Leaders’ Questions

Wednesday, 18 February 2009

Dáil Eireann Debate
Vol. 674 No. 5

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Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  We are worse off than we were yesterday. What is at stake is the liquidity and independence of the Irish banking system and our country’s finances. Yesterday’s news did not do us any good; we are worse off politically and economically than when we asked questions in the House yesterday.

When the Taoiseach was elected, I respected and believed his call that he would work hard and make his decisions in the interests of the Irish public. The Irish public is not being served by what is happening now, nor is Ireland’s interest. The Government that the Taoiseach leads has been far too timid about the situation in our financial institutions. The finger can be pointed at the Government for a lack of oversight, real regulation and activity as our country edges ever nearer to further economic depression. The Green Party — whose Ministers are not in the Chamber again this morning — will bleat in the distance for resignations and action, but the posteriors of its Ministers are super glued to their seats at Cabinet.

Yesterday I asked the Taoiseach when he was informed of the transactions between Anglo Irish Bank and Irish Life & Permanent. I asked him if he was aware that any member of the Cabinet in any way encouraged, was associated with, or supported that activity. The Taoiseach did not answer that question. On 29 September, when the Taoiseach discussed the offloading of shares in respect of the Quinn position, was he not aware how this would be financed? Did he ask questions about this? The Taoiseach is aware that section 60 of the Companies Act 1963 makes it illegal to transfer shares in this manner, except in certain circumstances. Does the Taoiseach agree there was a fraud perpetrated on the Irish Stock Exchange?

When did the Taoiseach find out about these transactions? Was any member of his Government in any way associated with this? Why did the Taoiseach not ask questions about how the transaction in respect of Mr. Quinn was to be financed?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I reject the Deputy’s contention. I also reject the idea that he does not wish to impugn my integrity when he has been putting out statements that impugn my integrity. I would rather Deputy Kenny desisted from that sort of hypocrisy.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I will withdraw any remark about the Taoiseach’s personal integrity. I would never do that and never have in my 33 years in politics.

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  Deputy Kenny is talking out of both sides of his mouth.

[318]The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Deputy Kenny did it as recently as last night, never mind his 32 years in politics.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Taoiseach, without interruption, please.

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  He gets others to do it for him.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  When did I impugn the personal integrity of the Taoiseach?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  He did it last night.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  It has more to do with confidence.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  The Taoiseach should explain his statement or withdraw it.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The briefing he gave suggested I am protecting people, and I do not even know who they are.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I gave no briefing to anybody.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Deputy Kenny put his point and now I will put my point.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I challenge the Taoiseach on where I impugned his personal integrity. The Taoiseach should explain it or withdraw it.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I will make my points.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  When did I impugn the personal integrity of the Taoiseach?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The position is——

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  He will not answer that question either.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I have answered that question. It was a preliminary remark, and I want to get to the heart of the matter.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  Exactly.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  What is suggested in the briefing by Deputy Kenny and his people is that I am protecting someone. I am not protecting anyone but the Irish taxpayer and the Irish national interest. That is my sole concern.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I have never impugned the integrity of the Taoiseach.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I hold no brief for anyone other than those people because they are the people I serve.

Deputy Michael Creed: Information on Michael Creed  Zoom on Michael Creed  The Taoiseach is incompetent and asleep at the wheel.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I have never impugned the integrity of the Taoiseach, nor any member of his Government, unlike the Taoiseach. He should deal with the issue.

Deputy Seán Barrett: Information on Seán Barrett  Zoom on Seán Barrett  The Taoiseach should read the relevant line.

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  Deputy Kenny is at it all the time.

[319]The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Deputy Kenny can be listened to in silence but I cannot be listened to in silence, is that it?

