Report of Tribunal of Inquiry into Beef Processing Industry: Motion.

Thursday, 1 September 1994

Dáil Éireann Debate
Vol. 445 No. 3

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[188]The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I move:

That Dáil Éireann:

— notes the Report of the Tribunal of Inquiry into the Beef Processing Industry;

— thanks the Chairman for his work in conducting the inquiry and producing the report; and

— supports the Government in its commitment to act without delay to take account of the report's findings and to implement its recommendations.

The task which the Houses of the Oireachtas placed before the tribunal was a formidable one, involving a fundamental inquiry into every aspect of the beef processing industry which was of public importance.

Under Mr. Justice Liam Hamilton's chairmanship, the tribunal had its first preliminary sitting on 21 June 1991, commenced hearing evidence on 7 November 1991, sat for 231 days, heard evidence from 475 witnesses and had its final sitting on 15 July 1993. The tribunal's report was presented to the Minister for Agriculture by Mr. Justice Hamilton on 29 July 1994.

I think every Member will agree that we all owe the chairman an enormous debt of gratitude for undertaking this inquiry. In all, he has given more than three years of his life to this assignment. I wish to pay tribute to him for his perseverance and diligence in providing us with the final report.

I will deal at length with the political allegations investigated by the tribunal but before I do, I want to place on the record of the House my appreciation and that of the Government of the work of the tribunal in investigating and [189] uncovering serious tax evasion, malpractices and many weaknesses in regulatory and supervisory systems in the beef industry.

The Minister for Finance will deal with the allegations on tax and the Revenue Commissioners, and the Minister for Agriculture will deal with the allegations on the whole beef industry.

The tribunal is over. I have no intention of retrying, or reopening the issues examined at great length by the tribunal and on which the Chairman has given his final word. To hear some Opposition Deputies engaged in restating their tired accusations, and selectively rehashing the evidence given at the tribunal, one would believe that the final report had not yet been delivered.

The public are interested in the bottom line, not in the minutiae that appear to be so riveting to a handful of commentators.

I would point out to all those engaged in this spurious activity, particularly those reiterating accusations which the report has declared groundless, that the tribunal report stands. The tribunal was set up to inquire into the original allegations.

The chairman and sole member, Mr. Justice Hamilton, was asked to report on the truth or otherwise of those allegations.

The tribunal was given wide-ranging powers, and every assistance of Government, to achieve that end. Now that the Chairman has given his final word on the truth or otherwise of the allegations he was asked to investigate, it is dishonourable and improper to seek to go behind his final report, and to re-examine evidence on which he has delivered judgment.

All of the matters which could be resolved have been resolved. The written word cannot be altered. I, and the Government, fully accept the tribunal's findings, and we will implement the appropriate changes in our departmental structures, our policies, and our legislation as recommended.

First and last the tribunal was about [190] integrity. The integrity of the Government and of the public administration formed the main focus of the tribunal's inquiries, and its findings are clear. I have been fully and totally vindicated, both personally, and as a Minister. My decisions at the time, the report confirms, were taken in the national interest, and the report further confirms: “...there is no evidence that (my) decisions were in any way based on improper motives, either political or personal;”. It states too: “There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time was personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the party that they represented”.

Since the circulation of the report, the focus of criticism has been shifted on a number of occasions from the findings which disappointed so many people to the decision-making process, and to competence. The fact remains that if political integrity had not been impugned, there would have been no tribunal. Senator Shane Ross put it well when he said: “An unnecessary political trial has been held”, and, I would add. a very costly one at that.

Disagreements about policy and competence are the stuff of normal everyday democratic debate. There were no tribunals of inquiry costing tens of millions of pounds, into the collapse of ICI, Irish Shipping, Dublin Gas, the over-runs at NET and Irish Steel, even though all of those policy debacles. some from another Coalition era, did not merely put taxpayers' money at risk, but actually cost the taxpayer hundreds of millions of pounds.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Never behind closed doors though.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  For many years since the 1980s, regular attempts have been made to impugn the integrity of Fianna Fáil in Government, to suggest somehow that those other parties embody higher political standards. There is no [191] evidence for those claims to occupy a higher moral ground. In that regard I am reminded of the comments of former Deputy Pat Cox on 7 June 1994, when he said: “There are no plaster saints in politics, including the Progressive Democrats”.

(Interruptions.)

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  To make baseless attacks on other people's integrity without proper evidence, in itself represents a lowering of standards in public life. It demeans the respect in which all democratic politicians are held, and places unwarranted question marks on the whole profession of politics and the integrity of those who choose to work in public life. Deputy Pat Rabbitte and the Progressive Democrats are particularly guilty in this regard.

If we as politicians do not protect our own profession and guard the institutions of State, then we cannot complain when others show a similar disregard and disrespect for our profession.

The entire democratic process has suffered greatly as a result of the conduct of some in the lead up to the tribunal and while it was in session. The manner of the attacks on personalities has cast a cloud over public representatives. Although this cloud has been dispelled by the Chairman in the report, it will take longer to dispel in the minds of the people of the country.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Seventy per cent of them.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  My integrity has been vindicated. I have been cleared of the allegations made against me — allegations of malpractice and wrongdoing. They have not been backed up by evidence.

It is legally illiterate to suggest that when a judicial tribunal clears a person of unfounded imputations, it is not vindicating his character, but merely saying that no evidence has been found to [192] prove him guilty. In finding no evidence to support the allegations of impropriety, the tribunal clears the person involved. How else can one have one's character vindicated?

There are those who claim that such a finding does not clear a person, that he is left in a sort of judicial limbo. The law says otherwise. With all the vocal legal expertise at her side, I am surprised that Deputy Mary Harney has adopted that disreputable line, reminiscent of some of the critical reaction to the acquittal of the Birmingham Six, and the Guildford Four. Where is our sense of justice and fair play? I would remind the House that the findings make clear that not a single allegation against me has been sustained, so I have every legitimate entitlement to state that I have been cleared by the report.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is not true.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The integrity of the Fianna Fáil Administration has been investigated in extraordinary depth by the beef tribunal, and it too has not been found wanting.

Because it had been stated in the newspapers for some time that there could have been grave political implications if this integrity had not been completely vindicated, I felt it vital that those central findings from that section of the report should be made known as soon as possible and that they should not be buried with all the detail and the side issues of the main report.

Some clearly disagreed with this approach. That is their prerogative. As Taoiseach, I recognised that all political parties would be coming from different directions in relation to this report, and it is a primary responsibility of the Taoiseach to remove political uncertainty and instability.

When I say that my integrity and the integrity of the Fianna Fáil party have been vindicated. I do not rely on a strained interpretation of the report's findings. There is authority in the report for everything I say. When I say that my personal integrity and my integrity as a [193] Minister have been vindicated, the report reinforces that claim, precisely and forcefully.

Those who have been found out by the Chairman, however, do not have similar authority for their assertions and strive for conclusions that are not to be found in the report, in effect, writing their own version of the report. Having failed so emphatically in their principal objective, that of proving political corruption, they have tried to shift the focus from that central question of integrity to the decision-making process and to the question of competence. It is a poor fall-back position. Moving the goal posts is never a good strategy. It does not fool anyone.

For instance, Deputy O'Malley now seems to be revising his original allegations of “blatant political favouritism” and “extreme personal closeness”, which he stood over throughout the 226 days of the tribunal. Now he states — this is a quotation from “Morning Ireland” on 9 August —“the word ‘favouritism’ seems to have taken up some kind of political or almost immoral connotation, that was not suggested”.

He was legally represented at the tribunal, at huge cost to the Irish taxpayer. Neither he nor his representatives sought to change one word of his allegations at any time during the tribunal, and, indeed, took every oportunity to reiterate the charge of favouritism. The Chairman, Mr. Justice Hamilton, dealt with it very specifically in the final report. He said:

It is alleged that the allocations of Export Credit Insurance Cover set forth in this report:

(1) were made for political reasons and because Mr. Goodman was extremely personally close to members of the Government;

(and) it is alleged that the allocations of Export Credit Insurance set forth, constituted acts of blatant favouritism.

[194] The Chairman dismissed Deputy O'Malley's allegation, clearly, emphatically, and unambiguously. Now Deputy O'Malley states: “If anything I made a mistake in using the word ‘favouritism’, maybe I should have used a different word, nobody could quibble if I had used the word ‘discrimination’.”

It was, perhaps more than any other single factor, Deputy O'Malley's crusade to uncover this alleged “favouritism” that led to the longest, costliest, and most comprehensive tribunal of inquiry the State has ever witnessed.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Not so.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It is now estimated that it will ultimately cost the State between £35 and £45 million.

Now the Deputy feels he may have used the wrong word. President Lincoln was right about not fooling all the people all of the time, but Deputy O'Malley has not given up trying. His position merely serves to prove what was evident to many all along, that the exact accusations were not important. What was important was that accusations be made which would, with luck, be converted into an indictment. He failed, and the people of Munster have demonstrated their view of such politics.

Of course. Deputy O'Malley would like to change the text of his original allegations; and of course would like to change too the text of the Chairman's findings which need no strained interpretation.

The report states: “There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time was personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the party that they represented.”

Deputy Rabbitte would also like to rewrite many of his original allegations, and indeed if he could, many of the tribunal's findings. Since the report was circulated he has attempted to suggest that he made no allegation impugning my integrity. He said on radio on Saturday, 6 August:

[195] One thing that fascinates me is this continued talk that the Taoiseach's integrity has been vindicated. Who made an allegation at any stage about the Taoiseach's integrity?

Deputy Rabbitte's desire for revisionism is understandable, but I suggest that he reread his own allegations which the tribunal had to investigate at great length and great cost to the taxpayer; his allegation of an “inside political track”; and his allegation that: “The granting of export credit insurance was a political decision and depended on whether you were a member of the club”.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Vindicated.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  We had better hold another tribunal. Perhaps Deputy Rabbitte's recollection of impugning both my integrity and that of the Fianna Fáil Government has dimmed with time. Lest he has also forgotten the words contained in the recent report, I will repeat them for his benefit: “...there is no evidence to suggest that (my) decisions were in any way based on improper motives, either political or personal”.

Deputy Rabbitte received his answer in the report. Once again, no strained interpretation of the report's words is needed by me or anyone else to see that Deputy Rabbitte's allegations were considered damaging and wasteful. In this regard, his repeated calls for an early publication of the report had all the plausibility of a turkey calling for Christmas.

It is one thing for a politician to be accused of improper motives, or failure to discharge his duties in a proper way. It is entirely another matter to impugn the countless civil servants who perform their duties in a selfless and dedicated way. These public servants have laboured for years under a cloud of innuendo and suspicion, without an opportunity of vindicating their reputations. Although he now tries to walk away [196] from this too, let it never be forgotten that Deputy Rabbitte made an allegation which can only be described as scurrilous, that the Revenue Commissioners were turning a blind eye to tax evasion in the Goodman group.

The report states that “there was no basis for Deputy Rabbitte's allegation that the Revenue Commissioners had turned a blind eye, whether because of political connections or otherwise, to the activities of the Goodman group in relation to tax evasion”. The Chairman further says that this allegation: “constituted a serious attack on the independence and integrity of the Revenue Commissioners”. Indeed, it was a disgraceful attack on a group of public service workers, by a party that often claims to espouse their cause.

The independence of the Revenue Commissioners is of course protected by statute and they do not respond to any political directive, something which Deputy Rabbitte knows only too well. Deputy Rabbitte's astonishing response to this finding on radio on 3 August was to say that he was both irritated and puzzled as to why he was: “slapped on the wrist for what he [Mr. Justice Hamilton] calls attacking the Revenue Commissioners, which I didn't do, and didn't intend”.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  And for which £12 million tax evasion was uncovered.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  The Taoiseach, without interruption from either side of the House.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Another extraordinary lapse of memory. Deputy Rabbitte's attitude to the Revenue Commissioners resulted in his very serious allegation being examined in depth, and at great expense to the taxpayer. His allegations were not merely that the Revenue Commissioners had failed to carry out their job properly, but that they had yielded to political pressure, perhaps the most damning allegation that could be made against a public servant.

[197] Deputy Rabbitte made his allegations casually, based on misleading information, which he obviously accepted uncritically, from sources he refused to reveal. His allegations have been investigated, and they have been found wanting. Now he wishes to disown his allegations, and selectively reject the findings of the tribunal where they do not suit his political purpose.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  No Sir.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Could there be a more serious indictment of public representatives, than the findings of the tribunal on Deputy Rabbitte's and Deputy O'Malley's irresponsible and wild accusations and allegations?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The Taoiseach must have read only one page of the report.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Surely the public servants who were so maligned, are entitled to expect more than this from elected representatives in this House? Admittedly there is some criticism by the Chairman of individual lapses by public servants, but these are more than adequately balanced by proper reference to the excellent, selfless and dedicated jobs done by countless civil servants, whose areas of responsibility were examined in depth by the tribunal.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  When will the Taoiseach get to Deputy Spring's allegations?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It is inevitable that many of those who called for the tribunal will attempt to justify their original positions, but they cannot do this by making new allegations, or by writing a new version of the report based on inferences which are not there.

A clear unity of intent in the Opposition's approach has emerged. They are unified in their attempts to side-step and to avoid the inevitable consequences of the tribunal's findings. They would now have us believe that the report's findings are in some way [198] inconclusive and that questions remain to be answered. Whatever else can be said about the tribunal, it must be accepted that there was ample opportunity for every party and individual to produce whatever evidence they wished in support of their allegations, however trivial. They had available to them all the assistance of the legal world. They were asked to put up or shut up. They neither put up nor shut up.

There was perhaps, one notable exception. Deputy O'Malley's counsel were remarkably silent when they finally had the opportunity of pursuing one of his most serious allegations against me, the allegation that I misled this House. They choose not to pursue that most serious allegation, because they could not pursue it since there was no basis for it. It referred to a speech I delivered on 21 June 1988. I delivered this speech dealing with export credit insurance for Iraq exactly as it was prepared by senior civil servants in my Department. Because Iran and Iraq were then at war, and since Ireland supplied both markets, references to both were carefully and appropriately worded by the officials involved because of the obvious sensitivity of the situation. On this occasion, I had no additional input to the speech and made no alterations.

The fact that this speech was prepared by senior civil servants in my Department, and that I delivered it on this occasion as it was written, were confirmed by the files in the Department of Industry and Commerce. Those files and facts were available to Deputy O'Malley when he became Minister for Industry and Commerce and before he came to the tribunal to give evidence.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Who is blaming the civil servants now?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Did the civil servants mislead the House?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  So also was the knowledge that his own party, Deputy Rabbitte's party and Deputy Bruton's party [199] had all supported the increase in the limit on export credit insurance cover from £300 million to £500 million.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The Taoiseach did not tell us what it was for.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  This is confirmed by the Official Report of Tuesday, 21 June 1988, columns 1144-1162. The same Deputies are now questioning the competence of this decision and those that followed from it. Their hypocrisy defies belief.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  This is unbelievable.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Let me repeat it — the tribunal is over.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  It is totally misleading.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  There are no questions still to be answered. We have already had over three years of questions and answers at the tribunal. We will not now have a tribunal of inquiry into the tribunal's findings. There are many lessons to be learned from the report, but first it has to be accepted by all parties as the Government and I unreservedly do.

I am surprised that Deputy Bruton also wishes to shift the emphasis to competence.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I do not.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I am glad he does not. On the question of competence, I would welcome any comparison of my political competence and my record of achievements with anyone else in this House.

Am I really going to take lectures on political competence from someone who twice precipitated the collapse of the Government by his attempts to introduce an annual budget or from the same Deputy Bruton whose only answer to a budget deficit was to raise taxes by a large amount, where I was able to reduce them?

Am I, who never had a budget deficit [200] of more than 1 per cent, to be lectured by someone who promised to eliminate the current budget deficit in four years and who ended up with the highest budget deficit on record?

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Extremely relevant.

Minister of State at the Department of the Taoiseach (Mr. N. Treacy): Information on Noel Treacy  Zoom on Noel Treacy  That is competence.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  The speaker in possession, without interruption from any side of the House.

Mr. Currie: Information on Austin Currie  Zoom on Austin Currie  It is supposed to be a debate.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Or am I to be lectured by someone who doubled the national debt, as then defined, to a figure of £25 billion? There was no public inquiry or no tribunal into that extraordinary failure, which added vastly to the taxpayers' debts and will for a long long time to come.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is a reusable allegation.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Am I to be lectured by someone who made a decision, as Deputy Bruton did, to sink £100 million of taxpayers' money into a bankrupt Dublin Gas——

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Better than sinking it in British beef.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  ——with a loss to the taxpayer? Am I to take lessons from someone who failed to put together a Government when he had that possibility in December 1992? The less said by Deputy Bruton on the subject of political competence the better. Am I to take lessons from Deputy Bruton who does not seem to realise yet that the grant giving functions of the IDA in relation to the food industry have been vested in the Department of Agriculture and Food since 1987?

The political decisions which the [201] Government, of which I was a member, made on being returned to office in March 1987 are now being judged with the benefit of hindsight. Ireland has an over-supply of hindsight decision makers.

I take no particular exception to that, but I object to being second guessed by hypocritical politicians in Fine Gael whose own political inactivity and whose refusal to take hard decisions resulted in economic recession and stagnation in the years up to the change of Government in 1987. They had refused to take the difficult decisions needed to restore confidence in the Irish economy.

President Lincoln said: “The legitimate object of Government is to do for the people what needs to be done.” Doing what needs to be done for the people requires that decisions be taken. The incoming Fianna Fáil Government made those difficult decisions and got the economy moving by generating rapid growth. That fact is established.

There is an element of risk in all decisions and that risk can always be avoided by not taking any decisions like our Fine Gael predecessors who led that Government.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  We do not railroad others into decisions.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It is clear that the decision making process adhered to by the Fianna Fáil Government was precisely the same process available to the previous Administration.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Nonsense.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I freely acknowledged at the tribunal that I took decisions against advice as indeed have many former Ministers in this House if they had the honesty to stand up and say so. The advice given to me, as the chairman stated in the report, was mainly based on commercial considerations. My duty as Minister however, meant that I had to take the national interest into account also and this led me to reject the advice proffered.

[202] In a democracy, elected politicians bear the responsibility for taking decisions. Civil servants advise, but Ministers ultimately decide. That is democracy at work.

Deputies:  Hear hear.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  This process is described by Dooney and O'Toole in their book Irish Government Today. They outline the responsibilities of civil servants and indicate clearly that decisions come from Ministers. The notion that a tribunal was set up to examine this decision making process is ludicrous.

It is being insinuated that a Minister responsible to Dáil Éireann should not have the right to take a decision, if it runs counter to official advice.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  He should be accountable.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  If that is really so, then obviously the permanent Civil Service or the advisory State agencies, not the Government elected by this House and by the people, have the ultimate authority.

I believe a Minister and Taoiseach are appointed to take initiatives and decisions, if necessary on their own responsibility, taking advice into account, but not always blindly following it. Are democratic politicians redundant or do they have an electoral mandate to use their political skills and judgment that they have developed over the years for the benefit of the nation?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  To insure English beef?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Do Members really believe that civil servants and other professional advisers are better qualified to take political decisions than they are?

This week has seen a major and historic move towards the establishment of peace on this island. Does anyone think that in helping to reach this point I have not had to take many critical decisions without being able to take cover behind official advice? Does anyone think we [203] could have reached this point without personal political initiatives and risktaking on my part? The country is fortunate that I did not take the official advice in this case——

Mr. Currie: Information on Austin Currie  Zoom on Austin Currie  That is a very contentious remark.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  ——yet the only crime I am now being accused of is having disregarded such advice in the past.

Do the people want political leadership or do they want a country run entirely by a bureaucracy? I believe they want and will respond positively to political leadership.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  If I were a civil servant I would be very sore if I was working for the Taoiseach.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The procedure I adopted as Minister for Industry and Commerce, in those years and examined by the tribunal, was the same procedure adopted by my predecessors and established by Government decision of 17 June 1983.

The same procedure for export credit insurance is still in operation and the policy is as sound today as it was in 1987.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Does that mean that Mr. Justice Hamilton's recommendations are not being implemented?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Incidentally, in providing cover for Iraq, that Government too rejected advice received from the ICI on 27 April 1983 recommending that all cover for Iraq be immediately suspended. This is referred to in the report also.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is 3.5 per cent.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  In 1982, one of the very first decisions of the Fine Gael-Labour Government on coming into office in December was to grant export credit insurance cover for the first time [204] for beef exports to Iraq to Mr. Goodman's company. At that time too concerns were expressed about the unacceptable financial risk because of the Iran-Iraq war, but these concerns were overruled.

I am not criticising that action, but to suggest, however, that a similar decision taken by a later Government should be the subject of a tribunal of inquiry simply beggars belief.

The principle was the same in both cases — the only difference was that the amounts were greater, but that is how we have gone on increasing exports and foreign markets over the years.

The motive for the decisions taken by me and the Fianna Fáil Government was examined in detail by the tribunal. All my decisions were made in the national interest and not for any corrupt or improper motives. The report is clear:

“there is no evidence to suggest that (my) decisions were in any way based on improper motives, either political or personal”.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  There is no evidence.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The report says that: “the determination of where the national interest lay was a matter for decision of the Minister for Industry and Commerce”.

The people who now insist that the tribunal was set up to examine the decision-making process, and not alleged political corruption, ought to reread their original allegations. They should pay particular attention to the allegations that decisions were taken to favour the Goodman organisation because of Mr. Goodman's political connections. These allegations were dismissed out of hand in the report.

The chairman went even further and said:

“Because of the position of Mr. Goodman in the agricultural life of the country and because of the obvious concerns of the Taoiseach [205] and the Minister for Industry and Commerce to develop the agri-food sector of the economy and exports of value added products, leading to job creation, there is no doubt but that Mr. Goodman had reasonably ready access to members of the Government, including the Taoiseach and the Minister for Industry and Commerce, for the purpose of discussing his plans for the development of his companies and his exports. It is clear that he had similar access to the previous Taoiseach, Dr. FitzGerald, and members of his Government”.

My decisions as Minister for Industry and Commerce were proper decisions, adhering to proper criteria, motivated solely by consideration of the national interest. The requirements of the national interest in 1987 were clear — to rescue the economy from the pit of stagnation into which it had been allowed to sink and to rescue the beef industry.

I regarded export credit insurance then, and still do, as a legitimate and valuable instrument available to Government to stimulate exports. In the Chairman's own words:

“The purpose of providing export credit insurance and other guarantees in connection therewith is clearly stated to be for the purposes of encouraging the exportation of goods and the provision of such services as specified from time to time by order of the Minister. The encouragement of exports is clearly public policy within this State.”

When Fianna Fáil set out in 1987 to restore confidence in the economy, the beef industry was identified as a key area with obvious potential for growth and job creation. A host of reports on the industry throughout the 1980's and even before had emphasised the importance of building up strong players who would be able to compete internationally.

The question of export credit insurance cover was among the first [206] issues raised by officials in my Department when I became Minister. It had been suspended in 1986 but was being kept under review by the outgoing Administration reduced then of course, to the Fine Gael Party only.

Two things were clear from the records however; that the outgoing Administration saw the desirability of restoring cover at the earliest possible date; and that had it been restored, the intention was to provide the cover to the existing exporters, Goodman International and Hibernia.

I restored cover on a restrictive basis. While this decision was against the advice of my officials, the chairman points out that their advice was based mainly on commercial considerations.

In contrast my decision was made in the national interest, and not solely on a commercial basis. I took into account, for example, the indications that many other countries which had been off cover for Iraq in 1986 — countries like France, West Germany and the United States — were now strengthening their trading positions with Iraq, and were providing, or were about to provide export credit insurance again, for a mixture of political and commercial reasons.

It is to be remembered that in 1987 and 1988 in particular, and up to 1990 in the case of the United States, heavy commitments were entered into by many countries. My decisions were not taken in isolation from international trends, but in accordance with such trends in competitor countries. There is absolutely no mystery as to why I took the decisions I did, for anyone who cares to look beyond these shores.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Why did you not check the origins of the beef?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I took into account the fact that Iraq was an extremely wealthy oil-rich country with over 100 years of oil reserves. It had never defaulted on payments to Ireland, or never re-scheduled a debt with Ireland.

I agree with Deputy Bruton's views, [207] as expressed in 1985, when he proposed a further increase in export credit insurance to Iraq. He said then:

“There is no doubt that Iraq will be a very good market in due course. They will certainly remember the countries which stood by them and this has been a factor which has influenced many countries to offer financial and military and other support in large amounts. I believe we have developed a special relationship with Iraq and that they have been consciously putting business our way. I believe also that this account for their excellent payment record.”

I took into account that the three M's— meat, medicine and munitions — were always the first to be paid for. In addition, I brought to all decisions my wider knowledge and experience gained in a number of different Ministries, and my experience in international business.

The decisions taken have to be viewed in the context of the national crisis at the time. Industry and farming were in crisis. Cattle prices and farm incomes were down in 1985 and 1986. Farmers appeared to have lost faith in beef as an enterprise, and there was a genuine crisis of confidence at producer level.

The potential of the industry was the subject of a profusion of major reports, reviews and studies.

The McKinsey report, the Telesis report, a report by NESC, the Culliton report, the report by PA Management Consultants, and a Government White Paper, published by Deputy Bruton, all stressed that the road to more jobs lay in maximising the value added aspect of our beef exports. These reports all clearly demonstrated for policy makers, the enormous benefits to the economy which would flow from such a policy. For these benefits to accrue, however, action would first have to be taken.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  It would have to be Irish beef.

[208]The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The country was the victim of a paralysis by analysis, and totally deprived of decisive action. Decisions like that to bring forward an imaginative five year development plan for the beef processing industry must be seen against that background. The tribunal's report is comprehensive and precise on the subject of the IDA and the five year plan.

It is clear from its enumerated findings, that the principal allegations made against the Government — allegations of the plan being foisted on the IDA; allegations of undue political pressure; and allegations that the plan was rushed through without proper consideration — have all been completely rejected.

The tribunal's finding that the Government acted outside of its powers some nine months after the plan had been approved, does not detract from these principal findings, since it is also clear that what was involved was merely the removal of an administrative log-jam.

What is sometimes lost in all the confused criticism is the simple fact that the five year plan for the beef industry did not go ahead, and that not one penny of taxpayers' money was ever spent on the implementation of this plan.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  What about section 84?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Similarly, we are now witnessing eruptions of self-righteous indignation from many quarters, on the potential risk to which the economy may have been exposed. There was not a tribunal of inquiry into the collapse of ICI, Irish Shipping, or Dublin Gas, even though these policy fiascos did not just put taxpayers money at risk, but actually cost the taxpayers hundreds of millions of pounds.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Policy disasters.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Contrast this with the record of the export credit insurance scheme. As I speak, the cost to the taxpayer of using export credit insurance to cover beef exports to Iraq — since [209] the inception of the scheme — is less than £8 million, and there are proceedings in place to recover most, if not all, of that figure.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  Because Deputy O'Malley did not accept it.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The great irony is that this national interest scheme managed by politicians has a far better payment record than the commercial scheme managed by the professional advisers, whose advice on many occasions we have been criticised for disregarding.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Because Minister O'Malley avoided it.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Of course the Goodman claim against the State is still there, but I cannot understand those who insist on inflating the value of that claim, unless it is for their own political purpose. In a storm at sea, surely no one on board would wish the ship to sink. Yet it would appear that the sinking of the ship is precisely what is wished by some just to prove that they are right. They will find however that the ship is solidly crafted.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Do not worry; Labour will not sink it.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Substantial payments have been received since the original cover was written and this is acknowledged in the report, dramatically reducing the initial exposure and dramatically reducing any early potential risk.

A portion of the Goodman claim relates not to policies in place but rather to promises of cover which it is alleged that I made. Without wishing to trespass on the judicial sphere, I am confident that the outcome will show that the decisions I made did not expose this country to any unjustified risk. I am as prudent and cautious with taxpayers' money as I am with my own.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Passports for sale.

[210]The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  An important point often overlooked is that as Minister for Industry and Commerce I always reserved the right not to provide export credit insurance cover until the last minute even where offers of cover had already been made.

As Minister, I introduced a “shipment by shipment” clause, an extremely important added value safeguard for the taxpayer and the Exchequer. This meant that cover could be withdrawn right up to the time of shipment. Under this policy, there is no effective cover until such time as specific shipments are notified to the Government's agents, ICI. Because the contracts in question each involved a large number of shipments over an extended period of time it gave me, as Minister, the flexibility to cancel at any time if circumstances changed.

It was this very safeguard which allowed my successor, Deputy Ray Burke, to stop all cover when circumstances changed, an entirely correct decision.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  And to take the advice he got.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  At the end of the day, who in this House can say that the Goodman organisation will not be paid in full by the special fund in the United Nations for covering such losses — a fund financed by the freezing of Iraq's lucrative foreign assets?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Or from Oxfam.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  If this happens, that is the end of the claim from the Goodman organisation and the end of any potential risk to taxpayers. Even if this does not happen and the claim comes to court, who in this House suggests that the State is not likely to win the case given what appears to be a blatant breach of the conditions of the contracts?

When I made my decisions I did so with the sole motivation of benefiting the Irish economy. I sought to build our [211] food industry, increase value-added exports, increase farm incomes and create jobs.

All my decisions were made on the basis that the beef being covered for export was commercial beef and the report so finds. It states that: (my) “decision in this regard was based on the belief that the beef to be exported in pursuance of the contract in respect of which export credit insurance cover was granted was ‘commercial beef’ as defined by (me) and would be sourced within the jurisdiction”. The report makes it clear that at no stage was it ever disclosed to me or to my Department that the beef in question was other than commercial beef.

The report completely endorses my view that if the beef had been commercial beef, as I believed it was when making my decisions, that the benefits to the Irish economy and particularly to the agricultural sector would have been substantial. It transpired that much of the beef was non-Irish. In effect, this was breaking the conditions under which cover was being provided.

We have all filled out insurance forms at some stage in our lives, for one reason or another. We make declarations on those forms and we all know what happens if untrue declarations are made or if the conditions are breached, when it finally comes to pay-out time under a claim.

The report makes it clear that the inclusion of large quantities of beef not sourced or produced in the State was contrary to the express terms of the declarations made by the exporters. It states:

“such inclusion constituted a substantial abuse of the express terms of the scheme and the policies issued in pursuance thereof”.

The abuse in question was an abuse by the exporter and not by the Government.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  In collusion with the Government.

[212]Mr. Dempsey: Information on Noel Dempsey  Zoom on Noel Dempsey  You want to write your own report.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  The Taoiseach did not check it out.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  It was a policy disaster and he knows it.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The Chairman goes on to say that this abuse would not have led to a fraud on the taxpayer as alleged by Deputy O'Malley because, in the event of a claim, the exporters would have had to produce proof that the origin of the beef was what they had stated it to be in their original declarations. The fail-safes in the system would have come into play to make sure that the Exchequer did not lose, a fact confirmed in the report.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  There is no national interest in intervention beef. That is disingenuous. Intervention beef would have been paid for in any claim.

(Interruptions.)

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  The Taoiseach, without interruption.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  He is trying to mislead us but he will not fool all of us.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It also transpired that a substantial amount of the Irish beef came from intervention stocks. It has been suggested by some that it would have been easy for me or my Department to verify the producers' assertions as to the origin and status of the beef being contracted for.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  The Taoiseach was told it was intervention beef.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It has been suggested all that was required was a 'phone call to establish the position. Nothing could be further from the truth.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  It was on file.

[213]Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  What about the telegram?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  In the first instance, the responsibility of the Minister for Industry and Commerce extended only to covering a letter of credit. The certification of the beef involved and its origin were the responsibility of the Department of Agriculture and Food.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Poor oul Michael O'Kennedy, leave him alone.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The risk covered by me as Minister was the risk that the letter of credit might not be honoured by the purchasing country for political reasons.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  The Taoiseach doctored the letter from the CBF so that they would not know.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  In other words, as Minister, I was covering a political risk which is why commercial advice criteria did not apply. In providing such export credit insurance what I was not covering was failure by the purchasers, in this case Iraq, to pay the Irish exporter because of breach of contract.

My responsibility as Minister was to take a policy decision, which I did and I was entitled to assume that all necessary research had been carried out.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  The Taoiseach would not listen to it.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Leaving that aside, it took a consultancy unit established in the Department under Mr. Fisher five months to establish that a substantial amount of the beef was sourced outside the jurisdiction. It also took the Department of Agriculture three months and an enormous exercise at that, to establish the proportion of intervention beef being used.

This information arising from Deputy Burke's investigation and the Fisher report provided the basis for Deputy [214] O'Malley's action in voiding those policies, a decision correctly taken to protect the Exchequer. It is from this action that a substantial portion of the Goodman claim against the State arises.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  No laughing now fellows.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I fully accept that the tribunal identified a weakness in the system. Vital information was available within Departments and was not passed on to the relevant Department resulting in an important policy decision being taken based on incorrect information.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Who takes responsibility?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Naturally, it would be expected that all information available to a Department would go to the Cabinet before a decision.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  They were fiddling the records.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Order. please.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  There is no doubt that this breakdown between Departments constituted a policy co-ordination failure. Recommendations in the report, coupled with changes already effected, will close off such weaknesses.

If this information had been passed on the report concludes that the position would have been completely different. If I had known that much of the beef was going to come from intervention stocks and that non-Irish beef was also going to be used, of course my decisions would have been different.

If I had known in advance that Iraq was going to suddenly invade Kuwait, of course my decisions would have been different as would the decisions of the US and many other Governments who continued cover virtually up to the invasion of Kuwait.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Would the Taoiseach have believed it?

[215]Mr. Dempsey: Information on Noel Dempsey  Zoom on Noel Dempsey  Would it have satisfied Deputy Rabbitte?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  None of these hindsight considerations alters the proper basis on which my original decisions were taken. The health of the economy in those years, particularly the improvement in the lot of farmers, is the best testimony to the policies of the then Government.

In 1987 beef exports grew by £78 million from a figure of £712 million to £790 million. That same year family farm incomes rose by 38.9 per cent and in 1988 family farm incomes increased by 18 per cent. Cattle prices reached their highest level to date at approximately 120p per pound.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  How many weeks and days?

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  We could do with a bit of it now when you are in Government. Take a look at the situation.

(Interruptions.)

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Can we have the same level of order which has obtained up to now?

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Come back Joe, all is forgiven.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Where is the Minister for kick-starts?

(Interruptions.)

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  No interruptions from either side, please.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The flourishing Middle East export markets certainly had much to do with these trends, just as their subsequent closure for two or three years deeply depressed prices and led to a resumption in the flight from rural areas. In 1987 and for the following years the decline in numbers leaving agriculture had been arrested for the [216] first time in decades. Nobody will persuade me that these improvements were entirely coincidental. My colleague, the Minister for Agriculture, Food and Forestry will deal with this aspect of the report in greater detail.

There is a final matter of some importance which I must address. All of us in this House, the Government and myself, are bound by the terms of our Constitution. Neither the Government nor any of its successors can of their own volition change a provision of the Constitution. It is for the Supreme Court, and the Supreme Court alone, to interpret the Constitution.

In this context the issue of Cabinet confidentiality came to be considered by the Supreme Court which clearly decided the extent to which the Government of the day is bound by this principle and what information can be made public.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Who took the case? Who asked the Supreme Court?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  This is not a matter of the Government of the day choosing to abide by a particular principle. It is a matter of it being bound to do so. The law in this area is not made by the Government; it is in the Constitution, interpreted by the Supreme Court and it binds us all.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  At the request of the Attorney General.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  No more leaks.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The challenge facing the Government is to manage change and to make this House more responsive to the public need for more information. We all recognise that secrecy is not the answer but balance is also necessary. I am very much in favour of a freedom of information Act but, as the Supreme Court has determined, there are times when confidentiality has to be respected, particularly discussions leading to decisions. The Government has commenced work on this area and all [217] Government Departments have been requested to examine this area fully and report back to the Tánaiste, in line with our Programme for Government.

Since the formation of the Government a programme of Dáil reform has been put in place to increase the efficiency with which legislation is processed, to facilitate greater scrutiny of Government policy and to allow an even closer monitoring of spending by Government Departments. We introduced a new committee system, increased the time allotted for questions in the House——

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  Not today.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  ——and revised arrangements for adjournment debates.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  The Taoiseach will not answer the questions.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  One major result of these reforms has been the relaxation of the sub judice rule. This allows the debate of a wider range of issues than before and has considerably broadened the scope of the actual debates.

The debate on this issue, highlighted by the tribunal, will, I am sure, continue. However, the tribunal is over. Clearly its findings are unpalatable to some. In a democracy the judicial process is the ultimate recourse whereby any individual can clear his or her name. Any attempt to go behind the tribunal's findings is to be deplored. The openness, transparency and objectivity which are so often called for should equally be required from all commentators.

We will heed the lessons to be learned from the tribunal and the final report. Not least is the serious lesson for public representatives — that their duty to the public and their right to bring into the open matters of concern to the public——

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Attacking the Tánaiste again.

[218]The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  ——have to be balanced very carefully against the damage they can cause if their information is unreliable or inaccurate. I accept that there is always a legitimate role for any Opposition party to play “devil's advocate”, in other words, to put up what seem to it plausable criticisms and put the onus on the Government of the day to dispose of them. However, it is going a bit far to insist on an extremely expensive tribunal in the hope that this will somehow provide proof of its allegations. I hope we will not in future allow ourselves to be stampeded into this sort of costly exercise.

Mr. Currie: Information on Austin Currie  Zoom on Austin Currie  Charlie will love that one.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  There must in future be a better, less costly and more effective way of doing business.

Mr. E. Kenny: Information on Enda Kenny  Zoom on Enda Kenny  Answer the questions.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  We can promote a viable alternative by developing our committee system to do the job of tribunals in the future. I have directed that the Bill to compel witnesses to attend committees be expedited.

With the benefit of hindsight it is always easy to identify where things were wrong. The tribunal was dealing with events of up to seven years ago. Today we are all older and wiser. We have the benefit of the tribunal's investigations and the benefit of its findings. The tribunal has identified changes which will make systems more effective and these changes will be implemented.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  All of them?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Both parties in Government are already successfully facing the challenge of managing change on this and many other fronts.

Our two parties in Government have separate identities. We have our own sets of values. We each have our own vision of where the future lies. While preserving the best in both of our traditions, we are fusing those visions to [219] bring about positive and lasting change. I am reminded of the following words of President Lyndon Johnson:

If you came to hear me talk about all the things wrong you are going home sad because there are some things wrong but the things that are right outnumber them a great deal.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Does the Taoiseach know what he said about being inside and outside the train?

A Deputy:  Is the Taoiseach thinking of running for the White House?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I would never claim that all of my decisions were correct but I would claim on balance that I have made far more good decisions than bad, and the record bears this out. I, and the Government, fully accept the findings of the tribunal of inquiry and we will implement the appropriate changes in our departmental structures, our policies and our legislation as recommended in the findings of the beef tribunal report.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Does Deputy Bruton wish to move his amendment?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I move amendment No. 1:

1. To add the following to the motion:

“and

(1) calls on the Government to set out a timetable for the implementation of the recommendations contained in the report;

(2) notes the many failures of public policy in the period 1987 to 1989 identified in the report;

(3) deplores the findings of the report regarding systematic tax evasion by the Goodman Group; and

(4) furthermore is of the opinion that the present Taoiseach was wrong [220] in his claim to have been totally vindicated by the report and is in agreement with the view, as stated by the Labour Party, that the decisions in which he was centrally involved as a Minister at that time and which were covered in the report amounted to a policy disaster for which he is accountable.”

In the course of my prepared speech I will make specific references to pages in the tribunal report, columns of the Dáil Official Report and passages in the evidence given by the Taoiseach and others at the tribunal. These page references are contained in the prepared text of my speech which will be available to those in the press gallery and any member of the public, but in order not to interrupt the flow of what I am saying I will not be quoting the references verbatim in the course of my speech. I can do so if necessary but it would slow up the process.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Thank you, Deputy.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I can assure you that everything I will say is substantiated by what is in the report. I will also rebut comprehensively most of what the Taoiseach has said. At the end of my contribution, however, I will return to some of the comments made by the Taoiseach which were particularly at variance with the truth and which necessitate specific correction.

We meet at a time of great national opportunity, when, at last, after 25 years of murder, maiming and destruction there may be an opportunity for lasting peace in Northern Ireland and on the island as a whole. We meet at a time when there may be an opportunity for reconciliation between the peoples of this island on the basis of respect for our differing traditions, religious and moral views.

It is a time also perhaps of great economic opportunity when, because of a combination of circumstances, there is a [221] chance to relieve the crippling unemployment problem that has afflicted this society for the past decade, at a time when there is an opportunity to improve our educational system and enhance our health system. All these concerns are of enormous importance to our society and take precedence over party advantage or personality politics.

To many people watching or listening or who will read about this debate, it may seem that our preoccupation with what may appear as the minutiae of policy decisions taken six or seven years ago in an arcane area of national life is remote from the concern or interest of the vast majority of our population; it may appear to them to be bizarre and self-indulgent that the House should take so much time to discuss these matters given the enormous opportunities I mentioned which are opening up for us. This is the appearance only, it is not the reality because what we are discussing here today, and in the two days that are to follow, is at the core of the way our society is governed; it concerns the integrity of the political system itself.

If people in senior positions in public life escape accountability for their actions when such actions have been documented by a public tribunal, established at enormous cost to the taxpayer, that devalues our democracy and will add to the store of cynicism. Without accountability democracy becomes an irrelevance.

I propose the amendment to the Government motion in my name and that of others because I do not believe in the concept of accountability that Fianna Fáil and the Labour Party seem to have. As far as those parties are concerned, as far as the issues involved in the Tribunal of Inquiry into the Beef Processing Industry are concerned, accountability now means that tax evaders, identified in that report, should be allowed to enjoy a specially designed tax amnesty. It means that the Taoiseach and other Ministers, identified in the report, as having risked taxpayers' money and behaved recklessly and unfairly, should now enjoy indefinite [222] continuance in office, courtesy of their accusers. It means that those Deputies who made allegations, and then refused to disclose their sources should enjoy immunity from sanction, or even from censure. Yet a young woman journalist, with a child to look after, can go to jail for doing exactly the same as those two Deputies. If that is a concept of accountability that pleases the Fianna Fáil and Labour Parties, then, in the words of the Leader of the Labour Party here on 5 November 1992, Official Report, column 2313, Volume 424: “By their behaviour, time and time again, they have cheapened and debased one of the highest callings there is, and dishonoured those who serve the public in political life.”

Before continuing I want to make the following quite clear. Anything I have to say relates only to the conduct of Deputy Reynolds as a public representative and Minister. I am not challenging the moral worth of the Taoiseach as a person. It is not his personal integrity I challenge but the integrity of his political conduct. Neither am I saying that all his contributions to public live are worthless or are to be set at nought. I admire some of the contributions he made as a Minister; in particular, I acknowledge the genuine efforts he made to bring peace to this island but none of that raises him above accountability for other things he has done which are documented in the report of the Tribunal of Inquiry into the Beef Processing Industry. No one, no matter what they have done in other spheres, is above accountability to this House.

Let us not forget that the Tribunal of Inquiry into the Beef Processing Industry was commissioned by the Dáil, that it was, in its own words, “a simple fact finding operation” only. It is for the Dáil to draw the political conclusions from those facts. It is no defence of the Taoiseach to say that the tribunal itself does not find him unsuitable for ministerial office. Such a finding would not have come within the terms of reference of the tribunal. It is for the Dáil, to whom the report of the tribunal is now [223] presented, to make that finding based on the factual evidence contained in that report to which I will refer.

The programme on which the Government was formed calls for “accountability, transparency and trust” in the conduct of Government and ministerial business. The manner in which Deputy Reynolds conducted Government business, as a Minister, as shown in this report, was not accountable, transparent or politically trustworthy.

Specifically, and based on details from the report which I will produce, I want to make five charges which impugn Deputy Reynold's political trustworthiness. First, he broke almost all the terms of a Cabinet decision, by which he was bound, in regard to export credit. One result of this breach of a Cabinet decision was to give a straight and needless gift of £2.74 million to the Goodman organisation. This was an outrageous abuse of public money. Second, he insisted that some companies produce contracts to get export credit cover for Iraq. Yet, at the same time he gave another company, which had no contract and no track record in Iraq, export cover at a secret meeting. This meeting in particular, to which I will refer, gives rise to the gravest suspicions. Third, he gave commercially useful information about his future intentions on export credit, on an insider basis, to the Goodman organisation. He denied that information to everybody else. Even more seriously, he deceitfully concealed that same information from the Minister for Finance and officials of his Department. Fourth, as Minister in charge of the IDA, Deputy Reynolds took part in the breaking of a law in respect of an IDA grant agreement. Previously he had allowed the IDA's statutory freedom of decision-making to be pre-empted by his Cabinet colleagues.

Fifth, and finally, as Taoiseach, Deputy Reynolds pushed through a tax amnesty, which excluded from eligibility evaded taxes that were before the courts, but which very specifically did [224] not exclude evaded taxes that were known to have been discovered and to be before the Tribunal of Inquiry into the Beef Processing Industry. Those are the five charges I make in regard to the political trustworthiness and political integrity of the Taoiseach.

I want to make two further charges in respect of Deputy Reynolds' incompetence and carelessness as a Minister. He put a huge amount of taxpayers money at risk insuring beef exports to Iraq, in defiance of official advice, without explaining his rejection of that advice at the time, without investigating the risks involved, and without investigating whether the beef he was insuring was Irish or not. This was done for the sake of so-called economic benefits, that the tribunal found were illusory rather than real. Finally, he concentrated almost all of Ireland's export credit insurance cover on one commodity, on one market, against all normal insurance practice of spreading risk. This was reckless by any standard.

I will demonstrate the truth of each of those seven statements. I say to the Labour Party:

If you believe in accountable Government, you must be willing to call people to account. If Deputy Reynolds is demonstrated in this debate to have breached the trust given to him as a Minister, then he should not continue as Taoiseach. Otherwise there will be no accountability. If you, the Labour Party, for the sake of political convenience, try to avoid that issue, you will be burying the concept of public accountability deeper than it has ever been buried before in the 70 year history of this House. Ethics Bills are only window-dressing if transgressors are not called to account at the highest level.

Deputy Haughey, and others, were made accountable in 1970. Deputy Lenihan had to stand down in 1991. What are the Labour Party's standards in 1994?

[225] I will now deal with each of the specific charges I have made in respect of the political trustworthiness of the Taoiseach.

On 8 September 1987, the Cabinet agreed to raise the ceiling on export credit to Iraq to £150 million. In so doing, it left the overall limit for export credit insurance generally unchanged at £300 million worldwide. Therefore, the Cabinet had decided that Irish exporters to markets other than Iraq were to be denied cover, because so much of the cover was now to be concentrated on Iraq — a market on which the risk of non-payment was exceptionally high. This was obviously a very serious Cabinet decision. It was proposed by Minister Reynolds on the basis of a memorandum circulated by him at the meeting on 8 September 1987. This memorandum set out the special conditions on which this extra cover for Iraq was to be granted. These conditions were — I hope Members will remember them (p.74)—: (a) 70 per cent cover maximum on any contact; (b) maximum credit period of one year, as opposed to the normal six months for low risk countries; (c) a claims waiting period of 12 months as opposed to the normal six for low risk countries; (d) a minimum premium rate of 4 per cent of full contract value as opposed to the usual 0.04 per cent for good risk countries and (e) cover to be provided only to exporters in respect of whom claims because of non-payment had not arisen in Iraq, or who had subsequently been paid.

The increased cover for Iraq which denied exporters to all other markets of cover was specifically agreed by the Government on those five conditions on 8 September. Yet that very afternoon, Deputy Reynolds, as Minister, started to break the conditions of the Cabinet decision. At 4 p.m. that day, he met Mr. Oliver Murphy of Hibernia Meats and Mr. Paschal Phelan of Master Meats, a man who was not unknown to him.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  May I say here, and I do not wish to intervene, that [226] while I realise that individuals named in the report are in the public domain I have to remind Members to be mindful in their contributions lest they reflect upon people outside the House that they must never forget that such persons who may be maligned in this House have no redress against accusations about them in this privileged assembly.

(Interruptions.)

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Let us have regard for these people who are defenceless against accusations made in this privileged assembly.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  As it happens I am not making allegations against any people outside the House. I am making, however, the most serious allegations about Deputy Reynolds. At 4 p.m on that day, the then Minister, now Taoiseach, met Mr. Oliver Murphy of Hibernian Meats and Mr. Paschal Phelan of Master Meats. At that meeting he awarded £10 million cover to Hibernia with a credit period of 18 months. By doing so, he had, within hours, broken two of the conditions on which the Cabinet had that morning agreed the extra cover for Iraq.

First, he had granted a credit period of 18 months, whereas the Government limit was a year. Second, he had awarded cover to Hibernia, a company from whom claims had arisen in Iraq, and in respect of which payment was still outstanding. Six days later, on 14 September, Deputy Reynolds, as Minister, broke even more of the conditions set by the Government on 8 September, this time for the benefit of the Goodman organisation.

He agreed to give Goodman 80 per cent cover, whereas the Government conditions specified 70 per cent. He cut the claims waiting period for Goodman to six months, not the year specified at Government. He cut the premium charged to Goodman on their Iraqi beef contract to 1 per cent, as against the 4 per cent specified by the Government. This premium concession constituted, [227] on its own, a gift of £2.74 million from the taxpayer to the Goodman organisation.

This cut rate premium of 1 per cent contrasted not only with the 4 per cent being charged to other exporters within the scheme but with a market rate premium of between 15 per cent and 24 per cent that Mr. Goodman would have had to pay if he had insured his contract for Iraq on the commercial market. With that level of incentive it was no wonder that Mr. Goodman put all his eggs in the Iraqi basket and ended up in trouble when the basket broke wide open. The Goodman organisation was getting a clear cash benefit as a direct consequence of Deputy Reynolds breaking the terms of the Cabinet decision.

This special 4 per cent premium was advanced in the memorandum for Government as one of the only three arguments in favour of giving Iraq a larger share of the total amount of export credit available — almost half of the total in one market. Yet that argument was ignored within hours of the decision being taken.

It may be said that there is always haggling in such circumstances, and that the Minister did the best he could to negotiate the best possible premium and conditions. Not so. There was no need for haggling in this instance because there was no economic benefit to be obtained. The Goodman organisation had already signed the contracts with Iraq for which they were seeking export cover for $134.5 million two months previously. No extra incentive, reducing the premium from 4 per cent to 1 per cent, was necessary to sweeten the deal for them because they had the deal already. No additional jobs would result from that gift of £2.74 million to the Goodman organisation because he had the deal that was going to create the jobs in the bag for the previous two months without this totally gratuitous and unnecessary concession. It was a straight handout to a private company in return for nothing. The Minister did it in clear and delibarate breach of a [228] Cabinet decision. This, on its own, is quite staggering.

