Dáil Éireann debate -
Tuesday, 15 Dec 1998

Vol. 498 No. 4

Private Members' Business. - Comptroller and Auditor General and Committees of the Houses of the Oireachtas (Special Provisions) Bill, 1998: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. McDowell

Generally speaking, I welcome this Bill. I certainly welcome the motivation behind it. I am conscious that the Committee of Public Accounts has done a great deal of good work in the past six or eight weeks since this matter was first aired in Magill. It has been grasping seriously to find a way in which to deal with this issue within the confines of the House without the need to establish a tribunal.

I have some doubts about the Bill and about individual provisions. Some of my doubts to which I will give expression later go to the roots of the Bill.

I support the thrust of what we are trying to achieve. We are trying to establish the facts and what happened and whether an arrangement was reached between the Revenue and AIB and, if so, the nature of that arrangement, and whether full disclosure was made by both sides as part of that arrangement. That is an important part of what we are trying to do. We are also trying to ensure there is full accounting for any tax liability that arose in the 1980s. Before closing this chapter it is important that we know that full account has been given in relation to the liability to the Exchequer for all taxes due at that stage.

It is important, in fairness to AIB — the institution which has been the target of so much criticism — to establish whether other financial institutions, other banks in particular, were also guilty of the same scam and were part of the culture which, by all accounts, appears to have been widespread in the financial sector at the time. We have read on a number of occasions in the intervening two months or so about allegations, generally unspecific, that other financial institutions, including banks, were involved in the same culture. In fairness to AIB and all concerned it is important to establish if that was the case.

The primary purpose of what we are doing must be, as Marie Antoinette said, encourager les autres, to ensure something like this becomes a good deal less likely in the future. In a sense, we have here a collective luxury in that we are doing something which does not and cannot have an immediate impact on the financial sector. It will not affect people's confidence in the bank in a tangible way. We are looking at something which happened six or seven years ago and which most of us assume is now finished but it is important to ensure it does not happen again. The reason we are doing it in this way is to avoid another beef tribunal and we want to investigate the matter in a quicker and less formal way and, indirectly to give some teeth to committees of Dáil Eireann when they choose to go about investigations of public matters in this way.

I am in some difficulty because we have unwittingly created a tribunal by another name. We have created a hybrid arrangement whereby the Comptroller and Auditor General is effectively given the powers of the chairman of a tribunal and has been asked to produce a report which the committee can endorse. I say "endorse" because it is difficult for the committee to do anything else. The Comptroller and Auditor General is being given legal powers. He is obliged to observe due process, to administer the law as he sees it, but in a fair way, to all concerned and to look at all the facts. He will set out the facts in a report which will be laid before the House and the committee. The committee is then empowered to reach conclusions based on those facts.

There would be a real difficulty if the committee were to decide to reach conclusions different from those set out in the Comptroller and Auditor General's report or to reject, alter or accept only some facts set out in the report. In short, it would be difficult for the committee in those circumstances to legally and properly act in any way, other than as a rubber stamp for what the Comptroller and Auditor General concludes. If that is to be the case, what is the difference between the Comptroller and Auditor General's operation and what would be done by the chairman of a tribunal except that in all cases the Comptroller and Auditor General would operate in private whereas a tribunal, based on previous experience, would be in public? I am not sure the cause of Dáil committees is substantially advanced by taking this route, if the committees are confined to the role of a rubber stamp. The members of the committee simply do not have the time or, perhaps, even the inclination to sit in a quasi judicial way to consider all the facts as carefully as they might and, dare I say it, it is not impossible that some members of the committee may vote on some conclusions without properly reading the Comptroller and Auditor General's report. If this happens there will be real problems. Litigants or people whose reputations might be in some way damaged, such as the banks, would have little difficulty in impugning a report of that kind and, perhaps, of fatally wounding such a report.

This is a flaw, if the argument I am making is accepted, which necessarily runs to all investigations of this kind and not only this one. I hope I am wrong in that but it strikes me as an obvious problem. Perhaps the matter can be teased out later.

Essentially I am asking questions and I hope the Minister will have an opportunity to respond. I join Deputy Noonan in saying I am frustrated at the limited time in which to discuss this Bill.

