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Dáil Éireann debate -
Tuesday, 22 Jun 1999

Vol. 506 No. 5

Private Members' Business. - Prevention of Corruption (Amendment) Bill, 1999: Second Stage.

I move: "That the Bill be now read a Second Time."

I wish to share time with Deputies Durkan, McCormack and Ring.

Is that agreed? Agreed.

I am pleased on behalf of the Fine Gael Party to introduce this Bill which contains a number of important changes to an area of law which has remained unaltered for almost 100 years. In spite of good intentions and numerous promises since the foundation of the State, little has been done to modernise and reform our corruption laws. Corruption is not widespread in Irish public life. Allegations of corruption have been few. The vast majority of persons in the public sector and public life generally act with honour and a high degree of professionalism in carrying out their duties.

In introducing this legislation I am not by any means alleging that corruption is rife in the State. It is undeniable, however, that the close links between politics and business give rise to a perception on the part of many that they are not transparent and have the potential to be widely regarded as being contrary to the public good and, in many ways, unhealthy and unsavoury.

By international standards, Ireland is not perceived as being a corrupt state. According to the head of the Australian independent commission against corruption who addressed a select committee of the House last year, there are statistics to indicate that Ireland ranks fourteenth on the corruption perception index. This means that we are not as good as Denmark, which is seen as being the least corrupt, or Australia, which is seen as being the eighth least corrupt. We are, however, better than Pakistan and Nigeria which come in forty-ninth and fiftieth, respectively.

I am not sure how secure we can feel by examining this list in detail but there is no room for complacency. There is no overt public corruption on the scale of some Third World countries. It could be contended that our relatively high standing in the corruption perception index means that we have little to worry about. We could try harder but our performance is better than most and outstandingly better than some. We can hold our heads high on the international stage, at least according to some observers and experts.

Against this, however, the fact remains that our corruption laws are outdated and need to be redefined in the form of a modern statute. This Bill is the first to deal with corruption since 1916. It deals with bribery, the payment of secret commissions, payola and the misuse of information for personal gain. It is clear that corruption encourages criminal activity, undermines confidence in democracy, wastes public resources, distorts trade and fosters a black economy. Corruption retards economic development, debases standards and, ultimately, undermines confidence in the democratic system.

There is a large degree of public cynicism regarding the operation of business and public life. In spite of the many tribunals established during the past ten years, our corruption laws remain obsolete, outdated and even irrelevant. This Bill would ensure the law and the threat of prosecution can represent a strong deterrent against corruption in commercial business and public life.

As the existing 83 year old law stands, only one person in the State was convicted under our corruption code in the past 13 years. Strangely, neither the Department of Justice, Equality and Law Reform nor the Garda Síochána are able to supply any figures for the number of prosecutions or convictions prior to 1986. Such statistics are unavailable.

I raised the matter by way of parliamentary question to the Minister for Justice, Equality and Law Reform last year when I asked the number of prosecutions brought since 1960 in relation to offences under the Public Bodies (Corrupt Practices) Act, 1889, and the Prevention of Corruption Acts, 1906 and 1916, and the number of acquittals and convictions in these prosecutions. The reply stated:

I have been informed by the Garda authorities that the information requested by the Deputy in relation to the period before 1986 is not readily available and could only be obtained by the use of a disproportionate amount of staff time and resources. From 1986 to 1989, however, there were no prosecutions. In 1990, there were three prosecutions against the same individual. A nolle prosequi was entered in all three cases. In 1991 and 1992, there were no prosecutions. In 1993, there was one prosecution. In 1994, 1995 and 1996, there were no prosecutions. I am informed that the statistics for 1997 have not yet been published and are, therefore, not available.

I believe there was one since. Perhaps the Minister will confirm there was no more than one.

Against the background of growing public concern and cynicism towards business and public affairs, and with continued scandals and allegations of malpractice throughout society, this Bill is both appropriate and timely. The practice of bribery, corruption, payola and secret commissions strike at the very root of democracy and such malpractice shatters the confidence of the citizen in the rule of law. Such conduct whereby people make personal gain by dishonestly setting aside their duty of care and high standards is unacceptable and intolerable.

The Bill creates a number of new offences. For the first time bribery is being defined in statute, in response to the need for a modern statutory offence of bribery, and will include new offences of procuring a breach of duty by deception or by threats or intimidation. In common law, under which the law on bribery is covered at present, the specific offence of bribery is difficult to define. As a result it has evolved over time and judicial opinion has differed as to its applicability. This is why very few prosecutions appear before the courts.

A necessary ingredient for a successful prosecution under the Prevention of Corruption Acts, 1899 to 1916, is that the bribe or inducement should be offered or received corruptly. Nowhere is the word "corruptly" defined in legislation. Its meaning has been the subject of judicial interpretation and is less than certain. In this Bill the term "corruptly " is defined in law for the first time. Section 1 states: "‘Corruptly' means to destroy or pervert the integrity or fidelity of a person in the discharge of his or her duty, and shall include an inducement to act in a dishonest or unfaithful manner."

In the early part of the century when our corruption laws were framed there was a perception and a presumption in law that a higher standard of care and conduct was required in the public sector than in the private commercial sector. This was most appropriate for the time but it is out of date in the 1990s. The 1916 Act applies only where a bribe has been paid to a person in a public body. This is now inadequate having regard to the privatisation of many institutions in recent years with particular reference to those in the area of transport, communications and a wide range of other utilities.

Last week the House passed a motion on the Council of Europe agreement establishing the Group of States Against Corruption. This could be viewed as a worthy motion passed by the Parliament of the 14th least corrupt state, but the reality is different. The introduction of this motion was an act of breathtaking and cynical opportunism on the part of this Government which has a long wish-list in the area of law reform. Government inaction and inertia on criminal law reform in areas relating to bribery and corruption would surely push us well down the list of least corrupt states. Quite apart from matters of international standing, the lack of effective criminal law reform in this area is fuelling the engine of cynicism and disaffection with the political process.