I now want to turn to my second charge, that Deputy Reynolds was arbitrary and unfair in the way he dealt with other companies in regard to export credit cover for Iraq. To do so I have to return to the meeting of 8 September between Deputy Reynolds and an old friend of his, Paschal Phelan, who happened to own a meat company called Master Meats. Mr. Phelan was accompanied by Mr. Oliver Murphy who owned another meat company called Hibernia Meats. Not surprisingly, as the report notes, the meeting was set up by Mr. Phelan.

Mr. Oliver Murphy had been making representations, both directly and indirectly, to Deputy Reynolds for several months, to no avail. He was trying to get a piece of the action on export credit insurance cover that, up to then, had been exclusively made available to the Goodman organisation. Indeed, he had to contact the Minister for Finance at the time to get him to write a letter to Deputy Reynolds, but that was all to no avail until the meeting was arranged for him by Mr. Paschal Phelan at 4 p.m. on 8 September, the day of the Government meeting.

The difficulty was that Hibernia Meats was owed money by Iraq and the Minister had made it clear up to then that any company that was owed money by Iraq would not get cover. Hibernia, therefore, could not get cover because of the very sensible condition that the Minister, Deputy Reynolds, had quite prudently applied until 4 p.m. on 8 September. I have already noted that one of the conditions of the decision specified by the Government on the morning of that meeting was a reiteration of the practice of Deputy Reynolds that no company should get cover if payments were outstanding.

What was said or transacted at that remarkable meeting? We do not know precisely because only Deputy Reynolds, Mr. Phelan and Mr. Murphy were present. There was not an official from the Department present, neither [229] was there anybody to take a note of what transpired even though public money was being dealt with, a precaution that most Ministers invariably take, that Deputy Reynolds took at a meeting some time later with representatives from Halal when he had bad news to give. It was then useful to have officials present. There were no officials at the September meeting to witness what took place or record the conversation and that is a great pity. As I have said, the outcome of that meeting was remarkable and involved a direct breach of a Cabinet decision in two respects. Out of the blue and without explanation, Deputy Reynolds did an about-face on the question of issuing export credit insurance cover to Hibernia — a company which up to then was debarred from receiving cover and under the terms of the Cabinet decision was still debarred.

Suddenly the Cabinet decision did not matter any more and Deputy Reynolds handed the company export credit insurance to the value of £10 million. Why? Suddenly, the sensible and reasonable precaution of refusing cover to companies who had claims outstanding in Iraq was abandoned. Deputy Reynolds at a meeting with a crony and a crony of a crony, suddenly reversed a policy on a matter that had been considered sacrosanct at Cabinet that morning.

That was not the only extraordinary thing that happened. At that meeting, Deputy Reynolds also agreed to give £10 million export credit insurance cover to Master Meats, the company of his friend, Paschal Phelan. What was remarkable about that was that there was no record of Master Meats ever having applied to the Minister, to the Department, to ICI or to anybody else for export credit insurance cover for Iraq. Out of the blue, hey presto, at that remarkable meeting, Master Meats, owned by Deputy Reynold's friend, Mr. Paschal Phelan, got £10 million export credit insurance cover on the spot.

The matter gets curiouser and curiouser. Needless to say, Master Meats [230] had no contract to export beef to Iraq, when out of the blue it was offered £10 million cover. It did not even make any great attempt afterwards to negotiate a contract for the export of beef to Iraq. Yet, it was getting more than £10 million cover, never having applied for it, never having attempted to negotiate a contract with Iraq for the export of beef and, so far as we know, never having subsequently attempted to negotiate a contract.

The significance of this extraordinary transaction is underlined when we note that subsequently a whole host of other beef exporting companies, including Agra, Taher and Halal — all Irish companies who, unlike Master Meats had been in Iraq, some of whom, unlike Master Meats, had negotiated contracts and all of whom, unlike Master Meats, had made application after application to get cover — were refused cover.

At the beef tribunal Deputy Reynolds sought to defend the giving of all the export credit insurance cover to Goodman and Hibernia to the exclusion of Agra, Taher, Halal and others on the grounds that Goodman and Hibernia had a “track record” in Iraq. If a track record in Iraq was what was required, why did he give £10 million to Master Meats at that remarkable meeting on 8 September 1987, when it had no track record or contract? To put it another way, what did Master Meats have going for it, that Agra, Taher and Halal did not? One should not believe for a moment that the £10 million cover granted to Master Meats was worth nothing to it because it never used it. Given the premiums that were being charged on the private insurance market for exports to Iraq at the time — premiums of between 15 per cent and 24 per cent — the value of the cover at 1 per cent given to Master Meats on a £10 million contract was worth approximately £1.7 million.

What did Master Meats do with this valuable asset it was handed at the meeting on 8 September? It did not use it, it transferred it to Hibernia, perhaps altruistically as a favour or, more likely, [231] for commercial consideration, and on 21 October, 1988, not surprisingly, Deputy Reynolds approved the transfer of this valuable asset worth approximately £1.7 million from Master Meats to Hibernia, the other participant in that famous meeting on 8 September, that involved the transfer of a taxpayer-created asset.

Let us consider again that amazing meeting of 8 September, 1987 and examine what Deputy Reynolds did. Without a hint of explanation he abandoned his own firm policy and gave insurance cover to Hibernia, although it was owed money by Iraq. He thereby flagrantly overrode the Government decision he had sought that morning and scandalously awarded £10 million worth of export credit insurance cover to Master Meats, who had no case at all for getting such cover and had not even applied for it. He did that without a civil servant being present. Surely that gives rise to the gravest suspicions.

My third charge, concerns insider dealing with Mr. Goodman and the deceit of the Minister for Finance. As Minister, Deputy Reynolds consistently fobbed off applications for export credit insurance from other applicants apart from the favoured trio of Goodman, Hibernia and Master Meats. More than that, the Goodman organisation was given exclusive advance information by Deputy Reynolds about future Government plans for export credit. This inside information enabled Mr. Goodman to plan his business to his advantage and to the disadvantage of his Irish competitors on the Iraqi market. He knew what price he could charge because he alone knew he would get cover. His competitors had to negotiate in the dark. It is clear from the tribunal report that, as early as 6 May 1987, Mr. Goodman had an inside track with Deputy Reynolds. On that day. Mr. Goodman telexed his managing director, Mr. Britton, from Baghdad to tell him, “to phone Albert Reynolds. at home if necessary”.

[232]An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Order, let us not forget our Standing Orders. Members of this House must be referred to by their appropriate titles.

Mr. Barrett: Information on Seán Barrett  Zoom on Seán Barrett  The quote is from a telex.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  On a point of order, I want to clear up this matter. I wish to quote from a parliamentary document. I believe, Sir, I am entitled to do that in the form the quote appears in the document.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That is so, Deputy.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  On any other occasion when I use my words I will refer to Deputy Reynolds as either “the then Minister” or “the Taoiseach”.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That is the main concern of the Chair.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  When I quote directly from a parliamentary document I believe I should quote verbatim.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That is in accordance with the Chair's concern.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I understand the Chair's intervention because perhaps it was not clear that the quote was in inverted commas.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  In accordance with Standing Orders, Members should be referred to by their appropriate title Deputy, Minister, Tánaiste or Taoiseach as the case may be.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I referred to the exclusive inside track Mr. Goodman had with Deputy Reynolds. On 6 May 1987 Mr. Goodman telexed Mr. Brian Britton, his managing director from Baghdad as follows:

He is to 'phone Albert Reynolds, at home if necessary, and before the [233] next Cabinet meeting, as we understand a Government decision will be given on his proposal to open up and increase facility for Iraq. Advise Albert Reynolds that we need a very substantial amount for here.

It is plain from the telex that as early as April 1987, before Mr. Goodman departed for Baghdad, unless he telephoned Deputy Reynolds from Baghdad, he knew from Deputy Reynolds that Deputy Reynolds ultimately intended to give a big increase in cover for Iraq. However, the then Minister, Deputy Reynolds, had not told anybody else of that vitally useful commercial information. That advance knowledge gave Mr. Goodman a huge, and grossly unfair, advantage over other Irish companies in negotiating and pricing his beef deals with the Iraqis.

To ensure that Mr. Goodman got the maximum advantage from this advance knowledge, the then Minister, Deputy Reynolds, did not tell anybody that he intended to increase export credit cover for Iraq by what transpired to be a huge amount. Even as late as 28 August, when Deputy Reynolds was in hospital, he did not give his private secretary the impression that he did not agree with the recommendation from his Department that a further increase in cover for Iraq was not to be granted, even though he proposed such an increase three days later.

He actually went so far as to deceive his colleague, the then Minister for Finance, on the matter. On 2 July, Mr. Goodman signed a beef deal for $134.5 million with Iraq, made all the easier for Mr. Goodman to negotiate because, as he had told Brian Britton, he already knew about Deputy Reynolds's proposal to open up and increase facilities for Iraq. Six days after he signed that contract in Iraq, on 8 July, Mr. Goodman met Deputy Reynolds for the purpose of updating him in relation to export credit insurance. It is inconceivable that Mr. Goodman did not tell Deputy Reynolds at that meeting about that huge Iraqi beef deal — the biggest [234] beef deal in world history, that far exceeded the existing £35 million limit on export credit for Iraq — which if it was to be insured for Mr. Goodman had to greatly exceed that limit. The day, after that meeting during which Mr. Goodman negotiated that huge contract, after he had met Deputy Reynolds to discuss export credit insurance, Deputy Reynolds wrote a letter to the then Minister for Finance, the former Deputy MacSharry, and in a briefing note attached to it he told him that the limit still stood at £35 million. He did not give the former Deputy MacSharry an indication of any intention to raise the limit, even though two months previously Mr. Goodman telexed Mr. Britton to remind him that Deputy Reynolds had already told Mr. Goodman that it would be increased. Almost certainly, that was an attempted deception of the then Minister for Finance because we know that the then Minister had made representations to the Goodman organisation on behalf of a rival meat company.

We cannot prove that Mr. Goodman told Deputy Reynolds about that big deal the day before the letter to the then Minister for Finance was written, because coincidentally, civil servants were not present at that meeting either. If they had been, they might have argued that others, apart from Mr. Goodman, might be entitled to know what extra cover would be made available as well as what information was given to Mr. Goodman. If the then Minister for Finance had been aware of this he might have felt the same, but neither was told what transpired between Mr. Goodman and Deputy Reynolds on 8 July 1987, and the Taoiseach cannot remember the detail.

Are we expected to believe that Mr. Goodman did not even mention his six-day old $134.5 million deal to Deputy Reynolds when he met him on 8 July? Regardless of when Deputy Reynolds first heard about that deal it appears he kept his officials in the dark. He did not mention it to them when he got a briefing note from them on export credit [235] insurance less than two months later on 28 August 1987. In the report Mr. Justice Hamilton is incredulous about the hazy memories of all concerned, about how the Goodman organisation first told the then Minister, Deputy Reynolds, about the biggest beef deal in world history. I wonder why memories are so hazy on this particular point.

Suddenly, on 31 August 1987 three days later when Deputy Reynolds had not mentioned it to civil servants, almost two months after he had met Mr. Goodman, four months after Mr. Goodman had telexed Mr. Britton to tell him that he already knew that there would be an increase in export credit cover, it was all systems go. On 31 August, Deputy Reynolds told his private secretary that he knew Mr. Goodman would be making a big application, about which the Department had not been told and that it was so big that Government approval would be needed before the following Wednesday.

I am convinced Deputy Reynolds knew this big deal was coming through the pipeline well in advance and had made up his mind that he would provide cover for it. I am convinced he deliberately concealed this from his civil servants, and from the then Minister for Finance, in a letter of 8 July, because he wanted to give Mr. Goodman an advantage over all other competitors. That is also why he rushed the final decision to the Cabinet on an urgency certificate. He did not want to give other Cabinet Ministers time to tip off other beef producers.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The Deputy will agree that the statement that a person deliberately deceived——

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  A Cheann Comhairle, you are part of the problem.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Do not interfere with the Chair, Deputy.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  This is nonsense.

[236]An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The statement that a person deliberately deceived might be reconsidered.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  What I said is that I am convinced that he deliberately concealed this from his civil servants and from the Minister for Finance in a letter of 8 July because he wanted to give Mr. Goodman an advantage over all his other competitors.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  There is no evidence for that.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The use of the word “deliberate” is a concern of the Chair.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I am convinced of it. A ruling of this House will not make me believe anything else. I will believe nothing other than a convincing rebuttal from the Taoiseach.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The judge heard all the evidence and did not believe it. Is that not good enough for you?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  As I have said in response to the Taoiseach, this is a report on which this House may draw conclusions.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I would advise Members to be very cautious in reflecting on other Members of the House.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  It is impossible to judge the fitness for office of people without testing questions of their integrity.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It needs more than the Deputy's judgment.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  My predecessors have ruled out of order accusations of untruths, deliberate mistakes and deliberate perversion of what is said. Will the Deputy reconsider his allegation?

[237]Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I have a problem here. I have a very serious speech to make and serious allegations about the Taoiseach which I intend to substantiate, and it is unfair that I should be distracted in this way over a matter which——

(Interruptions.)

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I have no wish to do so, but the language we use must be appropriate to this parliament.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  And accurate.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I really do not want the headline tomorrow to be in respect of this silly argument. I believe he deliberately concealed that information and nothing will make me change that view until the Taoiseach rebuts it, if he can. In this debate the Taoiseach has an opportunity, if he wishes, to reply but he has chosen not to take that opportunity. He has chosen not to allow me to put these matters in the form of a question for him to answer.

I have no option but to put them in the form of assertions because of the Taoiseach's refusal to answer questions, a refusal which is a denial of the very principle of accountability to this House and represents a deliberate waste of all the time and money spent on preparing this report. If the Government is not to answer questions in this House or rebut allegations made in this House in regard to matters in this report then our democracy has come to a sorry pass, and I would be most surprised that you, Sir, given your constitutional position and your honourable record, would want to associate yourself with such a proceeding.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The Chair must distinguish between political charges and personal imputation.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  These are political charges. I made that clear at the outset. I made it clear I was not reflecting on the personal integrity of the Taoiseach [238] but on the integrity of his political decisions.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That clears up the matter.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Please let Deputy Bruton continue. It is quite clear that it is a political charge and nothing else.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I appreciate Deputy Bruton not impugning my personal integrity.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I said that at the outset.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Let us proceed. The matter has been cleared up.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I am convinced Deputy Reynolds knew this beef deal was coming through the pipeline well in advance and that he had made up his mind to provide cover for it. I am convinced he deliberately concealed this from his civil servants, and from the Minister for Finance, in a letter of 8 July because he wanted to give Mr. Goodman an advantage over all his other competitors. That is also why he rushed the decision to the Cabinet on an urgency certificate. He did not want to give Cabinet members time to tip off other beef producers in case they might demand a fair share of the cover being readied for Mr. Goodman. It is on record that Cabinet Ministers had been making representations on behalf of other beef producers.

There is no other explanation for the sudden rush to put through the extra credit for Iraq in early September 1987. There did not seem to have been any commercial urgency, of a normal kind, emanating from the Goodman side. Mr. Goodman negotiated the contract in May, signed it in July, met the Minister, Deputy Reynolds a few days later, but did not formally apply for export credit until the end of August after Deputy Reynolds had tipped off his civil servants that the application was on the [239] way. This leisurely pace tends to confirm my view that the Goodman organisation already knew that its extra cover was in the bag and that there was no need to rush in with its application until everything was ready. It is certainly clear that Deputy Reynolds acted over that entire period as if he were no more than an agent and a benevolent financier of the Goodman organisation.

Other meat exporters were treated very differently. After the Iraq limit was increased in September 1987, other exporters put in applications for some of the new extra cover. For instance, Agra Trading applied for cover for an Iraq contract valued at $17 million on 28 October 1987. Its representatives were about to set out for Baghdad to finalise a deal at that stage. They were wasting their time.

Sixteen days later the Minister, Deputy Reynolds had yet another meeting with Mr. Goodman on 13 November 1987. Mr. Goodman told the Minister, Deputy Reynolds that he was “anticipating a further contract for 30,000 tonnes, $105 million”. He did not have a contract, he was “anticipating” one, just like Agra when it applied to the Department several days earlier. What happened? At this meeting on 13 November the Minister, Deputy Reynolds gave all the remaining available cover to Mr. Goodman who already had a large amount of cover, thus leaving none available for Agra which had applied before Mr. Goodman and had told the Department it was negotiating a contract with Iraq. That company was left with no cover because, after the event, all the cover was given to Mr. Goodman.

The Minister, Deputy Reynolds was misleading in his evidence on oath to the tribunal about his meeting of 13 November. He tried to pretend he was justified in giving the cover to Goodman and not to Agra because Mr. Goodman was someone “who had the business” and Agra was a company that “might get the business”— Deputy Reynolds' words in both cases. On 13 November [240] neither had the business; both of them were, in Mr. Goodman's words, anticipating a contract, and the Minister, Deputy Reynolds arbitrarily chose to give the cover to Mr. Goodman and not to Agra. That was unfair.

The Minister, Mr. Reynolds treated Taher Meats equally unfairly. He told it on 5 May 1988 that no export credit could be made available to it for Iraq because “exposure to that country was now at the maximum acceptable level”. Taher, at this time, was supplying beef to Iraq without any export credit cover, in direct competition with Mr. Goodman who already had heavily subsidised and very generous export credit cover given to him by the Minister, Deputy Reynolds.

At some later stage. Taher Meats were told — it is not clear from the tribunal report by whom — that insurance could not be provided for them “unless they had a contract”. As we have seen, this requirement did not apply to Mr. Goodman at the meeting of 13 November — it certainly did not apply to Mr. Phelan of Master Meats at the meeting of 8 September — but Taher was told it would have to have a contract if it was to be considered. One might say that was a reasonable requirement if it was applied equally to all.

Having been told this, Taher went to Iraq, obviously at some expense, and successfully negotiated a contract — we know how much it costs to negotiate a contract in a country as far away as Iraq. with a different legal system and so on. Unlike Mr. Goodman. who already knew he had cover in the bag, it had to be involved in the risk, the cost, and the commitment of negotiating a contract at a particular price, without knowing whether it would get cover for it at the end of the day. To get this contract, the Taher company had to put up a bid bond, which it would lose if it did not fulfil the contract. Then, when it came back to Dublin from Iraq, having negotiated a contract putting up a bid bond and putting money at risk in support of that contract, it was told that the cover was no longer available. Without cover, [241] Taher was not able to proceed with the contract, and its bid bond was liable to be confiscated.

Thus the pretence, maintained by Deputy Reynolds, that companies like Taher might get cover if they produced contracts, was adding injury to insult. It was an insult to deny them cover on the same terms available to Mr. Goodman, Hibernia and Master Meats, but it was an added injury to make them waste their time and money negotiating contracts to qualify for cover, only to be told when the contracts were produced that there was no cover available. At the same time, Deputy Reynolds was holding open insurance cover for his friend, Mr. Paschal Phelan of Master Meats, without any contract or any track record.

Deputy Reynolds might be able to make some sort of argument for limiting cover on certain markets to one or two suppliers who had a track record to avoid damaging competition, but there can be no justification for what he did — misleading some companies, favouring others, and allocating cover to companies who had no track record and no contract while denying it to others who had both. This was arbitrary Government at its worst. Some might say, so long as you sell the beef, what does it matter if there is a bit of unfairness along the way? It does matter.

This is a country based on the rule of law, and on the principle of equality before the law. Every act of a Minister can only be done because the Minister is authorised to do it by a law passed in this House. If Ministers apply their legal powers arbitrarily or unfairly, it offends against the very principle on which our democracy is founded — a society based on law. Deputy Reynolds, as Minister for Industry and Commerce, operated the export credit insurance system in a manner that was arbitrary and unfair, and that was fundamentally wrong. This conduct made him unfit to be a Minister.

There are a number of important findings of the tribunal about Deputy Reynolds' behaviour as a Minister. [242] They concern the IDA. The tribunal report shows that while Deputy Reynolds was the Minister responsible for protecting the statutory independence of the Industrial Development Authority, he allowed the then Taoiseach — p. 256 — to pre-empt the role of the IDA, by meeting the Goodman Group about the details of their negotiations with the IDA, without the knowledge of the Authority. Deputy Reynolds participated in some of these meetings. He allowed the Cabinet to come to a decision about these negotiations, without telling the IDA, and he did so as Minister with overall responsibility for the IDA.

Deputy Reynolds had entered into an agreement with the then Chairman of the IDA Authority, Mr. Joe McCabe, that there would be no announcement of IDA deals with individual companies until the grant agreement had been signed between the company and the IDA. This agreement was made for the very sensible reason that the fact that a project had already been announced would put the IDA at a huge disadvantage in negotiating with the company afterwards. Not only did Deputy Reynolds allow a press conference on this Goodman project to be called before the grant agreement was signed, he allowed it to be called by Deputy Joe Walsh, now Minister for Agriculture, Food and Forestry——

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Was the Deputy listening to me earlier?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Closely, and I will be returning to the Taoiseach's address when I finish my contribution.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The Deputy missed out on the section on where responsibility lies.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  The Taoiseach had statutory responsibility.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The Deputy in possession should be allowed to continue.

[243]Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Not only did Deputy Reynolds allow a press conference on the Goodman project to be called before the grant agreement was signed, he allowed it to be called before the Authority had even met to decide whether to agree to it. This completely compromised the statutory independence of the IDA, an independence which, as Minister for Industry and Commerce under the 1986 Act Deputy Reynolds had overall responsibility to protect.

Before that, he had allowed the Goodman package to go straight to the Cabinet over a weekend, allowing the Department of Finance just one working day to examine a £120 million package. It was a package which also tied up a large share of Ireland's quota of EC grants for beef processing in commitments to one single company, the Goodman company. Deputy Reynolds was happy, it seems, that the Department of Finance had only one working day to look at that.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I did not bring it to Cabinet at all.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Taoiseach participated in the Cabinet, was collectively responsible for its decisions and was the Minister responsible for protecting the statutory independence and integrity of the IDA. If it was his own money, I am sure he would want his own accountant and finance director to have a little longer than one working day to look over the details of a £120 million project, but he was not so careful with the taxpayers' money.

As Minister for Industry and Commerce, with statutory responsibility for the IDA, Deputy Reynolds was involved in a Government decision which, in the words of the tribunal, “wrongly and in excess of its powers directed the Authority to remove the performance clause from the grant agreement being negotiated between the IDA and the Goodman Group.”— p. 284. Deputy Reynolds knew exactly what he was doing.

[244] The Secretary of Deputy Reynolds's Department, Mr. John Donlon, who considered he had some responsibility in this matter, contacted the Secretary of the Taoiseach's Department, Mr. O hUiginn, on the very day of that illegal Government decision, to tell him that “changes in the agreement are a matter for the IDA and that in effect the Government has no power to amend the agreement”.— p.237. If Mr. Donlon told Mr. Ó hUiginn that the law was being broken by the Government, he would also have told his own Minister, Deputy Reynolds. It is quite obvious that Deputy Reynolds did not care, because there is no record of him having done anything about it. This was not an isolated incident. It is part of a pattern disclosed in the beef tribunal report of disregard of laws, procedures and safeguards by Deputy Reynolds, which is repeatedly documented in that report.

There is another matter which is relevant to this debate — the decision of the Taoiseach, Deputy Reynolds, to push through a tax amnesty on coming into Government with the Labour Party. The tribunal report shows that on 17 September 1991 Mr. Goodman's auditor went to the Revenue Commissioners to admit to large scale tax evasion. I am not sure whether the Minister for Finance of the time, Deputy Reynolds, was ever made aware of this meeting between Revenue and the Goodman auditors — probably not. But he was well aware, when the tax amnesty was being prepared, and pushed through by him in 1993, that the Goodman Group had been accused of large scale tax evasion before the beef tribunal, and that the tax amnesty might therefore be useful to it. Despite this knowledge he, the Minister for Finance and I am sure the Tánaiste drafted the tax amnesty so as not to exclude from the terms of the tax amnesty evaded taxes which were the subject of investigation before a tribunal. Evaded taxes that were the subject of court proceedings were excluded, but not evaded taxes that were before a tribunal. Why?

Why did the Taoiseach, and, indeed, [245] the Tánaiste, and the Minister for Finance not draw up the terms of the tax amnesty so as to exclude from eligibility evaded taxes that were already the subject of investigation before the beef tribunal? It was a very strange omission, particularly on the part of the Labour Party, though probably in its case a sin of omission rather than commission. As it had made so many allegations of tax evasion in the first place it was very strange that it should come along and reward tax evaders identified during the tribunal proceedings by giving them a tax amnesty which enabled them to pay their taxes on a markedly more favourable basis than those in the meat business who had paid their taxes on time.

I have been reflecting up to now on what I consider to be questions about the political integrity of the Taoiseach and I will now turn to matters disclosed in the report concerning the competence of the Taoiseach.

The report finds that Deputy Reynolds, as Minister, exposed the Irish taxpayer to the loss of, at the very least, between £98.65 million and £113.13 million, against the professional advice available to him. The advice was given to him repeatedly, not only by his own officials, but by the Department of Finance and by the Insurance Corporation of Ireland, who are the State's chosen professionals in assessing the insurance risks associated with trade with particular countries.

Where a Minister rejects repeated, insistent and written advice of this kind, and he is, of course, legally entitled to do so and may well be right in doing so, the least one would expect of him, if he believed in accountability, would be that he would set down in writing at the time, his reasons for rejecting the advice. Deputy Reynolds did not do so. He just ignored the advice. Thus the officials of his Department who, under the laws passed by this House, must account to the Comptroller and Auditor General and the Committee of Public Accounts for public funds, were provided with no coherent basis for explaining these potential losses as [246] required by law because there is no written record from the Minister who rejected the advice as to why he did so. What is on record is their advice advising him not to take the course he took. There is no basis on which the Secretary of the Department can come and account for those decisions, as is required by law.

Yes, Deputy Reynolds was entitled to disregard official advice on the issue of restoring export credit insurance for Iraq in April 1987, and yes it is true that most Ministers, certainly those of drive and initiative, from time to time disregard official advice which for understandable and justifiable reasons often errs on the side of caution. No, the issue is not that Deputy Reynolds rejected official advice in April 1987. It is not even that he rejected the insistent advice on this same issue again and again, something which in my experience is very unusual indeed.

The charge is rather that he recklessly and constantly changed his policy. He first improved the conditions under which insurance cover was being offered for the export of beef for Iraq for some companies and not for others. Then he increased cover to £150 million, and later to £270 million.

This reckless abandonment of caution against official advice took place, as Mr. Justice Hamilton noted, although the situation in Iraq remained unchanged, and although the advice of the officials in his Department, in the Department of Finance and in the Insurance Corporation of Ireland remained steadfastly opposed to the course being followed. The tribunal finds that Deputy Reynolds took all of these decisions at the instigation of just one person, Mr. Larry Goodman.

Let us ponder for a moment on the careful and muted reflection — and it is certainly muted in the report in other aspects — of Mr. Justice Hamilton on the conduct of the then Minister for Industry and Commerce:

While the Minister for Industry and Commerce and the Government were [247] entitled to make their respective decisions in the national interest, the national interest would also appear to require that before exposing the State to a potential liability of well in excess of £100 million, a more detailed investigation or an analysis of the benefits of such decisions ...should have en carried out.

Mr. Justice Hamilton continued:

Such an investigation, if made, might and in all probability would, have disclosed that a large portion of the beef to be exported was intended to be sourced outside the jurisdiction and an even larger proportion had been or was intended to be purchased from intervention stock, and that the benefits to the Irish economy, arising from such exports, were illusory rather than real.

What more searing indictment of a Minister's competence could there be: that he failed to make even those elementary investigations to establish whether the enormous risk he was undertaking with taxpayers money was worth anything at all. Would not even the most junior executive in a cat food company make such preliminary checks before risking even a crate of his valuable product?

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I am a long time in business.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  He would be sacked.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  In response to the Taoiseach's interjection, the problem is that one cannot run a Government, where one is dealing with other people's money, with the same methods that one runs a company which consists almost exclusively of one's own.

All of us who have held ministerial office, if we were candid with ourselves, would acknowledge mistakes, mistakes of policy and mistakes of executive action from time to time. If we do not recall them, they will be recalled for us. [248] But is there an instance of a Minister ever having been guilty of such persistent, comprehensive and fundamental incompetence as that revealed by the report concerning the activities of the then Minister for Industry and Commerce who, thanks to the Tánaiste, is now Taoiseach?

If the then Minister had made elementary investigations he could have found out that, variously, 84 per cent and 75 per cent of the beef he was insuring at public cost was purchased from EC intervention stocks. He could also have found out, if he had made inquiries in good time, that 38 per cent of the beef insured for Goodman, was not even Irish.

Deputy Reynolds, more than any other Member of this House, claims to know and understand the meat business. In his evidence before the tribunal he made much of his “knowledge of the international market place”, his “knowledge about Iraq” and the fact that he had just spent the previous four years in Opposition developing his own business — which is in the meat trade. There is some difference between what he said to the tribunal and what he said about the passports for sale, but we will let that pass.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I notice Deputy Bruton was looking for one for somebody a couple of weeks afterwards.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Taoiseach is working away on the files, he is welcome to them because he will not have them for long.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Let the Taoiseach not run away from what Deputy Bruton has just said, we will be back.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  How can a person who claims to know the business so well also claim that he was so ignorant of it that it did not even occur to him to ask whether he was using limited insurance to cover non-Irish and intervention beef? He knew enough to ignore official advice, but he did not know enough to [249] ask the right questions. Or did he deliberately choose not to ask the right questions? I will return to that.

Some may attempt to excuse Deputy Reynolds's decision by saying that we will not have to pay out on insurance claims on the non-Irish beef, and indeed the Taoiseach attempted to do that here today. We may or may not have to pay. That depends on a court case yet to be decided and anybody who reads the tribunal report closely will see that that exclusion of Community beef is claimed to be illegal under Community law in one side of that court case. However, this excuse does not cover insuring intervention beef which was not excluded by any clause in the insurance agreement and yet providing export credit insurance for intervention beef was a total waste of taxpayers' money. Furthermore, the taxpayer may still be liable, in addition, for claims for both the non-Irish and the intervention beef under the export credit finance scheme.

It was stated in the tribunal report that the State would still be liable to the banks for exports which are covered by unconditional guarantees issued under the export credit finance scheme. In other words, we could be at a loss under that scheme for the non-Irish beef and the intervention beef regardless of any clause in the contract because the liability there is to the banks.

As Minister for Industry and Commerce, Deputy Reynolds was the Minister officially responsible for trade. One would expect a Minister responsible for trade to insist that his officials keep an eye on the trade statistics — collected at public expense. If the Minister for trade and his officials do not read trade statistics, who would one expect to read them, particularly the export statistics in regard to a product that the same Minister was providing half of all the worldwide insurance cover that Ireland was giving in respect of one product and one country? Yet throughout his period as Minister for Industry and Commerce responsible for trade, the Minister or the Department for which he was ministerially responsible, never seemed to [250] have consulted the trade statistics in regard to beef exports to Iraq. If they had they would have found that they were insuring beef to Iraq far in excess of the total amount of Irish beef going to Iraq — in other words, they would have found that they were insuring foreign beef. They should have taken the simple precaution that one would expect of a Minister and a Department responsible for trade of reading trade statistics but they did not. That has some implications for the competence of all involved, including the Minister.

It fell to Mr. Sher Rafique, not an Irish born person but a man who did a lot for this country; who obviously did read Irish trade statistics — unlike either the Minister and the Department of Trade — to be the first person to tell the Department responsible for trade on 12 December 1988 that the Irish trade statistics showed it was insuring twice as many beef exports to Iraq as were being exported from this country to Iraq. Sher Rafique had to tell them that. It was only then, we are asked to believe — and I do not believe it — that the Department and the Minister began to worry that they might be insuring non-Irish beef. The Minister responsible for this failure to read Irish trade statistics as Minister for Trade was Deputy Reynolds, a man familiar with the beef industry, who was subsequently made Taoiseach by the Labour Party. Perhaps he did not believe in reading trade statistics because they ran to more than one page.

The irresponsible over-dependence of the Goodman organisation on the Iraqi market, which contributed to its collapse, is directly traceable to the equally irresponsible decisions of Deputy Reynolds, which artificially made that market for beef far more attractive to the Goodman organisation than any other beef market. The unhealthy growth and the financial collapse of the Goodman organisation were caused by political decisions in respect of which Mr. Reynolds played a central part [251] because he led them with their own willing consent into over-dependence on an unstable market.

It is important to point out that Deputy Reynolds continued increasing the export credit exposure of Ireland to Iraq long after Iraq had started to default on its payments. It was not a case of a Minister being unable to foresee the invasion of Kuwait, as he attempted to claim here in the House, as if that was the only charge against him. Iraq had started defaulting on its payments long before it invaded Kuwait. At the time that Minister Reynolds was increasing export credit insurance exposure to Iraq by an extra £100 million in late 1988, Iraq was already £51 million overdue in paying up on the existing £122 million exposure.

Deputy Reynolds had also been told by the Department of Finance that to concentrate nearly 60 per cent of Ireland's worldwide export credit insurance on just one market, Iraq, was “at variance with the normal commercial insurance practice of spreading risk, and would leave the Exchequer extremely vulnerable if the situation in Iraq were to deteriorate”. That is exactly what happened when on 2 August 1990 Iraq invaded Kuwait. Deputy Reynolds might not have been warned of the invasion but he had certainly been warned of the risk of relying on one market for almost all the export credit insurance cover, and he still went ahead.

I now wish to turn to another issue in regard to Deputy Reynolds which I did not mention at the outset even though it is a very serious matter. This is the absolutely mysterious fact that he claims he never knew or even asked whether he was providing export credit insurance for intervention beef. To understand how amazing this claim is, one must read not only the chapters of the report dealing with export credit insurance, but also the chapters dealing with the IDA aid package and section 84 loans for the Goodman organisation. [252] I ask Members, before they come to any judgment on the charges I am about to make — which are very serious — to read all three chapters.

Right through the period when he was insuring Goodman beef exports to Iraq, Deputy Reynolds was also intimately involved in negotiations concerning Goodman getting IDA grants and section 84 loans. Deputy Reynolds met Mr. Goodman about these two issues on 9 April 1987. He was present at a Cabinet meeting at which these two issues were again discussed in detail on 26 April 1987. Again on 16 May, Deputy Reynolds met the Goodman Group specifically to discuss the breakdown in their negotiations with the IDA. These negotiations had broken down because “the Goodman Group were not convinced of the suitability or benefit of section 84 loans” as offered by the IDA to their group. The reason for that is crucial to what I am about to say. They were not convinced of the suitability of section 84 loans; that was the reason for the breakdown in the negotiations in respect of which Deputy Reynolds attended four meetings.

Deputy Reynolds again met the IDA to discuss the matter on 19 May 1987. That is a total of at least four recorded meetings about the issues surrounding the usefulness to the Goodman organisation of section 84 loans. These issues around section 84 were not solved for at least a year afterwards, which explains the delay in signing the IDA grant agreement with Goodman for such a long time after it was announced at the famous press conference. However, this problem for Goodman with section 84 loans was directly linked to the fact that Goodman was using intervention beef.

If we turn to page 294 of the beef tribunal report we will see set out by Mr. Quigley of the Department of Finance one of the central problems for Goodman in regard to section 84, which was at the heart of the IDA negotiations at which Deputy Reynolds was concerned with four meetings. Mr. Quigley told his Minister, Deputy Ray MacSharry, on 11 March 1988 that:

[253] The second section 84-related item concerns a letter from Goodman International requesting an amendment to the section 84 provisions to allow a particular company in their group to take a substantial section 84 loan to finance its export sales and its debts. This company sells processed beef on the export market on a wholesale basis and gets export sales relief on the profits of these sales. The beef is obtained partly from another company in the group which processes it, and partly from intervention.

That is what the Minister for Finance was told by Mr. Quigley directly in respect of the issue concerning section 84 which was at the heart of the negotiations in regard to the IDA package for the Goodman organisation in respect of which Deputy Reynolds, as Minister, attended four meetings in 1987 just as he was about to start this massive increase in export credit insurance to the Goodman organisation.

One of the problems for the Goodman Group in the section 84 loan offer was that the beef it was exporting “came partly from intervention”. Deputy Reynolds had four meetings in 1987 about this matter and we are expected to believe that the fact that Goodman was using beef from intervention, even though it was the central problem in the issue, was never mentioned to Mr. Reynolds. His civil servants, of course, could not have known about this, because, as I said, they were excluded from these meetings. Why?

The Department of Finance official, Mr. Quigley, went on to explain to his Minister why Goodman needed a change in section 84 to facilitate his export of intervention beef. He said: If the intervention portion exceeds 25 per cent of the total sales of the exporting company in any accounting period, then the company will not qualify for a section 84 loan. There is evidence of the systematic use by the Goodman organisation of intervention beef elsewhere in the report.

[254] On page 295 of the report, we see that Mr. Britton of the Goodman Group was quite up front about the issue in a letter to the then Taoiseach's office of 28 September 1988. He said: “If in any accounting period, non-Group processed sales by AIBP International exceed 25 per cent of total sales, then AIBP is not carrying on a “specified trade” and cannot avail of section 84”. He then proposed an amendment to section 84 so that his company “could avail of section 84 if it exported wholesale Irish processed beef notwithstanding that the beef might have been processed by another company”. It is pretty clear from Mr. Quigley's note that the only beef that Goodman was using which was not processed by itself was intervention beef. Mr. Britton was up front about the matter in his letter to the Taoiseach. As it happened the section 84 problem was never solved.

The suggested amendment to section 84 was never made. The famous IDA aided Goodman expansion plan never actually went ahead, probably for that reason.

The issue of the use by Goodman of beef “processed by another company” and its use of intervention beef specifically, was at the very heart of the negotiations between Mr. Goodman and the IDA, about which Deputy Reynolds held four recorded meetings in 1987 with Mr. Goodman and/or the IDA and the Cabinet. In these circumstances, it is quite difficult to believe that it never occurred to Deputy Reynolds, who is familiar with the beef business having spent a good part of his life in it, to inquire whether some of the beef for which he was at that time giving export credit insurance was also beef bought from intervention.

The then Minister for Finance, the former Deputy MacSharry, definitely knew that Goodman was using intervention beef, as he was the recipient of the note from Mr. Quigley of 11 March 1988, which I quoted earlier and which preceded a further huge increase in export credit insurance for Iraq. Are we to believe that Mr. MacSharry never [255] even mentioned this to Deputy Reynolds then or two months later when he brought the whole issue of export credit insurance to the Cabinet in June 1988?

Who was selling the intervention beef to Goodman anyway? None other than another Cabinet colleague of Deputy Reynolds, now Senator O'Kennedy the then Minister for Agriculture who operated the intervention agency in Ireland on behalf of the European Community and who also apparently attended all these meetings called at short notice by Deputy Reynolds to discuss export credit insurance. The then Minister for Agriculture was well aware of the point in regard to the use of intervention beef being central to the IDA negotiations because, as the Taoiseach reminded us earlier this morning, the Department of Agriculture had a central role in those negotiations and was responsible for that aspect of the IDA's operations on a day to day basis. Definitely the Minister for Finance knew, almost certainly the Minister for Agriculture knew, Deputy Reynolds attended four meetings at which the central issue at stake concerned the use by Goodman of intervention beef and we are asked to believe that Deputy Reynolds never knew, asked or was told that intervention beef was being used?

Yet Mr. Reynolds said on oath before the beef tribunal, in answer to question 716, that “knowledge that (export credit was being given for intervention beef) was not available to any member of Government”. This is simply not true. The Minister for Finance definitely knew, as documented in the tribunal report. There is also documentary evidence in the report to show that Deputy Reynolds was specifically told that another company exporting to Iraq, Halal, was using intervention beef. I draw Members' attention to page 118 of the report wherein a note of 16 December 1987 from the Irish Ambassador to Iraq, he told his Department that he would be grateful “if you [256] could urgently pass on this very confidential message to Minister Reynolds.”

In this message, Ambassador McCabe specifically stated that:

On the 22nd of September 1987 Halal bought 6340 tonnes of beef from the Irish Intervention Agency. The purchase was specifically for the Iraqi market.

As we know, for other reasons, Deputy Reynolds never actually gave export credit to Halal. However, the fact that he knew Halal was using intervention beef for Iraq was never given by him as one of his reasons for refusing it export credit. Thus it is plain that as early as December 1987 Deputy Reynolds is on record as knowing that intervention beef was being used by at least one Irish company supplying Iraq. Why did it not occur to him to ask whether other companies, Goodman and Hibernia, to whom he had extended such huge amounts of export credit insurance were doing the same? Why did he not ask?

The evidence is circumstantial, it is not direct or absolute proof. No one was actually sitting there when Deputy Reynolds asked if intervention beef was involved and was told “yes” but there is a lot of evidence to suggest that such a discussion took place. It is hard to escape the conclusion that there is something very peculiar indeed in Deputy Reynolds' claimed failure to ask, at any stage over a period of almost 18 months, whether Goodman and Hibernia were using EC intervention beef for their export to Iraq on which he was giving them such exceptionally generous export credit insurance at the taxpayers' expense.

At the tribunal, Deputy Reynolds gave evidence that the first he heard that he had been insuring intervention beef was at the tribunal itself. This again is simply not true. In June 1989 — two years earlier — he told Mr. Rory Godson of the Sunday Tribune he knew, at that stage at least, that intervention beef was included in the beef he had insured earlier.

[257]The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Wrong. I hope the Deputy accepts my word.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Mr. Godson, whom I know as well as I know the Taoiseach, gave his evidence on oath to the tribunal to that effect. The House will have to decide. I have a lot of time for Mr. Godson.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  I hope in a private conversation——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I also have a lot of time for Mr. Joe Timbs and Mr. Dominic McBride with whose evidence the Taoiseach's also differs and whom I also probably know better than I know the Taoiseach.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  The tribunal dealt with that evidence.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Without any evidence to back it up, it took away the reputation of those civil servants in a grossly unfair way.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  It did not.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I know those civil servants personally and it is appalling that their evidence was rejected. Even though Mr. Donnelly backed up Mr. Timbs the tribunal chose to accept Deputy Reynolds's word and reject the words of Mr. Donnelly and Mr. Timbs.

The Taoiseach: Information on Albert Reynolds  Zoom on Albert Reynolds  Talk to the judge.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I do not believe the Taoiseach's evidence on this matter; I believe he knew from early on that he was insuring intervention beef and that the tribunal would have come to the same conclusion if it had drawn together competently the evidence spread throughout different parts of the report which shows that it would have been almost impossible for the Taoiseach not to have found out or been told he was insuring intervention beef.

I should now like to turn to three [258] related matters: first, the truthfulness of other Ministers' replies to questions put to them under oath at the tribunal; second, the attendance of civil servants with the Taoiseach at official meetings and, third, the news that the DPP is to take an action against the journalist Susan O'Keeffe. It is interesting to note that in a public opinion poll two weekends ago 84 per cent of people questioned believed that a Minister who was found to have lied to the Dáil should be either forced to resign his seat — 41 per cent — be dismissed as a Minister — 30 per cent — or be suspended from the Dáil — 13 per cent. Only 15 per cent of those questioned believed he should get away with a public reprimand. That was the public reaction to Ministers misleading the Dáil and I presume the public would take an even more severe view of Ministers misleading the tribunal. My colleague, Deputy Avril Doyle, will detail the very serious discrepancies in evidence given to the tribunal by the Minister for Agriculture, Food and Forestry, Deputy Joe Walsh, and the reasons these are particularly serious matters for him, the Taoiseach and the Tánaiste. I hope the Minister will deal with these matters in his reply to the debate.

My second point deals with the way the Taoiseach did his business in regard to both export credit insurance and the IDA and how this placed civil servants and the taxpayer in needless jeopardy. The Taoiseach is now known to have had meetings concerning public business and taxpayers' money with Mr. Larry Goodman on 13 May 1987, 19 May 1987, 21 May 1987, 8 July 1987 and 13 November 1987. Apparently, most or all of these meetings are now known about by the civil servants in the Department only because they appear in his diary which he had to hand up to the tribunal. He probably had many other meetings which are not recorded in his diary. Even though all these meetings concerned taxpayers' money the Taoiseach chose not to be accompanied by a civil servant at any of them. It would appear that he did not trust [259] either the discretion or confidentiality of his civil servants. This is a serious matter.

The consequences of the Taoiseach's decision to exclude civil servants from these meetings was that, first, there was no record of what happened at them and this put the State at an immediate and unnecessary disadvantage in any legal dispute that might arise about what might have been decided at these meetings. At least one of these meetings between the Taoiseach, without a civil servant, and Mr. Goodman will figure in a forthcoming multi-million pound court case. To be unaccompanied by civil servants in such circumstances was reckless of the Taoiseach. Second, the lack of any official presence at these meetings means that the departmental secretary who is obliged by law to account to the Comptroller and Auditor General and the Dáil for any financial commitments entered into at these meetings will be unable to do so because he was not represented there and has no record of what happened. This deliberate — I am convinced it was deliberate — exclusion of officials from meetings by a Minister undermines the entire system of accounting for public money which was introduced to counter political corruption and bribery many years ago and which has worked very well. I think this system dates back to the 1860s.

It is noteworthy that the Taoiseach and Mr. Haughey are the only former Ministers mentioned in the tribunal report who excluded officials from meetings they had with outsiders. Minister of State Deputy Brennan, and Deputy Burke are shown clearly in the report to have had civil servants present at meetings they had with meat companies. This was also normal practice under previous administrations. It is highly suspicious that, unlike Minister of State Deputy Brennan and Deputy Burke, the Taoiseach and Mr. Haughey chose to exclude officials from their meetings.

I now want to turn to the most recent [260] disturbing development to emerge from the tribunal report, that is the news that the Director of Public Prosecutions is to take an action against the journalist Susan O'Keeffe in respect of her evidence on her allegations which lead to the establishment of the tribunal. This news is a sign of unprecedented double standards. If Deputies, one of whom is present in the House, can make allegations and call for a tribunal to be established to investigate them and then refuse to disclose the sources of those allegations to the tribunal, as I did in respect of my allegations, and get away with it, then it is very hard to explain why a journalist who refuses to disclose her sources should go to jail.

Essentially what we have been discussing in this debate is the fitness for office of the Taoiseach, Deputy Albert Reynolds. Other issues such as the conduct of the Taoiseach's predecessor and, in particular, the conduct at the tribunal of the Minister for Agriculture, Food and Forestry have and will intrude but essentially we are talking about the fitness for office of a person who apart from the President holds the highest office in the State. There is revealed in the report and in the evidence I have put carefully before the House today a pattern of conduct which shows that the Taoiseach is unfit not only for the office he holds but for any senior public office. I have demonstrated the validity of this most serious charge in my speech.

Before the last election the Labour Party put itself forward as the party that would clean up public life. I do not doubt its sincerity but I question some of its exaggerated language because it accused other politicians of being a cancer on public life and having low standards. The time has come for the Labour Party to put its standards to the test. I believe I have shown that the beef tribunal report reveals the Taoiseach, Deputy Reynolds, to have systematically acted in a manner unfitting to his office as a Minister. The Labour Party or the Fianna Fáil Party has to put that right. We will then see which of the two parties has the higher standards.

[261] I do not want to detain the House unduly but I wish to refer specifically to some points made by the Taoiseach. He spent a lot of time dealing with allegations made by Deputies O'Malley and Rabbitte. Forty seven allegations were made by the Tánaiste, Deputy Dick Spring, and Mr. Barry Desmond but significantly the Taoiseach did not refer once to any one of those allegations in the course of his superficial and self-justificatory speech. There was no expression of regret by the Taoiseach for any of the mistakes he made: no regret, therefore no accountability. He attacked Deputy Rabbitte on the grounds that the tribunal said there was no basis for one of his allegations. Yet he sought to defend himself on the contradictory ground that the tribunal found there was no evidence for the allegations against him. He cannot have it both ways. If Deputy Rabbitte is not vindicated, the Taoiseach is not vindicated.

The Taoiseach tried to defend his speech of 21 June, 1988 on the grounds that it had been prepared by civil servants in his Department and that he delivered it as it was written as confirmed in the files of the Department of Industry and Commerce. That was his justification for giving a misleading speech. As I have shown, the civil servants could not possibly have written an accurate speech because they were excluded from virtually all the important meetings at which the decisions are taken. Therefore, the Taoiseach's defence of himself as Minister for Industry and Commerce, against a charge made by Deputy O'Malley is entirely groundless.

The Taoiseach made a number of references to me which I will ignore. In defence of his attitude to advice in matters pertaining to the Tribunal of Inquiry into the Beef Processing Industry he instances his alleged attitude to official advice in respect of the peace process. He said:

This week has seen a major and historic move towards the establishment [262] of peace on this island. Does anyone think that, in helping to reach this point, I have not had to take many critical decisions, without being able to take cover behind official advice? Does anyone think we could have reached this point without personal political initiatives and risk-taking on my part? The country is fortunate that I did not take official advice in this case.

I ask the Tánaiste and Minister for Foreign Affairs to reflect on what the Taoiseach was saying about civil servants in the Department of Foreign Affairs and in the Taoiseach's Department. He was, totally unnecessarily, and for a party political purpose, advertising the fact that he disagreed with the advice of his civil servants. For the first time he has put on public record the fact that official advice was against the things he did to achieve peace.

That places civil servants in the Department of Foreign Affairs in an appalling position. They cannot reply to this criticism of their advice in this House. The only person who can do so on their behalf is the Tánaiste and Minister for Foreign Affairs, Deputy Spring. Even if the Tánaiste — as I expect he will — defends his civil servants stoutly from this criticism which probably is unjustified, that does not end the matter because it is entirely inappropriate for the Head of the Government, with whom the buck stops, to land his civil servants in public odium in the manner in which the Taoiseach did in the course of his remarks in this House today. It is entirely unacceptable and demonstrates beyond all doubt the case I have been making throughout my contribution, that this man is unfit for office.

The Taoiseach made a number of other points of considerably less importance in the course of his contribution to which I have already replied. However, there are just two to which I will refer. The Taoiseach sought to hide behind the fact that the Tribunal of Inquiry into the Beef Processing Industry was [263] expensive. For example, towards the end of his contribution he said:

However, it is going a bit far to insist on an extremely expensive tribunal in the hope that this will somehow provide proof of their allegations.

The first person in this House to call for the establishment of this tribunal was Deputy Spring, Leader of the Labour Party in Opposition. It is a call for which he does not deserve criticism, a justifiable call, which I supported much later. The Taoiseach owes not a little gratitude to Deputy Spring.

The Taoiseach referred to the tribunal being expensive. I would remind him that the Attorney General who set the scale of fees was a Fianna Fáil Attorney General, that the Attorney General kept the scale of fees at the initial level — even when it became known that the tribunal would continue for much longer than at first anticipated and failed to avail of the opportunity available to the Attorney General in normal High Court cases which continue longer than expected — to renegotiate the fees at a lower level on the grounds that there is a much longer time involved and that the barristers will get enough money anyway. The Attorneys General responsible for the cost of the tribunal are both Fianna Fáil appointees, members of the Taoiseach's party.

