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Dáil Éireann debate -
Tuesday, 6 Oct 1998

Vol. 494 No. 4

Other Questions. - Appeal Against Commission Fine.

Eamon Gilmore


82 Mr. Gilmore asked the Minister for Agriculture and Food the latest position regarding the appeal by the Government against the £70 million fine imposed by the EU Commission for alleged breaches of regulations; when it is expected that the matter will be finalised; and if he will make a statement on the matter. [18414/98]

The European Court of Justice delivered judgment in favour of the EU Commission on 1 October 1998. Ireland had appealed the EU Commission's decision to disallow £50,243,111, or 10 per cent and 5 per cent of intervention beef expenditure in 1990 and 1991 in respect of the control system for intervention beef, and £18,475,350 or 2 per cent of intervention beef expenditure in 1991 and 1992 in respect of tendering procedures for beef purchased into intervention. The court upheld the Commission position as regards weaknesses in the control system for beef intervention in 1990 and 1991 and ruled that the Commission had taken account of measures by Ireland to remedy these when it reduced the 1991 penalty from 10 to 5 per cent. As regards tendering, the court ruled that there had been an infringement of article 9(2) of regulation No. 859/89 and that member states have a general obligation to take the measures necessary to satisfy themselves that the transactions financed by the EAGGF are executed correctly even if the specific Community Act does not expressly provide for the adoption of particular supervisory measures. The court also rejected similar appeals lodged by Denmark, France, Italy and the United Kingdom.

In budgetary terms, the judgment has no immediate effect in that the transfer of the amount of disallowance to the EU budget took place when the Commission took the clearance decision in 1996. The disallowance arose during a period when it was necessary to have consideration of intervention support because of a market collapse in the beef sector and the Department's control systems were put under enormous pressure by annual intake levels of more than a quarter of a million tonnes or 750,000 animals. Since that period control systems have been considerably improved with the assistance partly of increased resources, and a subsequent EU Commission inquiry into intervention beef controls at slaughter plants and cold stores endorsed these improvements.

While it is disappointing that the court has confirmed the disallowance, the judgment emphasises the need for continuous vigilant controls to ensure sound management of annual EAGGF payments of £1.3 billion in Ireland. Ireland's performances in recent years compares favourably with other member states but the aim must be to have control systems in place which eliminate disallowances entirely.

This would appear to be the end of the appeal process and that the taxpayer is now stuck with a fine of £70 million because some big players in the beef industry swindled large sums of EU funding, in some cases with the collusion of the Minister's Department. In view of that, has the Minister recovered any of the money which has been lost due to irregularities or negligence? What steps is he taking to recover the money which was lost in 1990 and 1991?

It is a surprise to me that there was collusion between my Department and others. I stand behind my Department and officials——

It is in the Advocate General's comments.

——who are the best in the country. I am proud of those people who work hard, did an excellent job long before I entered the Department and who will probably do so after I leave. On the best legal advice available to us, the Attorney General, the Department of Agriculture and Food and its officials, we do not see any recourse in terms of recovery of the funds. It is a major disappointment and a terrible state of affairs. Four countries, Ireland, Denmark, France and the United Kingdom, were involved in that court case.

Is the Minister seriously telling this House that a poor man on unemployment assistance who does a few nixers will have to pay back the money but a beef baron who swindles millions of pounds of taxpayers' money will not have to pay back a penny? Does he agree there is a provision in article 8 of the relevant European regulation which requires him to recover the money? What is he doing to comply with the EU regulation requiring him to recover the money?

I do not want to repeat myself but on the best legal advice available to us, there is no route for recovery. That is the honest answer to the Deputy's question. I said it was disappointing and it is annoying that this should happen and that any beef baron is involved in this matter.

I am surprised to hear what the Minister said because his predecessor——

A question please.

Is the Minister telling the House that he has dropped the legal proceedings which were commenced against the Goodman Group in respect of the defrauding of money at the Rathkeale plant for which two executives were found guilty? His predecessor told the House in 1995 that legal proceedings had commenced. Have these legal proceedings been dropped?

Legal proceedings against two plants have not been dropped. They are still in train and have not yet come before the court.

At what stage are those legal proceedings?

We move on to Question No. 83 in the name of Deputy Gormley. Deputy Gilmore had a good innings and other Members have tabled questions.

May I ask a supplementary question?

I will take a brief and final supplementary question from Deputy Rabbitte

On the undertaking given by the Minister's Department to the Committee of Public Accounts that as soon as this matter was disposed of in Europe, it could then act under article 8 of the relevant regulation to recover taxpayers' money from the industry, in particular Goodman International which was the beneficial corporation in this scandal especially in August 1990 and 1991, is it still the intention of the Department to take the necessary action under article 8 to recover as much of that taxpayers' money as possible from the offenders concerned?

The possibility of disallowances relating to the beef sector were examined by a group of senior officials from my Department, the Attorney General and the Department of Finance, and the group reported to the Departments of Finance and Agriculture in 1996. The legal advice obtained did not in itself give any entitlement to the Minister to recover any part from incumbents who may have featured in cases against Ireland by the European court. We cannot sustain a case. I am not aware of what was said at the Committee of Public Accounts or of article 8 of the European regulation.

This is a cover up.

We move on to Question No. 83. I cannot allow Deputy Rabbitte ask another supplementary question as I allowed him ask one after I had called for a final supplementary question. We move on to Question No. 83 in the name of Deputy Gormley.

I am grateful for that but we are talking about the largest scandal——

I called Deputy Rabbitte when I had already called the final supplementary question.

There must be a sense of proportion. We are talking about £70 million of taxpayers' money.

The Deputy had the opportunity to ask a supplementary question after I called the final supplementary question. Every question is important but other Deputies have tabled questions which they see as important. I ask Deputy Rabbitte to resume his seat. I have already ruled that the final supplementary question has been called on this question. To give other Deputies who have tabled questions an opportunity to have them answered, we will move on to Question No. 83.

It was this type of cover up which led to the beef tribunal. Will any attempt be made by the Minister to recover £70 million of taxpayers' money?

I ask Deputy Rabbitte to resume his seat. I want to make it clear that as far as the Chair is concerned, there is no cover up.

This is the only forum in which this question may be asked. Will £70 million of taxpayers' money be recovered?

I ask Deputy Rabbitte to leave the House.

The question should be answered. If these questions were answered in the Dáil, it would not have cost the taxpayers as much. That is what we are here for.

I ask Deputy Rabbitte to leave the House.

Am I in order to ask a final supplementary question since it is normal that the Deputy in whose name the question is tabled gets an opportunity to ask one?

The Chair has ruled. It is not a matter of the substance of the question.

This is a £70 million fine and the Minister is coming in here to cover it up.

I ask Deputy Rabbitte to leave the House.

It is a disgraceful decision that the Minister can——

I ask Deputy Gilmore to resume his seat.

This is £70 million of taxpayers' money and the Minister has said nobody will be called to account. What is going on here?

Will Deputy Rabbitte leave the House?

I have resumed my seat.

I ask Deputy Rabbitte to leave the House. The Chair must be obeyed. I must ask the Ceann Comhairle to come into the House because I asked Deputy Rabbitte to leave the House and he refused.

I thought a Member could not be suspended during Question Time.

Sitting suspended at 4.01 p.m. and resumed at 4.08 p.m.