Dáil Éireann debate -
Thursday, 8 Jul 1993

Vol. 433 No. 7

Adjournment Debate. - Telecom Éireann Report.

Mr. R. Bruton

It is unfortunate that we have ten minutes only to discuss a report running to 120 pages. This report makes very sordid reading for members of the public. It describes a trail of transactions punctuated by misrepresentations, undisclosed conflicts of interests and downright deception. At the end of the day the taxpayer was left carrying the can, not only for the substantial costs of disentangling that trail but through our company, Telecom Éireann, who paid £9.4 million for a site whose value is probably about half that.

Many questions must be answered quickly by the Government. It is not good enough for the Minister to wash his hands of responsibility by referring this matter to half a dozen State agencies. We want a Minister accountable to the Dáil to come back to us before the end of the summer through the Employment and Enterprise Committee with specific recommendations upon which he is acting to prevent this recurring. The Government must not use the referral to the Director of Public Prosecutions as a means of avoiding legitimate debate and report in this House about the matter.

Telecom has been shown up in this report in the way it managed its affairs. It apparently purchased a site without investigating the price at which it had sold a short time previously and the property did not have zoning compatible with the planned headquarters. Despite all this, it decided to proceed without a condition that the purchase should be subject to obtaining planning permission. This seems strange, to say the least, and there should be a reform in the code of practice to ensure that it does not happen again. It seems that a warren of criss-crossing transactions was designed by the companies involved to drive a coach and four through our tax laws. We need to know whether the capital gains tax and the stamp duty due on these transactions has been paid. We also appear now to have moneys held in overseas accounts as part of a tax avoidance scheme. The public deserve to know from the Minister whether these funds can enjoy the benefits of the tax amnesty. This report reinforces the belief that there is one law for the ordinary PAYE taxpayer and quite another for those who can wriggle their way through various on shore and off shore shell companies to avoid legitimate tax liabilities. The Government must produce a set of proposed transactions to deal with the issues involved. I am quite happy to allow time to the Central Bank, the Revenue Commissioners, the Minister for Transport Energy and Communications, the Director of Public Prosecutions, the Stock Exchange and the Department of Finance to consider the implications of this report but I am not prepared to see it being left to gather dust without a clear set of proposals from the Government. I call on the Minister at least to give an undertaking that the Government will prepare a clear statement of the lessons learned from this transaction and the steps being taken to remedy the errors. If we cannot have that statement, he should agree to report to the Enterprise and Employment Committee during the course of the summer.

Minister of State at the Department of Finance (Mr. N. Treacy)

As Deputies are aware, Mr. John Glackin, the inspector appointed by the former Minister for Industry and Commerce, under section 14 of the Companies Act, 1990, to inquire into the Telecom affair finalised his report after 5.30 p.m. on Wednesday, 7 July and duly presented it to the Minister for Enterprise and Employment on the same day. It will be recalled that the decision to conduct the inquiry was taken following public concern about the circumstances surrounding the acquisition by Telecom Éireann of the former Johnston, Mooney and O'Brien site in Ballsbridge at a cost of £9.4 million, a figure significantly higher than that at which the site had been sold a short time previously. The Minister, Deputy Quinn, decided to proceed with the immediate publication of the report because it was in the public interest that the findings of the inspector should be made available to the public at the earliest opportunity. There has been much media speculation over the past week or so, apparently based on leaked confidential information, as to the likely findings of the inspector. The Minister considered it desirable that all concerned with the content of this report, as well as the public generally on whose behalf the inquiry was undertaken, had a right to know the precise contents of the report, thereby minimising the possibility of subsequent speculative and perhaps misleading comments.

A further important consideration in reaching his decision was the possibility that attempts might be made to obstruct or otherwise delay the publication of the report. In that regard Deputies will recall that there have been numerous attempts to prevent the inspector from pursuing his inquiry most of which were not successful. Nevertheless they had the effect of greatly prolonging the investigation and, indeed, adding to its cost.

As the Minister, Deputy Quinn, indicated in the statement which he issued on publication of the report, he has decided on the following course of action: first, to refer the report to the Minister for Transport, Energy and Communications, under whose auspices Telecom Éireann falls, for detailed consideration of any aspects impinging on Telecom Éireann's role in the matter; second, to refer the report to the Director of Public Prosecutions in connection with the separate investigations that office is pursuing and for consideration of any other matters arising from the report which it would be appropriate for that office to pursue; third, to refer the report to the Revenue Commissioners for consideration of any issues which it would be appropriate for them to pursue; fourth, to refer the report to the Department of Finance for consideration, in consultation with the Central Bank, as necessary, of any exchange control issues or indeed any other general considerations relating to the operation and procedures of State-sponsored bodies and, finally, to refer the report to the Stock Exchange for consideration of any issues which may arise for that organisation.

The Minister also indicated that in the period ahead his Department will take the findings of the report and the experience of the investigative process into account in the context of a review of company law generally which is already in train.

I have listened with great interest to what Deputy Richard Bruton said. The Government, and the Minister, Deputy Quinn, have no desire to see dust settle on this report. The Minister acted immediately when he received it and everything has been done in accordance with proper procedures. I am sure the House welcomes the fact that the Minister responded immediately on behalf of the Government to this major report.

Mr. R. Bruton

May I ask a brief question?

An Leas-Cheann Comhairle

I am sorry, Deputy, it is not permissible.