Dáil Éireann díospóireacht -
Tuesday, 10 Feb 2015

Vol. 867 No. 1

Standing Order 107I: Motion

Minister of State at the Department of the Taoiseach (Deputy Paul Kehoe)

I move:

That, pursuant to Standing Order 99(1)(a), the Committee on Procedure and Privileges recommends that the following additional Standing Order be adopted as a Standing Order of Dáil Éireann relative to Public Business until further notice in the 31st Dáil:

Privilege: failure to comply with professional secrecy provisions in respect of confidential information provided under the Central Bank Act 1942.

‘107I. (1) Where confidential information has been provided pursuant to section 33AK(5)(ahb) of the Central Bank Act 1942 a member shall not make an utterance during the course of proceedings which constitutes a failure to comply with the provisions of professional secrecy referred to in sections 33AK(6) and (6A) of the aforementioned Act. Where a member makes such an utterance during the course of proceedings it may prima facie be an abuse of privilege, subject to the provisions of this Standing Order.

(2) If, during the course of proceedings, it appears to the Ceann Comhairle that a member has made an utterance as described in paragraph (1), he or she shall refer the matter to the Committee on Procedure and Privileges: Provided always that the Ceann Comhairle may also at any time thereafter, on his or her own volition, refer any such matter to the Committee.

(3) At any other time and at the earliest opportunity, but not later than two weeks after an utterance as described in paragraph (1) is made, any person may make a submission in writing to the Ceann Comhairle claiming that—

(a) the information disclosed was provided under section 33AK(5)(ahb), and

(b) the utterance by the member in question constituted a failure by him or her to comply with the provisions of professional secrecy as set out in section 33AK(6) and (6A) of the Central Bank Act 1942.

If the Ceann Comhairle is satisfied that—

(a) the submission is so obviously trivial, frivolous, vexatious or offensive in character as to make it inappropriate that further action be taken or that it be considered by the Committee, or

(b) it is not practicable for the Committee to consider the submission under this Standing Order,

the Ceann Comhairle may decide that no action shall be taken in respect of the submission.

In any other case the Ceann Comhairle shall refer the submission to the Committee.

(4) Where a matter or submission is referred to the Committee and is considered under this Standing Order, the Committee may invite the member who made the utterance and any other person as the Committee may deem appropriate to give evidence orally or in writing to the Committee.

(5) The Committee shall have discretion to publish a matter or submission referred to it under this Standing Order or its proceedings in relation to such matter or submission, and may lay minutes of its proceedings and all or part of such matter or submission before the Dáil.

(6) In relation to any matter or submission referred to it under this Standing Order, the Committee may decide and adopt a report to the effect that—

(a) no abuse of privilege has occurred and it shall recommend that no further action be taken by the Dáil in relation to the matter or submission; or

(b) an abuse of privilege has occurred, and it shall recommend that one or more of the following actions be taken:

(i) the member in question be discharged from the Joint Committee that is conducting the Part 2 inquiry;

(ii) the member in question be suspended from the service of the Dáil, and that suspension may continue until, but shall not surpass, the eighth day on which the Dáil shall sit after the date on which a motion under paragraph (8) is agreed;

(iii) the member in question be censured.

(7) Any decision taken by the Committee under paragraph (6) of this Standing Order shall require the support of three-quarters of the members present and voting.

(8) As soon as is practicable after its adoption of a report under paragraph (6), the Committee on Procedure and Privileges shall lay such report before the Dáil, and shall nominate one of its members to table a motion, as soon as is practicable, which—

(a) takes note of the recommendations and decisions in the report, and/or

(b) proposes one or more of the actions under paragraph (6)(b) be taken.

(9) The Dáil shall consider the motion under paragraph (8) as soon as is practicable.

(10) Notwithstanding the provisions of this Standing Order (save the provisions of paragraph (6), which shall continue to apply), the Committee, following consideration of a matter or submission under this Standing Order, may make such recommendations as appear to it to be appropriate.

(11) For the purposes of this Standing Order

- “Committee” shall mean either the Dáil Committee on Procedure and Privileges or a sub-Committee thereof;

“proceedings” shall mean parliamentary proceedings of the Dáil, a Standing, Select or Special Committee or a sub-Committee thereof.’

