COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 15 May 2003

Vol. 1 No. 18

Criminal Assets Bureau Accounts, 2001.

Mr. Purcell

The Defence Forces will not be called in defence of the particular civil powers in this case.

The Criminal Assets bureau was set up in 1996 to address the matter of assets derived directly or indirectly from criminal activity. The Bureau's functions involve the seizure or freezing of such assets as appropriate, ensuring income tax is paid on the proceeds of crime and determining the eligibility of claims for social welfare benefit or assistance by criminals or suspected criminals.

The activities of the bureau are funded through the Vote for the Minister for Justice, Equality and Law Reform. Under the governing 1996 Act the Secretary General is responsible for preparing the annual account of the bureau and submitting it to me for audit. He is also designated chief accounting officer under the Act for the income expenditure and assets of the bureau.

The committee will note that the account comprises only the administration expenses of the bureau and includes payments made by the Department on behalf of the bureau as well as payments made directly by the bureau itself. It does not include the value of assets confiscated by the bureau, as the proceeds are held in a private account by a court appointed receiver, nor does it include the tax and interest collected as a result of the activities of the bureau. These are accounted for in the Revenue account.

Where property seized is held under an interlocutory order, seven years must elapse before the property in question can vest in the Minister or the legitimate owner, as established by the courts. The bureau was only established in October 1996, so any such determination will only arise next year.

There have been no issues of a public accountability nature arising from my audit of the accounts over the years.

Mr. Dalton

I have no comments on the CAB accounts.

Chairman

Is it possible to establish market value of the assets seized by CAB since 1996? Are those figures available?

Mr. Dalton

There are two different figures. The value of property which is the subject of interlocutory orders is in the region of €19 million which as the Comptroller and Auditor General said is not available for distribution or available to the State because a seven-year period must pass. The amount sought in the case of tax was in the region of €61 million plus of which about €56 million has been collected.

Chairman

Has the property been independently valued?

Mr. Dalton

Is that the property that has been frozen?

Chairman

Has the independent valuation been reassessed during that period in order to get the real value for the property?

Mr. Dalton

I am not aware of that. These are not assets that are available to the State in any shape or form at the moment. They are simply frozen. The question of their true value would only come up when the courts come to consider again, in case the person affected decides that he will go into court and explain where he got the assets. That is an option open to the person concerned. It may well be the courts will decide that some of these assets should be returned to the persons from whom they have been taken and frozen or it may well be that they would become the property of the Minister for Finance. That can only begin to happen next year.

Chairman

Is there any case where a freezing order has been enforced for not less than seven years in regard to a specified property where the CAB has made an application to the court to have it transferred to the State?

Mr. Dalton

As far as I know, none has arisen yet.

Chairman

Is there any likelihood of that happening?

Mr. Dalton

It is bound to start to happen soon because the seven year period will be up. Automatically, the Criminal Assets Bureau will have to find out to whom these assets belong. They either belong to the Minister for Finance or to the person from whom they have been taken.

Chairman

Is there any possibility of the assets reverting to the owner due to the orders not having been taken out through the courts? Would that work need to be processed now?

Mr. Dalton

Yes it would. It would be a serious matter if, through negligence, the assets were lost.

Chairman

Is there any indication that is likely to happen?

Mr. Dalton

No there is not.

Deputy Ardagh

A sum of €56 million was collected. What was the maximum amount of any individual payment?

Mr. Dalton

I do not have that information but I will gladly send it on to the Deputy. Some substantial sums have been involved in the case of people allegedly involved in serious crime. I have annual sums but I do not have——

Deputy Ardagh

If one takes the year 2002, from how many individuals was money collected in that year?

Mr. Dalton

I am sorry, I do not have the figures. I will send them on.

Deputy Ardagh

The Comptroller and Auditor General suggested that the money was taken from criminals or suspected criminals. Is that a true reflection of from whom the money came? Is there any other category?

Mr. Dalton

No, by and large they are people who would be criminals in the sense of evading tax or in the sense that it is believed that their wealth would have been acquired through unlawful activities. The thing about the legislation, unusually, and exceptionally in criminal law legislation, is that the burden of proof shifts. If the view is formed that the assets are the result of criminal activity, the onus falls upon the holder of the assets to prove otherwise.

