Tag Archives: Catherine Murphy

Social Democrat TD Catherine Murphy speaking about the sale of Siteserv in the Dáil on May 6, 2015

Yesterday.

In the Sunday Business Post.

Tom Lyons reported that the Commission of Investigation tasked with investigating the sale of Siteserv to Denis O’Brien, and other matters – which is being led by High Court judge Brian Cregan – has told Social Democrat TD Catherine Murphy that if she doesn’t reveal her sources, “it may not be possible to advance some of the issues raised” by her.

Mr Lyons reported:

The Commission wrote to Murphy earlier this month in relation to her 300-page witness statement, much of which it said appeared to be “dependent upon information and views supplied to you by unidentified persons”.

It said that the allegations in her statement and accompanying documentation appear to be based on confidential banking information about named individuals that “may have serious implications for the good name and reputation of the person or persons mentioned.”

The Commission said it was “of the view that, if such allegations, information and views are to be admitted into evidence, it will be necessary in the interests of fair procedures, and in order to protect the constitutional and person rights of the persons named, that the identity of the sources of such information and views should, in the first instance, be disclosed to the Commission.”

It said it would then consider whether such allegations, information and views should be admitted into evidence, and whether the identity of the source should be disclosed to witnesses or potential witnesses “bearing in mind the right of a witness to confront his or her accuser, where serious allegations are made against him or her.”

The Commission requested Murphy disclose the source or sources of 23 allegations made in her 300-page witness statement to the Commission as well as furnish it with six emails without redacting the name of their sender.

These allegations relate to O’Brien, Brian Harvey, the then chief executive of Siteserv, Mike Aynsley, the chief executive of IBRC and Richard Woodhouse, a senior executive of IBRC, among others.

…“The Commission is appreciative of the assistance you have provided it to date,” it said. “However, if and to the extent that sources are not disclosed and / or unredacted documents are not made available to the Commission, whether based on a claim of parliamentary privilege or otherwise, it may not be possible to advance some of the issues raised by you.”

Yesterday.

On Kildare FM, Ms Murphy said:

“Yes, I received a letter from Justice Brian Cregan during the week, I think it was Wednesday. I will be taken, and have taken and will take further advice before responding in detail. Essentially, I’ve given a commitment to people who came to me with information that that would be treated in confidence. I gave them absolute assurance that that would be the case and I’ll respect that. I feel duty-bound to respect that.”

Siteserv sale probe: Murphy told she may have to reveal sources (Sunday Business Post)

North Kildare TD Catherine Murphy Intends To Stand By Siteserv Sources (Kildare FM)

Previously: [REDACTED]’s 1.25% Interest Rate

Bringing The House Down

Yesterday’s Irish Independent; Social Democrat TD Catherine Murphy and Taoiseach Leo Varadkar

On Monday.

The Irish Independent reported that Kevin O’Connell, the legal adviser to the Office of the Director of Corporate Enforcement who shredded documents pertaining to trial of the former chairman of Anglo Irish Bank Sean Fitzpatrick – an action that contributed to its collapse – had sent emails to the Department of Jobs in 2011 complaining of a lack of resources and experience.

Journalist Niall O’Connor reported that these emails were only forwarded to the Government last month.

MrO’Connor also reported that “a report into the shortcomings of the case will confirm that Mr O’Connell has been moved out of the now under-fire corporate watchdog”.

Former Minister for Jobs Mary Mitchell O’Connor ordered this report shortly after the former chairman of Anglo Irish Bank Sean Fitzpatrick was acquitted.

Further to this…

This afternoon.

During Leaders’ Questions.

Social Democrat TD Catherine Murphy raised the Irish Independent story and responses that she and fellow Social Democrat TD Roisin Shortall received from the Department of Jobs.

Catherine Murphy: “Taoiseach, yesterday’s Irish Independent raised significant questions regarding the ODCE [Office of the Director of Corporate Enforcement] and their handling of the Sean Fitzpatrick trial which was the longest running criminal trial in the history of the State. The public reaction to the case was a feeling of being utterly left down. People read what happened in the courts, rightly or wrongly, and as another case of people with friends in high places and the sense of punishment only being for the little people.”

