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"For theirs is the kingdom"

IN THE DÁIL - SPEECHES

Ansbacher Speech

25.09.02

Mr. Eamon Ryan:
I am not fond of conspiracy theories. Five years ago, if one had outlined the scenario that appears in this report, one would have been accused of being a conspiracy theorist. Yet it was a conspiracy and a criminal one at that. One of the reasons I am not a conspiracy theorist is that I feel most people are honest. In my dealings with bankers, lawyers and accountants over the years, I have found them to be straight, hardworking and honest. All of us are tempted from time to time and all of us cross the line sometimes when a sense of momentary greed perhaps makes us do the wrong thing. The story of this report is that of people who allowed their sense of greed to completely outweigh their sense of honesty over a protracted period of time and allowed it take a legal form in a furtive and calculated manner. That is a tragedy for those people but it is a fact. They were led astray partly by people who possibly had no sense of honesty and whose sense of greed was dominant in their character. They were criminals. I do not know whether that was due to a genetic kink or nature, but looking for criminal opportunity is the main force in some people's lives. Such people set up the complicated schemes that were in operation here. As other Members said, this was at a time when the majority of Irish people had to pay huge amounts in tax to carry the State services. Others, because of their sense of greed, did not want to carry their share of the burden which is a serious offence to those who did.


12 o'clock
I attended a conference recently at which the Garda Commissioner said criminals loved to work furtively and needed a shadowy world in which to operate. There can be no doubt that the political establishment created a furtive world in which such criminal activity could carry on. There is no doubt that the Revenue Commissioners were completely underfunded by certain people at the highest levels of Government at the time in order to help this furtive work. There was a climate of fear in institutions which was created by those at the very top of the political world. I do not have the same sense of celebration about this report as others because I have a terrible fear that that climate of fear and furtiveness still exists to a certain extent in our political world. On the day the Government was appointed it was reported that agribusiness companies and other large corporations seemed able to influence the appointment of Ministers. That sends out a message about the way the political world works.


Corporate donations are still allowed to parties. This creates a nod and wink climate. It suggests that if one is involved in business in the State, such as providing services worth hundreds of millions of euros, perhaps the best financial advice is to invest €50,000 in a corporate donation to a political party. Our political climate has not changed and we still have a lot of the problems in politics which created the climate in which these events occurred.


I am particularly interested in public-private partnerships, for some of which tender documents are being prepared. There is little or no public analysis of the financial conditions being set for them, rates of interest or the economic arguments in favour of such partnerships. The argument made is that certain information cannot be published for competitive reasons or because it is confidential business information, but this is public money. We are entering into multi-million euro deals with no independent analysis as to whether the State is getting the best deal.


The 1995 Finance Act was mentioned several times by Deputy Broughan, section 153 in particular. It is incredible. The Minister for Justice, Equality and Law Reform is present, but the Minister for Finance is notable by his absence. Where is he today? Is he interested in this debate or the report? He has a huge responsibility for implementing the measures that will result from it. Where are the members of his party? There is not one member of the leading party in the State present. Are they interested in what we have to say?


It is great fun reading the Committee Stage debate on the 1995 Finance Bill where the current Ministers for Finance and Justice, Equality and Law Reform lashed into the very provision the Tánaiste is now recommending - that we need the accounting profession to be accountable, not just to the people who pay them, but also to the State in order to make sure this furtive criminal activity cannot recur. One could give a dozen quotes from the debate and Deputy Broughan used some good ones, but this is one from the current Minister for Finance. He said with reference to section 153: "The person who drafted the section should be removed from the area of his or her current responsibility because if that person has any more brainwaves like this I fear greatly for the Minister's future political safety." The then Minister was Deputy Quinn. That was a threat to him and an official. It is incredible that seven years on we must reintroduce that very section because it is needed. It is shameful. The Ministers involved should give their opinions as to whether they felt they were right at the time given the hindsight this report offers.


Talking to accountants one is aware there has been a significant reduction in the amount of Revenue audits. Six or seven years ago if one had a small business, one was in genuine fear of a Revenue audit every four or five years, but that fear has diminished greatly. If it is because resources in Revenue have had to be diverted to the DIRT inquiry and other matters, why did the Minister not resource the Revenue Commissioners? We can introduce powers, but if the Revenue Commissioners do not have resources, those powers are meaningless.


