All the signs are that a banking inquiry will kick off this September under a new law that will not allow a final report that attributes blame.
An inquiry under the Houses of the Oireachtas (Inquiries Privileges and Procedures) Bill, due to be passed by into law before the summer, will have to avoid any evidence that "could be expected to prejudice any criminal proceedings that are pending or in progress, or any criminal investigation that is currently being conducted", according to a spokeswoman in Brendan Howlin's Department of Expenditure and Public Reform.
A number of former executives with Anglo Irish Bank are due before the courts next year. The trial of former chairman Seán FitzPatrick could last up to six months. Further charges against others could yet be brought.
The terms of reference for the inquiry will be drafted over the summer and it is expected that the committee will begin its work in September.
A key aspect of the terms of reference will be the extent to which the committee will seek to establish what happened within each of the main Irish financial institutions in the years before the September 2008 bank guarantee.
Such inquiries could look at: the reign of Michael Fingleton at Irish Nationwide and some of the deals he and the building society became involved in; the spectacular growth of Anglo Irish Bank and the structures which allowed that; the reasons why AIB, apparently, decided to compete with Anglo rather than warn the authorities as to the dangers involved in such rapid growth of a credit institution; and how Bank of Ireland was managed in the course of what, with hindsight, was a property bubble fuelled by reckless lending.
Many observers believe that, by the time of the bank guarantee, the bubble had been created and the day of reckoning was by then inevitable.
Primary actors
Too great a focus on the night of the September 2008 guarantee would, if such a view is accepted, make for an inquiry that would shift attention from the bankers and institutions that were the primary actors in the crisis.
The last government set up the Commission of Investigation into the Banking Sector in Ireland which, in turn, commissioned two preliminary reports – the Honohan Report and the Regling/Watson Report, as well as Peter Nyberg's report, Misjudging Risk: Causes of the Systemic Banking Crisis in Ireland (March 2011).
The current Government’s view – that the State requires public hearings which would allow the main actors in the banking crisis to be quizzed about their actions – is the main reason for the decision to go ahead with an Oireachtas inquiry.
It was the practice at the Moriarty and Mahon tribunals to conduct extensive private investigation prior to public sittings. A similar practice is pursued by the committee in Washington DC that recently held hearings into Apple and its tax-avoidance strategies.
According to the spokeswoman for Minister Howlin’s department, it is expected that once an inquiry committee is initiated, it will consider what written and documentary evidence it requires from potential witnesses and from public and private bodies.
“Having requested these statements (and received them given its powers of compellability), it may appoint an expert third party to examine this evidence together with other information and reports already in the public domain, to advise the committee as to what information, evidence and documents it might seek for the inquiry. This would allow an inquiry committee to focus its work in the context of the public hearings phase.”
Such a procedure might allow the committee to listen to any relevant taped conversations that may exist in other financial institutions besides Anglo. It will also, presumably, delay the start of public sittings.
The new law governing the inquiry protects the anonymity of persons who supply information to the inquiry on a confidential basis.
The view among many TDs is that, while the inquiry will not be allowed to make adverse findings against former bankers, politicians and civil servants, it can only make findings against members of the House and persons who are accountable to the House – the public will be able to come to its own conclusions based on the evidence heard.
The new law allows for the proceedings to be televised, which was not the case with the recent tribunals. However, evidence can be heard in private if the committee deems it desirable.
Findings of fact cannot be made that directly reflect on a person’s good name but a finding of fact can be made concerning systems, practices or procedures that the inquiry finds should have been carried out in a different manner, “even if such a finding could, as a matter of inference” reflect on the governance of an organisation or the management of a specific policy or public administration issue.
Witnesses can bring legal representatives with them but the inquiry will not bear any of their legal costs. Witnesses can also have their legal representatives attend sittings where other witnesses are giving evidence. This latter aspect of the law could make for some contested, and even prolonged, sessions.
Inquiry's orders
Persons who refuse to furnish information or to attend to give evidence can be punished. The penalties include imprisonment for up to 12 months on summary conviction, or up to five years on indictment. Directors or managers of companies who fail to comply with the inquiry's orders can also be punished, if they are shown to have directed such non-compliance.
It will be an offence for someone to destroy what they believe is a relevant document in anticipation of it being required by an inquiry.
An inquiry dissolves with the dissolution of the Dáil – which for the current Dáil is March 2016 at the latest. An interim report can be used as evidence by an inquiry set up by a new Dáil.
