Dáil Éireann debate -
Wednesday, 10 Dec 1997

Vol. 484 No. 4

Private Members' Business. - Tribunals of Inquiry (Evidence) (Amendment) Bill, 1997: Second Stage.

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue)

I move: "That the Bill be now read a Second Time." This short but important technical Bill amends the law contained in the Tribunals of Inquiry (Evidence) Acts, 1921 and 1979. Its purpose is threefold: first, to give additional powers to tribunals of inquiry in relation to costs that may be ordered to be paid by a tribunal; second, to allow orders generally of a tribunal to be enforced; and third, to provide for immunity from suit of persons who supply written statements or documents to a tribunal.

In the tribunal of inquiry under the chairmanship of Mr. Justice McCracken, on 28 October 1997, two issues arose in relation to the matter of costs. The first was whether the tribunal had power to order, of its own motion, costs to be paid to persons before it by any other person. The second related to whether the tribunal had power to award costs to itself against any person where the tribunal had incurred costs because of the non-cooperation of a person before it.

Subsection (1) of section 6 of the Tribunals of Inquiry (Evidence) (Amendment) Act, 1979 gives a tribunal of inquiry power to order that the whole or part of the costs of any person appearing before it be paid to that person by any other person named in the order, including the Minister for Finance. The tribunal must be of the opinion that, having regard to the findings of the tribunal and all other relevant matters, there are sufficient reasons rendering it equitable to make such order. The costs which may be ordered are those as taxed by the Master of the High Court.

Judge McCracken indicated that, on the basis of the provisions of section 6 of the 1979 Act, he was satisfied that the only persons who can get costs are those persons who have been given representation and are represented by solicitor or counsel before the tribunal. He concluded that he had no power under the Act of 1979 to order a person to pay the cost of the tribunal's expenses as such.

The solicitor on behalf of the public interest had sought counsel's opinion on the matter and on the basis of the advice given, decided not to proceed with an application to have any person pay some or all of the costs of the tribunal. Judge McCracken indicated his agreement to the approach that was adopted by the solicitor.

It was also established in the McCracken tribunal that costs could only be awarded by the tribunal on the application of a person appearing before the tribunal and that in the absence of such an application the tribunal had no power of its own motion to award costs to any person.

In view of those developments it is important that the law in relation to tribunals of inquiry be strengthened. The need to do so quickly is evident because two important tribunals, one under the chairmanship of Mr. Justice Moriarty and the other under Mr. Justice Flood, have recently been established under resolution of both Houses. The orders governing the work of both these tribunals includes reference to the fact that it is the desire of the Oireachtas that "all costs incurred by reason of the failure of individuals to co-operate fully and expeditiously with the inquiry should, as far as is consistent with the interests of justice, be borne by those individuals".

I now turn to the main provisions in the Bill. These are section 2 which deals with certain immunities, section 3 which deals with the matters in relation to costs and section 4 in relation to the matter of enforcement generally of orders made by a tribunal.

Under the law as it stands in subsection (3) of section 1 of the Tribunals of Inquiry (Evidence) Act, 1921, a witness before a tribunal is entitled to the same immunities and privileges as if he or she were a witness before the High Court. However, the Act makes no reference to the position of persons who produce or send documents to a tribunal pursuant to an order of the tribunal. I am, therefore, proposing in section 2 to amend section 1 of the Act of 1921 by the insertion of a new subsection (4) which provides that a person who produces or sends a document to a tribunal pursuant to an order of that tribunal shall be entitled to the same immunities and privileges as if he or she were a witness before the High Court.

I mentioned earlier section 6(1) of the Amendment Act, 1979, which empowers a tribunal to order the costs of any person appearing before a tribunal to be paid by any person named in the order but does not, as we now know from the McCracken tribunal, empower a tribunal to order that costs which are incurred by the tribunal be paid in favour of itself, and, ultimately, the State, through the Minister for Finance.