“In a week where the public debate rages regarding the operation of the courts and the judiciary, it must be said that cases such as the Fitzpatrick case have a significant impact on public confidence in a system as a whole.

I want to raise with you what appears to be significant conflict in the information provided to both myself and the Irish Independent by the Department recently, when compared to information provided to my colleague Deputy Roisin Shortall in November 2015.

“Yesterday the revelations in the Irish Independent seemed to suggest that the ODCE effectively misled the Department of Enterprise and therefore, Government too, regarding their ability, or lack of ability to effectively investigate the Fitzpatrick case and provide the DPP with the evidence required to prosecute.

“On the 31st of May this year, I received a reply from the then Minister for Jobs [Richard Bruton]. That reply assured me that, in 2011, the Secretary General of two departments, in Justice and Enterprise, had met the ODCE officials and offered extra resources if needed for investigation.

The reply went on to say that the ODCE had claimed that they had no need for any extra resources. The reply clearly says that it was emphasised at the meeting that any requests for resources would be responded to positively. The reply confirms that the ODCE stressed they were satisfied with the resources that were available to them.

“Yet, in the reply to my colleague Deputy Shortall, in November 2015, it was claimed that the ODCE had flagged the need for further resources within their office, subsequent replies relating to that question indicate that there was a significant delay in meeting those resource requests – that’s obviously a significant issue in its own right.

The Irish Independent claims that the email sent internally from Mr O’Connell, in 2011, about concerns regarding the lack of resources within the ODCE to pursue the Fitzpatrick investigation were only forwarded to the Department of Jobs within the last few weeks and we need to know if that’s true. We know that Mr O’Connell had, during the course of the investigation, shredded key documents and had also engaged in coaching witnesses and that ultimately, and that and other issues, ultimately led to the controversial collapse of the case.

“The questions I want to ask are: Can you explain the conflict between the Department of Jobs’ reply in May of this year to me and the same Department’s reply to my colleague Deputy Shortall in November of 2015.

Does the Taoiseach worry that the ODCE may have concealed vital information from the outset, regarding their ability to pursue the Fitzpatrick investigation and does the Taoiseach believe the Government was misled by the Office of the Director of Corporate Enforcement?

Leo Varadkar: “Thank you, deputy, I haven’t seen the report, it hasn’t gone to Cabinet. It hasn’t been published yet. I understand that parts of it may have appeared in a newspaper but I don’t know to what extent they are in truth or they are the full truth. And the report now has gone to the Attorney General and the Attorney General has to consider whether it needs to be redacted because, of course, individuals appear in the report and then may need to have their good name protected.”

“But once the Attorney General has dealt with the report, we will then publish an [inaudible] permission to do so and we’ll publish it with the response. At that point, I think it will be possible for the Tanaiste to answer your questions in more detail.

“What I can say is that the Office of Director of Corporate Enforcement, the ODCE, has got additional resources the last year and, indeed, the office has got several additional staff and I think too often in this country, a lack of resources is used as an excuse for poor performance which is why so often additional resources don’t make any difference in terms of outcomes and performance.

“And what I’ve read in the papers is that, you know, documents were shredded that shouldn’t have been shredded and witnesses were coached that shouldn’t have been coached. I don’t know how a lack of resources causes someone to shred a document they shouldn’t have or to find the time to coach a witness they shouldn’t have coached so I think we need more and more as Government opposition not to allow people to hide behind the excuse of resources, it isn’t always the reason as to why everything goes wrong. Often, it’s not the reason at all.

“As a Government and as a Taoiseach, I’ve expressed my view very clearly that I don’t think that our capacity to respond white collar crime and corporate fraud is adequate and for that reason I’ve asked Minister Fitzgerald and Minister Flanagan to work together with their departments to develop a package of measures to go to Cabinet by the end of September which will enable us to strengthen and deepen our response to white collar crime, to corporate fraud and I think that’s necessary, I think people demand it and I think if we’ve any chance in restoring confidence in the State’s ability to deal with such issues, we need to do exactly that.”