I suppose most ironic of all were the pieces of flannel introduced into this debate by the Taoiseach in his announcement that he is “very much in favour of a freedom of information Act”. That must be the most humorous line in this debate, or likely to be heard in this debate before it concludes in two days time. This from the Taoiseach who refused a question and answer session this morning on these very important issues, who refuses to answer questions on these issues in the House, who has made the one contribution to this debate, and has now left the House and will not contribute again. This is the [264] man who believes in freedom of information but refuses to answer questions. Could anything be more ridiculous than that? Could anything demonstrate more eloquently that this man does not connect with the real world as should the holder of his office?

Tánaiste and Minister for Foreign Affairs (Mr. Spring): Information on Dick Spring  Zoom on Dick Spring  This debate takes place in the shadow of some of the most momentous events in our recent history. The work that needs to be done in the weeks and months ahead, in building a lasting peace in Ireland, will require stable and coherent Government, unfettered by any internal bickering. It will require the Taoiseach and Tánaiste of that Government to work together, with all our colleagues and with Opposition leaders, in an atmosphere of frankness and trust. We all have to provide leadership, now more than ever.

The issues raised by the beef tribunal report are serious. They cannot be swept under the carpet. They too deserve to be treated with frankness and honesty.

I intend to speak in this debate primarily as Leader of the Labour Party. In doing so, I do not intend to neglect or ignore my duties and responsibilities as Tánaiste in this Government, but it was in my position as Leader of the Labour Party in Opposition, that I called for the establishment of the beef tribunal. In that role I made certain allegations, which were subsequently investigated by the tribunal. I see it as my responsibility to speak about the tribunal from the same perspective, now that its report is to hand.

With certain reservations, which I shall make clear, I accept the findings of Judge Hamilton. I acknowledge the painstaking work that has gone into the report. I do not believe I am exaggerating when I say that the way we in this House deal with the report has the potential to mark a defining moment in the public life of this country.

For all of us in public administration, for those engaged in the conduct of business, and for anyone whose work [265] brings them into contact with the development of public policy, the lessons of this report are clear, and must be mandatory. I intend to try to spell out those lessons as I see them, and to try to approach the issues involved in as honest and constructive a way as I can. Therefore, I must begin by dealing with a number of issues in particular in which I am personally concerned.

First, I made a number of allegations in this House about the conduct and regulation of the beef industry. The report prepared by Mr. Justice Hamilton finds that in respect of a minority of those allegations, I was wrong, sometimes in areas of substance, sometimes on points of detail. I believe that most of such inaccuracies must be viewed in the light of the inadequate information which was made available by the relevant authorities at that time.

However, the report also finds, in respect of a number of other allegations I made, and these would in the main be the more important ones, my allegations were wholly substantiated. Therefore, what I have just said should not be construed as applying to the principles of the Goodman group, or to any of those who manipulated, or were caught up in, the culture that surrounded the activities of that company and its interaction with a particular Government. As I did throughout the tribunal, I stand today over the allegations I made about that culture, as it operated then.

I am grateful for the acknowledgement in the report of the assistance I gave the tribunal, particularly in respect of its investigation in the Rathkeale plant, where a major fraud was uncovered.

Second, I have been criticised in the past for refusing to reveal the identities of those people who gave me information. I stand over that decision. Public representatives occasionally come across information, supplied in good faith by private citizens concerned about lapses in public administration. That information is often offered in return for a promise of confidentiality.

Public representatives have a duty to [266] use such information if they believe the public interest demands it. It would be unconscionable if the people who supplied such information were to be exposed to vindictiveness or revenge, as a result of public representatives breaking pledges given to them.

It is noteworthy, and I believe any examination of the report will establish this, that no allegation I made depended ultimately on the identity of the people who gave me information. Not a single one of the allegations I made based on such information was found to be false in substance. That speaks volumes about the honour and good faith of the people who supplied me with the information in the first instance. What is true of public representatives is also true of journalists acting in good faith. Whatever criticisms were made of aspects of the “World in Action” programme, it is clear that the programme as a whole served the interests of our community. I was shocked to discover from last weekend's newspapers that the journalist whose work led to the making of the programme is now subject to arrest.

There have been many stories based on leaks in our newspapers in the last couple of years. Nobody has ever been prosecuted. Yet how a journalist who has acted honourably to seek to expose wrongdoing is apparently to be put to the hazard — not in respect of any inaccuracies in the programme, but only in respect of the honourable and decent decision to protect the confidentiality of individuals who fear for their futures if that confidentiality is broken. This despite the fact that the work of the tribunal is now over — there are no more questions for her to answer.

I have written to the Attorney General, asking him to prepare a report for the Government on those aspects of the findings of the report which suggest criminal activity, and to outline the steps he intends to take to institute prosecutions in all appropriate areas. He has advised me that a copy of the report has been supplied to the Director of Public Prosecutions, and that the relevant authorities have indeed been [267] carefully monitoring the accumulating evidence.

Everyone in this House, I know, believes it would be totally unjust, in the face of overwhelming evidence of wrongdoing, if the only person prosecuted was the journalist whose work sparked off the investigation of those wrongs. There are of course constraints on what can be done, arising from the proper and necessary independence of the office of Director of Public Prosecutions.

Having regard to those constraints. I am examining what steps might be open, and I hope shortly to be able to propose to my Government colleagues ways and means to prevent the enforcement of legal penalties against anyone who acted in good faith in refusing to name sources to the tribunal.

Third, I must refer to the remarks made by some Opposition Members in regard to the issue of costs associated with the tribunal. The tribunal has decided that costs should be awarded to almost everybody who sought and was granted legal representation before it, including Deputies Bruton, O'Malley, Rabbitte, and others. This has been presented in such way, particularly by Deputy Yates, as if to imply that I am likely to profit from the tribunal.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  He did not say that.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  This would be a lie, as his leader would obviously know and I believe that Deputy Yates knows it to be a lie. At the outset of the tribunal, I was granted representation in respect of the allegations I had made, just as others were. In my case, as in the case of Deputy Rabbitte, for example, that representation covered a wide area. In addition, I provided assistance to the tribunal in relation to a number of the matters it was investigating — I have already referred to Rathkeale, for instance.

It is well known that one of the areas that caused considerable confusion at various stages in the life of the tribunal [268] was the issue of who represented the public interest. Through my lawyers, I made a number of efforts to ensure that the wider interests of the public were as fully represented as possible.

As Deputy Yates knows full well, I will not receive one penny as a result of costs being awarded to me — neither will any of the other Deputies I mentioned. Far from profiting financially, on the day representation was granted, I took out a bank loan for a significant amount.

The purpose of the loan was to help defray the expenses associated with representation — the costs of, for example, daily transcripts of the evidence, clerical and research work, and so on. Counsel involved on my behalf were paid small retainers — far smaller than they could normally expect to command — and apart from that, have never been paid any fees during the more than two years that they worked, diligently and with great skill, in seeking to assist the tribunal to get at the truth.

My solicitors, Spring Murray and Company, of which my brother Donal is a partner, were never paid any fees— not even a retainer — and bore a great deal of the “third-party” expenses involved. I imagine that Deputy Rabbitte in particular will appreciate the importance, in difficult circumstances, of being able to rely on lawyers who will devote themselves diligently to so complex a subject in such circumstances.

Against this background, I regard it as wild and cheap abuse to suggest that the tribunal was used or exploited by me to generate income or profit.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  He did not say that.

Minister for Enterprise and Employment (Mr. Quinn): Information on Ruairí Quinn  Zoom on Ruairí Quinn  He implied it.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  The fees that will now be paid will only be paid——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is an attack on a straw man.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Order, [269] please. The Tánaiste is entitled to the same level of order as obtained in the debate to date.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  My understanding is that the Tánaiste is misrepresenting what Deputy Yates said.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  There is to be no further interruption, please, from any side of the House. Order, please.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  The fees that will now be paid will only be paid because Mr. Justice Hamilton ordered that they should be, and the amounts involved will be independently assessed and become a matter of public record. I expect Deputy Yates to have the common decency to withdraw his innuendoes in the matter. It is noteworthy that apart from his personalised attacks, he has had little or nothing to say about the issues thrown up by the report itself, or during the course of the tribunal's work.

Fourth, I must comment on the manner in which the report was selectively leaked to the media when it originally became available.

The Labour Party entered Government at the start of 1993 on the basis of an agreed programme, which was painstakingly negotiated over several weeks. That programme, in its first couple of sentences, described the Government as a partnership Government, new in character, and based on close co-operation and mutual trust. In its last sentence, the programme says “in all that we do, we will try to bring out and reflect our national character and spirit at its best”.

Since the day the Government was formed. I have tried to be true to the letter and the spirit of that programme. I have accepted that the strictures of the programme have placed an obligation on me to be supportive of Government at all times, and to work as hard as possible to maintain the coherence and stability of that Government.

However, the initial handling of the beef tribunal report failed to reflect the [270]“close co-operation and trust” on which the Programme for Government is founded and has to be founded. In that sense, it was completely unacceptable to me. It was also counter-productive. The Taoiseach is aware of my strong feelings in this matter. We have worked closely together on many crucial issues in the past 18 months — none more important than the issue we discussed in this House yesterday. I believe that the trust on which we founded this partnership has been enhanced by that work.

We have discussed the leaking of sections of the report candidly with one another. He knows that that action damaged trust. The Taoiseach knows that I am prepared to work to restore it, and I believe he is too.

The truth is that if both sides of this Government are willing to see it as a genuine partnership, which puts the interests of the people first, this administration will succeed at its many tasks. If delicate and sensitive situations are to be played for party or personal advantage, this Government will fail.

I do not want that to happen — but it is not up to me alone. It will require a new commitment on all sides. I hope later to be able to demonstrate some of the elements of that new commitment that I believe are necessary.

I want now to turn to the report itself, but I do not intend to quote at length from it. My primary interest is in seeking to draw appropriate conclusions, and if possible to learn lessons. I said earlier that with some reservations I accept the findings of the report, even when they have been critical of my own actions and allegations. Perhaps, therefore, I should begin by pointing out those areas of the report about which I have reservations.

In fact, there is one aspect of the report with which I profoundly disagree. On page 12 of the report Mr. Justice Hamilton states that the tribunal is satisfied that contributions made by companies to persons engaged in the food processing industry were “normal contributions made to political parties (which) did not in any way affect or [271] relate to the matters being inquired into by the Tribunal”.

I believe he is wrong. I do not accept that the tens of thousands of pounds paid or offered to Fianna Fáil, Fine Gael, and the Progressive Democrats were gifts based on a philanthropic desire to further the cause of democracy in Ireland. It may stand to the credit of the recipients if that money never played any part in the decision-making process, but it would be naive to assume that it was not intended to.

If there is one lesson that must be learned from the beef tribunal report, and absorbed by every Member of this House, it is that we must get to the point quickly where even the appearance of private money affecting public policy decisions is treated as an issue requiring nothing less than total transparency. I will return to this subject later.

In his introduction to the report, in what is probably a key paragraph in terms of understanding the report as a whole, Mr. Justice Hamilton states that the function of the tribunal was to “carry out a simple fact finding operation” into the truth or otherwise of the allegations made.

He goes on to say that in presenting the report, the tribunal “has sought to confine itself to that function”. It is our job now to learn the lessons from the facts, and to ensure that those lessons are applied for the future.

It may be doing an injustice to a report of such weight and complexity to attempt to summarise it briefly, but I suggest that the main findings of fact arrived at by the tribunal can be interpreted in a few short sentences. It may be that in order to understand the full import of the tribunal's findings, we have to read between the lines of the report as well.

If we do so, the following are the most serious of the conclusions we must come to: although no one person is held responsible, the tribunal has found that over the years, operations in Goodman companies were run in a corrupt fashion. The scale of irregularities, and [272] the systematic and wholesale tax evasion involved, leave no room for doubt on this point. The interaction between the company and the Government of the day gave rise to what I have already referred to as a policy disaster. The lack of effectiveness of the regulatory authorities in relation to the company was a critical failure of public administration. The role played by professional advisers in the operations of the company gives rise to the most serious questions. The failure to deal openly with legitimate concerns and questions, and to provide a proper level of accountability, represented a major breach of public trust. I want now to elaborate briefly on each of these points.

In relation to the Goodman companies the tribunal has found, to use the words of the report, that the allegations made with regard to under-the-counter payments to employees were fully substantiated. There was a deliberate policy in the Goodman Group of companies to evade income tax and PRSI on employee payments, by making such payments, by concealing them as fictitious payments, and by producing deliberately misleading records calculated to deceive the Revenue authorities. The report states:

The system of concealment was common in all relevant plants, was known to the top management of the group, was undoubtedly authorised by them and ... was very well and professionally put together and had been organised by a large organisation and it had been put together by professionals.

To put it bluntly, cheating the Exchequer in this way was the policy of the company, and it was authorised and organised from the top. Who made the policy? Who did the organising? Who was responsible? The report, limited as it is to fact-finding, does not tell us the answers to these questions.

What it does tell us is that there is further work to be done. If in such a large company there was a policy of tax fraud — one can call it nothing else —[273] and that policy was masterminded from the top of the company, then the masterminds cannot be allowed to walk away scot-free. From the wealth of fact and evidence available, in the findings of the report and in the documents and other evidence submitted to the tribunal, the work of criminal investigation must now begin. There is no other way.

Of course, this is not the only area in which a great deal of further work needs to be done in relation to the Goodman companies. The evidence of widespread irregularities in Goodman plants represents a damning indictment of the most senior management of the group. In the report, Mr. Justice Hamilton states that it has not been established that the “many irregularities and malpractices” identified were carried on in all plants or with the knowledge of Mr. Larry Goodman and his senior management.

He goes on to say, however, that they must accept responsibility for them, for failing to exercise effective control and supervision of personnel, and ensuring compliance with the requirements of all relevant regulations applicable where public funds are concerned.

Indeed, I think it will be clear to any fair reader of the report that compliance with regulations was usually the furthest thing from the minds of Goodman management people. The ingenuity employed in cutting corners was at least as great as the ingenuity employed in cutting beef. The implications of this finding for the regulatory authorities at every level are profound.

In relation to the “policy disaster”, the tribunal report finds no evidence of political favouritism in the relationship between the minority Government of Mr. Haughey and the Goodman company. I accept that but if there was no political favouritism, there was no shortage of major policy actions by the Government of the day designed specifically to assist the Goodman Group.

Public support for the promotional efforts of the group, export credit [274] insurance, grants, rapid access to Ministers when public servants raised objections to requests were all dominating features of the policy of the then Government in 1987-88. There is no doubt about this.

To the credit of those directly involved, it appears that some sort of sought-for favours were turned down — requests to have obstreperous” officers removed from plants, for example. In the area of policy, however, it is clear that the entire culture of the Government of the day was “whatever Larry Goodman wants, Larry Goodman gets”.

This led to an unlawful decision to interfere with the decision-making processes of the IDA. It led to the reintroduction of export credit insurance for Iraq, against all the best advice available. It led to the limit on that insurance being increased whenever Mr. Goodman wanted it, and ultimately to the substantial exposure of taxpayers' money. It led to the advice of experienced and capable public servants being ignored and overridden time and time again — to the point where their advice was almost irrelevant to the development of public policy. It led to breakdowns in the normal relations between Government Departments, with a consequent effect on good Government procedure and practice.

All this happened against the background of a mistaken conception of where the national interest lay. Research which should have been carried out was not. If information readily available in the Department of Agriculture had been sought by, or made available to, the then Minister for Industry and Commerce, no argument about the overriding national interest could or presumably would have been employed to ignore the advice given.

These are the facts, as the tribunal has established them. The tribunal has taken pains to emphasise that even though serious mistakes were made, the motivation behind them contained nothing improper. The tribunal has also recommended ways in which such mistakes might be avoided in future.

[275] When this Government was formed, the Programme for Government contained an explicit commitment that the recommendations of the beef tribunal would be honoured in full. It was no secret then that the report could contain much that was critical, and so it has proved.

This Government will take every possible step to ensure that all the recommendations of the beef tribunal in relation to this area will be implemented.

Indeed, I believe that we should go further than the tribunal has recommended, and I will be proposing to my Government colleagues that a detailed annual report of the operation of all export credit policies should be published and laid before this House in future, so that all decisions can be examined closely and in the open light of day. In this area, as in so much else that surrounds the activities which led to the tribunal, the culture of secrecy has to end. It will be said by some people in Opposition that Labour should pull out of Government as a result of this whole affair.

I might remind the House that the aftermath of the 1992 election was not the only time when suspicion about some of these matters affected the atmosphere. A great deal of what is known now was widely known and suspected in 1989. Indeed, just to give one example, a substantial article in The Irish Times of 8 June that year — about a week before the 1989 General Election — summarised “serious discoveries” that had already been made and publicly discussed about the beef industry.

They included concern about export credit insurance and misleading statements about regulation by Government Ministers. This article was published as part of a daily series outlining the issues of the election campaign. Issues concerning the beef industry were not the only issues in the election campaign that year, but they were prominent enough for a number of senior political figures [276] to make speeches attacking Fianna Fáil on the matter.

Notwithstanding such expressed concerns, in the aftermath of that election, which as we all remember resulted in the loss of a number of Fianna Fáil seats, one Member of this House who consistently argued that it was in the national interest that a new alliance should be formed, to give the country stable Government.

The coalition he advocated then was to be between Fianna Fáil and Fine Gael under the leadership of Deputy Haughey and the person advocating it did so at least three times — on Sunday 18 June during a radio interview, on Wednesday 21 June at a party meeting——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Was the Tánaiste at it?

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  ——and again on 28 June——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  How does the Tánaiste know that?

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  ——also at a party meeting——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  This is incredible.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  ——where he argued for a much more flexible negotiating position with Fianna Fáil than had been published by his party leader.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  This is definitely bull beef.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  That single minded and persistent Deputy——

Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  Is Deputy Bruton blushing?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I am not.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  ——who eventually had to be contradicted by his party leader, was Deputy Bruton. He advocated [277] Government with Deputy Haughey, when these controversies were still fresh. Now, he argues that events of six and seven years ago should bring down the Government.

I believe he knew more about some of the events than the rest of us did, given his links with the IDA. Although Deputy Bruton did not allege interference in the IDA until 1991, an identical allegation——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  On a point of order, I want to correct that point now. That is a lie proved by the report and I ask the Tánaiste to withdraw it.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton, please desist.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste has made an untrue statement about me. He said that the first——

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton the Tánaiste is in possession.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I wish to clear my name now.

Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  Deputy Bruton was the first to blush and he is now blustering.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  A fraudulent statement about me was made by the Tánaiste and I ask him to withdraw it. I will prove its falsity now if he will yield, as the orders of the House allow.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  It is the practice in this House——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste's statement is false.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton, please desist.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  No Sir. The Tánaiste made a false statement and I ask him to withdraw it.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton, I will not tolerate defiance by any [278] Member of the House. Deputy Bruton said that the allegation is untrue. In such circumstances the Member's view must be accepted.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Allow me to demonstrate that.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  I will not enter into an argument——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Will the Tánaiste allow me to satisfy him and the Labour Party that the allegation is false?

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  What allegation?

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  If the Deputy disclaims the allegation, it should be accepted.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  As the Tánaiste impugned my name, will the Chair allow me to clear it?

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton is hindering the Chair in directing this matter in the proper way. If Deputy Bruton discounts the allegation made, his word, in accordance with usual practise, should be taken.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Will the Tánaiste withdraw it?

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  I do not have any difficulty with this matter. My research shows that Deputy Bruton made his allegation about the IDA in 1991.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is false.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  If Deputy Bruton can convince me otherwise I will have no difficulty in withdrawing it.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I made my first allegation in 1987 as reported in the Sunday Press. It is documented in the report that I followed it up——

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Bruton made his contribution largely without interruption. He must now desist.

[279]Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Please allow me to clear my name.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The Tánaiste has been good enough to accept your word on this matter.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste made a false allegation which is on the record. I followed up my first allegation made in 1987, not 1991, in a series of correspondence documented on page 897 of the report.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  When was the first time Deputy Bruton brought it before the House?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I mentioned it in the public press.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I will not have the Deputy disrespect the Chair. I have clarified the matter to the best of my ability.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste made a false statement about me and I ask him to withdraw it.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  The statement is that Deputy Bruton raised the allegation about interference with the IDA in 1991 in the House.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste said that I did not make an allegation about interference with the IDA until 1991 and that statement is false. I made it in 1987 and repeated it in correspondence with the IDA in 1988. I ask the Tánaiste to withdraw that statement.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I must ask Deputy Bruton to desist and resume his seat or leave the House.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  If Deputy Bruton informs me that he made the statement prior to 1991 I accept his word for it. I do not have any difficulty with that.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That casts doubts on [280] the credibility of the other statements made by the Tánaiste.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  It does not. If Deputy Bruton knew of that matter in 1987 he should not have proposed coalition with Deputy Haughey, in 1989.

A Deputy:  That proves the point.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  It does not.

(Interruptions.)

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is rubbish.

Mr. Allen: Information on Bernard Allen  Zoom on Bernard Allen  The Tánaiste is a smart alec without substance.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  The Deputy was muttering and I did not catch what he said. He is doing as he usually does.

Mr. Allen: Information on Bernard Allen  Zoom on Bernard Allen  I can stand over it.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Allen, please——

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  To be accused of being a smart alec by Deputy Allen knocks me really flat.

Mr. Allen: Information on Bernard Allen  Zoom on Bernard Allen  The Tánaiste cannot stand over what he said. He is a man of jelly.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Allen, you may not ignore me. If you cannot listen to the Tánaiste's speech without interrupting you have a remedy — there are many avenues out of this House.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Tánaiste made statements documented to be false.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  In relation to the Regulatory Authorities, the report makes clear that over the years under investigation there were a great many lapses of regulation — mainly caused by inadequate staffing and management. It is also clear that these weaknesses were ruthlessly exploited at every opportunity by individuals working for the Goodman companies. The report goes [281] on to point out that remedial action was taken over a wide range of areas, and expresses itself satisfied in the main, with the current position.

We should be prepared to go further. The excuse given in the past for covering up information about wrongdoing in beef processing companies was that to reveal instances of such wrongdoing would damage the competitive position of the companies. That excuse should not be allowed to wash any more. It should be a feature of the regulatory regime in future that companies who bend or break the rules are liable to be held publicly accountable, in addition to any other penalties that might be imposed. In this area annual reporting should be introduced to enable Members of this House to see for themselves how well the regulations, which are essential for the safeguarding of public money, are being operated.

One of the important issues raised by the tribunal is the role of professional advisers in difficult legal and commercial situations, their interpretation of their codes of conduct, and their responsibilities, if any, to the community at large. In the Greencore and Telecom reports also, a relevant feature was the role of external advisers. The published material in these reports helps to educate the general public and politicians as to how large-scale business in practice interacts with external professional support.

The tribunal has major implications for policy concerning the legal scope of the duties of auditors, the nature of the responsibility of auditors to shareholders, in particular the obligations — or lack of them — for disclosure of activities such as widespread tax evasion and their role in devising remedial measures for their client organisation.

Auditors, if the material outlined in the tribunal report is in substance at all representative, may find themselves in strange situations in seeking to justify or represent the activities of clients. For example, commonsense indicates that unauthorised advances taken by [282] employees are not the same as payments to employees free of deductions of income tax and PRSI deductions and no amount of paperwork will convince a sensible person that they are.

In the commercial world, most professional organisations do not like losing clients. The issue is that they must function in a regulatory framework consistent with standards that are fair, reasonable and serve the public interest.

In the tribunal report, there is extensive reference to part 5 of the Miscellaneous, Legal, Ethical and Practical Guidance issued by the Institute of Chartered Accountants of Ireland, including headings like withdrawal of services; auditor's duty to examine; duty to shareholders of a company; auditor's report; suspicion of client's conduct.

What these mean is a matter of commonsense judgment coupled with practical expertise. What the tribunal concluded is clear:

While the Tribunal is satisfied that the Companies' Auditors acted in accordance with their responsibilities as set out in Paragraph 14 of the Miscellaneous Legal, Ethical and Practical Guidance issued by the Institute of Chartered Accountants in Ireland which provided that:-

‘If an auditor discovers an act he believes to be illegal or questionable, he must report to, and obtain consideration of that act from the appropriate level of authority within the entity. In certain cases, this may necessitate his reporting in such a manner as to bring the matter to the notice of the shareholders’.

The Tribunal considers that in the case of tax evasion the obligations placed on an auditor should not be limited to reporting such tax evasion to the “appropriate level of authority within the entity” or bringing the matter to the notice of the shareholders but should be extended to oblige them to report such evasion to the Revenue Commissioners and recommends that a provision which [283] would have that effect, be included in the next Finance Bill to be placed before the Houses of the Oireachtas.”

This is a significant recommendation, which will cause an outcry among some professional bodies, and may well set interesting precedents. It will have to be implemented in full. In addition, the merits of any associated or consequential legal changes will have to be examined.

The first reference in this House to irregularities in the beef industry may have been made by former Deputy Barry Desmond, who outlined penalties that had been imposed on the Goodman operation in Waterford. He was accused almost immediately by the then Taoiseach, former Deputy Haughey, of a deliberate attempt to sabotage the beef industry. Later, a statement was issued by the then Minister for Agriculture which contradicted the assertions made by former Deputy Barry Desmond. The Goodman company itself issued public statements denouncing Barry Desmond.

Yet, former Deputy Barry Desmond was simply stating facts when he made his allegations in this House. The reaction to those facts was an instinctive pulling down of the shutters. It was the first illustration, and a good one, of the culture that surounded the relationship between the Goodman group and Deputy Haughey's Government.

Later, in an attempt to ascertain the facts of this and other situations of which we were aware, former Deputy Desmond and I tabled a series of Dáil questions to the Minister for Agriculture. One of the Books of Evidence prepared for the beef tribunal contains those questions, which were intended for written reply. It also contains draft after draft of possible answers to the questions we tabled.

What is remarkable is that in each succeeding draft, there is less information than in the previous one until. finally a bland and anodyne recitation of policy and practice was substituted for the information we sought. It is [284] quite clear to anyone who glances at the book that hours of painstaking work, from the highest level down, was put into the task of depriving us, as public representatives, of legitimate information.

This incident was symptomatic of many similar instances. Taken together, the entire range of obfuscations, misinformation, and misleading information — about every subject that had even the remotest connection with the Goodman group — made it inevitable that the deepest suspicions would be generated. Ultimately, a tribunal was rendered necessary and inevitable by the refusal of that Government to come clean about matters which were causing legitimate concern. It would, perhaps, be well now for those who complain about the cost of the beef tribunal to reflect on how much might have been saved by a little bit of open Government at the time.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  It is a pity we cannot get answers even now.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  At the outset of my remarks in this debate, I said that I believe that the way we approach the beef tribunal report could mark a watershed in public life in this country.

If the report tells us anything, it tells us that the entire philosophy of public accountability, of transparency, of plain and open dealing, a philosophy that was sorely lacking in many aspects of our public life; and in the eyes of many it still is, to too great an extent.

I say this as one who has made efforts to campaign for more transparency and accountability. I say it too as a Government Minister who recognises on a day-to-day basis that open government can be quite inconvenient for those who hold office in Government; and I say it as one who recognises only too well the often thankless job performed by Members of this House is in desperate need of enhancement, if the public we serve is to take politics as seriously as we would like.

I notice it has become something of a [285] habit, in debates of this kind, for members of the Opposition to quote speeches I made in the past back at me. Perhaps, therefore, I might be forgiven for quoting one of them myself. Speaking in this House on the day that Mr. Haughey's minority Government was formed, on 12 July 1989, I said:

Over the next months and years, two main questions will preoccupy the political system of our country. At least, these two questions ought to be among the principal issues that we face and deal with. It may well be that these issues will be ignored, and that they will be settled by default.

It may well be that the politicians we have elected to Government will simply turn a blind eye to them, and allow them to be decided by faceless, anonymous people. If that were to happen, the result would be disastrous, as it has been disastrous in other countries where these issues have arisen.

The questions are these: First, how are the fruits of economic growth to be distributed? And second, who is going to wield the power and influence of ownership in Ireland in the future? These are huge and difficult questions. They may not seem at first glance to be the most obvious ones that arise on a day like this. But if recent political experience has shown us anything, it has shown us that issues like these must be pushed to the centre of the political stage. Too much of our recent experience has been tied up with defending people against the callous and unthinking consequences of an ill-considered approach to policy.

Too much of our recent experience has been tied up with unscrambling the consequences of secret deals and political cronyism. We cannot, as a community, allow the style and substance of this kind of Government to continue.

Those remarks were made against the background of a series of commercial [286] scandals that were just beginning to be uncovered, and others that had yet to be revealed.

As it turned out, they were somewhat prophetic. We have spent an inordinate amount of time — in this House and elsewhere — beginning to change the callous and unthinking consequences of the policies of that time. Thankfully, we have had some success, even though a great deal remains to be done. We have spent far too much time coping with the style and substance of Government that I described in that speech.

This Government does not, and will not, operate in that way. Already, we have instituted a range of reforms aimed at increasing the effectiveness of this House in the legislative area. We have promoted legislation governing the area of ethical behaviour — legislation which has the potential to have profound effects, despite the reservations of some in the Opposition.

We are preparing legislation to ensure the maximum degree of transparency in relation to an issue which has troubled many — the granting of passports in return for investment.

Work is well advanced on the preparation of freedom of information legislation, as well as on the issues of compellability and privilege for people called before committees of the House. Finally, the Government will shortly be publishing a Bill covering political donations and the funding of political parties.

Again, more needs to be done. One could, I believe, suggest a long agenda of reforms in the operations of this House to make it a more effective place in which to ensure adequate scrutiny of the policy-making process, and adequate accountability for decisions.

Necessary reforms could include the way in which parliamentary questions are dealt with, the manner and style of debates, the treatment of urgent or topical matters, the application of out-of-date rules and procedures, the levels of research available for Members, particularly Opposition Members.

In addition I believe, as I always have, [287] that the Supreme Court ruling on Cabinet confidentiality must be seriously examined, and if necessary, changes must be put in place to ensure that the public interest is always the primary consideration in deciding whether Cabinet discussions should be private in all circumstances.

However, all these issues must be examined on a non-partisan basis. The agenda for reform which I outlined may not be exhaustive. What is urgently needed is a mechanism about which we can all agree, to ensure that reform is pushed to the top of our agenda, and approached in a way that will achieve results, and not just political point-scoring. The key must be to arrive at a point where accountability and transparency are built into the way public business is done in Ireland.

There are many precedents in Europe, and particularly in the European Union, for enlisting outside help to address complex and potentially divisive issues. A former Foreign Minister, Jim Dooge, for example, chaired one such committee of experts.

With that in mind, it is for that reason that in my capacity as Leader of the Labour Party, I am proposing today, to each of the party leaders in this House, the immediate establishment of a group of five eminent persons, each one nominated at the suggestion of one of the party leaders, to examine all these issues of accountability and reform, and to publish a report which is made directly to this House.

I propose, and I hope this is taken in the spirit in which I intend it, that each party leader would seek to nominate a person of experience and reputation to examine the issues involved. I do not envisage party representatives but people whose independence of party would be clear, and whose commitment to the improvement of the workings of the Dáil, and the issues I have mentioned would be beyond doubt.

Clearly the task will involve a burden of work for the five individuals concerned, especially as it will necessarily [288] involve a tight time-scale. I envisage that party would be free to make whatever submission it wished to the group, and that the group would also be free to raise and explore any issue relating to transparency and accountability it wished.

For my part, I have a person in mind, whose independence and commitment is unquestionable.

Mr. Allen: Information on Bernard Allen  Zoom on Bernard Allen  That is a fair fig leaf.

Mr. Spring: Information on Dick Spring  Zoom on Dick Spring  I do not propose to name that person here, as it would be unfair to approach him without an agreement in principle to the basic proposal I am making.

I am making this proposal as a constructive one, and I believe that if it is accepted it will help to enhance the role of this Parliament. We can never abandon the capacity to criticise and examine ourselves in the interests of an effective democracy. A functioning and effective democracy requires good government, better opposition and a vibrant parliament — a parliament able to challenge and question, as well as to change and initiate.

Much has been made of the cost of the beef tribunal. Of course, the arguments advanced ignore the revenue potential of tax frauds uncovered, and the huge potential losses in the future if some of these practices had not been stopped in their tracks. However, even if the tribunal yielded no revenue, its cost will be worthwhile if the result is lasting change in the way we do business in this country.

For any democratic government, the only powerful vested interest to which it must listen is the people as a whole. The days of secret business deals done behind closed doors, the days when Government frequently seemed accountable only to the rich and powerful, must never be allowed to recur. It will, as I said earlier, require new expressions of partnership to ensure that that never happens but this time, when the political point-scoring in this debate is over, I hope that partnership [289] can be extended to every Member of this House.

Mr. Allen: Information on Bernard Allen  Zoom on Bernard Allen  And the hands are washed, like Pontius Pilate.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  I have a difficulty with my speech in that as the text I have prepared is very long — I will need all the time allocated to me — I would like to start with a point that perhaps I would otherwise have ended with. Lest I do not get the opportunity at the end I would like to express my thanks to the three counsel and the firm of solicitors who appeared for me at the beef tribunal, in circumstances which for them were very difficult. There are various aspects of the practices of the Bar of which I have expressed disapproval but there is one tradition of the Bar, namely, that they will appear for somebody even if he patently is not able to pay them to ensure that justice is done, and that was true in my case. Without their assistance which was given freely over a period of more than a year, I probably would have been carved up at that tribunal because I do not think any witness was attacked longer or more vehemently by the State and by two sets of counsel for one organisation. I am profoundly grateful to them and to my colleagues in the Progressive Democrats for the way they have stood by me in this entire matter since it began almost five and a half years ago.

The Taoiseach's speech this morning was pathetic because it is mostly bombast and, where it is not, it is not factual. I do not have time, for the reasons I already stated, to deal with the many errors in the Taoiseach's speech. My colleagues, Deputy Harney, Deputy McDowell and perhaps others if the get the opportunity to speak in this debate will do that. There is one point in the Taoiseach's speech, which is indicative of several others, with which I want to deal. Last night I had to shorten my speech by taking out several sections of it, one of which was dealt with erroneously by the Taoiseach today. He [290] said: “It was this very safeguard which allowed my successor, Deputy Ray Burke, to stop all cover when circumstances changed, an entirely correct decision”. The truth is that Deputy Burke did not stop all cover. In 1989, after he was made aware of the foreign origins of much of the beef, he issued two large sets of finance guarantees which were totally unconditional and which totalled approximately £100 million to the two beef companies which are the subject of these various allegations. Because they were unconditional, even if the State could show that the exporters concerned had resorted to fraud, it did not matter, they had to be paid. That mistake of fact in the Taoiseach's speech today is typical of several other errors he made, and the House would be very foolish if it took much of what he said this morning at face value.

This debate is about accountability. It is about the way in which Ireland was and is to be governed. Above all, this debate is a response to one of the most damning indictments ever handed down by any court or tribunal on the behaviour of a number of Ministers and, in particular, of their sole survivor in office, the present Taoiseach. Simply put, the minority Fianna Fáil Government which held office between 1987 and 1989 made decisions which, at best, were reckless, irresponsible and foolish and, at worst, have been found to be illegal. The Taoiseach was party to all those decisions, from the illegal usurpation of the functions of the IDA, in respect of which he was the responsible Minister, to the grossly irresponsible decisions made in respect of export credit insurance, in which he personally bears the brunt of the blame.

As we speak, there are pending in the High Court proceedings against the State in the order of £120 million to £200 million. The only defence to such proceedings is the action taken by me in voiding certain insurance policies after I took office in July 1989. If the decisions taken by Deputy Reynolds and the insurance policies issued by him when he was Minister had not been changed [291] and voided by me, this State would by now have paid a huge sum to the Goodman organisation in circumstances where those decisions were made in the teeth of expert opinion and universal advice. The only thing standing between the taxpayer and that catastrophe is the issue of the sourcing and origins of the beef, and the only thing standing between the Taoiseach and personal complicity in the matter is the finding that he was personally acting under a culpable error of fact as to the sourcing of the beef.

Added to that is a tribunal finding that he ought to, and could have ascertained the true facts before he made his decisions in relation to export credit insurance. The straightforward choice confronting the tribunal in its findings was to condemn the Taoiseach for corruption or for incompetence. Because the tribunal chose the latter verdict, he has claimed vindication. The truth, of course, is wholly different. He and other members of that 1987-89 minority Government made decisions which were arbitrary, reckless and sometimes unlawful. That much is found against them. Deputy Reynolds played a central role in one of the worst episodes of mis-government which this country has witnessed, and which ranks with the events of the arms importation saga in 1970 as one of the greatest derelictions of ministerial responsibility ever established.

Deputy Reynolds has falsely claimed that the tribunal has found he acted in the “national interest”. Other Ministers have echoed this falsehood. At best, it can be claimed that the tribunal found that he had acted in accordance with his personal, mistaken view of the national interest, but by any objective yardstick, the tribunal's findings clearly indicate that the Taoiseach's decisions were wrong; were taken against the evidence and the expert advice available to him; and created the potential for a major financial catastrophe for this State.

If there was any real accountability in Irish politics, the people who engaged in such grave misconduct in public office [292] would resign or be removed from office. Instead, because of the political choices made by the parties opposite, the central figure in that misconduct, despite all the evidence, has been and continues to be rewarded with the highest executive office in this State.

When I became Minister for Industry and Commerce again in 1989, I was aware that there were grounds for suspecting that some of the affairs of the State had been conducted in the previous two and a half years in a manner which gave rise to a need for inquiry, disclosure, accountability and redress. Indeed, I can inform the Dáil that in July of that year, in the negotiations on the formation of the Fianna Fáil-Progressive Democrats Government, I sought from the then Leader of Fianna Fáil a commitment that there would be an inquiry into the Iraqi beef export issue. He countered this request by pointing out that I would, as Minister for Industry and Commerce, be in a position to acquaint myself with the facts. With considerable misgivings I deferred the issue of an inquiry, and we took our places at the Cabinet table, aware that a cloud of suspicion hung over a number of Ministers because of their involvement with the export credit issue.

As I stated to the tribunal, on my appointment as Minister I took steps to acquaint myself with the facts of the export credit insurance decisions made in respect of the Goodman Group. I read the departmental papers, including the Fisher report of June 1989, and having considered the matter thoroughly, I voided the export credit insurance policies in October 1989. The validity of those actions is the taxpayers' only defence to a claim for a sum between £120 million and £200 million. I knew then there had been a major scandal in the period 1987 to 1989. I became increasingly convinced that the truth could only be established and made public through the medium of a sworn inquiry. In particular, it was clear to me that I faced a difficult choice: (i) I could insist on some form of inquiry being established into the conduct of serving [293] Ministers, or (ii) I could expose the portion of the truth known to me and bring that Government to an end. The problem, as I saw it then and now, was that by leaving Government without establishing all the facts, those responsible for grave misconduct in public office would quite probably conceal their responsibility and comprehensively suppress the truth.

When the “World In Action” programme was broadcast in May 1991, the issue crystallised in circumstances which allowed the Progressive Democrats to insist on an inquiry, and we did. We were, of course, uncertain as to whether our stance would result in an inquiry or a general election and that was a risk we had to take, but we were certain that without such an inquiry, the truth would have been comprehensively suppressed and grave damage done to the principle of democratic accountability.

By unanimous vote of this House and of the Seanad on 24 May 1991, a tribunal of inquiry was constituted to inquire into matters described in the resolution as being “of urgent public importance.”

The tribunal sat for a lengthy period at great public expense. Its report now comes before this House for discussion. It will now be seen what the Members of the House who set up the tribunal can make of its report. The chairman of the tribunal described his task as “a simple fact-finding operation”. It is for this House to absorb and consider the facts which have been found, and which reveal, in the words of the Tánaiste, Deputy Spring, “...a major failure of public policy ... a policy disaster .”.

A clear majority of Members agree with that verdict. It has been arrived at after an unprecedentedly long and an unprecedentedly costly inquiry. It is for this House, not for the tribunal or any other body — as the Tánaiste has just suggested — to ascribe responsibility for this disaster and for the reckless, foolish and unwise decisions which caused it, to the appropriate persons.

This complex and detailed report — even before being made public — has [294] been misrepresented and distorted on the orders of the Taoiseach. As the Tánaiste, Deputy Spring, remarked in this House on 5 November 1992, the Taoiseach, and his party colleagues, regard the tribunal as nothing more than a political football. They have, as he said, done everything they can to cheapen and rubbish it. And the reason Deputy Spring gave for this is also correct, and I adopt it, with acknowledgement, as my own: “the truth is hurting them”. It was true on 5 November 1992 and it is true today, 1 September 1994.

I believe that the tribunal has, painstakingly and at great expense, established some very uncomfortable truths. These are of significance for the beef industry, for the revenue of the State, for the public service and for the whole conduct of public affairs inside and outside the Dáil.

To the extent that the tribunal was unable to establish the whole truth — and the report clearly identifies what it was precluded from investigating — the reason has also been stated by Deputy Spring at a time when he felt able to do so:

...This is the Taoiseach who promised open Government, but whose Government fought in the Supreme Court to establish a system of Cabinet secrecy that flies in the face of that promise.

On 5 November 1992, Deputy Spring made it clear that he and his party condemned the actions of the Taoiseach in relation to the beef tribunal. In terms of withering sincerity he condemned the Taoiseach, Deputy Reynolds, for hypocrisy, for governing behind closed doors, for attempting to shift responsibility for his own actions onto civil servants — we heard loud echoes of that this morning — and for trying to cheapen the tribunal. We heard that also. The proof of all of these allegations is now before us, in the report of the tribunal and in the pathetic evasions of the Taoiseach in the weeks since its publication and again this morning. Deputy Spring, and [295] his colleagues, now have the opportunity to vote in accordance with the beliefs they have so trenchantly expressed. The alternative will be to provide the disedifying spectacle of Labour Deputies voting down the stated views of their own leader in order to preserve him in office.

What emerges from the report of the tribunal is a sorry tale of gross incompetence in public office which may yet cost the State an enormous sum; of secrecy and deception including deception of this House; of tax evasion professionally organised on a gigantic scale; of simple theft; of scandalous misuse of EU schemes of great importance to this country; of inability to recover taxes of which the Exchequer was cheated by reason of an amnesty sponsored by the parties in Government; of conspiracy by privileged and well placed persons.

Is anybody to be made responsible for this? To date one woman journalist, who played a part in the revelation of abuses, is to be prosecuted for contempt. The conspirators, the professional fraudsters and the large scale thieves are as yet untouched and the Taoiseach hopes to escape censure in this House with the help of 33 Deputies who plainly believe in his culpability but are too cowed to vote for their beliefs.

I was relieved to have had the opportunity, as Minister for Industry and Commerce, to have voided the policies of export credit insurance which should never have been granted. I am happy also to have been instrumental in relieving the State from having to pay scores of millions of pounds to banks on foot of guarantees which should never have been put in place. But these actions of mine came about at the end of the discreditable saga which constitutes the management of export credit insurance by Deputy Albert Reynolds between 1987-89. To understand this topic, which occupied about half the time of the tribunal, it is necessary to return to the time it was first suspected that in relation to export credit insurance there was something which, quite literally, did [296] not add up. I will do that in the course of these remarks.

I now propose to address the tribunal report's findings on the allegations I made about export credit insurance, which I notice were not dealt with by the Tánaiste, some of which are similar to allegations made by Deputy Spring with which the Taoiseach did not deal.

My first allegation in August 1990 was in respect of Goodman's export credid insurance. Policy declarations were made that only beef with its origins in the Republic of Ireland would be covered, nevertheless very large quantities of non-Irish beef were included in the shipments purporting to be covered by that policy.

This allegation of mine was completely and dramatically upheld. In the course of the tribunal's hearings, no one challenged the factual roots of this allegation. It was not, however, admitted by the then Minister, Deputy Burke, in the course of his answers to parliamentary questions, or contributions to debates in the Dáil in the first half of 1989. He described this allegation as “reckless” even though he knew it was true. This omission is a simple and dramatic example of the unwillingness of Ministers, and of some public servants, to be properly accountable to Dáil Éireann; a factor which contributed so needlessly to the necessity for an expensive extra-parliamentary inquiry.

This allegation was restated by me as Minister for Industry and Commerce on the basis of the information available to me in August 1990. It is clear from parliamentary questions asked by me and my party colleagues in the previous year, and from newspaper reports, that the truth of this allegation could be inferred even by persons without access to departmental information from an early stage.

This allegation was not merely found by the tribunal to be true; it was known by the then Government to be true years before the Tribunal of Inquiry into the Beef Processing Industry was set up. Its truth was only formally admitted by Fianna Fáil Ministers at the [297] latest possible moment and under enormous pressure. Once admitted, however, it became the basis on which it was possible to void the Goodman group's export credit insurance policies. If this step had not been taken, the State would have had to absorb an enormous liability.

I alleged on 10 May 1989 that:

(a) The provision by the State of Export Credit Insurance cover on the sale of beef to Iraq in 1987 and 1988 of an amount in excess of the amount actually exported was (i) in breach of the terms of the Export Credit Insurance Scheme; and (ii) constituted a substantial abuse amounting to a fraud on the taxpayer, the scale of the abuse and of the potential liability of the State being unprecedented...

This was the second export credit insurance allegation made by me and examined by the tribunal. It expands on the first allegation by characterising what had been done as a substantial abuse amounting to a fraud on the taxpayer, and by indicating the enormous scale of the abuse and of the consequent potential liability of the State.

In this regard, it is necessary for me simply to quote the following damning findings set out at page 202 of the report:

(i) Very large quantities of beef, not sourced or produced within the State were included in shipments of beef to Iraq by AIBPI and Hibernia Meats Ltd. during 1987 and 1988: 18,938 tonnes representing 38 per cent of total tonnage by AIBPI and 2,680 tonnes representing 18 per cent of total tonnage declared for insurance by Hibernia (Daintean).

(ii) Such beef was included in shipments purporting to be covered by Export Credit Insurance policies.

(iii) Such inclusion was contrary to the express terms of the Declaration made by AIBPI and Hibernia Meats Ltd (Daintean).

[298] (iv) Such inclusion constituted a substantial abuse of the express terms of the Scheme and the policies issued in pursuance thereof.

At page 204 of the report, the tribunal quotes the present Taoiseach saying:

... I took that decision. I don't need Government or anybody else's approval. I can go in and appraise it and keep them in contact but it is my responsibility and I take the decision and the buck stops here.

Deputy Reynolds and his predecessor. Mr. Haughey, repeatedly stated that they were wholly unaware of the facts found by the tribunal concerning the use of non-Irish beef. Deputy Reynolds says he took his decisions on the basis that the beef used would be commercial Irish beef. He did so, he said, on the basis of what the tribunal described, at page 232 as “his conception of the requirements of the national interest”.

This phrase is at the heart of the Taoiseach's transparently false claim that the report has vindicated him. It is entirely typical of the Taoiseach that he made this claim on the basis of a wholly distorted leak of carefully selected portions of the report. It is ironic that the Taoiseach who described himself, at a sitting of the tribunal, as “a one-page man”, should have selected the portion to be leaked at his direction from two passages of the report separated by 31 pages——

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  He did a Joe Foyle course in speed reading.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  ——and tried to give the impression it was one sentence.

The fact is that the tribunal held. pages 215-16, that:

While the Minister for Industry and Commerce and the Government were entitled to make their respective decisions in the “national interest”. the “national interest” would also appear to require that before exposing the State to a potential liability of well in excess of £100 million a more [299] detailed investigation or analysis of the benefits to the economy of such decisions which involved:

(i) the allocation of 50 per cent of the amount of export credit insurance cover available for all exports worldwide to one particular destination, and

(ii) such risk to the Exchequer, if default in payment were made, should have been carried out.

Such an investigation, if made, might and in all probability would have disclosed that a large portion of the beef to be exported was intended to be sourced outside the jurisdiction and an even larger proportion had been or was intended to be purchased from intervention stock and the benefits to the Irish economy, arising from such exports, were illusory rather than real.

That is the finding of the tribunal. One would never think that to listen to the Taoiseach this morning.

This finding not merely supports the first portion of the allegations I am addressing, but constitutes an utterly damning indictment of the Taoiseach in his activities as Minister for Industry and Commerce. In its plain terms, it makes nonsense of his claim to have been vindicated on the basis that he acted in the national interest, for it finds that he did not take the simple and obvious step of investigating the source of the beef to be covered. Despite the Taoiseach's politically dishonest bombast based on selective leaks, the tribunal has found in so many words that “the benefits to the Irish economy, arising from such exports, were illusory rather than real”.

This finding also justifies in dramatic terms my statement to the tribunal that Deputy Reynolds' conduct of export credit insurance, for which he had ministerial responsibility, was “reckless, irresponsible and unwise”. It justifies too the subsequent statement of the Tánaiste that the allocations of export [300] credit insurance in 1987 and 1988 made by Deputy Reynolds constituted a failure of public policy amounting to a policy disaster.

The tribunal also held, at page 213, that:

“The benefit accruing or likely to accrue to the Irish Economy from this situation would be minimal compared to the benefit which would accrue if the exports consisted of commercial beef and would not justify the risk involved in granting Export Credit Insurance in the amounts granted”.

The tribunal has accordingly held: that the Minister for Industry and Commerce, now the Taoiseach, was legally entitled to decide on the availability of export credit insurance for any particular destination, and on its allocation. This is on the basis that the account in question is not the commercial account but the Number 2 or “national interest” account and this had never been disputed by any party or member of this House; that the national interest also required a detailed investigation or analysis of the benefits to the economy of the Minister's decisions, of a type which the Minister wholly failed to carry out or have carried out; that this investigation would have revealed the true position as to the composition of the exports to which the allegations related; that the allocations made by Deputy Reynolds as Minister conferred benefits on the economy which were “illusory rather than real”, and that the allocations made for the exports in question “would not justify the risk involved in granting Export Credit Insurance in the amounts granted”.

To this damning indictment, the Taoiseach has only one answer: that he did not know the true position. The inquiry finds in terms that he should have known it. To this extent, the report salvages Deputy Reynolds' integrity at the expense of his capacity and his competence.

In any other Western democracy, a Prime Minister so resoundingly convicted of incapacity to the extent that [301] this Deputy describes his policy as a disaster, would have the grace to resign.

In the words of his predecessor, Deputy Haughey, on another occasion, this would be “an honourable course” and indeed the only honourable course open to him. However, the standards of Irish public life under Deputy Reynolds and the Labour Party are such that there is no question of his taking that honourable course, or presumably of their requiring him to do so. The contention that Deputy Reynolds did not know the position is no defence at all. If the Minister was unaware of the composition of the exports, he and his Department were virtually alone in the relevant official circles in their ignorance.

Page 546 of the report stated: “The EEC., and the Beef Management Division thereof and the Department of Agriculture were fully aware of the fact that intervention beef was being exported to Iraq...”.