Today's motion is a result of this House passing the Central Bank (Amendment) Act 2015 earlier this year. This legislation was introduced at the request of the Joint Committee of Inquiry into the Banking Crisis. It allows that committee to have access to certain confidential banking information held by the Central Bank and is considered vital to that committee being able to conduct the inquiry successfully.

I want to highlight the positive work to date of the committee, under the chairmanship of Deputy Ciarán Lynch, and the efforts of all the members of that committee, from across the political divide, to fulfil the obligations put on them by the terms of reference passed by the Dáil and the Seanad last year. The members of the committee have put their political differences aside to work together to investigate the banking crisis. It is very positive that public representatives elected as Fine Gael, Labour Party, Fianna Fáil, Sinn Féin, Socialist Party or Independent Deputies or Senators are working together to uncover how the banking crisis and the economic crash and collapse that followed came about to ensure that, as a nation, we avoid the mistakes of the past. It shows to a wider audience what many of us in this House already know, that in committees the people elected to this Oireachtas work together in the interest of good government. While Oireachtas committees may not always get the media coverage their work rate deserves, they often show the better side of politics - hard work with less playing to the cameras and political point scoring. I hope that, as Members of the Dáil, we can follow the example of the members of the banking inquiry and not let party politics get in the way of the positive work being carried out by this committee. I hope that all Members of this House will support this motion before us.

This motion and the Central Bank (Amendment) Act 2015 address an issue identified early in the process by the committee. In May 2014, the Joint Committee of Inquiry into the Banking Crisis was established by the Houses of the Oireachtas. The committee was tasked with developing a relevant proposal for an inquiry into the reasons Ireland experienced a banking crisis. The committee, assisted by an expert group, developed and submitted a relevant proposal to the Dáil and Seanad Committees on Procedure and Privileges. On 26 November 2014, the committee was formally empowered to conduct an inquiry under Part 2 of the 2013 Act. The scope of the inquiry is broken down into two phases - the context phase and the nexus phase. The context phase is for the purpose of information gathering. This will inform the nexus phase, which will focus on three broad elements: banking systems and practices, regulatory and supervisory systems and practices, and crisis management systems and policy responses. In its relevant proposal, the committee identified that section 33AK of the Central Bank Act 1942 prohibited listed categories of persons within the Central Bank from disclosing certain confidential information. The committee felt that this provision may prove problematic for the inquiry when it seeks information which may be vital to its work. Having taken legal advice on this point, the committee was of the view that it was necessary to amend section 33AK in conjunction with necessary amendments to the Standing Orders of the Dáil and Seanad.

When considering the committee's relevant proposal, the Committees on Procedure and Privileges unanimously agreed that necessary amendments to the Act should be prioritised. The Central Bank (Amendment) Act 2015 and the amendments to the Standing Orders are the response to these requests. The new Act allows the Central Bank to disclose confidential information to the banking inquiry under certain circumstances. Such documents have professional secrecy obligations attached which everyone to whom they are disclosed must observe. The legal penalties attaching to others for breach of these professional secrecy obligations cannot be imposed on Members for anything they may say in the course of Dáil or committee proceedings.

To address this, the proposed new Standing Order puts in place a system where the Committee on Procedure and Privileges can examine, under fair procedures, any apparent breaches of the professional secrecy obligations by Members. Where such a breach has occurred, the CPP may recommend that the Member be discharged from the inquiry committee, which may be necessary owing to the potential legal implications of such disclosure, that the Member be suspended from the service of the House for a period of up to eight sitting days, and that the Member be censured. Such penalties are in line with existing penalties for disorder but the ultimate decision with respect to these penalties rests with the House.

Together, the Act and the Standing Orders provide a gateway. This gateway will, under the Act, allow confidential information to be provided by the Central Bank to the banking inquiry in the knowledge that, under the Standing Orders, sanctions exist for any Member who fails to comply with the provisions of professional secrecy as set out in the EU instruments. The goal of the Central Bank (Amendment) Act 2015 and these new Standing Orders is to address a concern raised by the members of the Joint Committee of Inquiry into the Banking Crisis and allows the members of the committee to continue to carry out the very positive and constructive work they are doing on behalf of the Oireachtas and the people.

