Untold story of EIB fiasco
The political debacle over the failure of the Dublin Government's attempt to obtain the £147,000 a year job of vice-president of the European Investment Bank (EIB) for Hugh O'Flaherty rumbles on. What have not been examined are the dealings that led to the nomination.
The 26-County candidature for the vice-presidency position was made with the approval of the Danish and Greek governments, these being the three EU countries that rotate one of the seven vice-presidency positions in the EIB among themselves.
The four or so votes which Hugh O'Flaherty obtained from the 25 members of the EIB's Board of Directors came from the Irish, Danish, and Greek directors of the Bank, and one or two others.
The EIB has a staff of 1,000 and disposes of assets of billions of euros. Its seven vice-presidents are each paid some £147,000 per year, plus unlimited expenses. So these are very valuable pieces of political patronage for governments to disperse.
Hugh O'Flaherty had no qualifications in banking, finance or economics, unlike the other seven EIB vice-presidents.
The Statute of the EIB makes clear that the sole and exclusive power of making nominations rests with the Bank's board of directors who are supposed to act independently. What has happened over the years is that the EU governments have taken on the role of allocating these lucrative positions, with the passive compliance of the Board of Directors.
The directors have just rubber-stamped whatever name was put before them from the governments and passed it on to the board of governors for formal appointment as being the ``nominee'' of the board of directors.
This happened without anyone noticing or bothering until the O'Flaherty controversy drew attention to it. The directors have not even set out any formal qualifications for the job, not to mind setting in place a procedure for ensuring that candidates for nomination as possible EIB vice-presidents are chosen in an open and fair manner.
The directors of the EIB are now faced with the challenge of setting in place proper procedures for appointments. The directors will have to stipulate proper criteria for the job.
There are now 16 other Irish applications before the Bank. All these applications have as much legal standing as that of Hugh O'Flaherty. How can the EIB board of directors deal with these applications without setting in place proper formal qualification criteria and fair selection procedures?
Charlie McCreevy has announced that the cabinet will make a new nomination for the EIB post. The next meeting of the EIB board, whose sole legal responsibility this whole vice-presidency nomination it is, takes place in mid-September. It remains to be seen if the EIB is capable of learning from the O'Flaherty debacle.
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