Friday, 8 July 2016
Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016: Second Stage
I move: "That the Bill be now read a Second Time."
As the Members of the House are aware, this Bill is being brought forward today to give additional powers to the Commission of Investigation into the Irish Bank Resolution Corporation, IBRC. These provisions are necessary, given the nature of the investigation involved, to ensure that the commission can effectively perform its functions. I am presenting this Bill today on behalf of the Tánaiste and Minister for Justice and Equality who has responsibility for the Commissions of Investigation Act 2004 under which the IBRC commission of investigation was established.
At the outset, I want to reiterate that the Government shares with the rest of this House a desire to ensure that there is an effective, efficient and timely investigation into the issues of significant public concern which have been raised in respect of IBRC. This shared determination across the Oireachtas has underpinned the extensive consultation at all stages with the Opposition initially by the Minister for Finance, and subsequently with the Taoiseach.
Before I outline the provisions of the Bill, I will set out the background to this particular commission of investigation and also mention some of the issues raised in the determinations and interim reports of that commission which have given rise to this Bill. The Commission of Investigation into the Irish Bank Resolution Corporation was established in June 2015 following the approval of a draft order by both Houses of the Oireachtas. The commission is charged with investigating matters which are considered by the Government, and affirmed by the Houses, to be of significant public concern in respect of IBRC and to make any reports required under the Commissions of Investigation Act 2004 in regard to its investigation.
In accordance with its terms of reference, the commission is required to investigate certain transactions, activities and management decisions which occurred at the IBRC between 21 January 2009, being the date of the nationalisation of IBRC, and 7 February 2013, being the date of the appointment of the special liquidators to IBRC and which either resulted in a capital loss to IBRC of at least €10 million during that period, whether by consequence of a single transaction or of a series of transactions relating to the same borrower or entities controlled by the same borrower, or are specifically identified by the commission as giving rise or likely to give rise to potential public concern in respect of the ultimate returns to the taxpayer.
In November 2015, the sole member of the commission submitted an interim report. That report sets out in detail the substantial work undertaken by the commission up to that point and the outcome of the interaction between the commission and the special liquidators, the Department of Finance, the directors of IBRC, the Central Bank of Ireland and the Irish Stock Exchange. It is evident from those interactions, as detailed in the report, that a number of significant issues arose in the course of the commission’s work, in particular issues regarding the ability of the commission to obtain and admit certain information and documents into evidence.
In light of those concerns, the Taoiseach engaged with the leaders and representatives of the Opposition and, on behalf of the Taoiseach and the Tánaiste, I would like to thank those Members for their observations and contributions during that consultation. On foot of those consultations, a legislative solution was proposed and it was agreed, again with Members from the Opposition, to further consult with the sole member of the commission on the proposed legislative response. Following those consultations, the Taoiseach and the Opposition agreed on 2 June to proceed with the drafting of urgent legislation to address the matters raised by the commission. This is the Bill before the House today.
As I have said, the first interim report of the commission from November 2015 outlined a number of significant issues which had arisen in the course of the commission’s work including the commission’s view that the issue of confidentiality precluded it from admitting certain documents into evidence; the commission’s view that the issue of legal professional privilege precluded it from admitting certain documents into evidence; the commission’s view that the duty of professional secrecy under section 118 of the Companies Act 1990 precluded it from receiving certain documents held by the Irish Stock Exchange; and the need to address matters relating to potential conflicts of interest and the management of the workload of the commission. These are all issues which are now being addressed, to the greatest extent possible, in the Bill before the House today. As I have said, there has been close consultation with the commission in the development of these provisions.
The approach adopted in this Bill is to introduce a bespoke piece of legislation which effectively applies the Commissions of Investigation Act 2004 with specific provisions relating to the IBRC Commission. The Bill contains nine sections. Of these, sections 2, 3, 4, 6 and 7 provide for additional powers to be assigned to the IBRC commission of investigation which were identified as lacking under the Commissions of Investigation Act 2004 and which consequently impeded the commission in performing its functions under that Act. The investigation into the transactions and other acts undertaken by the IBRC during the specified period is of a nature which warrants these additional powers being given to the commission. All of the provisions in this Bill, therefore, provide for the IBRC commission of investigation solely and do not extend or in any way alter the application of the 2004 Act to other commissions of investigation, ongoing or otherwise. Sections 5 and 8 of the Bill make provision to assist the management of the workload of the commission and to ensure any potential conflicts of interest are avoided.
Turning to the individual sections, section 2 addresses certain powers of the commission. Subsection (1) confirms that the commission may make such orders and determinations, and give such directions, as is necessary for the performance of its functions and for that purpose the commission shall have all such powers, rights and privileges as are vested in the High Court or a judge of that court. The need for such an amendment is set out in the determinations published by the commission, for instance, sections 7.90 to 7.94 of determination one. Similar provision is also available to tribunals of inquiry under the Tribunals of Inquiry (Evidence) Act 1921, as amended. One issue which arose during consultations and the drafting of the Bill is the extent to which this would draw this commission closer to the tribunals of inquiry model. However, the commission format remains distinct in terms of regular review and report back to Government.
Subsection (2) addresses the finding of the commission of investigation set out in its determinations and in chapter 6 of the first interim report to the effect that the commission lacked the necessary statutory powers under the Commissions of Investigation Act 2004 to engage in a balancing of interests which may trigger the public interest exception to what is otherwise a duty of confidentiality. This arose as the relevant section of the 2004 Act, section 21, expressly states that nothing in that Act shall compel any person to disclose information or documents over which a duty of confidentiality is asserted and found by the commission to apply. Section 2(2) of this Bill, therefore, confirms that the commission may admit documents in regard to which a duty of confidentiality is claimed.
Paragraph (b) of subsection (2) refers to Article 27 of the EU market abuse regulation. Article 27 provides for the non-disclosure, on grounds of professional secrecy, of information received pursuant to that regulation. This would apply to information received by the Irish Stock Exchange and is similar to the obligation of professional secrecy under section 118 of the Companies Act 1990 and which is to be disapplied in respect of the disclosure of information by the Stock Exchange under section 7 of the Bill. The sole member of the commission has confirmed that there may be circumstances where he may request information which may fall under the provisions of the EU regulation. Again, I would like to reiterate that these provisions are introduced solely for the purpose of this investigation and the particular circumstances which have been identified by the commission. Without the introduction of these provisions, the commission is clear that its ability to carry out its work would be severely limited. A definition of "document" is introduced in section 2(3) so as to include tapes, discs and sound recordings as well as written material. Again, this is to ensure that the commission has access to all information needed to effectively conduct the investigation.
Sections 3 and 4 of the Bill are introduced to ensure that the commission may seek the directions of the High Court or refer any question of law to that court regarding the performance of its functions. It is clear from the determinations published by the commission that the commission had considered seeking the directions of the courts in respect of certain matters but that the 2004 Act does not provide any mechanism for a commission to seek such directions. Sections 3 and 4 make the necessary provisions.
Section 5 is an important section and will address two concerns identified by the commission. The first relates to the efficient management of the workload of the commission. As the House is aware, one aspect of the terms of reference for this commission is the investigation of transactions during the relevant period which involved capital losses to IBRC of more than €10 million. As noted in the interim report, 38 such transactions have been identified by the special liquidators to IBRC. Effectively, this would involve up to 38 investigations. I understand that it has been agreed, in consultation with the Opposition, that the terms of reference for the commission will be amended so as to adopt a modular approach to these investigations.
However, in light of the potential for a large number of investigations, the commission has recommended, and it would certainly appear prudent, the appointment of additional members to the commission. While the appointment of more than one member to the commission is possible under the 2004 Act, that Act does not permit those members to operate in divisions or panels, rather the members operate together as a single commission. This section of the Bill proposes, therefore, that where an additional member or members are appointed to the commission, they can operate in divisions and, importantly, the report and findings of any single division will be a report and finding of the commission as a whole. While it is not intended to appoint an additional member at this stage, this recognises and responds to the range of transactions potentially to be investigated by this commission.
Permitting the commission to sit in divisions will also mean that the concern identified by the commission in its first interim report relating to a possible conflict of interest between a member of the commission in relation to any particular transaction can be avoided by allowing that transaction to be investigated without the involvement of that member, should the need arise.
Section 6 of the Bill addresses the disclosure of information by the special liquidators to IBRC to the commission of investigation. Determination No. 1 of the commission addresses the assertions of duty of confidentiality and legal professional privilege which have been asserted by the special liquidators and which the commission has found to apply.
