WE ALREADY KNEW from documents published last week that Judge Brian Cregan had run into a brick wall in his investigations into matters at IBRC, the zombie bank formerly known as Anglo. Both the bank itself (or rather, its liquidators, as the bank was killed off in 2013) and the Department of Finance had supplied all the documents Cregan wanted – while also asserting that he couldn’t use them, as they were either privileged, or covered by client-lawyer confidentiality.
But we find out in Cregan’s interim report that those two bodies weren’t the only ones lobbing legal grenades into his path. The Central Bank might not have any material information to give him – but if it did, it would be barred under EU law from handing it over. Meanwhile the stock exchange is unable to help because it has legal obligations of secrecy.
That seems to be a fatal blow in Cregan’s quest of finding out whether there was anything suspicious about the unusual volume of SiteServ shares being sold in the run-up to the sale of its assets, by IBRC to Denis O’Brien’s firm Millington.
And there’s one other awkward factor. The inquiry can only deal with companies that have legal personality – or, in other words, companies that are named on the Register of Companies. And after SiteServ’s assets were sold to Millington, SiteServ was then put into liquidation. It no longer exists – and therefore can’t help the inquiry with its work – although its liquidator says he’s happy to go back to the High Court and seek its re-establishment. (Funnily enough, the liquidator of SiteServ is also one of the liquidators of IBRC. Ireland is a small place, but Kieran Wallace occupies a lot of it.)
It means that SiteServ, the Department of Finance, the bank itself, the Central Bank and the stock exchange are all fundamentally unable, for legal reasons, to help Judge Cregan get to the bottom of certain transactions.
All of this means that, unfortunately, Brian Cregan’s report raises more questions than it answers. And for a Commission of Investigation, that’s precisely the opposite of what should be happening.
That’s not to say that Cregan’s report doesn’t contain some meaningful new information. We know now for sure that there were 38 transactions where IBRC – the bank formed by the merger of Anglo and Irish Nationwide, after both had been nationalised – had written off debts of over €10 million. In six cases (including the sale of SiteServ’s assets to Millington) the write-offs were over €100 million; those six cases involved an astonishing total of €859 million in loans being written off. In another six, where write-offs were larger than €50 million, the bank gave up another €448 million.
It’s worth pausing at this point to consider the sums involved. In total, IBRC’s transactions saw the bank write off debts of €1.9 billion. The 12 largest transactions involved write-downs of €1.3 billion. That’s a phenomenal amount of money in anybody’s language – but when you consider that the bank is 100% owned by the taxpayer, it effectively means nearly €2 billion of public money has been happily written off.
Perhaps there was just cause for doing so – maybe there were no other assets left to pursue, or the inevitable legal action would cost more than the assets at stake. That premise is exactly what Cregan was asked to investigate. But when you consider that the controversial cut to the respite care grant in 2013 saved the government a measly €26 million, the assets being thrown away by a state-owned bank merit full examination.
To its own credit the government has restated its own “determination to ensure an effective and independent review of the issues of major public concern which have been raised.” (After rejecting calls for a Commission of Investigation for this long, it’s good that they are now committed to their new path.)
Precisely how they do that is now a matter of open debate. Cregan reckons that the blockades of legal privilege, and confidentiality, could be overcome by pushing through some changes to the law. But that’s easier said than done. The government can of course pass laws, but it must be very careful not to use a sledgehammer to crack a nut. There are at least four other different Commissions of Investigation already operating under the same laws – investigating matters like Garda malpractice and Mother & Baby Homes. Moving their legal goalposts while they’re still operating could end up causing more harm than good.
There is also the open question of whether the attorney general, Máire Whelan, actually accepts Cregan’s verdict on the legal problems he faces. She evidently set out with the belief that Cregan’s powers of compellibility were enough to over-ride the concerns about legal privilege or confidentiality. Cregan has compiled lengthy ‘determinations’ where he outlines his rationale for disagreeing, but Whelan may not necessarily accept them. (While Cregan is a judge, he is not acting with the power of a court.)
That leaves her in a tricky situation. If she disagrees with Cregan’s logic, she may find it difficult to recommend legal measures that can address his problems – all the more so if they run the risk of causing collateral damage to the other inquiries already underway.
What may be an option is the process of freezing Cregan’s inquiry outright, and take inspiration from the past. In 2000, instead of setting up a Tribunal to investigate allegations of child sex abuse, the Government of the day instead went down a previously untested route. A special law was passed – the Commission to Inquire into Child Abuse Act – to grant very deliberate and specific powers, without necessarily creating a precedent for the future.
Following the same lead now cause a minor hiccup of transferring one inquiry’s work to another, but it could be just the ticket the government needs to try and salvage an inquiry where nearly €2 billion of our money is at stake.