Section 3 of the Bill substitutes a new subsection (1) in that section 6 of the Act of 1979. The new subsection repeats the substance of the existing subsection (1) in the Act of 1979 but, in addition, allows a tribunal to recover its own expenses where they have, in effect, been incurred by the non-co-operation of any party before it. I have provided in the new subsection (1) that the tribunal may of its own motion order that the costs of any person coming before it be paid by any other person named in the order. Section 3 of the Bill also provides that the new subsection (1) in the Act of 1979 shall apply to costs incurred after the Bill comes into effect. The section 3 provisions in the Bill will, therefore, apply to both the Moriarty and Flood tribunals.

I take this opportunity to mention that on the Order of Business in the Dáil on 18 November 1997, the Taoiseach indicated in response to a question from Deputy Quinn, that the Government intended to amend the Act of 1979 so that a tribunal would have the power to award costs to itself against any person where the person's actions had incurred costs for the tribunal. Deputy Quinn subsequently furnished the text of an amending Bill and I would like to thank him for that and to say that it has been taken fully into account in the Government's Bill. His Bill was confined solely to the matter of allowing a tribunal to award costs to itself. The Government's Bill goes that bit further by allowing a tribunal to award costs of its own motion. Section 4 is also new and is additional to that contained in Deputy Quinn's proposal.

Section 4 is intended to strengthen the position of tribunals of inquiry so as to ensure that its orders can be enforced. The section provides that where a person fails, refuses to comply with, or disobeys an order of a tribunal of inquiry, the High Court may, on application to it in a summary manner in that behalf by the tribunal, order the person to comply with the order and to make such other order as it considers necessary and just to enable the order to have full effect.

The provisions in the Constitution in relation to trial of offences are such that a tribunal cannot have the same powers as the High Court has to commit a person for failure to obey orders. However, in framing section 4 of the Bill I have taken into account section 3 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, which provides that where a person disobeys a direction of a committee the committee may seek an order of the High Court to have the direction complied with. Section 4 of the Bill is similar to the provisions in the 1997 Act and is intended to provide an effective method of enforcement of a tribunal's orders.

Those are the main provisions in the Bill. The changes provided for are important and timely. I commend the Bill to the House.

Mr. Higgins

(Mayo): I welcome the provisions of this Bill. It is another step in putting in place the necessary powers to enable tribunals of inquiry to have all the necessary powers to discharge the roles assigned to them. The beef tribunal, originally designed to unearth the unseemly business practices of the Goodman empire, ended up as a seemingly endless voyage into the world of the beef industry because its terms of reference were too broad and unspecific.

Admittedly it dug deep into the myriad of scams and frauds carried out by the favourite son of Mr. Haughey and his Government, the chosen one for preferential treatment from the State in terms of a monopoly on export credit insurance and special treatment from the State agency, the IDA, in getting grant-aid and the setting aside of performance clauses. It cost millions of pounds and the irony is that, apart from a few fingered relatively minor individuals who took the rap, none of the major managers or manipulators were brought to book.

Mr. Goodman has, through an elaborate financial arrangement which was facilitated by legislation in this House, worked his way back to being one of the major players in the beef market. This is despite the fact that volumes of paperwork describe his activities in detail and major and criminal irregularities were uncovered. However, none of the principal perpetrators, including Mr. Goodman, was asked to pay the costs either literally or metaphorically.

Tribunals are a painful and costly learning experience. However, lessons were learned when the Dunnes stores payments to politicians tribunal was established. The terms of reference were more tightly drawn. There were definite parameters, a preliminary report and a clear focus. The McCracken tribunal final report was a model of conciseness and clarity. It was delivered in simple, unadorned and effective language. The tribunal eventually extracted from Mr. Haughey the admission that he lied successively to the tribunal and that despite his numerous denials he had accepted £1.3 million from Mr Ben Dunne. It established that this amount was made up of several payments and merely helped to fund Mr. Haughey's lavish lifestyle for a relatively short period. It gave a damning denunciation of politicians in positions of power putting themselves in situations of compromise. In 11 separate paragraphs it condemns the blatant lies and omissions of an unrepentant Mr. Haughey.

