Wednesday, 26 June 2019

Questions (4)

Brendan Howlin


4. Deputy Brendan Howlin asked the Taoiseach the projected costs of the commission of investigation into IBRC. [25245/19]

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Oral answers (8 contributions) (Question to Taoiseach)

Following consultations with Opposition parties by the then Minister for Finance, the Irish Bank Resolution Corporation, IBRC, commission of investigation was established in June 2015. The commission is entirely independent in its work and Mr. Justice Brian Cregan is its sole member.

The commission was originally due to issue its final report by the end of December 2015, at an estimated cost of €4 million, excluding any third party costs.

The commission is required to investigate certain transactions, activities and management decisions at the IBRC and in its first module it is investigating the Siteserv transaction, which has been identified as a matter of significant public concern in Dáil Éireann.

In the commission’s sixth interim report, Mr. Justice Cregan requested an extension of the deadline for reporting until the end of March 2020. He also responded to several issues that I had raised with him in December last year regarding the estimated final cost of the investigation, the timescale for completion of the commission’s work and whether it would be possible for the commission to reach interim findings.

On 31 May 2019, following completion of consultations with the Opposition party representatives, I agreed to extend the commission’s timeframe for reporting until 31 March 2020. I also arranged for the commission’s sixth interim report to be published on my Department’s website and laid before the Houses.

Other than what has been published in the commission’s interim reports, I have no information on the status of its investigation as the commission is completely independent in its work.

Regarding costs, the commission’s sixth interim report provides an estimated final cost of the completion of the first module of its investigation, regarding the Siteserv transaction, of €11 million to €14 million. However, this estimate assumes the investigation is completed in accordance with the timetable set out in the interim report and excludes costs or delays associated with judicial review hearings.

The commission also acknowledges that it also involves a substantial degree of uncertainty regarding the amount of costs actually recoverable by parties before the commission and it assumes that the commission’s legal costs guidelines are not successfully challenged.

As I have informed Opposition party representatives, my Department continues to be of the view that the final cost is likely to significantly exceed Mr. Justice Cregan's estimate and could be of the order of €30 million.

We clearly do not have a firm indication of the projected costs of the first module of this commission of investigation. The Taoiseach is suggesting that the report indicates something of the order of €11 million to €14 million. Nor can we be in any way confident that the report will be concluded by 31 March next year. I appreciate that judicial review proceedings are under way that almost certainly will impact on the timeframe the Taoiseach has set out. We are in the fifth year of this commission of investigation relating to the controversial Siteserv transaction, which is the first module of many. It might be worth the Taoiseach's time to remind the House the number of modules that are expected. This is the first one and we do not have a timeline or an end cost on it.

We have had six interim reports to date. The commission has not revealed any substantial details surrounding the controversy in the six interim reports over five years. As the Taoiseach has indicated to the House again, the latest deadline for completion is set for the end of March next year and the cost may be €30 million, but we do not know. However, it seems that even this extended deadline is in jeopardy. Mr. Justice Cregan stated in his most recent report that a legal action taken "could pose a significant obstacle to the commission's ability to complete its work by its proposed end date".

We need to have an open and clear conversation about where this commission of investigation is going. How long does the Taoiseach perceive it will be before we finish the first module? What is his best estimate of that? Is it intended then to continue on to the many more modules, and at what ultimate cost? That will enable us to understand when the issues of concern will be addressed and we can have answers to the questions that were posed in this House. What cost will the full investigation of these matters reach?

Next month, this inquiry into a small part of the transactions process by the IBRC will have taken longer than the entire period in which the IBRC existed. That is an extraordinary fact. It is quite shocking on any reasonable level that it would take so long to investigate a transaction with the objective of ascertaining whether value was achieved for the taxpayer.

When commissions of investigation were established originally they were meant to be an alternative to tribunals. They were meant to be a far more cost-effective way of getting the facts of any basic issue identified. In this context, we amended the legislation to create a particular model to facilitate this investigation and the Oireachtas agreed to that. To call a spade a spade, whatever one says and whatever one's views are, this has not worked in terms of the objective of investigating one transaction.