It is disappointing that two years into the present regime progress has been slow and uninspiring. As I stated some weeks ago, it was unwise of Government to amalgamate the Department of Justice with the very successful Department of Equality and Law Reform. The newly-merged Department is not in a position to deal with the huge volume of work needed in the criminal and civil law reform areas. Once again I call on the Minister for Justice, Equality and Law Reform to establish a special arm of the Law Reform Commission to deal with criminal legal matters and to set targets for reports on the many areas of criminal law which require attention.

Coupled with this situation are the tens of Law Reform Commission reports produced over the years on which there has been no follow up action by the Government. It is essential that the Minister engages in a review of these reports and indicates which reports are to be acted upon and when, which are in the course of being acted upon, which are to be confined to the bin and why. Many of these reports have been gathering dust for many years with no action, intention of action or mention. That is why it would be helpful if the Government gave such indications.

In framing this legislation, Fine Gael is conscious of the widespread cynicism that exists towards politicians and the practice of politics. I hope the Government will accept the Bill on Second Stage. This would allow the legislation to be considered in greater detail on Committee Stage. If there are Government amendments, Committee Stage is the best forum to debate and deliberate on the issue.

There is ample evidence from the sharply falling graph of voter participation in elections that there is a growing apathy and widespread cynicism about the political process and its relationship with business and finance. There is a perception that for politicians, public servants and those in the higher echelons of the business and financial sectors, different rules, moral and ethical standards and codes apply to such people. Even when actually proven to have been "on the take", different sanctions seem to apply. This perception has become more widespread and has been openly discussed in recent years. However, its evolution is not of very recent origin, it reached its current proportions through the exposition of layer upon layer of financial and political scandals.

Perhaps some of the origins of this perception are to be found in the clientelism system of politics which operates. In the past, this system fostered the belief that unless one had access to those in the know, the citizen was unlikely to get anything done, and even the most basic individual rights of the citizen could be frustrated if the system was not used to good effect. Unfortunately, there are public representatives who still enthusiastically endorse this approach and cynically abuse the position by, for example, contacting the local superintendent regarding a road traffic offence or directly interfering with the workings of the Garda Síochána, the Revenue collector or the chief planning officer at local authority level. Unfortunately this practice was commonplace until very recently. The impression still exists in many quarters that without the help and direct influence of a TD, a person cannot get a job in the prison service, the Garda Síochána or the public service, thus compounding the impression that there are rules which can be circumvented by those in positions of authority and that there is an inside track accessible only to a chosen few who happen to be close to the public representative.

It is somewhat ironic that as clientelism is becoming an unpalatable part of the political process vis-à-vis public representatives and their constituents, the professional lobbyists, or public affairs consultants, as they prefer to be known, are making a very good living by fostering precisely the same system. They charge corporate clients hefty fees for making a few telephone calls to the political movers and shakers, and for performing introductions at meetings. This gives the impression that what they are selling is exclusive and special access. Wheels within wheels are still turning and, with each rotation, handsome dividends are paid to some.

I do not wish to imply that the perception that there is widespread corruption in politics, business and finance is based only on people's knowledge of the cynical manipulation of the system. The proliferation of tribunals of inquiry over recent years have uncovered evidence of real, not perceived, corruption. In many cases there was proof of collusion between those in the higher echelons of politics and business interests.

I wish to cite a number of examples. A well-connected friend of a former senior Government Minister buys some prime land in Dublin city centre, builds an office block and finds that an acquiescent Government is more than willing to pay him lots of taxpayers' money to rent his premises.

Second, a well connected businessman buys land on a college campus and fortuitously finds that an acquiescent Government speedily provides another college with the resources to buy the land and to provide the friend with a hand some profit courtesy of the taxpayer. This story has never been investigated and the truth has never been discovered, in spite of the fact that there are many in this House who know exactly what went on, the key players, when it went on, who was involved, how and why. There are Ministers serving in Government now who served in Government when these deals were struck. Members of the present Government are in a position to clarify the facts which have not yet been uncovered.

Third, a beef baron, with impeccable political connections, was alleged to have presided over the abuse of a monopoly position while at the same time was suspected of questionable practices, taking advantage of the European taxpayer. Some years later, many of those featuring highly in the report of the beef tribunal report are still operating successfully, yet the scandal remains that only two employees at a very low level of operation were convicted of malpractice by the courts.

Fourth, a US businessman hires a "well connected" party fund raiser to act as a broker and facilitator in a passport application. The American makes a payment termed "an interest free loan" to the party via the broker and the passport issues in due course. The evidence of the golden circle shines brightest in the days of the 1980s and early 1990s. The GUBU era was possible only because Mr. Haughey was facilitated. The facilitators were not only the yes men and women in his own party who turned a blind eye because they were anxious to be part of the glory days, but also large business and banking interests who saw, rightly, that their own empire building could be accelerated by giving or getting the nod from "The Boss".

Current tribunals are investigating allegations of corruption. Corruption seems to have been evident both high up and low down. It did not only involve the rich and influential but those who sought to be rich through being influential. These are the indulgence sellers of the 20th century. For a small down payment, salvation can be assured. Corruption – evident or perceived – is corrosive. It affects society adversely. It leads to widespread cynicism and ultimately undermines and shatters the pillars and basic principles of democracy.

There is a huge degree of public cynicism regarding the operation of the many tribunals since 1991. They are seen to have had little impact in spite of their huge cost to the taxpayer. Much of the work of the current tribunals could be made easier if there was a code of law to which they could refer detailing clearly defined offences of a criminal nature. The aim and objective of all Members in this House must be to ensure that a clear line is drawn between politics and business and that this line is real and workable, not appar ent and blurred. The ethics in public office legislation, introduced by the Rainbow Government, went some way towards identifying that line but more is needed. This Bill can go a long way towards redressing the imbalance by introducing significant and necessary reforms.