There are a number of provisions in it which sail close to the wind in terms of the Constitution. To be asked to get through Committee Stage in an hour this evening, is not good enough. We may well regret that.

There is an argument — I do not necessarily accept it — that the Comptroller and Auditor General as an established independent agent in the Constitution cannot be given additional powers by statute. The Minister will be aware the Constitution precisely defines what the Comptroller and Auditor General will do. It is argued by constitutional lawyers that one cannot simply, on an ad hoc basis, give him additional powers. I will be interested to hear what advice the Minister has been given because I am aware the issue has been addressed in the advice offered.

The Bill provides that utterances of members of the committee made outside of the committee are entitled to absolute privilege. There is a serious constitutional problem here. It can be argued that parliamentary privilege is a constitutional construct. It is set out in the Constitution as such. The Constitution specifically provides that the utterances of Members within the House are privileged. This has been extended, quite properly, to what may be said by Members at committees of the House of which they are members. I do not see how that can be extended with any ease by statute to anything which a member of a committee says outside the House, whether in pursuit of their function as a member of that committee.

The memorandum which accompanies the Bill specifically states that utterances on television and radio are not covered. The Bill does not say that. The Bill covers all utterances made by members of the committee in pursuit of their functions as members of the committee. As a public representative and if I was a member of the Committee of Public Accounts, I would be entitled to say that giving interviews on radio were in pursuit of my function as a member of the committee and that I could draw on the absolute privilege which appears to be given to members of the committee in those circumstances.

I was on Vincent Browne's radio programme with Deputy Ardagh a number of weeks ago and we discussed a number of these issues. Is Deputy Ardagh, as a member of the committee, entitled to absolute privilege in respect of everything he says while someone such as myself, who is not a member of the committee, is not entitled to privilege at all? If that is the conclusion which could be drawn, this is not a healthy state of affairs.

One of the provisions in section 9 appears to contain a constitutional infirmity. If a person disobeys an instruction by an auditor, the provision in question allows the Comptroller to involve the High Court which may hold a summary hearing and punish the person as if he or she were guilty of contempt of court. It strikes me that this cannot be done. The Minister will be familiar with the In re Haughey case in the early 1970s, which seemed to be based on similar circumstances, where the Supreme Court concluded without difficulty that the High Court is not a court of summary jurisdiction and that it cannot try someone for a criminal offence without a jury. It could be argued that, as constructed, the Bill does not provide for criminal offences. However, it uses the word "punish" which is not suitable when referring to civil contempt. We are clearly discussing criminal contempt. I urge the Minister to reconsider that provision because it seems to fall into the same category as the In re Haughey decision.

I am interested to know why the Bill allows for the appointment of auditors. The original reason for granting this power to the Comptroller and Auditor General and his office was that there existed within that office a capacity and an expertise in dealing with matters of financial regulation, the expenditure of money, etc. In that context, it seems strange to give the Comptroller the power to go outside his office to employ additional people to do precisely the work we thought him to be skilled at doing in the first instance. I do not understand the need for this provision. Trying to read between the lines and not having been privy to the briefings which were given in recent weeks, it appears this is being done for a legal reason to, in some way, keep the discharge of that function at arm's length from the Comptroller and the members of the committee.

I understood earlier that it was intended, through the resolution, that, when the report was made available to him, the Clerk of the Dáil would be obliged to effectively sit on it for two weeks before releasing it to Members. This was intended to facilitate the committee in taking ownership of the report in the interim. However, that is not stated in the resolution and perhaps the Minister will clarify the position later.

Section 16 deals with utterances or documents in the ownership of a committee which are not discussed in public session. The section places an absolute prohibition on the disclosure of those utterances or documents without the permission of the chairman. This provision appears to apply to all committees and is not one of those provisions which lapses with the resolution. I do not understand the reasoning behind this. There seems to be a view among the members of certain committees that what they do behind closed doors is their business. I would prefer to start from the opposition principle. What is done in these Houses, whether in committee or otherwise, is the public's business and we require a good reason to keep it to ourselves. Any notion that we should include in the Bill a provision which would draw a veil of secrecy over everything that is done by committees — including, for example, compiling reports — is wrong in principle.

