Group of States Against Corruption: Motion.

Wednesday, 16 June 1999

Dáil Éireann Debate
Vol. 506 No. 3

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Minister for Justice, Equality and Law Reform (Mr. O'Donoghue): Information on John O'Donoghue  Zoom on John O'Donoghue  I move:

That Dáil Éireann approves the terms of the Council of Europe Agreement establishing the Group of States Against Corruption, adopted by the Committee of Ministers at the Council of Europe on 5th May, 1998, at Strasbourg, a copy of which was laid before Dáil Éireann on 21st January, 1999.

The establishment of the Group of States Against Corruption is an important develoment in the international fight against corruption. The Council of Europe has already done a great deal of good work in this area through developing guiding principles for the fight against corruption and earlier this year, finalising a criminal law convention on corruption. Ireland, of course, strongly supports these developments, and legislation to enable ratification of the convention is currently under preparation. The establishment of this group represents a further development of this process in that it puts in place a mechanism of mutual evaluation to ensure compliance with these commitments.

Membership of the group will mean that paper adherence to Council of Europe anti-corruption standards will not suffice. Participating states, with Ireland I hope very much to the fore, will voluntarily submit to detailed and ongoing evaluation of compliance. This is a significant step which I very much welcome and for which I invite the support of the House.

The group is commonly referred to by its French acronym GRECO. The agreement, although approved by the Committee of Ministers at the Council of Europe last year, did not come into force until 1 May of this year because the agreement contains a commencement clause whereby 14 signatories are needed before its formal adoption, and that threshold was reached only last month.

GRECO is being established for an initial period of three years and its operation will then be reviewed. Each participating state may appoint up to two representatives to the group. GRECO will operate on the basis of mutual evaluation. Participating states will be regularly examined for compliance with anti-corruption obligations by a team selected from experts nominated by all the participating states. An evaluation will initially be based on answers to a questionnaire, but this may be followed by a visit by the investigating team to the state under examination. An evaluation report will be drawn up and the state under examination will be invited to comment before the draft report is submitted to GRECO. The draft report will be debated in a plenary session of GRECO and the state under examination may submit observations orally or in writing before [485] adoption of the report. The report may recommend improvements in domestic legislation or practice and, if so, the state concerned will be invited to report on any measures taken to implement the recommendations. Evaluation reports will be confidential but GRECO may issue a public statement if a state responds inadequately to any recommendations.

There are no direct implications for Irish law in this agreement although Ireland would, of course, be expected to take account of any recommendations made by GRECO in respect of our compliance with Council of Europe obligations.

The agreement is to be financed by annual compulsory contributions by the members of GRECO together with additional voluntary contributions, whether by members of GRECO or other sources. It is intended that the percentage contribution for each participating state will be the same as its normal rate of contribution to the Council of Europe. In the case of Ireland this is 0.5 per cent, which in an initial estimate would mean an annual contribution by Ireland to GRECO of approximately £3,000.

As the agreement establishing GRECO is an international agreement involving a charge on public funds its terms must, under Article 29 of the Constitution, be approved by this House in order for the State to be bound by it. I am asking the House for that approval. This is a good agreement. Membership by Ireland of GRECO will demonstrate not only our commitment to fight corruption, but our willingness for that commitment to be put to the test. I commend this agreement to the House.

Mr. Higgins: Information on Jim Higgins  Zoom on Jim Higgins  (Mayo): There are three Bills on the Government's published list of promised legislation dealing with corruption and fraud – the Criminal Justice (Fraud Offences) Bill, the Prevention of Corruption Bill and the Proceeds of Crime Bill – and none of them features as a priority to be dealt with this session. They are listed 10, 15 and 16 on legislative list C. Their lowly ranking in the pecking order has to be taken as an indication of the Government's lack of appetite for legislative reform or effective action to deal with the whole area of fraud, theft and white collar crime.