Deputy Billy Timmins: Information on Billy Timmins  Zoom on Billy Timmins  Deputies O’Dea and Ahern spoke out.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  One of the points raised by the Deputy was whether the Ministers in the Taoiseach’s Cabinet entourage supported a €300 million deal with select golden circle customers of Anglo Irish Bank. We were not involved with this, it was an internal bank matter. It had nothing to do with members of Government or any parties in the Government.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  The Government rushed in to save the banks.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I am entitled to reply to the question, Deputy Durkan. Of course, the old tactic is that if one throws enough muck some of it might stick. That is one of the reasons Fine Gael is so often on that rather than this side of the House.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  If the Taoiseach is lucky, he is heading this way fast.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Allow the Taoiseach to finish.

Deputy Michael Creed: Information on Michael Creed  Zoom on Michael Creed  He is finished.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  It is the old tactic. I want to make it clear to Deputy Kenny that every decision taken by this Government in respect of trying to handle a difficult financial crisis has been in the interest of the taxpayer and in the public interest, and in the interest of no one else. The Deputy asked about 29 September but there was no discussion on 29 September on those matters. What was being discussed at that time was the fact that we were facing the possible collapse of the Irish financial and banking system unless the Government was prepared to provide a guarantee to that system. That is what we did. In doing so we provided greater stability to the system.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  What did the Government know in July?

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  This is Leaders’ Questions in which the Deputy has no involvement.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I have made it abundantly clear that far from seeking to protect anybody, which is the nice juvenile conspiracy theory the Opposition has been going around with for the last three weeks——

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  We will tell the Taoiseach.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  That is way over the top.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  It is not over the top.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  Come on.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  One can take so much of that nonsense.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Taoiseach must answer. Deputy Kenny will have another chance.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  This Government has been seeking to——

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Please allow the Taoiseach to finish.

[320]The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I did not interrupt the Deputy. As a result of the due diligence undertaken on behalf of the Department of Finance, questions were referred to the Financial Regulator, which are now being investigated by the statutory authorities concerned. This suggestion of protection——

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  The Financial Regulator could investigate itself.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——is totally baseless. It is wrong, contemptuous and has no basis in fact. It is a political slur and smear campaign——

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  Hear, hear.

Deputy Willie O’Dea: Information on Willie O'Dea  Zoom on Willie O'Dea  Hear, hear. Those are the facts.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——in an effort for the Opposition to capitalise on difficulties that currently exist——

Deputy Ulick Burke: Information on Ulick Burke  Zoom on Ulick Burke  That is rubbish.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  That is due diligence all right. The Government would not recognise it anyway.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——in the financial system to see if it can get some cynical political advantage.

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  Hear, hear.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  That is precisely the game the Opposition is involved in. Let me tell the Irish people what I am trying to do.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  The Taoiseach is apparently the standing judge.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I am trying to achieve two things. I am trying to ensure the principle of accountability applies for anybody involved in any wrongdoing whatsoever, in this bank or any other.

Deputy Emmet Stagg: Information on Emmet Stagg  Zoom on Emmet Stagg  It is about time.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The Government has failed in that anyway.

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  The Taoiseach should read the files.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The only way in which that principle of accountability can be achieved is to respect due process. The one way to ensure that people with far more resources than the Deputy or I can avoid accountability is by not respecting due process.

Deputy Paul Kehoe: Information on Paul Kehoe  Zoom on Paul Kehoe  The Taoiseach’s predecessor spoke with some passion too.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  It is fundamental to trying to get to the bottom of this problem. One of the ways we can ensure confidence in our system, externally as well as internally, is to confirm that those who have the independent statutory authority to investigate these matters are doing so. As far as I and the Government are concerned, recognising their independence, they cannot come to a conclusion soon enough. Whatever facts must be dealt with or whatever further processes must be instigated can then be initiated. Let us be clear that this is the motivation of Government in respect of that matter.

[321]Deputy Richard Bruton: Information on Richard Bruton  Zoom on Richard Bruton  The Government is asleep at the wheel.

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  If the Government is in——

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  In respect of the other matter, which is of equal importance——

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Allow the Taoiseach to finish.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——in terms of the leadership that must be displayed in the country and this House, it is true to say that our financial system, like others, is under continual stress. The credit crunch and the ability to access markets and credit remains a challenge facing this system now more than ever. I hold absolutely no brief for anyone who would besmirch the reputation or integrity of Irish banking domestically or internationally because of the difficulties it brings, exacerbating an already difficult position.