I reiterate that I support what the Minister is attempting to achieve. However, I am concerned that we have created a hybrid which may not serve our purposes. Perhaps we should reconsider the functions of Dáil committees and the sort of matters we should be using them to investigate. When dealing with criminal or potential criminal offences, Dáil committees should be slow to tread into such territory. Those matters are best left to the Judiciary because, sooner or later, that body will be obliged to deal with them. We must give consideration to more carefully defining the matters of public interest which are to be dealt with by Dáil committees and the way in which they go about their business. I am not persuaded that the ad hoc legislation before the House represents the sort of template we should use in the future.

Mr. Roche

I have a distinct sense of déja vu because the House has discussed the role of parliamentary committees on many occasions during the past 25 years. The public must be utterly mystified at our incapacity to decide what is the appropriate role of those committees and to give to them and the House and its Members the opportunity to do the job with which we are charged in the Constitution. It is ridiculous that the House has been obliged to return again to this topic. The previous speaker rightly referred to the issues which arise in the context of the In re Haughey case, the constitutional circumstances that surrounded it and the difficulties successive Administrations have had to address in the past 25 or 26 years.

The political will to resolve these issues has been displayed by the current Administration and a number of its recent predecessors. However, I am mystified by our failure to draw together sufficient legal expertise from all sides and from the permanent Civil Service to reach a permanent and agreeable solution on this matter.

In the early 1970s the inadequacies of the powers enjoyed by committees of the House were fully explored. There is an abundance of Dáil debates available on the issue. Action was promised and the possibility of holding a referendum to deal with the constitutional issues, some of which were touched upon by Deputy McDowell, was raised. A great deal of political noise was made but, when the heat of the debate dissipated, no action was taken. As a Member of the House, a person who is passionately interested in the work of committees, a taxpayer and a citizen, I am mystified by our failure to resolve these issues.

I commend the Minister on introducing the Bill. I would prefer it to be permanent and, like other speakers, I hope we have resolved the various conundrums regarding how we should deal with this matter. In the 1980s, as chairman of the Oireachtas Joint Committee on State-Sponsored Bodies, I produced a special report — I believe it was the second or third of its kind — outlining the inadequacies of committees and the questions that raised. The Dáil and Seanad debated the report and it was endorsed by all parties in both Houses. However, because of the intractable nature of the issues we raised, no solution has been offered until today.

Whether we consider the solution produced by the Minister adequate or inadequate, we must give him and his officials credit for going some way towards resolving some of the problems which seem to prevent Oireachtas committees from fully and properly investigating circumstances of a questionable nature. With regard to Deputy McDowell's final comment — I say this in no patronising way because his contribution was thoughtful and provocative and I am sure it will prompt a response from the Minister — it seems there is a fundamental difference between the task of adjudication, the job of the Judiciary, and the task of investigation, which I regard as appropriate to an Oireachtas committee.

The circumstances which led to this measure are extraordinary and remarkable. Two issues arise from those circumstances, the mechanism for conducting an investigation which is central to the Bill and the manner in which the issues became public knowledge. I will deal with the latter issue first.

It is remarkable that we have had to depend on the media to highlight an extraordinary state of affairs. One must ask what would have happened if the Magill article had not highlighted the extraordinary situation regarding bogus accounts in Allied Irish Banks. As Deputy McDowell stated, to be fair to Allied Irish Banks, this matter may involve other financial institutions, we do not know the exact position in that regard. I cannot comprehend how the holding of up to 14,000 bogus DIRT accounts in one branch of Allied Irish Banks, in Tralee, went without being noticed by either of the two watchdogs appointed by the State, namely, the Revenue Commissioners and the Central Bank. The former Minister for Foreign Affairs is based in Tralee. I am certain he was anxious to attract business to his home town — I would do likewise — but it could only happen in Ireland that a relatively small branch of a bank would have up to 14,000 bogus DIRT accounts and nobody noticed. That is extraordinary.

I hope the Committee of Public Accounts and the Comptroller and Auditor General will be able to resolve the conflict in the evidence produced by the chairman of the Revenue Commissioners and Allied Irish Bank. Will they be in a position to discover why the Central Bank and the Revenue Commissioners did not move before the article appeared in Magill? That is the question to which I and other Members await an answer with considerable interest.

