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Civil service cabal in ‘plot to nobble bank probe’

PAC boss says ‘reactionary, unprofessional, inefficient top managers are protecting pay, perks and pensions’

By JODY CORCORAN and DANIEL McCONNELL EXCLUSIVE – Sunday Independent – Sunday July 08 2012

THE TD who wants to lead an investigation into the banking crisis, including the role of State institutions, has sensationally claimed that a cabal of civil servants wants to nobble the inquiry.

In the Sunday Independent today, John McGuinness, the chairman of the Dail’s Public Accounts Committee (PAC), says “senior public servants” fear the work of his committee which, crucially, intends to investigate events both before and after the night of the infamous bank guarantee.

He says: “There is at the heart of our administration a reactionary, unprofessional and inefficient group of senior public service managers, whose veneration of the status quo and the perks, pensions and pay it gives them is costing this country a very large fortune. It is a disgrace.”

Meanwhile, the government parties want the Dail’s Finance committee, headed by Labour TD Alex White, to take control of the investigation. Fianna Fail wants the PAC to finish the work it has already undertaken.

After six months of preparation, the PAC last week published a detailed framework for the proposed investigation into the bank guarantee, the role of the banks and the role of State institutions.

However, government sources said last night that “under no circumstances” would the PAC be allowed to undertake the investigation.

“It’s a done deal; it seems that Alex White’s committee will get it,” a source said. But Mr McGuinness says: “Not on my watch without a struggle.”

Both Mr McGuinness’s PAC and Mr White’s Finance committee can only “inquire, record and report” because the Constitution does not give power to the Oireachtas to conduct inquiries which can make findings of fact.

In this newspaper today, economist Colm McCarthy says: “Neither committee can do what is needed under current arrangements.” He also argues that: “The only inquiry worth having is one that allocates responsibility.”

Mr McCarthy urges the Government to reject the recommendation for a “constrained inquiry” and instead hold again a referendum to restore “proper investigative powers” to parliamentary inquiries.

A referendum which was defeated on October 27 last proposed to give the Dail and Seanad express power to conduct inquiries into matters of general public importance and, in doing so, to make findings of fact about any person’s conduct.

Urging the Government to “go back to the electorate”, Mr McCarthy says: “There will never be a full and proper allocation of responsibility for the mismanagement of the Irish banking system, the failures of supervision and the inadequate policy response until powers are restored to elected representatives to conduct prompt, public and cost-effective investigations.”

A Sunday Independent/ Quantum Research poll today shows a massive 77 per cent now in favour of a change in the law — by referendum, if necessary — to allow an Oireachtas committee conduct a thorough inquiry into the banking collapse.

However, a government spokesman said yesterday that the prospect of the Oireachtas inquiry referendum being re-run was “not being considered at present”.

But Communications Minister Pat Rabbitte told the Sunday Independent last April that it was the Government’s intention to rerun the referendum within two years.

Mr McCarthy says today that a “political turf war” appears to be under way between Fine Gael and Labour in Government and Fianna Fail’s Mr McGuinness as to who should conduct the banking inquiry.

Mr McGuinness says senior civil servants would say that the “PAC is doing too much — too much digging; too much investigating; too much searching for the truth and too much tugging at the veil of half-answers, memory lapses and obfuscations that covers a mind-boggling degree of incompetence and inefficiency for which no one is ever found responsible.

“Some senior public servants do not want the PAC growing teeth that it was never meant to have.

“But we have grown them ourselves through the good work of the committee down through the years. They want puppet committees that can growl enough to appear effective — which keeps the public happy — but have no teeth to cause the public service any meaningful discomfort.”

Yesterday, Mr White said he was unaware of any Government hostility towards Mr McGuinness, but added: “The chairman and those who will investigate should avoid controversy. This must be done in a very careful way.

“There is one issue of substance here. The PAC is a very important, powerful committee, but it is an audit committee. It does not examine policy. The Finance committee does deal with policy and that must be examined by anyone voicing an opinion on this.”

Mr White said he was unaware of a suggestion that he was to be handed the inquiry in order to improve his prospects of re-election in a reduced three-seat Dublin South constituency.

“I very much doubt that that is the case,” he said.

Meanwhile, Fine Gael TD Simon Harris, who is a member of the PAC, yesterday called on Minister for Public Expenditure Brendan Howlin to reconsider and allow the PAC conduct the inquiry.

He said: “Mr Howlin is missing the point and he totally jumped the gun. There is the legal basis for the PAC to do it and there is the strong legacy argument for the PAC to do it.”

Mr Harris rejected any “innuendo” that Mr McGuinness, as a Fianna Fail TD, was not suitable to chair the inquiry.

“As a Fine Gael TD, it may be strange for me to say this, but John McGuinness is doing a very good job. There is no hint of partisanship at all in how he runs the committee.

“From all parties, he allows us full latitude in our pursuit of information. I reject fully any innuendo that he would not be fully impartial in the running of this inquiry.”

Also last week, Environment Minister Phil Hogan moved to prevent the PAC from investigating matters relating to the Dublin Docklands Development Authority, which is locked in a legal dispute.

Declining to engage with the PAC, Nama cited a legal dispute with Treasury Holdingsarising out of a recent report by the Comptroller & Auditor General.

The development company had waived confidentiality related to the case.


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