The issues regarding the duty of confidentiality have been addressed through section 2 of this Bill in relation to which I have already spoken. However, in its determination, the commission further found that it had no power under the 2004 Act to admit into evidence documents over which a claim of legal professional privilege was asserted and found to apply. While it is understood that the special liquidators offered to the commission a limited waiver of legal privilege for certain transactions, nonetheless the commission considered that it could not proceed further or admit into evidence such documents. It is clear from the commission’s decision on legal advice privilege set out in determination No. 1 that the Commission was only seeking to obtain those documents which the directors of IBRC have received in the past which relate to legal advice which they might have received in respect of the write-offs of certain loans by IBRC and which are the subject of the current investigation.
While the special liquidators were willing to disclose the documents to the commission for the purpose of the investigation it did not consent to the documents being provided to any third parties although the special liquidators agreed to consider waiving privilege on a case by case basis. The inability to forward such documents to the former directors of IBRC would, in the view of the commission, deprive them of their right to fair procedures and their right to respond to the commission in a meaningful way.
Section 6 addresses the concerns raised by the commission. First, subsection (I) introduces a general requirement on the special liquidators to comply with all directions by the commission under the 2004 Act. With respect to the assertion of legal privilege by the special liquidators in respect of documents previously received by the directors of IBRC, subsection (2) will amend the Irish Bank Resolution Corporation Act 2013 to insert a new provision into section 9 of that Act. Section 9 provides for the Minister for Finance to issue instructions and directions to the special liquidators and the new subsection (2A) to be inserted by this Bill will provide that the Minister may, for the purpose of enabling the commission of investigation to perform its functions, give a direction to the special liquidator to do or refrain from doing a specified act. This may include a direction from the Minister to the special liquidators to waive legal professional privilege. There is no obligation on the Minister to issue such a direction and it will only arise where the commission requests the Minister to do so and informs the Minister, in writing, that the direction is necessary to enable the commission to perform its functions and it is in the public interest to do so. The basis for issuing such a direction would be the connection to the purposes of the IBRC Act as set out under section 3 of that Act and which, I remind this House, includes "to protect the interests of the taxpayer".
Section 7 will disapply section 118 of the Companies Act 1990 to enable the Irish Stock Exchange to provide confidential information to the IBRC commission who may admit it into evidence. Determination No. 3 of the commission, published in April, concluded that certain documents sought from the Irish Stock Exchange were confidential pursuant to section 118 which provides for professional secrecy in respect of documents obtained by the Irish Stock Exchange in pursuance of its functions under Part V of the 1990 Act in relation to insider dealing. As this is effectively a statutory duty of confidentiality, section 7 of the Bill will disapply it in respect of the disclosure of information to the commission.
Finally, in terms of the substantive provisions of the Bill, section 8 will amend the Commissions of Investigation Act 2004 but only in so far as it applies to the IBRC Commission of Investigation. Paragraph (a) amends the definition of document under the 2004 Act so that it replicates the definition under section 2 of this Bill. Paragraph (b) amends section 34 of the 2004 Act, again only in so far as it applies to the IBRC commission. Under section 34, a draft of any report by a Commission of Investigation must be distributed in advance of submission to the specified Minister and to any person who is identified or identifiable in that report. The provision in section 8(b) of this Bill will limit the distribution of the report to persons in respect of whom there is an adverse finding. This has been specifically requested by the commission to reduce the level of distribution which would otherwise be required on the basis that there is a strong likelihood of many persons being identified in the report but in respect of whom there would be no adverse finding.
Section 9 deals with the commencement of the legislation. I think Members of this House will agree that although this is not a long Bill, it will provide significant additional powers to the Commission of Investigation into IBRC. Given the conclusions and recommendations reached by the commission in the determinations and interim reports published to date, and following consultation with the Opposition, and with the commission itself during the drafting of this Bill, all of these provisions are proposed in order to ensure that the task set by this House back in June 2015 is conducted as effectively as possible.
I remind Deputies that the very significant public concerns regarding certain transactions carried out by IBRC, and which were recognised and acknowledged by this House, must be addressed in a comprehensive manner.
Finally, before I finish I would just like to return to a matter that I briefly mentioned earlier. Given the number of transactions undertaken by IBRC which have been identified and which involve losses of greater than €10 million, I understand that again following consultation with the Opposition, amended terms of reference will be brought forward shortly proposing a modular approach to the investigation with a focus in the first phase on the Siteserv transaction, being an issue of significant public
The Government intends to brief the Opposition leaders on these revised terms of reference next week, and a draft Order with the revised terms of reference will then need to be approved by both Houses of the Oireachtas, hopefully before the summer recess. I also understand that, as requested by the commission under section 6(6) of the 2004 Act, the Taoiseach has recently agreed to extend the timeframe for the commission until the end of October 2016. This will allow the commission to continue its preparatory work while the legislation is being enacted and the terms of reference amended as I have outlined.
I thank the leaders and Members of the Opposition for their contribution in reaching a solution to the issues raised by the commission and which would, if unresolved, have undermined the ability of that commission to reach findings in relation to the investigations involved. I look forward to hearing the contributions from the Members today.
Finally, I thank the Ceann Comhairle and Deputies for facilitating the Second Stage debate in this House today.
On behalf of Fianna Fáil I endorse everything the Ceann Comhairle said regarding the farce at the start of business today. We waited 35 minutes to get a quorum to allow business to start. It is unfair on the Deputies who were in the Chamber. I understand that the person in charge of business was on her local radio station talking about Fine Gael leadership which is a matter for the Fine Gael Party-----
-----but when it impinges on the business in the House it is not good enough.
I welcome the opportunity to speak on this legislation. The controversy around the sale of Siteserv fused together a number of issues that raised serious public concern. The legacy of Anglo Irish Bank, the enormous sums of taxpayers' money used to resuscitate the banking system and the exorbitant money spent on rolling out water meters were all linked together. Wealth, politics and policy were all woven together into a potential scandal that could simply not be ignored. In this light Fianna Fáil supports today’s Bill as a mechanism to ensure that the issues raised are fully and transparently dealt with.
Anglo Irish Bank was the nadir of the banking crisis. Some €34 billion was expended on that bank alone in an effort to stop the rot and staunch the bleed of the crisis. Countless families suffered and continue to suffer from the consequences of the decisions that caused the crisis. These repercussions are not simply financial but stretch deeper into people’s lives and the fabric of the State.
The State took action to tackle the disaster engulfing the banking sector at that stage. Taxpayers' money was used to try to salvage the banks and their vital role in the broader economy from a plummeting property market. Services and livelihoods suffered as a result of that effort. Getting value for this money must be at the heart of Government policy. This is a matter of both economic and moral importance. The grave impact of the crisis on people's lives must be dealt with fairly.
Against that backdrop and that challenge the emergence of rumours and information around the sale of Siteserv in early 2015 drew massive attention. Siteserv was sold by IBRC at a loss to the State of €119 million. The loss to the State was further reflected in other sales by IBRC and accusations of preferential loan interest rates. The idea that the remnants of Anglo Irish Bank's undersold assets linked to another deeply controversial public policy is incredible. Essentially, public money was grossly abused in order to privilege wealthy clients and it is indefensible in a modern democratic state.
Deputy Catherine Murphy and her staff deserve particular tribute for their assiduous work in this matter and in pursuing a series of damning documents under freedom of information and through parliamentary questions. Her efforts were commendable and are the reason we are here today. It is important to remember the foot dragging and rear-guard action taken by the Government on the idea of a commission. A compromised review by KPMG was an effort to stall calls for a full commission. It was only
Essentially, the commission was established to investigate and report to the Taoiseach on the substance and management of certain transactions and activities of IBRC that occurred between 21 January 2009 and 7 February 2013. Justice Brian Cregan was appointed the sole member of the commission in July 2015. Fianna Fáil pressed for a commission of investigation to shed light on the answers to the following questions. Why was there a surge in share dealing in Siteserv prior to its sale? There was a sudden upsurge in share sales in the month before the Irish Bank Resolution Corporation began to receive the first bids for Siteserv as part of a confidential sale process.
In November 2011, some 6.4 million shares were sold in the firm, compared to 121,000 in October 2011, and 4.76 million between January and October the same year.
Second, why were shareholders in Siteserv paid €5 million for an effectively insolvent company? Shareholders in Siteserv got this payment when the company was sold. Normally, shareholders get nothing if a firm that is sold is effectively insolvent. There has been no adequate explanation as to why this happened. It is also unclear why Siteserv itself was allowed lead the sale process and not IBRC.