Deputy Pádraic McCormack: Information on Pádraic McCormack  Zoom on Pádraic McCormack  If the Taoiseach acts, we will support him.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Those are the two principles upon which we are seeking to deal with these matters. There is no other motivation or reason. I reject with contempt any suggestion that I am in the business of seeking to protect anybody or do something in that respect. It is really about the Opposition seeking political advantage.

Deputy James Reilly: Information on Dr James Reilly  Zoom on Dr James Reilly  There are sins of omission as well as commission.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  Tell us who are the ten musketeers.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  The charges being made by the Taoiseach are beneath his office but typical of him. It is not the first time he has rejected questions, comments and proposals with contempt.

Deputy John Cregan: Information on John Cregan  Zoom on John Cregan  That came from the Deputy’s press office.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  It is not the first time the Taoiseach has descended into casting aspersions on other people’s judgment capacity. I am glad the Taoiseach has accepted that I did not impugn his personal integrity. I will follow up with some of the questions he did not answer.

When the Taoiseach was told of the Quinn shareholding being sorted out, did he not ask why it was so?

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  And how?

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  Is it not a fact that the Government was in possession of information two months before it was prepared to put €1.5 billion into Anglo Irish Bank, when one could certainly say there was fraudulent activity going on? The Government was quite prepared to put €1.5 billion of taxpayers’ money into it.

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  Hear, hear.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  The Government knew about this when discussions were taking place. The Taoiseach might confirm the report that the transaction of the €300 million — not to a golden circle but a toxic circle — was overseen by a British finance house. Is that true? If that was the case, was the Financial Regulator and Central Bank in possession of all the information in determining whether the transaction was legal?

[322]I do not know any of these people and the Taoiseach has told me he does not know any of them either.

Deputy Willie O’Dea: Information on Willie O'Dea  Zoom on Willie O'Dea  Does the Deputy accept that?

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I accept that. Who in heaven’s name made a decision not to pursue these ten people for €75 million owed to the Irish taxpayer?

Deputy P. J. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  Hear, hear.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  That is what they were liable for. Last year in the budget, for the sake of €100 million, 20,000 elderly people protested on the streets outside this House.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  Hear, hear.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  People are now walking into offices who have 22% of a surcharge on personal overdrafts by the same banks we guarantee.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  Hear, hear.

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  The lot of them.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  There is a chasm of anger out there. The Taoiseach is in a position to do something and send out a message both nationally and internationally that a change of direction is taking place in Irish banking and financial institutions, in which we now have no trust or confidence.

Who made the decision not to pursue the ten members of the so-called golden circle? Is the Government not going to go after these people? I listened to the chairperson of the Green Party this morning on the radio. When the Minister for Finance, Deputy Brian Lenihan, came in to speak about nationalisation of the bank, he referred to the concealment of loans to directors, the scale of those loans and the damage done to the reputation of Anglo Irish Bank and Irish banking in general. We were told the Government would go after those loans to balance those books.

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  Hear, hear.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  If a decision has been taken not to pursue these ten persons, that will not happen either. The Government states one thing with regard to nationalisation, while in possession of those facts, yet it does not act.

Was this transaction overseen by a British finance house? Was the Financial Regulator, the Central Bank and, therefore, the Government fully informed as to what was going on? Who made the decision and why has a decision been made not to pursue the ten persons in respect of the €300 million overhang from Quinn? What action will the Government take to send out a message internationally that this country is a good place to do business and banking?

The Government cannot do this unless it shifts persons in the boards and management structure. There are good people in all our banks. It is nothing personal but the message is all wrong. The Taoiseach is in office but not in charge.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  Hear, hear.

Deputy Richard Bruton: Information on Richard Bruton  Zoom on Richard Bruton  Hear, hear.

[323]The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I am very much in charge of this in comparison to the game being played by the Opposition.

Deputy David Stanton: Information on David Stanton  Zoom on David Stanton  Here we go again.

(Interruptions).

