IBRC inquiry: Challenges ‘would succeed’ if confidential data used

The inquiry into Irish Bank Resolution Corporation sell-offs, including the sale of Siteserv to Denis O'Brien, would face successful legal challenges if it tries to use confidential banking information, the judge heading the investigation has said.

In a detailed 77-page document sent to the Department of the Taoiseach, Mr Justice Brian Cregan warns legal challenges causing "serious delays" are inevitable, even if the Cabinet decides to give him greater authority.

The Cabinet will on Tuesday examine options to increase the judge’s powers, following declarations from Taoiseach Enda Kenny and Minister for Finance Michael Noonan that the inquiry will have what it needs to do its work.

The favoured solution among Ministers is to amend the 2004 Commission of Investigation Act to give Mr Justice Cregan the powers he needs to override the confidentiality rules.

In his document, seen by The Irish Times, the judge said he currently has no legal power to delve into confidential banking information and would immediately face legal challenges if he tried to do so.

Statutory powers

He warned he could face challenges even if the Government gave the commission of inquiry express statutory powers to decide the public interest could overrule the right to confidentiality. Such actions would cause serious delay, he said.

“In such circumstances the courts may have to determine the matter before the commission could proceed with the investigation,” the judge wrote.

The commission is investigating disposals by IBRC involving write-downs of €10 million or more. They include the sale of Siteserv to a company controlled by Mr O’Brien.

Attorney General Máire Whelan, whose role has been criticised by the Opposition, is expected to brief the Cabinet on Tuesday.

Options paper

Ms Whelan and her officials were on Monday night preparing an options paper on possible courses of action for Taoiseach Enda Kenny and Tánaiste Joan Burton.

However, Government sources said a decision on how to proceed may not be taken on Tuesday.

The commission has been asked to investigate about 37 transactions undertaken by the IBRC and borrowing terms offered to customers, and is now in possession of some 200,000 pages of documents. Mr Justice Cregan’s view is that this information cannot be used as evidence.

A Department of Finance legal opinion sent to the commission accepted much of the information was confidential, but argued the commission could decide to admit it into evidence under its legal powers.

In a blunt assessment, Mr Justice Cregan said the legislation used to establish the inquiry does not give him the powers to make that decision.

The commission issued the determination following correspondence with the IBRC special liquidators, who said their legal advice was that the banking information was confidential and in some cases also subject to legal privilege.

The former IBRC directors also submitted the commission had the power to overrule the right to confidentiality if this was in the public interest.

Mr Noonan said he was first made aware of Mr Justice Cregan's decision last Thursday evening.