Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

I am relieved that we are finally at a place where we can begin the process by introducing this legislation. The thought crossed my mind this morning when it took so long to get a quorum that it had been stymied at every opportunity, and I wondered. I am not prone to conspiracy theories and I can tell the Minister of State how relieved I am that we ended up getting a quorum when it arrived after 11.10.

The commission had been fraught with problems. The majority arose because this, in reality, is the first investigation that has dealt with financial and banking matters under the 2004 legislation and it has been different from inquiries that have happened under that legislation to date. Given the turmoil of recent years, I doubt it is likely to be the last of this kind of inquiry.

It is bespoke legislation but at least it is charting a way. Upon reading the legislation, it is not quite clear to whom the final report will be made available. I note in the comments of the Minister of State, Deputy Stanton, that persons will have sight of it if they are mentioned in it, but whom will it be delivered to at the end of the day? Maybe that could be clarified because we need some degree of certainty on that at this stage.

It is just over a year since I stood in this Chamber and raised issues that I still believe were in the public interest - a complex web of cosy relationships, outrageous financial dealings and convenient transactions that benefited some far more than others, all at the expense of ordinary citizens.

The public interest element of the investigation is without question. IBRC was a bank that the people never wanted and yet well in excess of €30 billion of citizens' money was pumped into the institutions formerly known as Anglo Irish Bank and Irish Nationwide Building Society that then combined to become IBRC.

Citizens have a right to understand why they are shouldering the burden of bank debts while some individuals appear to be doing very well from the purchase of distressed assets from IBRC. It became even more worrying when it transpired that Siteserv, a distressed asset that went on to win some lucrative water meter contracts, was purchased in highly irregular circumstances from IBRC. The information I got from a freedom of information request was that the Department of Finance had deep concerns about that. From the bits that are not redacted, it indicates that the reputation of IBRC and, by extension, the State is vulnerable due to the approach taken by the bank on these matters, and that the processes of IBRC should be beyond challenge in order to protect it. There was clear concern in the Department about it.

AIB, which is 99% State-owned, lent the individual the money to buy Siteserv. That is our bank, which would not lend to businesses, yet it provided the money to buy Siteserv, an asset owned by the State. When the loan was granted to that person, he owed the State significant sums of money already. We sold Siteserv to that person for less than it appears to have been worth. Why would we not ask questions about that? We did it when others told us they were prepared to pay more for the asset from their own resources rather than a loan from one of our banks. We know trade buyers were excluded, so we did not properly test what could have come in. As we know, there was a write-off of €119 million, with €5 million going to the directors of what was essentially a failed company in terms of the amount of money available.

My pursuit of the questions surrounding such an irregular transaction culminated in my making a speech in this House approximately a year ago that created a furore I could not really have envisaged. I was attacked by powerful interests using media outlets that were afraid of the power wielded by this individual. On one occasion my reputation was rescued by Deputy Micheál Martin because a presenter did not intervene. It took me by surprise; the legal issue is thrown over news stories very often when they involve very wealthy individuals, but it is not done in the same way for other people. I noted that at the time.

I have since discovered a whole other world that I did not know existed. A journalist contacted me on the false premise that he was writing an article and I took him at face value. He made an appointment to come to the Oireachtas for a meeting, but the sole purpose of it was to try to find out the sources of my information. He is Mr. Mark Hollingsworth. He did not get the sources but it appeared to be more of an inquisition than an interview. That kind of world, which I did not know existed, is there bubbling under the surface. We must be conscious of that. My staff and I were put under immense pressure, but at all times I felt the support of the public, and people went out of their way to e-mail me, call me, stop me in the street and encourage me to continue to ask the questions that they wanted to be asked. They were obvious to very many people. I continue to have people on a constant basis saying it to me, even at this stage.

There can be no denying there is a disconnect between citizens and politics. Mistrust and the impression of "them and us" has damaged the relationship, exposing issues of concern. There should be an insistence on transparency and accountability, along with a pledge to uphold both. That is the only way we can restore trust in both the political and public life in Ireland. Legislation being introduced today is a significant part of the process, but it is only one element. The Minister of State mentioned terms of reference and I hope we will see them in the next week, as they are important. It is essential to put in a modular fashion how this will proceed. Looking at the first, second and third interim reports, substantial work has been done by the judge in preparing for the inquiry, narrowing the issue and concentrating on Siteserv as the first element in the modular approach. This should be in place by the time the Dáil goes into recess.