It is probably fair to say that the reason the Garda would have been interested in the persons from whom the assets were taken was that there was a fairly substantial suspicion that they were involved in serious crime. Some would probably have been convicted but it may well be that others have no convictions. As the Garda would make judgments on the basis of the difficulty of explaining wealthy lifestyles, and possibly drawing social welfare money as well, there are discrepancies. Some people, by reputation and so on, would have criminal involvement which is sometimes difficult to prove. The strength of the legislation is that there is no need for a conviction before the money can be taken.

Deputy Ardagh

How many people have been chased for money by the CAB? How many individuals have had a judgment or assessment against them? In how many cases has the CAB been involved?

Mr. Dalton

Again, I am sorry. I do not have statistics on the number of individuals.

Deputy Ardagh

Does Mr. Dalton have even a ball-park figure?

Mr. Dalton

I just have some figures with me. I do not have those figures.

Deputy Ardagh

What figures does Mr. Dalton have?

Mr. Dalton

Well for 2002 the bureau got interim orders on property of about €30 million under section 2 of the Act. Interlocutory orders, the freezing or longer term orders——

Deputy Ardagh

That is €30 million of property which the bureau cannot sell.

Mr. Dalton

Yes, not for seven years. Some of those orders would be challenged. Some of the interim orders would not necessarily become interlocutory orders. Interlocutory orders are the later ones. There is a period in between when a person can claim that the property was legitimately obtained. The interlocutory orders came to €7.75 million which means that those assets remain frozen.

Deputy Ardagh

Of the €30 million, is €22.25 million related to interim orders and the rest to interlocutory orders?

Mr. Dalton

Yes that is right. The tax and interest collected from persons suspected of involvement in criminal activity in 2002 amounted to more than €10 million.

Deputy Ardagh

Is that the amount actually collected?

Mr. Dalton

I think they are assessments.

Deputy Ardagh

Does Mr. Dalton know how much of that was collected?

Mr. Dalton

That is what was collected.

Deputy Ardagh

Is it much in excess of €10 million.

Mr. Dalton

It is €10,003,816. There were social welfare savings too which tend to be smaller. They were €127,300. These are people who, despite the fact that they would have opulent lifestyles happen to be collecting social welfare money as well.

Deputy Ardagh

How many people are involved in that or is it only monetary figures Mr. Dalton has there?

Mr. Dalton

Just monetary figures. I will send on the details to the Deputy.

Deputy Ardagh

Is there anybody here with those details?

Mr. Dalton

Nobody who is here at the moment.

Deputy Ardagh

To come back to the property on which there is an interim or interlocutory order - both are probably treated in different ways - can the bureau sell the property when it has an interlocutory order? I know there was a sale recently at the IFSC of an apartment which went well.

Mr. Dalton

A share of it is sold and transferred into cash to prevent depreciation. Much of the €19 million is in the form of deposits in banks and so on.

Deputy Ardagh

Which €19 million?

Mr. Dalton

The €19 million collected which is the subject of interlocutory orders since the CAB came into action.

Deputy Ardagh

That is the proceeds of the property that has been sold under interlocutory orders.

Mr. Dalton

Yes.

Deputy Ardagh

What is the value of property under interim orders then, discounting the property under interlocutory orders?

Mr. Dalton

I do not have a figure but it would be much higher than that. I will try to get the figures.

Deputy Ardagh

Has the Criminal Assets Bureau initiated any proceedings in regard to people who were before any of the tribunals of inquiry?

Mr. Dalton

I am not aware of any. I did not know what angle the committee was likely to pursue. I thought it was something in accounts so——

Deputy Ardagh

I know Mr. Dalton has a wide brief. I fully understand that he will not have the information available to hand if certain questions are asked but that there is no problem in getting that information and producing it to the committee.

Mr. Dalton

I will produce it. There is no problem.

Chairman

It will be much appreciated if Mr. Dalton will furnish that information.