Murphy: “Taoiseach, I know the report is gone to, I mean, is gone to the AG. It wasn’t the question I asked. I asked the question in relation to a conflict between two questions, the same, broad question that was proposed to the same department where we got two different replies, two different responses.

“In 2013, the department were made aware that the documents were shredded, 2013. And that was just before the trial commenced. And I’m sure that same information would have gone to the DPP and would we have had the longest running criminal trial in the history of the State if they had that information?

I asked you very specific information. The question, when it was posed in 2013, we were told that, the reply that I got was, if resources were requested they would be provided. Well now compare that to the reply that Deputy Shortall got, when she posed the question in 2013, and had to follow it up with other questions in relation to how many staff were there, when it was going to be augmented? It took a very long time, in fact I think it took before last year before they had their whole complement of staff, so that’s two years. Now, I asked you very specific questions in relation to how you can resolve that conflict. That’s an issue in its own right irrespective of a report going to the AG where you have a department that tells you two different things, both of them can’t be right because they’re the opposite end of the spectrum. Could you please address that issue and do you have confidence or do you believe that you were misled by the Office of Director of Corporate Enforcement?

Varadkar:I don’t have an answer to that question. I haven’t any dealings yet with the Officer of Director of Corporate Enforcement. So, I can’t say they misled me because certainly I’ve had no dealings with them as Taoiseach, over the past [inaudible] days and I didn’t have in my previous weeks either so I don’t believe they misled me but if you’ve a question, ask them to the line minister, I imagine he’ll do that in the normal way…”

 

From top: Head of Internal Audit at An Garda Siochana Niall Kelly; Social Democrat TD Catherine Murphy

In the last 30 minutes.

During the closing stages of today’s meeting of the Public Accounts Committee.

Social Democrat TD Catherine Murphy had the following exchange with head of internal audit Niall Kelly in relation to the Garda College, Templemore, Co. Tipperary.

Catherine Murphy: “Obviously, you’re going to come back to us, Mr Kelly, in relation, to the number of bank accounts, and you’re looking at that at the moment and you probably were looking, and I’m not sure whether it’s yourself, or Mr [Chief Administration Officer Joseph] Nugent, who would have been, when the bank accounts were being closed, if anything was discovered.

Can I just ask you, very specifically, if there’s any indication of any Templemore monies being sent to a bank account in Dublin under the control of a former senior Garda officer and whether or not you’re carrying out a specific investigation in relation to that or anything of that nature?”

Niall Kelly: “Chair, I’d rather not answer that question because it’s the subject of audit…”

Talk over each other

Murphy: “But there is an audit?”

Kelly: “There is an audit.”

Murphy: “Of that nature?”

Kelly:There are some issues that you touched on that could be issues within our audit.”

G’wan the Catherine.

Earlier: What’s Another Smear

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Businessman Denis O’Brien

RTÉ reports:

The High Court has ruled that businessman Denis O’Brien should pay all the costs of his failed action over statements made by two TDs in the Dáil about his banking affairs.

Mr O’Brien took his case against the Clerk of the Dáil and the State over comments made by Social Democrats TD Catherine Murphy and Sinn Féin’s Pearse Doherty in the Dáil in 2015.

He wanted the court to reprimand the TDs and he claimed they had interfered with a court case he was taking against RTÉ.

…This morning, the judge [Ms Justice Úna Ní Raifeartaigh] ruled that the facts of the case were unusual and had some degree of novelty as well as being of some public importance.

…But she ruled there was “an insufficient degree of novelty” to cause her to depart from the normal rule where the losing party pays the costs of a case.

Denis O’Brien must pay High Court costs (RTE)

Previously: It’s Been A Privilege

[REDACTED]’s 1.25% Interest Rate

Rollingnews

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Garda Commissioner Noirin O’Sullivan and Justice Minsiter Frances Fitzgerald

The Public Accounts Committee received a 44-page Garda Internal Audit Section report on serious financial irregularities at the Garda College in Templemore on Monday.

It looked at financial transactions at the college from 2009 to 2016.

It also received a further 13-page report in relation to how the recommendations of the GIAS report are being implemented.