By establishing a figure of £1.3 million the clear inference is that there must have been numerous other unaccounted for benefactors who enabled Mr. Haughey to finance his many other years of luxurious lifestyle. It did not spare the use of unorthodox business practices of Deputy Lowry and his company, Streamline Enterprises. The tribunal did tremendous work in bringing into the public domain the existence of the £38 million Ansbacher accounts and the Guinness and Mahon (Ireland) Bank link with same. It was clear that the Central Bank regulations were flouted, particularly in the breaching of exchange controls. It was also established that the late Mr. Des Traynor who, according to Mr. Haughey, had total control of his finances had also total control of the Ansbacher accounts of £38 million deposited with Guinness and Mahon. The McCracken tribunal suggested that, in some instances at least, the mechanisms were designed to evade tax. The Ansbacher audits were clearly sounding the most ominous of alarm bells about lack of internal controls of various aspects of the management of the accounts. The comments of the auditor were included in the McCracken report:

Lack of internal control over this activity, coupled with the fact that the Ansbacher deposits constitute nearly 35 per cent of the bank's liabilities, expose the bank to serious risks of loss and embarrassment. These risks together with the legal position of the bank vis- a-vis the maintenance of offshore customer deposits by a bank employee and on the bank's premises need to be evaluated by the board.

These comments raise major questions as to what sanctions if any the Central Bank in its role as banking policeman and licensing authority imposed on Guinness and Mahon. Did it make a formal report to the Minister for Finance? Did it believe that tax evasion was afoot, and if so what did it do about it?

I am very pleased that the Moriarty tribunal is empowered to make recommendations "for enhancing the role and performance of the Central Bank as a regulator of the banks and of the financial services sector generally". The Moriarty tribunal therefore is in a position to ask all the relevant questions and to demand answers because it would seem that the role of the Central Bank in this whole affair leaves much to be desired.

I welcome this Bill as a further permanent stage in the development of tribunal procedures. The granting of immunity and privilege for those who submit documents to the tribunal is to be commended. It goes without saying that no obstacle must stand in the way of access to all information to enable a tribunal henceforth to discharge its functions.

I welcome the amendment to section 6 of the Tribunals of Inquiry (Evidence) (Amendment) Act 1979, to enable tribunals of inquiry to order those who do not co-operate to pay not just the costs of other persons appearing before the tribunal but also other tribunal costs. The terms of reference of the Moriarty tribunal state that "all costs incurred by reason of the failure of individuals to co-operate fully and expeditiously with the enquiry should, so far as is consistent with the interests of Justice, be borne by those individuals". It is quite clear that Mr. Haughey's attempts to frustrate the determination of the McCracken tribunal led to unnecessary journeys to London and the Cayman Islands. Furthermore, expensive work was undertaken by Guinness Mahon Bank and Irish Intercontinental Bank as requested by the tribunal. This all amounted to several hundred thousands of pounds which could have been obviated had Mr. Haughey co-operated fully and come clean at the start.

I wish the tribunal well. I hope that when its work has been completed no aspect will be left unfinished. It must get to the bottom of all aspects of the funding of the affairs of Messrs Haughey and Lowry. I do not say this out of political vindictiveness, but I believe we are at a watershed in political life. There has been much pain and damage to the system arising from revelations in relation to the conduct of people who recently held high office and, in the case of Mr. Haughey, the highest office in the land. If there is a well founded public suspicion after the tribunal has completed its work that for some reason all aspects of the finances of both individuals are not known to the tribunal, more damage than good will ensue as a result of the process now being undertaken.

There are two issues in particular which would seem to commend themselves to the tribunal. The first is the Mafouz passport issue. Not alone was every rule in the book dispensed with but Mr. Haughey personally delivered the passports to people who were subsequently involved in the biggest banking scam in history.

The decision by the then Minister for Education, Deputy Mary O'Rourke, and Mr. Charles Haughey as Taoiseach to jointly oversee and facilitate the handing over of £8 million of taxpayers' money for the unnecessary purchase of Carysfort Training College by UCD from Fianna Fáil activist Pino Harris, thereby handing him a cool £1.5 million profit for holding on for six months to a property he was desperate to sell, continues to be one of the major unanswered causes of public disquiet. To pretend that it has been adequately investigated by the Committee of Public Accounts is simply not credible. The key witnesses were not before the committee. The former Taoiseach, Mr. Haughey, the former Minister for Education, Deputy Mary O'Rourke, and the main beneficiary, Mr. Pino Harris, were not interviewed or present.