While I wholeheartedly welcome the proposed measures, I am frustrated and disappointed that they are not permanent. The Committee of Public Accounts and the Comptroller and Auditor General perform an important role in regard to the responsibilities Bunreacht na hÉireann and its predecessor place on Dáil Éireann. The control of the public purse is one of the most important roles given to Parliament. Eighty years after the first Dáil was elected and 50 years after Bunreacht na hÉireann outlined the modern responsibilities of Dáil Éireann — the control of public moneys, public expenditure and the patrimony of the nation — we are gingerly exploring yet again once-off measures to give temporary powers to the taxpayer's watchdog. That is a failure of all Administrations since 1972-3 when these issues were raised in the Haughey case. The Committee of Public Accounts is spancilled and blindfolded and has had its teeth capped. It is a joke. Were it not for the efforts of the members of the committee who are willing to expend considerable energy in the service of the State it would be a chatter shop with no useful purpose to serve.

When this Bill runs its course we will return to that situation. I have to ask why. The Magill revelations were remarkable by any measure but they are not the only queries to have arisen recently about the manner in which State assets have been handled. For seven of the last 12 months I have sought to focus the attention of the Committee of Public Accounts and the Comptroller and Auditor General on the circumstances surrounding the disposal by the Department with responsibility for energy of up to 140 acres of land at Glen Ding, Blessington without the invitation of tenders, a competition, an attempt to establish a market price for the land or an effort to explore the value of the sand and gravel contained thereon. A potential buyer was obstructed, discouraged and given misleading information by public officials. When he pressed to be allowed purchase the land he was falsely informed that it had been sold. It was only when he made a political intervention that he discovered that it had not been sold. If I had a suspicious mind, I would suggest there was evidence of wrongdoing. I compliment the Committee of Public Accounts on trying to discover how the issue could be examined.

If we were in a position to give real powers to the Committee of Public Accounts and the Comptroller and Auditor General, we could create a situation where a citizen or Deputy who is concerned about the manner in which an asset of the State has been handled could properly refer it for investigation. The Bill is welcome because it allows us to proceed with the task in hand. The House should return to this issue in the new year and explore precisely what it is we wish the committees to do and devolve finally to them the powers they need to get on with the job.

Mr. Rabbitte

I agree with much of what has been said on all sides of the House. I also pay tribute to the Minister and his backup staff in a number of offices in causing this legislation to be introduced as pledged. I agree with the remarks made on all sides of the House that it is most regrettable that we are discussing legislation as complex as this at short notice at the eleventh hour of the Dáil term. I hope we do not live to regret it. Deputy McDowell has identified some of the constitutional pitfalls which may be at issue. What is at issue is the efficacy of Dáil committees to conduct inquiries compared to tribunals of inquiry. If we fail, we will do serious damage to the notion that a committee of the House is capable of conducting an inquiry such as this. I agree with Deputy Roche that, even though there is complex legislation on the Statute Book which interacts, we still have not got it right. This is unknown terrain and we do not know what the outcome will be. It is phenomenally complex.

It is not the same as the Wallace committee, of which Deputy McDowell was a member. I do not know how that committee could reasonably have been expected to make findings of fact given that the issue was partisan political by definition. This is not a partisan political issue. It is, as Deputy Roche said, an issue that goes to the fundamentals of our democracy. It is about the efficacy of the procedures to collect tax and the alleged evasion of tax by at least one major financial institution. According to that institution, the practice was industry wide.

I cannot think of anything more important. It is not a question of the Opposition pointing a finger at the Minister for Finance or his predecessor and saying this is their fault and that we have to inquire into the matter from a political perspective. It is a non-political issue. If the House fails on this occasion to bring the bacon home, we will do serious damage to the concept that a committee of the House is capable of conducting an inquiry such as this.

We should have more time to tease out the implications of the Bill. I do not know how much time the Minister has spent on it. I have not been immersed in it for as long as the chairman of the Committee of Public Accounts and learned something new this evening about which I have serious questions. It may well be that they can be answered but they are serious questions. Anyone who has been a Minister will say that one cannot know these things unless one is personally involved in their detail.