Deputy Seán Ó Fearghaíl

I should apologise on behalf of our party leader, Deputy Micheál Martin, who wished to be here. There are certain points I need to make on his behalf. I am somewhat compromised because, as the Government Chief Whip knows, as a member of the CPP I have myself been party to the discussions which have brought us to this particular point. At issue here is the way in which this Standing Order must be adopted. I have personally agreed that it should be adopted. It needs to be adopted to facilitate the continuation of the inquiry. However, what is at issue is the manner in which the inquiry will proceed on foot of the necessary amendment to the Central Bank Act, having regard to EU directives, and the variance between the public expectation of the banking inquiry and the reality of the process from here on in.

My leader spoke about the intentions of the Standing Order last week. I wish to reiterate his genuine concerns. He stated that the Standing Order was consequent on the passing of the Central Bank (Amendment) Bill 2014 to facilitate the banking inquiry. There is a widespread public expectation that this will be open and transparent. The Act states: "Any member of either House of the Oireachtas to whom confidential information is provided under subsection (5) and who fails to comply with the provisions of professional secrecy referred to in subsection (6) in respect of that information may be subject to the sanction of the House of which the person is a member in accordance with rules and standing orders made by that House." The Standing Order is quite severe. As Deputy Martin stated last week, he has received legal advice that confirms that the Standing Order is very restrictive on the members of the committee in terms of the sanctions they may incur if they are judged to have breached the Act in terms of receiving confidential information from the Central Bank and breaching their duty of professional secrecy. Given that the inquiry is meant to open up everything in the Central Bank documentation on corporations and individuals, it seems an extraordinary restriction. Even though the Standing Order was agreed by the CPP, on legal advice it in fact creates a process for dealing with breaches of those professional secrecy obligations by Members and provides for penalties where Members do not comply with the requirements of the law. The Standing Order cannot be moved until the Bill is signed, yet this issue was not discussed when the substantive Bill was going through the Houses. It has become a latter-day requirement due to national and EU law on national secrecy.

It is unfortunate that the approach of the Government to the banking inquiry is so piecemeal and it also exposes the fact that the model of the banking inquiry the Government selected is the wrong one. We need a far more transparent inquiry. We need to be transparent about what is allowable and what is not allowable. The public has not got a clue about what is happening at present. We need to let the public be aware that the names of certain personnel and documentation will not be made public via the banking inquiry.

It is therefore not an inquiry that will be open, as I understand it, because of the restrictions placed on it. It indicates that we are in an area of legal difficulty. There is a quagmire arising here. The information the public might expect to get from a critical player in all of this - the Central Bank - is going to be protected, as of necessity it would appear or we would not get any information at all. However, it will be protected by a series of EU directives. This in turn has required us to amend our Central Bank Act which in turn requires the House to look at Standing Orders which also must be amended or no information at all will be provided. What we are saying here is that there is a big divergence between the public expectation of what will emerge from the banking inquiry and the reality of the limited access to information that will be available as a result of the constraints placed on the banking inquiry, emanating it would appear in large part from EU directives.

We have some political difficulty with that, which derives from the fact that at no point in the initiation of this legislation or in the debate about the banking inquiry was it signalled that this unique degree of protection and secrecy would apply to the Central Bank, its staff, those who have contracted to it and indeed its dealings with any incorporated or unincorporated body. That presents a real difficulty. Given where the banking inquiry is going and the work that has been undertaken, I accept that the Central Bank (Amendment) Act 2015 had to be passed to enable the inquiry to complete its work and have any engagement at all with the Central Bank. While I have concerns about the strict nature of the constraints envisaged in these Standing Orders, I agree that some amendment to Standing Orders needs to be passed.