The GIAS report was the subject of an article by John Mooney, of The Sunday Times, on January 22, in which Mr Mooney reported, among other things:

Auditors discovered that 37% of all expenditure linked to the college’s laundry service account in 2008 had nothing to do with laundry. Instead €7,231 was spent on meals and entertainment, €2,150 was given to parish clergy, €1,040 to the golf society and €300 spent on jewellery and gifts. A loan facility was also operated from the account with amounts of up to €500 being borrowed and repaid.

The audit discovered 50 bank accounts in total and said the current system of banking had resulted in a “non-transparent system of accounting”.

Garda Commissioner Nóirín O’Sullivan was asked about it on the Today with Seán O’Rourke show the following day – saying twice during the interview that the concerns raised were “legacy issues”.

This morning chair of PAC, Fianna Fail TD Sean Fleming said PAC will be asking the general secretary of the Department of Justice and the Garda Commissioner to appear before PAC to discuss the reports.

From the executive summary of the GIAS report….

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Meanwhile.

This morning, Social Democrat TD Catherine Murphy spoke to Cormac Ó hEadhra, who was filling in for Seán O’Rourke, about the report and why she believes the Minister for Justice Frances Fitzgerald mislead the Dáil about the matter on February 9 of this year.

From the interview…

Cormac Ó hEadhra: “This was discussed by Sean O’Rourke with the Garda Commissioner in January, I think. This question of financial irregularity. You raised this question with the Minister for Justice in the Dail, Catherine Murphy, on the 9th of February of this year. And she, in a way, she said this was related to the past, it was stopped and we’ve dealt with it in a way that she used words, with Sean O’Rourke, like ‘legacy issues’, ‘they span back a number of years’. What do you make of that now? Based on what you’re hearing.”

Catherine Murphy: “First of all, I think I was given very misleading information. I raised it at Leaders’ Questions with Frances Fitzgerald in February and it was in the context of the Garda [Maurice] McCabe that was being set up at the time. And I looked for this report to be published. She told me that it had been, it was in the public domain, it had been discussed at length by the justice committee. To be perfectly honest with you that was news to me. I then went back to the office. My staff contacted the justice committee and was told there was no such discussion, so I contacted the Tanaiste’s office again after I put in a lot of PQs, and after five weeks, she said that she had misspoke, that it was actually, it was actually sent to the Public Accounts Committee.”

“Now I had written to the Public Accounts Committee, looking for it to be, looking for the Public Accounts Committee to seek a copy of this report. I knew full well it hadn’t been discussed at the Public Accounts Committee because I’m a member of the Public Accounts Committee. So I feel, I feel I was misled in the Dail by the Tanaiste on this and indeed the report…”

Ó hEadhra: “But she did refer to an audit and in fairness to the minister, we, I quote her now: ‘that was in the public arena’, she says. ‘Questions were answered on it in the justice committee well before it was. Detailed information was put on the record about the audit and the actions that were being taken internally to deal with what had been uncovered by the audit of the college. That is the reality of the situation,’ she says. She may have got the committee wrong but she said it’s being dealt with.”

Murphy: “No it was not dealt it. It wasn’t dealt with at the justice committee. I made exhaustive searches to see. It wasn’t dealt with at the justice committee. What came into the public arena came out as a consequence of a newspaper article in The Sunday Times written by John Mooney. It didn’t transpire as a consequence of a news report as a consequence of a debate that had happened at any committee in the Dail. What I was looking for was that this report would be actually given to the justice committee or would be given to the Public Accounts Committee and that the minister would publish it.”

Ó hEadhra: “Ok, so do you believe the Minister misled you in the Dail? She’ll contest that obviously, I assume. What do you expect her to do now?”

Murphy: “The very first thing is that she should correct the record because it’s not correct to say that it’s discussed anywhere, at any committee, it wasn’t.”

