Govt yields on new bank inquiry after censorship bid fails

The Dublin government is to launch a formal investigation into financial transactions at the bailed-out Anglo Irish Bank after an attempt to prevent embarrassing details emerging via the Dublin parliament was rejected by a High Court judge.

Anglo Irish Bank’s unregulated lending and other fraudulent activity helped trigger the financial collapse of the 26 County state in 2008 and the subsequent 67.5 billion euro bailout by the International Monetary Fund, the EU and the European Central Bank in 2010.

Finance minister Michael Noonan has now proposed a formal commission of investigation to address the growing scandal about the bank’s dealings with certain business figures, including Ireland’s second-richest man, billionaire Denis O’Brien.

The move comes less than a week after an independent member of parliament, Catherine Murphy, used parliamentary privilege to suggest that O’Brien had received preferential treatment from Anglo Irish Bank, which is being wound down under the rebranded name of the Irish Bank Resolution Corporation (IBRC).

O’Brien’s lawyers had attempted to stop the publication of the details of loans from IBRC worth 500 million euro with an interest rate of “around 1.25% when IBRC could, and arguably should, have been charging 7.5%”.

Although the Irish media overwhelmingly submitted to the censorship demands, the details were published by Irish Republican News, the website broadsheet.ie, the Sunday Times and other (non-Irish) news organisations.

On Tuesday Justice Donald Binchy said it had not been his intention that his order would restrict the reporting of parliamentary proceedings, which have constitutional protection.

Earlier this week O’Brien accused Ms Murphy of using stolen information and of repeatedly making “erroneous and untruthful statements” about his relationship with Anglo Irish Bank.

The Kildare North TD said that she would welcome an independent inquiry. “It is important that we know what happened the people’s money and what happened every penny in this distressed bank that we poured more than thirty billion euro into,” she said.

Murphy has for months questioned events at IBRC and has expressed particular concern over O’Brien’s fire-sale acquisition of construction company Siteserv from the bank, which subsequently received a lucrative contract to install water meters.

It emerged this week that the total amount of Siteserv’s debts to Anglo Irish Bank written off by the State was 119 million euro, 9 million more than previously revealed.

In April this year, Noonan announced an inquiry into 40 transactions at the bank, but it was widely criticised after he called on the bank’s special liquidators, KPMG, who are themselves facing fraud accusations, to carry out the investigation.

The new probe will take place into all IBRC deals between 2009 and 2013 -- with a particular focus on preferential interest rates and “unusual” share trading of companies it subsequently sold -- after the Minister admitted the existing review is flawed.

In an announcement described by opposition TDs as a “spectacular climbdown”, Noonan told the Cabinet he is scrapping the review and replacing it with a commission of investigation to report by the end of December.

The Opposition is to request that the Commission of Investigation produce findings by October because of concerns that the report would be delayed until after an early general election.

“The Government had no choice but to accede to public and political pressure for a Commission of Investigation,” Mr Adams said.

He said any investigation must be comprehensive and deal with all of the issues.

“The terms of reference should be debated and approved by the Dail before they are finalised. There needs to be a tight timeframe for any Commission of Investigation as there will be strong suspicions that the Government will seek to push the findings back until after the General Election. That cannot be allowed to happen.”

He also condemned the the Taoiseach and the coalition government’s “poor leadership” over the attempt to prevent the reporting of parliamentary proceedings, and said no one from the government had acted to defend the rights of the parliament or its members.

“They did not ask the Attorney General to clarify the issue of Dail privilege nor did they go to court to assert it. The government left it to the media. This is a clear abdication of their constitutional and political responsibilities.”

Urgent Appeal