For example, before this evening I was under the impression that we were seeking to have conferred on the Comptroller and Auditor General powers analogous to an inspector appointed by, for example, the High Court under the Companies Acts. The Comptroller and Auditor General already has the power to go into a public sector organisation and find out what he will. He may demand to see papers, question people and make his findings. He does not have a similar power to go into private sector organisations but by conferring on him powers analogous to a High Court inspector under the Companies Acts we would give him such powers. I now find that we are not conferring any such powers on the Comptroller and Auditor General. In fact, while he may not be expressly disbarred from entering a bank or financial institution, he is effectively disbarred because under section 2(1)(c) he must carry out such an investigation at arm's length, employing an auditor for the purpose.

My understanding, up to now, was that the Comptroller and Auditor General would not use these powers to investigate individual accounts but would be able to access the internal audit reports of a bank or other documents such as minutes of meetings. It now emerges, if I am reading the Bill correctly, that he may not. I would like the Minister to address this point which raises a number of practical problems. Is it possible in this jurisdiction to find an auditor who will not have a potential conflict of interest in such a situation? One may search and find an auditor who has never done work for any of the financial institutions but what if, in the course of his investigation, he finds the non-resident account of a businessman of substance to whom he has given advice? Must he go back to the Comptroller and Auditor General and say that although he cannot state his reason he must abandon the investigation? A number of practical logistical problems are posed.

However, of more concern to the members of the Committee of Public Accounts is the revelation that the Comptroller and Auditor General in whom we repose great confidence because of his track record and skill could, up to now, do this work for us. The Minister kindly said that because of our onerous duties as parliamentarians we could not do this work ourselves. That is not the case. We would be quite happy to do the work but we do not think it appropriate to do so.

Section 2(1)(c) must be explained. The Minister must also explain if there is a facility for the members and Chairman of the Committee of Public Accounts to get access to the report so that they can make a considered and cogent response before we find ourselves answering soundbite questions from the media. It must be possible for the Government to accept an amendment which will enable us to do that. The Chairman of the Committee of Public Accounts made the important point that the committee should have the right to resort to the High Court in the same way as the Comptroller and Auditor General.

I agree with Deputy Roche that it is not acceptable that we pass ad hoc legislation which will fade as soon as the case is over, in the manner of people dealing with a bush fire. We will never provide an alternative to tribunals in Dublin Castle if that is how we do our business. Deputy McDowell raised a number of interesting constitutional issues, not least the one concerning privilege. Deputy Roche is right in saying it is perfectly practicable for the Comptroller and Auditor General to carry out the investigation and for the members of the committee to take his report and make findings of fact such as they will, based on his report.

Mr. C. Lenihan

Deputy Roche has made a worthy contribution in the House and on a wider level as an academic and lecturer in public administration. I have read much of what he has written on public administration issues and there is good sense in it and in what he said in this debate.

The Bill does not make a permanent change in the investigative procedures and privileges employed by the House. It is, by definition, a temporary arrangement to investigate a series of specific allegations concerning the Revenue Commissioners and their relationship with Allied Irish Banks and further allegations about other financial institutions. It is also intended to discover if they are exposed or involved to the same extent as has been publicly revealed in relation to Allied Irish Banks.

I hope the House will consider revisiting the issue of the institutional reform of this House. I made my maiden speech at a time of great controversy about politics and the nature of politics. We all know of the public tribunals which were set up to investigate the beef industry and allegations concerning the activities of former and serving Members of the House. It is important that we, the representatives of the body politic, take the investigative role which we have imposed on ourselves very seriously. The first parliament of the French Revolution was referred to as the grand inquest of the nation. If we are to fill that aspirational role which parliamentarians sometimes set themselves we must get our committee procedures right. It is agreed on all sides tonight, as it has been for a number of years, that our privileges and the powers of our committees are not appropriate to a modern democracy facing a new century. I implore all Members to revisit this issue in the manner expressed by Deputy Roche. We must reform the Oireachtas because if we do not we will become irrelevant and people will constantly seek the advice of lawyers. We have found it is not good that public debate be left in the hands of lawyers.

Deputy McDowell has expressed a number of reservations about the Bill. I assume he is worried about the temporary creature which will be born if the Bill is passed. The legislation is temporary and it will be watched and re-examined in the fullness of time. Nothing could be more politically sensitive or subversive than the questions of who pays tax, when they pay it and how they pay it or the question of whether equity is accorded to everyone under the taxation system and whether the balance of equity is maintained between individual and corporate citizens. The Committee of Public Accounts, of which I am proud to be a member, has taken the ball and run with it and decided that it wishes to investigate this matter to the fullest extent in the public interest.