Time and again on the Order of Business, others Members of the House and I have pressed for the publication of these Bills. None of the Bills will see the light of day before the end of this year at the very earliest yet we have the temerity to sign up to a Council of Europe Agreement establishing the Group of States Against Corruption, a body whose purpose it is to monitor the laws and policies of participating states in the fight against corruption. On the one hand we are setting ourselves up as monitors of the performances of other participating countries while at national level we stand well and truly indicted for our failure to put our own house in order.

[486] Our laws dealing with theft and corruption date back to the middle of the last century. We have known for a long time that they are totally ineffective and inadequate yet there were so many vested interests involved that successive Governments and Ministers for Justice kicked for touch on the issue and it was regarded as a political no go area. Ordinary criminals were much easier and less politically sensitive options; it is much easier to lock up petty thieves, shop lifters and bag snatchers.

In the five year period between 1987 and 1992 a stunned and shocked nation witnessed the unveiling of financial scandal after financial scandal. The Goodman corrupt monopoly's abuses in the beef industry where many millions of pounds of fraudulent practices and the systematic cheating of the European taxpayer were uncovered yet no charges were preferred against senior Goodman executives. Only two lower level operatives at the company's Rathkeale plant ended up in jail.

Greencore, the sale of the Telecom Éireann site in Ballsbridge and the Carysfort College scandal were highly questionable and shady deals involving people one would describe as well connected. When the Gallagher merchant bank collapsed in 1990, Patrick Gallagher was charged, found guilty and sent to jail. However, he served his sentence, not in this jurisdiction but in Northern Ireland under the Theft Act, 1968. We do not have a theft Act in this jurisdiction. The end result was that in spite of incontrovertible evidence against Gallagher, a frustrated Director of Public Prosecutions had little option but to make a no prosecution recommendation.

Since then very little has happened by way of bringing about legislative change. In the wake of the revelations between 1987 and 1992, we have had a special advisory committee established in 1992 by Pádraic Flynn, then Minister for Justice, to report on fraud and white collar crime. The Law Reform Commission produced a detailed list of recommendations, among them one to adopt British style theft laws but there was no action. The golden circle continued to thrive.

A litany of other scandals has been uncovered involving huge amounts of money paid through overseas bank accounts to a former Taoiseach and his family's enterprises with no tax paid; National Irish Bank encouraged its customers to invest £35 million in illegal off-shore accounts in order to avoid tax; AIB involved itself in a tax avoidance scam to the tune of £84 million; NIB rigged its charges, thereby stealing from its own customers and Ireland became a clearing house for dodgy money with Irish registered non-resident companies being used by international criminal elements, including the Russian mafia, to launder money.

As in 1992, the Government, in the wake of the mass outcry of public revulsion, again promised action. The Minister for Finance, Deputy McCreevy, guaranteed a role for the Central Bank in protecting the consumer. He spoke about [487] the need, as he said, to examine the law and practice governing the provision of financial services in Ireland.

The Minister for Justice, Equality and Law Reform, Deputy O'Donoghue, went even further. In banner front page headlines he promised tough, new legislation against fraud and white collar crime. He was going to introduce a prevention of corruption Bill – a catch-all provision for theft that would also deal with the misappropriation of funds, goods and services. That was exactly 16 months ago and we are still waiting. The Bill was supposed to be published last autumn. However, with the other two anti-fraud legislation promises it has been left to languish on the list and we are now told that its publication is not expected until late 1999. We have been looking at the effective and workable British model for 31 years, yet we have failed to replicate it.

The McCracken tribunal produced a succinct and scathing report. The Flood and Moriarty tribunals are unearthing major abuses of power and money, yet we do not have the legislative tools to deal with the perpetrators. For some reason, zero tolerance does not seem to have anything like the same degree of impetus when it comes to white-collar crime. We need legislative reform urgently.

Organised crime knows no boundaries. Money can easily be moved at speed across borders. The supply of illegal drugs is one of the main enterprises of modern crime. It is a huge international enterprise. The Criminal Assets Bureau, set up by the previous Government, has been the most singularly successful weapon in dealing with the criminal underworld which was so dominant a mere four years ago. Huge tax demands and the CAB's extra powers have put George Mitchell, known as “The Penguin”, John Traynor, Gerry Hutch, Tony Felloni, Brian Meehan and John Gilligan behind bars. Ireland should be pushing for a European criminal assets bureau to track down the proceeds of crime no matter where in Europe the criminal attempts to hide them. We should also be pushing for a European criminal court.