Third, why were other bidders apparently excluded from the sale process? According to the then chairman of IBRC, Mr. Alan Dukes, there were approximately 50 expressions of interest in the sale but it was decided to exclude so-called “trade buyers” to prevent the company being “upscuttled” by rivals merely seeking inside information. In the end, Siteserv’s advisers invited just six bidders to take part. This was approved by IBRC.
Fourth, was the Department of Finance kept fully informed of the sale process and what actions did the Department take on foot of concerns about the sale process? Documents released under freedom of information, FOI, show officials at the Department of Finance, including the Minister, Deputy Noonan, were concerned about the Siteserv deal and several other large IBRC transactions. What is startling about all this is just how low and bad relations were between the Department of Finance and IBRC at the time.
Fifth, why did the Minister not provide vital information via replies to parliamentary questions, PQs? The heavily redacted FOl files contradict responses to PQs given by the Minister and indicate that less than full responses were given. The PQ replies did not include information about the higher bids or about the meetings which took place between his Department and IBRC, including one which he attended with the IBRC chairman and chief executive to discuss concerns about the sale of Siteserv. Parliamentary questions are an integral part of how we hold a government to account and how any Deputy holds a government to account. Evasive replies by Ministers undermine the spirit of the system and the importance of parliamentary accountability.
These critical issues demand answers. However, the commission has been beset by legal problems which the Minister of State has gone through and which have generated serious delays in reaching a final publication. The commission which was due to report in December 2015 has now requested a deadline extension to October 2016. The legal barriers encountered early in the commission’s work have hindered progress in what was envisaged as a swift moving commission. On these grounds this Bill should be swiftly passed and acted upon to ensure we reach the new deadline of October.
The Commission of Investigation Act 2004 has been successfully used on several occasions across a broad range of areas. It is a critical tool for the Oireachtas to uncover the truth in deeply controversial areas. In view of this, the insurmountable legal problems encountered in this case are noteworthy. We must ensure they do not occur again and make changes to the Act where appropriate.
The IBRC commission of investigation quickly ran into difficulties over issues of legal privilege, professional secrecy, and confidentiality across several stakeholders. These issues were highlighted at an early stage. Its first interim report in December highlighted these concerns and the need for bespoke legislation to address them. Fianna Fáil has serious concerns over why these matters were not adequately flagged and corrected prior to the inception of the commission. The Government had a duty to ensure the terms of reference were watertight in what is a legally sensitive area. It failed in this and we are now trying to rectify the matter via this new Bill. While we are happy to work with the Government to facilitate the passage of this Bill, we should not expect re-runs of this scenario in future commissions. It is important that lessons from this delay are understood and acted on urgently. Further commissions of investigation cannot be stymied and delayed by problems that should have been identified and addressed at the outset. The legal structures and resources of the Government are best placed to undertake this work. In particular, the fact that the Department of Finance is the source of one aspect of the legal impediments begs the question as to the level of communication in government over the terms of reference. Relying on the Opposition to identify intricate legal details will not suffice. These types of problems only further exacerbate public cynicism about our efforts to get to the truth of controversial public matters.
This is fundamentally a technical bespoke Bill that impacts solely upon the work of the commission at hand, with nine separate sections which give the commission powers to compel the submission of relevant documentation, waive legal privilege and empower it to overcome the series of legal obstacles impeding its work to date. The Government has made efforts to ensure the Opposition has been fully engaged with the changes and what is needed to enable the commission complete its work. I appreciate that the changes put forward in this legislation are required to allow us reach the deadline. Ultimately, the massive sums of public money involved demand transparency around how the sale was handled. The public have to be reassured that proper procedures were followed and taxpayers' money maximised.
The legacy of the banking crisis continues to be felt around the country. The claim that some people are privileged above others and that public money has been abused must be thoroughly and robustly investigated. There is no room for evasion or rumour in these important matters. Cynicism will continue to fester in these dark corners. The public deserves better. This commission is designed to uphold public faith, uncover any wrongdoing and ensure any lessons from this sale are learnt and implemented. We support this Bill’s passage to empower Mr. Justice Cregan to shine a light on these matters, finish his work and achieve an aim which everybody in this House shares.
They were mistakes on the Government's part. It could be said they were intentional but at the time we pointed out, as others did, that there were flaws in the establishment of the previous commission and in the liquidation of IBRC. This is what happens when things are kicked down the road. This Bill is evidence of the inability of Fine Gael and this Government to deal with complex issues. It is also an indictment of the so-called new politics of Fine Gael and Fianna Fáil which so far has been predicated on setting up commissions and committees, putting Bills on hold for 12 months and more, in fact doing everything they can to put things on the long finger, rather than make any real decisions but kick the big important ones down the road. It has done this not only with IBRC and Siteserv, but also with the issue of fatal foetal abnormalities, water, bin charges, and workers' rights.
Here we are back again to make another attempt at cleaning up this mess. We can guarantee that we will be back in the near future. Let us not, however, forget the root of this problem, the bad decision to rush through legislation liquidating a bank in the middle of the night some years ago. I was in the Seanad at the time when the Minister for Finance came from the Dáil Chamber where very little time was given to the Opposition - I think it was 15 minutes for Committee Stage. My party in the Seanad was given one minute and 30 seconds to state its case and hold the Government to account on that Bill and to consider its wideranging implications. It was rushed through and we are now dealing with the consequences. It is not the first time that has happened.
IBRC took over the bones of the completely discredited Anglo Irish Bank and Irish Nationwide Building Society. These banks have cost the Irish people billions of euro. They became the excuse for Fianna Fáil and then Fine Gael and Labour to hollow out the rights and the public services of the Irish people. The history of banking in this State is that there were retail banks and some investment banks, which moved to being gambling banks. It was as if we took the casinos from Las Vegas and moved them to Ireland. They became outrageous gambling banks and the Irish people have been left paying the price for that. Casino capitalism took hold. There was light touch regulation and cheap credit was made available to these banks. Land was rezoned on a grand scale, there were tax breaks for developers and the golden circle came into its own. The banks were the so-called tigers of the economy. All the people associated with these banks were lionised as wealth-creators when in reality they were engaged on a mad gambling spree.
When he spoke at a function in September 2005, at a time when Anglo Irish Bank was racking up spiralling debts and behaving in a most reckless fashion, the bank's then CEO, Seán FitzPatrick, said:
It was as if, overnight, we discovered just how good we were. We were bright, well-educated, flexible, good-natured, creative and even hardworking. The Paddy stopped drinking G&Ts before the three-course, three-hour lunch and found Ballygowan, the bowl of soup and the hang sandwich. We had ideas, and we had balls ... And all the time as we worked the scene and maximised the moment, the world watched in astonishment.
The world certainly watched in astonishment when the house of cards came tumbling down, the casino capitalism came to an end and all of these so-called wealth creators, who were lionised by Fianna Fáil, Fine Gael and sections of the media, were seen to be the frauds they were. That is the reality. Their inactions and greed have landed us where we are today. That is why we are back debating legislation on the IBRC. Responsibility for this mess must be taken by the Minister of State, Deputy Stanton, his Government colleagues and those whose support of casino capitalism contributed to the creation of this mess in the first place.
It could be argued that all the banks were bad. Anglo Irish Bank and Irish Nationwide were two of the worst offenders. There can be no doubt that we are still paying the price for the criminal behaviour of some people at the top of these banks. In May 2008, four months before the crisis broke, David Drumm of Anglo Irish Bank told The Irish Timesthat the economic downturn would present a chance to see "the other side of the show". How right he was. Unfortunately, the other side of the show involved the taxpayer having to bail out these banks. The Irish people had their so-called rainy day fund - the National Pensions Reserve Fund - robbed from them and used to recapitalise the banks, or so the story goes. In reality, taxpayers' money was used to bail out the banks on foot of their reckless lending. What did that mean? Those who depend on public services, such as our education system and our hospitals, paid the price. That is the legacy of the bankers. That is the other side of the show that the Irish people really saw. This crisis gave the Irish people a rude awakening in terms of how power and influence work in this State. Many good books have been written about this period. They show how greedy elites and powerful golden circles controlled policy and the banks. There continues to be a special relationship between the conservative political parties and the so-called wealth creators. Billionaires who do not pay tax in this country think they can do and say what they like while attempting to frustrate commissions of inquiry. We all know who they are. They support some of the parties in this Chamber.
The IBRC was formed three years after the crisis first broke. Two years later, a monster was created by the special liquidation of the IBRC. Not surprisingly, many questions about the liquidation of the IBRC have gone unanswered. On the night it was liquidated, the Dáil was given 15 minutes on Committee Stage to debate the Bill providing for the liquidation. In all the subsequent media debates and commentary, my party and others quite rightly pointed out that we would be back here again. The Government told us this would not happen because the legislation in question was well thought out and represented the way forward. We can see what happened thereafter. The Bill was signed by President Higgins at 7 o'clock on a Wednesday morning, less than ten hours after its First Reading. It was almost unprecedented. The President had been rushed back to Ireland that night from an official visit to Rome to ensure the smooth passage of the Bill.
