The Final Report of the Oireachtas Banking Inquiry: A Constitutional Perspective

Dr Fiona Donson and Dr Darren O’Donovan

Since its inception, widespread doubt and scepticism has permeated discussion about the banking inquiry. As the end of the process neared, doubts emerged as to whether the committee would be able to publish a final report, and if it ultimately succeeded in its overall remit. The publication of the Final Inquiry Report will trigger further debate, not merely regarding the inquiry itself, but also on the role of parliamentary inquiries generally. In this post we want to locate the likely talking points within broader debates about the Constitution and the place of Oireachtas within it.

“The inquiry was hobbled from the start by constitutional limitations”

One truism that has studded media coverage, is the idea that committee was inexorably (and perhaps fatally) hobbled from the start due to judicially imposed limitations on its operation arising from Supreme Court’s Abbeylara ruling. Some commentators have described the committee as having “little choice” but to be “risk adverse and to focus upon “running a tight process”. The idea that the committee is constitutionally injuncted to “pull its punches” and barred outright from making criticisms of individuals has taken hold. The inquiry itself has been particularly cautious in this regard. Yet, in our view, the Supreme Court’s approach, while presenting challenges, should not be portrayed as a monolithic roadblock to an effective constitutional role for parliamentary investigations.

In seeking to understand this position we must first note the unique nature of the Abbeylara inquiry which impacted upon the judgment of the Supreme Court. The committee adopted terms of reference which envisioned it making findings relating to “unlawful killing”; this summoned up judicial concern about the ability of parliament to make the personalised findings that had marked the era of Senator McCarthy and the US House of Representatives Un-American Activities Committee.  The close relationship between the potential findings and the crime of manslaughter was viewed by the majority of the court as lending a uniquely adjudicative character to the committee’s work in the Abbeylara inquiry. This can clearly be seen in the judgment of the Supreme Court: for example in Justice Hardiman’s regular references to the applicants as “individual citizens” without any correlative emphasis upon them being public officers as members of An Garda Síochána. In short, the entire design of the Abbeylara inquiry hinged upon making findings of individual culpability. In contrast, when delineating the remit of Parliamentary inquiries the Court specifically found that the Constitution focussed inquiries upon considering whether legislation needed to be passed – i.e. in direct aid of the Oireachtas’ legislative functions.  These amount to two very different functions; only the second was regarded by the court as permissible.

So when will an inquiry be focussed upon legislative function rather than adjudicating individual conduct?

This is the question that remains at large, and that the banking inquiry was uniquely positioned to explore. Yet the question has been little noted in the commentary of the inquiry, nor does the committee appear to have spent time publicly considering it. The Abbeylara decision is of little help. The Supreme Court ruling provided only a circular and vague treatment of this question. Some rulings, for example Justice Geoghegan, at paragraph 837, attempted to differentiate between unacceptable direct findings against individuals and possibly inevitable and permissible findings relating to a managerial system which might result in implied blame being attributed to individuals. Overall, the specifics of the Abbeylara inquiry impacted on the examination of this issue with the majority finding that the Committee had not regarded itself as carrying out an inquiry relating to a “legislative function”.

In considering the scope of Oierachtas inquiry powers re legislative functions and wider findings, the position therefore appears to be that the banking inquiry was constitutionally permitted to criticise individuals where the attribution of blame is “inevitably” or “unavoidably” required for creation of new legislation [as per Justice Geoghegan’s test at paragraph 837] or is “genuinely incidental” to the creation or review of laws [as per Justice Hardiman’s test at paragraph 640]. Indeed, this is directly underlined by section 17(3)(a) of the House of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013 passed after the failed inquiries referendum in 2013 which states that a committee may:

“make a finding that any matter relating to systems, practices, procedures or policy or arrangements for the implementation of policy which fall within the subject [of the inquiry] ought to have been carried out in a different manner”.

Professor David Gwynn Morgan has noted that the concept of “implied blame” present in both the Abbeylara decision and the 2013 Act is “a very slippery standard for a lawyer to advise upon or for a court to rule upon”. Nonetheless, we argue that a carefully prepared report could have pressed the edges of the concept to deliver firm criticisms tied to concrete future legislative actions.

It is clearly vital that we get clarity on the Abbeylara ruling – something likely to happen this year with litigation arising from the questioning of former Rehab CEO Angela Kerins by the Public Accounts Committee. However, beyond the legalisms of the Supreme Court’s rulings, the banking inquiry underlines the lack of a proactive constitutionalism within our political culture. Too often, Bunreacht na hEireann is perceived as offering only judicially declared “red light” moments which legally prohibit or require conduct rather than injecting positive values to be upheld within the conduct of our politics, government and public administration.

 “There should never be another inquiry under the 2013 Act”

Blaming the Supreme Court only tells us a small, yet influential part, of the Inquiry’s story. As we noted above, the idea that the committee was constitutionally injuncted from pressing individuals on their role in the banking crisis is an easy way out for the Oireachtas. In reality, a number of factors within their own remit also provided for a scenario that indicated that their efforts appeared doomed from the start.

Firstly, and centrally, was the design of the committee’s terms of reference which included the following stated purpose:

“to inquire into the reasons Ireland experienced a systemic banking crisis, including the political, economic, social, cultural, financial and behavioural factors and policies which impacted on or contributed to the crisis and the preventative reforms implemented in the wake of the crisis”

This actually tells the reader little of the underlying objective of the inquiry beyond the creation of an historical record of the banking collapse. In addition, the goal of public engagement in this record building process, strongly championed at the start of the process by the committee, was ultimately obstructed by the extremely broad terms of reference.