Garda misuse of public money exposed in audit (John Mooney, January 22, 2017)

Garda College kept secret bank accounts (John Mooney, Aaron Rogan, March 29, 2017)

Listen back in full here

Rollingnews

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From top: Social Democrats TD Catherine Murphy; Sinn Féin TD Mary Lou McDonald; Taoiseach Enda Kenny; Fine Gael TD and Minister for Jobs Mary Mitchell O’Connor

Further to reported allegations that IDA Ireland has blocked more than 50 potential job creators from accessing a cash reward via Connect Ireland – an initiative that came out of the Global Irish Economic Forum in 2011- for introducing foreign firms to invest in Ireland…

Social Democrat TD Catherine Murphy raised the issue with Taoiseach Enda Kenny during Leaders’ Questions this afternoon – and in his response Mr Kenny once again said he was accused of clogging up the roads in Cork for all the jobs he’s created.

He made this jobs/traffic claim during Leaders’ Questions on February 21 and during the Friends of Ireland lunch with US president Donald Trump at Capitol Hill, Washington last week.

From Ms Murphy and Mr Kenny’s exchange…

Catherine Murphy: “Taoiseach, during Priority Questions, to Minster Mitchell O’Connor back in February, I asked about the anomalies emerging between IDA and Connect Ireland. There’d been a number of articles in the Sunday Business Post, which cause me to question what had actually transpired between the two agencies and if this is likely to result in the State, in a cost to the State, because of the disagreement.”

“A reply to me, the minister told me that she couldn’t go into detail because there was an ongoing legal dispute between the parties. Yesterday, the jobs committee heard allegations that Connect Ireland were possibly stymied in creating jobs in what sounds essentially like a turf war.”

“On the other side, IDA have noted that Connect Ireland failed to, by a long shot, to reach the target set in the number of jobs created, or the scheme was set to create. Whichever side is correct, the fact remains that there is a significant and fundamental difference between the jobs numbers claimed by both the IDA and Connect Ireland.”

“A Morning Ireland report today told us that the verification process used by the IDA to ascertain whether a connector would be due a payment until the scheme refused a significant number of connections yet, on a review, a third of these were overturned. This suggests a serious issue with the verification process used by the IDA.”

“The core issue here, Taoiseach, is that there’s potentially, there were potentially jobs lost to Ireland. And if this is the case the reasons for that must be made clear. An important element of this is the potential repetitional damage caused. Imagine from the point of view of someone who wanted to invest, when there’s two State agencies essentially almost in dispute with each other. And look at the confusion that would create. The issue is time sensitive in that the contract expires this coming Sunday. And, clearly, these issues must be satisfactorily addressed not just behind closed doors, before any new contract is entered into or, indeed, this one is cancelled.”

“So my questions are: why is there such a fundamental difference between the IDA and Connect Ireland regarding the jobs numbers? Who is nearer to the truth here? And, if it transpires that Connect Ireland are the ones telling the truth, how much will the IDA, using in public money, have to fork out in compensation?

Is that figure likely to be in the many millions? As has been reported in the many media – with figures of around €14million circulating. And will it be the IDA or the Department that would be the ones called to pay out the compensation if that was the case and has any amount been factored into either of their budgets? for this

Enda Kenny: “Well, I think the first thing I should say is that I’m quite sure that you welcome the improvement in the numbers of people working in the country. Unemployment has called from 15.2 to 6.6 with over two million-plus people now working in Ireland, spread throughout the region where every sector is growing.”

“In fact, I was accused in Cork recently of being responsible for clogging up the roads with people going to work which I suppose is a challenge, a challenge of success. I might say, I was interested in this initially, Deputy Murphy, because this was born out of an initiative that came from the 2011 Global Irish Economic Forum with the aim of involving global diaspora in job creation here when things were very, very bad…”

Later

“There are three issues here. One is the legal issue, which I can’t comment on, and that’s in respect of the financial situation. The second is: what were the number of jobs and what are the number of jobs that were created by the ambassadors and by the connectors of Connect Ireland and thirdly, what is the position now? Well. This was a four-year scheme, it was extended after contact was made with Government for a further 12 months and that runs out on Monday…”

Later

“Jobs are jobs and when we had none, we were very lucky to get any kind of jobs in here… I can’t comment on the court case but I will look forward to seeing Minister O’Connor’s review of this and that’s difficult given that there is a litigation at the moment…”

Murphy: “First of all Taoiseach, can I just say that your reply was a disgrace. It’s very disingenuous to question whether or I or others support jobs: of course we support investment in jobs in this country. I know what the Succeed in Ireland programme is about and I think most people in this house know what the Succeed in Ireland programme is about. I asked you very specific questions and I believe I’m entitled to a response to those.