I welcome the measure, but we must hold up the mirror of reality to our own performance which has been less than adequate. We are not in a position to set ourselves up as arbiters or monitors of international performance, when we stand so indicted due to our lack of action in this area.

Mr. Howlin: Information on Brendan Howlin  Zoom on Brendan Howlin  I agree with much of what Deputy Jim Higgins has said. I welcome the Council of Europe agreement establishing the Group of States Against Corruption. The internationalisation of crime must be combated on an international scale. We must also, however, use this opportunity to reflect on our domestic performance. Grandiose international treaties and agreements serve no purpose if we do not have the legislative base to deal with issues that undermine public confidence in the fundamental institutions [488] of State, including politics, banking and administration.

Legislative measures should ensure that those who commit white-collar crime, including fraud and corruption, end up behind bars. The statistics we debated in the Estimates for the Department of Justice, Equality and Law Reform, or when discussing the prison system, show that the vast bulk of prisoners are incarcerated for petty theft, usually involving sums of less than £200. The bulk of such prisoners are from deprived socio-economic backgrounds. They have no confidence in the judicial or police systems because they see that some people, due to their backgrounds, are able to get away with robbery on a mass scale.

This measure is before the House simply because a contribution of £3,000 annually is required. The Constitution requires the approval of the Dáil where an international agreement necessitates a payment from the Exchequer. I have the gravest concerns about how Ireland's participation in international agreements comes about. The House does not have a proper overview of international agreements and there has been no debate on our involvement in such agreements. Most of us had never heard of GRECO until this debate was listed on the Order Paper. That is also true for a raft of international agreements that are undertaken by the Government and by civil servants, without proper input by the Oireachtas from the beginning. The Oireachtas must change that practice so that we know the international agreements and treaties in which Ireland is involved. Had no financial contribution been required in this measure, it would never have come before the House for debate and nobody would have known about it, except for the officials in the Council of Europe and those dealing with it in the Department of Justice, Equality and Law Reform and the Department of Foreign Affairs. The House should have a much stronger role in dealing with treaties, agreements and other international business. If that were so, we would constantly have a monitoring system for our own domestic compliance with such agreements and we would not be pretending that the situation is otherwise.

The aim of GRECO is to improve the capacity of its members to fight corruption by following up “through dynamic process of mutual evaluation and peer pressure, compliance with their undertakings in the field”. The Minister has provided some examples of how this “dynamic process of mutual evaluation and peer pressure” is to come about. How will peer pressure work, however, if Members of the Oireachtas, charged by the Constitution and the people to legislate, are unaware of the international obligations and what is happening in other jurisdictions?

The Oireachtas should examine how we are represented internationally and how international agreements and treaties are concluded in our name. Dáil Éireann should never be a rubber stamp at the end of a process that is agreed by [489] Government, although many of us have allowed that to happen in the past.

The amalgamation of the Department of Justice with the Department of Equality and Law Reform has created a huge log-jam in the enactment of legislation. I have made this point many times since I became my party's spokesperson on justice. More than 30 instruments of legislation now form a backlog in the Department and two more have been announced this week to add to the list. The situation is becoming farcical. On the Order of Business today I asked whether the Bill to provide pensions to former judges would be enacted, and I was told that it was hoped to enact it before the end of this term, which is in two weeks. Yesterday, I asked whether the Traffic in Illegal Immigrants Bill, which was published yesterday, would be enacted before the end of this session, and I was told it was hoped to enact that also. Quite clearly, there is a difficulty in getting legislation through the Department of Justice, Equality and Law Reform. There should be two separate Departments to undertake this work. They were quite separate and worked extraordinarily well under the stewardship of the former Minister for Equality and Law Reform, Mervyn Taylor. The mistake in amalgamating both Departments should be acknowledged and rectified.