The report also states:

“It is clear from the evidence of Mr. Lawrence Goodman and Mr. Aidan Connor of Goodman International, Mr. Oliver Murphy of Hibernia Meats Ltd., and confirmed in the letter dated the l2th day of July 1993 from its parent company CED Viandes and perhaps more significantly the evidence of Mr. Nasser Taher of Taher Meats, that the Iraqi customers were aware of the fact that intervention beef was being used to fulfil a substantial portion of the contracts and had waived compliance with the terms of the written contracts”.

It is equally clear that CBF were aware of this state of affairs and in September 1988 attempted to make the Department of Industry and Commerce aware of it. They prepared a briefing note which included the following vital information: “In recent years, the product supply to Iraq has largely been from intervention stocks from some APS.”

The tribunal has expressly held, at page 214, that the Minister would have [302] become aware of this fact prior to his prodigal allocation of a further £120 million of export credit insurance on 21 October 1988 if that paragraph had come to his attention. However, as the tribunal states, it was taken out of the briefing document by an official of the Department of Agriculture.

Accordingly, on the Minister's claim of ignorance of the facts, the tribunal found: The European Community, the Iraqis, the Department of Agriculture, the Department of Finance, the Department of Foreign Affairs and CBF were aware of them; the “national interest” required that the Minister should have caused inquiry and analysis to be carried out, and such inquiry would in all probability have elicited the facts; there is no reason known to the tribunal why the information held by other official bodies within Ireland did not become known to the Minister, or why the Minister did not cause the inquiry demanded by the national interest to be made.

Is it credible for Deputy Reynolds and his apologists to claim that he was not informed that intervention beef was being used? I do not believe so and I ask the House to consider the following facts, based entirely on the tribunal report's findings.

Chapter 8, dealing with section 84 financing, brings a number of important facts to light. On 2 July 1987, which was very early indeed in this whole saga and apparently before any export credit insurance policies were issued, Anglo-Irish Beef Processors International Limited submitted a memorandum to the Department of Finance seeking an amendment of section 84A of the Corporation Profits Tax Act 1976 to facilitate more advantageous section 84 borrowing by them. The memorandum set out why it wanted the amendment made. In the course of the memorandum, which is relatively short, it refers no less than three times to the fact that they are exporting beef purchased from intervention stock and that was why they needed the amendment. The report concludes on page 293, having considered the memorandum of 2 [303] July 1987, that “As it was the practice of Anglo-Irish to purchase beef from intervention for the purpose of export, the amendment was sought.”

As well as considering the section 84 amendment, the Minister for Finance at the time, Mr. MacSharry, had to consider various other matters relating to the Goodman Group, in particular the question of export credit insurance, about which his officials were quite agitated. It seems unlikely, therefore, that they would have failed to draw his attention to the contents of the memorandum of 2 July 1987 and it might be assumed that he was aware of this thrice repeated fact from shortly after that date.

These were not the only Ministers who were made aware that intervention beef was being used in these export contracts which were the subject of insurance. The Minister of State at the Department of Agriculture and Food, Deputy Joe Walsh, received a draft letter from Goodman's on 28 July 1987 which he forwarded to the Department of the Taoiseach, seeking the same amendment to section 84 as that referred to in the memorandum to the Department of Finance of 2 July. Deputy Walsh received a letter dated 16 November 1987 from Goodman International referring to the same amendment stating that the suggested wording was submitted through Deputy Walsh to the Taoiseach's Department on 28 July and that there was a request from Mr. Ó hUigínn, through Deputy Walsh, for a memorandum summarising the proposed changes together with an explanation for it and that this was submitted through Deputy Walsh on 12 August 1987. This amendment was the one referred to earlier which was required by Goodman International because more than 25 per cent of their beef exports were coming from intervention. This letter is quoted in full at page 298.

Thus from that single chapter alone there is evidence that the then Taoiseach, the then successive Ministers for [304] Finance MacSharry and Reynolds and the then Minister of State at the Department of Agriculture and Food, Deputy Walsh and senior officials in their Departments were all informed of the fact that intervention beef was being used by the Goodman Group for export. They were told this on numerous different occasions between 2 July 1987 and 21 March 1989. That of course is not the full extent of the knowledge of Ministers of the use of intervention.

The Taoiseach and his recent apologists in this matter have sought to make great play of the fact that he was not aware that foreign beef or intervention beef was being used to a large extent in export contracts to Iraq. They state explicitly that if Deputy Reynolds had known this — he said it again this morning — he would not have given cover for the extensive amounts which he did. It seems to be conceded that knowingly to cover foreign or intervention beef would be extremely negligent and reckless because there would be a huge risk involved to the taxpayer and there would be no benefit to the Irish economy. However, this report indicates that Deputy Reynolds was personally informed that intervention beef was being used in the export contracts to Iraq and that it was covered by export credit insurance.

On 11 December 1987 the Private Secretary to the Minister for Industry and Commerce sent a telex, at the Minister's request, to Ambassador McCabe in Baghdad asking if there had been any further developments since 9 December when the last telex was received from the Ambassador and in particular whether two companies, Halal and Agra, had obtained contracts. An urgent reply was requested. There was a preliminary reply on 13 December and a fuller one on 16 December. This reply commenced: “grateful if you could urgently pass this very confidential message to Minister Reynolds via his Private Secretary, Mr Finbar Kelly”. It is obvious, therefore, that Deputy Reynolds received this telex of 16 December and even though it is slightly [305] more than one page he would certainly have read it. Paragraph (b) of the telex, quoted on page 118 of the report, reads as follows:

On the 22nd September 1987, Halal bought 6,340 tonnes of beef from the Irish Intervention Agency. The purchase was specifically for the Iraqi market. According to Mr. Khalid a French company CED has a contract to supply 12,000 tonnes of beef to Iraq. Hibernia Meats, which is 50 per cent owned by CED, have Irish Export Insurance cover available according to Mr. Khalid. Halal Meats, in association with Hibernia used Hibernia's Insurance cover to fulfil 6,340 of the CED contract for 12,000 tonnes.

The telex message ends “since this message is confidential, I would particularly request that its contents not be quoted in any discussions between the Department of Industry and Commerce or ICI and Halal Meat Packers”.

Paragraph (b) quoted above makes it clear that Halal bought 6,340 tonnes of beef from intervention and supplied it as part of a CED contract of 12,000 tonnes to Iraq. CED used Hibernia Meats' export credit insurance cover to insure the 12,000 tonnes, which included 6,340 tonnes of intervention beef supplied by Halal to Iraq through CED, who were insured under Hibernia's cover, they own 50 per cent of Hibernia.

This highly confidential telex was not simply one to the Department of Industry and Commerce. It was very specifically for Minister Reynolds alone via his Private Secretary. There can be no doubt that Deputy Reynolds was personally informed of the true position regarding exports to Iraq of intervention beef and what was and was not covered by insurance at that time.

The date on which the telex seeking urgent information was sent to Ambassador McCabe is significant. It was 11 December 1987 which was a Friday. The previous evening, 10 December, a social function described as “lavish” was held in the Burlington [306] Hotel, Dublin. It was described in the newspapers as “The Boss's Ball”. I understand this to mean a Cairde Fáil dinner for the President of Fianna Fáil. The Irish Independent of Saturday, 12 December 1987 in the course of a report on the function says: “a vision in sequined aquamarine, Albert and Kathleen cut quite a dash on the dance floor. And they had Ireland's most important “Baron” as their guest. Larry Goodman, beef baron extraordinaire even ventured onto the floor for a couple of twirls”.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  Still twirling.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  No doubt in between the twirls, Mr. Goodman had ample opportunity to tell Deputy Reynolds his requirements. After the ball was over, Deputy Reynolds was on the ball next morning and sent yet another telex. This was in spite of the fact that in the previous 36 hours a 'phone call and a telex had been received from the embassy in Baghdad giving information on what AIBP's Irish competitors were doing.

Now that we know that the Taoiseach was personally informed on 16 December 1987 that Irish companies were supplying intervention beef to Iraq and that they had the benefit of export credit insurance cover, which also apparently extended to French beef, will the Taoiseach tell us why he left this cover in place and why over the following 11 months he issued very substantial further cover for similar beef exports to Iraq?

Since he had this information about the use of intervention beef from 16 December 1987, will the Taoiseach now tell us what benefit there was to the Irish economy in giving extensive insurance cover on very favourable terms to an exporter who, at the relevant time, was found to have used foreign beef for 38 per cent of his exports and intervention beef for 84 per cent of the remainder, giving a total between foreign and intervention beef of about 94 per cent of the shipments? Perhaps he can explain how giving insurance [307] cover to beef, nearly all of which came out of either a foreign country or intervention, was of any value to the Irish economy.

As far as knowledge by other Ministers is concerned, it is inconceivable that from the very start of this saga, the then Minister for Agriculture, Mr. O'Kennedy, was unaware of the position regarding the use of intervention beef.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Mr. O'Kennedy was not aware of anything.

Mr. Connor: Information on John Connor  Zoom on John Connor  There was a particular problem.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  The tribunal finds on page 530 that “the Department of Agriculture, as the Intervention Authority, was at all times aware of the fact that the intervention beef purchased from it was destined for export to Iraq, authorised the repackaging or reboxing of the meat and authorised the payment of the appropriate rate of export refunds”.

Because of the nature of the intervention system and the complicated export system which is set out in Chapter 15 of the report and the export refund system — all of which were administered by the Department of Agriculture — it is inevitable that a very large number of officials in that Department would have known that intervention beef was going to Iraq.

It was even printed on the front page of the Farmers Journal for the week ending October 29 1988 that the AIBP Group had a new order for 20,000 tonnes of intervention beef for Iraq. For whatever reason, the Department of Agriculture sought for a long time to conceal the fact from the tribunal. They did not produce details or even confirmation of the export of intervention beef until October 1992, which was well over a year after the work of the tribunal had commenced.

When the chairman asked for these details on 24 June 1992, counsel for the State, Conor Maguire S.C., stated “this [308] would be difficult, if not impossible”. Clearly, it was no such thing. All the information was readily available in the Department and a large number of officials were aware of it.

The Minister must have been aware of it. He was aware that substantial export credit cover was being given by his colleague, the Minister for Industry and Commerce, to beef going to Iraq. It seems highly unlikely that he did not inform his colleague, Deputy Reynolds, in 1987 and 1988 of the use of intervention beef to reinforce Deputy Reynolds's own knowledge since December 1987. Mr. O'Kennedy and his Department, however, did not answer my query as to whether intervention beef was being used in these contracts when I asked an official of the Department of Industry and Commerce to make the inquiry in November 1989. By refusing to tell me, perhaps the Minister for Agriculture was simply protecting the interests of Deputy Reynolds who was Minister for Finance at that time, even though he was thereby jeopardising the State's defence to a very large claim against it.

Therefore, when in the aftermath of the publication of the report on 2 August last the present Minister for Agriculture, Deputy Walsh, claimed that certain matters were concealed from his Department, the truth was the direct opposite of what he said, that is, his Department concealed the truth from various others.

Evidence of the fact that Deputy Reynolds was informed of the use of intervention beef in these Iraqi contracts is also borne out by the interview he gave to Rory Godson, who gave sworn evidence of what Deputy Reynolds told him to this effect in volume 213 of the hearings.

While all the foregoing constitutes a damning indictment of Deputy Reynolds's stewardship as Minister for Industry and Commerce of the “national interest”, it relates solely to the fundamentally subsidiary question of the composition of the exports. On the more radical question of whether [309] there should have been any allocation of export credit insurance for beef exports to Iraq, the position is still bleaker for Deputy Reynolds. It is expressly held in the report that the Minister consistently disregarded the professional and official advice available to him from his Department and from his own agent, the Insurance Corporation of Ireland. In particular, the following decisions, all of vital importance to the State and the Exchequer, were taken by him against professional and official advice, which was unanimous: (1) the decision in April 1987 to reintroduce export credit insurance for Iraq; (2) the decision in September 1987 to procure Government approval to increase the ceiling of export credit insurance for Iraq from £70 million to £150 million; (3) the decision to obtain Government approval to increase the ceiling for Iraq from £150 million to £270 million in October 1988.

The terms of the advice which the Minister disregarded are of great significance. From first to last, he was advised in unusually strong terms of the utter folly of the course which he followed. As recently as two months prior to the fateful decision of April 1987 his predecessor as Minister had accepted departmental advice that no further cover should be granted in respect of exports to Iraq, based on “the general deteriorating financial and military situation in Iraq”— page 51. The Department had prepared a very comprehensive memorandum stating in terms that the Iraqis would not be able to pay their debts; that they were broke and that an analysis of their economic and military position suggested that their position would worsen rather than improve.

In 1988 the Department of Finance reviewed the history of export credit insurance and noted: “We oppose successive increases in the Iraq ceiling which, because of the extremely volatile Iraq situation, we regard as too much of a gamble with the Exchequer's resources”. This was a gamble which the Taoiseach took, a gamble of well over £100 million of public funds placed on [310] intervention beef, owned, ridden and trained by Larry Goodman in the Sadam Hussein stakes and carrying 12 stone 7 lbs and about 4 stone more in overweight.

In fairness it must be noted that the departmental advice in the Department of Industry and Commerce and elsewhere is of a very high standard. It is commonly stated, and the Minister for Tourism and Trade reiterated this in defence of the Taoiseach, that hindsight is always 20:20. The fact remains that the departmental advice in advance of the gamble taken by the Taoiseach predicted the coming disaster with uncanny accuracy. I would be the last to say that a Minister is obliged always to follow the advice of his officials, but if he is to dissent from the sustained and unanimous advice from sources inside and outside his Department he must have a rational reason for doing so and this reason must be stated.

The Taoiseach ignored the advice he was given and never stated why he was doing so. When asked at the tribunal if he had read one department memorandum he inquired how many pages were in it. On being told that it considered of 21 pages of reasoned and detailed advice he said in a famous phrase that he would not have read such a document because he was “a one page man”. This is surely the nadir of ministerial stewardship.

I have quoted from the findings of the tribunal at page 202 where my allegation that there had been a substantial abuse of the export credit insurance scheme was expressly upheld. In fairness to the Taoiseach I should continue to quote as follows:

(v) Such abuse would not have led to a fraud on the taxpayer because of the insistence by the Minister for Industry and Commerce and his agent the Insurance Corporation of Ireland that proof of the origin of the beef to be exported be retained and such proof would have to be produced to the Insurance Corporation of Ireland before any claims on foot [311] of the said policies would be paid. Such abuse however had the effect of tying up and rendering unavailable for allocation to other companies substantial amounts of Export Credit Insurance cover, which would otherwise have been available for allocation.

(vi) Such abuse was substantial and if AIBP are successful in the proceedings hereinbefore referred to the potential liability of the State is very substantial. Such abuse and such potential liability may not be unprecedented but it certainly is not a regular occurrence.

These findings amount to holding: (a) that there was a substantial abuse of the scheme and (b) that this was an attempted fraud on the taxpayer rather than a successful fraud where they collected the money.

As to whether the Goodman companies and others will recover damages in the courts despite this abuse, the tribunal does not attempt to anticipate the decision of the High Court. As to the extent of the potential liability, the report concludes as follows, after an analysis of the Goodman claim:

Independent of the question of general damages which may be proved in the proceedings, the plaintiff's pecuniary loss claimed is either £115,262,332 if the claim under the alleged second policy relates to the $30 million offer of cover or £159,113,616 if the claim under this heading relates to 70 per cent cover of contracts valued at £76,501,835.

In either case, it is a very substantial claim and that is the only matter for determination by this Tribunal.

I am happy to acknowledge the thorough-going and closely reasoned vindication of my allegation which the report contains. My satisfaction is qualified by the fact that, as the report makes clear. the Goodman Group's enormous action [312] against the State is still pending before the court.

I ask people to note that my view would also appear to be borne out by Mr. Goodman's evidence of what the Taoiseach said, and I quote from page 98 of the report:

the balance would be allocated to AIBP if the contracts materialised and subject to the approval by Government and the Dáil to the increase in the overall limit of Export Credit Insurance.

This shows clearly that his claim is not limited to the cover of $30 million but also relates to the balance of the ECI which he says he was promised. If Mr. Goodman's company recovers the enormous sum which it is claiming, or any significant part of it, the responsibility for this will rest firmly with the Taoiseach, Deputy Reynolds. If this responsibility does arise I am certain he will seek to shrug it off as he has shrugged off every responsibility with a spin doctor's formula which is as fatuous as it is false.

In my evidence before the tribunal and in the statement which I submitted beforehand at the tribunal's request I sought to quantify the amount of Mr. Goodman's claim. I was cross-examined about this by counsel for the State on a basis which was wholly unsound and betrayed a radical misunderstanding on the part of those instructing the State counsel, of the Goodman Statement of Claim and associated documentation. This dispute did not, however, seem to be of any great significance since all concerned knew the potential liability of the State was, to use the report's phrase, “very substantial”.

However, in his evidence before the tribunal the Taoiseach, of his own volition and without being asked any question about it, stated that my evidence in the tribunal on this point was not merely false but knowingly false. Pressed by counsel on my behalf it was found that he was not suggesting that my figure was wrongly or carelessly computed or that a mere mistake had [313] been made but that I had told a deliberate lie. It should be borne in mind that all evidence before the tribunal was given on oath. This scandalous allegation is, of course, fully exploded by the tribunal's report. The chairman pointed to a degree of ambiguity in the statement of claim and finds firmly that the cumulative amount of the claims mentioned in that document is capable of amounting to £159,113,616, exclusive of general damages.

To read the statement of claim in any other way, ignoring alleged contracts with a value of £76,501,835 which is specifically mentioned in paragraph 6.4 of the statement of claim seems unreal. All these sums, of course, are independent of the question of interest.

As the Minister who voided the relevant insurance policies on the grounds of misrepresentation I naturally hope and believe that no liability whatever will attach to the State. Certainly I have done everything in my power to ensure that this is the case. No such step had been taken before I became Minister, but I reiterate that my estimate of the potential liability is justified and, if interest and general damages transpire to be recoverable, it would now be a significant understatement.

It should be said in fairness to him that it became clear in cross-examination that the Taoiseach had no personal understanding of the statement of claim or of the manner in which the potential liability could be computed. I seem to recall he said he never even read the statement of claim. It appears, therefore, that he made a gratuitous allegation of perjury against me based on vet another spin doctor's notion which he himself could not or did not take the trouble to understand.

I have no doubt that this was done quite simply for the purpose of setting up a public relations smokescreen to divert attention from the significance of the tribunal's proceedings even though he knew it would have profound consequences. It was done cold-bloodedly without regard to the truth or falsity of what was said and without even an [314] understanding of the way in which its truth or otherwise could be worked out. This allegation of perjury — for that is what it was — was made against a Minister in the Taoiseach's Government and the Leader of the other party in Government. The Tánaiste and his colleagues should have no doubt that the Taoiseach will turn on them with as little reason the moment his handlers think it necessary to put that script into his prompt cards or, as I think they are called now, his idiot cards.

The provision in 1987 and 1988 of between one-third and one-fifth of all export credit insurance cover available to just two companies, both exporting beef to Iraq, with over 80 per cent going to Goodman, amounted to an abuse of the scheme. The provision of the bulk of the cover under this scheme to one company, to the exclusion of competitors, excluded fair competition within the State which aggravated the scandal. On the basis of such answers as I and other Deputies of my party had received up to that date in May 1989, and other information I attempted to estimate the extent of the imbalance in the allocation of the limited amount of export credit insurance available to Iraq, to beef going to Iraq and to Mr. Goodman's company. This estimate is borne out by the report of the tribunal which shows that position was even more ludicrously imbalanced than I had alleged.

At page 203 the tribunal found as follows:

As illustrated herein 50 per cent of the entire amount available for Export Credit Insurance worldwide and in respect of all manufactured goods and services was between 1987 and 1988 allocated to exports to Iraq and of this allocation, 75 per cent was allocated in respect of beef to Iraq, representing 37.5 per cent of the entire amount available for all exports worldwide. Of this allocation 75.52 per cent went to AIBP and 24.38 per cent to Hibernia Meats.

It has already been established that the [315] composition of the beef exported by these two companies constituted a substantial abuse of the scheme. The figures contained in the last extract from the report of the tribunal constitute a more fundamental abuse. There was a real and massive imbalance in the allocation of export credit insurance to two companies in respect of a single commodity to one destination, Iraq.

This is by no means the end of the peculiarities in allocation in the period 1987 to 1988. The amounts of insurance allocated were enormous but so too was the period of cover required, which went from one year to 18 months and, subsequently, to two years. The normal period for which export credit insurance was required for comestibles is only 28 days. Furthermore, these exports were to a country which the Irish public service rightly considered to be effectively bankrupt, which was ruled by a tyrant peculiarly prone to the type of economic and military adventurism which would, and eventually did, prevent the payment of national debts by that country. I also raised the question of the massive concentration of available export credit insurance on one company which required the rejection of other applications. The extent to which this is so, is strikingly clear from the findings of the report.

It was not the custom for the Government to conduct the export credit insurance business but rather to allow its agents, the Insurance Corporation of Ireland, to do so on its behalf. More innocent or naive applicants for insurance applied to that company, which in turn raised the question with the Department and were duly informed in most cases, that no such insurance was available. On the other hand, cannier applicants went directly to the Minister, Deputy Reynolds.

In respect of the first enormous grant of cover in September 1987, the Minister was aware of the application before it was received in the Department.

At page 209 of the report the tribunal found as follows:

[316] ...no satisfactory evidence was available to the Tribunal to establish the circumstances in which the Minister for Industry and Commerce was informed of the application prior to its receipt in the Department or of the necessity to have it dealt with at such speed, or why it was necessary to have the matter dealt with with such a degree of urgency that the Department of Finance and the Department of Agriculture and Food did not have an opportunity to express their observations on the matter in the Memorandum for Government.

Neither, the Minister for Industry and Commerce, Mr. Reynolds, the Taoiseach, Charles J. Haughey, who was to deal with the matter in Cabinet, Mr. Goodman, nor Mr. Britton have any recollection of who informed Mr. Reynolds that the application would be made.

On the same page, and the following page, the tribunal quotes the observations of the Department of Finance on this proposal including the damning sentence:

“In essence the Minister for Industry and Commerce's proposals are too much of a gamble with the Exchequer's resources”.

However, as the tribunal finds, on page 210:

These views were not forwarded to the Minister for Industry and Commerce for inclusion in the Memorandum for Government because time did not permit.

My observations in these allegations about the impact of the distorted allocations on competitors were the subject of the following findings by the tribunal, first at page 202:

Such abuse however had the effect of tying up and rendering unavailable for allocation to other companies substantial amounts of Export Credit Insurance cover, which would otherwise have been available for allocation.

[317] At page 230:

There is no doubt but that the allocation of Export Credit Insurance in the amounts which were allocated to AIBPI and Hibernia Meats Ltd with the consequent effect that no Export Credit Insurance cover was available to other exporters of beef to Iraq, placed other beef exporters at a considerable disadvantage when seeking to negotiate contracts for the export of beef to Iraq.

As a result of the size of the contracts involved, exporters who had not the security of a promise of Export Credit Insurance with the benefits of Short and Medium-Term Finance which was dependent thereon, were at a very considerable disadvantage in seeking to obtain such contracts.

The tribunal went on to note on the next page:

The Tribunal does not suggest... that this was the intention or motive of the Minister for Industry and Commerce in making these decisions but rather was the effect of such decisions.

Exporters excluded from the market in this way included those who demonstrably could, and presumably would, have filled their orders wholly with Irish beef.

In his recommendations at the end of this section of the report, the tribunal chairman makes specific suggestions to avoid any repetition of this imbalanced allocation; to ensure that all exporters in a particular area are aware of whether export credit insurance is available and on what terms; and to ensure that future allocations are made in a fair and transparent manner.

Two more of my allegations examined by the tribunal were that allowing just two companies, of which by far the larger and more substantial was Goodman, cover under the export credit insurance scheme for beef exports to Iraq for such large sums, so considerably in excess of the actual exports to [318] that country, was an act of blatant political favouritism and that decisions by Ministers and in some cases by the Government on export credit insurance, had the effect of strengthening further the already strong position of Goodman — to whom members of the Government was extremely personally close — as the dominant group within the beef processing and allied trades, contrary to the interests of farmers and employees, and of exporters in other business sectors.

These two allegations may conveniently be taken together. They are relevant to the portions of the report which are the basis on which Deputy Reynolds and his spokesmen, anonymous and otherwise, make the claim that he has been vindicated.

On page 232 of the Report is the following finding while the decisions made by the Minister for Industry and Commerce with regard to the allocation of Export Credit Insurance in respect of exports to Iraq in 1987 and 1988 undoubtedly favoured AIBPI and Hibernia Meats Ltd, in the sense that they were the beneficiaries of such decisions, the decisions were made by him having regard to this conception of the requirements of the national interest and there is no evidence to suggest that his decisions were in any way based on improper motives, either political or personal.

It has not always been noted that the tribunal here refers to Deputy Reynolds's “conception” of the national interest, rather than that interest itself.

The tribunal at page 213 also found that the exports covered did not “justify the risk involved in granting Export Credit Insurance in the amounts granted” at page 216 that the benefits of these exports to the economy “were illusory rather than real” and at page 233 that the Minister's decisions “were made by him against the professional advice available to him, which advice is set forth in detail in the course of this Report.”

[319] The tribunal also found that these decisions were taken on the basis of arguments presented by Mr. Goodman and that the Minister for Industry and Commerce accepted the arguments put before him by Mr. Goodman and without any independent appraisal, but based on his experience.

In addition the tribunal found that the national interest required the Minister to carry out certain investigations which he did not carry out and which, if carried out would have revealed that the benefits of his proposed course “were illusory rather than real”.

That is not a vindication of Deputy Albert Reynolds. The very best he can convincingly claim is that his integrity has been salvaged at the expense of his capacity for ministerial office.

He accepted Mr. Goodman's argument without independent appraisal; he disregarded the advice given to him; he failed to carry out the investigations required; he favoured two companies above all others; he was aware of the principal application before it came into the Department's hands, but cannot remember how; he insured beef which should not have been insured and he exposed the State to the risk of enormous liability. There is no evidence that he did any of these things for an improper motive. There is, in fact, no evidence as to why he did them at all.

The tribunal also held on page 231—

There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time was personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the Party that they represented.

Naturally, I accept that finding but the words “at the time” may be significant since there was evidence that Mr. Goodman was a guest at Deputy Reynolds's daughter's wedding in December 1990.

There was the Cáirde Fáil dinner of 10 December 1987, when Mr. Goodman was the guest of the Minister Deputy [320] Reynolds, to which event I have already referred. Interestingly, Deputy Reynolds swore several times — four times in all — at volume 135c, page 188 of the tribunal report that Mr. Goodman was “never ever a guest of mine at a Cáirde Fáil dinner”. The public can and have drawn their own conclusions from what they have seen.

In September 1987 Minister Reynolds allocated Mr. Goodman cover in respect of a contract worth $134.5 million and in November 1987 he allocated a further $30 million cover to Mr. Goodman. This $30 million was at the expense of Halal and we know from pages 116-118 of the report that at the very time that this function was being held, Deputy Reynolds was using the services of the Irish Embassy in Baghdad to find out what business Halal and Agra were doing in Iraq, since he had sent urgent telexes to the Embassy on both 9 and 11 December 1987.

Against this background, I understand the Department of Foreign Affairs was very unhappy about what was happening and gave certain advice to the Ambassador. It is not surprising that Mr. Khalid of Halal should have complained to the Ambassador that “his company's efforts to obtain Irish insurance cover were being blocked by an Irish competitor which, he said, had more influence at the political level”.

There is a number of important questions left unanswered by the tribunal. In the first place, why is it that neither Minister Reynolds, nor Mr. Haughey, nor Mr. Goodman, nor Mr. Britton, can recall the circumstances in which the largest ever application for insurance cover was made in August-September 1987? Why was it necessary to deal with the application with such speed? (page 209). While the tribunal does not come to any conclusions, one obvious one, and I submit the only logical one, is that Mr. Goodman had been promised insurance cover by Mr. Reynolds in advance of the application.

All of the circumstantial evidence [321] points to this. Messrs. Britton and Connor, both senior Goodman executives, stated before the tribunal that Goodman would not have gone into Iraq in such large contract volumes without export credit insurance cover. Moreover, the logistical plans — the chartering of ships etc. — were all put in place several weeks before Deputy Reynolds made his formal allocation of cover to Mr. Goodman on 8 September 1987. The first ship for Iraq set sail on the same day the cover was granted.

It is impossible to believe that this would have been done without a prior promise of cover. Many allegations have been made about the Goodman Group in this House, but nobody has suggested that they were fools. They would never have committed themselves to this enormous exposure without a prior promise of cover.

Second, why did Minister Reynolds tell Taher — page 221 — on 7 July 1988, a few days after the legislative ceiling for ECI had been increased to £500 million, that “ECI cover cannot be made available for the Taher Meats contract or indeed any other major contract in Iraq for the foreseeable future” when he went ahead and allocated £100 million extra, plus £99 million roll-over — a total of £199 million — to Goodman and Hibernia in October 1988?

The only explanation is that he had already determined on giving Goodman the bulk of the extra money — and remember that Mr. Goodman claims that this promise had been made as far back as November 1987 — and that at this stage the “managed policy” of confining cover to both Goodman and Hibernia was already in operation, even though Deputy Reynolds did not want to disclose that fact.

In other words, this secret policy was put in operation, but other competitors and, indeed his own Minister of State, Deputy Seamus Brennan, were deliberately kept in the dark about this. Even if there was economic merit in this spurious managed policy argument, which there was not, fairness and transparency dictated that its existence be disclosed [322] to all applicants, as the tribunal was subsequently to recommend at page 235.

In a poll published in The Irish Times last Saturday, it transpired that, despite the fact that the tribunal — operating as it did subject to legal constraints and requiring forensically acceptable evidence — found that there was no evidence of personal closeness between Mr. Goodman and Deputy Reynolds — some 70 per cent of the sample was of the opinion that there was undue closeness between Mr. Goodman and the 1987-1989 Government. Interestingly, this view is also held by two-thirds of Fianna Fáil supporters.

It is easy to see why this is the pattern of public opinion. The tribunal lists many things which should not have been done; things undone which should have been done; hundreds of millions of pounds in export credit insurance allocated in the most informal of fashions, other applications disregarded without adequate reason and pages and pages of excellent advice from inside the public service disregarded if the one-page Minister deigned to read it at all.

To this must be added evasiveness and concealment in the answering of Dáil questions; misleading and distorted reasons given to this House for increasing the statutory ceiling for export credit insurance, and disgraceful attacks on those who dared to question the propriety or the advisability of what the Minister was doing. None of this may amount to direct sworn evidence by which alone the tribunal was affected, but is clearly sufficient to allow The Irish Times poll respondents, and the population as a whole, to draw their own commonsense conclusions.

What has been the Taoiseach's response to this litany of damning findings in the report? Let us examine some of the defences put forward by him and on his behalf since the report was published. I am here quoting from a briefing document circulated by the Government press secretary on the night the report was officially published, on 2 August. This in essence, is almost a summary of the Taoiseach's speech this [323] morning. It is a one page document, the first sentence of which reads: “The Chairman found that all decisions were made in the national interest”. The tribunal found no such thing. It was something of a calculated untruth. What the tribunal concluded was that the Taoiseach had acted according to his own subjective view of the national interest — radically different from what the national interest actually required.

I quote again from the briefing document:

Everything has to be balanced against the benefits to the economy from these exports. In 1987 and 1988 ... cattle prices reached their highest level to date, about 120p per pound. Farm incomes were at their highest level ever. The multiplier effect of buoyant farm incomes was felt right through the whole economy. That is one result one gets from a decision taken in the national interest.

It is perfectly clear from page 213 of the report that whatever may have been the reasons for high cattle prices during these years, it was not due to the actions of the then Minister, Deputy Reynolds. Thirty eight per cent of Goodman's beef exports were sourced from outside the State and of the remainder, 84 per cent came from intervention stocks, making a total of 94 per cent in all his shipments so that only 6 per cent of what Goodman exported could have had any influence on the price of cattle.

The tribunal's conclusions — page 213 — swiftly dispatch the validity of this spurious argument: “the benefit accruing or likely to accrue to the Irish economy from this situation would be minimal compared to the benefit which would accrue if the exports consisted of commercial beef and would not justify the risk involved in granting Export Credit Insurance in the amounts granted”.

I quote again from the briefing document:

[324] All decisions were taken in strict adherence to the guidelines of the Export Credit Scheme, in place since the Fine Gael led Government of 1983.

Again, this is totally untrue. Let us look at the reality of what happened. The 1986 ECI arrangements — set out at page 45 of the report — approved the possibility of cover “under strict and specific conditions” to give cover for exports “which may not be acceptable under the normal scheme but nevertheless have an assumable risk”. It also cautioned about “the need to avoid over-dependence by a particular company on a single market”.

The evidence is overwhelming that ECI cover was granted by Deputy Reynolds in circumstances which were far from “strict and specific”. In the first place, the terms offered by AIBP were significantly better than those outlined in the Government decision of September 1987. Instead of 70 per cent cover, with a 12 month claims waiting period and a premium of 4 per cent — plus 2 per cent if a claim arises — a total of 6 per cent, the terms offered by Minister Reynolds were 80 per cent cover, six months claims waiting period and 1 per cent premium. In other words the premium he charged his friend Mr. Goodman was not a quarter, as Deputy Bruton said this morning, of what the Government had approved, it was one-sixth of it. Deputy Bruton did not know about the 2 per cent add-on in the event of a claim. Deputy Bruton said the Taoiseach gave a direct gift in cash terms to his friend Mr. Goodman of £2.74 million. In fact an extra one-third has to be added to that figure making the direct gift, as a result of his deliberately disregarding the terms of the Government decision, about £3.7 million. No explanation has ever been offered as to why these significantly better terms were offered — pages 211-212.

Secondly, the evidence shows that the then Minister, Deputy Reynolds, was incredibly casual in granting cover. Not only did he consistently reject all Civil [325] Service and professional advice in granting the extended Iraqi cover — that was bad enough — but, worse still, he was apparently quite willing to commit the State to potentially huge sums of money on the strength of oral promises to Mr. Goodman made in social surroundings and, as Deputy Bruton stated, never with a civil servant present and usually in some person's house.

The first of these so-called commitments came on 13 November 1987 — when the then Minister, Deputy Reynolds, made an oral promise that Mr. Goodman would get the balance of the cover — US$30 million available under the then ceiling of £150 million — for Iraqi contracts which he was then seeking.

The second took place on 21 October 1988 when Deputy Reynolds decided to commit the State to a further extra £100 million exposure, together with roll-over of £99 million. A civil servant was then told to inform the companies verbally that the extra cover would be forthcoming.

Thirdly, Mr. Goodman claims — and, unfortunately, there seems to be grounds for believing him — that the then Minister, Deputy Reynolds, gave him an oral promise that, in effect, he, Mr. Goodman, would also be getting the entirety of all ECI cover available for Iraq once the new legislation was passed by the Oireachtas, as it was in July 1988.

In these circumstances, it is no wonder that the chairman recommended at page 236 of the report that, “having regard to the potential liability on the Exchequer if default in payment is made by the purchaser, an allocation of cover for an amount in excess of £3 million should only be made by the Minister, with the specific consent of the Minister for Finance”.

It is also worth reminding ourselves that the decision in October 1988 to allot the further £100 million plus roll-over of another £99 million to Goodman and Hibernia was taken at a time when practically no payments had been made for a five month period; when [326] every civil servant and professional adviser had pleaded with the then Minister, Deputy Reynolds, to reduce the State's exposure to Iraq and when dire warnings had been given about the massive over-dependence on this risky market. In addition, these decisions were communicated to the companies concerned before Department of Finance approval had been secured or perhaps even applied for.

So far from being an “assumable risk”, the Department of Finance concluded, page 158 of the report, that in both September 1987 and November 1988, “... because of the extremely volatile Iraq situation, we regarded it as too much of a gamble with the Exchequer's resources”. In evidence given to the tribunal, Mr. Frewen of ICI concluded that the risks involved were “betting odds” and the risk was 50:50 of ever being paid and Deputy Reynolds charged them a premium of 1 per cent. This is the competent man who has struck the world stage now.

Mr. McGrath: Information on Paul McGrath  Zoom on Paul McGrath  Selling passports.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Mr. Reynolds's decisions also violated another requirement of the Government guidelines in that far from spreading the risk and avoiding over-dependence, the decisions had the effect of allotting well over 30 per cent of all ECI cover worldwide to beef to Iraq.

Finally, the briefing document stated:

And as to the potential liability, the FACT is that since the very first day the Scheme was put in place, less than £8m has been paid out on all claims in the beef sector.

The fact that less than £8 million has been paid out in respect of beef ECI claims is certainly not due to the actions of the then Minister, Deputy Reynolds. The person responsible for that is speaking now. It is salutary to bear in mind that had the beef been sourced in the manner that the then Minister believed it was at the time he made these decisions — that is commercial [327] Irish beef — the State would have had to pay what the tribunal concluded was a sum “well in excess of £100m”.

I want to turn now to Chapter 7 of the report dealing with the Industrial Development Authority. I was Minister for Industry and Commerce for various periods totalling nearly eight years, which is one of the longest periods of office that anyone has held in that particular Department; the late Seán Lemass was the only person to hold that office for a longer period. I am therefore familiar with the practices of the IDA, and of the Department of Industry and Commerce and of the Government in dealing with it.

The history of the Government's dealings with the IDA in the matter of the Goodman beef development plan from 1987 onwards was unusual to say the least. I am not aware from my extensive experience of any other case in which several Ministers, from the Taoiseach down, were simultaneously so involved with the IDA in seeking to encourage it to increase grants and to come to an agreement with a particular company as is the case here.

The principal finding of the tribunal in regard to matters relevant to the IDA is set out on page 284 and states:

There is no doubt whatsoever but that the Government on the 8th day of March 1988 wrongfully and in excess of their powers under the provisions of section 35 of the Industrial Development Act 1986, directed “the Authority” to remove “the performance” clause from the Grant Agreement being negotiated between the IDA and the Goodman Group and that this direction was made either at the instigation of the then Taoiseach or the Secretary to his Department.

This is a startling finding of direct illegality. The Government at the time did not break the law inadvertently. The report records twice, at page 247 and again at page 273, that the then Secretary of the Department of Industry and Commerce, Mr. Donlon, drew the [328] attention of the Secretary of the Department of the Taoiseach to the fact that the Government had no power to amend the grant agreement.

The chapter concludes that this illegal direction by the Government was made “either at the instigation of the then Taoiseach or the Secretary to his Department”. It seems most unlikely that a very senior civil servant, the Secretary of that Department, entirely on his own initiative, sought to give this illegal direction to the IDA. If he were not the instigator, there is only one other person who could have instigated this illegal action, accordingly to the report, that is the then Taoiseach.

What is curious is that no action whatever was taken by the then Minister for Industry and Commerce, Deputy Reynolds — who was statutorily responsible for the IDA — to protect its position. He must have been aware that what the Government was doing vis-à-vis the IDA was illegal because the Secretary of his own Department had drawn the attention of the Secretary to the Government and the Secretary of the Department of the Taoiseach to this fact.

He could hardly have failed to draw the attention of his own Minister to that fact also. Why did the then Minister for Industry and Commerce allow this illegality to continue and why did he not protect and vindicate the statutory rights of his own agency?

When asked at the tribunal if he knew about the Goodman demand for the IDA decision to be changed, Deputy Reynolds cunningly took refuge in the doctrine of Cabinet confidentiality, and the Supreme Court decision, to prevent the matter being pursued.

On page 253 of the report, Mr. Haughey is quoted as stating in evidence that the IDA is “an instrument of Government”. This is consistent with his actions and those of his fellow Ministers at the time. However, the tribunal, having reviewed the Act, holds that “the Oireachtas did not intend that the Authority should be an instrument of the Government ...but should operate [329] as an independent and autonomous body in the exercise of its functions”.

There are some remarkable features about the Goodman five-year development plan as finally approved by the Government, first in June 1987 and subsequently as amended in March 1988. First, the cost per job to the State was £90,000 which is approximately five times the average cost per job at that time and about six or seven times the average cost per job in indigenous industry. This figure is stated at page 240 of the report.

Secondly, the Government and the IDA agreed with the Goodman organisation, as part of an overall package to provide 664 jobs, that Goodman should be allowed to avail of £120 million in section 84 loans. Even though the beef development plan, as the package was called, never went ahead and even though the package was announced in June 1987 and the grant agreement not signed until 22 March 1988, we learn from page 288 that £106 million of this £120 million was drawn down by the latter date, the date on which the grant agreement was signed.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  As I alleged.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  This, of course is the company towards whom favouritism was not shown. It is bad enough that a company which never went ahead with the project should be allowed to benefit from the incentives, but it is much worse, and apparently quite unprecedented, that nearly 90 per cent of one of the most valuable sets of incentives in the package should be availed of before the grant agreement was even signed. This appears to be consistent with what the report notes at page 258, namely, that:

the actions of the Government in deciding that three cabinet ministers viz the Ministers for Agriculture and Food, Finance and Industry and Commerce should make every effort to bring the project to a successful conclusion could be interpreted as a [330] pre-emption by the Government of the role of “the Authority”.

The capitalised value of the section 84 facilities was expressed at the time as £30 million. Since nearly 90 per cent of the subsidised loans was drawn down, with the benefit of section 84, the capitalised value of this to the company was approaching £27 million. That strikes me as rather generous treatment of a company which ultimately did not implement any of the projects it had agreed with the IDA and did not create one single new job. Since the taxpayer paid for most of this, will the banks concerned refund to the Exchequer the tax foregone and recover it from AIBPI who paid only 0.68 per cent interest on some of these loans? I would like to hear from the banks on that point.

Another curious feature of the attitude of the then Government to the Goodman Five Year Plan is that it was originally placed before the Government and considered by them on 26 April 1987 without the knowledge of the IDA, although the Industrial Development Act of 1986 makes it clear that the IDA is to deal with all proposals for industrial development and the Government only becomes involved later in respect of certain larger ones where its consent to the grant-making proposals of the IDA is required.

Earlier on page 258, the report quotes a Government decision of a meeting of 26 April as stating that the three Ministers:

should make every effort to bring the project to a successful conclusion, in particular, by investigating the possibilities for meeting the financing requirements of the project in part by

(i) excluding the food processing industry from the scope of section 52 of the Finance Act, 1986 and/or adjusting the proposed FEOGA financing of the project, or

(ii) reversing the abolition of depreciation allowances on gross capital costs in toto, and

[331] (iii) a revision of disadvantaged areas so as to include Louth;

Ms O'Donnell: Information on Liz O'Donnell  Zoom on Liz O'Donnell  What an extraordinary coincidence.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Deputy Rabbitte seemed surprised that County Louth which we associate with prosperity should be on the verge of being condemned to the standard of the Third World.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  There is certainly no favouritism there.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  That seems to demonstrate an unusual degree of anxiety to assist one company as it sought these changes.

Reading this chapter as a whole, it is abundantly clear that the IDA was dealt with by the Government outside the law and that it was very unhappy about its treatment. Because what the Government did was illegal, there was an obvious conflict of interest between the IDA and the State. Notwithstanding this, the IDA was not allowed to be separately legally represented before the tribunal, even though it strongly wished to have its own representation. Instead it was represented by State counsel and the Chief State Solicitor's office, whose exclusive duty in practice was to serve only the interests of the members of the 1987-89 Government, and not those of the State or the public.

There is every possibility that if the IDA had been separately represented, as was its clear desire, the findings of the tribunal might have been even more stark than they are in this connection and even more blameworthy of the Government. The Attorney General should give an explanation as to why, with the obvious conflict of interest, separate representation for the IDA was prevented by him. Was there a danger of too much of the truth coming out?

All this was being done for the flagship, Goodman Group, but what was [332] going on in some of that group's plants was a matter of grave concern. Of all the many serious malpractices which came to light as a result of the tribunal, some of the worse appear to have been carried on in the cannery at Shannon Meats, Rathkeale.

At page 478, the report says that the Department of Agriculture was in clear breach of the obligations imposed on it by the EC Intervention Regulations and that:

their failure to fulfil these obligations resulted in the misappropriation by the company of intervention beef supplied free of charge and intended to be used in the canning operation and the use of hearts and substituted meat for such purpose is in clear breach of the regulations and specifications.

The report finds that there was a deliberate policy on the part of the management of Shannon Meats to misappropriate, and to use for commercial purposes, the intervention beef supplied to the factory to provide canned beef to the Soviet Union. If also finds that a total of 10,725 cartons of beef so supplied are unaccounted for.

Apart from the vast profits which the company made as a result of misappropriating this beef at the expense of the European Community——

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  And the Russians.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  There is also the deplorable fact that the people of the then Soviet Union, who were to be supplied with canned beef of a good standard by the Community, got product of a much lower quality with the substitution of inferior meat and a large proportion of hearts. This was a scheme of free aid by the European Community for the benefit of the people of the Soviet Union who were then suffering great hardship and malnutrition at the time of the change over from the old Communist regime.

For the company to steal this meat deliberately, to sell it commercially and [333] to supply inferior product to the Russian people is hardly something about which this country can be proud.

Miss Quill: Information on Máirín Quill  Zoom on Máirín Quill  It is beneath contempt.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Were it not for the tribunal, the fact that this was done by one of the Goodman companies would never have come to light. Since I prepared this speech it has occurred to me that this happened in the summer of 1991 after the tribunal had been set up.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is the point.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  The tribunal was not acting as a frightener for certain people. In the summer of 1991 while Mr. Goodman and his management team effectively controlled the company in terms of day to day management, the ownership of it was vested as to 60 per cent in a consortium of 32 banks and as to 40 per cent in Mr. Goodman. I invite the 32 banks concerned to realise what was being done in their name and to point out to them that they have benefited from what went on in Rathkeale and so many other places.

According to the report, the amount which has been misappropriated is 10.725 cartons. At 25 kilograms per carton, this amounts to 268.125 tonnes, equivalent to 15 forty-foot refrigerated containers.

The seriousness of the misappropriation can be seen when it is recalled that in Dublin recently an individual, who I believe was found down at the docks, was sentenced to five years in prison for stealing one container of intervention beef — he was a small time offender so he got five years.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  Mr. Goodman will get 75 years.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  This company, in a matter of two months or so, stole 15 times that amount. As Deputy Harney has remarked, pro rata that amounts to 75 years. It would appear that it was the better quality meat as opposed to what [334] was supplied free that was taken. It was sold on the commercial market where it would command high prices. Its value is estimated at something approaching £1 million.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  There is plenty of room in the jails for him.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  In fairness it should not be assumed that the local management at Rathkeale personally benefited in any way from this activity. I am certain they did not. They were simply doing what they were told.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  They were serving their master.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  This is obviously a case where the Garda should be actively involved in bringing criminal proceedings and I hope that the DPP will make a decision to prosecute with the same alacrity as he showed in his anxiety to prosecute Ms Susan O'Keeffe for activities that were scarcely comparable with what went on in Rathkeale.

I wish to deal now with some of the issues which arise for the Department of Agriculture. I do not take pleasure in doing this. It is the first time that any one has had to speak about a Department in this way in the 70 odd years since we gained independence.

As I mentioned before, I sought the assistance of that Department in 1989 and furnished it with a veterinary certificate sent to me by Hibernia Meats. That certificate was, unknown to me, a forgery. It must have been obvious to the Department of Agriculture that it was a forgery, yet for some reason, I was not informed of the forgery by the then Minister or his Department. I regard the failure to alert my Department or me to the forgery as a very serious and unexplained omission on the part of the then former Minister for Agriculture, Michael O'Kennedy and his Department. Taken by itself, it is serious enough. Taken in conjunction with other known acts or omissions, it takes on an even graver character.

[335] We have the added fact that when CBF furnished a memorandum which pointed to the heavy use of intervention beef for the Iraqi market, a civil servant in the Department of Agriculture decided to alter the memo to suppress that information. He said that others in the Department knew and that his doing so reflected departmental policy.

The passage of the report at pages 544 and 545 clearly demonstrates that the alteration made by Mr. Joseph Shortall to the CBF memo was of fundamental significance. The Department of Agriculture is noted at page 545 of the report to have been “fully aware” at all times that intervention beef was being used in the Iraqi trade.

Yet, when I as Minister sought from the Department of Agriculture in 1989 details as to whether intervention beef was used, I was stonewalled by explanations that it would be administratively impossible to give me the data I sought. I believe that the Minister for Agriculture was aware of the use of intervention at the time the decision was made to increase export credit insurance cover for the Iraqi beef market. His Department knew about it but suppressed the information. The finding by the tribunal that the Minister for Industry and Commerce, his junior Minister and the Department were unaware of the use of intervention beef prompts me to one or other of two conclusions: (i) there was a deliberate and concerted campaign to suppress the truth within the Department of Agriculture, or (ii) there was appalling negligence in protecting the taxpayer's interest.

Unfortunately, I am driven to the conclusion that the suppression was deliberate and was put into effect at a senior level in the Department of Agriculture. I believe the Minister must have known of this suppression. The report offers little comment on this behaviour except to emphasise its significance. The Minister for Agriculture, and thereby the Department, thus contributed to the export credit insurance debacle.

[336] The matter does not end there. The Department of Agriculture was found to be at fault in relation to the boning hall and cannery episodes at the Rathkeale plant. There was ample evidence that false and forged stamps were used at a number of Goodman plants.

One might think in these circumstances that there would be a good deal of circumspection in the Department's dealings with the Goodman organisation. On the contrary, the Department of Agriculture and the Minister seemed to regard the Goodman organisation with a strange attitude which was close to reverence.

It is a pity that the misconduct of the Department of Agriculture in relation to Emerald Meats Limited could not be dealt with by the tribunal. That case revealed serious breaches by the Department of Community regulations to the detriment of a non-Goodman company.

One of the matters of considerable concern arising from the tribunal is the extent to which answers to parliamentary questions in this House were inaccurate, evasive and untrue. As the Chairman himself remarked during the tribunal, there might have been no need for a tribunal had questions been fully and adequately answered. This was especially so in relation to export credit insurance and I give a few examples.

On 13 April 1989, Deputy Pat O'Malley put down a series of questions asking the Minister for Industry and Commerce to explain the discrepancy which had emerged between the trade statistics for beef exports to Iraq, and the amount of insurance cover for beef to that country. We now know from evidence given to the tribunal that the explanations given by the Minister were spurious and were known to be spurious at the time. Indeed, we know from a memorandum produced in evidence at the tribunal that the civil servant who formulated these replies was later congratulated for having given information “which will probably confuse the Deputy”.

[337] Likewise on 20 April 1989 and 3 May 1989 in response to questions put by Progressive Democrat Deputies, Minister Burke said of the ECI decisions that “the first two companies to apply had at the time of their applications firm contracts for the supply of beef to Iraq”. We know that this answer is false. On 8 September 1987, Minister Reynolds allocated ECI for beef to Iraq to both Hibernia and Master Meats. Neither company had a contract at the time and, indeed, Master Meats never did business in Iraq. It nonetheless was allowed to hang on to its ECI cover for a year before mysteriously transferring same to Hibernia, and just before it was equally mysteriously taken over by Mr Goodman.

