Leaders' Questions.

Yesterday we heard the Taoiseach, in his defence, speak strongly of the manner in which he conducts his business as Taoiseach of the country and to the effect that he never betrayed public trust and did everything in accordance with the highest of standards. Yesterday we also heard from TG4's Ms O'Connor of the method by which funds were despatched for a marine access infrastructure in Kenmare, County Kerry, despite the fact that on 4 December 2000, the assistant secretary of the Department of the Marine and Natural Resources, in a memo to the secretary, said that the Taoiseach was anxious that a letter would issue without delay and that he took the view that such a letter issuing without appraisal of the project involved would involve a letter of comfort, which could result in legal claims against the Department subsequently. The drafting of that letter was conducted by the Taoiseach's programme manager. It states:

Taoiseach,

This is the type of letter you need for the Kenmare marina project. Would you please see if Minister Fahy will sign and issue it?

The letter is signed "Gerry". This is in advance of any appraisal of the project involved, which project amounted to €750,000, of which over €300,000 has been paid.

Deputy Healy-Rae, in whose favour this was being granted, as distinct from the then Minister for Tourism, Sport and Recreation, who is in the Chamber, had this letter changed, on his insistence, to read "I believe that the project would be eligible for funding" to "I agree that the project will receive funding."

In light of yesterday's probity in high standards, does the remit of the Taoiseach's programme manager extend to approval of capital projects without appraisal? Did the Taoiseach see this correspondence? Did he see and approve the letter from Gerry? Did he tell the then Minister for the Marine and Natural Resources, Deputy Fahey, that the letter from Gerry should issue and that on foot of that, it amounted to a letter of comfort on a project, be it worthwhile or otherwise, that amounted to €750,000? How can the Taoiseach stand over this kind of dispensation and slush fund being used by his party, apparently on his personal direction?

I wish to make a number of points in reply to Deputy Kenny. The project, which I and the Government were supportive of, was part of four projects in 2000, one in Kenmare, which Deputy Kenny spoke about, Cahirciveen, Rosses Point and Roundstone. A total of€5.7 million was allocated. There were four flagship projects in advance of the NDP marine tourism grant. The grant approval for the Kenmare project was for €752,550 and was subject to a number of conditions, including evidence of planning and foreshore permissions having been obtained. Payment of the first instalment of the grant was made in December 2001 in the amount of €332,312 and it was made on the basis of invoices in respect of matured liabilities, copies of the planning permission and the foreshore lease that had been obtained.

In October 2002 the Department became aware that the development had not been constructed in line with the planning permission and the departmental engineers were immediately asked to investigate the situation with the local authorities. No further payments of the grant were made——

The Taoiseach should answer the question he was asked.

——and the Department liaised with Kerry County Council on the planning difficulties.

As the promoters had applied for retention permission, it was considered advisable to await the outcome of the planning process before taking legal advice as to how the State's investment should be protected. Following An Bord Pleanála's refusal of retention, a new planning application was made to Kerry County Council. The application was withdrawn in November 2003 and steps were taken by Kerry County Council to enforce the conditions of the original planning permission. The Department is waiting to see if the original planning permission is adhered to, otherwise it would have to retrieve its money.

What Deputy Kenny did not say about the letter from Gerry Hickey, my programme manager, is that he wrote on a letter from Kevin O'Reilly & Co., Registered Auditors and Accountants. The letter states:

Re: Proposed development of a marina and maritime leisure and training facilities at Derreenacallaha, Kenmare, Co. Kerry by Daniel McCarthy (the project to be developed and operated by The Star Marina Limited).

Dear Sirs,

I wish to refer to your letter dated 7 November concerning the above proposed development which was passed to this Department by the Department of the Taoiseach.

The criteria that govern projects of this nature is as follows:

— long term viability or value of project

— value for money of project

— tourism value (numbers, seasonality, spread of product etc.)

— compatibility with the protection of the environment...

— impact on quality of resources ...

— contribution to rural development

— contribution to community development

— impact on those in or at risk or falling into poverty

— impact on equality of opportunity

— long-term management capability

— links with other tourism...

(Interruptions).

Allow the Taoiseach, please, without interruption.

The initial examination indicates that the proposal scores highly on these points. The Department is reviewing the papers submitted with your letter and will be in touch with you shortly seeking some additional information.

As a general rule, any public grant-aid to infrastructural projects has to be based on clear and precise information within a pre-set framework with a clear indication of specific items such as exact details of costs of each specific element of the overall plan——

Did Jackie do the architectural work?

——exact details of all funding sources, detailed business plans, legal and planning requirements, details of operational aspects, etc.

Subject to the satisfactory responses to the additional information sought, I believe that the project will be grant aided...

Signed by Frank Fahey

That was the letter Gerry Hickey wrote the note on, not some letter out of the blue.

Kenmare is one of the finest places in this country and has one of the best tourism centres. It has been involved in tourism for 110 years and I am glad to see we are trying to do something for tourism in Kenmare.

It appears as if theCeltic Mist was going to be the first yacht to land at this marina. What the Taoiseach did not tell the House in respect of this “Punchestown by the sea” proposal was the letter following the one he read out, which has the heading: “Mr. Guilfoyle, Revised letter issued to Deputy Healy-Rae, following requested changes by him, overleaf, and agreed by Taoiseach's Programme Manager”. That change is as follows. Instead of, “I believe that the project will be grant aided...”, it reads, “I agree that the project will be grant aided...”. This is in advance of appraisal under all those criteria the Taoiseach has mentioned.