I hope we will return to the issue of a mechanism for dealing with the overview of international treaties in this House, not just in justice debates but also in the general administration of the House. Through the Committee on Procedure and Privileges, the Ceann Comhairle might reflect on the way the House questions and understands Ireland's position on international agreements before we sign up to them. Nobody believes the House will reject this agreement. I do not recall an agreement that was accepted by the Government being rejected subsequently by the Oireachtas. Other European parliaments, certainly the Nordic parliaments, have an input into every international debate right down to Council of Ministers meetings. Before their Ministers go to Council of Ministers meetings they report to a committee of the house of parliament to get instructions from parliament so they know they speak with the authority of Parliament. We work largely on an executive level. The Government makes its own decisions and expects Parliament to rubber stamp them. This is not a partisan point; it is something that has characterised Government here for some time.

I wish to comment briefly on the issue of corruption. Deputy Higgins rightly talked about the tolerance of white collar crime that seems to have been the practice in this country heretofore. This type of crime has been gradually exposed by inquiries initiated by the Tánaiste's Department, the regulatory agencies or tribunals of inquiry, but basically we need a whistle blower to get at the truth. Many of the instances were brought to light by chance or happenstance.

[490] The unfortunate affair of Mr. Ben Dunne in a hotel in Florida opened a huge can of worms, but it was simply a set of circumstances that brought that about. It was not a monitoring system devised by the Oireachtas that uncovered those facts. We must not simply congratulate ourselves on the number of tribunals of inquiry that are painstakingly revealing the truth – which are being resisted tooth and nail by many of the principals involved – we must also consider other legislative measures that can be introduced. It is no use promising such measures; we must realise an issue is of sufficient importance to bring it to the fore. That responsibility rests squarely on the shoulders of the Government and the Minister for Justice, Equality and Law Reform, who has characterised himself as the hard man on crime. Crime is not simply something associated with the thug, the petty criminal or the thief who steals a few bob or house-breaks; it also involves the thief who manoeuvres and manipulates money internationally and huge sums illegally. In solidarity with ordinary people, we have to show that is wrong and must be rooted out.

I hope our participation in the Group of States Against Corruption will show an element of determination to attack corruption. I hope the dynamic process of mutual evaluation and peer pressure envisaged under Article 1 of the GRECO Agreement will have an impact here and ensure the long promised legislative measures are enacted.

Mr. Higgins: Information on Joe Higgins  Zoom on Joe Higgins  (Dublin West): Ordinary people would welcome genuine moves to curb corruption in business, politics or any other area of life. The definitions of corruption, as applied by the Council of Europe and in this agreement, are far too narrow to take account of the potential for corruption that exists right across Europe. As normal, this agreement conforms to the ethos of market capitalism, which dominates this country and Europe and which informs the relationship between big business and the leading political forces in all the States of Europe. The relationship between big business, powerful lobbies, powerful interest groups, major politics and political parties is not properly scrutinised. Corruption is regarded as having taken place only when money is secretly passed under a counter and a Government decision is made in response to that money favouring whoever paid it in the first instance, whether a wealthy individual or a powerful company. There is no scrutiny of so-called legitimate political contributions. In my view there is massive potential for corruption at this level.

A few years ago the most powerful bank in this country divided £200,000 between political parties in this State and that was regarded as a legitimate contribution. There was no follow-on examination into how those parties could be influenced not to enrich particular individuals or do anything of that nature but, by that greasing of the wheels, to treat that bank and other banks favourably for tax purposes in finance Bills and [491] so on. Undoubtedly, no ordinary person believes those large-scale contributions are paid, even if legally according to the laws of the State at present, without those who pay them expecting something in return. That is not something any of the major parties here or throughout Europe want to examine.

There are other areas of activity which should be scrutinised most intensely. What does the Council of Europe Agreement say about the arms trade in Europe? It is regarded as a legitimate economic activity, but it is the dirtiest and most corrupt undertaking in which humans could be involved. There is massive potential for corruption, which would be legitimate according to these agreements, in the relationship between arms manufacturers, dealers and sellers and the major political parties in Europe. What about funding from those institutions to major political parties across Europe?