The main elements of the Bill are, first, a new statutory offence of bribery, punishable by seven years in prison. The offence of bribery must have the following characteristics—

I wish to remind the Deputy that 25 minutes of the 40 minutes allocated have elapsed. A number of other Members wish to speak.

I will conclude as quickly as possible. The offence of bribery must have the following characteristics – dishonesty, intent, giving, offering or promising a benefit to a donor, a recipient and, in most cases, an agent or third party.

Second, the Bill provides for a new offence of offering or receiving a secret commission, applying where an agent takes a payment from another as an inducement or reward for doing any action in relation to the business of a principal. A banker, for example, who corruptly receives money from a customer as an inducement for giving the customer preferential treatment when approving certain financial accommodation or a loan or settling an account, would be guilty of receiving such a secret commission. Likewise, the customer would be guilty of an offence. This section would also cover many in the financial services sector advertising and offering to arrange loans for people at high and totally unfair commission.

Third, a person – for example, the chairman of an interview board or an examiner – who is engaged in the business of making disinterested selections or examinations in respect of a priority or service, and where that official dishonestly asks for or receives a benefit for himself or herself, shall be guilty of an offence which is, in effect, "payola". Fourth, a public official who gains an unfair benefit from information at his or her disposal shall be guilty of an offence provided the information is used in a dishonest manner.

The Bill contains a section outlining the circumstances under which a defence may not be offered. This is unusual but necessary because of the widespread perception that what is regarded as common business practice and, perhaps, routine and accepted behaviour does not amount to corruption and is, therefore, perfectly within the law. The burden of proof shall be placed on the shoulders of a person charged in any action under the Bill. This is a fairly radical departure which will undoubtedly be controversial but it is necessary having regard to the obvious difficulties in proving a case beyond reasonable doubt.

All Members of the House have recently been on the hustings in the course of the European and local elections as candidates or canvassers. I am sure the vast majority met members of the public who showed polite but complete indifference to their exhortations to vote. They did not care even to engage in argument or debate. Many met constituents who were angry and who said: "You are all the same up there – a bunch of gangsters", "you are on the take" and "you are only in it for the money". How many, struck by those comments and stung by the accusations, responded by merely passing the buck and acknowledging that "someone somewhere should do something about it"? To be honest, how many of us were surprised that these allegations were made?

We are all culpable; we are all guilty. We are not guilty of corruption or acquiescence with or facilitation of corrupt practices but we are guilty of not rooting it out. We are guilty of hand wringing and verbal condemnation and of the "something must be done" syndrome. It is interesting to note the catalogue of promises made by the Taoiseach and his Ministers over the past 12 months on tightening up our corruption code. On numerous occasions, stronger ethics legislation and reform of our criminal law in the area of white collar crime has been described as "imminent", "in the course of preparation" and "under review". However, two years into the current Administration and with the Civil Service and parliamentary draftsmen available to it, the Government has failed to deliver. In some cases, it has been shown that the Government has a difficulty complying with the legislation that is already in place.

We must give power to the Garda Síochána and the Director of Public Prosecutions to apply sanctions. A tightening up of our corruption code must be accompanied by an increase in resources for the Garda Síochána to enable its members to detect fraud and corruption. Every effort should be made on the part of the State to ensure that proper and adequate resources for this special Garda fraud unit are appropriate.

As recently stated by the former Taoiseach, Dr. Garret FitzGerald, three questions currently dominate the political scene. Will the Celtic tiger survive? How can its benefits be more evenly distributed? Finally, an ethical question, to what extent has financial misbehaviour corrupted society and its political system? The passage of this Bill will be a clear signal that this House has, at last, got its political priorities right and is determined to bring our corruption law up to date.

Acting Chairman

The remaining ten minutes will be shared by Deputy Durkan and Deputy McCormack.

I am delighted to have this opportunity to speak on the Bill. I thank my colleague, Deputy Flanagan, for bringing this legislation before the House and for facilitating a timely debate on this issue. It is timely for a number of reasons, including those already outlined by Deputy Flanagan.

The world appears to be becoming smaller, particularly with regard to trade and work, as a result of the introduction of new technology. It is imperative, therefore, that legislation appertaining to corruption or fraud is updated. As Deputy Flanagan pointed out, we have not had an update in this area of law since 1916. While we have achieved the position of the 14th least corrupt country in the pecking order, I am not sure that puts us in an advantageous position. I assume some of the other countries in that pecking order are sufficiently adept to make it almost impossible to get past a certain level. It is important to examine the need for the legislation and that we pass this Bill.

No one can banish malpractice or eliminate it entirely. However, we can introduce legislation which makes it clear to perpetrators that they can and will be caught and dealt with. It is also important at this stage to be able to give a clear message to people, whether in the public or private sector, those in public life and those in business that certain rules, guidelines and regulations must be complied with in a rigid fashion and, if not, that there is a price to be paid. If we do not send out that message clearly, we are open to the suggestion that we are part of a major scam, that we do not have the guts, determination, dedication or intention to pursue corruption. As Deputy Flanagan said, that would leave us open to the charge that all politicians are the same, that we are part of the culture which allows corruption to happen and that we are on a gravy train enjoying its benefits regularly. That is insulting to Members and to the vast majority of people in the public and private sectors.

However, we are a small country and the world is a much smaller place than it was. The advent of technology makes it easier than it was 25, 50 or 60 years ago for a person to use information at their disposal to their advantage or that of their friends. It is important this legislation is given an airing and is given the necessary teeth to ensure that, when put in place – I hope it is accepted by the Government – it gives a clear signal to those inside and outside the House that we are serious about proceeding in this direction.

To be fair to the people, other countries have a strange reputation in terms of the application of the law and they would be familiar with corruption. That does not mean, just because we happen to rank more highly than such countries, we should become complacent and because several countries are worse than us. We should try to set the highest possible standard and put in place legislation to encourage those for whom it is intended to stay within its guidelines.