The Irish Bank Resolution Corporation Act 2013 was summed up by the media as offering the Irish people "a much-needed psychological boost" but little else. I think it was a disgrace that some people in the media did the job of the Government at the time. They sold the legislation as something it was not. They were not prepared to tell the truth about what the legislation entailed, what exactly was happening and who was going to pay the price. The people who should have paid the price for what happened in this country were let off the hook. Not for the first time, some people in the media missed the true nature of what was going on. We witnessed a cover-up that continues to this day, involving some of the most powerful people in the State. I refer, for example, to billionaires who do not pay tax but instead lecture the rest of us, threaten elected representatives and others and prefer to pass brown envelopes to elected officials. The brown envelope culture that threatened people's very attachment to politics in this State is another terrible legacy of the so-called Celtic tiger. Even now, events following the liquidation of the IBRC are out of bounds under the Bill before the House. Even if this commission of investigation is successful, it will not reveal the full story of what happened at the IBRC and to the Irish people's money.
When Sinn Féin started asking the first questions about write-downs at the IBRC, the Minister for Finance, the Taoiseach and their Government colleagues did not take us seriously. It took a lot of work and cajoling for the Minister to accept there was a problem. The Taoiseach decided off the top off his head to appoint the Comptroller and Auditor General to look into the issue. We eventually we got a commission of investigation. This is a complex legal issue. Clearly, the first attempt to set up a commission to do this job was a failure. It was signalled at the time that this would happen. The commission that was created by the Oireachtas in June 2015 was supposed to finish its work by December of that year, but the Taoiseach has extended this timeframe until the end of October 2016. It always seems to be the same thing in this State. We set up commissions and give them deadlines, but we end up having to come back and extend those deadlines because we have not thought it out and we have not given the commissions the powers they need.
The Teachta Dála who interrupted me earlier was right when he suggested this was not an accident. I do not think it was an accident that the commission was set up as it was. In my view, the intention of the Government at the time was to frustrate real progress and to hinder efforts to get to the truth. Many elements of what is wrong with this State are at play here, including the desire of the golden circles that have ruled it for so long to ensure their secrets are not unearthed. In November of last year, a shocking interim report listed - chapter and verse - the reasons the commission was not fit for purpose. Everything came shuddering to a halt. Panic set in among the officials who had to revisit the legislation. The legal advice from the Attorney General at the time should have been published, as we in Sinn Féin called for. We must get this right now. In my view, we will not have a third opportunity to do so. We cannot keep coming back at this over and again. We have to get it right.
I must compare the enthusiasm from the Fianna Fáil benches today to that party's sudden and inexplicable U-turn on NAMA investigations. As always, the two faces of Fianna Fáil exist side by side. It was quite incredible to listen to Deputy Calleary talking about greed, the problems in the banks and what happened in Anglo Irish Bank as if his party was somehow exonerated from having any hand, act or part in this. Every time Fianna Fáil speaks on this issue, I am reminded of the infamous episode of "Dallas" when Bobby Ewing emerged from the shower. In the case of Fianna Fáil, it is as if the last five years did not happen. That is what it is trying to present to the Irish people. It has mastered such tactics, but it should be reminded at every opportunity that it is the party which is primarily responsible for this mess. It fostered the greed in the banks, put light-touch regulation in place, allowed reckless borrowing and lending to happen and facilitated the speculation that devastated the lives of many people. These were not victimless crimes. The corruption that flowed from this politics was not a victimless crime. Bad planning happened as a consequence of this form of politics. Who paid the price when this house of cards came down? The bankers, the small number of policy makers in government and in the Department of Finance and the small elite in the golden circle did not pay the price for the decisions that required billions of euro to be spent, as I have outlined. Children in schools, people on hospital trolleys and those who are told they cannot have decent contracts of work are still paying the price of those decisions to this day. It is in that context that a Fianna Fáil Deputy has shown the brass neck to talk in this House about what went wrong in the last decade, as if it had no responsibility for the era in question.
In his letter, the Taoiseach speaks of the dangers of litigation inherent in this proposal. I fear he is right, but the country cannot stop because lawyers and, in particular, one client, believes he has the power to stop any investigation he wishes. There is always a danger of litigation, but that is not a valid reason to stop looking down holes.
The views of the public may not be fully focused on this issue at the moment but I do not believe for a second that all is forgotten. People know instinctively that this commission of investigation is looking into serious matters of fairness in our country. This is about people's money being treated preciously rather than being carved up among friends, among the elite.
We need only look at how abhorrent Fine Gael and the Labour Party were when it came to creating this commission to know that some uncomfortable truths might come out of it. The public will not let us off the hook for failing to correct this legislation. They remember what sparked this. It was allegations that certain people were getting sweetheart deals. That sounded and it still sounds like a perfectly reasonable possibility. For decades, this society has suffered from corruption at the top. Golden circles have operated with impunity and still do to this day. No one in his right mind believes that the corruption that was endemic in Irish politics is gone. We see it happening again in NAMA with all manner of allegations being made and the calls for commissions of inquiry into various deals again set front and centre in Irish politics. All of this is because of the failure of the State to deal with these problems and the way it has allowed the people in the golden circle to do what they wish. Politicians, businessmen and many others see themselves as out of reach, above the law and not subject to the same rules as the rest of us. The tiny numbers that have seen the inside of a prison cell in consequence prove that they are not completely wrong. To this day, it remains a sore for many people that those who were behind the greed, corruption and casino capitalism were not brought to book. Their recklessness in managing the economy, in particular, the way they managed the banks and ran those banks into the ground, led to these two banks becoming liquidated in the first place. These people have not been properly held to account.
Many people believe the State will never truly hold these people to account because that is not the way we do it - we like to protect these people. They are above the law and deemed to be respectable. If ordinary people do not pay their television licence or water charges because they see the charges as unfair, they are threatened with court action, yet these other people can act with impunity. This two-tier society and approach to law and order is the problem. The Deputies in the Government party see themselves as part of a law and order party. That is their view when it comes to working class people put not when it comes to their friends in high places and the golden circle. They take a completely different view when it comes to how they operate in this State.
I do not believe anyone was surprised that the special liquidators kicked up a fuss when the commission came sniffing around. The people in KPMG are the wrong people for this job. They are part of the protected elite and have so many fingers in pies in this State that there is no way they should ever have carried out this job. People from KPMG were the auditors at Irish Nationwide, one chunk of IBRC. They have an interest in this legislation that goes beyond what they are being paid for. Their role in the special liquidation was like appointing a poacher as gamekeeper. Their interests are not those of the people. However, their pockets are certainly lined with the people's money to the tune of €5 million in fees and counting. It is the same thing over and over again. The same companies are involved in the same scandals and unfairness in the use of taxpayers' money. Again, it continues and nothing is done about it. We turn a blind eye and pretend there is no problem, or at least some people do. However, there are some among us who do not act in this way. There are those of us who shine a spotlight on these issues.
I remember clearly the comments of a previous Taoiseach. Some of us spoke about the problems with greed, light touch regulation and reckless spending and borrowing. We spoke about the economy being a runaway train. He said that we were naysayers who should consider committing suicide. That is how opposition voices were labelled. This applied not only to those in opposition in the political system, but also to economists who called it right. That is how we were treated and that is how we are still treated to this day. They take the view that there is nothing to see here and that people should move along. Each time we try to shine a spotlight on any of this activity, the response is always the same - it is consistent. Why is that the case? We must try to carry on despite what obstacles will be put in the way.
The new power given to the Minister to direct the special liquidators is at the core of this Bill and is long overdue. The Minister should not be hesitant in using this power as necessary. The Taoiseach speaks of introducing a modular approach. For my party, the Siteserv transaction must be the focus of the first module. It is the reason we have a commission of investigation and it is where the public interest is most focused. It is logical, clearly, to home in on the largest transactions. The extension of the deadline for the report is to be moved. It is important to send a clear signal that only in exceptional circumstances will any further extension be considered. If there are to be discrete modules, then interim reports should be published as they are completed. Any increase in the commission's budget must be justified and implemented tightly.
