Referendum may be held to boost powers for bank inquiry

The electorate may be asked to vote again to give more power to politicians to conduct formal inquiries if the planned Oireachtas inquiry into the banking collapse fails to get full cooperation from leading figures involved.

During a Cabinet discussion yesterday on the inquiry, Ministers debated the option of asking the people to revisit the issue if the formula adopted for the inquiry doesn’t work.

The development follows the release of tape recordings made inside Anglo Irish Bank before and after the 2008 banking guarantee, which have intensified pressure for an inquiry. Among other disclosures, the tapes suggest Anglo's then chief David Drumm was happy to abuse the guarantee.

In the Dáil, Taoiseach Enda Kenny said Anglo’s chiefs lied about its affairs when he visited them as Opposition leader a fortnight after the guarantee.

"We were given a wonderful presentation by people who were very well remunerated in their positions and received very large bonuses. As has transpired, all of that presentation was a tissue of fabrication and untruths," Mr Kenny said.

The Cabinet’s chosen course is to proceed with an inquiry by Oireachtas committee, beginning in October or November.

One option under examination is for the inquiry committee to establish a separate commission of inquiry to examine records and develop a “book of evidence” for public hearings at the committee.

Amid concern at Cabinet that some of the leading figures involved might avail of their right to go to court to avoid being answerable to the committee, Ministers also examined their options if the inquiry cannot to operate as planned.

A Government source said last night that another referendum to give Oireachtas committees more powers would be a real possibility if that happened.A referendum on powers to examine the conduct of individuals and make findings of fact against them was rejected in October 2011, with 52 per cent voting No.

It was defeated after the intervention of eight former attorneys general who wrote a letter to The Irish Times arguing that the change would weaken the rights of individual citizens to protect their good names.

The looming inquiry will not have to power to make findings of fact so its remit will be restricted to inquiring into what happened.

It remains unclear whether the investigation will be carried out by an ad hoc committee, or by the Public Accounts Committee or the Committee on Finance, Public Expenditure and Reform.

Both the PAC and the finance committee will have the right to make a formal proposal to conduct the inquiry. It will be for the Dáil and Seanad committees on procedure and privileges to decide whether to accept or recast such proposals or seek the establishment of a special committee.

The agenda can in effect be set by the Coalition, as it has an in-built majority in both committees on procedure and privileges. These committees will make a recommendation to the Oireachtas, which will vote on a resolution setting the parameters for the inquiry, its likely cost and duration.

Legislation giving the Oireachtas powers to set up the inquiry had not been expected to become law until the autumn but the Government now aims to bring forward enactment before the summer recess next month.