‘Legal reasons’ shouldn’t prevent us from following our own money

There are two reasons usually given for not telling us about business dealings in Ireland. The first is “commercial sensitivity”. This is often referred to as “normal commercial sensitivity” – inferring that you shouldn’t be asking at all, and if you are asking, you really ought to understand that you shouldn’t be. After all it’s all “normal”.

The second is our old friend “legal reasons”. This one brooks no argument. The “law” is seen as such a powerful force in Ireland that the very mention of privacy and contracts sends everyone running for cover.

The banking inquiry, for example, is hamstrung by legal advice on what it can ask and what it can publish. The inquiry into IBRC is facing similar problems, with groups of lawyers mulling on what banking information is private and what isn’t and thus what the inquiry can get access to and what it will eventually be able to publish. There is no chance that this inquiry will finish its work before the next general election, such – we are told – is the legal minefield it must navigate.

Under wraps

The arguments to keep stuff under wraps suits those involved, of course. And in many cases it is entirely justified. If I buy a business from you, then no one else really has any reason to know what I paid you for it. If the bank loaned me money to do so, that is a matter between the bank and me.

But when it all involves a bank bailout which cost the State €64 billion, we are surely within our rights to find out where the money went.

This weekend Green Party leader Eamon Ryan made the interesting suggestion that the dealings of Nama should be disclosed after the organisation completes its asset sell-off.

This would involve publication of what it paid for assets, who it bought them from, what price it sold them for and to whom. This would apply in all cases where the original borrower did not repay the loan in full. In other words, it would involve cases where a public subsidy was given as part of the process.

Remember that, while Nama is now reporting “profits”, this is after the original write-off it took when taking on the loans from the banks – about €32 billion.

Ryan believes this can be achieved via a simple change to Nama legislation, as he said in a letter to Minister for Finance Michael Noonan.

No doubt many of the borrowers – and possibly this Government or the next one – will have a fleet of senior counsel who will find legal reason to object, probably on privacy grounds. There will be whispers from the banking community about breaching “normal” confidentiality and what this might mean for the IFSC. But the reality is that we are talking about history here – as opposed to live business dealings – and a huge public subsidy.

Nama and IBRC have operated inside a giant black box. We see what goes in one end and what comes out the other. And, to everyone’s relief, the original warnings that huge further losses – beyond the initial write-offs – could emerge from these boxes proved unfounded. But why should we not know, a few years on, the details of how Nama and the IBRC did their business, and what deals they did?

The details of much of what happened during the crisis have been dragged into the light. The culture, here, is to keep it all under cover.

Evidence presented

The banking inquiry has done its best, and evidence presented to it has added to our knowledge, but its activities have been constrained by the limitations on its powers. Attempts to give more powers to such enquiries were rejected by the electorate in 2011, for a variety of reasons. The banking inquiry and, I suspect, the IBRC inquiry will both show that we still do not have a working model for investigating such matters.

Will Eamon Ryan’s call gain any traction? It should. But given the attitude of “the system”, you would have to wonder. The Government will not be short of advice telling it to tread carefully and warnings that it could face legal challenges.

The Irish system’s approach to revealing information tends to be “ why should we?”, rather than “ why not?”