I will finish with a number of important points. I spoke at length about what led us here in the first place and what brought us to this point. Earlier, I mentioned that there are victims. The victims of all of this are the people who those of us in this Chamber should be representing. Collectively, we must ensure these things do not happen again. We can only do so if we have policies to ensure that the State has an important role to play in regulating the banks and ensuring that people are not above the law, including billionaire businessmen and women who should pay their taxes in the State and who should be subject to the same laws as the rest of us. We have a role to play to ensure that we do not allow our banks to behave in an inappropriate way. We have a particular responsibility to ensure that we do not spend taxpayers' money to bail out these people each time they make a mistake.
I remember clearly the height of the Celtic tiger. At the time, politicians from Fianna Fáil and Fine Gael and those who championed the rights of the banks told us that the State should stick its nose out of the free market and out of the banks. We were told to let the banks do what the banks do and that the rising tide would lift all boats. That was the mantra from the Government at the time. What happened? We know what happened. We had a bad crash and the people who were responsible for it walked away clean while ordinary people had to pay the price. In my part of the country, the south east, unemployment is still at 12.5%. People are on hospital trolleys throughout the State. Children go to school hungry. There is extensive poverty and inequality. Despite this, we still have these people at the top on vast salaries. Some of them are billionaires who do not pay tax. Some people in this Chamber think that is okay and we should continue with that. It is not okay and we need to change course.
I support the Bill only in that it seeks to deal with some of the concerns that have been raised by the sole member of the commission. I sincerely hope this legislation will improve the workings of the commission. I know there will be a final report and that some recommendations will flow from it. However, I am certain they will fall far short of what is actually necessary. I also hope the commission can really deal with the issues raised by many Deputies in respect of Siteserv and many other issues that flowed from the liquidation of IBRC as well.
I and my party are supporting the Bill only because we want to improve the work of the commission. We sincerely hope that it plays some small part in getting to the bottom of the many wrongs at the heart of how those two banks operated and how IBRC is now operating as well.
First of all, while you are here, a Cheann Comhairle, I wish to say that what happened earlier this morning was seriously regrettable. The Chief Whip or assistant Chief Whip should come to the Chamber and apologise to the House for what happened. Numerous people were here. In fairness to those from Fianna Fáil, they were here in significant numbers. Others were here as well.
I waited myself for more than 20 minutes. I believe that an apology is due. One of the most abused terms in recent times has been "new politics". This morning was an absolute example of new politics at its worst, where it is all about show and not about content. It has very little seriousness to do with the current challenges which face Ireland as a country as we enter a period of very significant financial risk once again. If there are purposes to this debate, one of them ought to be that it gives us some valuable learning that we can use as we face into this next crisis. If there is to be a new politics and if Deputies of the Government party, of whom I saw only three while I was here for 20 minutes, have a problem with coming here at 10.30 a.m. on a Friday, with access to phones and so on, we should have been able to arrange a postponement for a half an hour or so in order that the House could resume in an orderly fashion.
In relation to this investigation, I have heard quite a few people going into the dreadful history of Anglo Irish Bank and its subsequent sorting out in large measure by the previous Government. The people who are now pontificating at great length in arrears on stuff that they were, to be honest, quite terrified about at the time really ought to pay attention to what is happening at the moment in the Italian banks and whether that is going to have serious knock-on consequences for Ireland in the months to come. We have a number of people here who are very proud supporters of the Brexit campaign in the UK in which the extreme right met the extreme left. All the rest of us in the different countries have been left to pick up the pieces.
I doubt that many Deputies of any party in the Dáil hold much of a candle for well-off bankers who are paid astronomical and disgusting sums, often for very little other than promoting and developing the share price of the banks in question. In wishing Mr. Justice Brian Cregan well with this investigation and in wishing for a speedy conclusion in which all of the questions that people have are answered, I hope that we can focus as a Chamber on the challenges that now face us as a consequence of the UK leaving the EU and the extreme difficulties and uncertainty that that will pose for banking.
I know it is not fashionable to say this, but in this city, in Waterford, in Wexford and the south east, there are very many Irish people - graduates and others - who work in banking, in the financial services and in the development of financial technology and they are very happy to be so working. A previous speaker seemed to be condemning everybody who works in a financial institution or a financial capacity. To be perfectly honest, I only wish that perhaps a bigger accounting firm had been looking after the accounts of the charity Console in order that those accounts could have been properly looked after. The people who are dependent on the services of the organisation for counselling could have had the resources of an organisation that everybody acknowledges was being used to great effect to help people, particularly siblings and family members who had been affected by suicide. We need a little bit of honesty here. We need to be honest about things.
Even in the perfect Trotskyist nirvana, someone would have to look after the money, or perhaps money would be abolished. We know that nobody would have to work so that is taken care of. However, the people would probably need a little bit of income to do some of the things they wanted to do.
The previous Government of Fianna Fáil took out a €30 billion mortgage, roughly speaking, in the name of Irish taxpayers which was to be repaid in a period of ten years. It included a very significant and high rate of interest. At the time, Fianna Fáil took a two-year holiday on the payments of the interest so that when a new Government was formed in 2011, every March, €3 billion had to be paid in respect of that mortgage. If I were some of the Deputies in the House, that would not concern me. It would not concern or bother me because what is simpler is to abolish it all. As a country which was in significant financial difficulty, we have reached a much better place but we have not solved all of our problems. Renegotiating and restructuring the loans was a far better option than the default option which was suggested by a number of people quite wildly-----
Even in Argentina, which was held up as an example, it has only been in recent years - almost 20 years after their default - that they have begun to be able to sort their issues.
On the subject of Anglo Irish Bank, I was somebody in the Dáil who pursued the issues which led to the banking collapse, in particular the wild and extravagant property tax breaks which were given to developers and to many of what were called "high net worth individuals" to invest in property. That, more than anything else, sowed the seeds of the Irish collapse, as well as the fact that we had joined the euro and more money was available more cheaply to Irish banks to lend for property development. A small builder's bank, a boutique bank which I think had been run for the previous 20 or maybe 40 years in a modest way and which was very little known about except by people in the building trade and by people involved in investment, suddenly ballooned to the point at which it became bigger, certainly, than Bank of Ireland and was possibly going to become bigger than AIB. There was a famous quote at one stage from the big main street banks, which of course we absolutely need as a society to look after our money, to help us to save and to help us to invest, that Anglo Irish Bank was "eating our lunch". The other banks went after that particular model with the awful consequences that we know of for so many individuals, communities, business people and shareholders in the banks, many of whom were relatively small investors and lost all of their money, much of which was private savings for their retirement.
The scale of the human tragedy as a result of the mismanagement and the abuse that happened at Anglo Irish Bank affected, and ultimately almost brought down, this State. If we are to have an honest debate here, we must acknowledge that sorting it out, no matter what option was chosen, was never going to be easy.
Many of the Deputies who went for the default option have clearly never lived in a state either during or after a default. Otherwise they would know that is one of the worst things one could visit on any country's population. It means massive unemployment, far higher than we experienced-----
-----and massive poverty at a level which is utterly distressing. If those Deputies ever get an opportunity to visit such a country to see what happens they should take it.
If people were honest about the development of IBRC and the deal with the promissory note, they would lay out what their alternative was. That €3 billion a year hung like a noose around the neck of the Irish State and had to be paid every March in cash. Otherwise default would have ensued with consequences that I am not sure those who advocated it have ever seriously examined in other states, but then it would not be theirs to worry about. Like Nigel Farage, Boris Johnson and their friends in the Brexit campaign, they could run off the field. They could be a general on their horse but then run off the way Farage and Johnson have done in the UK leaving others to sort it out.
I have not seen him being very forthcoming about a lot of the different elements of his life. So, while Deputy Cullinane was talking about honesty, perhaps he will have a chat with him if he was sufficiently brave enough.
To renegotiate the €3 billion promissory note was a significant achievement. Of course it had costs and did not come free, but I challenge the people who said they had alternatives to set them out and cost them. For example, they should identify the consequences for pensioners who rely on the State pension. On my part, it was five years' work to protect those social welfare payments when others in international institutions would have seen them dramatically reduced, as happened in the two years that Fianna Fáil was in government after the financial crash.
In examining this legislation, I am not a lawyer so I will not comment on the amendments. I do not know if there are many people here who are qualified to comment in detail on the amendments which this legislation represents to the original terms of reference. The key thing is that the judge carrying out the investigation should have access to resources, facilities, powers and the capacity, if he so wishes, to go to the High Court. He or she should be able to deal in a competent and timely manner with all the matters which are raised. That is the critical issue.
Notwithstanding the initial queries which were raised by Deputy Catherine Murphy, there was a period in this House when others became involved in the debate and wished to expand the terms of reference to such an extent that I am not sure how long it would have taken to deal with them all. Deputy Catherine Murphy probably has a clearer idea.
