Most people do not understand we are entering into three follow-on inquiries, as the Minister outlined, following the two preliminary inquiries made by Mr. Regling and Mr. Watson and the Governor of the Central Bank, Mr. Honohan. The first inquiry is the formal public commission of inquiry; the second is an inquiry to be undertaken by the committee into future oversight of the budgetary and fiscal process, in respect of which we are close to all-party agreement on the possibility of establishing a council of wise individuals; and the third is the review announced separately by the Minister of the Department of Finance and how it may have reacted or not as the case may be to the crisis.
On the formal commission of inquiry to which the Government agreed sometime ago in the Dáil, I am bringing forward a series of amendments to the proposed terms of reference. The document I have provided includes notes setting out what the proposals seek to achieve. My proposals Nos. 5 and 6 set out additional terms of reference which seek to have included in the formal inquiry the role of both the Office of the Minister for Finance and the civil servants who provide information for the Minister.
Proposal No. 6 seeks to extend the date of the inquiry up to 15 January 2009. The reason for this is that the terms of the inquiries to date have extended to and presumably included the night on which the guarantee to certain financial institutions was agreed. The Government has decided that everything after that must be excluded from inquiry, the reason apparently being that many of the actions subsequent to the guarantee were subject to legislation and, therefore, subject to debate and discussion in the Dáil. In the run-up to the inquiry the Government and all of the various agencies involved told us — in committee, privately and on the floor of the Dáil — that the Irish banking system was sound and that stress tests had proved this.
By December 2008, however, the Minister had publicly admitted that Anglo Irish Bank and the Irish Nationwide Building Society were suffering from serious difficulty. As we later learned, they were on the verge of financial collapse. The Government has always maintained that it nationalised Anglo Irish Bank because of wrongdoing on the part of management. It has not acknowledged to this day that it nationalised the bank because it was completely bust, even after €22 billion and counting has been sunk into it. In addition, staff in the Department of Finance and the Minister seem to have been convinced that the head of the Irish Nationwide Building Society had insights into banking which nobody else on the planet had and which, therefore, rendered the bank a special case in terms of its particular style of management. It is important, therefore, that the terms of reference be extended up to 15 January 2009, as I have proposed, the point at which the Government finally acknowledged that Anglo Irish Bank would be nationalised and that the Irish Nationwide Building Society would also, in effect, be looked after by the Government.
The Government and the Department of Finance must be included in the terms of reference of the commission of inquiry because the most basic requirement in respect of any inquiry, statutory or non-statutory, is that the outcome be credible. This means that both the persons chosen to conduct the investigation and the terms of reference given to them must stand up to independent scrutiny and give rise to public acceptance that their report will be sound and reliable. However, a commission of inquiry, such as the one proposed, that omits completely from its remit two principal participants, namely, the office of the Minister and his Department, will lack fundamental credibility. When in private session at the last meeting, the Minister told members that he had set aside €1.8 million in this year's budget for the work of the commission of inquiry up to the end of this year. Given the crisis we face, for example, regarding the care of people with a mental handicap and other disabilities, €1.8 million may not be much to the Department of Finance. However, in the context of the life and death decisions that are being made when budgeting, the sum of €1.8 million before the end of 2010 actually is a great deal of money.
While members have already discussed this at length with the Minister, the Governor of the Central Bank, Professor Honohan, proposed to this joint committee that there should be a singular inquiry, to follow on in private from his inquiry, into each of the guaranteed institutions to ascertain relatively quickly what went wrong and what caused each of those institutions to collapse. I note the Minister's statement repeats his earlier comments that while he accepts Professor Honohan's proposition is reasonable, he will not accept its recommendation to push back the terms of reference. The Governor suggested that the formal commission of inquiry be pushed back in favour of a more rapid initial inquiry into each of the covered institutions. During the joint committee's private deliberations last week, this was not acceptable to the Minister and clearly remains unacceptable, according to the statement he has just read to members. I accept that he is the Minister and that he has the votes in the Dáil. Consequently, my point is that the dates encompassed by the inquiry, particularly in respect of the spectacular failure of Anglo Irish Bank and Irish Nationwide Building Society, which were at the rotten heart of the destruction of the Irish economy and our reputation, must be far broader and wider and must be extended.
In addition, I refer to the section that deals with auditors. While its inclusion is positive, an issue would arise were auditors to come into this inquiry. Under law, auditors are required to do certain things. However, they are not required to comment on the business plans, objectives or purposes of the organisations they audit. Consequently, were one to hold a commission of inquiry into such matters, anyone could write down on the back of a cigarette packet what would be the outcome. That is not within the legal remit of auditors. While they may consider that certain things business people do are unwise or wrong, that is not what they are reporting on. If, as the Minister is suggesting, one makes this some kind of central feature of the inquiry, it probably will have the outcome of a nil result. While it is very important that in the future, in the case of banks auditors should perhaps consider their financial stability, financial strength and so on, as matters stand they are governed by the requirements of the Central Bank.
The other broad issue in respect of the commission is how can the Minister suggest that the Central Bank and the regulator would be subject to the rigours of a full commission of inquiry? Many people in those institutions will put up the Nuremburg defence that they were simply doing their job and that the people to whom they reported ultimately, over and beyond their statutory responsibility, were in fact the Minister himself and, more specifically, the Department of Finance. How are they are expected to get a fair hearing when they are included in a full commission of inquiry but the Department of Finance and the Office of the Minister for Finance, including the Minister's predecessors and himself over the period leading up to the inquiry, are rigorously excluded? They would have grounds for arguing levels of unfairness in respect of the basic structure of the inquiry.
I acknowledge that as a lawyer, the Minister's response has been quite clever. He has suggested that a separate inquiry should be held into the Minister for Finance and the Department of Finance, by way of a separate review that the Minister will commission, presumably from an international expert, which will benchmark the practices of the Department of Finance against its peers. However, this is not adequate to the crisis into which this country has fallen. Of itself, that may be a worthwhile exercise but it in no way complements for the rigorous exclusion of the office of successive Ministers for Finance and the Department of Finance from the examination of their roles in what has led to a point at which 450,000-plus people are unemployed, 100,000 people have emigrated and people who seek the most basic services in respect of health and disability find there is no money to fund those services. In future years, the outcomes for and education received by children going to school will be severely restricted because of the banking collapse. Does the Minister seek credibility in terms of the citizens of Ireland, who are being asked to take this extraordinary debt burden and carry it on their backs for an unknown period, while excluding the Department?
Finally, a story appeared on the front page of today's edition of The Irish Times stating that the outcomes for NAMA and its draft business plan, which I understand——