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Allow the Taoiseach to answer the questions.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I will answer all the questions. The Opposition stated only a couple of weeks ago——

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  I must insist——

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Are we to have a discussion or a shouting match?

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  ——on silence for the Taoiseach. Deputy Kenny was listened to in silence and the same respect must be afforded to the Taoiseach.

(Interruptions).

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  This is a democratic forum.

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  Absolutely.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Some questions have been asked and the Taoiseach is entitled to reply without interruption. Please allow him to do so.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I thank the Ceann Comhairle. There were a number of issues to which I wanted to respond. Deputy Kenny spoke about the need to be responsible and is worried about our international reputation. I heard him saying in this House only two weeks ago that our banks were bust. That was a nice statement from the Leader of the Opposition.

Deputy David Stanton: Information on David Stanton  Zoom on David Stanton  What was wrong with it?

Deputy Paul Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  Was he wrong?

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  One could make the same point today.

Deputy Shane McEntee: Information on Shane McEntee  Zoom on Shane McEntee  The banks are bust.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  On the specific matters he asked about, I heard in comments this morning that the Cabinet had made some decision to ensure people were not pursued in respect of any liabilities they may have. Nothing could be further from the truth; the Cabinet made no such decision and it is not our business to make such a decision. We have nationalised a bank, which is now in the ownership of the people, so it can pursue, to the greatest extent it possibly can, all liability and debts due to it. That was the purpose of nationalising it.

If it were the case that we had not nationalised the bank and if the loss of market confidence was such that it could not maintain its deposits and it went into default, the taxpayer would have had to pick up the tab.

Deputy Dermot Ahern: Information on Dermot Ahern  Zoom on Dermot Ahern  Of course.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The reason we have nationalised the bank is to ensure the bank functions and we retrieve whatever debts are due to it to the greatest possible extent in respect of any [324]transaction in the bank. We made it clear that the management and board of the bank will do so according to normal banking practice. They will not be interfered with on a day to day basis by this or any other Government that would have enough sense to know how that should proceed. That is another canard that has been thrown out as part of the rumour machine we must contend with.

I have made the point clearly that in respect of the proposed recapitalisation at the time, in the statement we made on 23 December, on Anglo Irish Bank we were talking about taking a 75% stake in the bank to provide capital of up to €1.5 billion to it. Upon deciding that, with the loss of market confidence being such and the governance issues that were arising, we said we would have to nationalise the bank because there was no market confidence in its ability to continue under those structures. We nationalised the bank; we have not put money into it yet but we stand ready to support it.

That is the decision we made and it is at great variance with the suggestion we made about the recapitalisation of the other two banks at that time, a €2 billion capital injection plus €1 billion underwriting that would be supported by the Government in return for a 25% share if the private capital was not raised. It is a totally different transaction, taking into account the very different situation for Anglo Irish Bank compared to the other two main banks.

The Minister for Finance has indicated that we regard regulatory reform as a priority and that we must proceed with it to change the structure, how we provide regulation and its type. That is a challenge not only for this jurisdiction, but for every jurisdiction that must face this financial crisis. This is not unique to Ireland, although I am not suggesting in any way that is a factor. We must ensure, on the basis of the facts before us, that we have a new regulatory regime.

On this question of the transaction undertaken by these individuals to help to unwind the CFDs that had been built up in the Quinn stake in the bank, the issues that are arising now on that arose because of a due diligence undertaken, I again emphasise, by people acting on behalf of Government. If the contention now is being made that in some way we nationalised a bank to protect people——

Deputy Dan Neville: Information on Dan Neville  Zoom on Dan Neville  More or less.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——it is nonsense because those debts are owed by those people to the bank and to the greatest extent that they can be collected——

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  Not even Fianna Fáil could dream that one up.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——under the terms and conditions of that they remain owing and we intend that the management and board will collect those debts——

Deputy Bernard J. Durkan: Information on Bernard Durkan  Zoom on Bernard Durkan  Dream on.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——to the greatest extent it is possible to do so under the terms and conditions of what was brought forward.