The terms of reference have shifted substantially already, focusing on transactions initially above €100 million and, subsequently, transactions of over €10 million. Considering the amount of material that the judge has gone through at this stage with one transaction, I agree that in hindsight we underestimated the task involved. It is important that we narrow it and do one good piece of work before going back to see what else is needed. The Dáil will manage that. It is important to investigate the transactions accounting for substantial sums of money. There are also instances where the sum involved may be relatively insignificant overall but the context would provide an understanding of key relationships, which would be a vital component of the larger investigation. For example, in 2012, the then heavily indebted developer Paddy McKillen sought a bridging loan of just €5 million from IBRC when he had a cashflow problem following his unsuccessful litigation against the Barclay brothers. As part of that process, Richard Woodhouse, a man connected with the Siteserv sale, and Mr. O'Brien advised members of the IBRC, including Mr. Aynsley and Tom Hunerson - people connected directly with the Siteserv deal - that Mr. O'Brien would provide IBRC with a guarantee of €5 million to support the loan for Mr. McKillen. Astoundingly, despite serious concerns from some about Mr. McKillen's ability to repay the amounts he owed IBRC - far in excess of €5 million - the bridging facility was granted. Essentially, a man with huge debts to IBRC was granted a loan from the IBRC on the guarantee of another man who owed significant sums to IBRC while there were questions over both men's financial ability to fulfil original loan agreements with IBRC. Those making the decision were directly connected with the Siteserv deal and other transactions. Some of the larger transactions, such as those in excess of €10 million or €100 million, may be more straightforward than some of the smaller transactions that could give us some sort of better understanding of the relationships in the bank.

I also have a question on the provision of the loan by AIB, the bank that is 99% owned by the State, when the business sector in the country was screaming that it could not get credit just to get staff paid. The loan was paid to Mr. O'Brien to help facilitate the purchase of Siteserv. It is interesting to note that the AIB group chief credit officer at the time the loan was advanced went on after leaving AIB to join the boards of Siteserv, Topaz and the Beacon Hospital, all owned by Mr. Denis O'Brien. Why was that? My point has always been that, while there may be perfectly legitimate answers to these questions, they stand out as very obvious questions to ask.

An element of this legislation that I called for and which appears to be absent is a section dealing with the Irish Stock Exchange. There is one aspect of the stock exchange that I want to mention. In the course of trying to untangle some of the curious share dealings surround the sale of Siteserv, it proved wholly ineffective in maintaining any form of watchdog capacity or general oversight. The Minister of State referred to a portion of the Bill dealing with confidentiality with respect to the provision of information by the stock exchange. Deputy Calleary and I have made this point.

There was a big spike in the share dealings before it was publicly known that this company was going to be sold. I wrote to the Irish Stock Exchange and it stated it does not possess details of individual dealings regarding nominee accounts, so it did not have the information. Then I wrote to the Office of the Director of Corporate Enforcement and it stated there was no indication at the time of reply that any issues arose that came within the remit of that office. I wrote back to the Office of the Director of Corporate Enforcement and then I wrote to the Central Bank, which stated it does not hold details of the beneficial owners of the nominee accounts holding shares. We wonder why prosecutions are not taken in relation to insider trading but if nobody is holding anybody to account or has the function to do that, how can it happen? We should not have legislation if we have not got the means of enforcing it and we need to do far more in respect of the stock exchange and of share dealings.

In every situation there must be a system of checks and balances and a significant one must be the ability of the media to report news. It became increasingly obvious during all of this that we had a major problem with both the ownership of our media and our defamation laws. Not having a functioning media may well be a contributory factor in future inquiries, where that role should properly be played by the media in scrutinising and holding to account in the same way as we in the Opposition are expected to hold the Government to account. It is the checks and balances in the system. There can be no doubt that the chilling effect of powerful individuals is a problem in this country and certainly it has appeared to be the case that the thicker the wallet the thinner the skin. Our defamation laws, as they stand, allow that to be the case. Aside from the chilling effect, there is also very real concern regarding media ownership. When an individual is able, as Fintan O’Toole wrote, to accumulate "excessive private power" which has "an impact on the public realm of democracy" one knows there is a problem with the system controls that are in place. We saw the work, for example, that was done quite recently by the "Prime Time" investigations unitregarding Console. That was a very good piece of work, but even an adverse or a satirical comment will invariably produce a writ to RTE. Then we wonder why we do not see programmes by the likes of "Prime Time" about particular individuals, whether or not about this particular topic. That definitely has to be questioned. This is why the National Union of Journalists is calling for the establishment of a commission on the future of the media in Ireland. We should not just heed that call, we must commit to providing for that to happen as a matter of urgency. We have to get those checks and balances back into the system and the media are one element of that.

