Bernard Durkan (Kildare North, Fine Gael)

I am glad to have the opportunity to speak on this important legislation. It is ironic that the need for this legislation was evident several years ago, not just in the past few weeks, months or year or two. I agree with many of the sentiments expressed by Deputy Ross. I do not always agree with him, nor he with me and I would be worried if that were the case.

I agree with much of what he said concerning whistleblowers. I recall a previous well-known whistleblower in the same financial institution mentioned by Deputy Ross who was identified as having leaked crucial information to the media which indicated clearly there were serious weaknesses in the way the particular financial institution was operating and with regard to the way that financial institution was observing the rules and regulations laid down by the banking system and in legislation. He also indicated the institution was circumnavigating the system successfully and in such a way as to deprive the State of a considerable amount of revenue. As Members will know, this ultimately became the subject of the DIRT inquiry. This happened several years ago, but, sadly, no lessons were learned.

It is sad that we are back in the same place, having reverted to old habits. All of the issues raised by Deputy Ross, such as the incestuous relationship between auditors and financial institutions, were identified as being seriously detrimental to stability in the financial system. All of those issues were addressed and guidelines were set down. The regulatory system was introduced, as there had been no regulatory system as such previously, and regulatory guidelines were put in place. What happened as a result? Nothing. There was no observance at all as a result. The kind of attitude Deputy Ross mentioned continued. There was a kind of laissez-faire attitude to everything and an attitude of: "Let us get on with the real business and forget about these kinds of regulations." Sadly, we reached a situation where there was total contempt for legislation and regulatory guidelines and a total contempt and lack of respect for any kind of authority. The result was financial disaster and that is where we are now as a consequence.

I do not wish to blow my own trumpet, but I remember the fateful day of 29 September 2008. The curtain was drawn back and we all got to see and hear what was about to happen. At the time, I could not understand why the Central Bank, the Secretary General of the Department of Finance and the Financial Regulator were not all before committees at that time clarifying what went wrong. Some of us knew what went wrong. What was wrong was something I have tried to raise on numerous occasions in this House, a contempt for company law. In the early 1990s, some of us who were here then spent 18 months dealing with Committee Stage of the Companies Act. I am aware that it is due for review and consolidation now. There are so many flagrant and blatant breaches of company law on a regular basis here that it has become a serious issue which requires emergency treatment. That is the philosophy that has grown here.

If there are breaches of company law in the United States and if the company is at risk as a result of those breaches, action is taken against the perpetrators and against those directly responsible. In this country, a different situation exists. Here in this country we get an evaluation of the interests of the so-called investors or stakeholders.

In other jurisdictions, other interests must be taken into account, such as the common good and the general exercise of the functionaries in place. Failure to observe those regulations carries serious penalties.

Sadly, there is distinct disquiet at any attempt to investigate the issues that caused the problems we face. Observe the furore in recent days about Oireachtas inquiries. I am strongly in favour of ensuring due process and natural justice prevail. That is how it should be but that is not how it is intended. There is no intention of allowing that to happen in the lifetime of this Dáil because too many vested interests and sacred cows will be upset and too many ivory towers will be cracked. For reasons that may be good and genuine, the legal profession is concerned about Dáil committees of inquiry taking on a role of addressing these issues. I can understand why they are concerned. It will be a shorter and less expensive system and there is no guarantee that due process and natural justice will always prevail. However, in those cases the courts must prevail and there must be access to the courts.

The hysterical reaction at the present time leaves me speechless and I cannot understand it. Relatively speaking, the DIRT inquiry cost nothing, approximately £700,000 or £800,000, and brought in £1.2 billion in receipts to the Exchequer over a period of ten or 15 weeks. Legal advice was available to it. Several attempts were made by powerful vested interest groups, under the radar, to dethrone the committee. These groups attempted to torpedo the activities of the committee and its investigations. This occurred several times. The issue is not whether natural justice will prevail but whether anyone in a parliamentary system will be allowed to investigate the activities of people to whom responsibilities were devolved under the democratic system in this country. That is a serious issue and it is one we need to observe and address now. If we walk away from it, hold up our hands and say that we should leave it to someone else, it would be an abdication of responsibilities. It is something for which this or any other generation of public representatives will not be forgiven. From practical and personal experience, I emphasise that the points referred to, many of which have been raised by Deputy Shane Ross from a different perspective, are valid and need to be addressed urgently. If not addressed, we will have a series of similar discussions in this House or another House in future and that does not represent progress.

We all know the functional role of the Central Bank and the Central Bank knew its role over the past number of years. The Central Bank was overawed by political authority, which is not its function. The function of any institution with a statutory role to play is to do its job and, by all means, answer the questions raised by the political authorities but not to be overawed by them, subsumed into them or pushed aside by them. The Central Bank traditionally did its job in this way. In the 1950s, 1960s, 1970s and 1980s it was not uncommon for the Secretary General of the Department of Finance or the Governor of the Central Bank to speak out of sync with Government policy. That is not to say the Government was conceding its authority. We can have all the expertise we want but the job of the Executive is to ask the questions and test the case made. It is the job of the Executive to test the case made by the Central Bank but it obviously did not do this in the past. Each body became overly reverential towards the other's position. The result was a friendly, common approach that was in someone's interest. Eventually, the whole thing took on an impetus of its own and that lead to a downward slide at an alarming pace that brought the country to its knees.