Likewise, in the Adjournment Debate on 10 May 1989, Minister Burke described my charges of the use of non-Irish beef by the Goodman Group as “reckless”. Yet we know from the tribunal that he knew from the initial Fisher reports that that statement was an accurate one. I remember well how excited and agitated he became that night. He was also most apoplectic in his anxiety to condemn me for making these points, even though he knew them to be true. The tribunal decided not to deal with these matters.

Among other matters not dealt with in the report to any conclusion is the question of the forged veterinary certificate submitted to me as Minister for Industry and Commerce by Hibernia Meats in November 1989, and sent to the Department of Agriculture a few days later. That Department would have seen immediately that that certificate was forged, but the first time that I became aware of its forgery was when evidence was given to the tribunal in October 1992 some months after my appearance there. I never received any satisfactory explanation of why there was this concealment by the Minister for Agriculture and his Department.

Parliamentary democracy consists fundamentally in a popularly elected legislature holding the Government of the day accountable for its actions. That [338] accountability can only be properly exercised and implemented if the Government of the day is prepared to abide by certain basic ground rules of truthfulness and disclosure. That is so because only the Government of the day has access to the full facts.

If, as happend in this case, there is deliberate concealment of the truth, the system breaks down and we have a damaging blow inflicted on our democratic institutions which affects society as a whole, and not just the members for the time being of the legislature, who in any event, are only there as representatives of the people and not in their own personal right.

These are several examples of how this House was misled by Ministers on different aspects of this matter. Is this acceptable to the House and to the country? The truthful answer to my question is that, for the most part, it probably is.

I am however given hope by the result of last Saturday's opinion poll in The Irish Times, and, in particular, its finding that 71 per cent of those polled believe that Ministers who lie in the Dáil should be fired from their post or forced to resign from the House.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  You would have no Government.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Shock, horror. Because misleading this House is acceptable to quite a few, parliamentary democracy in Ireland is a great deal less secure than many of us would like to think and a great deal less firmly embedded than it is in other countries.

In January 1993, Paul Schluter, Prime Minister of Denmark, resigned from office as Prime Minister and as leader of his party on the publication of a report which was critical of the fact that he had stood by his Justice Minister who had given inaccurate information to the Parliament. The topic, dealing with refugees, was not of great importance in Denmark. The Justice Minister had already resigned. Yet when the report was published, Mr. Schulter resigned, [339] without being called on by anyone to do so, because of the doctrine of parliamentary accountability.

The Australians are noted for the robustness of their political system. Notwithstanding this, the former Premier of Western Australia, Mr. Brian Burke, has recently been charged, convicted and sentenced to two years imprisonment for certain activities arising out of political fund raising while he was Premier. Some other alleged misconduct of his is currently the subject of a second and further commission of inquiry in Australia.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I will bet he is sorry his forebears emigrated.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Great minds think alike. I was coming to that. There must have been a leak. It may or may not be a consolation to Mr. Burke to know that if he had come here and practised the profession of politics in the land of his ancestors, then all might have been well. There would not be much chance of his being charged with anything here, let alone convicted and sent to prison.

For all their apparent robust practices in the political scrum, the Australians have a sense of accountability which they regard as essential, but which is largely absent here. They realise that, if members of the Executive act in a particular way and are allowed to get away with it, the basic democratic system will break down. The sad fact is that that is not widely recognised here.

Over the past 30 to 40 years, there have been numerous British ministerial resignations arising out of different and sometimes bizzare affairs, but frequently the proximate cause of the resignation was not the personal misconduct of individual Ministers but the fact that they misled the House of Commons. In this country misleading the House is the least culpable of abberations. Certain Members and former Members of this House feel they can sleep easily in their beds tonight. They [340] do not live in a country where in practice any real accountability to Parliament is widely demanded.

Why is there no such real accountability? There is none because the development of our constitutional institutions over the past 70 years, and in particular over the past 30 years, has led to a growth in the undoubted primacy of the Government, some increase in the powers of the courts and a marked diminution in the standing of the only directly elected and popularly accountable institution, the Legislature.

Taking the Oireachtas as a whole, we find that the kernel of the problem lies in this House. The Seanad is not elected by the people and some Members are not elected and it has no democratic or moral authority to hold the Government accountable.

The problem has not happened overnight. It has been a gradual but inexorable process that this House over several decades has allowed itself to be ground down to a position where it is in practice subservient to the Government, rather than having the Government answerable to it as was intended in the Constitution.

This House loses control the day it elects a Government. It then becomes an instrument of the Government, its own creature, rather than an autonomous and superior institution. Even the very offices of this House are seen as in the gift of the Government rather than of the House and the inevitable consequence of that is plain for all who want to see.

I have characterised this report as a damning indictment of certain members of the 1987-89 minority Government. None of the Ministers or Ministers of State whose job it was to uphold the law and to uphold the interests of the people in this instance discharged his duty. On every front, these were not mere errors of judgment but radical departure from the standards imposed by high office and the trust reposed in elected politicians by the electorate and the Constitution. Many of those who breached that trust have left office or [341] have been removed from office, but the present Taoiseach remains in office supported by those who have now come into this Dáil on a commitment to “put trust back into politics”.

I set no unattainable standards for democratic politicians. Setting standards for others is not the function of individual politicians. Moralising about the failures or failings of others is repugnant. This debate is not about being “holier than thou”. This debate is about accountability.

Who is accountable for the illegal usurpation of the IDA's authority? Who is accountable for failing to protect the IDA, an agency under the Taoiseach's charge and protection? Who is accountable for incurring liabilities between £120 million and £200 million against all advice and for the private benefit of one man? Who is accountable for failing to inform the Government that the Iraqi beef market was being supplied by foreign and intervention beef? Who is accountable for failing to investigate that issue? Who bears the blame when the only thing standing between the taxpayer and financial catastrophe is a fortuitous misapprehension as to the sourcing of the Goodman beef? Who takes the ultimate blame for the alteration of the CBF memo? Who will explain to this House why that was done? Who is responsible for seeing that the thefts at Rathkeale are prosecuted? What Minister will put his hand on his heart in this House and say that the pattern of thefts and tax evasion were not done for the benefit of the Goodman organisation? Who in this House believes that the forged stamps were procured here and there in the Goodman empire as isolated, coincidental acts of individual enterprise by corrupt employees? Who in this House believes that the journalist who reported the scandals should be the only person to stand in the dock? She is rendering herself accountable in law according to her conscience. Where among the mighty are those who will render themselves truly accountable at the bar of public opinion?

[342] Critics of the report point to omissions in its scope and judgment. The tribunal saw itself as finding facts based on evidence. We, who established the tribunal, are charged with the duty of drawing inferences and making judgments on the facts. These judgments are fundamentally political judgments, but that is not to lessen them. This is the forum where the people expect judgment to be given. They look to every man and woman in this House to face up to the formation of judgment based on the facts found, to render accountable those whose conduct calls them to account. We are here to vindicate the principles of democratic accountability which this report shows was systematically trampled down by those who abused their position of trust.

In that spirit the Opposition amendment is moved. If it is passed, it carries with it the inevitable censure on those responsible, particularly the Taoiseach. If there is one word in the Opposition amendment that any member of the Labour party disputes, this is the place and now is the time to argue the point, but if the Opposition amendment reflects the true convictions of the majority of this House, we have a clear duty to act on those convictions and bring accountability to the conduct of our democracy and, in so doing, to “put trust back into politics”.

Mr. Harte: Information on Patrick D. Harte  Zoom on Patrick D. Harte  Before the next speaker is called the House should take note that for the past hour and three quarters not more than one Deputy from the Fianna Fáil Party and no Deputy from the Labour Party has been here, which is a disgrace.

Mr. Power: Information on Seán Power  Zoom on Seán Power  We heard it all before; it is nothing new.

Mr. Harte: Information on Patrick D. Harte  Zoom on Patrick D. Harte  It is the function of the Government to provide——

Mr. Power: Information on Seán Power  Zoom on Seán Power  The Deputy should look after his own party.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  On four occasions, I [343] addressed this House on what subsequently — together with the contents of the “World in Action” programme — became the subject matter to be inquired into by the Tribunal of Inquiry into the Beef Processing Industry. From my speeches of 28 August 1990 — column 2093 of the Official Report; 25 October 1990 — column 439; 15 May 1991 — column 1252; and 24 May 1991 — column 2458, the tribunal itself extracted altogether 33 allegations which were listed in the tribunal's own document entitled “The Book of Allegations”. One of these allegations related to the halving of the CBF budget for 1988 because of improper influence being brought to bear by the then Taoiseach, Mr. Haughey. The tribunal has found that while the budget of CBF for the year in question was halved, there was no improper intervention by Mr. Haughey. Because of my respect for this House, and since this is the first opportunity I have had since the publication of the report of the tribunal, I now wish to acknowledge that there was no evidence adduced before the tribunal to improperly implicate the then Taoiseach in that particular decision and, accordingly, in respect of that particular allegation, I apologise to Mr. Haughey.

In respect of a different allegation entitled “ICC”— page 359 of the report — which does not concern the beef industry but rather relates to the use of political influence the tribunal finds no basis for the allegation. I accept this finding. I should add that since I could not put my informant in the witness box, I did not seek to defend this allegation. I did not deal with it in my original comprehensive submission to the tribunal or in my personal statement and on my instructions my lawyers did not cross-examine the ICC representative. Transcript No. 157 (b) of 2 January 1993 shows that it took up altogether six minutes of the tribunal's time, a fact which is difficult to reconcile with the remark at page 359 that the tribunal [344] expended “considerable effort and time in its investigation”.

Straight off I want to say that it is remarkable that while there has been dancing in the rezoned streets of Longford at the presumed vindication of the Taoiseach, Deputy Reynolds, in the month since the publication of the report, other than the detailed statement from the Tánaiste, there has not been one statement from a senior Government Minister condemning in forthright terms the systematic tax evasion, the widespread malpractice, fraud and irregularities disclosed in the report. Surely the Ministers concerned have some views on these matters, or is “vindication” of the Taoiseach more important than respect for the rule of law and democratic accountability?

The task of assessing the findings of the tribunal as against the allegations comprised in the Book of Allegations, as compiled by the tribunal itself, is made quite difficult, not merely because of the manner of presentation, but because there is no finding in respect of some of the original allegations. For example, the second version of the Book of Allegations is listed as Appendix I to the report. However in Chapter Four of the report, there is contained a list of allegations which purports to be a summary of the allegations made in Dáil Éireann. The two are quite different and apart from an explanation for excluding a small number of allegations for reasons of private contract, there is no explanation as to why certain other allegations included in Appendix I, do not expressly appear in Chapter Four although findings of fact in relation to some of them are embedded in the report itself.

In my own case, nine allegations were uncontested before the tribunal, three excluded by reason of private contract, nine wholly or substantially established, four partially established and five dismissed. I wish to return to these latter two categories since they almost exclusively relate to allegations of political connections and personal closeness. This is not to pretend that all allegations [345] in the Book of Allegations were of equal import. Clearly it is possible to identify the issues of export credit insurance, tax evasion, the IDA plan and section 84 loans, malpractices in certain plants and failure of the regulatory authorities as the ones which caused the Dáil to unanimously approve the establishment of the tribunal in the first place.

Clearly a tribunal would not have been established merely to inquire into some of the more minor allegations and the report is critical of “the terms of the resolution passed by both Houses of the Oireachtas” since it failed to specify “the allegations regarded as of urgent public importance”. The report notes on page three that “As a consequence of such failure the Tribunal was obliged to inquire into all the allegations which it could discover in the official Dáil Reports.” It was possible for both Houses of the Oireachtas to anticipate this justifiable criticism and indeed I did attempt on 24 May 1991 to make this precise argument in column 2461, volume 408 of the Official Report:

I submit that the tribunal can and should select for investigation the more serious charges that have been advanced; otherwise the prospect of an interminable inquiry beckons.

On the same date I said in column 2460:

We do not want to send a huge judicial juggernaut nosing down every twisting and mucky boreen in Ireland or sneaking along every unapproved road between the Republic and Northern Ireland. If we want to get at a fair measure of the truth, we have to keep our eye on the ball.

The tribunal obviously found itself constrained by the terms of the Resolution of both Houses of the Oireachtas and, therefore, not permitted to be selective or to concentrate only on the more serious allegations. The result has been a more prolonged and expensive inquiry than anticipated but a revealing and devastating critique, not merely of the conduct of our public affairs but of the [346] character and culture of one of our biggest private companies. The report exposes the fundamental flaws at every level of our democracy from the Civil Service to the Cabinet to the functioning of this House and the Constitution itself.

It would have assisted those attempting to follow the enormous workload of the tribunal if an explicit finding was recorded against each allegation listed in the Book of Allegations. Alternatively the inclusion of a summary that would list each of the allegations with a corresponding finding by the tribunal would have presented readers with a fairer snapshot of the totality of the issues. It would also have made it more difficult for those who have been busy seeking to misrepresent the findings of the tribunal to accomplish their objective. However, in fact, for those prepared to engage in a little archaeological excavation the findings are indeed embedded in the body of the report with nugatory insights into political practices and corporate behaviour.

On pages 24 and 25 of the Report of the Inquiry into the Beef Processing Industry, the tribunal does explain that in respect of allegations under the following headings viz: “Goodman and the Banks”, “The Cyprus Loan”, “Goodman and Classic Meats”.

While these allegations were originally included in the Book of Allegations to be inquired into, the Tribunal subsequently decided that they did not come within the terms of the Resolution passed by the Houses of the Oireachtas.

It should be noted here that on 28 August 1990, I used my speech in Dáil Éireann to bring into the public domain for the first time the existence of what subsequently became known as The Cyprus Loan and on 15 May 1991 I explained in column 1254, volume 408 of the Official Report that my purpose in doing so was to show that Mr. Goodman of Goodman International “was acting as a money broker at the same [347] time as he was facing financial collapse”. In other words, it ought to be recorded that on the one hand the Dáil was being reconvened to rescue the Goodman group of companies at the same time as this loan of £20 million, in circumstances that may never be clear, was still outstanding.

In respect of my allegations — and of those of other Deputies — relating to the Master Meats takeover, which were also excluded from the remit of the tribunal, it ought to be recorded here that this issue goes to the heart of much of this controversy because it related to the monopolistic tendencies of Goodman International. It was established by the Fair Trade Commission that Goodman was indeed the force behind the takeover. The entire thrust of my various speeches on this issue was to highlight how one conglomerate was achieving a dominant position to the detriment of other beef processing companies and ultimately to the detriment of employment in our economy. I instanced the specific case of Halal and I was accused in this House of being a consultant for them. Let me make it quite clear that Halal never contributed either to me or to my party but I instanced the case of Halal to make the point of how unfair the treatment of other beef processing companies was. I alleged that this unfair competition was not only not being counteracted by the Government of the day but was being positively assisted. On this question of political favouritism, Deputies Spring and O'Malley made similar arguments, to which I will return.

It is a matter for regret that only a minuscule fraction of the public will read the report. Notwithstanding its frequent use of circumspect language, it is a devastating critique of the conduct of public affairs in this society. With the exception of the Arms Trial in 1970, the quality of Government decision making has rarely, since the foundation of the State, been subjected to sustained public examination. This report, in addition, subjects to public scrutiny for the first [348] time how Ministers interacted with big business, civil servants, State agencies and this House. In this instance the issues include the economic well-being of one of our major industries, our reputation as a trading nation, the behaviour, competence and practices of some of our most senior politicians and the propriety of relationships between these senior Ministers and a prominent businessman who was a major financial contributor to the political party of the Ministers concerned and whose stated objective was to persuade the Government of the day to restrict enormously valuable State assistance to his own companies.

This is not to argue that the man in the street would find all of the report immediately intelligible. As has been widely commented on, in terms of presentation, the report is not user friendly. The Church of Ireland Gazette of Friday, 19 August 1994 has noted:

“Throughout the report, there is a reluctance to express opinions or pass judgment where the weight of evidence appears to warrant it.”

This natural expectation on the part of law-abiding citizens for clear conclusions — not to mention opinions — even “where the weight of evidence appears to warrant it” must be viewed against the repeated assertions in the report that the tribunal may have “regard only to properly admitted evidence.” In other words, as stated on page 9 of the report, the tribunal ... “has sifted through rumour and hearsay but relies only on evidence, properly admitted, for its findings.”

This strict adherence by the tribunal in its findings to “properly admitted evidence” ought to be noted given the particularly silly commentary in The Sunday Business Post on 7 August by a Ms Synon who sought to give the impression that in a tribunal the rules of evidence do not apply but rather what she disgracefully termed a “hybrid jurisprudence” in a “pseudo-court.” The fact that the person concerned had enlisted “when all this started in 1991 to [349] help Mr. Goodman” may help explain her choleric outburst to the searing indictment in the report of her hero's corporate character.

Nonetheless it appears to be the case that having made his findings of fact, the chairman of the tribunal does, on occasion, as noted by a more serious and informed commentator, refrain from allocating blame. Sometimes the conclusion is left to hang in the air as if the tribunal was inviting this House to exercise its duty by drawing the only reasonable and inescapable conclusion and by inference to take steps to address its implications. Sometimes, as in the case of the operation of export credit insurance, further conclusions and indictments are avoided by resorting to the making of specific recommendations regarding the future conduct of export credit insurance. These recommendations, by inference, are further condemnations of the practices engaged in by the 1987-89 Fianna Fáil Government and in particular by the then Minister for Industry and Commerce, Deputy Reynolds. Similarly, comment on the evidence and performance of Stokes Kennedy Crowley, the Goodman auditors, is avoided by the mechanism of making a forthright recommendation about the future obligations of auditors. Most notably, the matter of financial contributions to politicians and political parties is avoided in the report and, in fact, the figures admitted before the tribunal are not even recorded.

Most people would agree that financial contributions to political parties are “normal” as the tribunal finds at paragraph (54) page 12, but whether most people would agree that financial contributions of £175,000 to a political party are “normal” is a matter that at a minimum is at least open to question. By choosing at page 12 “not to refer further to this matter” the tribunal leaves its conclusions on political favouritism open to question in the manner, for example, set out by the Sunday Independent journalist, Mr. [350] Gene Kerrigan in that paper of 7 August 1994:

Political favouritism is not just about people getting an edge because they are in the party. It is about wealthy people who give huge sums to politicians who are making decisions that will affect the donor's business, and who get to have private consultations with ministers. For every company that gets an advantage through access, another suffers in relation. With the judge's decision to leave aside consideration of the financial relationship between business and politics the report is not so much Hamlet without the prince as Macbeth without the dagger.

The report also goes to extraordinary lengths to protect the public service whilst at the same time pinpointing chronic failures and deficiencies, not least in the Department of Agriculture. For example, the report finds that an official in the Department of Agriculture altered a document from CBF intended for the Minister of State, Deputy Séamus Brennan, on his way to a trade fair in Baghdad and the alteration was to conceal the fact that the product concerned was in very large part coming out of intervention stocks. Despite the enormous implications of this action, it does not attract censure or further comment. I understand that the official concerned has since been promoted. Meanwhile the journalist, Susan O'Keeffe, is facing jail.

The extraordinary aspect of the evidence of the official concerned — and I have the transcript here — is that on page 40 he makes clear that what he was doing would have the full support of his Department. “I was reasonably satisfied that they too would have agreed with what I did.” He goes on to say “The Assistant Secretary would have been Dr. Patrick Power but I was satisfied that the amendment to the document would be acceptable departmental policy”. On page 49 of his evidence before the tribunal Mr. Shortall again makes the point when questioned about why [351] he made the alteration. I quote from Question 244: “It was my view that a slightly different version than the one that was prepared by CBF should be what went into the official brief”. He goes on to say that he has no reason to believe that they did not do this quite often in the Department of Agriculture. This attracts no censure and yet the word “unethical” is used about the journalist, Susan O'Keeffe.

Despite the scale of theft and wrongdoing uncovered, as Deputy O'Malley said, at Rathkeale, it is concluded that: “There is no evidence to suggest that the AIBP Management at Ravensdale were aware of the fraudulent activities being carried out by the management of the Plant at Rathkeale with regard to the misappropriation from the boning hall of beef intended to be placed in public storage and the misappropriation of intervention beef supplied free of charge to the Cannery for inclusion in the Russian contract and the records furnished weekly to AIBP management at Ravensdale did not disclose such misappropriation”. I think we have established that the value of it was approximately £900,000.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  What evidence could there have been?

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  That was for 34 days worth, the £900,000.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is right. On tax evasion, it is concluded in the report that “the system of concealment was common in all relevant plants, was known to the top management of the group, undoubtedly authorised by them” and in the words of Mr. O Donghaile of the Revenue Investigation Branch “was very well and professionally put together and had been organised by a large organisation and it had been organised by professionals.”

Does “top management” include Larry Goodman? The report is silent on this important issue.

[352]Miss Harney: Information on Mary Harney  Zoom on Mary Harney  He does not manage the company.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The man on the Tallaght bus will conclude that Larry Goodman did not get where he is today by not knowing what is going on in his plants.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  The man on the Tallaght bus would be in jail.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The chapter on export credit insurance shows beyond any doubt that the then Minister for Industry and Commerce, Deputy Albert Reynolds, was guilty of breathtaking political misbehaviour but there is no explicit finding to this effect. To lose one Taoiseach and one Government is a misfortune; to lose two would have been carelessness. Unfortunately for the Taoiseach, the facts speak for themselves.

It is important to put on the record of this House the general overview of the events on which this tribunal spent so much time and to identify the genesis of the policy which has caused so much controversy, which led to the collapse of the biggest processor in one important industry, the recall of the Dáil in August 1990, the “World in Action” programme, the setting up of this tribunal, the fall of a Government in November 1992 arising out of statements made by the Taoiseach, the findings of this report and the strains now placed on another Government seven years on from that fateful decision.

In a letter dated 5 March 1987 the then Minister for Industry and Commerce, Deputy Noonan, wrote to Brian Britton, the Deputy Chief Executive of Goodman International in the following terms:

The Minister is satisfied that the totality of difficulties facing the Iraqis, reflected in the non payment of significant amounts currently due to Exporters are such as to preclude him from extending further cover.

I would have to comment that [353] there are parts of your letter which I find distasteful and consider to be rather less than helpful. In the interest of accuracy I should point out that the Department's records of the Minister's comments to your request for cover during 1986 do not refer to his indicating a promise of favourable treatment for your application such as is suggested in your letter.

For the record the Application from Goodman International Limited is not the only one we have received from Irish Meat Exporters for cover in Iraq.

In an internal note on 8 March 1987 Mr. Britton noted the receipt of this letter and stated that he intended waiting until the new Minister was appointed before taking further action. A very percipient remark.

On receipt of this note, Mr. Larry Goodman directed Mr. Britton “to keep Goodman International ahead of other Exporters”— and then, tersely, “find a way to achieve this.”

On 11 March 1987 there had been a change of Government and Deputy Reynolds was appointed Minister for Industry and Commerce by the new Taoiseach, Charles J. Haughey. On 9 April 1987 a meeting took place between the Taoiseach, the Minister for Finance, Mr. Ray MacSharry, the Minister for Industry and Commerce, Deputy Albert Reynolds, the Minister for Agriculture and Food, Mr. Michael O'Kennedy and the Minister of State for Food who described himself as the Minister for kick-starts, Deputy Joe Walsh, with Laurence Goodman and Brian Britton regarding a proposed development plan for the beef industry.

The question of export credit insurance for beef exports to Iraq did not form part of that discussion but when the business of the meeting was concluded, Mr. Goodman availed of the opportunity to talk to the Minister for Industry and Commerce, Deputy Reynolds, about it. At the same time [354] other matters of significance were continuing apace which were effectively time bombs waiting to go off.

On 26 November 1986 Richard B. Hanrahan, a Customs and Excise officer, visited the Waterford cold store to check a bond belonging to AIBP. The bond selected for examination was No. 716 which related to the production for 25 November 1986 and to 464 cartons of boneless beef. He attempted to compare the individual weights on the cartons with the individual weights on the production records. He had great difficulty in so doing and eventually abandoned the attempt.

On 12 December 1986, Seán Ó Briain, an officer of Customs and Excise, during the course of a visit to Autozero Limited, Dublin, examined Bond No. 695 which related to production on 18 November 1986 and noted that the total of the weights marked on the cartons of shins did not correspond with the stated weights.

These inspections effectively led to a major investigation now known as the 1986 APS scheme on Waterford-Ballymun. They are dealt with in detail by the chairman at chapter 16 of his report. Matters relating to this investigation became the subject of an exchange between former Deputy Barry Desmond and the then Taoiseach, Mr. Haughey, on 9 March 1989, which led to a famous statement by the then Minister for Agriculture and Food, Michael O'Kennedy, to the media which had to be corrected later and the accusation that Deputy Desmond at the time was sabotaging the beef industry ought to have been withdrawn. This investigation continued right throughout 1987 and 1988.

I should have said that was not the former Minister O'Kennedy's most famous statement. His most famous one was when being quizzed on pertinent facts in the witness box he told Mr. Justice Hamilton that not only was he not concerned about the reputation of Irish beef but how it filled his heart with joy when, while visiting Milan with a number of colleagues in Europe whom he [355] named at great length, he saw at the top table none other than Pavarrotti eating Irish beef.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  He thought it was Irish beef.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  If Pavarotti knew it came out of intervention he would have a different view of it. Unknown to the Ministers at the meeting of 9 April 1987, there had been a no less significant meeting of senior management at Goodman International two days previously when it was reported that in the course of a routine audit at the AIBP plant at Cahir on 13 March 1987 the auditor, John King, carrying out the annual audit for the year ending 31 December 1986 discovered that approximately £840,000 had been paid out on phoney haulage invoices. That meeting fatefully decided to cover up the tax evasion by describing it as unpaid loans to workers and the jumping of the gun in relation to new dividend companies that were about to be set up for tax efficient reasons. The decisions at that meeting led substantially to the Examiner and the Revenue Commissioners being misled in October 1990 and to the ultimate findings of this tribunal on tax evasion based on documents I submitted in evidence, corroborated by Patrick McGuinness, which are detailed in chapter 9 of the report.

The initial meeting of 9 April 1987 led to a flurry of activity unprecedented in Irish public administration both in relation to the beef development plan and export credit insurance to Iraq. We must keep both of them in mind although they are not together in the report. What was in it for Goodman International and Goodman? On the one hand there was the beef development plan which never got off the ground but on which he drew down £106 million in section 84 loans with a capitalised value estimated by the IDA to be £30 million if he had drawn the full package. It was almost £27 million. [356] The export credit side was worth countless millions of pounds to him. It is a matter of how much over £100 million was it worth.

The flurry of activity on the beef development plan is described in detail in chapter 7 on the Industrial Development Authority dealing with the receipt of the plan on 23 April 1987, its approval on 16 June 1987 by Government and the press conference on 18 June 1987 and the detail of that is a lesson on how to organise a press conference.

Having apparently moved cautiously in April 1987 on the reintroduction of export credit insurance against all professional advice available to him things took a sudden turn for the worse as the summer of 1987 developed. Deputy Reynolds met Mr. Britton on 13 May and 21 May, the main purpose being the beef development plan and Deputy Reynolds had little doubt before the tribunal that export credit insurance would have been discussed.

On 2 July 1987 the famous contract between AIBP and the Iraqis for the export of beef with a total value of $134,500,000, the largest ever negotiated by the Goodman Group, was signed. On 8 July 1987 Laurence Goodman met Deputy Reynolds and updated him on export credit insurance. On 14 July 1987 Mr. Goodman met the Taoiseach, Charles J. Haughey. We know that Mr. Goodman had the telephone number, as Deputy O'Malley has explained at some length, of Deputy Reynolds' Dublin flat, his Longford office and his home.

The situation dramatically changed on 28 and 31 August 1987 when Mr. Dominic McBride, the Minister's Private Secretary noted:

I understand from the Minister that Anglo Irish Meats will today be making a submission for consideration by the Department. The Minister will make a decision on Iraq following an examination of the Anglo Irish Meats' proposal. It will require Government approval and he wants a [357] memo for Wednesday's Government meeting. The Minister is unlikely to attend the Government meeting and the Taoiseach will be taking this item at Government.

I am advised — I am not in a position to say but Deputies Bruton or O'Malley may be — it is unusual when a Minister is not available for a matter to be sponsored by the Taoiseach at Cabinet. It is normally sponsored by another Minister. Whereas we spent considerable time before the tribunal on Cabinet procedures I cannot find any reference to proper Cabinet procedures here. The whole thing was organised quicker than one could say “passports for sale”. The Departments which normally would be allowed to comment and give their observations were not so allowed. Deputy Reynolds was still in hospital and Mr. Haughey stepped into the breach.

The report finds there is no doubt whatsoever but that the Minister for Industry and Commerce on 31 August 1987 informed Mr. McBride that an application would be made by AIBP and the steps to be taken in regard thereto.

On 31 August 1987 Brian Britton, the deputy chief executive of Goodman International, wrote to the Minister for Industry and Commerce seeking export credit insurance on the major contract and the letter was received in the Department on 1 September 1987. No decision was taken at the Cabinet meeting on 2 September 1987. On 4 September 1987 the Secretary of the Department and the Minister had a detailed discussion. A Memorandum for Government was finalised and cleared by the Secretary on 7 September 1987 and on 8 September 1987 the Government decided that the ceiling for insured exports to Iraq should be raised from £70 million to £150 million which cleared the way for the Minister to approve export credit insurance for the contract which was duly done.

On the same day, 8 September 1987 at 4 p.m. the Minister for Industry and [358] Commerce, Deputy Reynolds, met with Mr. Oliver Murphy of Hibernia Meats Limited and Paschal Phelan of Master Meats Limited and in the course of that meeting made an offer of an export credit insurance facility of £10 million to Hibernia Meats Limited and £10 million to Master Meats. On the regulatory front, nine days later on 17 September 1987 an event of significance took place at the Dublin Circuit Criminal Court when Mr. Norbert Quinn pleaded guilty to charges of forgery relating to an incident on or about 28 October 1983. In the course of evidence to that court it was revealed that bogus customs stamps had been manufactured and ordered by Cahir Meat Packers Limited, Cahir, County Tipperary — a company within the Goodman Group. This was followed within a month by another significant incident which became a cause celebre at the tribunal itself as the chief witness, Patrick McGuinness, was accused of having ordered bogus stamps without any authority. On 16 October 1987 car-cases at the AIBP plant in Waterford were found to have had bogus classification stamps applied.

Matters continued apace on the export credit insurance front which led to a further significant meeting on 13 November 1987 between Mr. Goodman and Deputy Reynolds. Judge Hamilton found in relation to that meeting that it would appear that the Minister for Industry and Commerce accepted the arguments put before him by Mr. Goodman and, without any independent appraisal but based on his experience, formed the view that it was against the national interest and the national economic interest to allow foreign consumers the benefit of lower prices which he feared would happen if export credit insurance was granted to beef exporters other than AIBP and Hibernia Meats Limited and decided that export credit insurance cover should only be granted to these two companies. This was the famous “managed market” which Deputy Reynolds could not make up his mind whether he was operating or not and, in fact, denied so doing. This led to [359] the withdrawal of cover from Halal on 27 November 1987, and a letter seeking further export credit insurance cover on the same date from Aidan Connor, Deputy Chief Executive of AIBPI, to Mr. Timbs ended that significant year.

In 1988 matters continued at a somewhat slower pace, nonetheless there were significant developments. The beef development plan had got bogged down and this brought the intervention of Mr. Haughey and Mr. Ó hÚiginn on 8 March 1988, removing the performance clause which is again dealt with in Chapter 7 on the IDA. The other beef companies besides AIBPI, Hibernia and Master Meats were told throughout 1988 that there was no cover for beef exports to Iraq and on 21 June of that year the then Minister, Deputy Reynolds, introduced the Insurance (Export Guarantees) Bill. The Minister did not disclose to the Dáil that the increase in the ceiling was needed to facilitate further export credit insurance to Iraq for beef products. June 1988 was also significant but did not become so until 21 October 1988 when the then Minister, Deputy Reynolds, told his officials, Mr. Joe Timbs and Mr. Gerry Donnelly, that at the Government meeting on 8 June 1988, at which the text of the Bill increasing the overall statutory limit had been approved, the Government had agreed that (a) a further increase for export credit insurance and Iraq should be at the discretion of the Minister for Industry and Commerce and (b) the provision of export credit insurance for Iraq should be managed in the national interest to avoid damaging competition between exporters. The effect of this was that export credit insurance cover in Iraq would only be granted to the existing two exporters. The decision was to be communicated to Irish exporters by the Minister for Agriculture. Deputy Reynolds stated he would go back to the Government on Tuesday, 25 October and proceeded to decide that the following additional cover would be provided in the Iraq market: (a) a roll over of the existing [360] cover held by AIBP — liability under the scheme IR£95.6 million — and Hibernia — liability IR£23.1 million — as outstanding maturities were paid; (b) additional cover for AIBP and Hibernia up to a maximum liability under the scheme of IR£80 million and IR£20 million, respectively, and (c) additional cover for non-beef exporters up to a maximum liability under the scheme of IR£20 million subject to an increase should demand necessitate such.

On 23 November 1988 the then Minister for Industry and Commerce, Deputy Reynolds was appointed Minister for Finance and Deputy Ray Burke was appointed Minister for Industry and Commerce, thereby inheriting the attendant difficulties of the managed market policy which none of the other beef companies knew about and another time bomb we are told was unknown to the Minister who had just vacated the Department, Deputy Reynolds, which was ticking away, namely, the covering of non-Irish beef in the contracts to Iraq and the subsequent Fisher examination.

At this stage the beef development plan was going nowhere even though the Grant Agreement had already been signed on 22 March 1988 and life was starting to become difficult in the Dáil where Deputies Des O'Malley and Pat O'Malley were beginning to ask questions on export credit insurance. On the Waterford-Ballymun APS investigation on 18 January 1988, a report had been completed on the investigation and the terms of the report were considered by the finance division of the Department of Agriculture which prepared a memorandum whose principal recommendations were: (1) to sanction Goodman International for £1.111 million, including £430,000 in forfeited securities; (2) report the case to Brussels as an irregularity and seek bilateral discussions with the Commission to get their opinion of the sanction proposed; and (3) refer the case to the Garda Fraud Squad for investigation. The matter was reported to the European Commission in Brussels by the Department of Agriculture [361] on 29 January 1988. A meeting to discuss the implications of the said report was held with the EEC Commission, Legal Service in Brussels on 18 February 1988.

Nineteen eighty nine effectively saw the unravelling of the policies instigated at the initial meeting on 9 April 1987. On 12 December 1988 Mr. Sher Rafique of Halal had written to Mr. Burke dealing with a major discrepancy on the total value of exports to Iraq. This was reinforced by a letter from Mr. Banks, Chief Executive of Insurance Corporation of Ireland on 22 December 1988 to the Minister which stated:

If I have interpreted the trade figures correctly they imply that considerable quantities of exports covered by No. 2 Account policies may not be of Irish origin.

On 6 February 1989 after a further detailed memorandum was discussed the then Minister for Industry and Commerce, Deputy Burke, decided that he was not prepared to make any decisions in relation to the issue of new export credit cover or the rolling over of existing cover until the Iraqi payment position clarified itself to his satisfaction. He could not issue any further cover to Iraq until such time as the Iraqis made payment. It was also confirmed that the consultancy unit under Mr. Fisher had begun investigating the discrepancy between CSO figures and export credit figures on exports of beef to Iraq. A sum of £60 million was overdue on 10 February 1989 from Iraq.

The consultancy unit under the direction of Mr. Fisher of the then Department of Industry and Commerce held a meeting with the international trade division of the Department on 11 January 1989 and met officials of the Department of Agriculture in the Central Statistics Office on 20 January 1989. The unit prepared two interim reports dated 14 April 1989 and 11 May 1989 and the final report was concluded on 27 June 1989. The uncontested conclusions relating to AIBP showed that 38 per cent of the tonnage declared to [362] insurance was sourced outside the jurisdiction of the Irish Republic while in the case of Hibernia Meats the figure was 18 per cent. Deputy Desmond O'Malley who had been appointed Minister for Industry and Commerce on 12 July 1989 on 11 October 1989 voided, by letter, export credit insurance policy No. 2437. No progress was made on the beef development plan during 1989 and this provoked an angry letter from Padraig White, Managing Director of the IDA, to Brian Britton on 3 August 1989.

Difficulties began to mount on the regulatory front. On 12 January 1989 Gerry O'Callaghan a reporter with the RTE programme “Today Tonight” who was attempting to investigate some of the allegations, particularly those about stamp changing and malpractices in the Goodman organisation, visited the AIBP plant in Nenagh and witnessed an operation which the tribunal found in Chapter 18 of its report was similar to that being carried out at Eirfreeze, as alleged in the House by the then Deputy Mac Giolla and me. On 4 March, 1991 at the Eirfreeze plant at the North Wall, harbour police and the Garda investigated unsupervised work which immediately expanded into one of the stamps being applied without authorisation. This matter was raised in the Dáil on 9 March 1989 by Deputy Mac Giolla, the same day Barry Desmond had raised other matters about the Waterford-Ballymun investigation. The then Deputy Desmond further raised Gerry O'Callaghan's findings in the Dáil by way of question on 12 April 1989.

In June 1989 on his return from a visit to Japan Mr. Haughey, on hearing of a difficulty in the Dáil arising from the treatment of haemophiliacs who had contracted AIDS, called a general election which in July resulted in Deputy Desmond O'Malley joining him in Government as leader of the Progressive Democrats.

This morning the Taoiseach said that my allegations were damaging and wasteful. As the only Member of this House who has returned 25 times as [363] much money for the Exchequer as my costs are likely to be, I wish to refer to tax evasion. I believe the public understands the massive scale of the tax evasion endemic in the Goodman organisation, but I am not sure they appreciate the lengths to which that organisation went to deceive the Revenue Commissioners and lie to the High Court appointed examiner. The report finds that although, and I quote:

...between 1985 and 1990 tax inspectors had visited Goodman plants on about 90 occasions... no evidence was found of “under-the-counter” payments to employees.

Following my initial allegations of tax evasion on 28 August 1990, the examiner was appointed by the High Court but even he was misled as to the extent and professional nature of the tax evasion scam. As the report records at page 333:

At no stage had there been any disclosure by either Mr. O'Donnell or Mr. Mooney to Mr. O'Donghaile of the Revenue Commissioners with regard to the payments made to employees without being subjected to tax or PRSI contributions during the year ended 31-12-1986.

On the same page the tribunal records that:

At the Tribunal hearing on the 26th day of November 1991, Mr. O'Donghaile learnt for the first time that under the counter payments had been made in Cahir in the period prior to 1-1-1987,

Had I been unable to back my allegations with documentary evidence, which was corroborated by Patrick McGuinness, it is beyond question that the extent of tax evasion would never have been uncovered.

I want to digress briefly to explain the significance of the quotes I have just given. A young accountant from Stokes, Kennedy Crowley, Mr. John King, not customarily involved with the Goodman [364] account, uncovered the payment of £840,000 represented by phoney invoices while conducting the audit at the Cahir plant in the week beginning 13 March 1987. The matter was brought to the attention of Goodman International by Stokes, Kennedy Crowley senior partner, Mr. Niall O'Carroll, and was considered on 7 April 1987 at a management meeting in Ravensdale which was recorded on a document dated 29 April 1987 on Stokes Kennedy Crowley headed working paper. At that meeting were Larry Goodman, Peter Goodman, Gerry Thornton, Brian Britton and Aidan Connor. It is important to stress the extent of the tax evasion uncovered as a result of Mr. King's findings at Cahir. The sum of £840,000 represented an audit at one of the Goodman plants only for one year, namely that ending 31 December 1986.

The report states at Chapter Nine, page 316:

At the time, the £840,000 represented approximately 40% of the total haulage charges for the year ended the 31st December 1986 and it was clear that on a year to year basis the figure for the haulage charge in 1985 compared with 1986 and some of the names on the bogus haulage invoices were similar, raising a clear suspicion that similar practices occurred in the previous year.

There are two points to be emphasised: first, the discovery at Cahir was brought to the attention of the most senior people in the Goodman organisation, including Mr. Larry Goodman. Second, notwithstanding this discovery, the Revenue Commissioners heard about it only during the tribunal hearing of 26 November, 1991.

Of course, the tribunal establishes that the practice was widespread throughout all of the Goodman plants and that, notwithstanding its having been brought to the attention of the board, it continued for a number of years thereafter up to the appointment of the Examiner in 1990——

[365]Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  ——and was organised from Ravensdale.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  ——and was organised from Ravensdale, that is correct. A further point that ought to be stressed for future students of this tribunal is that, rather than receiving a medal as the chairman of the tribunal suggested in the course of the hearings, Mr. John King was discharged of any responsibility for the Goodman organisation or, as the report sparingly puts it, on page 318: “Mr. King had no further subsequent involvement in the matter.” What happened was as follows. Following my initial allegations on 28 August 1990 and the subsequent appointment of an Examiner by the High Court, an agreement in the amount of £4.53 million — as compared to an estimated liability of £8.3 million — was negotiated in October-November 1990, see page 335 of the report.

I was informed before my speech of 15 May 1991, almost a year later, that the tax evasion was even wider than I had suspected. I produced documentary evidence during that debate in this House, which I subsequently furnished to the tribunal, detailing the nature and basis of the tax scam. On receipt of the documents supplied by me Mr. Justice Hamilton wrote on 2 September 1991 to a Mr. Liam Coleman, described in the documents I supplied as the internal auditor of the company, in which he set out a long list of questions which anybody can read for themselves on pages 306, 307 and 308 of the report. The reply came on 9 September in indignant tones from A & L Goodbody, Solicitors:

We wish to state that these letters taken as a whole constitute an attack upon and a violation of our rights under the decision in Re Haughey (1971) Irish Reports...

We would submit and are advised that the Tribunal has no power to conduct this sort of interrogation of the witnesses of an accused party, and [366] should not persist in doing so after we have clearly stated our position.

The report records:

Because of the failure to secure answers to the questions and information sought in the aforesaid letters, which was readily available to the Goodman Group of Companies for the reasons set forth in this said letter dated 9th September 1991 the Tribunal was obliged to continue with its inquiries and devote considerable time thereto.

The A & L Goodbody letter is significant because it shows that, even as of 9 September 1991, there was no sign of Goodman International coming clean. The tribunal then wrote, on 12 September 1991, to Anglo Irish Beef Packets (Newry) Limited to query the existence of a Mr. George McMillen, named as a general haulier, Crossmaglen, County Armagh who supposedly received moneys in the sum of £9,524 in respect of work done for the company. On page 311 the report states: “No response was received to this letter from either the company or their solictors”.

The tribunal then wrote to the RUC and eventually received a reply from the RUC on 18 October 1991 to the effect that — as appears on page 312 of the report:

...at no time during my service in Crossmaglen RUC Station have I become aware of a George McMillen, General Haulier, Crossmaglen.

As the noose tightened further, on 17 September 1991 Mr. Séan Mooney of Stokes, Kennedy Crowley contacted Mr. Ó Donghaile of the Revenue Commissioners with what can be described as a partial confession by the company, which is set out on page 312 of the report. When the tribunal was made aware of this interview with the Revenue Commissioners a further letter dated 19 September 1991 was sent to A & L Goodbody setting out, inter alia, on page 313 of the report:

The Tribunal is concerned with all [367] of the matters contained within the notes but particularly is concerned that the Board of Goodman Group has now become aware that there were further payments in excess £2 million made to employees which had not been subjected to tax.

The tribunal requested an immediate response. On 23 September, 1991 A & L Goodbody responded to Mr. Justice Hamilton claiming that:

...the Tribunal cannot investigate or make findings of fact in respect of allegations which constitute a criminal offence...

The A & L Goodbody letter concludes with a paragraph that I submit ought to be the clear winner of the “brass neck of the decade” award. It reads at page 314 of the report:

In this regard, we wish the Tribunal to be aware that the matters in question have come to light as a result of the company's own investigation,...

As usual, the tribunal's comment is very restrained and I quote His Lordship from page 314 of the report:

While this letter states “that the matters in question have come to light as a result of the Company's own investigation” it is fair to comment that the contact with the Revenue Commissioners was not made until after the letters from the Tribunal.

In view of the claim by A & L Goodbody one half of its client “that the matters in question have come to light as a result of the company's own investigation” it is fair to comment that the contact with the Revenue Commissioners was not made until after the letters from the tribunal. The claim by A & L Goodbody is particularly disturbing having regard to the fact that we already know that the disclosure of payments of £840,000 represented by phoney invoices at Cahir was already advised to the Goodman board.

It is clear from the report that, in the [368] course of the examinership, the tax evasion was discovered as a result of the tribunal's work and was not disclosed to the Examiner, Mr. Peter Fitzpatrick. A conglomerate which sought assistance from Government, on whose behalf the Dáil was specifically reconvened on 28 August 1990 to rush through legislation to enable that Examiner to be appointed was misled as to the true tax affairs of the company when the Revenue Commissioners were endeavouring to assist the company by finalising any outstanding taxes due.

It is a matter for public concern that Stokes, Kennedy Crowley were involved in those discussions with the Revenue Commissioners in the autumn of 1990. Notwithstanding that, it was clearly obvious from the audit carried out in Cahir in March 1987 that cash payments covered by bogus invoices were not disclosed to the Revenue Commissioners.

Page 312, Chapter Nine of the report states:

On the l7th September 1991 Mr S Mooney of Stokes, Kennedy Crowley Accounts, contacted Mr O'Donghaile of the Revenue Commissioners and in an interview noted by Mr O'Donghaile and subsequently given in evidence before the Tribunal Mr Mooney said that:-

“in the course of discussions during the examination process in Autumn 1990 he had advised us that the company had paid amounts to executives and employers (loans-dividends) which had not been subjected to tax. He said that the Board of Goodman Group had now become aware that there were further payments, in excess of of £2m. made to employees which had not been subjected to tax. The Board had contacted him and he had advised that the Revenue should be informed. He said that his information, was that the Board had not been aware of the payments. He was not giving a preliminary outline of the position. He [369] emphasised that he had not been aware of these payments during our discussion last year.

He said that the payments, which were in excess of £2m. were particularly prevalent in the Dundalk operation but would have existed in other plants to a lesser extent. He said that the payments were made to various categories of shop floor employees and casuals. He stated that there was a system of bogus/fictitious invoices relating to hauliers or farmers in operation and that as far as he knew the payments were cloaked by these. The payments had been made over 5 or 6 years. He said staff in Stokes Kennedy Crowley's were presently working on the matter and attempting to quantify the precise amounts of this remuneration which had not been subjected to PAYE deductions.

It is clear from the report that both Stokes Kennedy Crowley and the board of Goodman International knew in March and April 1987 that there was a system of cash payments cloaked by bogus invoices. This information was still in the possession of Stokes Kennedy Crowley when they were negotiating with the Revenue Commissioners in the autumn of 1990. Mr. Mooney said in evidence that he was not aware of them. However, it is clear that the senior audit partner, Mr. Niall O'Carroll was so aware. It seems inconceivable that a senior member of a firm with serious responsibilities was sent to hold discussions with the Revenue Commissioners on behalf of our biggest private companies without having been put in possession of that information.

On page 329 the report concludes:

There is no reality in the representations made by Mr. Britton [on behalf of the company] to Mr. O'Carroll of Stokes Kennedy Crowley that these payments made to employees without deduction of PAYE and PRSI contributions were either [370] unauthorised or represented loans to these employees without the approval of the Board of the Goodman Group of companies or that they would ever have to be repaid to the companies by their employees and there is no evidence that they were repaid.

These payments were and were intended to be payments to certain employees free of deduction of income tax and PRSI contributions and should have been declared as such and the appropriate tax paid and PRSI contributions in respect thereof made.

The House will appreciate that the extent of the tax evasion practices carried out by this conglomerate is the most serious ever to have been uncovered in the history of the State. The fact of the tax evasion is clearly compounded by the following. First, the conglomerate was given a major opportunity at the time of the examinership to put their tax affairs in order and pay all outstanding taxes. Second, at the time of the examinership in autumn 1990, the board of Goodman International and all its top executives knew about the cash payments covered by bogus invoices. Their accountants, Stokes Kennedy and Crowley, knew about it also. Third, it is quite clear from the correspondence that passed between the tribunal, A. & L. Goodbody, Solicitors, and AIBP that were it not for the documentary evidence furnished by me to the tribunal, and corroborated by Patrick McGuinness, the group would not have disclosed this tax evasion. Fourth, the report finds that the tax evasion was carried out in every plant of the group and not alone is there the fact of the tax evasion itself, but it involved the employees of the group, many of them young people, creating fictitious invoices to cover cash payments thus encouraging a total disrespect for the rule of law. Fifth, at the time of the tax evasion, and particularly at the time of the management meeting of 7 April 1987, Goodman International was about to become the beneficiaries [371] of the enormous advantage conferred by export credit insurance for exports to Iraq and singled out as the conglomerate to develop the beef industry in accordance with the beef development plan.

The inaugural meeting dealing with this plan was held on 9 April 1987 between the Taoiseach, Mr. Haughey, the then Minister for Finance, Mr. MacSharry, the then Minister for Industry and Commerce, Mr. Reynolds and the then Minister for Agriculture and Food, when they met Mr. Laurence Goodman and Mr. Brian Britton two days after they considered the disclosure of the fraud at the Cahir plant in March 1987. Subsequently on that same day, after that meeting, Deputy Albert Reynolds, the then Minister for Industry and Commerce, discussed with Laurence Goodman the issue of reopening of export credit insurance to Iraq and it was re-opened within a week of that meeting. Sixth, a private conglomerate which acted in this manner nearly became the most dominant group in Ireland's most important industry, agri business, and taking into consideration Classic Meats were at the threshold of having a monopoly position of 40 per cent of the beef industry and were becoming dominant in the food industry through Food Industries PLC and involved in huge competition with the co-ops on various major takeover battles exactly at the same time.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  They were buying the sugar company at that time.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is right. Seventh, through a fortuitous combination of incidents, this did not happen, but certainly if the policies of the Fianna Fáil Government of 1987-89 were followed through to their logical conclusion, this would clearly have happened.

Against that background, it is perhaps remarkable that the tribunal should admonish me for “attacking the independence of the Revenue Commissioners” when no rebuke of any kind [372] is directed at the individuals who own the company and its top executives who masterminded the tax evasion. Maybe I should be grateful that I am not going to prison with Susan O'Keeffe for exposing this scandal.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  Not yet.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  On the other hand, a great many compliant taxpayers will want to know from the Government if anybody is likely to go to prison, other than the whistle blowers, for these criminal offences and if a file is being prepared for the DPP? Is it the opinion of the Government that in the context of the tax amnesty the criminal courts more than likely would take the view that a criminal conviction would be unsafe? Was the tax amnesty only the Taoiseach's latest favour to Larry Goodman? Was the tax amnesty deliberately designed to bail out the Goodman organisation?

