A decision is imminent here in Ireland on whether to establish yet another investigation into the fateful events that led to the introduction of a blanket bank guarantee in September 2008.
The rationale for the ruinous decision remains opaque, much to sustained public anger. As a consequence, there is residual distrust in and limited support for the rationale underpinning current policy recalibration.
The proposed putative inquiry by the Public Accounts Committee (PAC) is designed to cauterise inchoate but nonetheless deeply-held unease.
The PAC was once a powerful investigatory arm of the Irish Oireachtas (or parliament). It is currently evaluating the procedural and legal issues involved in calling to account those involved in acquiescing to the decision.
The mechanism, a key electoral pledge by the coalition partners, is exceptionally vulnerable to legal challenge from powerful vested interests.
The Supreme Court ruled in 2002 that parliament had the right to hold inquiries into matters of public interest. It could not, however, focus on the conduct of individual citizens if the effect risked the impugning of their reputation. As a consequence the PAC, which performed a major role in uncovering previous banking scandals, has been notable by its absence in the investigation and analysis of the current crisis.
The government parties had promised to rectify the situation by sponsoring a constitutional amendment. Last October, the proposition was narrowly defeated at a referendum. In part this could be traced to the intervention from a group of eight former Attorney Generals. They argued that that the proposed wording opened the door to parliamentary-sposnored MacCarthy-era witch hunt politics, saying it ‘seriously weakens the rights of individual citizens, firstly to protect their good names, and secondly to have disputes between themselves and the Oireachtas concerning their constitutional rights (especially their rights to fair procedures) decided by an independent judiciary.’
The use of full tribunals of inquiry is itself coming under sustained attack. The current controversy over ongoing links between serving government ministers and those criticised by recent full independent judicial tribunals that have the (contested) capacity to probe conduct has exacerbated the problem at two levels.
First, it demonstrates that expensive and time-consuming tribunals have limited capacity to sanction those found to have engaged in unethical (if not illegal) practice. As I noted in these pages earlier this month, very prominent businessmen implicated in misconduct have dismissed the findings as mere opinion, with no legal sanction.
Second, the referendum failure limits the legitimacy and authority of the investigative priorities of the Oireachtas. Unless carefully managed, it is inevitable that judicial challenge will accompany the publication of the witness list. This makes it difficult to create or sustain a compelling narrative on underlying purpose.
It is this latter function, however, that underpins the potential efficacy of the PAC. The question of legitimacy and authority pivots on the design and execution of the terms of reference. This political calculation remains within the PAC’s reserve.
If the investigation focuses on what constitutes optimal institutional design rather than individual conduct, it has the capacity to embed integrity in the operation of financial regulation.
Steven Carter, a law professor at Yale, has noted that integrity is like the weather: ‘everyone talks about it but no one knows what to do about it.’ In an influential eponymous book published in 1997, Professor Carter outlined three inter-linked steps needed to institutionalise integrity in public policy.
First, it is essential to discern the nature of the problem. This necessitates critical reflection on the totality of factors, material and ideational, that generated the crisis.
The second step is to act on this knowledge. Successful policy recalibration on this reading necessitates integrating technical and normative dimensions in regulatory design. The normative component is critical to the implementation of the third - and critical - stage, which is to inform key stakeholders why a particular course of action is being taken.
This public rendering of purpose is designed to transcend exercises in political posturing. Crucially, it allows for critical analysis of the rigour (or otherwise) of the initial moral discernment that justifies policy calibration.
Designing an inquiry into the banking crisis on these terms may not curtail public anger at the perceived lack of integrity of individual actors. It may well, however, provide the basis for warranted trust in the operation of a system built on the ruins of erroneous calculation in September 2008. As such it may strengthen the foundations of a new political order.
Political authority and legitimacy does not have to focus on perp-walks or public exercises in humilitation. Humility and reflection can also have a cleansing effect.