Deputy Alan Shatter: Information on Alan Shatter  Zoom on Alan Shatter  What did the Government know last July?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The contention being made is absolutely wrong. Let me emphasise again, Anglo Irish Bank was nationalised for the good——

Deputy Michael Ring: Information on Michael Ring  Zoom on Michael Ring  Of Fianna Fáil.

[325]The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——of the country. If it is being contended by those who would not even support the guarantee, let alone the recapitalisation of the banks, that we should allow that bank to default, clearly the situation would have been a greater liability for the taxpayer. We need to make sure Anglo Irish Bank gets on with its business, including the repayment of debts due to it.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The bank is bust.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  The Taoiseach stated yesterday that he did not know the identity of the ten wealthy investors who constituted the golden circle in Anglo Irish Bank. Has he found out who the ten are since? When will he find out and when will he tell us? We must be told because the people own this bank and we are stuck with the €300 million they gambled recklessly. The golden circle must be named.

The Taoiseach made an interesting statement yesterday. He told us that he, the Department of Finance, when he was Minister, and the regulator became of aware of what he called the “overhang” of the Quinn interest in Anglo Irish Bank in March 2008 and that they concluded it was a source of instability in the bank. That overhang was assembled by the Quinn group using a method known as contracts for difference, an arrangement whereby the person does not buy the shares, he or she effectively gambles on them, buying an interest in whether they go up or down. Why would someone use contracts for difference to acquire an interest in a bank or other body rather than buying the shares? One reason is that contracts for difference have a different tax treatment from the purchase of shares. Stamp duty is payable on shares whereas contracts for difference are not liable for stamp duty.

The Revenue Commissioners rumbled this back in 2006. On St. Patrick’s Day 2006, the Revenue Commissioners issued a compliance notice to the effect that contracts for difference would have to be subject to stamp duty. Within days, the Taoiseach, as Minister for Finance, caused the Revenue Commissioners to reverse that decision and to withdraw the compliance notice. He did so after being lobbied. We know he was lobbied because in reply to questions from Deputy Burton and Deputy Rabbitte shortly after that, he acknowledged that he was lobbied. The day after the compliance notice was withdrawn, the shares in Anglo Irish Bank increased by €0.30 and 3.7 million shares in Anglo Irish Bank were traded.

Will the Taoiseach tell the House who lobbied him in March 2006, causing him to direct the Revenue Commissioners to withdraw the compliance notice days after it had issued? This caused a situation to continue whereby trading in contracts for difference without tax liability continued, resulting in the overhang of Quinn shares in Anglo Irish Bank, among other things, which has now led to what the Taoiseach referred to yesterday as the instability in Anglo Irish Bank and all of the consequences that have flown with it, with the disastrous results for our banking system and economy.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  It is unfortunate that in asking a question about 2006, Deputy Gilmore did not give me some prior notice. I cannot give him the accurate information immediately, but I will get it for him as soon as I can now that he has mentioned it here. If he had wanted an accurate answer to that, he could have put me on notice to it and I would certainly have provided it.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  The Taoiseach was Minister for Finance at the time.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  It was 2006 but I will get the information; I have no problem with that. I recall, however, that the decision on those matters also followed official advice.

[326]Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The Taoiseach, as Minister for Finance, made the Revenue Commissioners withdraw the compliance notice.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Deputy Burton is not entitled to interfere in Leaders’ Questions.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I am helping the Taoiseach in his recollection.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Deputy is not entitled to interfere.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I will get the full explanation from the Department of Finance and will supply it to the Deputy in public in case there is any suggestion that I did something untoward or at someone’s behest. I did nothing at anyone’s behest; I did it on the basis of official advice on a matter which was having an effect on the trading of shares. That is my general recollection of 2006 but I will get the details and supply them. There is no mystery to this.

On the question of obtaining names, I have made the point — others can say differently if they wish — that the matter is currently being investigated by the Office of Corporate Enforcement and the regulator. It relates to a commercial deal done internally in a bank between the bank and its customers or investors. I do not have the details of that transaction. The independent statutory authority, acting independently, is dealing with that. If I went down to Fitzgibbon Street in the morning——

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  It did not act independently. It took Anglo Irish Bank’s advice.

