worked when EU money and the global credit surge combined to create the Celtic tiger, but it is not an option on this occasion.

Fine Gael has offered solutions, including an alternative budget, to maintain, stabilise and improve the economic situation. The damage that has been done to Ireland's reputation by the incompetence with which the Government has dealt with the banking crisis cannot be underestimated. I have described the behaviour of senior management in the banks as "financial treason". Bank officials and the Financial Regulator have considered themselves — and still consider themselves — so utterly immune from accountability that they have come to the Parliament of this Republic and told bare-faced lies to Oireachtas committees. Some time later, these same officials arrived at Government Buildings demanding a bail-out, which is exactly what they received. They were given a blank cheque and not even a slap on the wrist from a compliant Government.

In the boom days the banks were tripping over themselves to hand cash over to developers. In these days of bust, the Government is tripping over itself to hand over our money to the banks, money the State can ill afford to part with. It was inevitable that Anglo Irish Bank would have to be nationalised, not least because of the scandalous behaviour engaged in by its senior management for years. Now that nationalisation has taken place, what lessons have been learned? Do we even know the full story in respect of the liabilities and bad debts of that institution or is that too to be swept under the carpet? I cannot imagine any other situations where the owners of an institution — in this case, Irish taxpayers — would be denied basic information about their property.

I have several questions which I hope the Minister for Finance will respond to at the close of this debate. How will the new chief executive officer of Anglo Irish Bank be appointed? What has been done to provide competent, accountable leadership at the helm of that bank now that it is the property of the Irish taxpayer? Will it be an insider appointment or will applicants be subjected to interview and the appointment subjected to Dáil scrutiny? Have the salaries of top bankers in Anglo Irish Bank been examined? Have new salary scales been set? Have the ridiculous criteria for bonuses been appraised? I suggest a maximum salary for any banker of €200,000.

Will the Government clarify what connection, if any, exists between Anglo Irish Bank and interests in the Channel Islands? Has the bank been writing new business since it was taken over by the taxpayer? Has it been signing new contracts with new liabilities? Fine Gael is of the view that Anglo Irish Bank must be wound down in an orderly way over a period of five years. We were proved right in our assertions about the banks to date but the Government prefers to close the stable door after the horse has bolted rather than deal with the realities of the situation.

The reaction of the Government to the chief executive officer's disgraceful behaviour and recent resignation is telling in regard to Fianna Fáil's attitude to the banking crisis. There seems to be a belief that no wrongdoing took place despite staggering evidence to the contrary. The Minister for Finance said he was "disappointed", while the chief executive officer of the Financial Regulator remarked that no law was broken. Legislation does not cover every aspect of modern life but we all know the difference between right and wrong.

I draw the attention of both the Minister for Finance and the Financial Regulator to the Companies Acts 1990 which lays down clear procedures in respect of loans. These procedures should be pursued in respect of possible breach in this instance. From a criminal justice perspective, certain provisions of the Act are particularly relevant. Section 30 deals with the penalisation of dealing by directors of a company in options to buy or sell certain shares in, or debentures of, the company or associated companies. Section 31 establishes a prohibition of loans to directors and connected persons. Section 41 states that substantial contracts with directors and others must be disclosed in accounts, while section 42 establishes the particulars required to be included in accounts.

Section 46 establishes the duty of auditors of a company in breach of sections 41 or 43 of the Act. Section 53 defines the obligation of the director or secretary to notify interests in shares or debentures of a company. Section 197 establishes clear penalties for false statement to auditors. Section 202 establishes an obligation on companies to keep proper books of account. Sections 203 and 204 detail the liability of officers of a company to penalty where proper books of account are not kept.

Section 242 relates to the furnishing of false information. Subsection (1) states:

A person who, in purported compliance with any provision of the Companies Acts, answers a question, provides an explanation, makes a statement or produces, lodges or delivers any return, report, certificate, balance sheet or other document false in a material particular, knowing it to be false, or recklessly answers a question, provides an explanation, makes a statement or produces, lodges or delivers any such document false in a material particular shall be guilty of an offence.

The law is not just for the little people. It applies to us all. The Director of Public Prosecutions should be asked to examine the behaviour of bank officials in the context of the Companies Act 1990. Will the Minister inform the House whether or not the Director of Corporate Enforcement is taking or has taken action in regard to the banks?

Tom Wolfe's famous novel, The Bonfire of the Vanities, springs to mind when we recall bankers flashing their credit cards in the best restaurants in the best cities. This practice cannot continue in a bank that is the property of the taxpayer. Have we halted the sponsorship by Anglo Irish Bank of the top races at Cheltenham and other places? What is being done about the junkets of golf trips to the United States and the corporate boxes in luxury surroundings at sporting events?

The golden circle that characterises Ireland under Fianna Fáil has shown itself to be toxic. A cursory glance at the number of pies in which Mr. Seán FitzPatrick had his fingers shows that cover-ups and business based on winks and nods were bound to occur. While chief executive officer of Anglo Irish Bank, Mr. FitzPatrick was also chairman of Smurfit Kappa. Mr. Gary McGann, the chief executive officer of Smurfit Kappa, was on the board of Anglo Irish Bank and chairman of its internal audit committee. This man is also chairman of the Dublin Airport Authority.

Does the Government consider these arrangements appropriate in the circumstances? Apparently it does given that last week it appointed Mr. Maurice Keane to the board of Anglo Irish Bank. This person was a member of the board of DCC which voted confidence in Mr. Jim Flavin after the High Court had adverted to serious ethical questions in the Fyffes case. Similarly, the recent statement of Mr. Brian Goggin of Bank of Ireland that he is to retire next June is bizarre. This announcement is akin to the Captain of the Titanic, on viewing the fatal iceberg, announcing his intention to step down when the ship reaches port. The arrogance of the banks was exemplified more recently by Mr. Eugene Sheehy's statement that he would rather die than accept Government equity.

The greed and incompetence of bankers combined with the greed and incompetence of successive Fianna Fáil Governments have combined to bring this country to its knees economically. We are an international laughing stock, referred to in The New York Times as "the financial Wild West", and hapless Ministers failing to take control of the situation has done nothing to dispel that view. The consequences of this international perception are evident. Our credit rating has been downgraded and we are now paying 2% more on Government borrowing than the German Government. Some €50 billion has been wiped off the share value of Irish financial institutions in just 18 months.

Today, we again witness Fianna Fáil's dirty linen being aired in public. For 11 years, that party has treated the public purse as its private piggy bank. It has stuffed boards with its supporters, put the interests of its friends ahead of the good of the nation and allowed its donors to get away with the most reckless behaviour. The catastrophic mess we are confronting today offers the chance to call a halt to the clientelism, cartelism, back-scratching and political ineptitude that have characterised Fianna Fáil's governance for the last 11 years.

The economics of the Galway tent must be removed once and for all. The people who plunged us into this crisis are not capable of leading us out of it. That has been made manifestly clear by the pathetic flailing in which the Government has been engaged since last October. There must be a clean-out at the top of the financial institutions and a clean-out at the top of the Government. It is time to say goodbye to incompetent bankers and incompetent Ministers. These people should examine their consciences and, for once in their lives, put the national good ahead of their own greed and arrogance.

It is appropriate, on the 200th anniversary of his birth, to recall Charles Darwin's statement that, "It is not the strongest of the species that survives nor the most intelligent but the one that most responds to change". This is an apt quotation for the situation we find ourselves in, led there by the headless chickens who have overseen the governance of this State in the last six months. The required change is not possible under the current Government. People are angry and that anger is justified. The time has come for change and change in the banks and in Government must come about if we are to retrieve from this current situation.

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