The Sunday Independent today reveals how a catalogue of stark warnings by a Department of Finance official on the risk of a property crash were systematically ignored and dismissed by senior civil servants in the preparation of official public statements.

In one revealing email, the whistleblower official warned in 2006, at the height of the boom, of "increased residential mortgage defaults thereby exposing the banking sector".

But instead of being acknowledged as a prescient forecaster of impending economic woes, assistant principal officer Marie Mackle was told that such language was "inappropriate" for a public ministerial speech and "positively alarmist".

"I've paid the price for being an internal whistleblower," Ms Mackle wrote in 2011 in a memo in which she says she has been left "progressively alienated and isolated".

But had her dire warnings, from 2005 to 2007, been brought to public attention, it is believed much of the current mortgage crisis could have been averted.

Ms Mackle's hundreds of emails, briefing notes and speeches will feature prominently in an inquiry into the banking collapse to be held by the Dail's Public Accounts Committee (PAC).

Yesterday PAC chairman John McGuinness said the revelations contained in Ms Mackle's documents were "absolutely shocking".

He said: "The public and every member in Leinster House will be appalled and deeply shocked to know that such warnings within the Department of Finance were not shared with them.

"These revelations are the strongest case to date as to why an inquiry into what went on is so desperately needed."

Ms Mackle prepared a detailed file for various bodies, including PAC, Transparency Ireland and the Nyberg Commission, which examined the banking crash.

However, her warnings have never been made fully public until today.

The documents reveal, that between January 2005 and early 2007, Ms Mackle repeatedly attempted to include references to the risks from over-reliance on the property market in official departmental statements, as well as speeches by the then Finance Minister Brian Cowen and in replies to parliamentary questions tabled by Opposition TDs.

It is documented how senior officials repeatedly removed, erased and dismissed such warnings in favour of more optimistic language.

A number of those senior civil servants implicated still occupy key positions in the Department of Finance and the Department of Public Expenditure and Reform.

In one email to a superior in 2005, Ms Mackle stated: "I do have reservations about the final reply, but am doing as directed in accordance with procedure.

"I have reservations about the minister ignoring the possibility of a housing market crash," she told her bosses in another email.

"Yesterday I had also drafted a more trenchant response, which has zero chance of being passed by the department. This may be viewed as too trenchant a response for the minister.

"Below is a possible alternative reply which is more up to date but which may prove unacceptable. It is inadequate in my view as it leaves out references to the possibility of a house price crash," she warned.

During the preparation of replies to parliamentary questions, Ms Mackle's stark warnings were not present in Mr Cowen's official responses to TDs, the documents reveal.

In another email, Ms Mackle sought to use OECD criticism of the Government's series of tax breaks to include some warning about the property sector overheating, but she was told to omit it.

Senior official Ronnie Downes replied: "As regards to the recommendations of the OECD about tax policy on housing, I would recommend against making any reference to this issue in the PQ reply (it does not appear germane to the question and it is a sensitive policy area in any event).

Another senior official, Derek Moran, in 2006 told her to stop sending multiple emails per parliamentary question, as she tried to highlight her concerns.

"For future reference I want only one reply to each question. . . (the official) answer is okay with me," Mr Moran said.

In June 2006, Mr Moran ordered Ms Mackle to formulate a response highlighting the positive aspects of the property market.

"Go back to them and say this. . . the large increase in new housing supply will restore equilibrium to the market. . . There is a broad consensus amongst commentators that the most likely outcome for the housing market is a 'soft landing'. Government continues to run a prudent, stability-orientated budgetary policy. . ." Mr Moran wrote.

Also in 2006, Ms Mackle attempted to warn in a speech that Mr Cowen gave to a builders' conference in early 2006 that the never-ending spiral in house prices increased the risk of "default on residential mortgages thereby exposing the banking sector".

Her warning was dismissed and Ms Mackle was told: "Marie, this type of material is not appropriate or suitable for a ministerial speech. It is positively alarmist in tone in some areas."

In documents she sent to the Nyberg Commission, Ms Mackle said she had paid the price for trying to speak up.

"As matters stand currently, I am completely ostracised and my work is ignored," she said.

She outlined her problems in a letter to her superiors in the Department of Finance which was also sent to Nyberg personally on March 2, 2011.

Ms Mackle did not supply the information to the Sunday Independent, but had prepared the report to ensure the "truth came out".

Contacted for comment last Friday, Ms Mackle said: "I am disappointed individuals names have been mentioned (in the Sunday Independent) but I am very glad this has come out. I have been trying to get this out for years."

The Department of Finance refused to address specific questions posed by the Sunday Independent and instead provided a statement.

"As you are aware, as part of Nyberg's inquiry into the banking crisis, as set out in the introduction 'a very large amount of documentation was analysed and many relevant people were interviewed', it said.

"Furthermore, as part of the Department of Finance capacity review Rob Wright looked at policy advice over the past 10 years -- as part of this he examined three key areas including 'was the department aware of the risks of overheating in the property sector and did it provide advice appropriate to the circumstances'.

"In his work Mr Wright had full access to a wide range of documents and also had detailed discussions with a wide range of individuals including Finance employees," it added.

"With regards to whistleblowers Mr Howlin is bringing in whistleblower legislation -- he spoke on the draft legislation at the Finance Committee during the week," it said.

Sunday Independent