What about incessant lobbying, which has also taken off in a big way in this State in the institutions of the Dáil and Seanad? Lobbying by powerful interests has become a fact of life. These lobbyists have massive influence on major parties and on Government. What about the relationship between the alcohol and tobacco industries and major political parties and Government? We have had the infamous example of the British Labour Party being forced to give back £1 million it had received from Formula One racing, which is heavily financed by cigarette advertising, because it was found out.

What about instituting bans on special pleading, lobbying and, particularly, funding from such powerful institutions and interest groups to the major political parties? This is not examined in the agreement and, undoubtedly, the major parties here, which benefit from such massive contributions from big business, will not want to examine it either. The ordinary people who have been shocked by the revelations of corruption would want the concept of corruption to include a far wider range of activities at the interface of business and politics. While they are regarded as normal and legitimate, when powerful interest groups can purchase political influence, it constitutes corruption.

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue): Information on John O'Donoghue  Zoom on John O'Donoghue  I was surprised to hear Deputy Howlin say he had not heard of GRECO before this debate. I would have thought that if he had not heard of El Greco, he would at least have heard of Zorba, the Greek, but that is a matter for another discussion. What Deputy Howlin had to contribute in this respect was not indicative of a backlog but illustrated a tremendous output. Since I became Minister for Justice, Equality and Law Reform, my Department has been responsible for the enactment of 20 Acts in the Houses of the Oireachtas, or one third of the [492] Government's legislative programme over the same period. I am not boasting about it —

Mr. Howlin: Information on Brendan Howlin  Zoom on Brendan Howlin  God forbid.

Mr. O'Donoghue: Information on John O'Donoghue  Zoom on John O'Donoghue  —it is a fact. In addition, the legislative output of the equality and law reform section of the Department bears comparison with my illustrious predecessor. The reality is that there never has been a higher output of legislation from the Department and this will continue.

There was a difficulty with regard to the Proceeds of Crime Act because the original legislation which I introduced when in Opposition was challenged in the courts. It was found to be constitutional, while the former Minister of Justice on its presentation said it was not. However, the courts have spoken and what I said then was proven to be correct – that it was constitutional. In bringing forward amendments to the Proceeds of Crime Act it will be necessary to take account of the judgment of the courts which was positive and upheld the main Act. However, the details of that judgment must be urgently studied to see if there are any implications for the Bill.

I am particularly interested in dealing with white collar fraud. I am satisfied that our criminal legislation, in so far as it relates to matters such as theft, forgery, counterfeiting and dishonesty, in general terms, is out of date. Our Larceny Act dates back to 1916 while some fraud offences go back further. It is time for a change. I have made perfectly clear on numerous occasions that I am determined to tackle white collar fraud. We are working on the Criminal Justice (Fraud Offences) Bill at present. I anticipate I should be in a position to publish it before the end of this year. It will be among the most comprehensive Bills of its type in the history of the State. It will introduce new definitions of theft, counterfeiting and forgery and will be underpinned by the broad offence of dishonesty. From the day of the enactment of that legislation, the ability of lawyers to use technicalities will be greatly diminished as I intend to make it plain to everyone that if a person dishonestly makes a gain or causes a loss, he or she will be guilty of a criminal offence and a jury will have little difficulty in understanding the ingredients of that offence.

I always find the contributions of Deputy Joe Higgins, my fellow countyman, very interesting and sometimes what he says is positive. However, it would be a mistake to allow him get away with creating the impression that all politicians, other than himself and a few others on the left, are subject to a massive lobby and that in some way we are influenced by what large tobacco or drinks companies say to us. I assure Deputy Higgins that is not the case as far as I and my colleagues are concerned. Deputy Higgins is sincere in his observations but I am equally so in that respect.

I thank all Members for their support for this agreement which is a significant step forward in the fight against corruption. While it is important [493] that states enter into anti-corruption commitments such as the new Council of Europe Criminal Law Convention on Corruption, it is equally important that states comply fully with these commitments.

Question put and agreed to.

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