Deputy Ardagh

Having said that, I do not want to be constrained in the questions.

Mr. Dalton

I accept that.

Deputy Ardagh

As far as the tribunals are concerned, is it merely the case that Mr. Dalton is not aware whether the names are the same, or is he not aware of any individual of which he knows who has, as a result of evidence that has been adduced at the tribunals, been chased by the Criminal Assets Bureau?

Mr. Dalton

I am not aware. This does not mean it is not being planned or that it has not already happened; I just do not know. I will get the information for the Deputy.

In regard to interim orders for 2002, by comparison with interlocutory orders, the value of which are £7.75 million, the value of the interim orders, that is the initial order, is £30.5 million which is considerably in excess of the other. I will get the Deputy a brief on the Criminal Assets Bureau. I was simply approaching it in regard to its accounts.

Deputy Ardagh

As far as the accounts are concerned, I notice that the moneys provided by the Oireachtas tends to be equal to the pound to the actual expenditure. Is it usual that they match to such an accurate degree? Usually one would find that supplementary estimates come in. How is it that it works out that way?

Mr. Dalton

That is just an accounting thing.

Mr. Purcell

Normally, when there is a difference between the two, it is as a result of it being provided by way of grant-in-aid. In this case, it is merely an amount which is computed against the Vote, equivalent to the amount of payments in the years. If it did not agree I would be quite upset in this case.

Mr. Dalton

The grant we got was almost £3.9 million. The expenditure was £3.43 million so there is that difference.

Deputy Ardagh

That is in 2002?

Mr. Dalton

Yes.

Mr. Purcell

That is the Estimate provision rather than a grant.

Deputy Ardagh

Has the amount of activity within the Criminal Assets Bureau increased or decreased in the recent past?

Mr. Dalton

Over the years it has increased. The staffing of the bureau has remained fairly stable but the level of activity has gone up steadily over the years. As we see from looking at the figures, the amount of recovery and so on has gone up. The staffing has increased gradually over the years. While I cannot put a measure on the level of activity, I know it has gone up.

Deputy Ardagh

We do not seem to have the numbers of people. I would appreciate if Mr. Dalton could give us some figures in regard to that.

Deputy Boyle

It is hard to make out the legal costs incurred by the Criminal Assets Bureau in the figures provided in these accounts. I presume the bureau has its own legal team and expertise which is largely accounted for by salaries and allowances. There is a category for legal and witness expenses. Perhaps this did not arise before 2001, but in the past year there seem to have been legal challenges to some of the activities of the bureau, some of which resulted in court decisions that have not been favourable to the bureau. Is there a funding heading available for the legal costs involved and what are they likely to be?

Mr. Dalton

I do not know the figures. The bureau has a legal officer and his costs would be included under salaries and allowances. The figure for legal and witnesses does not represent the total legal costs of the bureau. I do not know the cost of the court actions. They may not even be in yet. I will try to find out the cost of those cases. There is no difficulty in regard to the bureau pursuing actions if it has to. So far, the court cases that have come down have, by and large, been hugely helpful, in that some of the fundamentals of the legislation that from a legal point of view appeared to be open to challenge have been upheld by the courts. Other jurisdictions would like to believe the same fundamentals would be upheld in their cases. That is a good result and that is also why it makes sense only to use the machinery of the Criminal Assets Bureau in very serious cases. There are suggestions that we should have mini-bureaus but there is no merit in using strong legislation of that kind where the courts might take the view that it was an excessive use of power. There is clearly merit in preserving the fundamentals of it for tackling major crime which is the purpose for which it was designed.

Chairman

I thank Mr. Dalton for his comprehensive replies and the fact that he will provide the additional information which was sought today. Is it agreed that we note the Vote? Agreed. We will defer the remainder of the agenda for another meeting.

The next meeting will be on 22 May when we will deal with the Department of Health and Children - Vote 33, chapters 9.1 and 9.2 and the VFM report No. 42, car parking at Beaumont Hospital.

The witnesses withdrew.

The committee adjourned at 2.26 p.m. until11 a.m. on Thursday, 22 May 2003.