The Dáil does not have the political authority that is needed for these matters. After the Abbeylara decision the Supreme Court took much of the power to represent the people from these Houses, while the European Union has probably taken the rest. While this report is very laudable, one must question the length of time required - four years. We knew the nuts and bolts of the operation in the first year, but it took four years of legal wrangling to get the rest of the story. In America accounting fraud and criminal activity at WorldCom were exposed two or three weeks ago. Its officials are already answering very hard questions in Congress and will probably be in prison next week. That is the kind of authority the Oireachtas needs to ensure these matters are resolved speedily.


We have found that the political world was deeply corrupt over the last 30 years. This report shows that the business and corporate world could match the political world for greed and corruption. The worst thing about this problem is that it involved those at the very top, those in the Culliton reports and those who, at IMI conferences in Killarney, were lecturing the rest of us about how we should think of the country and show fiscal restraint while they were primarily thinking of getting money out of the country.


A central weakness of this report is that it fails to call a spade a spade, particularly regarding the activities of Cement Roadstone Holdings. Three of its chairmen and two managing directors were involved in the scheme. When its boardroom table had huge amounts of cash landed on it by its banking activities it seems incredible to pretend the company did not know it was running a bank as well as a cement and concrete business. There will be a tame apology from the managing director, but the corporate body of Cement Roadstone Holdings came out in the report as being very proud of its history of corporate governance. Environmentalists throughout Ireland are well aware of what we perceive as the atrocious corporate governance in Cement Roadstone Holdings. We do not have to go far beyond the whole Glen Ding saga when £23 million worth of gravel and sand was bought for a song in very mysterious circumstances which should be examined immediately by the Moriarty tribunal. We do not have to go further than the climate change policy: we say we need to change our policy on building materials and have more environmentally sound insulation materials, but not quite yet. Cement Roadstone Holdings has a cavity block industry which we must make sure does not collapse. Environmentalists have asked for years the reason we do not recycle any of our construction and demolition waste. Most other countries in Europe are building roads with recycled concrete and other materials but we do not. We prefer to use fresh concrete; it does not matter about the cost. What is the role of Cement Roadstone Holdings in this? What is our political role in allowing 53% of our waste to be made up of demolition and construction waste?


The Tánaiste is very interested in competitive practices. Serious questions must be asked about how competitive certain cement and concrete businesses are. Were the discretionary trusts that were so popular in the Ansbacher report used in other aspects of Irish society? Is the same legal cleverness at work elsewhere? Cement Roadstone may be very proud of its corporate governance but the message should go out from this House today that we intend to examine the role of corporate governance. When we speak of the great and the good, we effectively mean the top three in the Stock Exchange. I read in one of the newspapers on Monday that the Bank of Ireland was very angry at being mentioned in the report. I was livid that it was not apologising. Not one of the bodies involved, corporate or individual, involved has apologised or acknowledged its mistake. Bank of Ireland was angry that its good name was being demeaned. I will not go into particular accounts but there was clear evidence that in a number of cases outline in the report, banks were taking deposits which they must have known were effectively offshore. If they did not, they should not be in banking. This was not confined to the main clearing banks.

We need to examine our own banks, the ICC and ACC banks, and the other merchant banks, including the IIB, to see whether other similar offshore facilities were used.
AIB also has questions to answer. One of the most remarkable parts of the report is the item on Jack Stakelum's activities. It reads like an advertisement for Allied Irish Banks. He switched from Guinness & Mahon, which was not good value, to AIB which was much better value. One could switch the money just as easily to Jersey rather than the Cayman islands; it was the same operation. He was running his own bank but was using a current account in AIB Jersey rather than incur the costs involved in Guinness & Mahon. The AIB has questions to answer on that issue.


We do not have to go far to another report, Deputy Lowry's involvement in the Moriarty tribunal, where again there was evidence to show that the Deputy could turn up at an AIB branch and whisk money off to an account in AIB Jersey without any real consideration for exchange controls or any real knowledge of where the money was coming from or going to. Obviously there were certain places in the bank where this was possible and where it was accepted.