Tribunals can constitute one member or several members with a chairman. From the point of view of balance as well as from the point of view of safety, tribunals should constitute more than one member. I say this in particular with reference to tribunals which run for a long time, where a large volume of evidence has been taken and considerable costs have been incurred. In such one member tribunals, the death of the tribunal member would inevitably lead to a situation where all of the work done and all of the evidence garnered would have to be set at nought.

I again welcome the Bill and hope it will put in place a further procedure in the development of the tribunal process.

Dr. Upton

This Bill is very welcome. It is, in effect, a replica of a Bill the Labour Party recently introduced. I give my sincerest welcome to the decision of the Government Parties, Fianna Fáil and the Progressive Democrats, to adopt our proposals. I thank the Minister for the gracious manner in which he acknowledged the contribution of Deputy Quinn and the Labour Party to the formulation of this Bill.

The Bill essentially builds on and updates the current law on tribunals. The Tribunals Act, 1921 provides that both Houses of the Oireachtas can establish a tribunal to investigate matters of urgent public importance. Tribunals are conferred with all the powers of the High Court. They can secure the attendance of witnesses and the production of documents. This Bill also provides for the hearing in public and legal representation of people who appear before the tribunal.

The 1921 Act was followed by an Act in 1979 which corrected a constitutional fault in the original Act relating to the procedure for the punishment of failure to comply with orders of the tribunals. More important for the present purposes, it also gave the power to order costs of any person appearing before the tribunal where there was sufficient reason to render it equitable to do so. In those circumstances it provided that costs should be paid to any other named person. In other words, the power of the court was established to award costs as between party and party arising from the terms of the 1979 Act. However, there was a flaw in this Act that became apparent in the McCracken tribunal. A great deal of delay and costs were incurred as a result of the non co-operation of Mr. Haughey with this tribunal. However, the costs which arose from this non co-operation were not borne by any other party at the tribunal. Instead, the costs were incurred by the tribunal itself. Trips to London, the Cayman Islands and an inordinate amount of research and backlog work which arose from the non co-operation of Mr. Haughey could have been avoided if he had co-operated with the tribunal. This gave rise to additional costs which had to be incurred by the tribunal, yet could not be ordered to be borne by Mr. Haughey since he was not within the terms of party and party costs. In effect, Mr.

Haughey cost the public a great deal of money and there is at present no way of getting him to account for it.

The new legislation, which primarily arose from the initiatives taken by Deputy Ruairí Quinn and accepted by the Taoiseach, is to correct this defect in the 1979 Act. In future a tribunal will be able to order that its own costs can be awarded against a person appearing before it. This is the provision contained in section 3 of the Bill.

There are some other welcome changes in the Bill. Section 1 extends the 1921 Act by providing that not only witnesses before the tribunal but also a person who produces or sends a document to it should be entitled to the same immunities as a witness before the High Court. This provision clarifies what has been understood to be the position as of now, and that is very welcome. The Labour Party has put down an amendment to extend immunity to those who send or produce documents pursuant to an order of the tribunal. In addition we are proposing that that immunity shall be extended to those who send documents to the tribunal arising from a request of the tribunal. In practice a great deal of a tribunal's preliminary work is done on an informal basis and by way of request. People who respond to requests should be given the same immunity as those who respond to orders. This would considerably reduce the work of the tribunal.

It is a pity that the remit of this short, technical Bill has not been extended to cover the £38 million in the Ansbacher accounts which has huge implications in terms of taxation. The Labour Party sought to have the Ansbacher account included in the original Moriarty tribunal but, although supported by the main Opposition party, our proposal was voted down by the Government. This has happened in the context of a budget which greatly benefits the well off. Tax equity is as important as tax reduction and it is crazy that the Government did not extend the investigation to cover the Ansbacher accounts. This decision is puzzling given the preoccupation with taxation prior to the general election and which was an important engine in returning the Government to office.