More to follow.

Related: Connect Ireland’s plea to save its scheme (Businesspost.ie)

IDA Ireland accused of blocking potential job creators (RTE)

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This afternoon.

Further to allegations that Garda Commissioner Nóirín O’Sullivan look a central role in the attempted smearing of whistleblower Maurice McCabe.

During Leaders’ Questions in the Dáil, Soc Dem co-leader Catherine Murphy said:

The Commissioner’s statement last night that she was surprised by the revelations made yesterday astonished me.

Because those allegations had been circulating in both political and media circles for some months now if the Commissioner genuinely didn’t know about them them then there is a really serious failure in the intelligence gathering capabilities of her office or indeed the force and a serious problem with internal communication.

Given the tittle tattle that the last Commissioner seemed to know about Mick Wallace’s minor driving incident for example it’s very hard to believe that the current commissioner is oblivious to the most serious and scurrilous allegations about both her and Sgt McCabe that were circulating.

And given that it appears RTÉ crime correspondents were made privy to the intricate details of the O’Higgin’s report before it ever saw the light of day, the Commissioner might ask if RTÉ are getting more information than she is.

If it is hard to believe the Commissioner’s statement last night then it begs the question what else can we believe? We in the Social Democrats also see no option but for the Commissioner to step aside while the Commission undertakes its work.”

Gulp.

Last night: ‘Orchestrated And Planned’

Unspeakable Allegations

Previously: Breaking The Law On Prime Time

Rollingnews

Meanwhile…

EXCLUSIVE: False sex allegation against McCabe circulated by Tusla following “clerical error” (Irish Examiner)

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bank-of-ireland-logo

Logos of Nama and Bank of Ireland

You may recall the Dáil debate on Wednesday in which Nama was discussed in detail.

During it, Social Democrat TD Catherine Murphy spoke about Bank of Ireland in respect of Nama.

She questioned the legality of Nama selling assets it obtained from Bank of Ireland, to entities such as Cerberus, when – according to financial consultants she has spoken with – the assets were owned by the Irish Central Bank-European Central Bank, and not the Bank of Ireland.

Reading part of a document that she obtained, into the Dáil record, Ms Murphy said:

“It appears that Bank of Ireland has delayed the recognition of losses with the financial position of Bank of Ireland being portrayed incorrectly when the bank drew down emergency funding from the Irish Central Bank-ECB.

“In an effort to delay the recognition of losses, Bank of Ireland relied on the International Accountancy Standards Board, IASB, rules. The particular rules in question, IAS 39 and IFRS 9, only apply to published accounts.

“However, IASB is a private entity and company law supersedes IASB. In 2010, the then governor of the Irish Central Bank, Patrick Honohan, raised concerns that Irish banks were delaying the recognition of losses, and the problems it was causing from a regulatory perspective.

“In addition, it appears that the financial position of Bank of Ireland was not portrayed correctly in accordance with the Chartered Accountants Regulatory Board, CARB, when the bank drew down its funds from the Irish Central Bank-ECB.

“NAMA claimed to have acquired approximately €10 billion in assets from Bank of Ireland in 2010. Some of these assets were sold by NAMA to Cerberus, but Bank of Ireland appears to have portrayed ownership of these assets when the assets were, in fact, owned by the Irish Central Bank-ECB by virtue of the aforementioned company law rules.

“In the Bank of Ireland’s interim accounts 2011, page 100, it states that the ownership of the assets would be de-recognised when substantially all the risk and rewards of the ownership have been transferred to NAMA. This would only occur when the ownership of beneficial interests was legally transferred to NAMA.

“As such, the situation is that NAMA stated it had acquired assets from Bank of Ireland when according to research and company law they were not Bank of Ireland’s to sell.”

Readers will note that Ms Murphy raised similar concerns at a meeting of the Public Accounts Committee on January 19 and also raised the matter briefly on TV3’s Tonight with Vincent Browne on Wednesday evening.

