Dáil Éireann debate -
Wednesday, 25 Jan 1995

Vol. 448 No. 1

Ceisteanna — Questions. Oral Answers. - Business Migration Scheme.

Michael McDowell

Question:

15 Mr. M. McDowell asked the Minister for Finance if his attention has been drawn to the fact that the Industrial Credit Company furnished security in respect of certain loans made for the purpose of obtaining citizenship under the business migration scheme to a company (details supplied); whether such a transaction was authorised by the board of ICC; whether he has given any indication to the board members of the bank in relation to such provision of security in future; and if he will make a statement on the matter. [1664/95]

Mary Harney

Question:

36 Miss Harney asked the Minister for Finance if his attention has been drawn to the fact that the Industrial Credit Company is furnishing security in respect of certain loans made for the purpose of obtaining citizenship under the business migration scheme to a company (details supplied); whether such a transaction was authorised by the board of ICC; whether he has given any indication to the board members of the bank in relation to such provision of security in future; and if he will make a statement on the matter. [1574/95]

Mr. Quinn

I propose to take Questions Nos. 15 and 36 together.

ICC Bank is a commercial body whose day-to-day relationships with its customers are conducted at arm's length from my Department and without reference to it. Accordingly, I have no knowledge of the existence or otherwise of the transaction referred to. In any case, in view of the convention of client confidentiality, it would not be appropriate to disclose information concerning any particular client of ICC Bank. This is normal banking practice and if ICC Bank was forced to depart from this practice, it would damage its business.

I have no reason to believe that ICC Bank conducts its business other than in accordance with strict commercial criteria and, on foot of the Deputies' questions, ICC Bank has reconfirmed to me that this is the case.

Mr. M. McDowell

Will the Minister accept that if ICC Bank did in fact provide security in relation to the transaction concerned it would have had two effects. It would have prevented the registration of a security which would have been the subject of publicity, thereby keeping secret the names of the lenders and the nature of such a transaction. Will he agree that if ICC Bank is furnishing security in relation to the business migration scheme investments for citizenship, this would be apparent to the Department of Justice?

Obviously the Minister has inquired of ICC Bank and drawn a blank on the basis of confidentiality, but will he now inquire from the Department of Justice whether it is aware that the ICC Bank furnished this security in respect of this loan to a company? Does he consider it very disturbing that, if such information was available to Government Departments, it was not made known to the Members of this House?

Mr. Quinn

As far as I am concerned the banks currently in State ownership will continue to operate on strict commercial criteria similar to those operated by other banks. I, for one, abhor political interference in the commercial activities of any State enterprise. Indeed that is what has given State enterprise here a bad name in contrast with successful State enterprises in other countries. Therefore, I do not propose to take the course of action outlined by the Deputy.

Mr. M. McDowell

I am informed that the Department of Justice knows that the loan in question was secured by ICC Bank, that that is within the knowledge of the Department of Justice and that this House was misinformed in relation to it. Furthermore, if this House had known that a semi-State bank had cooperated by providing security and, indirectly, ensured complete secrecy about this transaction, there would have been a very grave scandal indeed. It is not good enough for the Minister now to say that he is happy to accept the assurance of the ICC Bank that it was a normal commercial transaction when the reality is that this transaction was carried out to cloak in secrecy a transaction about which the public was entitled to know.

Mr. Quinn

I respect the integrity of ICC Bank in the way in which it conducts its commercial affairs. Its successful annual accounts, which are on my desk and in the process of being made public, will indicate that it is a successful bank. I have no intention of getting in behind, because it is a State-owned bank, to obtain information which would not be normally available to me if the clients in this case had been clients of AIB, the Bank of Ireland or any other, I am surprised that Deputy Michael McDowell — who espouses a very clear and cogent policy philosophy — would want me, as Minister for Finance, to interfere in the commercial operations of a successful bank. For the life of me I cannot understand his ideological motive in this regard.

Mr. M. McDowell

I simply asked the Minister to agree with me that it would be much more serious if this transaction had been undertaken by ICC Bank as a result of the interference of a politician in his or her own interests. I am asking him to inquire whether that did happen. I suggest to him that, if he consults his colleague, the Minister for Justice, he will discover that there was such a transaction involving the ICC Bank and that it amounted to an abuse of the banking system to procure secrecy for a deeply suspect transition.

Mr. Quinn

I repeat categorically that, as far as I am concerned, none of the State credit institutions, whether it be the Post Office Savings Bank, the ACC or ICC, will be open to political interference of the commercial kind to which the Deputy referred.

Mr. M. McDowell

I accept that; I do not want to protect them.

Mr. Quinn

So far as I am concerned — and I want to state this very clearly — no such interference has occurred as far as I am aware. For the benefit of every normal customer who may well be listening to this question and reply, who may think that coming to a Member of this House to obtain leverage on a loan they may want to obtain from ICC Bank, because they may be a friend of the Member concerned, whether he or she be in Opposition or in Government, I want to refute any such suggestion. Anybody who would engage in such practice would be doing a great disservice to the credit institutions of this country.

For the Deputy to imply that some type of political interference resulted in favourable lending facilities being extended to a particular company is totally at variance with the information I have been given by ICC. I do not want the impression to go abroad that political pressure can be put on any State owned bank — for which I have responsibility as Minister for Finance — that will result in soft loans or easy credit terms. That is at variance with everything that I, as a Labour Minister for Finance, want to achieve in this area.

Mr. M. McDowell

I did not suggest to the Minister that a soft loan was made as a result of political interference and I ask him to accept that. I suggest that the Department of Justice knows well that the ICC provided security for this loan in circumstances which were designed to prevent the loan becoming public knowledge and for the purpose of throwing a cloak of secrecy over a particularly suspect transaction.

Mr. Quinn

To my knowledge the ICC acted totally within its terms of reference with what it regards as good commercial sense. I want it to do in the future as it has done in the past.