I come from a long line of bankers. Both my grandfathers were bankers, as were my father and mother. I do not think they would have been involved in this culture. There was a cultural shift in Irish banking in recent years. Perhaps the culture came from Cement Roadstone which was practically a crèche for the AIB board room in that people moved from Cement Roadstone into AIB. Maybe there was an exchange of cultures between the different companies at boardroom level. I know from bank managers that incredible pressure was exerted on them from the mid 1980s onwards to increase their loan book and deposits. In my discussions with bank managers about that time, it was hinted that one would look the other way if a deposit was coming in. Irrespective of whether an account was offshore, the first concern was to ensure the figures were right. That culture came from the top down and still exists. The culture where people have options or bonuses based on stock market performance is discussed around the world at present. Where chief executives or directors are on huge multi-million euro options, one must ask if that is in the best interests of a particular bank, the country, shareholders or customers because it is creating a climate where people are pushing numbers rather the right banking practices. If people were looking the other way on the deposits side, obviously they were also looking the other way on the liabilities side when Mr. Rusnak was able to lose some €600 million or €700 million. That corporate culture of looking the other way was costly in the end.


Where do we go from here? That is the important issue we have to decide here today. Companies who have breached the banking and other company law Acts must be prosecuted. The evidence is clear. I imagine that the Statute of Limitations would not apply as these cases would be taken by the State. The Minister for Justice, Equality and Law Reform could advise us on that. For those sad people whose sense of greed outweighed their sense of honesty, prosecutions are necessary because the original decision to participate in this scam was not their first offence. They also made two further decisions when they had a chance to get out. Those who did not avail of the amnesties had three chances. The first chance was to say they would not join, then they had the chance to avail of an amnesty. Their argument, that tax rates were too high and therefore they had to get money offshore, does not count in that case because they were only liable for tax at 15%. A second amnesty followed. If people did not avail of those amnesties or did not declare their true worth to the Revenue Commissioners, how can we fail to prosecute them when we are doing the exact same down in the District Court every day to 16 or 17 year olds who make the same mistake two or three times? We let them off with the probation Act the first time, we give them a stern warning the second time but the third time, as a rule, we prosecute.


There is a need for the Tánaiste to take heed of the fact that we need urgently to extend Mr. Appleby's investigations into all the other financial institutions and any offshore accounts they had. The report mentioned that Mr. Stakelum's dealings with AIB could not be investigated because they were included in the terms of reference. This makes it almost obligatory for Mr. Appleby to extend his investigations into other financial institutions with offshore accounts because we cannot just choose one example of fraudulent practices and deny their existence elsewhere.


With great urgency we need to send the Attorney General back again to Mr. Justice Moriarty, as we did a number of years ago, to say that the parties in this House want the activities of Cement Roadstone Holdings included in the Moriarty tribunal. Whether he wants to appoint a second judge to handle the case is not the main issue but we cannot let the Moriarty tribunal continue without including the activities of Cement Roadstone Holdings, particularly with regard to such issues as the Glen Ding woods, when there seems to be clear evidence of concern about the company's role in or links with political operators in recent years. The work of Mr. Paul Appleby has to be continued and expanded in terms of investigating some of the trust's activities and the possibility of fraudulent activities existing in areas or industries in which the company is involved. If the Tánaiste is serious about creating a climate of honest rather than corrupt capitalism, she has an obligation to pursue this with great speed.


We have to clean up our own act as we cannot just point the finger elsewhere. The Oireachtas created the climate for this type of culture to develop. The first way to change it is by banning corporate donations. I am aware Fine Gael is hoping to getting them back as rapidly as possible. There is no doubt that as long as that culture exists, there will be a perception that one can be bought. If we allow that perception to exist we cannot point the finger. The message should go out from here from all political parties that greed is not good and that crime does not pay. It is very simple - thou shalt not steal. Corinthians states that the thieves, the greedy and the robbers shall not inherit the Kingdom. Greed is the problem here and we need to change our views on where it should be allowed.

Bertie has inherited the kingdom Eamon,lock stock and barrel,  and some new concubines besides..