We also need a discussion regarding why the media mergers guidelines are not retrospective. Where there have been similar concerns about other sectors that have an over-dominance in the market, steps were taken. The one I am thinking of, which was very obvious, was the situation regarding Ryanair and Aer Lingus, where Ryanair was told it was over-dominant in a particular market – between Stansted and Dublin, I think. It was ordered to sell some of that, if not all of it. Why is it that one sector is looked at and another sector that is just as important, if not more so, is not considered in the same way? While I am pleased to welcome the Bill and I look forward to the work finally progressing in a meaningful way, I regret that it is necessary to use legislation to force some of the parties involved to make the relevant documents and information available to Mr. Justice Brian Cregan in a way that overcomes the privilege and confidentiality issues asserted by some of those involved.

I am pleased that Siteserv will be prioritised as I believe it to be the issue of primary concern to the public and I believe it will act as a bellwether for other transactions that require serious questioning and analysis, including the controversial Topaz deal and the worrying circumstances surrounding the Blackstone transaction. Much of this has taken me to places I would not look at. Blackstone would not normally be on my radar, but I had a look at their website. There is a section within the company that deals with tactical opportunities, which they call “Tac Opps”. It is a bit eye-opening. This section is, by its own description, “an opportunistic investing platform seeking to capitalize on global investment opportunities that are time-sensitive, complex, or in dislocated markets where we believe risk is fundamentally mispriced”. We have a situation where one of the leading investment companies in the world, with the proud objective of capitalising on distress, was employed to advise IBRC, without any procurement or any competition from others, on the sale price of the assets. It went on to be allowed, astonishingly, to buy some of the assets it had priced itself. That is one of the issues the Department of Finance officials were concerned about and it is one of the major transactions they highlighted in the FOI information. The internal documents from the Department of Finance discuss concern about the poor quality of decisions taken. That language is terribly tame, but I suppose it is the kind of thing one puts into official documents that will be read at some point. I would have said something a little more extreme, but I will not say it in here. This was stated in respect of transactions such as Siteserv and Blackstone. The officials themselves seem to be extremely unhappy.

Situations such as these raise questions for any right-minded person looking at them. It is my job, and the job of those in the Opposition, to hold the Government to account, as a representative of the citizens, to look at these things and to ask questions. The public expects and deserves that those questions are asked. In respect of the point that was made about the Irish Nationwide mortgage-holders, what has gone on there is an absolute disgrace. The web that was outlined by my colleague, Deputy Donnelly, yesterday in respect of even the avoidance of tax is unbelievable, but the real concern should be those people who took out a mortgage in good faith with Irish Nationwide Building Society. Some of the mortgages were performing and some of them were distressed, but some of the distressed mortgages could have been serviced if there had been even a small discount. We are not just going to end up with this company running big profits out of all of this but the State will end up having to house some of the people who will, inevitably, lose their homes as well. The whole thing does not make sense.

I listened to Deputy Burton talking this morning about the great work that had been done in dealing with the promissory notes that were turned into sovereign debt on the night IBRC was liquidated. It was as if we should be thankful to them for doing all this hard work, that they sorted it all out. The promise the Labour Party actually made was that it would be dealt with. It was "Frankfurt’s way or Labour's way" and the impression was given that the debt would be written off. That was a legitimate expectation that people had.

We should continue to challenge the very idea that this debt is still there. The promissory notes were turned into sovereign debt and there was a restructuring of the repayment schedule but not one solitary penny of it was written off. Some €2 billion was borrowed and extinguished in the Central Bank to take it out of the economy. This was last year but there is a schedule of payments up to 2030 to repay an odious debt, with which we should never have been lumbered. We should not lose any opportunity to restate that point.

I wish Mr. Justice Brian Cregan well on the work ahead. I know he has done a lot of work in preparing for this and I have read each of his interim reports with great interest. It is right to narrow this down and it is critically important that we have the terms of reference before the Dáil goes into recess. Both these things are required for the judge to proceed with his inquiry in the fullest way possible.

See this speech in context