The 26-County Minister for Finance Brian Lenihan has drawn a veil of secrecy around the state’s banking system and the Dublin government’s efforts to reinvent the sector.
The first use of the controversial new Credit Institutions (Stabilisation) Act was to throw media representatives out of the High Court as the first steps were taken to nationalise the failed Allied Irish Bank.
Lenihan had sent lawyers to the High Court to make an application “in relation to a financial institution”, which the government declined to even name.
When a reporter asked for a brief adjournment to give media lawyers an opportunity of considering the proposed news blackout, the request was refused.
The proceedings were then heard in secret, prompting speculation that the government is attempting a cover-up over the actions of Ireland’s elite ‘golden circles’.
As police investigations continue into the white-collar crime involved in Ireland’s banking collapse, Allied Irish Banks -- once Ireland’s largest bank -- has so far evaded allegations of illegality over its dealings with politicians and developers.
The secretive new legislation was rushed through the Dublin parliament on December 15, and gives Minister Lenihan sweeping new powers to transfer state funds to the private financial sector. It was signed into law by the President of Ireland only after a rare hearing of the Council of State, which advised the President on the constitutionality of the Act.
The first action taken by Lenihan was to seek the High Court’s approval, behind closed doors, for the transfer of 3.7 billion euro from the 26-County Pension Reserve Fund to Allied Irish Banks.
Explaining the secrecy, government officials said only that there were issues of “extreme commercial sensitivity” involved.
Meanwhile, some fifteen thousand staff at AIB face jobs uncertainty after being told that a “restructuring plan” is at an advanced stage.
Fine Gael TD and deputy enterprise spokesman Kieran O’Donnell questioned the Minister’s reasons for the secret court hearing.
“Why was it done in this fashion . . . under the cloak of two days before Christmas,” when it had already been signalled that money would have to be put into AIB, he asked.
Labour’s Joan Burton said the Minister was simply raiding the pension reserve to provide the new funds for AIB.
“He has used the extraordinary clause in the new Act to secure High Court approval by means of a secret hearing, a most disturbing feature of the new law that will deny citizens the right to full disclosure of information on this transaction,” she said.
Sinn Fein finance spokesman Pearse Doherty said the National Pension Reserve Fund should be used to stimulate Ireland’s economy and create jobs and not to ‘bail out banks’.
“When Sinn Fein proposed using the pension reserve fund to stimulate the economy we were told it couldn’t be done but now we see that the Government is only too willing to commit this money to the banks.”
Mr Doherty said this represented a further failure of the government’s banking policy and AIB and Bank of Ireland should have been nationalised long ago.
“This money should be used to stimulate the Irish economy and create jobs rather than being used to bail out banks. If this had been done when we had suggested it many people would be having a much happier Christmas and would be facing the new year with much better prospects.”