In addition, also in the Dáil on Wednesday, Independents 4 Change TD Mick Wallace spoke about a financial consultant Cormac Burke who has been working with the Namaleaks team.

Mr Wallace said:

“Cormac Butler has also been making the point that when Wilbur Ross  – Donald Trump’s secretary of congress nominee – purchased Bank of Ireland shares in 2011 and then flipped them in 2014, for a profit of €477million, he did so with the advantage of having access to the financial position of the bank which was not in the public domain, information which was not available to smaller shareholders.

I’d like the minister to confirm or deny that his, that his officials are now aware that the activities of Wilbur Ross and his sale of Bank of Ireland shares is the subject of an investigation in the US. “

Further to this…

Saoirse McGarrigle writes:

Two financial experts Ed Heaphy and Cormac Butler have been analysing the banking crisis for the past eight years.

They claim that Bank of Ireland deliberately hid the extent of massive losses for five years because, if it failed, their assets would automatically be taken over by the European Central Bank (ECB).

They also claim the ECB itself was aware of how dangerously close Bank of Ireland was to insolvency – where a bank has suffered huge losses and has not enough assets to meet its liabilities – but continued bailing it out.

It means that Bank of Ireland’s bad debts should never have been transferred to Nama in the first place.

Mr Heaphy said: “When a bank is insolvent the ECB automatically assumes control of its assets. The Bank of Ireland was not the true owners of the assets and therefore it should not have transferred them to NAMA.”

Mr Butler said: “A bank automatically becomes insolvent if it hides substantial losses because creditors will refuse to provide funding to banks that fail to keep proper books of accounts.

“This forces the bank to sell assets at distressed prices.

“Bank of Ireland uses mortgages to give to the Central Bank as collateral. Some of the collateral had fallen substantially in value, but Bank of Ireland never disclosed these significant losses.

“The value of the mortgages used as collateral by the Bank of Ireland fell for two reasons. Customers pledged their property as security for the mortgage and that fell in value. Also customers lost the ability to repay because people had lost their jobs.

“This is in breach of the Companies Act 1990 – the failure of banks to recognise losses from the mortgages falling in value is a breach of company law because it is difficult to see if the bank is solvent. They were insolvent but they weren’t disclosing it.”

Mr Heaphy added: “They [BOI] admitted in the Banking Inquiry that they exploited a supposed loophole in the accounting standards which apparently allowed them to hide their losses.

“In fact, the law requires them to write down the value of the mortgages, but they thought that they didn’t have to. It’s their ignorance of the law. The bank was no longer the true owners of the assets, the ECB should not have transferred assets to NAMA.

“But if the ECB had confirmed they owned the assets, it would be admitting Bank of Ireland was insolvent.”

Mr Butler added: “If they (ECB) admit the insolvency then they wouldn’t get their money back. The ECB, like any other creditor, is not allowed to take back loans it advanced to an insolvent bank.”

“In such cases, the bank must be liquidated with broadly all creditors treated equally. By keeping quiet about the commercial bank’s insolvency the ECB was able to transfer its losses to the Irish government, which is potentially illegal.”

Auditors Price Waterhouse Cooper never disclosed that the bank was either insolvent or very close to it.

On October 15, 2010, the then ECB president Jean-Claude Trichet threatened to withdraw extra funding because of fears that the Irish banks were not ‘financially sound’.

His solution was for the Irish government to inject fresh funds into the bank so that he could withdraw illegally the loans he advanced.

Hedge funds bought Bank of Ireland bonds at distressed prices and said that they wanted the 100% price back.

Mr Butler added: “The Government said ‘no they must take responsibility for some of the losses’, but the hedge funds said because Bank of Ireland has not admitted to the losses, we don’t have to take any losses.

“The hedge fund should have taken the losses, but the Government faced legal challenges and therefore decided not to burn the bondholders.

“Bank of Ireland had a lot of losses built up which were hidden therefore the hedge fund claimed that Bank of Ireland was solvent.”

Mr Heaphy added: “The Irish Government paid dearly for its failure to admit that some losses were hidden.

“It left the hedge funds with an opportunity to profit at the expense of the Irish taxpayer.”

Saoirse McGarrigle is a journalist with the Irish Daily Mirror