It is nice to think that one will be able to investigate everything, but I hope this legislation will allow a focus on those issues that are critical in terms of the questions which were put. I also hope that in the context of the investigation we will then be able to identify better mechanisms in the Dáil whereby questions can be answered. In my view, had Deputy Catherine Murphy been able to get comprehensive answers to her questions - I do not necessarily have a solution, but perhaps by being briefed in detail and being able to interact with some of the officials dealing with the issues, and not simply with the Minister on the floor of the House - much of the commission's work could have been avoided.
That point is important because with new politics it is inevitable that we will potentially see a lot more commissions, which are expensive exercises. Social expenditure is significant, but if one has to spend vast amounts on commissions that will clearly restrict the sums that would otherwise be available for critical areas like health and education. Nonetheless, if we can get the answers it is money worth spending. I hope, however, that we will also get some advice and insight into how the Dáil can deal as well as possible with answering questions when they are first asked. A mechanism must be found to do so.
As Tánaiste, I know that from time to time Deputies tabled extremely complex questions about individuals - particularly individuals with businesses in the North - whom I personally had never heard of. They demanded an answer there and then which of course they are entitled to do under the rules of the Dáil. In all honesty, however, I was not in any position to give an answer because I was hearing about names, transactions, amounts and actions, in detail, of which I had no knowledge. Nor could I have any knowledge of them. I simply had no involvement in that particular area. I hope therefore that we will ultimately be able to use this legislation to make the Dáil function in a much better way than it has done up to now concerning inquiries and parliamentary questions.
I imagine that the concentration of much of the inquiry will inevitably be in relation to Siteserv. It is important it should be and that those questions are answered. It will be a matter for the judge to determine the inclusion or exclusion of specific transactions based on the powers as well as the actual terms of reference. Hopefully, that will facilitate a broader scope of inquiry and will allow witnesses to participate. It will also allow for other matters, which were raised at various times in parliamentary questions, concerning share trades. Inevitably though, the main area of focus will be on the issues around Siteserv. It is important that those should be addressed.
Special liquidators have also been mentioned and it is important that comprehensive answers should be available to any questions on them.
We also have the question of write-offs which were incurred at IBRC on the sale of Siteserv. I took part in the debate on the creation of NAMA. I was extremely critical and did not support the formation of NAMA. However, once it was formed as the State's bad bank for the purpose of rescuing what remained of our banking system at the time, it was literally impossible to untangle it at that point.
In terms of a banking collapse and looking at what is happening to Italian banks at the moment, once banks have adequate liquidity by and large they keep going, assuming that in the long run they make a minimum level of profit. They need solvency, as well as an appropriate ratio between their loans, deposits and borrowing.
It was suggested in relation to the Irish banking collapse that there was a liquidity problem, including in Anglo Irish Bank which, in turn, became the Irish Bank Resolution Corporation, but that that was not a solvency issue, which was probably the biggest weakness in all of the discussions that took place. People in the Dáil, the Department of Finance and the Central Bank were terrified even to allow the term "solvency" to be discussed because banks are about confidence and once confidence is lost in a bank, even a small bank or credit union, creditors, depositors and so on tend to want to get their money bank and this leads to the business of the banks diminishing and inevitably in a crisis such as happened here in 2008, the collapse of the banking sector.
There has been much mention of Mr. O'Brien. I hope that any connections or transactions he has had will be, if and where appropriate, properly examined and that the questions that people have raised will be answered in the report.
When we discussed what led to the crisis, I said that the key contributor was the crazy tax breaks given to developers and those known as high net worth people. I noted in recent weeks a development that we need to be careful about. We have a housing crisis and we need to build a huge amount of additional houses every year to cater for social housing and particularly to cater for affordable housing for young people who have been working since 2004, 2007 or 2008 and who now either individually or as part of a couple with a family want to buy a house. The Minister for the Environment, Community and Local Government, who has responsibility for housing, has put forward a proposal - I do not know if it has been agreed by the committee-----
No, this is relevant. Other speakers spoke at length about what caused the crisis. The Minister has proposed that developments in excess of 500 units, which in Dublin west in my constituency is a relatively small level of development, of which there are many in my area - in other areas there are bigger developments - be allowed to bypass the planning process of the local authorities. Deputy Barry Cowen was quoted as saying that he felt, if necessary - this is the reason I come back to these events - the Dáil should sit all night to pass the necessary legislation. He was recommending that the number of units involved could be as low as 150 and possibly as low as 30. In terms of the lessons being drawn from what happened in the run up to 2008, we should not abandon proper planning in this country to allow a free-for-all at a time when we have an incredible housing crisis and we need thousands of units built every year. The road to Hell is paved with good intentions. If we cut local authorities and local residents out of the picture we will have learned nothing at all of value from the terrible things that happened to people in this country as a result of bad and poor regulation.
This legislation is not just about the past: it is also about our future and how we respond and recover. Unemployment in this country is down to 7.8%. Youth employment has more than halved but is still unacceptably high. We have a way to go in that regard. Areas like the south east and parts of the centre of Ireland are still heavily affected by unacceptably high rates of unemployment. We still have a lot of work to do. We need to learn the lessons of the past and to look to models that will work. If Brexit goes badly we will be faced with real challenges over the next two years. Most commentators in the UK are already talking about a recession in the UK. The value of sterling has plummeted. This will probably lead to greater traffic going northward, which will affect towns like Dundalk which had been doing well for a number of months on the basis of the strength of sterling. I know that in political ideology the fate of a town like Dundalk and the fact that it was beginning to be prosperous might not count for much.
As we move to the discussion of how to manage our economy so that we have the type of Ireland we want, a society with people at work and with good, strong public services, particularly in health and education and social protection, then we need people contributing tax and social insurance so that we can afford the services that I believe we want. Although this legislation is extremely technical - as I said, I am not a lawyer - it may help us to learn about what happened, what we got right and did not get right and the solutions. As I said, we will need solutions in the time to come to the challenges of Brexit.
I wish the judge well. I congratulate Deputy Catherine Murphy on her work over a lengthy time to elicit answers in relation to these matters. I doubt if we will get all the answers but there are key modules of this that should be the focus of concentration. If they are addressed we may learn something valuable that will help us to avert future crises by which we may be threatened.
What happened this morning, in terms of there not being sufficient members from the Government side in the Chamber to allow us commence our work, particularly given this is Government legislation, was very poor form. I am not sure Deputy Burton was best placed to make that point given she was only here for a couple of minutes and then left and as such did not contribute to the quorum.
Yes. It is important that we discuss this legislation and that we do not just re-run old battles from the election about who was right about bank bailouts and so on. This is important legislation.
We accept and agree with the proposal from the Government in terms of the amendments because we want to see the Commission of Investigation empowered to do its work effectively and to get over the barriers identified by Judge Cregan as quickly as possible and, in particular, to allow it report as quickly as is possible on the question of the Siteserv transactions. An important point for discussion is why we need to make this change long after the establishment of the commission. The point was raised originally by the judge in November and we are now making this change. An article in The Sunday Times by journalist Brian Carey, raises the questions better than I could. It states:
For all the world, the inquiry into loan write-offs at IBRC looks like it was built to collapse: the towering edifice, the flimsy foundation, the complex material, the entirely infeasible completion deadline.
It ran out of control well before it was due to begin. By estimating a duration of several years, Judge Brian Cregan first rendered the whole prospect outrageous. It was the government’s decision to broaden the probe to 38 transactions and losses to the state bank of more than €10m. Now the government claims that an investigation could cost as much as a tribunal.
There were never grounds for a probe of that scope, depth, length of expense, nor was one ever demanded. And so the public's question for truth runs aground in a legal quagmire of confidentiality, privilege and enormous expenses. How convenient.
There were only ever a handful of questions that begged answers in this affair. Did Denis O'Brien, the most powerful businessman in the country, receive preferential treatment in his dealings with IBRC? Was he unduly favoured in his purchase of Siteserv, a utilities service company which was heavily indebted to the bank? Did he get preferential rates of interest on his own personal borrowings?
... KPMG could review, as suggested by Cregan, the top 12 write-offs, provided once again there is no conflict of interest. It is the job of a liquidator to investigate the affairs of a bust company. As yet, the evidence is not there to justify a wide-ranging, lengthy and expensive judicial inquiry. Frankly the public should be aghast that one should take place without at least establishing a case for such a probe.
By the same token, the Siteserv issue should not be buried with this administration. Right now, this looks like a manufactured botch job.