From a democratic and a financial perspective, something needs to be done because the public deserves answers. The Dáil and the Oireachtas deserve answers in terms of these issues. I do not know whether it is open to the Dáil to undertake an independent evaluation into the procedures being used and the extent of the areas being covered and whether the Oireachtas can then satisfy itself that it should continue to proceed or look at another way of getting answers to the basic questions that were put in regard to that transaction. After all, this is about the public having access to all of the information through the Oireachtas.

I appreciate the fact that the Taoiseach is not in a position to have access to what the inquiry is doing but it would be interesting to know whether core accounting and economic work has been undertaken in regard to the issue. I was not able to attend that last meeting but I am not clear about the Taoiseach's own views on how it should proceed from here onwards. I would be interested in his perspective on that.

Deputy Cullinane has asked to make a short supplementary question.

This is a challenge for us all. A balance must be struck between establishing the facts, which is why the commission was established in the first place, and the commission doing its work in a timely and cost effective fashion. The Taoiseach has brought representatives of all parties and groupings together on several occasions to seek advice, which was the right thing to do. Advice was given. I deputised for Teachta McDonald at the last meeting. I understand that she wrote to the Taoiseach asking that he seek a commitment from Mr. Justice Cregan that the costs be kept to an absolute minimum and that the one-year extension that is being examined be a one year extension and that then we would see a report. There are risks attached to this, including court challenges and there might be issues outside the control of Mr. Justice Cregan, and us.

Has the Taoiseach written to Mr. Justice Cregan since that meeting with the representatives of different parties and groupings and, if so, what was the nature of the communication and what was his response? As others said, there is a reasonable attempt to get information about something important and something which some people see as questionable in terms of process, and establishing the facts and the truth, but also making sure that is done in a timely and cost effective way. We can all accept that it is not happening to the satisfaction of all parties and groupings in the House including, I imagine, the Government.

Deputy Howlin asked about the number of modules so far. Only one module is currently being dealt with, namely that on Siteserv. I think there are 20 or 30, off the top of my head, but I will have to double check.

There are 28, I think.

One is not yet complete and there are 27 yet to begin. The commission was established by the Oireachtas, largely on foot of demands from members of the Opposition. It is independent and is not being run or directed by the Government in any way. The time it is taking and the rising cost of the investigation demonstrate the real difficulty in carrying out inquiries into what are ultimately commercial transactions, as well as the need for the need for us to be cautious when we set up commissions of investigation. Between ten and 20 commissions are currently running and we must ensure that the threshold we set is appropriate.

On costs and the commission's approach to its work, in its fourth interim report the commission stated that it is open to discussion with the Department of the Taoiseach on how to conduct its work in the most efficient manner possible, consistent with the applicable legislative and constitutional requirements of due process, as to how the duration of its investigation might be shortened. On foot of this, my officials met the commission to discuss the matter. As I said, the commission is independent in its work. It must also be borne in mind that any changes to its terms of reference or the number of modules to be completed as part of its investigation would require both Government and Oireachtas approval.

As required under the Commissions of Investigation Act 2004, the IBRC commission's legal cost guidelines were prepared at the commission's outset by the Taoiseach as the specified Minister with the consent of the Minister for Public Expenditure and Reform and in consultation with the commission. The fourth interim report said that in its view, the guidelines are inadequate and there needed to be proper consultation between the commission and the Departments of the Taoiseach and Public Expenditure and Reform in order to establish supplemental guidelines to meet the particular needs of persons involved in the commission. The commission also stated that various witnesses have made submissions to it and are concerned that they will be out of pocket for legal expenses that they incurred in order to comply with the commission's directions and to protect their own good names and reputations. My Department met with the commission to discuss this proposal for supplemental guidelines, however it is not intended to revise the commission's legal cost guidelines. In this context, the potential cost implications for other existing or future commissions must also be considered.