Finance Minister Paschal Donohoe has staked his personal reputation on the decision to proceed with the appointment of a new Central Bank governor who is embroiled in controversy.

An inquiry has found outgoing New Zealand treasury secretary Gabriel Makhlouf failed to take responsibility for the leak of sensitive budget information last month and fell short of expectations in how it was handled.

Police dismissed Mr Makhlouf’s claim the website was “deliberately and systematically hacked”, saying nothing illegal happened.

It was later revealed the New Zealand opposition National Party uncovered the budget details just by using the website’s search function.

Investigators yesterday said Mr Makhlouf made a “clumsy response to a serious issue”.

The investigation found he acted in good faith and without political bias, but his actions were not reasonable and he should have taken more personal responsibility.

New Zealand’s State Services Commissioner Peter Hughes, who led the inquiry, said the security breach around budget documents should never have happened.

“The right thing to do here was to take personal responsibility for the failure irrespective of the actions of others and to do so publicly. He [Mr Makhlouf] did not do that,” he said.

The investigation, however, concluded Mr Makhlouf’s decision to refer the matter to the police was made in good faith. There were also no grounds to support allegations Mr Makhlouf’s public statements or actions were politically biased, Mr Hughes said.

“It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive,” he said.

But Mr Makhlouf remains on course to take up the post of Irish Central Bank governor in September.

Mr Donohoe said: “I wish that the incident that has now been the subject of this report had not happened.

“I have considered the report in its entirety and I have noted that in the report it makes note of his integrity, his political neutrality and his desire to act in good faith at all times.”

The minister said Mr Makhlouf had an “unblemished” record up to this point and should still get the top job.

Asked whether it would hurt his own reputation if the new governor were to be at the centre of any controversy here, Mr Donohoe replied: “Of course, the responsibility does sit with me as Minister for Finance.”

Former Central Bank deputy governor Stefan Gerlach warned yesterday in a posting on Twitter that the controversy “will unavoidably impair Mr Makhlouf and the Central Bank’s credibility” .

Mr Donohoe said he retained confidence in Mr Makhlouf: “I am confident that when Mr Makhlouf moves into the role the qualities that have led to him having such a successful career in public service all over the world up to this incident happening will become apparent to stakeholders in our economy and to the country.”

Labour’s Joan Burton said Mr Donohoe would have to begin work “to reassure us all that the new governor of the Central Bank will conduct himself, and manage his office, in a fully transparent manner”.

While she described the inquiry’s findings as “worrying”, Ms Burton stopped short of calling for Mr Makhlouf to be deselected.

Source: Read Full Article