One could accuse him in normal circumstances of extreme cynicism and of believing in conspiracy theories, etc., in respect of believing that what we have here is a manufactured botch job. That certainly would be the case if we were to take seriously what the Minister outlined when he reiterated that the Government shares with the rest of the House a desire to ensure that there is an effective, efficient and timely investigation into the issues of significant public concern that have been raised in respect of IBRC.
The problem is that this statement does not tally with the actions of the Government, particularly those of the Minister for Finance. Far from establishing this commission of investigation in timely manner and giving it appropriate powers to do the work it had to do and certain terms of reference, this was dragged out of the Government kicking and screaming. Famously, we know that Deputy Catherine Murphy put 19 questions to the Minister and failed to get answers. We know that the Minister effectively engaged in deliberate attempts to bury the issue, claiming in answer to the 19 questions that there was nothing wrong with the Siteserv deal and that the board of IBRC was happy but never mentioning that his own Department had questions. We know he attended a meeting in July 2012 between the Department and the board of IBRC where the sale was discussed and the Department raised serious concerns about the way Siteserv was sold. The Minister had the opportunity at that stage to order an inquiry when he knew about the problems but he obviously did not do so. Over a number of weeks in the Dáil, we saw the Government under pressure and the KPMG investigation. Eventually, this was dragged out of them. The question raised by Brian Carey is not an unreasonable one.
The essence of the matter for us, which needs to be investigated as quickly and thoroughly as possible, is the Siteserv transaction. The consequences are that the taxpayer picked up a bill for €119 million. On the other side, Denis O'Brien effectively got a licence to print money through the imposition of water meters. The board of Siteserv was allowed to conduct the sale instead of IBRC, which was tasked with getting the best return for the State. We know that the board decided to exclude trade sales and instead entered into an exclusivity deal with one buyer, Denis O'Brien. We know that the board of Siteserv decided to reject higher bids for the company and that their shareholders got a €5 million payout for what was a bankrupt company. We also know that many of the directors of the company who conducted the sale were shareholders, that Arthur Cox acted for the buyer and the seller and that KPMG and Davy acted as advisers for the sale despite many of the Siteserv board having links to KPMG and many of the shareholders who got the €5 million being clients of Davy. Those are the central issues that need to be investigated. They are not that complicated in reality despite the previous stonewalling from the Minister.
Another issue relating to Siteserv that needs to be investigated, but obviously will not be investigated by this commission as it is outside the terms of reference, concerns the more fundamental point about why Denis O'Brien bought a bust company in a field in which he had no experience. Did he did so in the expectation that he would then be able to get the water metering contract as part of GMC Sierra? That is not included here because it is limited to the question of the write-offs in terms of IBRC, but it is an important part of the story. There are obviously two parts of that story. We know that Bord Gáis, which was responsible for the decision on water meters, told the Government that it was unnecessary to install the meters before the charges came in. Nonetheless, the Minister responsible at the time, Phil Hogan, decided to push ahead with the water metering. We also know a number of meetings happened behind closed doors, including two that involved the former Minister. We know that on 26 April 2015, Mike Aynsley said that the existence of the water metering tender was known, as was the likelihood of Siteserv bidding and the knowledge that, should it be successful, the value of the company would be enhanced. On 24 April 2015, Alan Dukes said that the sale took place over two years before there was any discussion of a public contract for the installation of water charges, so there are further questions to be asked there.
The fundamental point is that what has happened here is not victimless, nor is it winner-less. There are people who won from this series of transactions. The Siteserv shareholders, Denis O'Brien and the firms that were paid fees to oversee the process benefited while the public was the loser. It goes the heart of how Irish capitalism operates, which is why it is a sensitive issue from the perspective of the Government, particularly Irish capitalism in the so-called post-bailout environment, where write-offs have come to the fore as a mechanism for a transfer of public wealth to private individuals. In particular, it raises the issue of Denis O'Brien and his relationship with the media and politics and what this demonstrates about how society operates - how the 1% works in practice. This commission has the potential to unveil aspects of how this relationship works and how people are able to make substantial amounts of money. We need to look at that.
It also involves an individual who is extremely litigious and who has used legal action or the threat of legal action against the Dáil to prevent it from discussing certain matters, against media outlets that attempted to report, in line with the Constitution, utterances made in the Dáil, and against the satirical website Waterford Whispersfor a joke. It is clearly an attempt to chill discussion in public and the media so that these things are not discussed and do not come out.
My final general point is about winners, losers and write-offs. It is relevant in terms of the points made by Deputy Donnelly yesterday. We have had massive bailouts at a cost to the taxpayer, with IBRC resulting from that. In effect, a second round of bailouts are taking place. There have been transfers of wealth to certain private individuals by the State through the mechanism of write-offs. The Minister said that write-offs are a normal part of doing business. That speaks to the reality of Irish society and how it functions for the top 1%, for whom write-offs are a normal part of doing business. However, if we look at struggling mortgage holders who cannot afford to pay their mortgages, we can see that write-offs are not a normal part of their lives. They cannot get access to write-offs, so the point is that it is a case of write-offs for the elite - the 1% - but no write-offs for the rest. It is a mechanism for a transfer of wealth upwards, which is why we see the kind of accumulation of wealth we have seen over the course of the crisis. The top 300 people increased their wealth by about 60%, while Denis O'Brien doubled his wealth over the course of the crisis. It is precisely through mechanisms such as this that they are able to achieve that.
I did not hear Deputy Donnelly's speech yesterday but I received an e-mail from somebody who did, who had e-mailed me last February about her mortgage and engagement with the financial institution that used to be Irish Nationwide and became IBRC. It is telling about what is at stake in all of this. I will read out a little of what the person says:
I am an IBRC mortgage holder with a performing (just about so far) loan that has just been sold to Mars Capital No 3 Ltd. An unregulated fund. I have stood outside the Dail with other mortgage holders trying to get this government to see sense but no, Michael Noonan had no regard for me or any ordinary person caught up in the Government's liquidation of IBRC. So I wanted to know who will I be dealing with. Who is Mars Capital No3 ltd? I did some research on CRO.ie and discovered that Mars Capital No 3 Ltd had until January 15th, two directors one of whom had the same name as a person who held a senior position in IBRC in the past and who was also in the past an employee of KPMG the firm of liquidators. That surprised me but I am an ordinary person unused to looking at company documents. In recent days that director stood down and another is appointed per new documents lodged with the CRO. The other fact I discovered is that the company has three share holders - all of them charitable trusts which I googled and are associated, I think with a Dublin legal firm. They are named Badb, Medb and Eurydice. What in the name of God has charity got to do with it??? Who would use charitable trusts? Why charitable trusts? Who owns my loan? I am still none the wiser ... I believe this has to be examined. Why hide behind charitable trusts? I took my loan out with a building society not a charity. I stand to be corrected but the charitable trusts concerned may have been in the news in the past. I think I am entitled at least to know who owns my loan considering my government has done the selling.
I will inform people, if they do not know, that the charitable trusts were owned by Ireland's biggest corporate tax firm, Matheson, which has been in the news because it was using these three companies to help international hedge funds avoid tax. The Central Bank has reported on the use of these charitable trusts. They are apparently registered to relieve poverty and distress but actually help hedge funds and banks pay billions less in tax in the area of high risk assets. The Central Bank has warned that these structures are potentially extremely dangerous because we do not really know anything about them. This says everything about the web of connections between corporate accountancy firms, the financial institutions that we bailed out, and handing over the mortgages of ordinary people to vultures engaged in aggressive tax avoidance. That same institution gets a write-off but the person who e-mailed me does not get a write-off. They do not get a discount and do not even know who now owns their loan but we discover that the people who own the loan are a legal firm assisting people in tax evasion - I should say "tax avoidance," as I have to use the technically correct term. This same institution can write off €119 million to the benefit of the richest man in Ireland, Mr. Denis O'Brien, who is not tax resident in this country. Apparently he does not live here, although his kids go to school here and he has a yacht in Roundstone, County Galway. Deputy Murphy and I have said these things. In the middle of 2012, when I made some of these points and suggested the Mafia would have something to learn from some of the dealings of the rich in this country, I had the privilege of receiving a letter from Mr. Denis O'Brien castigating me for abusing my Dáil position, with a thinly veiled warning that I had better stop doing it. That is what goes on. Ordinary people like the woman who wrote to me, and thousands of other mortgage holders, some of whom lost their homes, are screwed to the wall by unsustainable mortgage payments and all the devastating consequences beyond that. Some €34 billion of the €64 billion total went into Anglo. All this devastation wrecked the lives of ordinary people, yet this stuff is going on where tax refugees like Denis O'Brien benefit. What was the other write-off he got? Independent News & Media, in which he had a major shareholding - I forgot about it - also had more than €100 million written off. He has done well out of IBRC. That is the sort of stuff that goes on.