Deputy Jim Mitchell, who is present, has done an excellent job in this regard. The Committee is non-partisan in its focus. It does not preach or talk in a political manner. It conducts its business in a non-political and non-partisan manner and pursues the taxpayers' interest, particularly as it applies to the public sector and the spending of taxpayers' money. This investigation, which we have begun, does not only involve a public taxation issue, but the complicated issue of banks and other institutions which are charged with collecting taxpayers' money. The question that cuts to the quick is how well or badly they did that. That is where the complications, legal and constitutional, arise. Deputy McDowell, who is a lawyer, is aware there are pitfalls. It may be the case that an individual or a body corporate may choose to challenge these powers or challenge the investigation while it is in progress. We have seen that elsewhere in regard to tribunals, but it is important to underline that there is cross party support and support from the Minister, the Cabinet and the Government, to pursue these allegations to the nth degree. If we are challenged, we will have to come back here and overcome it in whatever way we can. If we cannot overcome it, it will have to be passed to someone else to investigate it.

There are complications here because the allegations we are investigating about the AIB and the Revenue Commissioners are in regard to what has been described by AIB executives as an informal arrangement that was industry wide. They have suggested in their hearings before the Committee that there was some sort of informal arrangement, whereby they could play out their tax obligations. That is a serious suggestion, all the more so, because at that stage the banks were in charge of collecting a particular tax. If that is so, it will cause major concern. Nothing can be more politically subversive than the issue of taxation and its collection, given the high taxation environment through which we have come.

That was the substance of the dispute in the Committee. AIB suggested there was an industry wide deal, informal though it may have been, of which it was part, but the Revenue Commissioners said the opposite. It is important tax-payers get this message. The Revenue Commissioners are pursuing to the fullest degree the liability they believe is due, but there is a conflict. It is no accident Mr. Mulcahy, when replying to me and others on the Committee, stated he was in discussions with the Revenue Commissioners. He did not put it further than that. Discussions are taking place parallel to this investigative process of inquiry by Parliament whereby the Revenue Commissioners are pursuing a liability which they believe is justly due to them. The tax collectors are charged on behalf of the public to collect taxes. That is what further complicates this issue.

I praise the Government and the Minister, not only on the budget in terms of taxation provisions, but on the powers that have been produced quickly for this investigation. Members have stated it might have been better if we had been given more time, but time is not on our side. There may be a settlement between the Revenue Commissioners and AIB, and taxpayers' legitimate interest in inquiring and finding out more about this arrangement may be lost. It is important we get down to work relatively rapidly and try and test the powers available to us. These powers are not final and they will not necessarily be a guidebook for the future. They are one set of legal devices given to the House on an issue of enormous political importance. We will have to revisit the issue of the powers available to this House in the long-term.

As a member of the Committee, and I note other members of it have contributed, it is important that we should be careful of the language we use because ultimately the Committee will sit in some sort of quasi judicial role in regard to the investigation by the Comptroller and Auditor General and we will have to make some determinations about it. That behoves us all to be very careful about what we say here and not to be party political in our interpretation of any evidence we get.

I agree with Deputy Rabbitte that we should avoid comparison with the Wallace Committee. It was generous and investigated something which, by its nature, was politically charged. It was an inquiry that had highly political overtones and we may not find out about the truth or lack of it that emerged because of the downfall of the then Government in 1994. History may have to cast judgment on that when files are opened and declassified.

Mr. Durkan

I wish to share my time with Deputy Gormley.

I appreciate the difficulty in regard to the short period we have to make our contributions. Like other Members, who are also members of the Committee of Public Accounts, I have considerable reservations about the Bill. I do not see it as a bridge too far but as a bridge that goes only half way, a bridge that does neither one thing nor the other. This Bill purports to give powers to the committee, which it may or may not be in a position to use and to use such powers the Members would be out of the House in committee for months on end, which is impossible and impractical.