Corruption has many facets. Deputy Flanagan mentioned interviews as an example. An interview in Ireland is not the same as one in the United States because it is a small country with a small population. A poor, unfortunate person coming before an interview board in either the public or private sector must wonder whether they have an equal a chance with everyone else. Looking at interview boards, I would have reservations as to whether they would. It is probable that someone on an interview board knows a candidate and either likes or dislikes them or knows one of their relatives and either likes or dislikes them. On that basis, it could well be that a person in such a situation would not have an equal chance. That cannot be allowed. It may also be the case that the interviewer is honest and above board and does all that he or she is supposed to do, but that the interviewee sees himself or herself as a victim and reaches the conclusion that all interviewers are the same because the individual was not successful.

I strongly support the proposals in the legislation. There is a need to focus attention on the issue. I hope the Government takes it on board and supports it to ensure we are seen to do something to give a signal to those at whom the Bill is aimed which will, in turn, be of benefit to us all.

I support the Bill. Its necessity is probably due to the scandals which have unfolded in recent years. The public may have become immune to trials, tribunals and investigations, but were it not for the accidental discovery of some of the scandals in recent years, an acceptance of the culture that money could buy any favour would by now have gripped the country. Disclosures of events show that there was a ready acceptance of this culture by previous Fianna Fáil Governments. The actions and reactions of the Government suggest it also accepts this culture.

Two examples highlight this. The first is the EU Commissioner, Pádraig Flynn, and the alleged payment of £50,000. What amazed me about this was not whether the money was retained or handed over to Fianna Fáil but the lack of concern on the part of the Taoiseach about the reason for the payment in the first place. The second in the case of the alleged two payments of £30,000 to the former Minister, Ray Burke. No astonishment or condemnation was expressed by the Taoiseach about such large sums of money changing hands. This leads one to believe that this was an accepted practice within Fianna Fáil, that it was the done thing. Perhaps the establishment of the tribunals, the subsequent exposure of such activities and legislation such as this Bill will help establish in the public mind that such behaviour is unacceptable and must end.

The greatest opportunity for corruption appears to lie in the planning process where rezoning or the granting of planning permission can greatly enhance the value of land. This should not be confused with councillors' legitimate right, when dealing with county or city development plans, to rezone land in an orderly fashion. That is a separate matter. Property development is occurring at an ever increasing rate and there is great pressure on planning authorities to deal with planning applications quickly and positively. This can lead to checks and balances not being applied properly.

Planning departments in cities and counties throughout the country are hopelessly understaffed. In County Galway, the planning authority is dealing with twice the number of planning applications it dealt with two years ago. A similar situation applies in Galway city, yet the planning authority only has an additional two planning officers. It is hopelessly understaffed and nothing much can be done about it. To employ a planner on a permanent basis, permission must be sought from the Minister for the Environment and Local Government whose responsibility this is, the Local Appointments Commission advertises the position and holds interviews. The process can take up to two years. The Minister should give councils the necessary staff so that the pressure on planners will be eased.

This is a sensitive area which, because of the pressure on planning authorities, is open to being abused if the will is there to do so. Most councils, because of the pressure under which those people work, employ temporary planning staff who move into the private sector at the first available opportunity, thereby creating a huge turnover of staff. That is no way to operate such a sensitive operation.

A number of the scandals and a certain amount of the alleged corruption exposed in recent years relate to planning matters. I urge the Minister for Justice, Equality and Law Reform to convince the Minister for the Environment and Local Government of the need to provide councils with adequate staff to allow them to deal competently with the increasing number of planning applications with which they are obliged to deal.

I welcome this opportunity to discuss the proposal by the Opposition to amend the Prevention of Corruption Acts. It goes without saying that everyone in this House, across all parties, would, in principle, support any measure which would improve the law on corruption or the implementation of that law. Only last week I secured the agreement of the House to the terms of a Council of Europe Agreement establishing the Group of States against Corruption, under which participating states, including Ireland, will have their adherence to Council of Europe anti-corruption standards monitored. The question is not, therefore, whether this House supports improvements to the law on corruption, because I take that for granted, but whether the proposal before the House will actually improve that law. I believe it would not, and that, in certain respects, it would weaken existing law.

Before I give my detailed views on that, I will recall for the benefit of the House that I am preparing a Prevention of Corruption (Amendment) Bill which will enable Ireland to become a party to three important international agreements on corruption. The Bill will significantly expand the scope of the Prevention of Corruption Acts to cover categories of persons not covered by it at present, for example, Members of this House and Members of the Seanad. It will also make important technical improvements to the law.

As the House will recall, it agreed earlier this year to my suggestion that my proposals should be sent to the Oireachtas Joint Committee on Finance and the Public Service. We had a useful exchange of views with the committee on my proposals and I was grateful to its members for their positive reaction and for some technical suggestions they made. The Bill is being prepared by the parliamentary draftsman and I expect to be in a position to publish it later this year.

Let me turn now to the proposal before the House which is deeply disappointing. I say that while making full allowance for the fact that this is a Private Members' Bill prepared without the resources or advice available to the Government. I say that not from any negative attitude on my part towards Private Members' Bills – in fact I believe that in Opposition I did what I could to highlight their importance in the process of law reform – but based on an objective analysis of the proposals.

I believe that every fair minded person who listens impartially to what I have to say will conclude that my criticisms are well based and I ask Deputies opposite not to instinctively reject such criticisms, just as they would not like the Government to instinctively reject the Bill.

That is what the Minister is doing.