I support Judge Cregan's request and the legislation here to give him the powers to look into all of this. As Deputy Murphy asked, why did it take us this long to get here? These points were first raised back in 2012 and the Minister and Government had to be dragged along kicking and screaming, obfuscating and resisting at every point the sort of investigation that was necessary into this sort of stuff. It appears to the innocent observer, such as the person who sent me this e-mail and the majority of citizens in this country, to be simply that there is one law for the rich and one for everybody else. The economic crisis was produced by the greed of a tiny network of super-wealthy people positioned in the banks and accountancy firms, often with quite strong associations with some of the major political parties in the country. I remind people about the Moriarty report and its findings on Denis O'Brien's relationship to a former Fine Gael Minister and a transaction in which he got the second mobile phone licence that enriched him overnight.
That is an absolutely fair thing to do, although I am sticking quite closely to the subject matter of it, as opposed to certain previous speakers who managed to stray into discussion of the Brexit vote.
Yes. It is legitimate, and I will explain the connection if it is not clear. I think it is fairly clear. This is about the disposal of its assets by Anglo Irish Bank and IBRC and huge write-downs it gave to the benefit of one person we know, at least, who happens to be Ireland's wealthiest and most powerful businessman - somebody who had a record of past connections with a previous Fine Gael Government and had adverse findings made against him.
My point is this stuff still goes on, it needs to be investigated and it has taken us this long. Therefore, although I support the Bill, I ask why it has taken us this long. Why must we now have a judge tell us that the initial basis of the commission was inadequate and could not do the job it was set up to do? It is not difficult to be a little suspicious and conspiratorial. I would like to think I am wrong, but one looks at the record of this saga, of how long it took us to get to the point where the Government even accepted that it was necessary to have an investigation into it, and then we have an investigation set up which we subsequently discover simply did not have the teeth to get to the sort of answers that it was set up to get. Added to that web of connections is the fact that at the centre of this is a look at a deal with the aforementioned Denis O'Brien, and meanwhile the ordinary mortgageholder is shafted. That is what ordinary people see, that is what I see and that is what needs to change.
I will respond to probably the only relevant question Deputy Joan Burton raised when she spoke about our attitude to the banks and how we could avoid this. Of course, something we must learn out of all of this, the debacle of the banking crisis and IBRC, is how all that happened and how we ensure it does not happen again. I am not sure this investigation can give us those answers. This is more specific, and rightly so. As Deputy Paul Murphy stated, if the commission throws its net too wide, it will be like Jarndyce and Jarndyce, for those who have ever read Charles Dickens' Bleak House, the legal battle that goes on for so long that nobody remembers what it was all about in the first place but a lot of lawyers get rich. Indeed, how pertinent that remains today in so many cases. We do not want a Jarndyce and Jarndyce. We want a short, sharp focused investigation into the particular transaction in relation to Siteserv, Denis O'Brien etc., and maybe a few of the other big write-downs that happened, and whether that was all above board. That is what we need. I hope this investigation can get those answers. I remain somewhat sceptical, given the saga of all this to date.
Even beyond that, and with the terms of reference of what this can achieve, we need to ask how we prevent all this happening again. Contrary to what Deputy Joan Burton and sometimes the Government suggest, we are not naysayers who do not have a proposal. We have a definite, simple proposal, that is, that banks - all of them - should be taken into public ownership and their mandate should change in order that it is not primarily about making money but about lubricating the economy and having particular social and societal objectives. That is what banking should be about. If banking were about that, we would not have had IBRC and this sort of stuff. Where does that culture come from where, if this person's e-mail is correct, somebody who was working for KPMG was then working for IBRC and then ended up working with this charitable trust that has taken over some of the loans sold to it by IBRC? The sort of culture that produces that is simply one of greed that is deeply entrenched in the logic of a private for-profit banking system. It is the nature of the beast. It cannot be regulated out of existence and it is a fantasy to believe it will be.
Signs on it that we are correct, because after the crash, in 2008, that was the big mantra. There was a general acceptance, even from those who had been the cheerleaders for all this madness prior to 2008, that maybe we needed to look at a bit of regulation, in Europe and in Ireland. The story moves on to where we are now and it has to be asked whether anything has changed when, once again, the property market is going crazy and we are selling off these banks that we bailed out just as they get to the point where they can generate a bit of revenue which we could possibly put back into areas such as housing. Deputy Joan Burton and the Labour Party were involved in starting the flogging off. It is extraordinary.
When we are asked where we will get the money from for the big social housing programme that we are always talking about and which it is claimed is the stuff of fantasy, my answer is, simply, the banks. We probably have the best capitalised banks in Europe at present. There are enormous amounts of capital in them and they will not lend it for the sort of things we need. I went to the consultation of the Minister, Deputy Coveney, yesterday on the issue of housing and, of course, the debate was circumscribed by a debate about finance and the complete failure of the market to deliver the investment we desperately need to get it off the ground. It simply does not occur to the Government or the political establishment, which is hard to understand after everything that has happened, that maybe we should take control of the banks we bailed out and direct their lending and investment decisions towards things that would be beneficial to society. To boot, we would have oversight of those banks, of their priorities and of their internal structures and we would have power to do something if anything went wrong, none of which we have in either these privatised bodies or these bodies that are set up and ring-fenced with commercial secrecy in order that detailed questions cannot be asked or five or six years of criticism, demands and pressuring the Government must be gone through eventually to get to some kind of investigation. Surely we can do a bit better than that.
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.
I thank the Members of the House and those who contributed to this debate today. As I said when I presented the Bill, the Government wants an effective, efficient and timely investigation into the issues of significant public concern which have arisen in relation to certain transactions conducted by the IBRC. It is evident that this aim is shared across this House and I thank again those Members involved in the consultations which led to these provisions.
I also acknowledge the very substantial preparatory work which has been carried out by the sole member of the commission to date and which is set out in detail in the interim reports and determinations published to date. It is also clear that there is a very significant task facing the commission and the sole member of the commission acknowledges this in his reports. The provisions contained in the Bill before the House today seek, to the greatest extent possible, to facilitate the commission in conducting its work, to ensure that the information and documents sought by the commission will be made available to it, and to provide for a more efficient management of the workload where possible.
I will now turn to some of the issues raised in the debate. Deputy Calleary outlined a number of issues relating to transactions carried out in IBRC which have rightly given rise to significant public concern and which the IBRC commission is charged to investigate. The Bill today will enable that investigation and address the issues with the 2004 Act which the commission raised in relation to a particular investigation.
Deputy Cullinane stated that this Bill was the result of a rushed and flawed legislation but this commission was established under legislation dating from 2004. The issues raised by the commission concern the 2004 Act and not the IBRC Act of 2013. The commission identified that, in the nature of this particular investigation, the sole member lacked certain powers under the 2004 Act, though not under the 2013 Act. The commission also confirms in the second interim report that, while the special liquidators initially claimed legal and professional privilege over a number of documents furnished to the commission the special liquidators, following a request from the commission, they informed the commission that they were willing to waive that privilege in respect of the Siteserv transaction. The commission is satisfied that the issue of privilege in respect of the Siteserv transaction has been resolved.
The Government and I share Deputy Burton's wish to see a speedy investigation by this commission. The provisions of this Bill are drafted to assist an efficient and, more important, an effective investigation. I assure the Deputy that the powers which she called to be given to the commission are included in the Bill.
In response to Deputy Paul Murphy, the intention is to amend the terms of reference to introduce a modular approach with a focus in the first phase on Siteserv, and this was welcomed by a number of Deputies including Deputy Murphy. Deputy Boyd Barrett asked why it had taken so long to identify matters which delayed the investigation. The sole member of the commission published his first interim report in November 2015, identifying the matters which were hampering the investigation. There was a period of consultation with the Opposition and with the commission to ensure the concerns of the commission were met as far as possible. At the beginning of June it was agreed to proceed with the provisions contained in this Bill.
I acknowledge the excellent and outstanding work of Deputy Catherine Murphy which led to the establishment of this commission. I say to her, "Well done". She raised a question about the circulation of the report. Initially, the draft report will be made available to all persons identified in the report with regard to whom there is an adverse finding, and the final report will be submitted to the Minister, in this instance the Taoiseach, under the 2004 Act. He is required to publish the final report as soon as possible unless it has to be referred to the High Court for any directions. Deputy Catherine Murphy also raised matters relating to the stock exchange but this Bill addresses the commission's concerns in respect of obtaining documents from that source.