With no disrespect to my friends in the legal profession, I said in private, and I have no hesitation about saying it in public, that given existing powers drawn from the Constitution, the Committee of Public Accounts is unique and it need not apologise, any more than does this House, to any quarter. As we saw in the past this House has been able to forage in areas that are the preserve of other institutions, often the courts. In many cases in the past we saw that where there was a conflict of interest the sub judice rule was invoked or ignored. The Committee could well have done its job with its existing powers and it could have proceeded to encourage witnesses to appear before it and give evidence. At some stage somebody would have shouted halt and said the Committee had extended beyond its remit. That may have been the case, but on this issue it should be understood that a particular institution came voluntarily before the Committee and gave evidence. Because of that, an obligation fell on anyone else who stood on the sideline or who was directly or indirectly involved, to come before the Committee or withdraw on whatever basis they wanted to put forward. Given that one group, Allied Irish Banks, came forward voluntarily and openly gave evidence, I do not see why any other group should refuse to do so. If someone wanted to mislead or run circles around the Committee, there would be a problem, but if someone wanted to come forward and give honest and factual evidence, I do not see any difficulty in that or in the Committee operating outside its remit.

My worry about the proposed legislation is that it will do something in relation to a specific subject matter, which has been discussed, but I do not know what it will do. I do not know if it is a general or a specific provision, but it seems to be a specific one. I do not know if we will have to seek to introduce similar legislation to deal with other issues. The Wallace Committee was a very different committee with different powers drawn from a different institution of the State. This Bill is a one off measure that will enable the Committee to go down a particular route, which will be soul destroying for the members of the Committee, whoever they may be, when this investigation is at an end. I may be proven wrong but that is my concern. I served approximately ten years on that committee, but there are longer serving members who have greater experience.

There have been two legal challenges in the past 60 or 70 years. It is an extraordinary record that for all the controversial issues which have come before committees of the Houses of the Oireachtas, particularly the Committee of Public Accounts, the number of legal challenges has been reduced to the minimum, especially at a time when litigation is rampant.

As regards the compellability of witnesses, I do not see any difficulty with a witness who is called before a committee or a Member of this House saying something they believe is true. Nobody in the State could challenge their right to do that. We should not devolve powers to other institutions which circumvent or restrict the rights of Members of the Houses of the Oireachtas to do their job to the best of their ability.

I hope this Bill does the job it was intended to do and that it does not bury the members of the committee for months as they pursue issues which capable legal people are paid large sums to do equally effectively in another arena.

Mr. Gormley

The Bill restricts its interest in DIRT free accounts to those held by persons claiming to be non-residents. This is a failing and that is why I have tabled an amendment which I hope will get all-party support. One must ask why the investigation into the operation of DIRT free bank accounts should be restricted only to those operated in the name of supposed non-residents. There are and have been other opportunities for the unscrupulous to operate DIRT free accounts. These include opportunities which were identified by the internal audit of the Revenue Commissioners as long ago as 1988 and commented on by both the Comptroller and Auditor General and the Committee of Public Accounts in 1992 and 1993.

None of the concerns raised in the period 1988-92 have been addressed due to the failure by Government to make progress on the long promised fund-raising for charitable and other purposes Bill or the related trusts Bill. It has been publicly confirmed that once a body has been granted tax exempt status, it is free to open an unlimited number of DIRT free bank accounts. Whether such accounts are used solely to lodge and disperse funds collected for charitable purposes is not adequately monitored.

The Revenue Commissioners do not operate adequate monitoring or review procedures of tax exempt bodies. In many cases, there has been no follow up by the charity section after tax exempt status has been granted. In a significant number of cases, tax exempt bodies are known to have changed their objectives and structures subsequent to getting tax exempt status. However, there was no follow up or intervention by any of the statutory bodies concerned.

The legislative provision requiring tax exempt bodies to account for their fund-raising activities is acknowledged to be inadequate. There is no statutory body with which tax exempt bodies can be registered and no way their exemption from tax law, including their responsibility to pay DIRT, can be made known to the public. In the absence of such provisions and safeguards, obvious opportunities for direct fraud and malpractice have been identified by the Comptroller and Auditor General. That is why I tabled my amendment which I hope will be accepted.