Section 1 provides for the definition of words used in the Bill. The first definition sets out the circumstances in which an advantage is accepted or conferred corruptly, namely, if it is an inducement or reward to act or refrain from acting in any way which has a substantial tendency to encourage a person, or his or her agent, to act in breach of his or her duty. The definition is based, as far as I can see, with some minor adjustments which are of no consequence, on a provisional proposal of the UK Law Commission at paragraph 8.20 of its consultation paper on corruption. The purpose of the proposal was to spell out what is actually meant by the word "corruptly", which is not at present defined in the Prevention of Corruption Acts. In the event, the Law Commission in its final report recommended an entirely different approach.

A proposed key definition in the Bill, therefore, is based on a provisional proposal of the UK Law Commission which the commission itself has rejected. It is difficult to imagine a more authoritative rejection. The House is being invited to put into the heart of our Prevention of Corruption Acts a concept which, on reflection, has been abandoned by the very experts who provisionally proposed it. If the proponents of the Bill were willing, as it seems they were, to accept the provisional proposal, why do they not now accept its considered rejection? This is so because there are compelling reasons that the proposal is inadequate.

The Bill would define the corrupt acceptance or conferral of an advantage in terms of an encouragement to a person, or his or her agent, to act in breach of duty. This seems, as it seemed on reflection to the United Kingdom Law Commission, to be too limited. It would not cover many situations which I believe the House would wish to be covered, for example, where payments are made to a person in a public position even though no act is performed which is actually in breach of his or her duty. Apart from the obvious impropriety of such payments, which all of us would instinctively accept, in effect they constitute an incentive to a person to act in accordance with duty only on receipt of payments or, to put it another way, an incentive to act in breach of duty in the absence of continued payments. This proposed linkage between corrupt payments and breach of duty is not to be found in the existing Prevention of Corruption Acts and its introduction would in my view substantially weaken, not improve, the law.

Section 1 also seeks to extend the definition of "agent", which is already defined in the Prevention of Corruption Acts. The proposed definition is based, as far as I can see, and again with some minor adjustments which are of no consequence, on a provisional proposal of the United Kingdom Law Commission at paragraph 7.17 of its consultation paper. Again, the Law Commission, having considered the matter further and taken into account the comments on its consultation paper, came to the view in its final report that its provisional definition was inadequate and it proposed a significantly different definition. Once again, therefore, we have the extraordinary situation where the House is being asked to give effect in law to a proposal which has been rejected by the very experts who originally formulated it.

I accept that the Opposition has every right to adhere to provisional expert proposals even where the experts make different final recommendations. Surely I am not alone in finding it odd that the proponents of this Bill apparently accepted the provisional proposals of experts but rejected their final, considered recommendations.

Section 2 contains a proposed new offence of bribery which, as far as I can see, is based on a provisional proposal of the Law Commission at paragraph 8.102 of its consultation paper. Deputies will by now not be surprised to hear that the Law Commission rejected this provisional proposal in its final report, preferring a significantly different approach. Leaving aside minor drafting differences which are of no consequence, there is, however, one difference of substance between the provisional recommendation of the Law Commission and section 2.

Section 2 deals not only with the bribery of an agent in connection with the performance of his or her duties, but with the bribery of any person in connection with the performance of his or her duties. There is a reference in the Law Commission's proposal to a person, as distinct from an agent, but only in the context of giving or taking a bribe in connection with the performance by an agent of his or her duties. I am not sure if this distinction escaped the proponents of the Bill, or if they really mean to apply the law on corruption to everyone.

On balance, I am inclined to think that they did not because if they intended the offence to apply to everyone, clearly there would be no need to refer in the section to agents. In any event, no matter which interpretation is put upon it, it is clear that the proposal has not been properly thought out. Even if the thinking behind the section were clear and the drafting reflected the intention of the Bill's proponents, we should not forget that this proposal is based on a provisional recommendation of the Law Reform Commission, which it has rejected itself.

Section 3 proposes a new offence relating to secret commissions. It seems to contain two separate offences and only the first of these, in subsection (1), is described as the offence of receiving a secret commission. Subsection (1) makes it an offence for an agent corruptly to take a payment from another person as an inducement or reward for performing any act in relation to the business of a principal. The offence is limited to receiving a secret commission, as distinct from giving a secret commission and, although the offence is described as relating to secret commissions, it contains no requirement of secrecy. The offence is committed even if payment is openly accepted. I mention these points only out of interest because the conduct described in subsection (1) is in any event fully covered by existing law. It is barely conceivable that subsection (1) was not intended to constitute an offence but was in some way meant as a general description of the offence set out in detail in subsection (2). Even if this were the intention, however, the wording of subsection (1) clearly creates a specific offence.

Subsection (2) would make it an offence for a person to give a gift or consideration to an agent without the full knowledge or consent of the agent's principal essentially for doing anything in relation to the affairs of the principal. It would also make it an offence for an agent to accept such a gift or consideration for any person other than the principal, although here the knowledge or consent of the principal is irrelevant. It seems this proposed new offence is based on the Australian Secret Commissions Act, 1905. While I make no criticism of this Australian legislation, some might think it paradoxical for an Opposition, which regards Irish legislation on corruption as outdated, to propose reform on the basis of legislation of another State dating from 1905. It is not simply a question of the antiquity of the proposal, with which I do not have a problem but which the Opposition should have a problem if it is to be consistent, but rather of seeing how this proposal might fit into Irish law. The 1905 Act may very well have been relevant to the circumstances of Australia at that time, but at around the same time, a year later, what is still one of the main Irish Acts on corruption was enacted. To transplant one onto the other nearly a century later seems to be questionable. Apart from anything else, this provision would overlap very substantially with existing law.

Section 4 would create a new offence of abuse of public position. It would apply to any person who offers the public disinterested selections, examinations or opinions in respect of property or services and who dishonestly seeks or obtains a benefit in order to influence those selections, examinations or opinions. It copies a recommendation of the 1995 Australian report of the Model Criminal Code Officers Committee on Theft, Fraud, Bribery and Related Offences.