What, in the name of God, did the Labour Party think it was doing in facilitating this charter for crooks and cheats? It would remove some of the hurt being felt by law-abiding citizens if the Tánaiste, in his contribution today, would at least admit that the tax amnesty was a catastrophic error. The Laurel and Hardy act engaged in by the respective chairpersons of Labour and Fianna Fáil, Deputies Kemmy and Jacob, feigning outrage that the Goodman organisation was likely to benefit from the amnesty was a cynical exercise which offended tax compliant citizens. Was the tax amnesty brought in for the Legion of Mary?

I intended no slight on the independence of the Revenue Commissioners as I made clear in the witness box. However I was puzzled — and to some degree I still am — at how such a huge tax fiddle could operate for so long without being detected. I assumed — wrongly according to the evidence before the tribunal — that the Revenue Commissioners would have in place some kind of yardstick to measure the [373] Revenue yield from one of our top companies which claimed to employ 2,000 people. I understand that such a system is now in place and I am assured that such a scam could not now go undetected for long.

In transcript 155A, Mr. Seán Moriarty for the Revenue Commissioners told my solicitor, Mr. Michael White, in cross-examination, that:

At that stage we would admit certainly we were under resourced in the number of people we had monitoring the PAYE... we had got our act together in identifying the number of people we needed and had made a proposal to treble the resources. (Question 25)

I did not know anything about that. One cannot get answers in this House to such questions.

At Question 27 Mr. Moriarty replied that:

There would be grounds for saying that Revenue structures were coming under control ...we were reorganising the PAYE control system and to that extent the Revenue was rebuilding its team and structures.

It is also appropriate that I remind all concerned that on 28 August 1990 my criticism of the Revenue Commissioners was in the form of a question viz. I asked in this House, and I quote from the Official Report, Volume 401, column 2098:

Is it not true that a blind eye is turned by the Revenue Commissioners to the type of “remuneration packages”...

—etc. applicable in the Goodman organisation.

I was trying to provoke a response to what I was informed were very serious tax offences but I did not have the documentary evidence in my possession until 15 May 1991. Needless to record I got plenty of abuse but no answers. By the time I asserted my argument more strongly in May 1991, I did have documentary evidence but still no report [374] back to this House on whether my earlier allegations were well founded or what settlement, if any, had been concluded with the Examiner.

I note that Deputy Dick Spring made a not dissimilar allegation on 28 August 1990, in respect of different authorities, when he told the House:

The regulatory authorities turned a blind eye on (Goodman's) dubious business practices — the false labelling and accounting the commercial arrangements involved in the disposal of offal and so on.

In fact Deputy Spring went further on 15 May 1991 when he told the House — Official Report, Volume 408, column 1247:

I have been told by a number of sources that Mr. Goodman has been guaranteed immunity from civil prosecution as part of his settlement with the banks and from criminal prosecution. We all know that the only people who can give immunity from criminal prosecution are the Government as a whole.

Another allegation made on 15 May 1991 and attributed to the then Deputy Spring at page 827 of the report states:

The Government covered up the illegal and improper activities in the beef industry since 1987. The refusal to reveal any detail of investigations, the failure to investigate thoroughly the complacency about control and the willingness to take action amounted to a cover up.

Deputy Spring alleged that immunity had been given by the Government to Goodman. Despite the gravity of that allegation there is no rebuke of Deputy Spring in the report. One may be forgiven for thinking that the report betrays a relatively more benign approach towards politicians in power than towards politicians in Opposition or in retirement.

Fianna Fáil Ministers who have been silent on the perpetrators of the serious wrongdoing in the report have been [375] very vocal in latching on to Mr. Justice Hamilton's criticisms of my remarks about the Revenue Commissioners. I wish to remind those great upholders of the independence of the Revenue Commissioners that in 1987 and in 1988 I was on the streets of this and other cities and towns throughout Ireland marching with public service workers in an attempt to uphold their rights against the then Fianna Fáil Government cutbacks. While our openhanded leaders were offering Larry Goodman unimaginable millions to develop the beef industry, public service workers were losing their jobs to pay for this largesse. While more than £100 million of tax-payers' money was being put at risk by the man who is today Taoiseach, the health boards were obliged to ration incontinence pads for handicapped children. I will hear no lectures from Fianna Fáil Ministers or from the Taoiseach, as was the case this morning, on my record for public service workers. Their ill-informed hectoring will not extract from me any blanket approval of the public service. I saw what I saw, I read what I read and I heard what I heard at the tribunal. My confidence in the overall integrity of the public service remains unshaken, but I was discomfited by some things I learned.

The findings of fact contained in chapter 6 of the report are a devastating critique of the conduct of the Taoiseach who was Minister for Industry and Commerce between 11 March 1987 and 23 November 1988. The facts summarised at pages 210 to 221 of the report allow no other conclusion but that, as Minister, Deputy Reynolds was guilty of breathtaking political misbehaviour and cavalier profligacy with taxpayers' money. In most other neighbouring democracies the responsible Minister would have resigned a long time ago. He did indeed, as the Tánaiste and Minister for Foreign Affairs said, preside over a policy disaster and the logical question to put to the Tánaiste and Minister for Foreign Affairs now is whether this Taoiseach will continue to [376] preside over the Labour Party in Government.

I noted a letter published in The Irish Times from Mr. Noel Browne — now living in exile in Connemara — in which he stated he was informed by a reliable source that the beef tribunal report would not pose a problem for the cohesion of the Government because it had entered into an understanding at the time of the pact that the Taoiseach would resign if the report found as it has. He said he had received that information from a reliable source; I think I know the source and I have respect for him. I respectfully suggest that if such an agreement was entered into, it should be put into effect now.

On 24 May 1991 I alleged that the then Minister, Deputy Reynolds, restored export credit insurance in 1987 “in the teeth of professional and administrative opposition” and that has been found to be fact by Mr. Justice Hamilton. On 24 May 1991 I alleged that “conscious decisions were taken to give one conglomerate (Goodman) more than 80 per cent of the available cover in that market, disadvantaging rivals and exporters in other products”. That has also been found to be a matter of fact by Mr. Justice Hamilton. I also alleged on that date that “insurance cover had been offered to a person who had no contracts and no immediate contemplation of doing business with Iraq”. Mr. Justice Hamilton upheld that allegation and found that Paschal Phelan of Master Meats was granted cover of £10 million on 8 September 1987. As Deputy O'Malley said, he passed it on to Hibernia who subsequently passed it on to Goodman. On 24 May 1991 I also alleged that “the granting of export credit insurance was a political decision and depended on whether you were a member of the club”, but the Taoiseach said this morning that was not upheld. Of course it was upheld. Of course it was a political decision. It was not a decision for the insurer, the ICI, the Civil Service, the Department or the Government, it was a decision for the Minister. Under the Act it is a decision [377] for the Minister and it is a political one. Whereas Mr. Justice Hamilton does not advert to the question of the membership of a club, we know it was restricted to two companies and that Paschal could join the club any time he wanted because he had a Cumann card.

The role and involvement of Paschal Phelan and his company, which I introduced to the Dáil in a debate on 24 May 1991, is very significant as borne out by the report. On 24 May 1991 I alleged “that the export credit insurance scheme was operated in such a manner as to ensure the dominant position of one company in the beef [beef processing industry]”. The report finds this to be a fact, but the tribunal, in a construction entirely too jesuitical for my more basic educational background states:

...does not suggest or seek to imply that this was the intention or motive of the Minister for Industry and Commerce in making these decisions but rather was the effect of such decisions.

This is a simple question of assisting Mr. Goodman in his acquisition of a dominant position. Mr. Justice Hamilton found that he was so assisted but stated that that was not the intention or motive of the Minister, but rather the effect of the decision.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  An unintentional one.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  There were only six companies in the country as a whole and if a decision is made to assist one of them it is inconceivable that the others would not be disadvantaged.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  The then Minister did not know that.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I cannot conceive of anybody who has held office and who would not know that. Apparently it is the effect of the decision that is important.

[378]Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  The judge had the advantage of hearing the Taoiseach being cross-examined in the witness box and knew how his mind worked or did not work.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  On 15 May 1991 I alleged that:

... on hearing that Halal had been granted their share of the newly restored Export Credit Insurance in 1987, Mr. Goodman intervened with the Taoiseach who caused the Minister for Industry and Commerce of the day, Deputy Albert Reynolds, to get in touch with the chief executive of Halal and tell him he was sorry the whole thing was an error. Deputy Rabbitte furnished the name of the official who made the telephone call.

It is clear from the report that cover was withdrawn from Halal by the then Minister, Deputy Reynolds, but it concludes that “there is no evidence to substantiate the allegation made that the Taoiseach Charles J. Haughey, T.D. caused the then Minister for Industry and Commerce Mr. Albert Reynolds, T.D. to cancel the allocation of ECIS to Halal”.

However, as stated in paragraph (BB) on page 219 of the report, Mr. Justice Hamilton found as a fact that:

On the 27th day of November 1987, the Minister for Industry and Commerce decided to withdraw the offer of Export Credit Insurance made to Halal as it had not been accepted in the terms in which it was offered and because there was no evidence that they had a contract and instructed his Private Secretary to so inform Halal of his decision.

On 25 October 1990 I stated in the House — column 441 of the Official Report — that the Private Secretary's name was Michael Kelly; in fact, it is Finbarr Kelly and I apologise for getting his name wrong.

If the report is satisfied that Deputy Reynolds alone made the decision to cancel Halal's cover and that Mr. Haughey was not involved I accept that. [379] In that regard, however, I draw the attention of the House to a passage in my speech of 25 October 1990 at column 442 of the Official Report in which I stated:

When I posed such a set of circumstances to the Taoiseach at Question Time yesterday, he seemed to deny any such intervention. In the public interest I should like him to clarify his role without delay. Is he saying that the Goodman intervention took place at the level of the Minister for Industry and Commerce or the then Minister for Finance, or did the Minister for Industry and Commerce take the decision to withdraw cover from Halal on his own initiative? My authoritative information suggests that the intervention took place at the level of the Taoiseach.

As usual it proved impossible to get an answer. In any event, the net effect was that Halal was screwed.

Mr. Justice Hamilton found as a fact, as stated on page 219, paragraph (v) of the report that:

On the l3th day of November 1987 the Minister for Industry and Commerce met Mr. Larry Goodman. During the course of this meeting Mr. Goodman informed the Minister that he had negotiated an extension of his contract with the Iraqis and would require further cover. As at that time there was only $30 million available within the ceiling, the Minister for Industry and Commerce agreed to the allocation of this amount to Goodman International and (AIBPI).

At this meeting also Mr Goodman complained to the Minister about the activities of Halal and Agra Trading Ltd. in Baghdad and alleged that they were engaged in price cutting.

Mr. Harte: Information on Patrick D. Harte  Zoom on Patrick D. Harte  It should be noted that only two Government Deputies have been in the House for the last three hours.

Debate adjourned.

[380]Sitting suspended at 6 p.m. and resumed at 7 p.m.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The important connection here is that on page 220, paragraph (dd), Mr. Justice Hamilton held that as of 25 November 1987 the statutory limit had been reached and there was no scope within the existing ceiling of grant cover to Halal or Agra Trading even if they had produced contracts, or in respect of the $30 million contract on which he offered cover to Goodman on 13 November.

On 24 May 1991, I recalled for the Dáil, as reported at column 2464 of the Official Report, the panic which caused the then Minister, Deputy Reynolds, to telephone “Today Tonight” on 16 May 1991 in an attempt to batten down the hatches. The cat was now out of the bag and the squeezing of Goodman's competitors was coming out in the open, including Halal. On that “Today Tonight” programme Brian Farrell stated:

and that report by Nicholas Coffey.

We've had a phone call from Albert Reynolds, Minister for Finance, in regard to Pat Rabbitte's allegation that Halal, the meat company, had been deprived of export credits to which they were entitled. The Minister points out that a fundamental condition for such credit is a contract of sale and this, he says, Halal failed to produce while he was in office.

Not only did the tribunal find that the Minister purveyed an untruth to the nation since having a contract was not a fundamental condition for the award of export credit, but the report highlights the injustice done to other exporters and on page 50 of it the chairman of the tribunal explains how other exporters were done down.

My allegations in respect of the role of Paschal Phelan have materialised to be more significant than either I or, I suspect, Paschal Phelan thought at the [381] time. Mr. Phelan sought me out primarily because of his conflict with Larry Goodman, against whom he harbours a grievance concerning the manner in which Goodman took control of his company. However, the report of the tribunal shows the devastating implications of Mr. Phelan's role for the Taoiseach, Deputy Reynolds.

As the report shows, the then Minister for Industry and Commerce, Deputy Reynolds, bought Mr. Goodman's line about a track record in Iraq hook, line and sinker. The report concludes that: “It would appear that the Minister for Industry and Commerce accepted the arguments put before him by Mr. Goodman”.

Where was Paschal Phelan's track record in Iraq? He did not even do business with Iraq and, as the report confirms, he passed on the cover given to him to Hibernia, who subsequently passed it on to Goodman. It goes without saying that he had no contract — the fig-leaf used to do down Halal. Whereas, Paschal Phelan may not have had a track record in Iraq he had a track record in Fianna Fáil. As he told the tribunal, he was also a major financial contributor to the party.

At a Cabinet meeting on the morning of 8 September 1987 it was decided to increase the ceiling from £70 million to £150 million. Within hours of the Cabinet meeting making that fateful decision, Paschal Phelan was on the doorstep of the Minister's office along with Oliver Murphy of Hibernia Meats, also well known to Fianna Fáil, but not to Deputy Reynold's personally.

As the report records on page 78:

On the 8th of September 1987 at 4 p.m. the Minister for Industry and Commerce, Mr. Reynolds, met Mr. Oliver Murphy of Hibernia Meats Limited and Mr. Paschal Phelan of Master Meats Ltd. This meeting had been arranged by Mr. Phelan [as I alleged in the House].

Paschal made the introductions and, according to the report, page 78:

[382] During the course of the meeting, the Minister indicated that he would allocate a facility of £10 million to Hibernia Meats Limited and ...£10 million to Master Meats ...

Earlier on that page the report states:

—the view of the Department in August 1987 was that no Export Credit Insurance should be given to Hibernia Meats ... until all sums outstanding on previous [contracts] ... had been paid by Iraq.

Contrary to what the Taoiseach's spin doctors would have us believe, nowhere in the report does the chairman say that he found no evidence of “political favouritism.” Whatever about the change of heart towards Oliver Murphy, who had a track record in Iraq, only blatant political favouritism can explain the allocation to Paschal Phelan.

If the Taoiseach considers the tribunal finding that there was “no evidence of any political associations” between himself and Mr. Goodman to be a matter for celebration in the rezoned streets of Longford, it logically applies that he must be very downhearted indeed at the exposure that he pulled such a blatant stroke for Paschal Phelan who gave evidence to the tribunal that he was associated, not only with Fianna Fáil but with Deputy Reynolds personally.

The Master Meats issue is therefore crucial. The argument was that Goodman and Hibernia, to whom Phelan had passed on his £10 million cover, had track records in Iraq. That could not have been the position with Master Meats. Master Meats did not have a track record of business in Iraq, had not produced a contract and never took up the offer of export credit insurance. although it was always booked in its name up to 21 October 1988 when it was transferred to Hibernia.

In contrast to certain detail and repetition in the report generally, it is somewhat silent on some of the facts in mid-December 1988 when the two [383] firms' dominance of the export credit available was finally ended.

Because I was present at the hearings, and am familiar with it, I find it surprising that the tribunal does not appear to attach more significance to the evidence in relation to that period given by Mr. Ted O'Reilly who was then Assistant Secretary in the Department of Industry and Commerce with responsibility for ECIS. My surprise is all the greater because Mr. O'Reilly's evidence was never questioned, much less contradicted at the tribunal.

By reference to papers made available to the tribunal Mr. O'Reilly made a few crucial points that ought to be put on the record. He demonstrated to the tribunal that a memorandum of 12 December 1988, represented as being a document for consideration by the new Minister for Industry and Commerce, Deputy Burke, was in effect a statement that the allocation arrangements made by Deputy Reynolds on 21 October must stand.

In addition, Mr. O'Reilly referred the tribunal to a document in which he questioned the propriety of Mr. Timbs ringing AIBP and Hibernia after the meeting on 21 October and telling them of their new allocations. He showed the tribunal that in the same document Mr. Timbs replied that the Minister had told him to do that and that, in any event, the information would be conveyed to the companies by others. Mr. O'Reilly told the tribunal that his interpretation of the latter phrase was that Mr. Timbs was acting as locum for the Minister and other politicians. Mr. O'Reilly also told the tribunal that in the light of the memorandum, Mr. Timbs's replies about telephone calls, and being told by the Minister's private secretary that both Halal and Agra had been informed that they would not get any insurance cover because the Minister was bound by his predecessor's decision of 21 October he, Mr. O'Reilly, was most concerned about the overall position.

Accordingly, although I cannot find [384] reference to it in the report, Mr. O'Reilly stated that he then wrote a minute to the Minister's private secretary, the thrust of which was that the position at that date was, in all the circumstances, — including the letters from Halal that were sent not only to the Minister but also to the Taoiseach — no longer tenable and would have to be reviewed.

Mr. O'Reilly referred the tribunal to that minute. Moreover, he told the tribunal that following its receipt on Thursday, 15 December 1988 he was told by the Department Secretary that he was being transferred out of the international trade division to the science and technology division with immediate effect and contrary to organisational arrangements decided upon three months earlier. So it is obvious it was not an accident that, as the report says, the Taoiseach, the Minister for Industry and Commerce and the Minister for Agriculture and Food discussed the position on Friday 16 December 1988.

The significance of my mentioning the absence in the report of any reference to this part of Mr. O'Reilly's evidence is that it was never disputed. His approach then was, as far as I can see, consistent with his efforts over 1987 and 1988 to resist the policy pursued — now named the disaster policy.

To put it mildly the report is not very informative about the discussion on export credit insurance between the Taoiseach, Deputy Haughey, the Minister for Industry and Commerce, Deputy Burke and the Minister for Agriculture and Food, Deputy O'Kennedy on Friday 16 December. This raises many questions. Why was the discussion confined to these three people. Why was the Minister for Finance, Deputy Reynolds not included either in his capacity as Minister for Finance or as one who had made the arrangements being discussed? What precisely were they discussing? What precisely did they decide? Did any of them ring Larry [385] Goodman afterwards? Does the tribunal know the answers to these questions? A discussion between those Ministers is not a Cabinet meeting, even if it took place shortly after a Cabinet meeting. That being so, it should hardly be governed by the Supreme Court decision mentioned in the report. It appears now that we shall never know the answers to these questions.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  We might, as a result of the case.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Let us hope so. It is important that we do. On 24 May 1991, I drew the attention of the House to the Minister, Deputy Reynolds's telephone call to the “This Week” programme on Sunday 19 May which had used an except of a speech of mine from the Dáil. The Minister, Deputy Reynolds made a number of statements including the following from the transcipt: “When Export Credit was restored to Iraq, it was restored not alone for the Beef Industry, but for the Pharmaceutical Industry, for PARC the company who were managing the hospital.” This was untrue. PARC was never taken off cover. The following exchange then took place:

Interviewer: Some of your political opponents want this question of the restoration of Export Credit Insurance in 1987 in the case of Iraq to be examined by the Judicial Enquiry. Is that something that you would favour?

Mr. Reynolds: I don't mind whether it is or it isn't. The Government took a decision at the time because of bad cattle prices and to help our exports abroad that they were going to restore it.

Neither statement is true. The [386] Government did not take the decision, the Minister, Deputy Reynolds did. More importantly the decision had nothing to do with cattle prices since the Minister did not even bother to establish for himself that 38 per cent of the product insured came from outside the State and 84 per cent of the total from intervention stocks as a result of which the benefit to the economy was, in Mr. Justice Hamilton's word, “illusory.”

Questioned further on that programme about my allegation of having withdrawn cover from Halal, Deputy Reynolds replied: “An absolute nonsense, it wasn't ... you can't withdraw something that doesn't exist for a start.” Of course, the tribunal found that the Minister withdrew cover from Halal, so it did exist — another untruth. The Minister did not describe the offer to Paschal Phelan in the same terms, although he had no contract, no intention of doing business with Iraq and, in the event, did not do business with Iraq.

Deputy Bruton has already dealt in some detail with the progress of the Beef Development Plan and the pressure put on the IDA including the finding of the tribunal at page 284 which relates to the decision of the Government, in excess of their powers under the provisions of section 35, to direct the authority to remove the performance clause. I do not wish to go back over the same ground because of the time limit although we were told by the Minister, Deputy Dempsey that we could talk about this until the cows come home. However, all of the main people concerned find that they do not have time to deal with it adequately, and it would be very difficult to get the report back into this House again.

However, I want to draw attention to my allegations that Mr. Goodman improperly drew down a package of section 84 loans put in place by the IDA in the specific context of the beef development plan and that although the beef development plan did not get off the ground, they were drawn down to the extent of £106 million. The IDA [387] estimated the capital value of the package of section 84 loans being offered to Mr. Goodman at £30 million. Letters from the IDA file reproduced in the report demonstrate clearly the value attached to this facility as well as the fact that it was the prestige and influence of the IDA negotiating with the top banks that caused this package to be put in place.

The report finds at page 291 that:

On the l6th June 1987 the Government agreed to support the development and approved a financing package as outlined in the memorandum involving:—

(1) IDA capital grants totalling £25,000,000,

(2) IDA redeemable preference shares of £5,000,000 to be taken up by the Authority and repayable at £1,000,000 per annum after 5 years, and

(3) Currency swap loans under Section 84 of the Corporation Tax Act 1976, with an estimated capitalised value of £30,000,000.

The report notes on page 265 that:

On the l2th June 1987, Minister Walsh sent a confidential memorandum to Mr Goodman which was in the following terms:—

“1. Padraig White, Managing Director of the IDA, informed me today that, it was written into the proposal that the whole project was dependent on section 84 financing coming into line as agreed.

2. Between Padraig White and Martin Lowry, they will negotiate with the top people in the banks to make sure that the financial package comes through as appropriate.

3. Mr. White told me that the negotiations could best be done following Authority and Government approval.”

A memorandum for Government [388] dated 16 June 1987 prepared by the Office of the Minister for Agriculture and Food included the following section:

The section 84 currency swop arrangements will require both Central Bank and Revenue clearance. They comprise of an essential element of the financial package for the promoters and any diminution of the expected interest savings would undermine the proposed project.

Despite the clear evidence that the package of section 84 loans constituted an integral part of the Beef Development Plan, and the obvious effort by the IDA top executives in securing same with the banking institutions: “A presentation was made by the IDA to the AIB, Bank of Ireland and the Irish Intercontinental Bank to ensure favourable attitude to the Banks to the proposal.” This is at page 271. On the same page Mr. Justice Hamilton goes on to make this finding: “The Goodman Group proceeded to obtain and draw down such High Coupon Section 84 borrowings even before the Grant Agreement was signed.”

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Will it pay it back now? Will the banks pay it back?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  That is the question being asked by the taxpayer and that is why I alleged it amounted to tax evasion and was found to be wrong before the tribunal because apparently it was perfectly legal, according to the tribunal, for it to do that. The loopholes in the law at the time were so bad that it was legal, once the IDA put them in place, to draw down such loans no matter for what purpose they were used. It was a disgrace but, of course, the law has been greatly tightened up since then.

Despite the somewhat phlegmatic performance of senior IDA executives when questioned before the tribunal, for understandable reasons, their internal correspondence revealed at the tribunal demonstrates the very real anger inside the IDA at the manner in [389] which the Goodman organisation proceeded to draw down the major part of the package of section 84 loans put in place by the IDA specifically in the context of the beef development plan, a plan that did not get off the ground.

By letter of 4 March 1988, Martin Lowry of the IDA wrote to Aidan Connor, Deputy Chief Executive of Goodman International in the following terms:

The IDA remains anxious that the project should go ahead as planned. It has expended considerable resources in facilitating the timely start-up of the project. As part of the package and of our undertaking to you, we worked directly with the Banks to put in place a large tranche of currency swop section 84 funds specifically to fund the development in the programme you negotiated with us.

What could be clearer? However, Deputy Haughey prevaricated with a magisterial wave of the hand before the tribunal saying: “I don't know about this. Only five or six people in the whole country understand section 84 loans. Fair play to the IDA for misleading Goodman...”, and so on. In the internal correspondence it was clear that the IDA did this very specifically in the context of the plan.

In a letter of 3 August 1989 Padraig White the Managing Director (refer to Volume 14, IDA Book 3, pages 38 to 44), wrote to Brian Britton Deputy Chief Executive of Goodmans in the following terms:

Turning to the High Coupon Section 84 Finance. I was disturbed at the manner in which you seem to dismiss the IDA's contribution to securing the High Coupon Section 84 facilities. This finance has been the subject of detailed correspondence between the IDA and Goodman International, an IDA submission to the Revenue Commissioners and representations by the IDA to the highest levels in the banks.

[390] This finance was explicitly negotiated as a fundamental part of the funding package for the £120 million capital investment programme along with the IDA and FEOGA grants. I therefore find your comments both surprising and difficult to rationalise.

I consider it a serious issue if a very significant part of these section 84 funds, believed to be of the order of £70 million were drawn down for purposes for which they were not intended.

I fail to understand how commentators cannot understand the significance of the section 84 loans. I fail to understand that people cannot understand the benefit conferred on Mr. Goodman as a result.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  No jobs were created.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Not one single job, not one brick upon a brick of the development plan ever materialised. We now know that £106 million was drawn down and that the plan never got off the ground.

Mr. Hamilton's findings expose the fact that the loopholes in the law were so wide that this could be done legally, but was it moral for a major company to draw down funds, the cost of which to the Exchequer was capitalised at £30 million, when no part of the project went ahead? A draw down of funds approved under section 84 should have been tied into the specific project. Because of the blatant nature of the loopholes in the legislation it was perfectly legal for Mr. Goodman to do what he did. The law has been tightened up since then.

A pertinent point is that Brian Britton wrote to the then Minister for Finance, Mr. MacSharry, submitting a proposal for the amendment of section 52 of the Finance Act, 1986, excluding the food sector. This section reduced capital allowances on grant aided plant and machinery, a proposal that was supported by a letter from Deputy Albert [391] Reynolds to Ray MacSharry on 16 April, 1987. On 23 April Maurice O'Connell of the Department of Finance wrote a note on the subject, in which he expressed strong reservations about the amendment as drafted by Mr. Britton. The Government met on 26 April 1987 at Barretstown Castle and decided to support this amendment. There is a story surrounding precisely why that Cabinet meeting took place at Barretstown and how the plan was prepared. It is not unconnected with going to a ball, as referred to earlier by Deputy O'Malley in a different context.

The amendment was effected by section 25 of the Finance Act, 1987, in respect of food processing companies which purchased their own plant and machinery. If the development plan had gone ahead and Goodman International had received the projected grants for plant and machinery they would have benefited, according to the tribunal by a further £6 million approximately. Not satisfied with the potential of section 84 loans for their business Goodman International sought to have the legislation amended with the support of the IDA but in the face of opposition from the Department of Finance. In the light of the professed inability of the Minister, Deputy Reynolds, to establish that intervention stocks were being insured. it is interesting to note that the reason given by Goodman for submitting their amendment to the section 84 loans — they drafted an amendment, to be helpful, stating precisely how it should be put in the Act — was that they were taking the product out of intervention. Yet we are told that nobody knew it was coming out of intervention.

On 11 March, D. Quigley of the Department of Finance strongly opposed the amendment as it would extend the scope of section 84 rather than narrow it. On 28 September 1988 in a letter from Brian Britton to Sean Donnelly who was on secondment from the IDA to the Taoiseach's office he stated:

[392] I set out briefly the amendment which was supposed to be in the Finance Bill. This matter will have to be reactivated.

The report stated:

While this proposed amendment was never enacted into legislation, it would appear, however, that Goodman International, during the course of negotiations with regard to the Development Plan, sought that such an amendment would be made [and the quotation continues].

The State argued strongly at the tribunal that the amendment of section 52 of the Finance Act, 1986, by section 25 of the Finance Act, 1987, was a stand alone amendment. The tribunal has found that it was enacted specifically as a result of the beef development plan and at the request of Goodman International although it benefited the food processing industry generally.

On the question of the public interest, it is again important to put on the record of this House the actual role I had to play at the tribunal and the actions of my legal advisers. At the preliminary hearing on 21 June 1991, through my solicitor, I offered full co-operation and reserved my position on representation. At the preliminary hearing on 26 July 1991, I sought and was granted limited representation when giving evidence. On 30 September 1991, my counsel sought service of documents and this was refused. On 10 October 1991, counsel for the State stated that I “would have to be brought to account for my allegations”. My counsel indicated that if that was the position of the State we would have to play a larger part in the tribunal than heretofore envisaged.

At the opening of the tribunal proper on 7 November 1991, counsel for the State stated that the allegations were completely false and malicious, that the export credit insurance scheme was at all times administered fairly and that allegations were being thrown around like snuff at a wake. In the opening [393] statement made on my behalf on that date my counsel expressed concern about a conflict of interest in the dual role of the State in representing both the public interest and other persons and bodies who were themselves the subject of allegations.

Previously at the preliminary hearing of 21 June 1987, the Chairman of the tribunal brought this to the attention of Mr. Harry Whelehan, now the Attorney General and then counsel for the State. The issue of public interest came up again before the tribunal in an exchange between the Chairman and Mr. Hickey, counsel for the State, in which Mr. Hickey clearly stated that it was not for him to act in the public interest, that it was a matter for the tribunal. Judge Hamilton subsequently decided that since counsel for the State was plainly unwilling to take on the role, the tribunal would have regard to the public interest. From that day it evolved that my lawyers and those acting for Deputy Spring and Deputy O'Malley were obliged to share the responsibility of seeking to protect the public interest.

It is significant to point out to the House that at least one former Government Minister, Deputy Michael Noonan, had cause on 29 May 1992 to take issue with the representation afforded to him as a former Minister in a previous administration, when State counsel attempted to make the pre-posterous case that both he and Deputy Bruton had acted in relation to export credit insurance in a somewhat similar fashion to Deputy Reynolds. Deputy Noonan stated — Transcript 95, 29/5/92, page 83:

I feel I haven't been represented here and my name has been raised on a number of occasions and mis-statements and factual errors went on the record and I would have thought initially that the State team would have represented me as a former Minister but, in my view, they haven't and I didn't intend raising this until now, but I got a document put to me [394] now by the State side which I hadn't seen or wasn't shown to me in consultation and I want to know where I stand from now on. Am I represented by the State or will I get independent representation or what is the position? What is the mandate of the State side?

The report has made strong findings of fact which makes clear that Mr. McGuinness was accepted as a truthful and relevant witness on the vast majority of allegations he made. I suppose counsel for the State were put in an impossible position, effectively representing only Fianna Fáil when they talk about the State — I know that Fianna Fáil tends to draw a correlation between the two——

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Parts of Fianna Fáil — there are shades and gradations.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Nonetheless there were times when the casual visitor to Dublin Castle would have found it difficult to distinguish between the positions of counsel for the State and counsel for Goodman International. I was especially unhappy about the refusal of the State to treat Mr. Patrick McGuinness as the valuable witness he turned out to be. Their attack on him was only acceptable by comparison with the treatment Mr. McGuinness received at the hands of counsel for Goodman International and counsel for Larry Goodman both obviously acting on the instructions of their clients.

There has been an amount of uninformed and ill-considered comment on the fact that Deputy Spring and myself were obliged to appeal the decision secured by the Attorney General — acting allegedly in the public interest — in the High Court on our claim of privilege. In my case, I am satisfied that my primary source would have been unable to continue his career as a senior banker, if I had disclosed his name. The Supreme Court, in July 1993, in a vary detailed judgment and by a majority of [395] 4 to 1 upheld Mr. Hamilton's original ruling.

The tribunal further ruled in March of 1993 that TDs as distinct from a constitutional privilege, have a privilege at common law to protect their sources. Judge Hamilton concluded:

It appears to me that a member of the Oireachtas not only has a right to, but in the absence of a clear and unequivocal waiver by his informant, a duty to refuse to disclose the source of his information — [Transcript 177A, 5 March 1993].

The ruling of the tribunal was upheld on appeal to the High Court and, it should be noted in this House in the context of the Susan O'Keeffe affair that the cornerstone of the common law privilege is the protection of the informant. It upholds the right of the citizen to put his or her parliamentary representative in possession of information of public interest without fear either for personal safety or protection of livelihood. It is not a protection for TDs; it is a protection for the citizen — the right of the informant, without fear or favour to blow the whistle by using their parliamentary representative to ventilate the issue in this House.

Criticism of the privilege of being a Member of this House only diminishes this House. We should rather be legislating on issues such as freedom of information and reform of the Official Secrets Act in order to ensure that a responsible journalist will never again face the prospect of imprisonment merely for protecting their sources. This society needs more, not less investigative journalism.

This is an appropriate juncture for me to record my appreciation of the diligent work done on my behalf and on behalf of the public interest by my lawyers, Mr. Adrian Hardiman SC, Mr. Seamus Woulfe BL and Mr. Michael White, Solicitor. Contrary to the impression given by those who have orchestrated the snide campaign to discredit the work of the tribunal, these [396] gentlemen have as yet received no payment, except for one inconsequential payment to my solicitor, Michael White, and as in the case of lawyers for Deputy Spring and, I suspect, Deputy O'Malley who played a similar role, had to wait until the report issued to know if they would be paid.

Of course, there is widespread and legitimate public concern at the estimated cost of the tribunal and as to whether there are alternative methods of investigation. The Chairman of the tribunal has a strong reputation as an expeditious and able administrator. However the terms of reference given to him by this House were too wide, as he points out in his report. Two important points must be made. First, the fees structure for lawyers were agreed before the tribunal commenced with the then Fianna Fáil Attorney General, Mr. John Murray. It was all cant and humbug from the Fianna Fáil backbenchers. Deputy Callely has been jumping up and down like a jack in the box asking questions about the cost of the tribunal when it had all been agreed.

Mr. E. Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I thought the Deputy would say what the former Deputy Joe Lenehan once said.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Second, as the tribunal remarked, the inquiry might never have been necessary if the procedures in this House had not failed.

On 24 May 1991 I anticipated the remarks of Mr. Justice Hamilton when I told this House — column 2466 of the Official Report:

The very same Ministers who resisted such an inquiry and who continue to mutter darkly about it, are some of the same Ministers who stubbornly refused to properly answer parliamentary questions over a long period or respond to pleas in this House to clean up the industry. Any observer who wishes to trace the tenor of ministerial replies to questions put as far back as February 1988 by my colleague, Deputy McCartan, [397] up until Question Time yesterday will clearly detect a glaring pattern of obfuscation, denials, distortions, half-answers, refusals and downright abuse of the questioners.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  No questions at all today.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Nobody in this House can deny but that this was the case.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  But Deputy Reynolds funked answering anything today.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Deputy Rabbitte without further interruption.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I will give only one further example. When the then Minister for Industry and Commerce, Deputy Albert Reynolds, introduced the fateful Insurance (Export Guarantees) Bill, 1988, on 21 June 1988 the purpose of which was to increase the ceiling to £500 million in order to facilitate the Goodman organisation, two words that were not uttered during the entire debate were: “beef” and “Iraq”. A Bill was introduced in this House for the specific purpose of assisting the Goodman organisation but we were not told that it was about either beef or Iraq, yet the Taoiseach tries to pretend that is not misleading the House.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  He blamed the civil servants, he said they wrote the speech, that therefore they were responsible.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Deputy Rabbitte is in possession.

Mr. Connor: Information on John Connor  Zoom on John Connor  These are helpful pieces of information.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  How can an Opposition do its job if a Government Minister is so blatantly deceitful when introducing legislation?

The real test of whether this Government is serious about taking on board the lessons of the tribunal will be its [398] willingness to make this Parliament more relevant, effective and responsive.

Let me turn to this report's highly significant findings regarding Eirfreeze (Chapter 17); AIBP (Chapter 18) and intervention at Waterford. In particular Heading (F), pages 546-57, regarding abuse of intervention systems by use of bogus stamps to alter the classification of animals, makes fascinating reading.

During our joint submission to the tribunal on 22 July 1991, the then Deputy Tomás Mac Giolla and I focused on the issue of bogus stamps, indicating that we had been separately approached with information concerning such irregularities.

On 9 March 1991, the former Deputy Mac Giolla outlined the information he had received, while on 15 May 1991 I referred in the Dáil specifically to the Nenagh plant. I also referred to the incident at Cahir Meat Packers on 28 October 1983 — an incident involving the procurement by AIBP, Cahir — with Mr. Norbert Quinn's consent — of bogus Customs stamps. It is important to detail these irregularities, since the tribunal Chairman's findings raise important issues regarding the handling of the matter in the Dáil by the then Minister and former Deputy, Michael O'Kennedy. There are also serious issues regarding the way in which this threat to the regulatory system's integrity was handled by senior management at the Department of Agriculture, Food and Forestry. Finally, of course, there are questions regarding the attitude of Goodman International, the biggest beef processing company in our most important industry.

Mr. Justice Hamilton has outlined seven instances where bogus stamps were in the company's possession, and used. His findings implicate high level Goodman management in the authorisation of the use of these bogus stamps, including Mr. Gerry Thornton, deputy chief executive in charge of Goodman International's meat division. In three instances the stamps were classification stamps, reserved for the possession and [399] use of officials from the Department of Agriculture, Food and Forestry.

The classification system was fundamental to the EU intervention system for which the Department was acting as the intervention agency. Thus the Department of Agriculture, Food and Forestry was responsible not only to the Irish Legislature but also the European Commission.

The fact that a leading Irish conglomerate — one dominant in the beef industry — was known to possess bogus classification stamps posed a serious threat to the classification procedure's overall integrity.

When the “World in Action” programme was debated on 15 May, 1991, the then Minister put down the following motion:

That Dáil Éireann reaffirms its confidence in the regulatory and control procedures for the Irish Meat Industry.

From his answers in the Dáil on 16 December 1987, it is abundantly clear that the Minister was fully briefed on all aspects of the case.

On 16 October 1987, Mr. William O'Connor, an agricultural officer, was on duty at AIBP Waterford load bay, where he observed carcases being removed from the chill room and cut in readiness for export. He noticed 15 sides with similar classification marks — marks which appeared to be wet, fresh and smaller than the official grading stamps. He showed the carcases to the classification officer, Mr. Padraig Feeney, who confirmed that the stamps were wet, were smaller than the official stamps ... and that no carcases had been regraded that morning.

This incident caused considerable controversy at the tribunal, as counsel for Goodman International had the cheek to accuse the chief witness Mr. Patrick McGuinness of ordering and collecting these bogus stamps himself, and ordering their use without the company's authorisation or the knowledge of senior management.

[400] Mr. Justice Hamilton found as follows, and I quote from page 50:

“The Tribunal has dealt with this matter in some detail because:—

(i) it established the use of bogus stamps as the AIBP plant in Waterford;

(ii) it established that the stamps were applied either in the chill room or as the carcases were being taken out of the chill room;

(iii) it established that in addition to the stamps being applied to the carcases the original labels containing the kill number and grades were replaced, and;

(iv) the effect of such changes in the stamping on the carcases and the labels attached thereto was to give the appearance that the carcases were eligible for intervention when, according to Mr. McCarthy they obviously were not;

(v) the action taken by Mr. McCarthy in stopping the kill and classification was indicative of the seriousness of the irregularity;

(vi) it confirms the evidence of Mr. McGuinness, particularly at (ix) above;

The Chairman continued to outline the evidence of Mr. Connolly, the plant manager at Waterford, and Mr. Gerry Thornton, deputy chief executive, meat division of the Goodman Group.

In commenting on the evidence of Mr. Gerry Thornton who stated, page 552:

From the evidence of Mrs Susan McGuinness it is now my belief that Mr. McGuinness procured and used the bogus grading stamps himself.

Mr. Justice Hamilton, page 553, stated:

This is an attempt by the Senior Management of the Goodman Group [401] to disassociate itself from any irregularities or improper practices in plants under their control.

The Chairman found, page 556, that:

“Having regard to all the circumstances, the Tribunal is satisfied that:

(i) The plant manager Mr. Connolly was fully aware of the existence of the stamps;

(ii) he kept custody of them and released them for use as required;

(iii) the stamps were used with his approval;

(iv) the purpose of the use of the bogus grading stamps was to upgrade the classification of carcases to render them eligible for intervention;

(v) the stamps were removed from Mr Connolly's office by Mr McGuinness on the instructions of Mr Gerry Thornton, and;

(vi) there is no basis for the suggestion made by Mr Thornton in his evidence that the bogus grading stamps were used by Mr McGuinness himself and by no other person.

He went on to state:

These incidents, serious though they are, are not sufficient to justify a finding by the Tribunal that the use of bogus grading stamps was institutionalised throughout all the AIBP plants.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  It was only in some of them.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Apparently. I regret very much that time does not permit me to deal further with this and other incidents, especially Eirfreeze and in particular the decision by the then Secretary of the Department of Agriculture. Food and Forestry to release the South Dock containers. I [402] would like the Department of Agriculture, Food and Forestry to note that I will return to this aspect at a future time. I hope the opportunity will present to deal with it in the detail it deserves.

I alleged in the Dáil on 15 May 1991 that “The customs officers concluded that they had intercepted a “carousel” operation.” (page 367) In fact the report finds that the incident referred to “was not part of a carousel operation” ...but that there was “a reasonable suspicion on the part of the Customs authorities that it might have been part of such an operation”— pages 374-375. Some media coverage of this extraordinary and colourful saga seems to have fallen for the Goodman organisation line that they had been vindicated, to use that awful word.

But what actually does the tribunal find? This story about the “illegal importation” of meat is an extraordinary one. The tribunal found that a tractor unit with a container of meat left AIBP in Cahir on 19 March 1988 destined for AIBP Fermanagh Meats, Enniskillen, that the meat had been cleared through customs in Castleblayney on 19 March 1988, that on 23 March 1988 the meat was rejected as “unsound” by a veterinary officer at Fermanagh Meats who told the driver to, “take the meat back to where it came from.” The meat was not returned to Cahir but was apprehended by customs on an unapproved Border crossing between Crossmaglen and Castleblayney. The driver said that he was on his way to Lough Egish; he told the tribunal he was on his way to lunch but I will return to that in a moment. The tractor unit and container was seized and released on payment of a deposit of £10,000 on 24 March 1988.

At the tribunal it was established — December 10, 1991, Transcript 25, pages 112 and 113 — that Tom Kirwan, the purchasing manager at Cahir, lied to the investigating Customs Officer, Mr. Brosnan, about different interpretations on two separate occasions on 23 and 24 March. On 23 March Patrick Garvey, a [403] higher officer in Customs and Excise, Waterford, went to the Cahir plant and spoke to Peter Maguire, the plant manager, who produced for the meat a goods outwards docket which turned out later to be fictitious and gave an untrue account of the origin of the meat seized.

Mr. Nollag O'Broin, the Customs and Excise officer who subsequently investigated the matter, went to Cahir on 30 March 1989 and inspected the records there. Mr. Kirwan again denied all knowledge of events under investigation and it was not until after another visit on 13 April 1989 that Mr. Kirwan and Mr. Maguire admitted they had been lying previously and that the goods outward docket was false.

At the tribunal, the driver of the truck, Mr. John McBennet, stated that he was crossing the Border for his lunch with the container in tow.

Finally, the tribunal was concerned by the lack of co-operation with Customs and Excise Authorities shown by Mr. Kirwan the processing manager of the AIBP plant in Cahir, his attempts to mislead the officers of Customs and Excise who were dealing with this incident and who only admitted the circumstances of the incident to Mr. O'Broin when the facts had been established by him by independent investigation.”

If this case of illegal importation i.e. smuggling of rotten or “unsound” meat and of producing fictitious documents to mislead Customs is a vindication, then it says more about the Goodman organisation than it does about my original allegation. It is a matter of regret that it was not the task of the tribunal to establish what happened to that unsound meat when it eventually reached its true destination.

Proinsias de Rossa:  It is probably still going around.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The decision of the incumbent of the office of Taoiseach, Deputy Albert Reynolds, to preempt [404] the findings of the report by a misleading statement issued within hours of the report's findings — a report on which his actions as Minister for Industry and Commerce were being inquired into — was a serious abuse of his high office, a serious rebuke and insult to his partner in Government, the Tánaiste, and a serious insult to the Oireachtas which set up the tribunal. The claim of vindication by him when acting as Minister for Industry and Commerce, a further claim of vindication by the Department of Agriculture and Food, and a claim of vindication by Goodman International are inaccurate and seriously demean a highly complex and detailed report, which needed days to unravel rather than hours.

For the difficult problem of publishing a tribunal report which asked awkward questions and gave some awkward answers, there was adequate precedent in the annals of Fianna Fáil, of which perhaps the Tánaiste should have been aware, prior to the Taoiseach's sleight of hand on the evening of 29 July, the bank holiday weekend.

I will now quote from de Valera, Long-Fellow, Long Shadow by Tim Pat Coogan:

...a prominent Fianna Fáil politician in the bacon-curing business, Dr. F. C. Ward, who was forced to resign his junior ministerial position as Parliamentary Secretary. Another doctor had sent a list of allegations to de Valera, who immediately directed that a Tribunal of Inquiry should be set up, on 7 June 1946. Most of the allegations, including charges of local government corruption in Ward's native Co. Monaghan, were disproved. However, it was found that Ward and his fellow directors (it was a family concern) made payments to themselves which “were not brought to account for income tax purposes”. The Wards were forced to make restitution to the Revenue Commissioners. The tribunal conducted its business with such despatch that de Valera was tempted to try a “cute [405] hoor” manoeuvre to damp down discussion of the affair. He attempted to announce its findings minutes before the Dáil's summer recess for 1946. The Opposition, however, were keeping watch on Ward and de Valera. Dr. T.F. O'Higgins of Fine Gael summed up a widespread feeling when he said:

There was a very general effort to make him [Ward] the scapegoat for administrative inefficiency in many Government Departments, to brand him as the one black sheep in a flock of Ministerial white sheep. Part of the plot was the rather unworthy attempt by Mr. de Valera to suppress all debate and reference to the matter by his plan, which was frustrated, to announce the findings at one quarter of an hour before the adjournment of the Dáil, and his statement that no person other than himself had a right to speak.

In conclusion, I suppose it would have been too much to have expected the Taoiseach to use today's debate to answer the questions that he refused to answer before the tribunal. Why did he ignore expert advice in reviving export credit insurance? Why did he put more than £100 million of taxpayers' money at risk for illusory benefit to this economy? Why did he not know or make reasonable effort to find out that he was insuring with Irish taxpayers' money product that came either from intervention or from outside the jurisdiction of the State? Why will he not tell the House how he knew that Goodman would make an application for cover for a $134.5 million contract in August of 1987? Why did he mislead the Dáil when introducing the Insurance Bill to raise the limit on 21 June 1988? Why did he, as the responsible Minister not protect the integrity of the IDA? Why did he deny the existence of the managed policy before the tribunal? Why did he mislead RTE about the treatment of Halal? Why did he mislead the Cabinet as to the stringency of the conditions that would apply to export credit [406] or did he in fact mislead the Cabinet? Why did he mislead his own unfortunate Minister of State whom he was dispatching to Baghdad?

Mr. Justice Hamilton was precluded by reason of the Supreme Court decision on Cabinet confidentiality from inquiring into this critical question of motivation. It remains the central question. Why did Deputy Albert Reynolds do it? I reject the incompetence argument. The Taoiseach is not as incompetent as the report makes out. Seventy per cent of the Irish people believe that he did it “because of undue closeness between Mr. Goodman and the Government during the period 1987-89”. I agree with the Irish people.

Minister for Tourism and Trade (Mr. McCreevy): Information on Charlie McCreevy  Zoom on Charlie McCreevy  I would express my appreciation and thanks to the Honourable Mr. Justice Liam Hamilton, President of the High Court, for his Report of the Tribunal of Inquiry into the Beef Processing Industry.

Mr. Justice Hamilton has investigated the whole array of allegations made both within the House and without. He has presented these allegations, has examined them in accordance with the normal procedures for assessing evidence and has given his findings on their strength and veracity.

The beef tribunal was set up against the immediate background of the broadcasting of the “World In Action” programme. That programme had two central thrusts. It alleged widespread and systematic fraud in the Irish beef industry and specifically in the largest beef processing company, Goodman International, and it alleged that this fraud was tolerated by the State as a direct consequence of corrupt links between Fianna Fáil and the company in question.

In detail, it was alleged that officials of the Customs service, Revenue officials and civil servants had all connived at the cover-up of systematic fraud and tax evasion and had done so because of connections with the Fianna Fáil Government and, in particular, the [407] Taoiseach. A direct link was alleged between political contributions and Government corruption.

This charge of corruption had been made or hinted at in this House during the course of a protracted series of questions involving the beef industry. While many Deputies were involved in keeping the whole issue in the public arena, this central charge of corruption was essentially ventilated by Deputies O'Malley and Rabbitte.

Following the “World in Action” programme, the character and reputation of members of the Government of the day had been impugned and the rule of law here had been called into question. The integrity of the operation of the Revenue Commissioners, the Custom Service and our Civil Service had been undermined.

Whether with the benefit of hindsight, tribunals of inquiry are the best means of investigating issues of this type is a matter of debate. However, when the beef tribunal was established, it appeared to be the best if not the only mechanism available.

A good deal of criticism has been levelled at the Taoiseach's claim that he was totally vindicated by the report. The real issue at the beef tribunal as far as I was or am concerned is that in this House, in the media and at the tribunal. the characters of the present Taoiseach and his immediate predecessor were persistently and doggedly impugned.

The following are the allegations and the tribunal's findings.

On May 10 1989 Deputy O'Malley alleged that “allowing just two companies, of which by far the larger and more substantial was Goodman, cover under the export credit insurance scheme for beef exports to Iraq and export credit insurances so considerably in excess of their actual exports to that country, was an act of blatant favouritism and had the effect of strengthening further the already strong position of Goodman, to whom members of the Government were extremely personally closed, as the [408] dominant group within the beef processing and allied trades...”

After the tribunal issued its report, Deputy O'Malley made several attempts to suggest that in alleging “blatant favouritism” he was not alleging fraud or impropriety.

Of course, he has to say, given the finding of the tribunal, page 231, that:—

There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time were personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the Party that they represented.

The tribunal also found — page 231 — that, in respect of Mr. Goodman's access to members of the 1987-89 Fianna Fáil Government, he, Mr. Goodman, “had similar access to the previous Taoiseach, Mr. FitzGerald and members of his Government”.

The tribunal found that there was no evidence to suggest that the Taoiseach's “decisions were in any way based on improper motives, either political or personal.”

If Deputy O'Malley was not alleging impropriety on the part of members of the Government of the day when he spoke in this House on 10 May 1989 and accused them of “blatant favouritism” for the benefit of a company owned by a person “to whom members of the Government were extremely personally close”, what did he mean?

