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Friday 9 December 2016

Andrew Lynch: Kevin Cardiff evidence heaps even more pressure on Cowen

Kevin Cardiff at the Oireachtas Banking Inquiry at Leinster House, Dublin
Kevin Cardiff at the Oireachtas Banking Inquiry at Leinster House, Dublin

We already knew that Brian Cowen had a lot to answer for. However, after the revealing evidence of top civil servant Kevin Cardiff to the Oireachtas Banking Inquiry yesterday, the ex-Taoiseach is now facing an even longer list of awkward questions.

One by one, the jigsaw pieces are falling into place - and it is already obvious that the overall picture will not be a pretty sight.

Unlike most witnesses who have come before the Banking Inquiry, Cardiff actually looked quite happy to be there. He began writing his opening statement last Christmas and it eventually ran to almost 400 pages.

During four hours of questioning, he managed to get a lot off his chest - some of it extremely damaging to the people who were supposed to be in charge when Ireland's economy went up in smoke.

Buried

If anyone knows where the bodies are buried, it should be Kevin Cardiff. Before becoming Secretary General at the Department of Finance, he was in charge of a unit that oversaw the country's banks.

Most importantly of all, he was in Government Buildings on the night of September 29, 2008, when Brian Cowen made the fateful decision to issue a State bank guarantee.

So what did Cardiff have to say? For a start, he was keen to point out that the Department of Finance was prepared for all sorts of disaster scenarios.

By late September, he felt that Anglo Irish Bank "were shot" and believed Irish Life & Permanent would also run out of cash within a few days.

At the crucial meeting on Merrion Street, a split quickly emerged. Cardiff thought that Anglo should be nationalised and Finance Minister Brian Lenihan agreed with him.

Brian Cowen, on the other hand, had a very different view. Although Cardiff could not confirm reports that the Taoiseach banged a desk and cried out: "We are not f***ing nationalising Anglo", that was basically his position.

At some point, the two Brians went off together for a private chat - and when they came back the nationalisation idea was no longer a runner.

This is one of the key issues that Cowen must explain when he appears at the Banking Inquiry on July 2. Did he persuade Lenihan to go down the guarantee route or simply pull rank on him?

At a book launch in Kerry last April, the ex-Taoiseach insisted there was no question of overruling his late colleague - but Central Bank Governor Patrick Honohan is just one of many people who have expressed a different opinion.

Whatever the reality, Cardiff's damning testimony suggests there is more than enough blame to go around. He revealed that instead of being eternally grateful for having their bacon saved, the banks actually pushed for an even more generous deal that would fully guarantee their new borrowings.

In other words, right at the death these toxic institutions were doing their very best to bleed the Irish taxpayer dry.

On the touchy subject of Jean-Claude Trichet and his role in Ireland's EU/IMF bailout, Cardiff did not mince words either. When the former President of the European Central Bank appeared in Dublin recently, he presented himself as a kindly old uncle who handed out advice but exerted no pressure one way or the other.

Cardiff remembers things quite differently, claiming that Trichet stamped out the Government's plan to burn some Anglo bondholders and then "pushed hard" for the bailout with a distinctly threatening "or else" letter.

Dead

All this matters for one simple reason. Lenihan is dead and can no longer give his side of the story.

Cardiff's evidence may be the closest we will ever get to seeing how things looked from the Department of Finance's point of view.

Ultimately, however, the buck must stop at the Taoiseach's desk. Cowen now stands accused of ignoring a property bubble during his own tenure as finance minister, allowing the bankers to make a fool of him and writing a blank cheque that wrecked many people's lives.

If he has any decent answers, it is long past time that we heard them.

Cardiff has done the State some service by pushing us closer to the truth. In two weeks' time, Cowen should have enough courage to finish the job.

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