Secondly, the terms of reference were broadened from the initial focus on the 2008 decision to bail out the banks to a wide-ranging consideration of context, banking systems and practices, regulatory systems and practices and finally crisis management and policy responses, all operating over an extended period of time. The last module was, inevitably, particularly complex.  In part, the terms of reference were influenced by a desire on the part of the committee to “demonstrate that it [could] carry out a fair and balanced inquiry to answer the key questions that remain behind the banking crisis.”

This desire to “add value” to the existing record, led the Committee to engaged in what we would describe as unfortunate entrepreneurship; at times displaying undue flexibility in relation to evidence gathering. The attempts to hear accounts from the former head of the Anglo-Irish Bank Bank and Jean Claude Trichet were instances where the desire to secure evidence from previously unheard key actors came close to according additional entitlements to particular individuals based on their inaccessibility. The approach taken by the Committee to “engaging” Mr Trichet, at a private event was legitimately criticised by the family of the late Brian Lenihan. Ironically, despite the Committee’s confidence in this private evidence gathering solution, the European Central Bank nevertheless withdrew co-operation from the informal process, citing comments made by inquiry members at the Trichet event.  It argued that while it could engage in a general exchange of views with parliamentarians, it would not discharge accountability to a parliamentary inquiry.

Finally, the timing of the inquiry was a key roadblock to success. While Fine Gael and Labour had committed themselves to a parliamentary inquiry in run up to the previous election, the Government elected to hold the inquiries referendum as a first step to its establishment. The defeat of this referendum, based in large part of the public’s lack of trust of the Oireachtas to carry out this role appropriately, together with the need to create the 2013 Act, meant that the inquiry would be carried out in the last year of the government. At its conclusion, the inquiry had heard from 128 witnesses over 49 days, together with 50,000 documents. A first draft of the report ran to 750 pages but ultimately the timeline, fatally tied to the end of the current life of the Oireachtas, has resulted in a much reduced and reportedly sanitised final version. This is in no way connected to the Abbeylara decision but is the result of politicking and the failures in drafting the 2013 Amendment proposal.

 “This ground has all been covered previously”

This view, often expressed by political scientists and journalists, attempts to portray the independent Commission of Investigation carried out by Peter Nyberg as having been sufficient in its treatment; the idea being expressed here is that we already knew enough of the story. This inevitably leads to other questions: what was the point of the Oireachtas Banking Inquiry? What was it that the Committee was attempting to accomplish anyway? Was this simply politics? While it may be tempting to conclude, as Joe Higgins TD has, that there should never be another inquiry under the 2013 Act – this is to misunderstand, or perhaps close ones eyes, to the central role the Oireachtas can and should play in holding Government responsible for its actions.  A parliamentary inquiry offers a significant forum for debating underlying political responsibility, publicly airing contrasting perspectives and mobilising public debate about reform. It also provides a potentially stronger mechanism for achieving change at the end of the inquiry process.

Commissions of Investigation, as independent inquiries allow for focused forensic fact finding mechanisms carried out, at their best, by experts in their field. However, they are ultimately reliant upon the political buy-in of the Oireachtas and more particularly Government. The failure to implement key Mahon Tribunal findings, underlines that fact that political buy-in or the mobilisation of political shame are irreplaceable variable – something an Oireachtas Inquiry can more often provide. More fundamentally, we should not dismiss our elected body as a central accountability mechanism, consigning it to being “fundamentally ill-suited to the task”. Other jurisdictions show us that Parliamentary Committees are well able to carry out central accountability roles when given the machinery and space to do so. While the passing of the 2013 Act provided a framework for inquiry, it is clear that simply legislating to provide a better inquiry structure is not enough to produce real change. The Act may simply have raised false hopes in the face of a failure to change the political and administrative culture operating within our state.

 “It’s all he said she said anyway”: Why is it so hard to investigate?

This to us is the key constitutional question. Governments typically enjoy talking forward from the crisis rather than acting upon the cause. At this time, a lot of the media coverage is aimed at the institution of the Oireachtas, forgetting the responsibility of Government to operate in a manner that allows for accountability to work in practice. It is vital that we focus discussion of the banking inquiry not only upon politics, but also consider it in its broader constitutional perspective.

The failure to engage in appropriate record keeping by government including the recording of key decisions, along with the failure to provide a wider access to information is detrimental to the accountability process.  We see again that key decisions reached on the night of the banking guarantee were not recorded, that the interactions and justifications behind key regulatory actions were not recorded. While media reporting criticises the lack of “silver bullets” or bemoans the technicality of reports, this should be placed within the context of the investigatory difficulties faced by judicial or other independent actors. Last year’s interim report of the Fennelly Commission also crystalised this dynamic:

“This Commission is, of course, powerless in the matter. It is left in the position of having to reconcile conflicting sworn evidence from responsible ministers and officials at the highest level in the State. It can only register its astonishment at a system of administration which apparently quite deliberately adopts a practice of not keeping any record of a meeting where an important decision is made.”

Ultimately, while the banking inquiry may not reflect well on the Oireachtas, the questions flow far beyond the committee room with the entire investigation reflecting broader difficulties in our constitutional culture. Bunreacht na hEireann is very clear about its aims; the problems are to be found in its interpretation and operation at the most basic structural level.

Dr Fiona Donson (School of Law, University College Cork) and Dr Darren O’Donovan (Faculty of Law, Bond University) are authors of Law and Public Administration in Ireland (Clarus Press, 2015).

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