Minister for Finance (Mr. McCreevy)

I thank Members for their contributions to the debate. The Bill is a considered and balanced response to the recommendations made in the first interim report of the Committee of Public Accounts. In that report the committee recognised the need for an investigation to be carried out by the Comptroller and Auditor General, new powers for the Comptroller and Auditor General to pursue the investigation, the presentation of a report to Dáil Éireann setting out the facts as far as possible, an examination of the report by the Committee of Public Accounts using enhanced compellability powers and a report to the Dáil drawing conclusions and making recommendations. All these matters, and many of the other crucial elements requested by the committee, are reflected in the Bill.

The Government has worked hard to get these arrangements right. We have covered a lot of ground in a short time. I have been greatly assisted in framing this legislation by consultations with the chairman of the Committee of Public Accounts, the Comptroller and Auditor General and their legal advisers. I want to put on record my appreciation of the time and commitment they have given to this matter over recent weeks.

This has not been an easy exercise. The matters to be investigated are important. The Comptroller and Auditor General is an independent constitutional officer and the request that he would prepare a special report of this nature is breaking new ground. I am aware that this legislation could be fine-tuned and I accept that the amendments proposed have this in mind. However, I ask the House to take into account the pressing need to progress this Bill as quickly as possible, particularly in relation to Committee Stage.

I want to address a few specific points raised in the debate. I was a little surprised that Deputy Noonan criticised us for not bringing the Bill before the House last week and not having the draft resolution circulated to Members before today. I have sympathy with that view. My understanding was that the Committee of Public Accounts did not want more than a month to elapse before the investigation could begin. Deputy Jim Mitchell, who has been involved in discussions with me, my officials and the Attorney General, can tell him that these were taking place last week. I assure the Deputy there was no unavoidable delay in preparing the Bill. Only 55 days in total have elapsed since the Dáil sought this legislation. The framing of this complex Bill could not have been completed any earlier.

As regards the resolution, I am sure the chairman of the Committee of Public Accounts will confirm that as late as last Friday evening, officials of my Department were in consultation with him about the text which was then cleared by the Government yesterday. There was no unavoidable delay.

Deputy Noonan, Deputy Jim Mitchell and Deputy McDowell raised questions about the implications of the role of independent auditors. My legal advice is that this arrangement is necessary to protect the investigations of the Comptroller and Auditor General from a constitutional challenge. These arrangements are innovative. The special provisions concerning the functions of the Comptroller and Auditor General are germane to his functions set out in the Comptroller and Auditor General (Amendment) Act, 1993. However, giving him specific responsibility to look into the accounts of private individuals held by the financial institutions could raise doubts.

Under the Bill, if the Comptroller and Auditor General feels he needs information contained in such accounts, he may, at his discretion, appoint an independent auditor to examine them and report to him. The auditor acts on behalf of the Comptroller and Auditor General and subject to his control and supervision which is, as section 2(1)(c) states, "for the purpose of enabling the Comptroller to perform his functions under this Act". It is difficult to see how this could act as a brake on the functions of the Comptroller and Auditor General. On the contrary, the purpose of the provision is to obviate the risk of potentially lengthy and disruptive court challenges.

Deputy Noonan also asked me to comment on the nature of the absolute privilege provided for the chairman and members of the committee under section 11 of the Bill. Such privilege attaches to members for the purpose of the performance of their functions as such members. In this regard, the range of functions mentioned by Deputy Noonan would be encompassed within the scope of the privilege granted. However, I am advised that comments made on television, radio or in the print media cannot be understood as being "the performance of their functions as members". Accordingly, they are not covered in such circumstances.

Deputy McDowell says we have created "a tribunal by another name". I understand his concerns. In his closing remarks he outlined what was the role of the Oireachtas and the Committee and what should be the role of the Judiciary. This is a problem which has addressed the minds of Members of this House for a long time and the last Government tried to address it too in the Committee on Finance and General Affairs.

I am more in the Deputy McDowell camp on this matter than perhaps would be other Members of the House. There must be a clear distinction between what is appropriate to the courts and what is appropriate to be investigated by the House. I accept that it is difficult to draw lines appropriately. In general, we must be careful not to turn the Oireachtas or sub-committees of the Oireachtas into alternative courts.

Question put and agreed to.

Agreed to take Committee Stage now.