The Bill is a missed opportunity in terms of addressing these issues. It is a great pity action was not taken to deal with the Ansbacher accounts. The failure to act on these accounts enforces the impression that there is one law for the rich and another one for the rest of the public. This is very regrettable given that tax equity is as important as tax reduction and more important than it in many respects. It helps to stimulate the long held impression that the wealthy have an inside track and that regardless of the regulations they can work their way out of a corner. It is a pity action has not been taken to tackle this issue and my party will continue to highlight this deficiency. Leaving aside these concerns, I welcome the Bill.

Mr. Rabbitte

I also welcome the Bill for the reasons outlined. It is interesting to note the change in the environment in terms of the commendable speed with which the Government reacted to shut off a shameful loophole and the response to the report of the Goodman tribunal. The climate and environment have changed almost beyond recognition.

I remember well the debate on the Goodman report on the day of the ceasefire. Deputy O'Donoghue was one of the leading defenders of the conduct, exposed in the report, of his Fianna Fáil colleagues, the Fianna Fáil Government and the then Taoiseach, Charles Haughey. He defended that conduct without the slightest shame. I do not have the report with me partly because it is late and partly because I do not want to use this opportunity to embarrass the Minister. However, it is worth noting that in respect of the unfinished business of the McCracken tribunal we are no longer prepared to condone actions which a majority of the House were prepared to condone at the time of the Hamilton tribunal.

The reason for this is the public outrage at the conduct of the former Taoiseach who refused to come out of the bunker and surrender and who at the very end came out into the sunlight to wave at those he thought were his traditional admirers. Having obstructed the work of the tribunal and lied to it and having been criticised by the tribunal for having done so, he incurred serious costs which the taxpayer must pay. The former Taoiseach effectively refused to comply with the law of the land and taxpayers regard it as unfair that they should have to pick up the bill for him. It is this loophole we are seeking to shut off in the Bill.

Nobody seeks to defend that conduct now but Members were sent in here on the day of the ceasefire —which I am sure was coincidental — to defend what was exposed in the report of the Goodman tribunal. Will the Minister deal with the decision by the sole member of the tribunal not to make the principal offender amenable for his costs before the tribunal? Does the Minister believe there is anything in the Bill which provides for this situation?

In brief this case involved a major corporation which had been found guilty of the biggest organised tax evasion scam in the history of industrialisation. A sum of £8 million was subsequently retrieved by the Exchequer based on documentary evidence which I submitted to the tribunal and which was corroborated by Mr. Patrick McGuinness. The extraordinary decision which offended the public was that Mr. Justice Hamilton found, on his reading of the relevant Acts, that he had to allow Mr. Goodman his legal and other extensive fees for consultants. He received hundreds of thousands of pounds for someone who acted as a spin doctor during the tribunal and who interpreted the workings of the tribunal for the assembled press corps. The fees for all the other consultants were also discharged by the tribunal and paid for by the taxpayer. The sole member of the tribunal believed he was not able to make him amenable and to require him to pay his fees.

Leaving aside the myriad matters on which the tribunal made findings, some not as conclusive as one would like and perhaps not as conclusive as they would be if the sole member was seized of them again post McCracken, does the Minister believe it is fair that someone found guilty of organised tax evasion on the multi-million pound scale the Goodman corporation was found to be guilty of should have his fees discharged by the tribunal? If he agrees that this is unfair and that it offends the sense of justice of the ordinary citizen, is there anything in the Bill which will ensure, in a repetition of the Goodman affair, that the sole member of the tribunal will feel enabled to have deducted from a corporation or principal the cost of their appearance before the tribunal and any other such costs as he thinks proper? That is an important question and I would like the Minister to deal with it.

Will the Minister comment on the provision in the Bill under which immunity will be conferred on a person who produces or sends a document to a tribunal? What is the situation of a person resident outside the jurisdiction? The genesis of the Flood tribunal is in the documents purportedly in the hands of a group of solicitors outside the jurisdiction in Newry. It appears they have been leaking information. Is there anything in the legislation or we can insert in it a provision under which persons outside the jurisdiction who submit or produce documents to a tribunal can be made amenable? I hope the people for whom the solicitors in Newry are acting will produce documents. Immunity will be conferred on them even though they are not citizens of this jurisdiction. Could they be required to appear before a tribunal?