At the tribunal, Deputy O'Malley stood over his allegation of closeness between members of the Government and Mr. Goodman notwithstanding that he had not one shred of evidence to support it.

Deputy Rabbitte alleged that granting export credit insurance “depended on whether you were a member of the club” and further alleged that “Mr. Goodman, when he heard that Halal had been granted a slice of export credit insurance, intervened with the (then) Taoiseach who caused the Minister for Industry and Commerce. Albert [409] Reynolds, TD, to cancel the allocation of such insurance and to inform the chief executive of Halal.” That is on page 29 of the report.

Speaking in this House on the last occasion the Dáil was recalled during the summer recess, Deputy Rabbitte on 28 August 1990 said that:—

the extraordinary recall of the Dáil and Seanad in August 1990 has as much to do with the integral link between Fianna Fáil and the Goodman organisation as it has with protecting a key Irish industry. That is from page 29 of the report.

Dealing with these allegations, the tribunal found on page 233:

There is no evidence to substantiate in any way the allegation made that the then Taoiseach Charles J. Haughey, TD, caused the then Minister for Industry and Commerce, Albert Reynolds, TD, to cancel the allocation of Export Credit Insurance to Halal. This allocation was withdrawn by Mr. Reynolds. TD, for the reasons given by him in evidence and the is no evidence of any intervention of the then Taoiseach, Charles J. Haughey, TD, in this matter.

On page 231 it is stated:

There is no evidence to suggest that either the Taoiseach at the time or the Minister for Industry and Commerce at the time was personally close to Mr Goodman or that Mr Goodman had any political associations with either of them or the Party that they represented.

Because of the position of Mr Goodman in the agricultural life of the country and because of the obvious concerns of the Taoiseach and the Minister for Industry and Commerce to develop the agri-food sector of the economy and exports of value added products, leading to job creation there is no doubt but that Mr Goodman had reasonably ready [410] access to members of the Government, including the Taoiseach and the Minister for Industry and Commerce for the purpose of discussing his plans for the development of his companies and his exports. It is clear that he had similar access to the previous Taoiseach, Mr. FitzGerald and members of his Government.

Let us be quite clear as to what Deputy Rabbitte alleged and what the tribunal found. Deputy Rabbitte made general allegations of improper links between the Government of the day and, in particular, the Taoiseach and the Minister for Industry and Commerce on the one hand and Mr. Goodman on the other and, by way of illustration of the practical effects of these links, specifically alleged that export credit insurance was taken off a trade rival of Mr. Goodman. that is Halal, after he, Mr. Goodman. intervened with the then Taoiseach “who caused the Minister... to cancel the allocation of such insurance.” If Deputy Rabbitte was correct then there were indeed good grounds for a crisis of public confidence in the Government of this country but the tribunal found that there was “no evidence” to back up these allegations or to substantiate them in any way. As regards the reasons the then Minister withdrew the offer of cover of export credit insurance to Halal, the tribunal found that “it was withdrawn by Mr. Reynolds, TD, for the reasons given by him in evidence” and all of which reasons had been bitterly disputed on behalf of Deputy Rabbitte during the hearings at the beef tribunal.

The “World in Action” programme alleged: “That a major European investigation into the operation of Goodman companies was prevented by assurances from the Irish Authorities that they themselves had a wide-ranging investigation of Goodman in hand...”.

On page 422 of the report the tribunal found that this allegation:

implied that there was collusion between “the Irish authorities” and the Goodman organisation to thwart a major European investigation by [411] the appropriate authority of the European Commission into the Goodman organisation and was part of the general approach in the said programme that the Goodman organisation was protected and favoured by the Irish Government, because of political connections therewith.

The tribunal specifically referred to the “seriousness of this allegation” and went on to find that, as a result of the evidence heard by the tribunal, the allegation, to quote from pages 422 and 423 of the report:

... was clearly established to be baseless and false. Such was the cogency of the evidence in this regard that the allegation was withdrawn by Ms Susan O'Keeffe, the journalist who had researched and played a large part in the preparation of the programme.

The “World in Action” programme alleged specific “links” between the then Taoiseach, Charles J. Haughey, and Larry Goodman which, it was alleged, “went back a long way” and charged that “Larry Goodman gave money to the Fianna Fáil Party and the then Taoiseach publicly promoted Goodman at the very time that Customs investigators were warning that Goodman's operations were strongly suspected of involvement in fraud.” It was then alleged that the Customs report on the suspected fraud was withheld from the Garda Fraud Squad for a period of 18 months even though the Customs authorities had recommended the instigation of criminal proceedings.

This was a classic example of how, throughout so many of the allegations investigated by the tribunal, events which occurred as a matter of fact, such as the delay in the forwarding of the Customs report, were attributed to improper links between Fianna Fáil and Mr. Goodman. I will not repeat the finding of the tribunal that there was absolutely no evidence of links between [412] the then Taoiseach and Larry Goodman. However, I want it recorded that the tribunal found, page 403, that there was nothing sinister in the delay of the Customs and Excise Authorities making the file available to the Garda Fraud Squad.” and continued:

The Tribunal is satisfied that such contributions were normal contributions made to political parties and did not in any way affect or relate to the matters being inquired into by the Tribunal.

As clearly established at the tribunal, Mr. Goodman's company has made contributions not only to Fianna Fáil but also to Fine Gael and to Deputy O'Malley's party. It is quite clear that he contributed to parties in the centre or to the right of Irish politics. It is equally dear that no attempt was made by the “World in Action” programme to ascertain whether there was anything unique or unusual about his contributions to Fianna Fáil; of course, it would have been more difficult to peddle the allegation of corruption based on the fact of political contributions if it had to be admitted that Mr. Goodman's largesse was not confined to any one party and that the programme makers' fellow traveller in respect of alleging fraud, that is Deputy O'Malley, had not only obtained moneys for his party but had unsuccessfully attempted to cosy up to Mr. Goodman for further funds. Nor would it have helped the case being made to have to admit that Deputy O'Malley's sudden zeal for “outing” AIBPI followed his unsuccessful solicitation of funds from Mr. Goodman.

There has been much talk about the “freedom of the press” and the right of journalists and programme makers to investigate and bring before the people matters of public concern. Nobody disputes this right and indeed a free and fair press is a bulwark of any democracy. However, just as the public have an entitlement to expect ethics in Government and as journalists are entitled to expose shortcomings in that [413] area, both the public and the Government is entitled to expect ethical standards to be followed and adhered to by journalists.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  The latter do not understand the word “fairness”.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  The “World in Action” programme did not meet even the most basic standards of ethics or fairness. The standards of the programme makers and the journalist involved can by judged by the findings of the tribunal on their allegation that:

The Commissioner Ray MacSharry had sought the assistance of the Dutch Agriculture Minister, Herik Braks to approach a Dutch Bank, Amro, to withhold proceedings against Goodman. That is stated on page 19 of the report.

The tribunal found, page 362 of the report, that:

Commissioner MacSharry, in the course of his evidence before this Tribunal, denied that he had made any such request to Minister Braks to intervene on behalf of Goodman International with any Dutch bank and has stated that he was not aware of the Dutch bank alleged to have been a creditor of the Goodman Group.

The Tribunal accepted his evidence in this regard and that would have been the end of the matter as far as the Tribunal was concerned were it not for the evidence with regard to the manner in which the producers of the television programme distorted and edited the video which showed Commissioner MacSharry's statement to the European Parliament on 11 October 1990.

The actual video of what Commissioner MacSharry stated to the European Parliament was shown to the Tribunal and, when compared with the purported extract therefrom shown on the ITV programme, it was manifest that the excerpt which was [414] shown on the TV programme was carefully and, in the opinion of the Tribunal, unethically, edited to present a distorted picture of what he had actually said.

Nor has this lack of ethics been confined to the allegations which led to the setting up of the tribunal or the way in which they were reported. It is no secret that within months of being elected to office, the Taoiseach had to issue proceedings against the newspaper which purports to be and represents itself as the newspaper of record. Since then it has been clear to any impartial observer that the newspaper in question has pursued a relentless and vindictive campaign against the Taoiseach.

However, even newer depths are now being plumbed. Last Saturday we saw revealed an entirely new concept in media coverage of judicial inquiries. A public opinion poll was carried out which apparently included questions as to whether those polled accepted particular findings of the beef tribunal. Poor Mr. Justice Hamilton. How silly of him to have spent a year reviewing and sifting through the mountain of transcripts of evidence adduced before the tribunal when all he had to do was commission a public opinion poll and publish the findings. How regrettable for the taxpayer to have to fork up the costs of the tribunal when all that was needed was some basic market research.

I want to take one example. The tribunal found in unequivocal terms that there was no evidence of closeness between the Fianna Fáil Government of 1987-89 or the then or present Taoisigh and Mr. Goodman. The results of the public opinion poll are apparently that three quarters of those polled did not agree with the finding. The “closeness” issue, with its clear innuendo of political impropriety and corruption, was central to the justification for holding a tribunal in the first place. Tribunals are established to inquire into matters of urgent public importance and thereby either to expose wrongdoing or to vindicate [415] those alleged to have committed wrongdoing in the first place. Now, apparently, even a three year long tribunal hearing evidence from more than 200 people and costing tens of millions of pounds cannot vindicate the character of a person wrongly impugned in the first place. If anybody does not like the findings of the tribunal then they can commission a poll and if they do not like the results of the first poll, a second poll and so on until they get a result suggesting that the tribunal's vindication is not accepted by the people. That is some vindication, some chance to clear one's name.

Why stop there? If the alleged perpetrator of a particularly horrendous crime is acquitted and the victim of the alleged crime does not agree with the verdict presumably he too can commission a poll and show that the majority of those polled disagree with the jury's verdict. Of course, those polled will not have heard the evidence, will not have seen the witnesses or be familiar with the reasoning behind the decision of the jury. Rather one will get a gut reaction and, if it suits, in the public eye the verdict of the jury and the vindication of the accused can be set at naught.

For two decades a section of the media has been at pains to highlight the threats, real and imaginary, to democracy. Last week saw the emergence of a new threat to democracy and to the system of Government and public administration. At present there is a debate as to whether tribunals of inquiry are the best method of conducting inquiries of this type. There is no point in having an inquiry of this type if the results can be immediately undermined and sabotaged by the addition of a few hand-picked and highly selective questions at the end of a public opinion poll.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  They are the people who pay the piper.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  Much has been made in this debate, and in the media, about [416] Ministers accepting or rejecting official advice. There seems to be a curious fixation around that a Minister who does not accept the advice of his civil servants is acting in an incompetent way. This is based on the premise that all civil servants are right about all matters all of the time. I have yet to meet one civil servant who believes that proposition. I would go further and say that if there is a Deputy in this House who has never asked a Minister to review a case and to take a decision contrary to the official advice I have yet to meet him. I could equally say that there is not a newspaper which has not berated some Minister for following official advice to the letter.

I can think of many examples where Ministers have done themselves and the country considerable damage by accepting official advice. Take, for example, the decision of the then Minister for Finance in January 1982. His advisers recommended that he put VAT on children's shoes. They had many reasons for recommending this, for example, it was equitable — why should rich adults who buy expensive shoes for their kids escape? — it would raise extra taxation, shifting the balance from earned income to disposable income, and it would bring us into line with other European countries, etc. The good Minister, and his Cabinet colleagues, accepted the advice of his good advisers. What happened? When he came into this House on budget day he met Members like Deputies Jim Kemmy and Sean Dublin Bay Loftus who did not think accepting official advice was such a good idea and we had a general election which resulted in the good Minister and his party losing office. I wonder if that former Minister when he is walking the dogs across the fields on a sunny Sunday morning in County Meath ever thinks: “if only I had not taken their advice”.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  The Minister's party has doubled the tax on children's shoes.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  It is now 21 per cent.

[417]An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Sheehan must contain himself in quietude.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  In the real world in which we live the rule is simply — advisers advise, Ministers decide.

I am glad to say that I am not alone in this view. On 26 February 1991 in this House the then Minister for Industry and Commerce, Deputy Des O'Malley, was asked by Deputy John Bruton why he had disagreed with his Department's recommendations contained in the Review of Industrial Performance 1990. He replies as follows I quote from the Dáil Official Report:

I imagine there are precedents for a Minister and a Department taking a different point of view. I would hope that there are. It is very unhealthy if a Minister is only expected to rubber stamp whatever his Department comes up with, and that is not my way of operating.

He went on to explain that it was for the Department to complete its review, and added:

When they finished the review I considered it and wrote a preface to it in which I gave my own thinking in relation to these matters.

As I said, advisers advise, Minister decide.

Apart from the political dimensions of the tribunal, a substantial part of it is devoted to the operation of the State's export credit insurance scheme. The scheme is now operated by the Department of Tourism and Trade. Throughout the chapter on export credit insurance, Mr. Justice Hamilton gave the minutest detail on the operation of the scheme and clearly identified the parts played by Governments, Ministers, civil servants and commercial interests seeking to have their exports covered. Details are given on the operation of the scheme under successive Governments, with particular reference [418] to the actions and roles of many Ministers of several different political parties, during a period spanning the years 1983-89.

The tribunal's report shows clearly that export credit insurance was not a novel scheme dreamt up for the first time in 1987 to assist certain interests in the beef industry. Rather it was a scheme of long standing to assist the totality of Ireland's export efforts across a wide range of products and services. Far from being a new scheme in 1987 the State's export credit insurance Scheme had been initiated under the Insurance Act, 1953 — over 40 years ago — and had developed considerably since the 1970s after the Insurance Corporation of Ireland was appointed sole agent to the Minister for Industry and Commerce.

Exports are the life blood of the Irish economy. We are critically dependent on international trade for the creation of national wealth and for the production and maintenance of jobs. Over 60 per cent of Ireland's GNP is in trade. This is the second highest figure in the EU. We have a greater dependence on exports than nations traditionally associated with foreign trade such as Japan and the United States.

Industrial policy has been clearly focused on exporting and on supporting Irish businesses in these endeavours. The whole array of State assistance to industry is based on identifying and supporting businesses which have the potential to compete and succeed in international markets.

Strategies followed by successive Governments of all political persuasions have been to encourage the growth and diversification of exports. New market opportunities have to be identified and trade developed against tough international opposition. The export credit insurance scheme is one tool in the State's overall range of supports for business.

These strategies have proved successful. Our one time national dependence on the UK market has diminished over [419] time and we have developed considerable levels of business on mainland Europe and beyond. Profitable markets in other continents have been secured and significant business has been carried out with many trading nations.

It is estimated that since the export credit insurance scheme was initiated nearly £6 billion worth of trade has been insured under the scheme.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  It is not all Irish trade.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  This figure will help to put in an overall context the amounts and volumes of business which are the subject of the tribunal's report.

Export credit insurance policies have been issued in the past to cover exports to nearly all EU and OECD member countries. They have also been issued for exports to other destinations such as China, Mexico, Nigeria, the former USSR, Iran and Iraq. The focus has always been on assisting the exporting activity and developing new markets to the overall benefit of the country.

As with any insurance operation which deals with risk assessment, payment failures have arisen from time to time and claims have been submitted, examined and paid. The knowledge that claims for payments could be made sometimes is an intrinsic feature of all insurance schemes and no less so in the case of export credit insurance.

On the other hand, as an international mechanism to develop trade, export credit insurance also afforded exporters the security to develop new markets on a planned basis without endangering the whole financial foundation of their business.

As I said nearly £6 billion worth of trade has been insured under the export credit insurance scheme and net losses to date come to less than one-half of 1 per cent of the trade covered.

The report gives details of the circumstances under which export credit insurance cover was granted during 1987 and describes the reasoning behind [420] the decisions taken. It clearly acknowledges that the decisions were taken on the understanding that “commercial beef” was being used not intervention stocks or beef produced outside the State. Now, there is an important point to note with regard to this, that insurance is operated on the basis of uberrima fides. In other words, there is an obligation on the party seeking insurance to act with “utmost good faith” and to inform the insurer of all material facts. In the case of any warranties given, the assumption in any insurance contract is that they are genuine and true. There is not an obligation on the insurer to verify these facts before issuing a policy.

In the case of motor insurance cover, no insurance company will send out an inspector to check that a car is of the make and type claimed by the insured. In the case of a household insurance, no insurer will send out inspectors to verify the values declared under the insurance policy. This simply is not how the insurance industry operates.

In the operation of the export credit insurance scheme, these same insurance principles apply. Utmost good faith applies to all policies. It has never been the job of the Minister in charge of the scheme, nor is it my job now, as Minister for Tourism and Trade, to check out in advance the origin of every item or product being insured before granting an export credit insurance policy.

It is when a claim is made that a rigorous check is made to ensure that the terms upon which the policy is issued have been met in full by the insured. It is then that the make and type of a car is noted. It is then that the valuations on property are assessed. It is then that the products exported are examined in detail. It is also the time that the poor widow finds that the insurance company is disgruntled that her late husband did not notify them of his 25 heart attacks when taking out his life insurance policy. To operate in any other fashion would make the issuing of insurance policies an impossibility.

The decisions taken on Iraq were also [421] based on considerations of national interest. The risks of non-payment were more than counter-balanced by the perceived benefits which would accrue to the Irish economy by the development of beef exports to Iraq. Mr. Justice Hamilton acknowledges that these benefits would indeed have been substantial.

As it transpired, as everyone now knows, it was later discovered that the beef question was not all commercial or produced within the State. The important point to recognise here, however, is that these facts were unknown to the Minister when the decisions to grant cover were taken. Mr. Justice Hamilton's findings in relation to this are unequivocal.

When the facts began to emerge that beef produced outside the State might be involved in the contracts, a full investigation was undertaken. It was commenced on the direction of a member of that same Fianna Fáil Government of 1987-89.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  Were there any findings of the investigation? I have never seen any.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  In the case of export credit insurance, it has been shown that the scheme was operated in the national interest without any impropriety. The recommendations made concerning export credit insurance will be implemented.

There is an argument for going further in one area and having the administration of export credit insurance for food products handled by the Department of Agriculture, Food and Forestry which is, after all, the Department with the expertise in the food area. It could be argued that if a scheme had been operated like this in the 1980s, it might well not have fallen victim to the communication gap between Departments, highlighted by Mr. Justice Hamilton. Empowering the Department of Agriculture, Food and Forestry to write export credit insurance policies for food exports [422] would be consistent also with that Department's overseeing the food development functions of Forbairt and with the establishment of An Bord Bia, which brings all food marketing activities under that Department. In any event, I assure the House that there is, at present, regular consultation between the two Departments on matters pertaining to export credit insurance for agricultural products.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  Too late for Bovril now.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  There has been much comment by the media, Members of the Opposition and by a whole string of tribunal-analysts on Mr. Justice Hamilton's findings in relation to export credit insurance. Much of this comment has been motivated by disappointment — disappointment that allegations did not hold up to critical analysis when examined in great detail by the tribunal. There seems to be a strong desire by all such analysts to embark on a strategy of re-interpretation of the tribunal's findings and of applying a meaning to Mr Justice Hamilton's words which does not match up when the report is read in the overall context.

There were calls in this House for the establishment of a tribunal to investigate a series of serious allegations made about the beef industry, persons within it and politicians, particularly, Government Ministers. The tribunal was set up and did its work. The findings are publicly available in Mr. Justice Hamilton's report and not in the myriad overly-selective and biased commentaries on the report.

I understand the frustration on the part of certain Members of the House whose prophecy of doom and gloom has not come to pass.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  It all depends on how one reads it.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  There my understanding ends. It is time to accept the report's findings to learn whatever we can from [423] the experience and to move on to other important work to be achieved in this House.

Mr. Noonan (Limerick East) rose.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Is the Deputy a designated spokesperson for his party?

Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): Yes, Sir, I am next on your schedule.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  The Deputy has an hour available to him.

Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): No, I think half an hour.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Then the Deputy is not a designated spokesperson.

Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): My advice from our Whip is that I am the next speaker on this side and have half an hour at my disposal.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That is fair enough, then, you are a non-designated speaker.

Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): A non-designated speaker, all right.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  We have a procedure to follow here.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Never a non-person.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  May I explain for the benefit of the House that designated speakers are entitled to an hour and non-designated speakers to 30 minutes only? I understand the Deputy is now in that category.

Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): It applies no particular lack of privilege.

(Interruptions.)

[424]Mr. Noonan: Information on Michael Noonan  Zoom on Michael Noonan  (Limerick East): I accept the findings of the Tribunal of Inquiry into the Beef Processing Industry and wish to thank its Chairman for his diligent work not only in the course of the hearings of the tribunal but in the compilation of his report. I should also like to thank Mr. Justice Hamilton for his personal courtesy to me when I appeared before the tribunal in my capacity as a former Minister for Industry and Commerce.

I made no allegations against anybody, either prior to the establishment of the tribunal or in the course of its deliberations. Nobody made any allegations against me. Consequently, I have nothing to defend or nobody to attack in my contribution; that is a first for today.

When I was Minister for Industry and Commerce I abolished export credit insurance for the export of beef to Iraq or, to use the in-house expression “I took Iraq off cover”. As the decision by the subsequent Minister for Industry and Commerce, Deputy Albert Reynolds, to restore cover for beef exports to Iraq was the subject of allegations being examined by the tribunal, the tribunal deemed it relevant that I should explain the reasons I took Iraq off cover to help in its evaluation of the present Taoiseach's decision to restore cover. I complied with the request of the tribunal to give evidence, I stood over my decisions, I explained why I did what I did and, naturally, I am pleased that the report of the tribunal upholds my actions.

When I was Minister for Justice I was responsible for setting up a tribunal to inquire into the circumstances of the case which subsequently became known as the Kerry Babies Case. I mention this because, before I requested the Government to establish that tribunal, I had to consider carefully whether any other course of action would be available to me which would establish the facts, when it was quite clearly of major public importance that the facts be established. There was no alternative course of action open to me. Therefore, the [425] Government agreed to the establishment of that tribunal. I mention this because tribunals, such as the Tribunal of Inquiry into the Beef Processing Industry, are set up only in circumstances in which no parliamentary or judicial examination of events has any possibility of establishing the full facts. In effect, a tribunal is a form of last resort invoked to establish facts about matters of great public concern when there is no other recourse available. Consequently, tribunals can be fairly blunt instruments and it would be foolish to expect that their conclusions will dot every “i” and cross every “t”; if they establish the main thrust of events they will have fulfilled their function. I believe this tribunal has done so.

The test of evidence for what I might call the standard of proof required by a tribunal is crucial to its findings. Mr. Justice Lynch in the Kerry Babies' Tribunal applied the civil law test and drew conclusions on the balance of probabilities. This, I understand, was the test also applied by Mr. Justice Costello when he drew conclusions on the Whiddy oil disaster. Mr. Justice Hamilton, in the Tribunal of Inquiry into the Beef Processing Industry applies the criminal law criterion. He does not draw conclusions until the facts are established beyond reasonable doubt.

I understand why he applies the more stringent test. Reputations were at stake and many allegations, if proved, could have led to criminal proceedings. Contradictory evidence given at the tribunal had brought down one Government and there was an expectation that the report might threaten the life of this Government. However, the conclusions drawn by Mr. Justice Hamilton in this tribunal report are not always in accordance with the balance of probabilities. This has led to a recent opinion poll showing that over 70 per cent of the public do not believe that the Government of the day was not close to Mr. Goodman and his companies. This is the key to the conflicts in the House today. The Taoiseach is sticking rigidly to the standard of proof used by the sole member of the [426] tribunal. Everything had to be proved beyond reasonable doubt. Other speakers are looking at the evidence in the report and are drawing conclusions on the balance of probabilities. The norm for tribunals has been that proof would be on the balance of probabilities rather than beyond reasonable doubt.

Tribunals do not impose sanctions, they do not send people to prison or administer fines arising out of their conclusions. It was the intention of tribunals that a less onerous standard of proof, more in keeping with the practice of civil law, would be applied rather than the certainty required before convictions under criminal proceedings. That being so, I understand the dilemma in which the honourable sole member of the tribunal found himself and I accept his report.

In his contribution this morning the Taoiseach claims that “it is legally illiterate to suggest that when a judicial tribunal clears a person of unfounded imputations, it is not vindicating his character but merely saying that no evidence has been found to prove him guilty.” The Taoiseach is correct in his view where criminal cases are involved. One is either guilty or innocent and there is no middle position. If the balance of probability is the test, different conclusions could be arrived at. Anyone reading the closely argued speeches of the leader of Fine Gael, Deputy John Bruton. Deputy Desmond O'Malley and Deputy Pat Rabbitte today could, on the balance of probabilities, arrive at a different conclusion about the conduct of the Taoiseach from that concluded by Mr. Justice Hamilton, using a more stringent standard of evidence.

I became Minister for Industry and Commerce on 13 February 1986. One week previously the Government had decided to increase the ceiling for export credit insurance to Iraq. As a consequence the Department of Industry and Commerce received a number of applications for cover for beef exports to Iraq. I knew very little about the export credit scheme at that time, as the Department of Justice in which I [427] had served for the previous three years was not a relevant Department for the purposes of the scheme.

I decided that the general scheme would be operated at arms length from me by the relevant civil servants and the Insurance Corporation of Ireland. I realised, however, that I would be directly involved in making decisions for the provision of export credit insurance for high risk countries in accordance with the Government decision of 6 February 1986.

I considered the applications received by the Department of Industry and Commerce in March and April 1986, and by April I concluded that it would be prudent to extend limited additional cover for the export of beef to Iraq. Shortly afterwards, however, I was informed by the relevant civil servants that there was a doubt about the origin of the beef being supplied to fill Iraqi contracts. I sought clarification on this and did not extend insurance to Iraq.

Later in April, the relevant civil servants informed me that in their opinion the situation in Iraq had changed to the extent that the prudence of extending any extra cover to Iraq was questionable. I asked that the situation in Iraq be carefully monitored and that I be kept informed. This was done, and arising from the information provided to me, I suspended all insurance cover to Iraq with the exception of cover to the PARC Hospital in Baghdad with effect from 22 May 1986.

I informed the Government of this by way of informal memo. The Government, however, requested a formal memorandum. I produced it and the Government noted it on 18 July 1986. I subsequently met Mr. Goodman at his request, and in the course of the meeting I informed him that I would not change my decision.

In late autumn of 1986, I re-opened the issue and asked my Department to produce an informal memorandum for Government. This memorandum was prepared and circulated to the relevant Departments. I did not, however, bring [428] it to Government, as there was no change of circumstances sufficient to warrant a change from the decision of May 1986. I re-affirmed my decision that Iraq was off cover on 12 February 1987. I informed interested parties, and brought an informal memo to Cabinet at the last Cabinet meeting of that Government in the first week of March 1987. The Government noted and agreed with my decision.

One month later, between 13 and 16 April 1987 the incoming Minister for Industry for Commerce, Deputy Albert Reynolds, directed officials in his Department to restore insurance cover for the export of beef to Iraq.

I asked the Tánaiste to note the date of my decision of 12 February 1987. This morning, in the course of his speech, the Tánaiste stated that “tens of thousands of pounds were offered to Fianna Fáil, Fine Gael and the Progressive Democrats”, by meat companies, and said he did not believe that these “gifts were based on a philanthropic desire to further the cause of democracy in Ireland”. His remarks repeat the slur on Fine Gael made on a number of occasions by the Labour Party, which, in effect, implies that contributions to Fine Gael's election campaigns were made in exchange for preferential treatment of the companies that made contributions. No matter how delicately the Tánaiste puts it, this is a charge of corruption which I reject out of hand and ask him to withdraw.

I re-affirmed my decision to keep Iraq off cover on 12 February 1987. My officials informed the relevant meat companies of this decision. The General Election took place, five days later on 17 February, 1987. I made my decision independent of any influence. I did not know whether or not, the beef companies contributed to the Fine Gael election campaign but I would expect someone as righteous as the Tánaiste to realise that a decision to keep Iraq off cover for export credit insurance, taken five days before polling day, would be a rather peculiar way to ingratiate oneself or one's party with the beef barons.

[429] The present Taoiseach, reversed the decision I took in mid April 1987. The tribunal has concluded that in doing so he put in excess of £100 million of taxpayers' money at risk, and since the beef, exported to Iraq was either sourced abroad or by and large came from intervention, his decision was of absolutely no commercial benefit to Ireland.

Other speakers in this House have already gone into the Taoiseach's decision making process at that time in great detail. I do not intend to cover the same ground, but I would like to make a number of points.

The Taoiseach justified that disregard of advice by suggesting it would be relevant if his decision were taken on commercial grounds, but because the decision was essentially a political one relating to the political state of Iraq, he as a politician, the Minister heading the Department, had the sole political competence to make the decision. He claimed that the position in Iraq had improved between the time I took Iraq off cover and the time he restored it, that the Iraqi market was a less risky proposition in his time and that his successor, Deputy Ray Burke, also acted properly when he took Iraq off cover when he became Minister for Industry and Commerce, as the political risk in Iraq had again increased.

The claim by the Taoiseach that in April 1987 and throughout that summer Iraq was a less risky market than it was either before or after his period as Minister for Industry and Commerce does not stand up to examination. On 12 March 1987, the day after Mr. Reynolds was appointed Minister for Industry and Commerce, The Irish Times gave a description of the position in Kerbala, the Iraqi holy city and second in the Muslim canon only to Mecca which was under siege by the Iranians. That description clearly showed that the Iranians were on the offensive and that the Iraqis were falling back and on the defensive. By Tuesday, 17 March, a week after Deputy Reynolds became Minister and approximately three weeks [430] before he reversed my decision Basra, Iraq's second largest city was still under siege. The Irish Times of 17 March 1987 reported:

All through the night, the walls of the old Shatt-al-Arab hotel trembled, and the arm of the river was lit up by white flashes, as Iranian rocket salvoes were fired at Iraqi positions less than six miles north-west of Basra.

The Iranians were within six miles of Iraq's second largest city and the present Taoiseach claimed that the position was improving in Iraq and it was a less risky market for insurance cover.

According to The Irish Times, of 23 March 1987, approximately 17 days before Deputy Reynolds reversed my decision, Iran claimed the right to close the Straits of Hormuz to block access to the Gulf and US aircraft carrier, the Kitty Hawk, was dispatched to the Gulf to keep those straits open. According to The Irish Times, on 9 April 1987, six days before Deputy Reynolds took that decision, Teheran claimed it had killed or wounded more than 4,000 Iraqis during two days of fighting near Basra. On 15 April 1987, the very day — according to the tribunal — that he possibly made the first decision, The Irish Times reported that the Soviet Union announced it was leasing three oil tankers to Kuwait and was ready to provide an armed naval escort to prevent Iranian attacks on the Gulf. On 25 April 1987, ten days after his decision, the Iranian President warned that Kuwait, its capital city and ships and port facilities were in range of fire of Iranian forces and threatened to attack them because of Kuwait's backing of Iraq. On 28 April 1987, approximately a fortnight after the decision, again according to The Irish Times, the Iranians launched an offensive on its second front and captured 100 square miles of territory in the northern Kurdish region of Iraq.

Around the period when Albert Reynolds made his decision to restore insurance cover to Iraq, the Iraqis were on the defensive, the Iranians were making substantial gains and there was [431] international concern that the Iranians would close the Gulf, attack Kuwait, and turn a local war into an international conflagration which would bankrupt Iraq. Yet, the present Taoiseach stated Iraq was a less risky market in April 1987 than on 12 February 1987, a month previously, when I had reconfirmed my decision to take Iraq off cover.

In light of those events it is difficult to understand how the Taoiseach can justify his decision on the grounds that Iraq was a less risky market in April 1987 than it was when I was Minister for Industry and Commerce. That is an important consideration as the Taoiseach stated he did not take the advice of his officials because Ministers do not have to do so and as the decision was essentially a political one they did not have the political competence to influence him. Neither did he have to take the advice of the officials in the Department of Finance or the employees of the Insurance Corporation of Ireland because all their competence was based on the commercial world. He claimed that the essential ingredient was the political nous to understand how matters might work out in Iran. Yet, the evidence shows that the Iraqi position deteriorated systematically during the spring of 1987 and in the middle of that deterioration the present Taoiseach reversed the decision which I took and claimed he did so on political grounds on his understanding that the Iraqi market was less risky then than when cover was removed.

Be that as it may, when one applies the standard of proof beyond reasonable doubt only the Taoiseach's confidence as distinct from his integrity is called into question by the findings of the tribunal. At the court of public opinion, however, the test will be on the balance of probabilities and the public has already applied that test and made up its mind. I am prepared to leave the matter there and participate in this House in decisions necessary to ensure [432] that the circumstances which allow such events to occur cannot be repeated.

Deputy Rabbitte, in the course of his lengthy and well researched contribution, referred to a statement I made while giving evidence, namely, that I felt I was not adequately represented by State counsel at the tribunal. I do not propose to repeat what Deputy Rabbitte said because he read on to the record the statement I made at the conclusion of my evidence. What the Deputy may not know or recall is that the chairman of the tribunal advised me to raise the issue of representation with the Attorney General. I did that by way of letter and received a very courteous reply from him on 10 June 1992. That letter states:

Dear Deputy Noonan,

I received your letter of the 4th instant on Monday last the 8th June and I note the contents thereof. I had, prior to receiving your letter, on hearing of and on reading of your expression of dissatisfaction with your representation by State Counsel already inquired into the manner in which Counsel prepared you and themselves for the taking of your evidence by the Tribunal.

Firstly, I should say that as a former Minister for Industry and Commerce you were indeed represented by State Counsel who were obliged to correct any factual errors or inaccuracies emerging in the course of the hearing concerning you and which would have been known to them, they were also obliged to assist you in the presentation of your evidence, and to take and follow your instructions.

You will however appreciate that much of the evidence before the Tribunal has been based on a vast amount of documentation from Departmental files and if some of the documents referred to contain inaccuracies or errors, it is extremely difficult to deal with these at the time they are referred to in the absence of instructions from the people to whom [433] the errors or inaccuracies relate, unless these errors are apparent from the documentation itself. In your particular case State Counsel could not have been aware of the matters of concern to you prior to the reference to the particular documents in the absence of specific advance instructions from you.

However as I understand it you indicated to State Counsel, prior to giving evidence, that you wished to clear up a number of matters of concern to you and you were afforded a full opportunity to do this in the course of your evidence by State Counsel and, in fact did so, and your evidence is now a matter of record in this regard. Concerning the document to which you refer dated April 1987, I understand that this document was not of any great significance and you were asked by Counsel to comment on a development which had occurred after you had left Office as Minister for Industry and Commerce.

Counsel for the State consider that they treated you fairly and courteously at all times and will continue to deal with any matters which may arise in connection with your tenure of Office as Minister for Industry and Commerce. I, having considered the matter, must say that I agree that Counsel representing the State appear to have behaved properly and competently in relation to the conduct of State case and in relation to your representation by them while giving your evidence, and I very much regret that you do not share this view.

Should you wish to return to the Tribunal to clarify any matter or consult further with State Counsel (with me personally present if you wish) I will ensure that your wishes and instructions are carried out so as to leave you satisfied in relation to all aspects of your evidence before the Tribunal.

Yours faithfully,

HAROLD A. WHELEHAN S. C.

Attorney General.

[434] That is a courteous letter from a courteous gentleman, but he did not accede to my request for representation.

I drafted a reply to him. As I was not central to the tribunal I did not forward the reply because I did not want the distraction of a battle with senior legal people. However, as I pointed out to State counsel in evidence at the tribunal, I regarded the evidence in Dublin Castle as the away match and the clarification of outstanding matters today as the home match for Deputies.

I wish to put on record the letter I drafted to the Attorney General on 17 July 1992, which he can now read by way of open letter. It states:

Thank you for your letter of the 10th inst. in reply to my letter of the 4th inst.

As I stated previously, a number of factual errors were allowed to go unchallenged on to the record of the Tribunal over a period of months, before my appearance. These errors were given widespread coverage in the media. In particular, in the course of Mr. Mee's evidence and Mr. Donnellan's evidence, decisions made by my predecessor were attributed to me, and adverse comment damaging to me, accompanied their publication.

I enclose a copy of an editorial from the Sunday Tribune, which is an illustration of what I mean. The Tribune editorial purports to be comment on a decision attributed to me which was made in June of 1985, 20 months before I became Minister for Industry and Commerce.

When I contacted the Tribunal about these matters, a correction was made, but it wasn't publicised [only the original charge was publicised].

I cannot understand, how errors such as the above were allowed go unchallenged by the State Counsel. Surely, in circumstances since many of the allegations being investigated by the Tribunal are of political favouritism, all Counsel could have a [435] schedule showing who was Minister for Industry and Commerce at any particular time.

Your letter states that it would not be possible for State Counsel to correct errors in departmental documents, when they had not been briefed that the documents were erroneous. This, no doubt, is true, but does not apply to any criticism I made. Justice Hamilton in the course of Mr. Swift's evidence drew a conclusion from a letter, sent by an official in the Department of Agriculture to an official in the Department of Industry and Commerce, that a meeting had taken place between Dr. Garret Fitzgerald, Mr. Peter Barry, Mr. Goodman and myself, and that at that meeting, a decision was taken not to proceed with the transfer of the Irish Embassy from Beirut to Baghdad, until such time as Mr. Goodman had completed a beef deal with Iran.

Judge Hamilton further concluded that this put the lives of diplomats in Beirut at risk, and said that if politicians were favouring Mr. Goodman the inside track did not commence in 1987.

No such meeting ever took place, and under any normal reading of the document it was not possible to conclude that such a meeting took place. It appears that Judge Hamilton misread the document, and yet Counsel for the State did not correct what was quite clearly an error. This error lead to most damaging publicity on all main news media.

I have not criticised State Counsel on the grounds of either competence or courtesy as your letter suggests. They were never rude to me, and I believe they are very competent people.

My argument is that at the beef tribunal the State counsel did not equally represent all those on the State side. Their [436] mission was to exonerate the Taoiseach, Deputy Reynolds, and others, like former Ministers on this side, had a lower place in their scale of values. The public interest was not well represented at the tribunal. I would have thought that the job of State counsel was to evaluate what would be the ideal behaviour for Ministers and officials in any particular circumstance and to measure behaviour against that ideal without fear or favour. That was not done and because the public interest was not represented by any counsel at the tribunal, the task of Mr. Justice Hamilton was made very difficult. State counsel did not represent the public interest. They represented the individual politicians and civil servants employed by the State and, in doing so, applied a particular order of priority with the Taoiseach, Deputy Reynolds, at the top of the pyramid and other Ministers a little lower, provided their interest did not conflict with Deputy Reynolds. Former Ministers were treated extremely well provided their evidence did not injure the reputation of people higher up the ladder. Some people, like Mr. McGuinness, at great personal risk gave evidence and contributed mightly to the tribunal conclusions about abuse in the beef industry. We all owe him a depth of gratitude because his allegations were upheld by the tribunal. Mr. McGuinness was treated most shabbily by State counsel at the tribunal who should have represented the public interest and have been four square behind him.

One aspect of the tribunal report, the question of tax evasion, is more serious than others and a matter of great concern. This morning the Taoiseach sought to exonerate his party and himself, on the grounds that the events inquired into were forgotten battles of long ago and while they had a relevance they did not touch the Labour Party. However, they touched the Labour Party when the tax amnesty was applied to tax evasion in the Goodman companies. In the preparation of the Finance Bill which introduced the tax amnesty, matters of tax evasion before the courts [437] were excluded from the tax amnesty, but matters before the tribunal were not. Those people who pillaged the public purse through tax evasion have now, with the full endorsement of the Labour Party in Government, been put in a position to avail of the tax amnesty. That is deplorable and the Labour Party has a case to answer in this respect as in many others.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I now call the Minister for Justice, Deputy Geoghegan-Quinn. Regarding the time allocation motion, would the Minister like to be in the one hour category?

Minister for Justice (Mrs. Geoghegan-Quinn): Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I would like to be put in the same category as Deputy Noonan, the non-designated one. I wish to share my time with the Minister for Defence and for the Marine.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  I am sure that is satisfactory and the Minister and the Deputy concerned are allotted half an hour.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  From listening to what people said to me it is difficult to avoid the conclusion that most of the population are fed up to the gills with all the broughaha about the beef tribunal. Their perception is that we as politicians seem intent on going over the same ground again and again playing what they see as political games that have no regard for the genuine public interest and which are indulged in at their expense and at that of tackling the real problems this country faces.

This feeling of disillusionment is probably all the more intense in the past day or so in circumstances where truly historic developments are taking place which require considered and courageous responses from all parties.

We would not be in this position, of course, but for the fact that some, who took unfounded allegations for fact, insisted on having a tribunal.

Now that we have had all these years of inquiry it is reasonable to have the [438] opportunity to discuss the outcome. We can only hope that the public will understand why we are again debating these issues. We hope they will recognise that the truly regrettable fact is not so much that we are having three days' discussion, for which the Dáil has been specially convened, but that we put ourselves in this position in the first place because, and only because, some extremely serious allegations were made to the general effect that people in high public office had behaved improperly, allegations which, to put it in plain language, have simply been rubbished, one by one, by the tribunal of inquiry.

The Tribunal of Inquiry into the Beef Processing Industry represented the most exhaustive inquiry conducted by any tribunal in the history of this State.

It will be clear to anybody who has attended hearings, studied the final, report or followed the extensive media coverage of the inquiry that the tribunal involved a costly intensive and complex investigation into diverse matters at all levels of the beef industry. It was a mammoth task by any standards, a much more demanding task than anybody could reasonably have foreseen at the outset. The tribunal was equipped with intensive legal powers and resources to enable it to carry out its task to the fullest possible extent. Special thanks must be accorded to the chairman and sole member of the tribunal, Mr. Justice Hamilton, for the remarkable skill and perseverance he showed in conducting the inquiry and compiling the tribunal report.

The Government accepts the report of the tribunal in its entirety. It has not sought to enter any reservation on the report's recommendations, to dispute any of the facts established by the tribunal or to dilute or water down any of the tribunal's findings. As is clear from the motion before the House, the Government is committed to acting without delay to take account of the report's findings and to implement its recommendations.

The findings of the tribunal are too [439] numerous and varied to be dealt with individually in this debate. They are all set out in the tribunal report for anybody who wishes to study them in detail. Those who take the opportunity to study the tribunal report must acknowledge that above all else it has nailed a litany of unfounded political allegations which had the potential not only to destroy reputations but to cause the most serious harm to the Irish beef industry. The tribunal report variously describes those allegations as being “baseless”, “without any basis whatsoever”, “having absolutely no basis”, and “being based on a lack of understanding or appreciation of (relevant) scheme(s) ... and ... Regulations”.

Among the most serious of the unsubstantiated allegations — and central to the establishment of the tribunal — were allegations which implied a corrupt relationship between the beef processing companies of Mr. Larry Goodman and the Government of the day. The tribunal clearly found that there was no evidence that either the Taoiseach at the relevant time or the current Taoiseach, the then Minister for Industry and Commerce, was personally close to Mr. Goodman or that Mr. Goodman had any political associations with either of them or the Fianna Fáil Party. In this respect the integrity of both the Government of the day and the current Taoiseach have been entirely and unquestionably vindicated.

We went through three years of inquiry at an estimated cost of somewhere between £35 and £45 million to have it established finally and unequivocally that the Taoiseach's motivations are and were beyond reproach. The man and woman in the street who ultimately has the questionable privilege of paying the piper for all this will most certainly and understandably contrast the £35-£45 million spent on the exercise with the cost of the export credit insurance scheme itself. That cost is under £8 million, a sum which is being pursued on behalf of the taxpayer, through the legal process.

[440] While it is right, as I have said, that after three years of inquiry we should have a debate in this House, there can hardly be a soul among us who does not now regret in his or her heart of hearts that we got ourselves into this inquiry in the first place. True, there were failings in the system and it is essential that they be put right but we did not need years of inquiry, surely, to get our administrative arrangements in order. We would not have gone about the task of tidying up our administrative arrangements in this extraordinary way, were it not for the fact that some insisted in seeing corruption where in fact there was none.

Again, the man or woman in the street who takes the time to reflect on the situation, will wonder why we, their elected representatives, find ourselves here today with all the innuendo about corruption and improper motives stone dead but still having to listen to the whimpers of Opposition Members who simply cannot accept that the extraordinary, expensive game is over and that the extremely serious allegations which led to the establishment of the tribunal have been found, one after the other, to be without a shred of substance. The public will wonder why, today of all days, some in Opposition appear set to whip public credibility in standards in Irish public and political life into the mire.

A number of Deputies who failed in instance after instance to stand over their allegations before the tribunal continue to seek to convince this House of the correctness of their position. One has to wonder what these people really want or whether they will ever be satisfied. Are we to have a tribunal to inquire into the findings of the tribunal? Are we to have a succession of opinion polls on the findings of the tribunal, on various people's assessments of the findings of the tribunal, on the debate in this House on the findings of the tribunal? Will some people never accept the fact that the tribunal has reported conclusively on the matters referred to it and [441] that, given the Government's clear commitment to implement the recommendations contained in the report, the time has come to close this chapter in our public affairs? Do they intend to forever try to change the rules of the game — unfortunately, in many cases, motivated entirely on grounds of petulance rather than policy?

One of the most distasteful aspects of this debate has been the behaviour of those Deputies who, having seen their original allegations roundly rejected by the tribunal, now attempt to move the goalposts to pretend that their position has been vindicated by the findings of the tribunal. And this, in circumstances where the same Deputies refused to offer evidence to the tribunal in support of the allegations which they had made — and which they would now, I suspect, prefer to forget about.

I am reluctant to single out individual Members of this House for criticism because that course is more likely to continue rather than close this sorry chapter in our public affairs but any neutral observer would regard it as nothing other than fair comment if I say that Deputy Rabbitte especially is someone who must seriously regret — or at least ought to regret — that he ever made allegations in the first place. I recall that shortly after the report was published the Deputy appeared on a television programme and when the fact was put to him that almost all the allegations which he made had been found to be entirely without foundation by the tribunal the best he could manage in the end was to suggest that as a public representative he had a duty to raise in the Dáil any allegation that is made to him irrespective of whether he knew anything about the truth or otherwise of the allegation.

I am sure he must — or at least he ought to — realise today that it is an awful pity that he did not make this refinement clear to the House at the time. I am sure that he must — or ought to — regret also that his allegations had the effect of denigrating time and time again public servants and the manner in [442] which they carried out their duties — allegations which were resoundingly rejected by the tribunal. If one is willing to enter politics then it is fair to say that one has to be prepared to take public criticism. However, it is surely wrong that public servants — who are not in a position to defend themselves in this House — should be subject to baseless allegations of a grave nature. It is a pity that the Deputy has done little since on this issue apart from protest that the allegations he made were not really allegations. Apparently he was merely sharing with the House things that had been said to him about which he knew nothing. It is difficult to avoid the conclusion — and Deputy Rabbitte must, or ought to, realise this himself — that what really happened was that one or two people who were intent on working to their own agenda simply found a willing dupe in the Deputy and set him on a road he wished he had never travelled.

I think that on that performance the Deputy will fully understand if in future people treat any allegations he may choose to make in this House with considerable caution.

Much has been said in this debate as to whether what is contained in the tribunal report represents a vindication of the Taoiseach. The Taoiseach, in his usual straightforward way, explained his position to the House and I believe that any fair-minded observer would accept completely what he had to say in this regard.

The Taoiseach freely acknowledged to the tribunal that he had taken certain decisions as Minister for Industry and Commerce which were contrary to the advice made available to him. The tribunal found that the Taoiseach took those decisions in the national interest in circumstances where the advice given to him was based mainly on commercial considerations alone. There are few, if any, Members of this House who have a greater regard and respect than I do for the quality of advice provided to Ministers on a daily basis by civil servants across all Departments. The contribution of Civil Service advice to the [443] economic and social development of this State is beyond question. That is not to say, however, that such advice must be automatically followed in all instances. Ministers and Government have a responsibility to weigh all advice put before them and take considered political decisions which they judge to be in the best interest of the State. This is precisely what Albert Reynolds did as Minister for Industry and Commerce and those who would criticise him for doing so serve little purpose other than to demonstrate their own inadequacies for ministerial office.

The single-mindedness of the Taoiseach is not unknown to us in these historic days. In the wake of the Sinn Féin conference in Letterkenny few outside the Government parties appreciated the correctness of his decision to persevere in his approach to seeking an end to armed conflict on this island. Long years of experience in Government, combined with undoubted personal abilities, have marked the Taoiseach as somebody who is willing to take strong political decisions and follow through on them.

Having failed miserably to make headway with their allegations of impropriety on the Taoiseach's part, his now frustrated critics began to focus their attention on his competence. Deputy Bruton sought, with others, to suggest that the Taoiseach was incompetent as a Minister. For Deputy Bruton of all people to question the competence of others as Ministers is really a bit much. I know that Deputy Bruton might not regard me as a particularly objective observer on this matter. I wonder though how he would try to explain the fact that, as far as I can make out with all the changes, there is now no one of his Front Bench who served in Government with him, and this arises because most, if not all those members of his party who served in Government with him, have made it clear that they lack confidence in him. Those involved have seen him operate close up as a Minister. The fact that they [444] judge it best to be out of his Front Bench team speaks more for his capacities as a Minister than anything I, or indeed anybody else, could say on that subject.

I believe it came as something of a surprise to many in this House — it certainly will come as something of a surprise to many outside of it — that Deputy Bruton thought it appropriate, in effect, to second guess the findings of the tribunal formally established by this House. The findings of this independent tribunal are the only findings that matter. Whatever the man or woman in the street may say, it is simply not good enough for a person holding Deputy Bruton's responsibilities to say, in effect, that while the tribunal has found the Taoiseach's motives to be above reproach, Deputy Bruton has his own views. Coming from somebody in his position in this House in the course of a formal debate on the findings of the tribunal, that is very little short of giving offence to the integrity and independence of the tribunal. The tribunal findings are the only findings that matter for the purpose of this debate — there is no room for second guessing.

Deputy Bruton seeks to make as much capital as he can about the position of the Tánaiste. It is not surprising in the least that the Leader of the Opposition would pursue this course — that is the stuff of politics but it seems reasonable to ask Deputy Bruton whether this means that he has at long last abandoned his rainbow coalition. Are we right in saying that the logic of his position is that he would not be prepared to serve in Government with Deputy Spring and his party in the unlikely event that such an option were open to him?

There are open and honest differences of opinion between Fianna Fáil and the Labour Party about decisions made by a Government of which my party was a member but the Labour Party was not. I do not expect members of the Labour Party to defend decisions that were made by a Government in [445] which they did not serve; no more than they would expect me to defend decisions of the Government they were in with Deputy Bruton. The Taoiseach has mentioned some glaring failures for which that Government was responsible which — this is worth emphasising — actually cost the taxpayer hundreds of millions of pounds. The allegations which led to the setting up of the tribunal related fundamentally to potential risks, not actual loss.