I note that the offence is based on dishonesty rather than corruption. That difference and its implications would need to be explained. The UK law commission considered whether dishonesty ought to be an element in offences of corruption and concluded that it should not be. I am not suggesting that the law commission's opinion is conclusive, but the detailed consideration it gave to this issue would need to be carefully considered. The commission also considered the issue of corruption by persons performing public functions and made recommendations in that regard, recommendations which do not include the Australian proposal, although the commission was aware of it. This issue is one which I am examining in the preparation of my proposals for a Prevention of Corruption (Amendment) Bill.

Section 5 would create a new offence of abuse of public office. It also copies a recommendation of the same 1995 Australian report. The offence would apply to any public official who dishonestly exercised any function or influence arising from his or her office, or failed to exercise any such function, or used any information gained from the office to obtain a benefit or cause another person a loss. The scope of the offence is not clear in that the phrase "public official" is not defined and, as in the previous section, the word "dishonestly" is used. Nevertheless, I accept this is a subject that deserves attention and I will study it in the preparation of my legislative proposals on corruption.

Section 6 extends the presumption of corruption, which currently applies only to the obtaining of Government contracts, to proceedings for any offence under the Bill. The UK Law Commission studied this question carefully, UK law being the same as Irish law on this point, and not only did it not recommend the extension of the presumption but it recommended its abolition. Any proposal to extend it in our law would need careful consideration not only from a policy point of view but also from the perspective of the Constitution and the European Convention on Human Rights.

Section 7 rules out certain defences to the offence of bribery created by section 2. It is based, with some minor differences, on a proposal of the UK Law Commission in its consultation paper, at paragraph 8.58. It is, however, based on a profoundly mistaken view of the purpose of the law commission's proposal. In making its proposal, the law commission was simply rejecting the idea that certain specified grounds should be a defence to a charge of corruption. Implementing the proposal does not require positive statutory intervention. It merely means that no such defences should be positively provided for. Section 7, therefore, is simply not needed.

It might be noted that while the law commission originally, in its consultation paper, identified five separate grounds which, in its view, should not be defences to a charge of corruption, it changed its mind on one of the grounds, coming to the view in its final report that the consent of a principal should after all be a defence. The law commission proposed, therefore, that such a statutory defence should be provided for, which is the opposite of what is contained in section 7.

I have no comments on the remaining two sections of the Bill, which deal with penalties and the short title and I will, therefore, sum up my reaction to the Bill in general. I agree with the proponents of the Bill that corruption is a matter of the utmost importance. I am sure every Member would agree on that. I also agree that the law on corruption would benefit from reform, although I would not like the impression to be given that this House has neglected reform of the law on corruption. Significant changes were made to that law in the Ethics in Public Office Act, 1995, and no doubt more could have been done in that Act if it had been thought necessary at the time. The question is whether this Bill is an adequate response to the need for reform. I defy anyone to answer that in the affirmative. The Bill does not even attempt to deal with the main purpose of the proposals I am preparing, which is to make major improvements to our law so as to meet our international obligations.

Even in the areas it attempts to tackle, it does so partly on the basis of expert provisional recommendations which those very experts have subsequently rejected. If their own provisional recommendations are not sufficient for the UK Law Commission, why should they be sufficient for this House? Other provisions in the Bill are based on a mixture of old law and new untested proposals from another state. Some provisions overlap existing law, other provisions are based on misunderstandings, and others still are unnecessary.

Members of this House do not demand or expect perfection, and they are glad to be able to contribute to the improvement of a Bill by way of amendment. Members are, however, entitled to expect legislative proposals to at least be adequate, to at least constitute a basis for reform. This Bill does not constitute such a basis. I cannot see how it could be put right even with the most extensive amendment.

I will shortly put proposals before this House to improve the Prevention of Corruption Acts. Deputies will welcome my proposals as a significant reform of the law on corruption. I will listen carefully and respond positively to any suggestion, from whatever side of the House, for further worthwhile changes. If this Bill provided the basis for the change required I would have wholeheartedly accepted it, but I cannot, for the reasons I outlined.

Deputy Flanagan and to a lesser degree, Deputy McCormack were selective and displayed signs of premature amnesia when they outlined alleged acts of impropriety to the House. Tribunals are dealing with these matters and it would be wrong of me to go into any detail on same. I will await the outcome of the tribunals' findings.

With regard to the old chestnut that the merger of the Department of Justice with the Department of Equality and Law Reform has somehow resulted in less legislation coming before the House, from either Department, I again lay that to rest. In the past two years, the Department of Justice, Equality and Law Reform has produced more legislation under my direction than at any time in the history of the State. For example, as regards the performance of the equality and law reform section of the Department, I defy anybody to establish that it does not favourably compare with that under my illustrious predecessor, the former Deputy, Mervyn Taylor. More than one third of the legislation which has been brought before this House in the past two years has emanated from the Department of Justice, Equality and Law Reform. That is a tribute to the staff in the Department and I am pleased to be politically accountable for such major reform in our laws.

It is untrue, as some have sought to suggest, that in that period there has not been substantial criminal law reform – there most certainly has been. The Criminal Justice Act which was passed recently is a hallmark in the evolution of the battle against drugs in society. The Child Trafficking and Pornography Bill represents an assault on one of the most insidious and heinous crimes of all. Other legislation which has been enacted has served to buttress our criminal justice system at a crucial period in its history. Planned legislation is of a revolutionary variety. The new sexual offences Bill which is being prepared will represent the greatest change in the law on sexual offences since the foundation of the State. The new criminal law (fraud offences) Bill which will attempt in a comprehensive way to redefine old crimes, represents the most radical step in the evolution of our criminal law in so far as it relates to dishonesty.

It must be remembered that definitions of larceny here go back to the 1916 Act. Other definitions dealing with such matters as forgery, embezzlement and counterfeiting go back even further. Therefore, the new legislation must clearly reflect modern society and perhaps even more importantly it must be capable of being understood by any man or woman who serves on a jury. Any individual who dishonestly makes a gain or causes a loss will be dealt with in a straightforward way by the criminal justice system.

