Labour leader Brendan Howlin has said the appointment of new Central Bank governor Gabriel Makhlouf should be "re-examined".
Mr Howlin made his comments after The Irish Times reported that two former governors, Philip Lane and Patrick Honohan, raised private concerns with senior government figures regarding aspects of Mr Makhlouf assuming the role.
The European Central Bank also raised concerns privately, although an ECB spokesman stressed it was “not involved in the appointment procedures of national governors”.
Mr Howlin said Minister for Finance Paschal Donohoe "needs to explain why he is ignoring the concerns of both former governors and the ECB itself in relation to this appointment".
“He bears ultimate responsibility for this appointment and he can’t hide behind a process. The Minister has to satisfy himself that the governor is the best person to lead the Irish Central Bank and to guide its relations with the ECB at this critical time,” the Wexford TD said.
Mr Lane, in private comments, is understood to have discussed how a controversy in New Zealand involving Mr Makhlouf could be managed as he took up his new role in the Central Bank.
Mr Makhlouf was approved by the Government in May and he will take up the €286,760 post in September.
Lane concerns
Mr Lane did not raise concerns about the appointment of Mr Makhlouf in and of itself, but rather how the controversy in New Zealand, and its implications for the Central Bank, could be managed as it was unfolding earlier this year. Mr Lane declined to comment when contacted.
Mr Makhlouf has been chief executive and secretary of the New Zealand treasury since 2011. He was previously a senior civil servant in the UK, where he was a principal private secretary to Gordon Brown when the latter was chancellor of the exchequer.
However, the Government decision was caught up in a controversy involving Mr Makhlouf in New Zealand. It emerged he had claimed the accidental leak of sensitive budgetary material was a result of a hack, but a follow-up police inquiry found no evidence of one.
A spokeswoman for Mr Donohoe has said: “Mr Makhlouf was selected as the new governor of the [Central Bank] following a competitive, international process and was, and is, deemed to be the most suitable candidate for the role.
“Mr Makhlouf has been found by the independent State Services Commission to have acted at all times with honesty, integrity and in good faith, and was politically neutral throughout,” the spokeswoman added, in reference to the New Zealand controversy.
‘Critical’ report
Mr Howlin, however, said the Department of Finance has “played down the findings of an independent inquiry into the New Zealand budget scandal involving Mr Makhlouf”.
“While the report indicated that Mr Makhlouf had not acted in an improper fashion, it was severely critical of his actions and he was criticised for not describing the incident accurately.
“He has been widely criticised in New Zealand for not taking personal responsibility for the incident and for failing to attend a key parliamentary committee in the aftermath of the incident.
“We are entitled to set a higher bar for the competence of the incoming governor than the mere absence of deliberate wrongdoing. The Department of Finance is seeking to whitewash the issues raised in the report.”
In a statement responding to New Zealand’s public service watchdog on the affair, Mr Makhlouf said the report “confirms I acted at all times in good faith and with political neutrality” and “I am pleased that my honesty and integrity are not in question”.
Well-placed sources said Mr Honohan separately raised private concerns with figures in Government about the appointment of Mr Makhlouf. When contacted, Mr Honohan declined to confirm or deny this and declined to comment.
The exact nature of Mr Honohan’s concerns are not known. However, one source argued that Mr Makhlouf comes from a general civil service background, whereas a candidate with more direct experience of the euro zone could have offered an alternative option.