Deputy Peadar Tóibín

Cuireann Sinn Féin fáilte roimh an rún seo. Cabhróidh muid leis an Teach é a thaisteal tríd an Oireachtas. Is céim thábhachtach é an rún chun cúnamh a thabhairt don Chomhchoiste Fiosrúcháin i dtaobh na Géarchéime Baincéireachta. Sinn Féin fully supports the banking inquiry in its efforts to delve into the aspects of the bank guarantee and bailout that have not been explored to date, including the nature of the economic and political power of the Twenty-six Counties. The key to the banking inquiry lies in the relationships at the heart of the elitist State. I refer to the dynamic between developers, finance and the State.

When the banking inquiry heard evidence last week from Professor Bill Black of the University of Missouri-Kansas City, my colleague, Deputy Pearse Doherty, asked him about an article he wrote in 2009 in which he called for the prosecution of "elite control frauds" regardless of their political patrons. Deputy Doherty asked Professor Black to explain what he meant by "political patrons" and to speak about "the effect such a relationship would have on the financial crisis". In response, Professor Black made it clear that "if you bring cases against powerful bankers, they will enlist their political allies and they will give very large political contributions to do that". Of course he was talking about the United States, but he went on to say that the United States is not unusual in those terms, adding that "if you take on really powerful bankers you will find that you get political push-back".

It is not the purpose of the banking inquiry to look into individuals. It is required to look into systems, practices and procedures. This means facing up to the uncomfortable fact that there are strong links between politics and finance in the Twenty-six Counties. We know, for example, that the former Taoiseach, Brian Cowen, played golf with Seán FitzPatrick and the regulator in Druids Glen in County Wicklow in 2008, a mere two months before the bank guarantee decision was made. We know from a book, The FitzPatrick Tapes, that they talked about Seán Quinn and his loans to Anglo Irish Bank and that the Taoiseach promised to pass the information to the Central Bank. Such was the nature of the links between finance and politics in the Twenty-six Counties that a regulatory matter could be discussed and sorted out, as it were, over a game of golf in County Wicklow.

Of course there is nothing illegal about a game of golf, but illegality is not the issue here. We are looking at a very small world, one that is open to a select number of people and closed to most others. We got a glimpse of that in the banking crisis. We know that 50% of Irish loans in Anglo Irish Bank were in the hands of 20 individuals and that 51% of the commercial loan book of Irish Nationwide Building Society was in the hands of 25 individuals. When this was put to Professor Black, he responded by saying he had "never seen a concentration that high at any financial institution of any size anywhere in the world at any time in history". This is a phenomenal thing to say about our crisis. He told the inquiry that it was "absolutely - no questions and no ifs, ands or buts - utterly unsafe and unsound". He said that if he had been the regulator, he "would have begun efforts to stop it immediately" and worked on putting Anglo Irish Bank and Irish Nationwide into "receivership".

Yesterday's developments in the HSBC debacle, which was raised by my colleague, Deputy Pearse Doherty, in October 2013, exposed how tax avoiders are treated by the Revenue Commissioners. There are no dawn raids and no detentions. Instead, there is just a quiet conversation and a settlement fee. Maybe there is a round of golf as well, just between friends. Who knows?

We welcome this motion and the efforts to map the relationships that underpin finance, property and the State apparatus in the Twenty-six Counties. We will work to take down that apparatus and make sure the democratic State functions properly in future.

Deputy Richard Boyd Barrett

I find myself in something of a dilemma in the face of this Standing Order. There is not much point in opposing it, but I could hardly be enthusiastic in supporting it. Essentially, this change relates to the veil of secrecy that legally supports the golden circle in this country. If the public is to see any value whatsoever in the banking inquiry, I suggest it relates to the question of discovering who was responsible for bankrupting this country and inflicting such misery on millions of our citizens over the past seven years. Indeed, the consequences of what this golden circle of bankers, developers and politicians did to this country are likely to continue for many years to come.

The law set down by the EU in terms of central banks and confidentiality requires that for the banking inquiry, which is supposed to be acting on behalf of the public, to look into these matters, the members of the inquiry have to give an undertaking that none of the confidential information from the Central Bank that they will look at will be revealed to the public. That is why we have a public inquiry that cannot reveal to the public the details of what it is looking at. In such circumstances, what is the point of the public inquiry at all? I suppose it is marginally better that, as a result of this motion, the secret circle around the golden circle is expanded to include some public representatives. For those public representatives to access confidential information and evidence that might help them to draw serious conclusions about who was responsible for the banking crisis, they will have to give an undertaking not to pass this information on to the public. It is really pretty scandalous.

