Bananaman: Jim Flavin made an 'error of judgement' which netted DCC €80m

Some weeks are better than others. Last week we were in banana republic territory. Only in Ireland can you make a mistake and receive €80m in reward for your error of judgement. Only in Ireland can a democratic government face its masters – the electorate – and declare with a straight face that it is no longer possible to conduct public inquiries into anything. Only in Ireland is common sense jettisoned whenever it comes into conflict with the interests of those at the upper echelons.

Appropriately, the place to start with is bananas. In February 2000, Jim Flavin, a paragon of corporate Ireland, made a fortune for his company when he sold shares in the fruit importer Fyffes while in possession of price sensitive information.

Flavin was a non-executive director of Fyffes. In that role he had come into information that would most likely depress the company's share price. Before that information was made public, he organised for the sale of shares in Fyffes, held by DCC, the company he had founded and chaired. DCC made €80m on the sale.

Fyffes took an action against Flavin. The Supreme Court ruled that the sale was a fraud on the market. All five judges were in agreement. Justice Nial Fennelly said the facts of the case were those upon which "common sense judgements and opinions can be formed without the input of an extraordinary degree of expertise". In other words, it was plain as day what had happened.

A fraud on the market has consequences for, among other things, the pension funds of workers. There was no criminal prosecution for insider trading. A criminal case is much harder to prove, and there has never been a successful prosecution of significance for insider trading in this country. Some say that's because corporate Ireland is so honest, nobody who works therein would know how to commit a fraud. Others disagree.

In June 2008, the high court appointed lawyer Bill Shipsey to look into the whole affair. Last Tuesday, Shipsey's report was published. He concluded that no fraud was knowingly committed. It was all down to an "error of judgement" on Flavin's part.

The paragon of corporate Ireland, with 40 years of experience in trading shares, had satisfied himself that he was not in possession of price sensitive information when he traded. That his company managed to reap €80m in profit as a result of his ignorance was, we must conclude, just, well, lucky.

Technically, the judgements of Shipsey and those of five Supreme Court judges can be reconciled. On a common sense basis, they cannot. But common sense, as Judge Fennelly pointed out, has largely been absent in this case.

Shipsey concluded that his findings reflected well on corporate Ireland "at a time when Ireland Inc is taking a beating internationally from a perception of low standards in high corporate places".

While Shipsey was reporting in good faith, he is completely wrong about how the conclusion of this affair will be received. Outside Ireland, common sense is a valued commodity. Anybody abroad looking at the whole affair would conclude that it has more than bananas in common with some other alleged republics.

The allowance for public inquires is one of the tenets that separate a functioning democracy from banana republics. When trust in institutions of state breaks down, a government concedes that public trust can only be restored by washing the dirty linen before the eyes of the nation. Trust has never been as low as it now is.

Last week, the government announced an inquiry into the banking collapse would take place behind closed doors. Such a move should ensure there will be no findings published until after the next general election.

Functioning democracies routinely use parliament as a forum for public inquiry We are told that is not possible because of the Abbeylara judgement. The issues around Abbeylara centred on whether politicians could make a finding of unlawful killing against a member of the gardaí.

Common sense suggests such an issue is a world away from inquiring as to processes and communications – few if any of which involve criminality – that led to the banking collapse. But common sense is an optional extra in a banana republic.

The only other form of public inquiry is a tribunal. This is ruled out because of the woeful experience of Mahon and Moriarty which have been running for 12 years at huge cost. We are being told to accept that the lawyers' trough is a law onto itself, that it is not possible to design and cost a tribunal in a manner befitting a useful democratic tool.

So unlike in the UK, or the USA, there will be no public inquiry into the greatest economic catastrophe to befall the state. The little people, the peasants, are not worthy of such respect.

We have also been told that a public inquiry might undermine confidence in the country. It's difficult to know whether the government is taking us or potential foreign investors as the bigger fools with that line. The mores in this banana republic are clear. If you occupy the dizzy heights of business or politics, you are largely untouchable. As long as you don't transgress too openly, kill somebody while drunk or embarrass your fellows, you can do as you please.

Accountability, the law as we know it, the application of common sense, these are issues for the little people, the peasants. Let them squabble among themselves over their petty concerns. Up in the rarefied air, where power is routinely wielded as a weapon, different rules apply.