Entering into coalition Governments does not entail members of individual parties abandoning their views of the previous behaviour of others while in office. It involves instead reaching an agreed programme for Government and implementing that as best we can in the public interest. That is what the present Government is all about and I believe any fair-minded observer would credit our success in that regard. For my part, while clearly I would not agree with some of the Tánaiste's conclusions in relation to matters dealt with by the beef tribunal I have worked with him closely, particularly in relation to the North, and I respect absolutely his commitment to and zeal in pursuing the public good.

I propose to say very little about the contribution made by the Progressive Democrats to this debate. It becomes clearer by the day that that party was founded on personal antipathies and will flounder on personal antipathies. Members of this House are wearied by the never-ending attempts by that party to pretend that they occupy the high moral ground on every issue. I suspect that some years ago when the Progressive Democrats tried to delete references to God in a draft Constitution it was because Deputy McDowell could not stand the competition.

What is now required above all else is that we get on with the business of taking account of the tribunal's findings and implementing its recommendations. As the Taoiseach said this morning, the Government fully accepts the findings of the tribunal and will implement the [446] appropriate changes in our departmental structures, our policies and our legislation.

We are a Government committed to change and in this connection it is not, I believe, out of place in the context of the tribunal's report and this debate, that I should briefly mention what is happening in the area of fraud and dishonesty which is of course a matter for my Department.

The tribunal did not of course agree with the innuendo that the Taoiseach's motives were tainted by dishonesty. It specifically found no evidence “that any of [his] decisions were in any way based on improper motives either political or personal”. But there is mention of possible dishonesty on the part of others and it is appropriate, therefore, to tell the House about proposed changes in the law and in Garda structures in the general area of fraud and dishonesty.

The need for reform in this area has been highlighted by the reports of the Law Reform Commission on dishonesty and the Advisory Committee on Fraud, which recommend a root and branch reform of the law. The importance of their recommendations has been recognised in the Programme for a Partnership Government which contains a commitment, arising out of these reports, to revise and strengthen the law on fraud and dishonesty. Work is already under way on this legislation which will deal with this challenge and will represent a significant codification and simplification of existing law. I will bring my proposals to Government as soon as possible.

In addition to considering legal change, I am also in the process of getting Government approval for important structural changes in the Garda Fraud Squad in line with the advisory committee's recommendations. This will involve the creation of a new National Bureau of Fraud Investigations under the direction and control of a superintendent with extra investigative staff at inspector level. The new bureau will be able to hire qualified accountants on short-term contracts [447] and, ultimately, will have the benefit of expert legal advice at the earliest possible state of the investigation to focus and prioritise its work so as to increase the chances of a successful prosecution. The most up-to-date sophisticated electronic equipment will be made available to the bureau to help speed up its work, particularly in the processing of paperwork, so much a feature of fraud investigation.

These measures are necessary to assure we do not lag behind other countries in dealing with the problem of international fraud. We have our European Union responsibilities to face up to in strengthening the protection of the financial interests of the European Union, particularly in the context of the Community budget.

Mention has been made of possible prosecutions arising out of this report. It will fall to the Director of Public Prosecutions to consider all of these issues. A decision has been made in one case which has been mentioned. It would be neither proper nor appropriate for me as Minister for Justice to make any public comment on this or any other case except to say that the prosecution of offences in this State is a matter for the Director of Public Prosecutions and he is, as the House well knows, and for reasons which the House well appreciates, independent in the exercise of his duties.

Despite the expense involved — as the Taoiseach said we need to look again at better and less costly alternatives — the tribunal has been significant in dismissing a range of unsubstantiated allegations. In addition the tribunal has identified the need for changes in departmental systems and structures and has recommended changes in policies and legislation. Both parties in Government are committed to implementing the tribunal's findings in these matters. I fully support the motion.

Minister for Defence and Minister for the Marine (Mr. Andrews): Information on David Andrews  Zoom on David Andrews  I am very [448] grateful to my colleague, the Minister for Justice, for allowing me some of her time in what might be described as an important debate in the circumstances of the week.

In common with previous speakers I too urge that this House welcome the report of Mr. Justice Hamilton, the chairman of the beef tribunal. There is not one amongst us who could fail to acknowledge the enormous task that faced the learned judge in conducting his inquiry into the beef industry. It should not be forgotten that at the time the tribunal was set up it was confidently expected by those requesting it, and indeed by Mr. Justice Hamilton, that it would last a matter of weeks and, if not, would certainly be over by Christmas of that year. It transpired that in order to discharge the task assigned to him the tribunal sat on no less than 231 days and that the proceedings took more than three years to conclude a mammoth task. None of us here would criticise the chairman in any way for the time taken given the exhaustive nature of the inquiries he conducted by equally giving the opportunities afforded to allegers and other interested parties to participate in the proceedings. It is entirely wrong to suggest that there are now some loose ends to be tied up, questions to be answered, issues not resolved or that in some way the tribunal did not finish its business.

The chairman has acknowledged in his report that he received the fullest co-operation from all the Departments of State and from those politicians, Ministers and past Ministers alike, who were the subject matter of the allegations he investigated. Anyone who has followed the proceedings in the tribunal or read its report will know that no stones were left unturned in its investigation and conclusions but yet there are those in the media and some politicians who seem determined to raise new queries and make new allegations. By doing so, of course implicity, they are rejecting the detailed assessment carried out by the learned judge and substituting their own half-baked conclusions. As the [449] Taoiseach said, the tribunal is over, that chapter in our political history has closed and we should acknowledge that fact.

Many times during the hearings of the tribunal, for one reason or another it occupied centre stage, and I suppose as could have been expected it generated much political comment and controversy even before the report was published. Disregarding the invective and the party political perspectives it will be seen that Mr. Justice Hamilton has performed a significant service for our country. The decision making process has been examined. The functions of the various Departments of State have been explained. In short, the workings of Government have been brought closer to the man in the street.

The terms of reference set out in the order which established the tribunal of inquiry were widely drafted to ensure that any person who had any complaint to make or axe to grind in respect of the beef industry was invited to participate in the proceedings. Under the terms of the order not only were the allegations made in the Dáil and on the “World in Action” programme to be investigated. It also provided as follows: “Any matters connected with or relevant to the matters aforesaid which the Tribunal considers it necessary to investigate in connection with his inquries” would be considered. Still some people say the inquiry was not complete. The tribunal is over.

Due of the wide terms of reference numerous allegations were investigated by the tribunal, ranging from such specific and simple matters as the changing of labels on meat to the interpretation of complex statutory provisions of finance and insurance Acts. Behind that complexity, ignoring the hyperbole and the red herrings, the central allegations reduced to a simple damning proposition, that of corruption in Government. The nub of the allegations was that there was an improper relationship [450] between the members of the Government and Mr. Goodman and his companies. — in other words they suggested that Mr. Goodman was some type of social pariah to whom one should not even speak or look at. This is a source of the allegations of “blatant political favouritism”, affording Mr. Goodman the “inside political track and extreme personal closeness”.

In so far as the Taoiseach, Deputy Reynolds, was concerned it was alleged that as Minister in the Government and as an elected representative he did what he did for an improper motive. Can there be any more damning allegation about a politician than an allegation of corrupt political practice. This is the allegation kept alive by his detractors right up to 29 July, the date of the delivery of the final report.

Regardless of the shifting of emphasis, the strained interpretation and the deflection of the conclusions on this matter, the report is fundamentally clear and concise. The Taoiseach has been vindicated. There was no improper motive behind the decisions of the then Minister Deputy Albert Reynolds. Having analysed all the complaints from the trivial to the complex he did what he was entitled to and he did it in a proper way.

The corollary of that, to the discomfort and dissatisfaction of his detractors is that when they made the personal political attacks on his integrity they were wrong, and were found to be wrong.

Do they not acknowledge the statement in the report that: “There is no evidence to suggest that either the Taoiseach at that time or the Minister for Industry and Commerce at the time was personally close to Mr. Goodman or that Goodman had any political association with either of them or the party they represented”.

Do they reject the finding made by the chairman that:

[451] The decisions were made by him having regard to his conception of the requirements of the national interest and there is no evidence to suggest that his decisions were in any way based on improper motives either political or personal.

There is no room for misinterpretation of these findings. Deputy Albert Reynolds was cleared of the allegations of impropriety. Contrary assertions made at the time and repeated now fly in the face of the findings and the facts.

It comes as no surprise that no such improper motive was found to exist on the Government's or the Taoiseach's behalf. Anybody close to Government at the time knows, as I do, that such a vindication would be forthcoming when a proper inquiry was conducted into the matter.

There is often a misunderstanding about the actions of a Government active in the pursuit of its objectives. Decisions properly made necessarily involve the selection of one at the expense of another. The loser is always aggrieved. When those decisions involve economic consequences the grievance is all the greater. Where the decisions in question are made by a politician that sense of grievance sours to suspicion. When the suspicion is inflamed by others with a destructive political agenda it rapidly becomes proven corruption in the mind of the person originally aggrieved.

At this remove it is clear that much of the time of the tribunal was taken up with the pursuit of suspicions and innuendo. It is apparent that much of the cost of the tribunal is attributable not to the fundamental matters which were investigated but rather to the way in which the allegations were made and pursued by the allegers. Those allegers should not be allowed to walk away from the political consequence of their groundless allegations. If one reads the report, time and again one comes across [452] the finding that the allegation of corruption not just against the politicians but against the Revenue Commissioners, the Customs and Excise, the Garda and others were groundless. There was no carousel. There was no interference with the Customs and Excise. There was no interference with the Revenue Commissioner. Changes in legislation were not implemented at Goodman's request as alleged. The board of the IDA did not threaten to resign. No grants were paid in respect of any development under a five year plan. At no stage did the Government decide that it would rely solely on the Goodman group to develop the beef industry. These are just a few of the findings which clearly vindicate the Government of the day.

In an attempt to drive a wedge between the Government parties, the focus of the allegers has now shifted. They have walked away from the allegations of impropriety and political corruption and have sought to focus instead on the alleged incompetence of the decision makers but they have also sought to diffuse the issue by criticising the way in which the report came into the public domain. The chairman of the beef tribunal compiled his report and it has now been circulated far and wide. Quite properly the chairman provided a single original copy of that report to the Department of Agriculture, Food and Forestry. Quite properly it was brought before the Cabinet at its next meeting on Tuesday, 2 August. Due to the grave implications of the allegations of political corruption and the questions they raised in the minds of the public, it was appropriate at the earliest opportunity to disclose the fact that the report vindicated the personal and political integrity of the Taoiseach. There is nothing surprising or untoward about such a disclosure particularly having regard to what we now all know were the sensitive matters being dealt with by the Government at the time.

The reality of the dissatisfaction with [453] the report is that it failed to meet the allegers' expectations because the Taoiseach was vindicated.

I said at the beginning that Mr. Justice Hamilton had performed an invaluable service for the country in decrying the allegers who have failed to sustain their allegations. I do not seek to take away from that. History will judge this report as a watershed in Irish political life not because it displays for the public the workings of Government in a way that had never been done before. There is a dynamic in politics and government which is forgotten. If one compares the Government we had in the 50's and 60's with what we have today it can be seen that enormous changes have occurred. I predict that when people of the next generation look back to our time in Government they will see the tribunal as part of a changing process. With the benefit of hindsight of course, there are lessons to be learned and things will be done differently in the future. The fundamental fact remains that the allegations of corruption against the Taoiseach and members of the 1987-89 Government have been found to have fallen “flat”. Perhaps the one criticism that will be reserved for us in this House is the failure of the parties opposite to accept the findings so clearly set out in Mr. Justice Hamilton's report.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  With the permission of the House I propose to share my time with my colleague, Deputy Crawford.

An Leas-Cheann Comhairle: Information on Joe Jacob  Zoom on Joe Jacob  Is that agreed? Agreed.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  I gave evidence at the Tribunal of Inquiry into the Beef Processing Industry and my overriding impression of this whole sorry saga is that if Government Ministers answered parliamentary questions fully, openly and honourably and dispensed with the widespread and insulting behaviour of [454] suppressing information, half telling the facts and answering only the exact question asked and generally conspiring to withhold valuable information from Deputies, the Irish taxpayer would be £35 million better off. Make no mistake but the smart alec approach of Ministers is undermining democracy slowly but surely and must come to a halt at once. Mr. Justice Hamilton referred to this at the tribunal.

A Deputy, regardless of his status has been elected to represent the constituency and I do not understand why when he or she tables questions, or communicates by letter or telephone with Government Departments he or she is shunned by civil servants, who obviously are working on the instructions of their Minister. They are so dismissive that one would surely think there was some sort of sabotage envisaged when the questions were asked.

I see no tangible signs of a change in this area. I want to put on record my disgust at this trend and I believe if Dáil questions are not honestly and properly answered it is not alone an insult to the Dáil Deputy in question but more importantly it is a direct insult and snub to the electorate.

If the tribunal is to produce any worthwhile result it must surely start at Dáil accountability. The foundation for this is to give an honest thorough answer to Dáil questions. If open Government is to mean anything it means that when you get an answer to a Dáil question you can take it that it is the whole truth and nothing but the truth and covers the subject thoroughly.

The old adage that “beauty is in the eye of the beholder” could be ascribed to the interpretations used by the major protagonists in the beef tribunal. Both the accused and the accusers had a field day, according to themselves and depending on who one spoke to. Everybody was vindicated. The Taoiseach said he was right, the Tánaiste said he was right, although they contradicted [455] each other today. Larry Goodman said his name was cleared, the legal teams cannot but be happy with the outcome and it appears the only person to whom the boot has been applied is Susan O'Keeffe, the journalist.

It would be ironic if Susan O'Keefe is the only person who may serve a jail sentence out of this debacle. Shoot the messenger seems to be the policy now. The people of Ireland are simply aghast at this outcome as indeed I am. If Ms O'Keeffe is the only person to face charges then it is difficult to know what the beef tribunal was all about.

The Taoiseach has cheek for ten faces after today. His midnight rush to the papers on the release of the tribunal report to vindicate himself was poor judgment and poorer statesmanship. How could the Taoiseach claim to be vidicated when the tribunal found many disturbing aspects to his performance as Minister for Industry and Commerce? Page 59 of the tribunal report states that the Taoiseach, in evidence, said on the export credit insurance scheme:

The reintroduction of Export Credit is a decision within the statutory authority of the Minister for Industry and Commerce, and, I didn't discuss it with any of them before I reintroduced it. I carried out my own evaluation and I made my decision. I did not make Members of the Government aware that I had reintroduced it at that particular time. So far as informing other traders was concerned I view my position as Minister for Industry and Commerce as the person who makes a decision, and makes the policies, and the Department Officials carry out the policies and the decisions.

Would that extract alone convince the nation that here was a man who was involved in collective responsibility in a Government? Could the other traders such as Halal Limited of Ballyhaunis, [456] now sadly gone, have confidence that their particular point of view would be heard and understood by that Cabinet?

The above quotation from his own evidence is ample proof that Deputy Reynolds, when Minister for Industry and Commerce, had his own pets and treated all others with contempt. It is also exceedingly difficult to understand that a Minister for Industry and Commerce, where he would be contemplating covering huge volumes of meat into a market so shaky as Iraq, would not see fit and indeed incumbent upon himself to even casually mention to the Minister for Agriculture what he was about to do. It is also significant that the Taoiseach, when giving evidence, seems to have a very faulty memory. It is difficult to understand how he could not recall the circumstances in which he was told about the largest single beef contract in the history of world trade, but then he was the man who did not know his own firm had got £1 million in the passports for sale controversy. On that occasion the members of his own family seemingly forgot to tell him or if they did, he forgot what he was told. The Taoiseach cannot but be concerned with the findings of the beef tribunal where his view of the “national interest” in the distribution of export credit insurance was objectively incorrect.

It is difficult to understand why any Irish Minister for Industry and Commerce would want to cover non-Irish beef and would also want to cover beef coming from intervention. Whoever financially gained from the sale of such beef, it certainly was not the farmers of Ireland. I would have assumed that one of the major overriding factors in issuing export credit insurance would be that it would have been of vital national interest to a large section of the population in Ireland, and clearly that was not so.

I made a statement in the Dáil in late 1990 that I believe there was collusion amongst the meat factories to keep [457] prices depressed to Irish farmers. I did so on the basis that I believed that the Goodman operation was getting so big that it was in a position to dictate to the smaller operators the price to be paid on a particular week.

If preferential treatment, as outlined in my view by Mr. Reynolds, was given to the Goodman organisation to the exclusion of others it was reasonable to assume that within a very short space of time the other companies would be unable to compete on a level playing field and it was quite easy to see that a monopoly situation would develop with Goodman International as lord and master.

The Taoiseach and Fianna Fáil have been making great play out of the fact that he did not do anything other with the export credit insurance scheme in 1987 and 1988 than that which was carried out by the Fine Gael-Labour Government. This is sheer nonsense. Every impartial observer understands that in May 1986 on official advice, the then Minister for Industry and Commerce, Deputy Michael Noonan, suspended the export credit insurance because of the particularly unstable situation in Iraq. If anything that situation became much worse between May 1986 and April 1987. However, Mr. Reynolds found no problem in reintroducing the cover.

Fianna Fáil Ministers, Deputies and Deputy Reynolds himself, not to mention his spindoctors, crow very loudly about the fact that the tribunal found that there was no special relationship between the Government of the day and Goodman International. I accept the finding of Mr. Justice Hamilton. However, I would like to know how many more meat processors were invited to the various weddings in the Taoiseach's family. I find that difficult to understand. It is indeed absolutely possible that such a close relationship between families need not or would not [458] necessarily mean that preferential treatment would be given in the world of business, but I can assure you that many people in this country find it difficult not to believe that Albert Reynolds and Larry Goodman are not on very friendly personal terms.

The decision by the IDA to drop the jobs provision clause from the Goodman International package is also very difficult to understand. I remember at the time many Ministers in that particular Government being ecstatic about the fact that the Goodman package would not alone prevent jobs from being lost in the meat industry but would create another 600 full time jobs. It was difficult to understand the IDA thinking on this. If they believed when the package was drawn up that it was prudent and advisable in the national interest that 600 jobs could and should be provided, it was equally puzzling to understand why this could be dropped and seemingly with Deputy Haughey, the then Taoiseach, as some type of mediator between the IDA and Goodman International.

No area of the country suffered so much by this particular change of policy as Tuam in my constituency where Goodman was supposed to build a state of the art meat factory, which of course never materialised.

The Taoiseach should not feel himself vindicated and I think the people of Ireland believe this to be the case as well. I was in the Dáil when the Tánaiste, Deputy Spring, made a series of allegations which I can only describe as mind boggling. Deputies sat on that occasion with open mouths as one serious allegation after another was hurled by Deputy Spring at the then Taoiseach Mr. Charles J. Haughey and at Mr. Reynolds. Deputy Spring's speech in which he castigated Fianna Fáil and in particular Deputies Haughey and Reynolds, provided the foundation stone for the position he now holds. There is no doubt that his stature as a [459] serious politician dramatically increased as a result of his contribution on that occasion. What Deputy Spring did not say about Fianna Fáil that day is not worth saying. I have one serious question for the Tánaiste, his fellow Ministers and Labour Deputies: given that the tribunal found that many of the allegations made on that were held to be incorrect, how can he now face the people and say, irrespective of the outcome, he will keep Fianna Fáil in power? That is what the Labour Party is now doing.

The judgment given at the tribunal against many of his allegations clearly points up why the Tánaiste needed to protect his sources of information. He went a long and costly way to protect that right. The only people who can put Fianna Fáil out of office are the Labour Deputies. I can only inform them that the events in this House today will not easily be forgotten. They will need extra spindoctors and programme managers at the next general election.

Fianna Fáil must take the blame for the level of costs awarded to the legal people at the tribunal. It is nothing short of a disgrace. I understand it was the Attorney General who agreed the fees. Some senior counsel earned £1,800 a day while their junior counterparts commanded about £1,200 a day. This could only happen in a banana republic and would not be acceptable in any normal democracy elsewhere.

Many commentators in the meat business repeatedly maintained that there was illegal practices in the Goodman Group. The tribunal found that such was the case. However, it found that Larry Goodman and his senior executives were unaware of what was going on in some of their factories. Why would a factory manager in any one of the Goodman Group of factories put himself in a position where he was breaking the law and could be prosecuted for such indiscretions? What was [460] in it for the managers of the various factories? I believe there was nothing in it for them.

I have not seen in the report the tribunal's attitude to this. I would have thought that if a factory manager was acting the maggot in a manner which meant that profits would be reduced those in high positions in such a company would very quickly ask questions. However, it appears that if a factory was making money, irrespective of how it was being done, nobody questioned its performance.

I hope that the many recommendations of the tribunal as far as the meat industry is concerned will be implemented right across the board withot fear or favour. I believe that when the history of this period is written the Government of the day will be shown in a very poor light, that it will be clear that the normal checks and balances were not implemented and open Government was non-existent.

Mr. Crawford: Information on Seymour Crawford  Zoom on Seymour Crawford  I thank my colleague for sharing his time with me. This is one of the more serious issues to come before the House. The tribunal was an independent one, and, as our party Leader said today, it is important that we use the contents of the report properly.

It was frustrating when the Taoiseach published that part of the report which was favourable to him. It was not just annoying to us but to the Tánaiste as he made clear again today.

It is fair to say I would not have stood for election had it not been for the activities of the then Fianna Fáil Government and their closeness and cosiness with Goodman International. During my time as chairman of the Irish Livestock Committee and my seven years service on the board of CBF, I had a good and close relationship with Larry Goodman and many of his colleagues in the business. One of my friends and one of the better business people in the [461] bacon industry, Samual Graham, had a company which was bought over by the Goodman Group. No attempt was made by the then Minister for Agriculture, Food and Forestry, Michael O'Kennedy to save the company. I asked myself what role I could play in farming or politics and I chose to stand for election and try to prevent small people like Samuel Graham from being wiped out.

The Government recalled the Dáil for the purpose of saving the Goodman Group in the interests of the nation when it was £50 million plus in debt. That is a measure of the friendship between Larry Goodman and the Taoiseach. Paschal Phelan and Oliver Murphy are well known supporters of Fianna Fáil, there is nothing wrong with that. It has been said that Larry Goodman is not close to the Taoiseach but I am glad the Tánaiste said it is clear that in the area of policy the entire culture of the Government of the day was, whatever Larry Goodman wants, Larry Goodman gets. The Tánaiste went on to say that unlawful decisions to interfere with the decision making process of the IDA were made to support that policy. Contrast that with the treatment meted out to another Graham family which ensured that the National Irish Bank were allowed to move their cattle from Donegal to Dublin notwithstading the risk of disease.

It has been said that decisions were made to give export credit insurance to Goodman and two other factories to ensure cattle prices were maintained. I question that as one deeply involved in the industry. Those three groups were given a major advantage. Is that how to promote fair trade and competition? It is not, it leads only to a monopoly, yet that policy was decided on at Cabinet.

The Taoiseach is able to forget many things. He advised us that he was not involved in his family company and so did not know about the soft loan of £1 million in return for a passport. Yet he is quoted in the report as saying he was [462] deeply involved in the family business for four years prior to 1987. This raises questions about some of the information given by him and certainly does not vindicate him, I do not intend to go into this issue in detail as my party leader, Deputy John Bruton, and several other Members have done so. However, it is clear that the Taoiseach did not follow the guidance of the Cabinet that assistance should not be given to one or two companies if it was not being given to all companies. Even though some paragraphs of the report can be taken out of context in an effort to show that he did not personally gain from the investment, the report clearly indicates that the Taoiseach was less honourable than he should be in his dealings with many in the industry and could be said to be reckless in many cases.

The reduction in the interest rate from 4 per cent to 1 per cent benefited the Goodman group to the tune of £2.74 million. This represented a total change in the rules. Many small farmers have been refused payment of livestock and headage grants because they put a wrong “X” in a box. These farmers, many of whom are old and some of whom may not have much education, have been told that they have defrauded the State and will not receive payment. Contrast this with the major efforts made by the Taoiseach to help Larry Goodman.

If the report does nothing else it shows clearly that there was major tax evasion by that group. To add insult to injury, the group availed of the tax amnesty, something for which the Taoiseach must bear full responsibility. Serious consideration will have to be given to this matter by taxpayers and all those who are being asked to bear the burdens on the State.

The Taoiseach said the most serious aspect of the tribunal was its cost of £35-£45 million. Whose fault is this? As Deputy Connaughton made clear, the [463] matter could have been solved in this House if questions had been properly answered. It could also have been solved if Fianna Fáil appointed attorneys readjusted the fees when it was recognised that the tribunal would sit for a considerable period. Many taxpayers feel very aggrieved that this was allowed to happen, and it should not be allowed to happen again.

In this context it is no harm to point out that Lester Piggott had to spend a term in jail for the non-payment of taxes in a country across the water which we often criticise for its legal rulings. It is strange that the only person who faces the possibility of legal action being taken against her is the journalist Susan O'Keeffe. I believe many people feel very angry at this possibility.

The most serious issues facing the Government are tax evasion and the making of special deals for the payment of that tax. Many small farmers, shopkeepers etc. live in constant fear of the sheriff calling to see if they have paid their proper taxes. Yet nothing was done about the massive tax evasion by this group which, as many of us involved in industry know, went on for years. The sums referred to are only the tip of the iceberg.

I have brought to the notice of the Minister for Social Welfare a case involving an invalid who was docked £5 a week when it was discovered that his wife was earning £15 per week cleaning floors in someone else's house. When one considers that is how the law works in some areas it is difficult to believe that we as a Parliament can sit back and allow it to operate differently in other areas. It has been said that changes will be implemented in the law. It is important that these changes are implemented as quickly as possible so that all citizens of this State are treated equally whether in terms of hand-outs, taxation etc.

I have been involved in the meat [464] industry for some considerable time. Many years ago I was involved in the Cork Marts IMP Group where animals were slaughtered, boned and processed to the last, so to speak. As in the case of Clover Meats and other factories, the canned meat was sold as corned meat. It is baloney to say that Larry Goodman could have rejuvenated the beef industry on his own. Much damage was done to the industry in the short term by the assistance given to him at a cost to others. As a result many people who should have remained in the industry went out of business.

When the tribunal was established people said it marked the end of the Irish beef industry, that it would be disgraced. However, it has helped greatly to improve the image of the Irish meat industry abroad and people can now buy better Irish meat. The £35 million spent on the tribunal has not been wasted. We must learn from the findings of the tribunal and the Taoiseach, who has more to answer for than anybody else in this House, must look at his conscience and decide what has to be done.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. O'Shea): Information on Brian O'Shea  Zoom on Brian O'Shea  Tá anáthas orm an deis seo a fháil chun labhairt sa díospóireacht thábhachtach seo, go mór mór os rud é go bhfuil sé de dhualgas orm tionscal an bhia a fhorbairt agus cabhrú le postanna breise a chur ar fáil. Rud a chuireann an-dóchas orm ná go ndúirt an Breitheamh Hamilton ina thuairisc go bhfuil mairteoil na hÉireann ar fheabhas agus, mar chruthú ar sin, deireann sé go bhfaigheann an mairteoil an praghas is airde ar mhargaí na hEorpa agus i dtíortha eile ar fud an domhain.

Déanann sé cur síos ar chleachtaithe in aghaidh an dlí freisin, agus caithfidh an Rialtas glacadh le sin, agus na moltaí go léir sa tuairisc a chur i bhfeidhm. Tá an gheallúint sin i gclár an Rialtais.

I currently hold responsibility for the [465] development of the food industry and, while I strongly supported the call for setting up the tribunal, as Minister with responsibility for Food, I am encouraged by the fact that neither the image of the product nor the potential of the sector has suffered as a result. I take a great deal of comfort from the following extract from the beef tribunal report regarding the development of vacuum packed sales of Irish beef:

This more than four-fold increase has been achieved against a background of falling EC consumption, increased pressure from competing meals, alternative protein sources and the growth in the convenience food sector. Such a striking commercial performance could not have taken place if the quality of the product were in doubt and concerns which have been expressed about the quality of Irish meat exports are in the view of the tribunal, unfounded. It is a product of the highest quality, justifiably commanding a premium price on international markets both within the EC and worldwide and remains the country's most successful foreign export commodity.

This is particularly encouraging at a juncture when the Irish beef industry, which in the past was so heavily reliant on intervention, must now dispose of its product on commercial markets. We produce eight times the amount of beef that we need for the domestic market. A great deal has been achieved in the context of winning commercial markets, last year's stocks were successfully disposed of with little reversion to intervention and this trend has continued throughout the present year.

There are difficulties, also, in relation to the present high level of live exports. This is largely a matter of balance in regard to the application of the export refund system. I am seeking to ensure that supplies to processors are maintained at levels sufficiently high to [466] enable them to service all available commercial markets, thus maximising employment and value-added in the sector. Selling beef in processed form must remain the predominant activity in the industry. This is clearly in the national interest. It is also in the longerterm interests of producers.

Indeed the expert group on the food industry set as a target that a 20 per cent slaughter is to be achieved in each of the first three quarters every year to off-set the seasonality problem of the disproportionately high kill in the final quarter. The slaughter premium which has been paid to producers in recent years from January to April is designed to assist in realising this objective.

Our slaughtering and processing facilities compare favourably with those in other member states of the EU. There is a solid base to our industry and, through the excellent promotions of CBF and the highly professional and effective salespersons of the various companies, the beef industry is very well placed for the challenging and exciting times ahead.

In entering this debate on the tribunal report I am mindful of the impact of the findings and recommendations of the report on the industry and its future development. In looking forward to the future development of the food industry and the beef sector we need, to be aware also of the past, or at least that period investigated by the tribunal and to learn lessons from the past. It is a wide-ranging and detailed report. I propose to focus on just a few issues that are important to me and to my party.

The report notes that the Irish food industry has an estimated output of around £8 billion, its exports account for some 22 per cent of total exports; it generates a positive trade balance of the order of £2 billion a year; it accounts also for around one in five of all manufacturing jobs currently employing up to 40,000 people with a further 165,000 people directly engaged in agriculture.

[467] It represents a substantial part of our indigenous economy and has been the source of economic development aspirations of successive Governments — and with good reason — as the industry that represents the best opportunity for indigenous wealth and job creation in Ireland.

The export beef sector which is a major part of the industry employs some 4,500 people on a permanent basis and some 6,000 people in total when seasonal workers are taken into consideration. Beef and cattle exports are valued at approximately £700 million a year, excluding export refunds, which represents some 5 per cent of total exports.

Thankfully, this report, while unearthing evidence of illegal activities, has not set the food industry back. As far as I am aware no contracts have been lost as a result of this investigation, neither has the quality image of our beef product been diminished.

There are rogue operators within the industry as there are in other sectors of the economy but they have been — and will over time continue to be dealt with — by the regulatory authorities. However, the vast majority of people and businesses within the industry act with the integrity expected of them as employers, employees and businesses. As the Minister responsible for the industry I must state that clearly.

The question logically follows as to why it became necessary to hold a highly expensive tribunal into the beef processing industry.

Whereas it can be dangerous to generalise, it is substantially true that the problem is as much a cultural one as anything else. The industry has been very heavily reliant on intervention, a market support mechanism which basically seeks to maintain farmer incomes. In doing so it also encourages the social objective of retaining people in rural areas. Intervention is a highly complex, [468] and difficult to supervise, system. Inevitably there were occasional lapses of control. Equally there were attempts by some, admittedly a minority, to exploit the system. Inevitably, this led to abuses. Most of these abuses considered by the tribunal had in fact been detected, and were being dealt with, by the regulatory authorities. Those uncovered during the course of the inquiry are now being dealt with. With the exception of a number of cases, to which I will refer later, the report does not find that the abuses were general or systematic.

To the extent that abuses occurred and the fact that they occurred led in large measure to setting up the beef tribunal, they were essentially the result of greed. There is no doubt that a small group of people became extremely wealthy at the expense of the EU intervention system. In addition, the values system and culture which underpins the industry in some quarters, of course, led to tax fraud on a very significant and highly organised scale to the detriment of the Exchequer. This is one example of systematic abuse. These and other illegalities must be pursued with the full rigour of the law, as the Tánaiste said, and I believe should be the case.

The Labour Party effectively became involved in uncovering this corruption when information was forthcoming that all was not as it should be in the industry. A large penalty had been imposed in one case. Initially, this was concealed and the whole process of obtaining information through the normal parliamentary procedures was frustrated to a totally unacceptable degree, a point referred to by Mr Justice Hamilton during the tribunal.

When there is concealment an atmosphere of suspicion is created that a great deal more is being concealed and indeed, as further information began to emerge, the flames of suspicion rose higher and higher. The Labour Party, whose ethos is based on transparency [469] and equality before the law, vigorously pursued through its Party Leader, and then Deputy Leader, former Deputy Barry Desmond its duty to its electors to bring the fraud and corruption into the open.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Is the Minister going for equality before the law in this report? Will it be small fry only they will go for? What about the big players? Will it be only Susan O'Keeffe and a few easy targets who will be pursued?

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Deputy Doyle will have her opportunity.

Mr. O'Shea: Information on Brian O'Shea  Zoom on Brian O'Shea  Not alone did they succeed in doing this but from the time they forcibly brought these issues into the Dáil, there was an immediate and very substantial improvement in the control systems in the industry.

A basic principle is that all institutions require systematic review and continuous reform if they are to maximise their effectiveness in achieving their legitimate objectives. This is true of Parliament, of public bodies and of industry. Equally, control and regulatory systems require regular review and improvement.

The size and complexity of the beef sector and the difficulties for the regulatory authorities are well covered in the report. Evidence produced at the tribunal, from which I am now quoting, indicated that total beef production at meat export premises in the period 1973 to 1992 amounted to 7.3 million tonnes equivalent to 20.5 million cattle and all of which was subject to Department supervision. The scale of the operation of the intervention measures in the beef sector in Ireland during that period was enormous. It involved the Department of Agriculture in dealing with hundreds of companies in the beef industry including up to 50 meat factories and more than 20 cold stores. It ranged from the organisation of cold storage ships to [470] the movement of large quantities of beef for storage in continental stores, to the organisation of large-scale sales of intervention beef to third countries. As the Secretary of the Department pointed out, it ranged from such minute items as control of trimmings of less than 100 grammes, to the financial accounting of individual sales as high as £46 millions. All the expenditure had to be accounted for by the Department to the EC Commission on behalf of the Minister as the Commission's agent.

In implementing the various direct and indirect intervention measures in Ireland the Department had to observe a myriad of EC regulations, which were subject to almost constant amendments. The complexity of these regulations has been clearly demonstrated in the course of the tribunal.

There is absolutely no doubt that the Department's control systems were overtaken by the upsurge of throughput in meat factories as the industry developed through the 1980s and the difficulties in implementing complex regulations. There is no doubt either that these systems have improved immeasurably since their weaknesses were first raised by Deputy Spring and former Deputy Desmond in 1989.

The control system now includes: a specialised Intervention Unit; control inquiry teams which are most important because of the value of unannounced inspections; a beef controls division which has line responsibility for intervention control; additional resources; intensified post-factum checking; new instructions to staff to exercise closer inspection of all weighting of beef; improvements in the forms used; a new general intervention contract; an updated deboning contract and a systems investigation and training section has been established within the Department.

All of these are valuable improvements to the control system and will [471] help to ensure much improved regulation within the industry. I do not propose to go into the detail of these regulatory changes, however, the pity from the taxpayers' perspective is that such rigorous systems or their like were not in place in the mid to late 1980s and before. However, in deference to the Department, and in recognition of what the tribunal said on this matter I acknowledged the vast improvements which have been brought about in the past two to three years by the Department, not least because of the incisiveness and outspokenness of Deputy Spring and former Deputy Barry Desmond.

The tribunal considered the steps taken by the Department of Agriculture, Food and Forestry as outlined in Secretary Dowling's statement to streamline and improve the control systems against the background of the evidence adduced before the tribunal. The tribunal was satisfied that the Department had addressed the problems disclosed therein. If fully implemented these controls will greatly lessen the possibility of irregularities and malpractices occuring in the future. The report states that “such systems should particularly ensure that all documents or certificates required to be completed by departmental staff, either veterinary inspectors or agricultural officers, be completed in total by them and not signed until they have been so completed”.

The tribunal makes specific recommendations that the system introduced by the Department of Agriculture, Food and Forestry should require: that the quarters being weighted into a boning hall for either public or private storage should be weigthed in by an employee of the Department and all relevant documentation, in respect thereof, should be prepared and be signed by him, and that subsequent to deboning [472] and cutting in accordance with specifications of the quarters of beef, and in addition to weighting the cartons containing the cuts being placed in public storage, the balance of meat remaining should be examined by an officer of the Department to ensure that identifiable pieces of meat are not included in such balance and such meat should be weighted and its weights recorded.

The tribunal has noted the proposed amendments to the basic Commission Regulation No. 859/89 governing intervention and considers that the proposed amendments are eminently desirable. I am satisfied from my experience within the Department that it has been acting and will continue to act to take account of the report's findings and recommendations. I will be pressing for the necessary resources to be provided to ensure that the control system can be rigorously and effectively implemented. Members of the House should realise that there are resource costs involved in implementing these recommendations which will have to be borne by the Department and that it is not simply a matter of wishing things to change.

My objective is the further development of the food industry and the putting in place of the programmes required to do this. In the beef sector, in particular, we have moved sharply away from the use of intervention and we have assisted the sector through CBF to intensify its export marketing efforts. While the sector has in the past relied heavily on intervention, there are new restrictions on its use as a market clearance mechanism following CAP reform and the GATT negotiations.

The recent establishment of An Bord Bia will lead the way to a new marketing drive for Irish food and it will have an important role to play along with other State agencies in the development of the Irish food industry. I am currently putting in place a single multi-annual operational sub-programme for the food industry under which resources, [473] both national and EU, will be provided for capital investment, research and development, training and marketing and promotion. As well as increasing the overall level of resources specifically provided for the development of the food industry, this programme will greatly sharpen the focus on food by Departments and State agencies. I make this point to assure the industry of my best intentions towards it and its future development.

While I am speaking today primarily to Members in this House, I am conscious of the need to address myself also to another group of people outside the House — a group who, like Deputy Spring and other Deputies, place a high price on the values of honesty and integrity. In this regard I am speaking about those workers from the meat plants who broke ranks to give evidence to the tribunal.

Those of us who left school in the 1960s with a leaving certificate were virtually guaranteed a job. Sometimes we do not fully understand or empathise with the anguish felt by young people today who despite leaving school with good qualifications fail to get jobs. Given the fact that finding work is so difficult, it is despicable that young workers would be initiated into systematically corrupt work practices such as those uncovered by the tribunal.

It is easy to be moralistic in a facile way and at some remove to say that they should have refused to commit illegal acts, and of course they should have, but throughout the report we see evidence of how people can be coerced and intimidated into acquiescing with what they know to be wrong. They acted in most cases in fear of their employers, in fear of being caught and against their better judgment. The alternative, of course, was to risk losing their job and starting from a negative position in terms of finding alternative [474] employment. When people are surrounded by their peers who are unemployed and with little prospect of finding work, how harshly should we judge them? We certainly owe them our sympathy and our understanding.

In coming forward under no little pressure they put themselves and their families in a difficult position. Some would have had neighbours who would not have wanted them to testify and would have suffered resentment or indifference afterwards. Some of those who gave evidence were young workers, fresh out of school and in their first jobs. They knew that what they were being asked to do by their employers was wrong. In the normal course of our employment we do not expect to become part of systematic fraud and deceitful or illegal work practices.

We would not expect to be subjected to systematic corruption by our employers, yet this is what happened according to some of the witnesses who gave sworn evidence to the tribunal. Why did this happen? How could it happen? No matter which way we look at this it is an enormously sad reflection on the small number of companies which the tribunal found to be involved in such activity and I acknowledge the integrity, moral courage and bravery of those witnesses. They added greatly to the work of the tribunal and without them it is unlikely that the full story would have emerged as it did.

As a further indication of the extent of corruption in some parts of the sector we need to look no further than the evidence given in relation to the Russian food aid programme under which the EU decided to transfer agricultural products from intervention free of charge to the Soviet Union. This aid was to be in the form of canned processed beef and produced by releasing a sufficient quantity of intervention beef for that purpose. The company in question submitted documentation to the Department indicating that all the beef [475] had been processed to fill the contract. However, evidence was given to the tribunal that most of the hindquarter beef supplied to the company for processing into cans was not, in fact, so processed and that the product was reboxed and sold commercially with inferior forequarter and heart meat being substituted in the processing operation.

An examination of documents at the Rathkeale plant indicated the almost daily use of heart meat in the canning operation and that a mix of 180 kilograms of meat to 20 kilograms of heart meat was sought by the company. The report states that a number of employees of AIBP at the cannery during June and July gave evidence before the tribunal, which was uncontradicted, in relation to the trimming of hearts, the inclusion of hearts with beef in the mix for the cans, the inclusion of fresh meat from the boning hall and instructions from management to conceal the hearts if agricultural officers were present or likely to be present. The report finds that there was a deliberate policy on the part of management at the company not to comply with the terms of the food aid regulations, not to use the highest quantity of eligible meat, to include other inferior meat and to misappropriate intervention beef for commercial purposes. The net effect of these actions was that 10,725 cartons of beef so supplied is unaccounted for.

These actions have severely reinforced the need for the work of the tribunal and such acts perpetrated by the company must sound a deep note of discord with the people. This episode is symptomatic of the culture of greed and exploitation which has permeated parts of the beef sector. And as if this were not bad enough we have to bear in mind also that this incident happened after the tribunal had begun its work and for that reason could only be construed as an act of the deepest corporate arrogance.

[476] The function of the tribunal, as described by itself, was to carry out a simple fact-finding operation into the truth or otherwise of the allegations regarding illegal activities, fraud and malpractice in connection with the beef processing industry made or referred to in Dáil Éireann and in a television programme transmitted by ITV on 13 May 1991 and in presenting this report has sought to confine its role to that function.

The broad outcome of the tribunal is that there were failures in public policy in the period under investigation. Apart from its findings on export credit insurance, the tribunal has uncovered huge amounts of tax evasion and fraud which would not have come to light had it not been for the work of the tribunal. It is conceivable that this evasion and fraud would still be going on in view of the fact that the best efforts of the Revenue Commissioners had failed to detect them.

Similarly the accountancy profession will have to examine its role in this regard and decide how it will deal with the issues of principle and practice raised for it in the report. In particular the tribunal considers that in the case of tax evasion the obligations placed on an auditor should not be limited to reporting such tax evasion to the appropriate level of authority within the entity or bringing the matter to the notice of the shareholders, but should be extended to oblige them to report such evasion to the Revenue Commissioners and recommends that a provision, which would have that effect, be included in the next Finance Bill to be placed before the Houses of the Oireachtas.

The Programme for Government states that the recommendations of the tribunal will be accepted and implemented and in keeping with that undertaking this recommendation will be implemented.

Much has been made of the cost of [477] the tribunal. Estimates vary but it will undoubtedly cost the State a great deal of money even if we discount the revenue potential of the tax frauds which were uncovered and the restriction on potential future revenue losses. This is money which many could argue would more usefully be spent on other public services. Yet, I have to come back to the central reason for having the tribunal in the first place. Material became available to my party that something wrong was happening in the beef industry. Despite many attempts to determine the truth of the matter we suffered frustration and obfuscation at the hands of the then Government. The findings of this tribunal must serve to reawaken a greater sense of the need for values, honesty and integrity from those in public life and service, whether in Government or Opposition and it is money well spent if it serves to achieve that aim. That is not to say that there may be other administrative, legal or parliamantary ways of achieving the same objective. In the long term, we need to explore these other avenues for eliciting the truth. The Tánaiste and Minister for Foreign Affairs in his contribution dealt in some detail with this matter and I do not intend to go over this ground except to emphasise that there must be real and substantial change.

The motion before the House thanks the chairman for his work. I think every Member will agree that the House owes the chairman its thanks for the diligent and efficient conduct of the inquiry by him and I wish to record my own thanks to Mr. Justice Hamilton for his work.

As I stated at the outset, the fundamentals of our beef industry are sound and our product is excellent. The unacceptable practices identified by the tribunal are essentially ones of control and regulation. A great deal by way of improvement has been put in place by the Department of Agriculture, Food [478] and Forestry. The Government is committed to the acceptance and implementation of the recommendations of the tribunal.

Our real task then is to remove all fraud and corruption and to exploit the job creation potential of the beef industry both in terms of producers and in the processing area.

The work of the tribunal and this report puts the challenge to us. There is no retreat from the unpalatable truths contained in it. I am proud of what has been achieved by my party Leader and my party in this regard and I believe in the strongest possible terms that our actions have been supported by its findings. It is now up to this House to ensure that the recommendations of the report are implemented in full and to commit ourselves wholeheartedly to this task.

Mr. Crawford: Information on Seymour Crawford  Zoom on Seymour Crawford  I am surprised that not one member of the Fianna Fáil Party is in the House to listen to this serious debate. It is necessary, therefore, to call a quorum.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Is Deputy Doyle offering to speak for one hour or 30 minutes?

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  For one hour. The issues raised in this report are among the most serious to be debated in this House for many years. This report is about much more than an investigation into the beef industry, it is about how Fianna Fáil exercises power in Government and how in Government it blatantly disregards the primacy of this House. The House was misled deliberately, systematically and unashamedly by Fianna Fáil Ministers in the previous Government. The Minister of State who entered the Chamber is very welcome and if he has [479] anything intelligent to put on the report I will listen to it. Answers to parliamentary questions were so shaped as not to reveal the full truth. If a spade is a spade such answers can only be deemed lies.

The report is a lesson in Fianna Fáil's cavalier approach to running the country and of its relationship with elements of big business. The distinction between the national interest and the interests of a few is completely blurred. In the words of Dick Walsh, Fianna Fáil does not know the difference between running a democracy and owning one.

Mr. O'Dea: Information on Willie O'Dea  Zoom on Willie O'Dea  He is fair-minded commentator.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  In its view the national interest is defined by it and its Ministers in Government——

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  The Deputy's party has many scriptwriters.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  ——and is synonymous with its interests and those of its friends.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  Let us hear the Deputy without interruption.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  I enjoy the Deputies' interruptions.

Mr. Ring: Information on Michael Ring  Zoom on Michael Ring  And the Deputy is well able to deal with them.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  This report clearly shows that. The interruptions by Deputies opposite are probably the only sensible contributions they will make. They will get their names on the record so that their constituents will know they have been here to claim their expenses.

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  We were delighted to come back.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Mr. Justice Hamilton [480] stated that if the questions asked in the Dáil had been answered in the way they had been answered at the tribunal there would have been no necessity for the inquiry and more than £35 million could have been saved. This is one of the most serious matters to come out of the tribunal.

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  Nonsense. That is unsubstantiated and disgraceful.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  For Ministers to mislead Parliament is to subvert democracy. Fianna Fáil drove a coach and four through the constitutional and institutional framework of Government here. This is a democracy and the key pillars of Government are accountablity and legitimacy, but both were blatantly ignored. Responsibility for this cannot be avoided by the principal protagonists opposite.

The Labour Party will also bear a heavy responsibility here when its members troop through the division lobbies in support of the Government at the conclusion of this debate. They will be absolving the participants in this squalid affair of their sins. They will be retrospectively sanctioning the behaviour and attitudes that led to what Deputy Dick Spring calls this “major policy failure”.

The claim by the Taoiseach to have been completely vindicated by the report is arrant nonsense and only serves to add insult to injury.

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  That is silly.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  I remind the Taoiseach, his party colleagues and the spin doctors around them who have gone in to bat on his behalf that the findings of the recent Irish Times MRBI poll verify the old adage: you can fool some of the people some of the time——

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  The Deputy should not forget that certain spin doctors ran [481] the earlier Fine Gael Government. Members of the party had to meet them for breakfast to decide on each day's work.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  ——but you cannot fool all of the people all of the time. What I am saying is obviously hurting.

Mr. N. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  It is not.

Mrs. Doyle: Information on Avril Doyle  Zoom on Avril Doyle  Deputy Reynolds's reputation for political judgment and competence lies in tatters. Nowhere is this more clear than in relation to his handling of the issue of export credit insurance. My party leader, Deputy Bruton, put a case on record this afternoon that needs to be clearly answered.

Central to many allegations about export credit insurance was the accusation of political favouritism by the then Minister for Industry and Commerce, Deputy Reynolds, in his allocation of the export credit insurance scheme. On the evidence before it, Mr. Justice Hamilton did not find that that allegation stood up. The case was not proven. It would appear from the recent opinion poll that the public thinks otherwise.

Export credit insurance cover is an important support for encouraging export trade where there is financial insecurity or political instability in the markets. An export credit insurance scheme has been in place since 1953. The most recent agency agreement between the Minister for Industry and Commerce and the Insurance Corporation of Ireland governing export credit insurance includes the following clauses inter alia: (ii) The export credit insurance policies could be issued to persons exporting goods and/or services manufactured or produced in Ireland: (vi) ICI were to keep two separate sets of accounts — a “No. 1 account” and a “No. 2 account”. The No. 1 account related to normal insurance business, exclusive of the insurance included in [482] the No. 2 account. The No. 2 account [of interest to us in this tribunal report] related solely to business done on the basis of special ministerial or Government decision. The ICI were to provide insurance for the No. 2 account only when specified by the Minister.

Adding to the importance of acquiring cover under this scheme is the fact that the ICI is also empowered to issue guarantees to banks on behalf of individuals or companies who have a current and valid export credit insurance policy. Finance is then available to the exporter from the date the goods are exported, greatly assisting the requirement for working capital. This is a major bonus given the huge sums involved in filling meat contracts and the credit terms demanded.

From May 1986 the Department of Industry and Commerce was expressing concern about its lack of capacity to repay its debts. The then Minister, Deputy Michael Noonan, put a stay on further approvals for export credit insurance cover after consultation and full consideration of the facts. At the end of May, Anglo Irish Meats and Hibernia approached the Department of Industry and Commerce and the Taoiseach requesting cover for £34 million on contracts to supply beef to Iraq. Though the matter had been kept under continuous review by the then Minister, Deputy Noonan, no cover was granted until the Iraqi debt repayment position had been clarified to his satisfaction.

The risks of the deteriorating financial and military position in Iraq out-weighed even considerations of the national interest in developing the trade in the export of beef. In other words, the underwriting risk to the Exchequer resources, the taxpayer's money, was too great.

In a letter of 25 February 1987, Brian Britton, deputy chief executive of AIBP, attempted to persuade the Department of Industry and Commerce [483] to restore cover to Iraq and said inter alia:

all of the product being supplied is being processed and prepared in our group factories giving substantial employment in this country ...

On 5 March 1987 the Department replied to Brian Britton stating that the difficulties facing the Iraqis reflected in the non-payment of significant amounts currently due to the Irish exporters — a figure of £30 million at the time —[484] precluded the Minister from extending further cover.

Following the general election in that spring Deputy Reynolds was appointed Minister for Industry and Commerce on 11 March 1987 and within days the reintroduction of a restricted form of export credit insurance cover to Iraq was on the agenda. Anglo Irish Meats continued to press its case.

Debate adjourned.

The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Friday, 2 September 1994.


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