These are just some of the reforms planned. The list I outlined is by no means exhaustive. However, it is fundamentally unfair of commentators in this House, who must know better, to try to create the illusion that a Department which has never flowered better in its legislative output is doing the opposite. It would be understandable coming from those who do not know any better or do not want to know any better. However, it is a bit rich coming from people who know better. It is clear that the law on corruption is inadequate. If that was not so I would not bother to frame the legislation which is in the process of being drafted.

In summary, many of our offences relating to fraud are hopelessly outdated which is why they will be changed. By the end of the life of this Government, history will show that the period when this Government was in office was the most revolutionary and radical, in terms of overhauling criminal law, since the foundation of the State. Unfortunately, I cannot accept this Bill because of its inadequacies.

I wish to share my time with Deputy Moynihan-Cronin.

Is that agreed? Agreed.

I welcome the opportunity to speak on the Bill, although from listening to the Minister I am not sure if there is any hope it will get further than Second Stage. I compliment Fine Gael on putting so much effort into an area which is of considerable importance and interest to many people. I wish to outline some of the reasons we will be supporting the Bill and to point out some of its features which we will seek to amend if it is reaches Committee Stage.

The Bill has been tabled to help politics, public life and business move forward in the healthiest possible way, by increasing transparency and eliminating acts of corruption. The motivation behind the Bill is firmly grounded in the fall-out of the events leading up to the establishment of the tribunals. No doubt, during the run-up to the recent elections, Members will have sensed and will have had communicated to them the level of public disquiet about, and distrust of, our political system. This was referred to by Deputy Flanagan in his opening remarks.

The low voter turnout, which was as little as 26 per cent in some polling stations, is a sad reflection on our modern democratic society. We, as legislators and public representatives, must consider proposing new methods of maximising voter turnout. One such method is to restore trust and confidence in our system. The damage done to the political system by a handful of public representatives, some of them no longer Members of this House, has implications for us all. It is only through the introduction of tough, anti-corruption laws that we can reverse this damage.

Of course, corruption is not limited to politics. Business, particularly big business, has been tainted by malpractices which have come to the fore in recent times, especially in the banking sector. The Labour Party is supporting this Bill because we believe the overriding motivation behind it is to underline bribery and secret commissions as serious offences that will not be tolerated in public offices or business.

The motivation of people in influential positions must, above anything, be the public good. The acceptance and giving of bribes to secure personal favours, often to the detriment of others, is not a feature of public life with which I want to be associated. I believe that the majority of Members of this House and the business community would support any measure which would reinforce their integrity.

Nonetheless, this legislation is by no means perfect. As I have already said, in the event of the Bill reaching Committee Stage, my party, following legal advice, will be tabling a series of amendments to it. These are mainly technical amendments and I hope they will help to enhance the legislation.

I am slightly put out by the fact that the Bill completely ignores section 38 of the Ethics in Public Office Act, 1995, which updated the Prevention of Corruption Act, 1916. Section 9 of this Bill, which addresses the collective citation of the Bill, completely ignores the 1995 Act. I would be interested to know if this was a genuine oversight by the framer of the Bill or if there is an overriding reason for failing to include it. Perhaps Deputy Flanagan will address those points in his reply.

The Ethics in Public Office Act, 1995, was introduced by my colleague, the former Minister of State, Eithne Fitzgerald, against strong odds and strong opposition at all levels to getting it through the Oireachtas. It amended the anti-corruption legislation to take into account, among other matters, the activities of Ministers and ministerial special advisers.

Furthermore, the 1995 Act also redrafted the presumption of corruption, which arises in certain circumstances and which was initially set out in section 2 of the Prevention of Corruption Act, 1932. The section states: "Any money, gift or other consideration received from a person seeking a contract from a Minister shall be deemed to have been received or given corruptly, unless the contrary is proved." This Bill deals with the presumption of corruption in a similar way. A section of the Bill provides that if a gift was received from a person as part of an inducement to secure a special reward or favour, it is corrupt unless proven otherwise. If my understanding of this section is correct, I must again question why the amending sections of the Ethics in Public Office Act have been overlooked.

On a more minor point, I would like to see greater definition of some of the terms used in the Bill. The Minister has referred to this. For example, in section 5 I would like to know what precisely constitutes a public official. Nonetheless, despite our concerns, I believe that, through amendments on Committee Stage, we can iron out the technical problems with the Bill in its current form.

When launching the Bill, Fine Gael pointed out that only one person in the past 13 years has been convicted under our current corruption code. In a sense, this sets corruption apart from any other crime. Corruption, which may drastically influence planning decisions in favour of large developers over the needs of communities, is somehow a lesser crime than one where a petty criminal tries to secure the means to purchase his or her next fix. Corruption in many guises leads to criminal behaviour and helps the black economy to flourish. Despite the fact that members of the public believe that corruption is widespread and, as Deputy Flanagan said, are saying, "You are all at it" and "You are all the same", it is ironic that nobody seems to have been found guilty of cor ruption – I should say "as of yet", until the tribunals complete their inquiries.

Corruption is predominantly a white collar crime. The fact that only one person has been charged with this offence in the past 13 years raises the question of whether there is one law for the rich and another for the poor. Our prisons are bulging at the seams with convicted heroin addicts who were sentenced because they robbed £30 or £50 for their next fix. I am not saying it is right for them to rob, but why should others who have taken bribes to carry out favours which were not part of their terms of duty be let off the hook, particularly if the action for which they accepted bribes inflicted hurt or damage on others?

The Bill brings the penalties for the crime of corruption into line with those for other crimes. For example, a fine of £1,500 or a 12 months prison sentence is proposed for summary convictions, which is in line with what is now perceived to be the maximum penalty imposed by the District Court.

