I apologise to the House for not being present this morning. I had an official engagement with the National Training Centre for People with Disabilities.
The story and controversy which has arisen in the past 24 hours is not new. Financial journalists in all the main publications — Shane Ross, Nicholas Webb and Gene Kerrigan in the Sunday Independent, Gerald Flynn in the Irish Independent and Siobhán Creighton in The Irish Times— have been writing about this matter for several months. Although Deputy Rabbitte and his party sat on their hands for a week before making a public statement, it came as no great surprise to me, the media or the parties which were members of the previous Government. Deputy Owen acknowledged that she was aware of the problem. All the parties which were members of the previous Government were aware of it.
The Government and the Department are determined to find a solution to what is a growing problem. We have not yet decided what form the solution will take. Three measures will, probably, have to be taken — reform of company law, reform of tax law and, perhaps, reform of the money laundering legislation. There are a number of Departments, therefore, which will have to make changes to legislation.
Allegations have been made that, in some sense, the Dáil was misled or information was concealed from it. The following is the question put to me by Deputy McManus on 18 February:
To ask the Tánaiste and Minister for Enterprise, Trade and Employment the proposals, if any, she has for improvement to the procedures for registration and monitoring of companies, in view of the fact that up to 40,000 non-resident companies are registered here but hold no assets or carry out no trading in this State and some of these may be set up for the purpose of tax avoidance in other jurisdictions or criminal activities; and if she will make a statement on the matter.
In response I said the Government was acutely aware of the problems that some Irish registered non-resident companies were giving rise to and of the urgent need to put measures in place to address these problems. At no stage did I dispute the figure mentioned in the question and adduced by Deputy Rabbitte because we do not know what the figure is. We have never sought to exaggerate or downplay it when various financial journalists have raised queries with the Department.
I was asked what procedures were being put in place for registration and monitoring of companies. I said there was a working group, the purpose of which was to come up with workable solutions to what was a difficult and complex issue. I also said the Department was being assisted by the agencies under its aegis, that the "thrust of whatever action is taken in the company law area will be aimed at a tightening up of the registration process consistent with avoiding the imposition of undue cost and administrative burdens on business at large" and that we would "respond swiftly to any reasonable proposals emerging".
Deputy Rabbitte said, "the question asked for the number of companies involved in criminality and so on". I was not asked for that information. If I had, the question would have been transferred to the Department of Justice, Equality and Law Reform. The Deputy is trying to rewrite history.
Deputy Rabbitte did not become aware of this matter for the first time in the last few days. As far back as 15 September 1995 the then Minister for Finance, Deputy Quinn, wrote to Deputy Rabbitte, then Minister of State with responsibility for commerce, to express his concern. In the interests of accuracy I intend to publish both letters. Deputy Quinn said:
However, in view of the fact that the tax measure which we have introduced can only be of limited effectiveness and that in the meantime the reputation of Ireland and that of the IFSC in particular is being compromised by the undesirable activities of certain IRNR companies, I would be grateful if you would give urgent consideration to accelerating the adoption of interim administrative measures aimed at curbing the misuse of this vehicle.
Deputy Rabbitte did not respond for nine weeks. He said:
As you know, the IRNR question will feature on the agenda of the next phase of the Company Law Review Group and it would be very inadvisable, in my view, to consider embarking on significant changes in the company law area until the CLRG has had an opportunity to fully examine the matter.
That was reasonable but Deputy Rabbitte never called a meeting of the group to discuss the issue, although Deputy Quinn had informed him that it was urgent.
Deputy Rabbitte said that he had made great changes in the Companies Registration Office and sought Government permission to appoint an outsider to head the office. He wondered why I, as the great champion of privatisation, did not appoint an outsider. I did not do so for the following reason. On 26 May 1997 a decision was made to appoint an excellent public servant, Mr. Paul Farrell, who was recalled from Brussels to take up the position. He is doing an outstanding job. Is Deputy Rabbitte suggesting that I should have dumped him? I know what Deputy Rabbitte would have said if I had dumped him and brought in an outsider. To highlight the hypocrisy on this issue——