I would like to have had the opportunity to underline some of the points made by Deputy Higgins. Deputy Upton is correct that a motion dealing with the Ansbacher accounts was defeated in the House recently. It is extraordinary that we are prepared to inquire into these accounts only as they relate to two former Members of the House and, apparently, allow people outside who hoarded money for the purposes of tax evasion to escape scot-free. That is not right. I hope we will have an opportunity to return to this matter on Committee Stage.

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue)

I thank the Deputies who addressed the House on Second Stage. I indicated that the Bill is about strengthening the powers of tribunals of inquiry. It does so in three specific ways. It gives additional powers to tribunals of inquiry in relation to costs that may be ordered to be paid by a tribunal. It provides for a mechanism whereby orders of a tribunal can be enforced efficiently and for immunity from suit of persons who supply written statements or documents to a tribunal.

A number of issues have been raised in relation to the further measures that might be taken. I will outline briefly the Government's overall approach to this area. Consideration is being given to extending the jurisdiction of the Ombudsman to include the functions of monitoring and investigating possible breaches of the Ethics in Public Office Act. This would involve extending his powers to enable him to carry out investigations by the making of certain forms of orders such as orders for the discovery of documents and possibly by allowing him to have recourse to the courts to seek letters of request to courts in other jurisdictions to enable witnesses to be examined and documents produced in such jurisdictions.

The Government is examining recommendations in this regard. Its consideration will include reconciling the tribunal recommendation with the recommendation of the all-party committee on the Constitution on the establishment of an electoral and ethics commission. As the all-party committee stated in its first report, a single commission incorporating the Public Offices Commission, the Constituency Commission and the proposed independent Referendum Commission would guarantee its independence and impartiality, generate greater confidence in public life, create greater transparency in public institutions and provide an independent source of advice and information in the areas of ethics in public life and electoral law reform.

There is also the question of making it mandatory for a candidate for either House of the Oireachtas to produce a tax inspector's certificate to the Clerk of the Dáil or Seanad, as the case may be, to the effect that his or her tax affairs are in order, accompanied by a statutory declaration to that effect. The Government's programme outlines support for such a proposal. The matter is being examined.

Questions have been raised regarding the Government's commitment to the introduction of legislation which would provide that a person found guilty of an offence under the Ethics in Public Office Act would be ineligible to become a Member of either House of the Oireachtas, either for a limited period or permanently. The necessary amendments to that Act to implement the McCracken tribunal's recommendations in regard to the creation of a criminal offence for breaches of the legislation and the consequent barring of a convicted person from standing in a subsequent election are being prepared.

Decisions which arise from Government consideration of these matters will not prevent existing authorities such as the Office of the Director of Public Prosecutions, the Revenue Commissioners and the Comptroller and Auditor General from exercising their statutory powers as they deem necessary. The chairman of the Revenue Commissioners has stated publicly that the proceedings of the tribunal were monitored closely and that all appropriate action will be taken. The Minister for Finance has indicated that any additional investigative powers required by the Revenue Commissioners can be introduced.

Deputy Higgins referred to the Minister for Public Enterprise. I sincerely hope he did not intend, by innuendo or otherwise, to call into question her probity or integrity which is respected by her colleagues in this House and the people.

It is obvious the contents of the Bill cannot deal directly with the question of the Ansbacher accounts. I have no intention of wasting the time of the House by discussing all over again the contents of the beef tribunal report but when I entered the House I ascribed certain descriptions of Deputy Rabbitte's testimony to the chairman of the tribunal. The accusations or allegations levelled by the Deputy were held to have no foundation. Perhaps the less said, from his perspective, about those allegations the better.

With regard to the decisions of the tribunal, it is not for me to decide whether it should have done X, Y or Z but it is clear a tribunal of inquiry does not have the power to impose penalties. It could not have such a power.

Deputy Rabbitte asked whether this legislation changes anything in relation to the powers of a tribunal to ensure certain persons who appear before it pay costs. The answer is yes. Provision is made for the conferring of immunity on persons who submit documents, whatever their source, to a tribunal. There are clear powers relating to the ordering of documents by a tribunal.

Question put and agreed to.