As I said when we discussed this matter last week, I can see the logic that underpins the rules of the European Central Bank or our own Central Bank to the effect that information on normal deposit holders and normal borrowers should not be divulged to the wider public. There is good reason to keep that information confidential and private. It seems to me that there is absolutely no justification for withholding the names of the 20 or so biggest borrowers from Anglo Irish Bank, the tiny golden circle of people who were borrowing from Irish Nationwide or any of the other small groups of super-wealthy and well-connected developers who borrowed enormous sums of money from the banks to speculate in the property area and consequently crashed the economy.

Why should their identities and the extent of their loans and involvement in destroying our economy be confidential? They should not be. Why should public representatives who get to see that information be bound by confidentiality clauses under threat of sanction from the Dáil? The only comfort I can take is that the sanctions are pathetic, which makes it likely that the information will be leaked and make a mockery of the entire process. Getting flung out of the Dáil for eight days could hardly be described as the worst punishment one could inflict. One could argue the case that it might allow public representatives time to do something useful, for example, organising the next demonstration against water charges and austerity, which might have a serious impact on addressing the wrongs arising out of the banking crisis and the austerity that has ensued.

I will not vote against the motion because it is marginally better that the inquiry have access to this information, but why the secrets and key individuals, developers and culprits behind the crisis should be protected by a veil of confidentiality is beyond me. It says everything about how the golden circle persists.

Minister of State at the Department of the Taoiseach (Deputy Paul Kehoe)

I will take Deputy Boyd Barrett up on a point. He stated that the committee was "supposedly" meant to work on behalf of the public. Let me assure him that it is acting on behalf of the public.

Deputy Richard Boyd Barrett

We will not get any of the detail.

Deputy Paul Kehoe

Independents and members of the Technical Group are elected on behalf of the public and are doing a good job in trying to find answers.

I thank the Members opposite who contributed on the motion. This issue was highlighted by the committee. The motion will remove an obstacle to its work. The sharing of information by the Central Bank with the Joint Committee of Inquiry into the Banking Crisis will not be possible until the changes to the Standing Orders have been passed by both Houses. The changes will amend the Standing Orders to accommodate the constitutional position of the privilege of Members of the Oireachtas, which is not the case for any other person who may disclose confidential information.

The banking inquiry is examining and investigating in the full light of public hearings some aspects of our recent history that are not among our proudest moments as an independent nation. In the coming months, the committee will reflect on some of the darkest days of the economy and the people. The Deputies and Senators on the committee are carrying out their work at the request of both Houses. It is our duty to remove any obstacle to their investigation where we see fit.

The matters being investigated by the banking inquiry had devastating consequences for everyone. The economic recovery that we are now witnessing, with unemployment rates continuing to fall and our national finances improving, has come about as a result of the people's sacrifices. It is the Government's priority to secure and rebuild our economy. However, ongoing economic recovery does not mean that we can afford to ignore the mistakes of the past. People are entitled to understand the origins of the crisis and, most important, to ensure that the same mistakes do not recur.

The gateway that the Act and the amendment to the Standing Orders create addresses a key concern of the committee and removes barriers to the Central Bank co-operating with it fully. It is in the interests of the majority of the people that the committee does a successful job. I wish all of its members the best of luck.

To address Deputy Boyd Barrett's points, the committee is acting on behalf of every citizen, be that citizen from Wexford, Donegal, Cork, Kerry or Dublin. Members of the inquiry were elected with a mandate and appointed to the committee to carry out a job, which I am satisfied they are doing to the best of their abilities. It is only right and proper that, as public representatives and elected Members, we remove any obstacle from their path and give them every opportunity to be successful in finding out what happened in the country's darkest days.

Before and after entering the House, Deputy Boyd Barrett and members of the Technical Group have been jumping up and down, so to speak, looking for answers. Now that we are giving the committee the opportunity to find those answers, the Deputy is still not happy. I do not know what he wants.

I commend the motion to the House.

Question put and declared carried.