Although I have made some slight criticisms of the Bill, which mainly relate to technical details, I thank Fine Gael for using its Private Members' time to table it. I am surprised the Minister found the Bill so reprehensible that he could not support it or suggest amendments to it, which I would have thought was the purpose of this Private Members' time. In my view, the more we can do to legislate for a fairer and more just society, the better for us all.

I too welcome the opportunity to contribute to the debate on Deputy Flanagan's Private Members' Bill which is before the House this evening.

Corruption and the public belief that corruption exists in business and in public life in Ireland is doing untold damage to public confidence in the institutions of the State and society as a whole. It is right and proper that our legislation be reviewed and updated to ensure that our laws are stringent enough to deal with corruption, bribery and secret commission in any form in which it appears. In this respect this Bill is welcome. It updates our existing laws which date from 1916 in respect of corruption and bribery. As has already been stated many times tonight, the fact that only one person in the State was convicted for corruption in the past 13 years is proof positive that both our legal framework and our enforcement regime are in need of radical overhaul. It is the responsibility of the Oireachtas to ensure that both aspects of the matter are addressed in a forthright manner and that a real assault on corruption, backhanders and sharp practices is undertaken.

Let me dwell for a moment on the subject of enforcement of our laws, particularly as they relate to white collar crime. For most people here, the mention of the word "crime" conjures up images of sinister gangs involved in the drugs trade, protection rackets or other such criminal behaviour. Our perception of crime and of criminals is heavily reinforced by these images which are also widely disseminated through television and other media.

However, white collar crime is also prevalent in our society today. In some respects it is more insidious than many so-called ordinary crimes. In much white collar crime it is difficult to point to an individual victim, to a citizen whose rights have been trampled on by those with no regard for the law. Let there be no doubt that white collar crime does create victims, from the unsuccessful job applicant who has been passed over because the selection procedure was rigged to the companies bidding for a contract whose tenders were never given a chance because they did not grease the wheels in the manner to which some people have become accustomed. These people and organisations are victims of white collar crime.

On a wider level, all citizens of this State, and the State itself, are victims of crimes of this nature. Recent revelations have proved that tax evasion was rife in many businesses in Ireland over the recent past. In the 1980s and early 1990s, while the Government was forced to make drastic cutbacks in public expenditure, cutbacks that often hurt the most vulnerable sector in our society, leading businesses and individuals operated on the basis that the tax laws were an annoying obstacle that could be got around. In many instances there was no connection between the payment of tax and the social services that the State made available to its citizens. The "I'm all right, Jack" mentality dictated many decisions made in some of the most important boardrooms of this country. This avoidance of tax at a time when thousands of citizens suffered from cutbacks in essential services, was a form of robbery. The victim may not have been as readily identifiable as the elderly lady who is robbed of her handbag on the street, but let there be no doubt that white collar crime of the nature that has gone on here has real victims. People's basic supports were cut back while people who should have paid their fair share flouted the law at every turn.

It is important that this House clamp down on this type of crime and ensure that the Garda and the relevant authorities have the resources necessary to deal effectively with allegations and investigations.

The definition and scope of the term "bribery" has never been defined in Irish law. Judicial interpretations at different stages since the foundation of the State have formed the most reliable basis for interpretation. I welcome the fact that this Bill defines "bribery" in our primary legislation. Bribery and corruption undermine the basic principles of equality and fair play which should inform all decisions, public and private.

The recent privatisation of a number of State firms and the increasing liberalisation of a number of important markets, such as telecommunications and electricity, necessitate a review of our corruption laws. Traditionally the legal thrust of our bribery laws has been concentrated in particular on the behaviour of public officials. However, the increasingly open liberalised economy which we are in the process of creating must also be protected against corruption and bribery. Individuals in business who are guilty of nefarious practices must be investigated thoroughly and prosecutions must be brought before the courts.

In this House, over the past four years in particular, we have spent much time and energy establishing regulatory regimes to ensure that a level playing pitch is in operation for all entrants to our new liberalised markets. This work cannot be undermined by under-the-table payments aimed at gaining a competitive advantage. Our laws defining bribery should apply to those in the public and private sector alike.

This Bill, in conjunction with a recent report on company law compiled by Mr. Michael McDowell, SC, represent a significant advance in how we deal with white collar crime. The report on company law has at long last drawn the attention of the Government to the widespread flouting of legal requirements passed by this House. In many circles, registration with the Companies Office and the regular filing of company returns were unheard of practices. The new vigour which the McDowell report will engender should put an end to this behaviour and ensure that our business sector complies with the requirement for transparency and openness that the law of the land demands.

While I support this Bill in principle and look forward to the debate on Committee Stage, it may be valuable to review our laws on corruption and bribery in the wake of the final report from the tribunals which are currently sitting. Ordinary people are outraged by the fact that, despite the amount of wrongdoing which has been uncovered, the main players in these scandals have avoided prosecution in the courts. The fact that the most high profile prosecution to emanate from the beef tribunal was against the journalist who originally broke the story still rankles with me and with many others in this House. In the wake of the tribunal reports, we should undertake a wholesale review of our laws relating to corruption and bribery.

I note that in section 5 – the section dealing with abuse of public office – specific reference is made to an individual who dishonestly "uses any information he or she has gained arising out of his or her public office". This section touches on a matter that is much on the minds of people in this House. My colleague, Senator Pat Gallagher, will soon publish a Bill relating to lobbyists which represents a major step forward in establishing a legal framework in which lobbyists can work. Section 5, although its scope is wider than lobbyists, also addresses this and I urge the Government to act on the remarks the Taoiseach made at the end of Question Time last week when he outlined the major issues that need to be tackled in this regard and to look favourably on the Bill soon to be presented by Senator Gallagher.

We need to update our laws on corruption. Deputy Flanagan's Bill deserves to be given a Second Reading and debated in Committee. I urge the House to accept it.

Debate adjourned.
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