The Commission of Inquiry into the Irish Banking Resolution Corporation will not now meet its December deadline and is expected to be delayed by several months due the legal issues.
Attorney General Máire Whelan will brief the Cabinet tomorrow on possible resolutions to break the impasse.
Ms Whelan was contacted by the Taoiseach on Friday following the letter he received from commission chairman Mr Justice Brian Cregan, setting out the problem.
Both Enda Kenny and Minister for Transport Paschal Donohoe, in separate interviews, raised the possibility of emergency legislation being rushed through the Dáil.
Catherine Murphy, who first raised the issue of a company, Siteserv, being sold at a significant writedown to a company associated with businessman Denis O'Brien, yesterday raised the possibility of a collapse. "There is a real possibility of it collapsing," she said, adding: "That will cause absolute outrage."
The problem is believed to derive from the legislation that established the commissions 11 years ago. The Commissions of Investigations Act 2004, initiated by then minister for justice Michael McDowell, removed many elements that had made tribunals unwieldy, gallingly expensive, lengthy and ineffectual.
The investigation and hearing phase of a commission was to be held in private, unless there was a compelling reason for a public hearing.
At a stroke, the adversarial nature of tribunals was removed. It also allowed a commission to hear from witnesses without involving legal representatives. The legislation emphasised co-operation and compromise but did allow for more formal legal solutions where agreement could not be reached.
The new approach ultimately did not give the chairman the determinative powers of a High Court judge as was the case with tribunals. Until now, this has not been an issue. But a problem has arisen, it seems, with the commission's request for financial documentation from the special liquidator KPMG.
Privilege claimed
It is believed the liquidator claimed banking and legal confidential privilege over documentation. After some exchanges, the liquidator informed Mr Justice Cregan it was willing to distribute the documents to him but not to any other party.
Seemingly this was unacceptable to Mr Justice Cregan, as was a suggestion from the liquidator it might be willing to disclose some documents, with each disclosure judged on its own merits.
This would have resulted in the liquidator having control over the scope of some aspects of the inquiry.
If it were a tribunal, the chaiman would have been in a position to make a decison on how the documents should be handled. However, the 2004 Act does not seemingly cover this eventuality.
A number of political questions arise. Should the Government and AG have been alert to this issue when drawing the terms of reference?
Why did it take until now for this issue to emerge– just seven weeks before the due date for it to report?
These have been raised by Opposition TDs. Fianna Fail’s Michael McGrath said: “Questions do arise for the AG who advised the government on the establishment of the Commission and knew its purpose.
Pearse Doherty of Sinn Fein said: “For it to fall flat on its face just before a general election will raise suspicion.”
Timeline
March 2012: Denis O'Brien's Millington buys Siteserv for €45.4 million. The deal saw State-owned Irish Bank Resolution Corporation (IBRC) write off €110 million of its €150 million debt – a 70 per cent haircut.
April 2012: The unsuccessful under-bidder Altrad says it was prepared to pay €60 million for Siteserv.
April 21st, 2015: The Siteserv controversy blows up again after Independent TD Catherine Murphy retrieves documents under the Freedom of Information, which reveal the level of official concern over deal.
April 23rd: The Government moves to quell the growing storm by announcing review of IBRC deals, including Siteserv.
May 1st: A Sunday Times report reveals a spike in Siteserv shares before the company’s sale.
May 7th: In the Dáil, Murphy suggests insider trading may have occurred in Siteserv shares.
May 28th: Murphy makes new claims in the Dáil about O’Brien’s banking arrangements with IBRC. June 2015: The Committee on Procedures and Privileges rejects claims from O’Brien that Murphy abused Dáil privilege.
November 2015: The Government considers introducing an emergency Bill in the Dáil to overcome a legal obstacle that has effectively stalled the work of the Commission of Investigation into the wind-up of the IBRC.