  11 o’clock

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——and asked the sergeant in charge to give me the names of the suspects in crimes A, B or C which he or she was investigating, I would not be entitled to that either. It is in the interests of due process and of ensuring the objective everyone has is achieved, which is to see if there was any wrongdoing in regard to these matters and that if there was wrongdoing, those who did wrong will have to answer for it under the law without fear or favour. That is my only motivation in regard to this matter. I have no other motivation. While I will perhaps have to put up with the smear obviously going around as a result of it, I want to make it very clear that this Government holds no brief for any individual, that it expects everyone to be treated equally before the law——

Deputy Pádraic McCormack: Information on Pádraic McCormack  Zoom on Pádraic McCormack  That is a big change.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  ——and that we have confidence in those investigating the matter, in particular in regard to the Office of the Director of Corporate Enforcement, who has the statutory authority on the basis of that examination to appoint a High Court inspector and to proceed. If that is his requirement and he includes two members of the Garda from the fraud squad in his staff, he will proceed with that with the full support of Government. That is the situation.

I am not prepared to do what has been suggested to me because it may, in some way, put that at risk and not because I hold any brief for anybody or for who they are, what they are or who they eventually emerge to be. That is not my motivation. I have no interest in any of that.

I am simply trying to ensure the process of investigation is concluded as quickly as possible. I ask that it is concluded as quickly as possible and that the decisions which flow from it are proceeded with. We hold no brief for anyone. The law should affect everyone without fear or favour whatever way that turns.

In regard to the other matter, I am also very cognisant — this is something the Deputy and the Fine Gael Party will know from detailed briefings with the Minister for Finance — that we [327]are in a situation where we want to maintain stability in our financial system and ensure our financial system remains stable. That is a very great challenge in the present circumstances.

I say to people who quite rightly, as I do, wish to see emphasis placed on proper oversight, proper supervision and proper outcomes to any wrongdoing that has taken place, let us please keep our eye on the big picture too, which is to ensure at the same time, and not at its expense, that our financial system continues to operate in a way that helps to serve the economy.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  The Taoiseach said he will provide the information to me in regard to what happened in 2006. I remind him that the information I seek is the identity of those who lobbied him in 2006 to cause him within days to reverse the decision by the Revenue Commissioners to issue notices of compliance for contracts for difference.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  My recollection is that it was a professional body but I will check it.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  Let us see.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I have nothing to hide anyway.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  I am not so sure that it is of such insignificance that it has entirely escaped the Taoiseach’s mind because of what a commentator, whom I wish to quote, said at the time. John McManus, writing in the business opinion section in The Irish Times on 3 April 2006 days after the decision was made, stated:

That was very prescient because now we know what has happened to all those investors and to the banks now that the downturn has come. The overhang of Quinn shares in Anglo Irish Bank, which the Minister described yesterday as causing instability in the bank, brought about a situation where that bank ended up having to be nationalised, where our entire banking system has been put at risk, where repeated efforts have had to be made to restore confidence in it and where tens of thousands of people in our economy are losing their jobs as a result of a lack of credit being extended to them and as a result of what is happening in banking and the economy. That is the consequence of it.

That is what the Taoiseach was being warned about by this commentator in 2006. It was also what he was being warned about by Deputy Burton in 2006 when she raised this very issue with him. The Taoiseach this morning and Ministers put on media over the past few days are trying to spin the line that something untoward was going on in the banks, that they discovered it only lately, that they are trying to sort it out and that this is the Government acting tough with the banks. The fact of the matter is that the Taoiseach’s stewardship, as Minister for Finance, has contributed to the hole we are now in economically. The Taoiseach was at the heart of it.