I disagree with Deputy Shane Ross on the following point. Experts do not have the answer to everything. If anyone believed that the expert opinion we have heard expressed in this country over the past three years or the past ten years was accurate, it was not. The Executive failed to question expert opinion. I and others have talked about this point on several occasions. The Executive failed to question expert opinion on the basis that it was not qualified to do so and I strongly disagree with Deputy Shane Ross on this point. It does not fall to those with a particular expertise to be the be all and end all in regard to what they know most about. An old official in a local authority gave me very good advice many years ago, saying that if I ever wanted to take on a person in an unassailable role, the area they least expect to be taken on is the role in which they have the greatest expertise and are most qualified. He told me that was the weakness.

There was so much deference to expertise, with the attitude of "Howya Seanie?" and that everything is going okay and how could it be going wrong in any case because it was going right last year. No one questioned the basis for this opinion, how the person had come to this conclusion, who they consulted with, whose paper they referred to and what people thought of certain policies, papers or opinions. As every Member of this House must always do, I reserve the right to question expert opinion and to have an opinion of my own. I will stand by that opinion and will ask the question again and again why conventional regulatory procedures were not followed. This was simply because new women and men had new, brighter and better ideas but no one tested the ideas and there was no basis for coming to such conclusions. We know the result.

There is a tendency for people with expertise in a particular area to become alarmed when someone questions their authority. No one should be alarmed when their authority is questioned. They only have to answer simply and explain the situation. If they cannot explain the situation, they have a problem. We must examine the attitude we have in respect of questioning people in authority, particularly on economic issues and what seems to be the preserve an elitist group of people who seem to have the answers to everything but seem not to know the cost of anything. Let us consider a simple example. The Central Bank had a direct link to the ECB and vice versa.

Moreover, the ECB interacts with the regulatory system and the Government finance department in each eurozone state. Given such apparently robust oversight, how did it all go wrong? The basic reason is that people did not observe the terms of reference of their job. Moreover, the authorities which appointed these people to do the job did not appoint them to perform their function in accordance with the terms of reference but rather to maintain the status quo and ensure no feathers were ruffled. We know where that brought us.

The important question now is whether our experiences in the last ten to 15 years will serve as a useful guideline in the future, or will they be observed for a time and ignored when it becomes convenient to do so? That is what happened in the aftermath of the DIRT inquiry. It is amazing that nobody seems to want to dwell on the fact that we have been here before, long before we got into the type of difficulty we are now experiencing. All of the issues and weaknesses were identified, all the necessary regulations were made and all the legislation put in place. Unfortunately, all of that was ignored.

I do not agree with Deputy Shane Ross's view that the answer is to ensure there is expertise available to financial services and in devising fiscal policy. We hear from many experts, or those who presume they are experts, in this House. Yesterday morning, they told us we should all identify with Greece and seek to emulate the benefits of the Greek financial situation. That was only 24 hours ago. Having read the newspapers in the meantime, I am not surprised they have rapidly resiled from that position. That is where expertise gets us. Our experts do not seem to be as expert as they claim to be. I will not go into the details as to why that might be, but suffice to say that vested interests is one of the reasons and political advantage is another. Neither of those two issues should be to the fore at the present time.

The solution lies not with so-called experts but in ensuring the relevant people abide by the terms of reference of their role. It must be a requirement that one follows the rules and regulations, observes those regulations from day one and does not deviate from them in any way without providing a compelling reason for doing so to the authority which appointed one to the role. Had that been done, we would not be where we are today.

This country is facing an extremely serious economic situation, but I have no doubt that we have the ability to survive and that we will survive. Nor do I doubt that there is a commitment on the part of most people, both in and outside this House, to ensure we survive. However, there is always the tendency to take the quick-stick opportunity, to claim there is a better, easier or quicker way. The bottom line is that there is no such way. The time has come to knuckle down, put our shoulder to the wheel, accept reality and do what must be done. In doing so, we must be careful to stand by the many people throughout the State who are vulnerable. Nobody knows better the circumstances in which people are struggling than those who meet them on a daily basis. We have sometimes had lectures from Members in this Chamber as though they were the only people who ever met anybody outside the House and that the political system was impervious to everything except their eyes and ears. The rest of us also meet with people and have done so for a long time.

It is imperative that this country achieves certain objectives. First, confidence must be restored in the institutions that are here to protect us all. That is of more importance than ever. Second, everybody must be seen to put their shoulder to the wheel, make sacrifices and bear their fair share of the burden. Third, everybody must accept responsibility to effect change, including ordinary Members of this House, the Government and the various bodies and institutions - financial, statutory or otherwise - throughout the country with a direct responsibility to observe and enforce the law of the State. I welcome the legislation and hope it will be effective. It must be observed in the letter and in the spirit. It is to be hoped that as a result of this and similar legislation, we will never again have to revisit this issue.

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