The Revenue Commissioners decided these things should be taxed. Up to 40% or 50% of transactions were being done in this way. It was a form of gambling. These people were taking risks and gambling with the economy and shares. Why would they not do so? They did not [328]have to pay tax on it. No stamp duty was being imposed. If they had to buy the shares, they would have had to pay the stamp duty. The Revenue Commissioners said they should have done so but the Taoiseach responded to lobbying from somewhere about which he has yet to tell us which reversed the Revenue Commissioners’ decision and they carried on partying, as Charlie McCreevy would say. Now we know the result. The banks and the economy are in trouble and the Taoiseach was the Minister for Finance charged with the stewardship of this. At the very least, he was unwise in the decisions he made and, at worst, he was not doing his job.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The reason Anglo Irish Bank got into difficulty is that the business model it had required obtaining borrowings——

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  Answer the question asked.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The Deputy’s leader has had a chance to speak for ten minutes.

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  Answer the question asked.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  If the Deputy does not mind me saying a few words——

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Taoiseach must be allowed to answer.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I am entitled to answer and to defend myself.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Taoiseach must be allowed to answer.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The suggestion that we have a financial crisis in Ireland because of the CFD position is really stretching things.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  We have one in Anglo Irish Bank.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Let me answer.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Deputy Burton has no involvement in this.

Deputy Seán Sherlock: Information on Sean Sherlock  Zoom on Sean Sherlock  The market was betting against Anglo Irish Bank.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The leader of Deputy Sherlock’s party is capable of asking questions. He does not have to help.

Deputy Michael Kennedy: Information on Michael Kennedy  Zoom on Michael Kennedy  I wish he would ask a question.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  In regard to what happened in Anglo Irish Bank, the problem was that the international credit crunch brought about a situation where its business model came under immediate pressure and the market made a decision on that. Its perceived exposure on the construction side was regarded as another negative but the idea that it was just in regard to the CFD issue is stretching things considerably.

I said that the acquiring of a shareholding by Mr. Quinn through the CFD mechanism was causing concern and was referred to me by the Governor in his normal meetings with me as Minister for Finance, which are conducted on a regular basis, and was unwound through 15% of shares being converted to shares for Mr. Quinn and his family. The other 10% then arose in regard to this other arrangement which is now under investigation by the regulator.

[329]That source of instability was dealt with in July but, unfortunately, what we are now finding out is that the nature of the transaction in regard to the shareholding made up of the investors which was referred to the regulator has now been referred to the Office of the Director of Corporate Enforcement. It has to be dealt with to see whether it was a commercial loan conducted in the ordinary course of business. There are indications that perhaps that may not be the case. That issue has to be resolved by the Office of the Director of Corporate Enforcement.

However, to make the leap the Deputy just made that the CFD issue has caused all this problem in the banking system is totally exaggerating the case.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  In Anglo Irish Bank——

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The source of instability which that created was being resolved. Deputy Kenny has suggested that the ultimate amount involved could be of the order of €300 million, but the problems in Anglo Irish Bank were far greater than that. While it is a very large figure, in the context of overall banking stability it will not have the impact suggested by the Deputy. It would be better for us to keep things in perspective. The issue here was——

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  It would be better if the Taoiseach answered the question.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I have answered the question. The contention of Deputy Gilmore was that the CFD position of itself has brought about a situation——

(Interruptions).

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  He made that contention very clearly and the record will show what he had to say.

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  The Taoiseach should account for his stewardship.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I did not interrupt when he was making his comments.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  The Taoiseach, without interruption.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The CFD position is not the reason we have a financial crisis in Ireland and if that is the contention, it is wrong.

Deputy Róisín Shortall: Information on Róisín Shortall  Zoom on Róisín Shortall  It was a major factor.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The truth is that was not the situation.

Deputy James Reilly: Information on Dr James Reilly  Zoom on Dr James Reilly  Did it help the situation?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Of course it did not help the situation, but that source of instability was dealt with in July and August through the mechanism we have just been discussing. However, the problem now is that an aspect of the nature of that transaction is under investigation. Those are the facts with regard to the CFD position and the unwinding of the shareholding by Quinn in that bank with regard to that matter. It is an exaggeration to associate with us and CFDs the rest of the problems of the economy, including the international recession and the depreciation in sterling.


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