I do not doubt the validity of any project, but the method the Taoiseach adopted in delivering on this project needs to be answered. Why was the Taoiseach involved in this particular project? He came into this House last December to answer a charge that he was involved in a planning permission case in Roscommon which he dealt with very comprehensively. He was involved in this case because the programme manger in his Department asked him to look at a letter and to advise the then Minister, Deputy Fahey, that he should issue it.

There are 20 people within 400 yards of this building who sleep in cardboard boxes every night. There are hospitals units waiting to be opened, hospital beds closed down——

The Deputy's time has concluded.

——and yet the Taoiseach allocates €750,000 for a project, half of which has been demolished, as it did not comply with planning permission. Is this not an abuse of power? It is the creation of a slush fund for political patronage by him and on his direction and it is an insult to the people of the country and it is not the kind of standard he spoke about yesterday.

Deputies

Hear, hear.

I remind Deputy Kenny that we get 6.1 million visitors per year, that €4 billion in foreign revenue earnings comes out of tourism, that the industry employs 140,000 people in this country and tourism is massively important. Kenmare is one of our best tourist resorts.

The Deputy is turning his back on it.

(Interruptions).

This is Leaders' Questions. Only Deputy Kenny was entitled to ask a supplementary. Deputy Kenny is entitled to hear the answer and I would ask his colleagues in the Fine Gael Party to allow him to hear the answer without interruption, please.

I was saying that tourism is massively important to this country, that we take over €4 billion in tourism revenue. All our national development tourism operational projects try to improve the infrastructure in tourism and in this case, that equally happened with four other projects. It is proper that that happens. The fact that in this case Deputy Jackie Healy-Rae and other local Deputies were pursuing the project——

(Interruptions).

There is not a project under the national development plan that Deputies are not supporting.

A Cheann Chomhairle——

Deputy Hayes, the Chair will be left with no choice but to deal with you.

There is not a project under the national development plan for which TDs are not lobbying. I cannot walk the corridors of this House but TDs of all parties are lobbying me about capital projects. Let us stop the hypocrisy.

Deputies

Hear, hear.

If we are helping tourism projects we are helping them. In this case, the matter was properly dealt with by the officials and it was properly dealt with throughout.

(Interruptions).

A Cheann Chomhairle, you quite properly allowed 17 minutes for that valuable exchange on an innovative project so I presume you will allow me the same time.

The Chair requests each Member speaking at the end of the time allotted to conclude.

Who deserves credit for this? Is it Deputy Healy-Rae or the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, or does Deputy Healy-Rae get everything done?

The Deputy is using his time but I am not sure if it is on the question he intends to raise.

I start by thanking the Fianna Fáil backbenchers for their warm praise for me "giving the Taoiseach a clean bill of health". I repeat that I accept what the Taoiseach said, that is, that he did not delay the planning tribunal for five years. I accept that. I want to ask him, like I did yesterday, if that means he did not delay the transfer of any single document. If he says he did not, I accept that too.

I want to refer back to the TV3 programme which had absolutely nothing to do with that allegation. It was about tax evasion and standards in public life. What we know from yesterday and from the TV3 programme is that a donation of IR£50,000, made for whatever purpose, was placed in a bogus non-resident account in Castlebar by a then serving senior Fianna Fáil Cabinet Minister and that within months that money was drawn out. Deputy Cooper-Flynn said she was not involved in setting up the bogus non-resident account and nobody ever said she was. She also said she did not know the origins of the money. She said she did not ask and she was not told. Of course, her father, Pádraig Flynn, did know it was hot money. He knew that, but apparently he did not tell her.

She also told the House that she included a standard letter warning that it was the client's responsibility to look after their tax affairs. That is the same standard letter that she, and other colleagues in her bank, sent to hundreds of people with hot money and which has led now to €48.5 million being recouped by the Revenue Commissioners, on the word of the Chairman of the Revenue Commissioners to the Committee of Public Accounts before Christmas. So much for the standard letter. We will take her word for it in the meantime.

I want to go back to ask the Taoiseach about the gravamen of these allegations, never mind holding up the tribunal. Has the Taoiseach spoken to the Minister for Justice, Equality and Law Reform, Deputy McDowell, about the matters he considered to be of the utmost gravity?

What did the Taoiseach mean when he said he did not ask Mr. Gilmartin if he had made a donation to Fianna Fáil? He said yesterday, "I am quite certain I would not have asked him did he give a contribution to Fianna Fáil." Two minutes later he said to me: "If he brought up the issue with me I might have exchanged discussion with him about it." A minute later, the Taoiseach said: "If he brought it up in conversation, I could well have engaged in conversation with him." What is the Taoiseach saying there? Is the Taoiseach saying he did not ask him if he had made a donation but that he did discuss the £50,000 with him in conversation? What exactly is the Taoiseach saying?

I will take the three questions quickly, one of which was about Deputy Cooper-Flynn. I heard her statement yesterday. That statement will now form part of the investigation by the tribunal into these matters. I have no comment to make. These matters will now be looked at. I will say no more than what I have said previously. We will have to await the examination of the details. I am in no position to investigate any of these matters. I have no power of compellability, or papers or witnesses. These will all be considered during the overall examination which Members know is ongoing.

With regard to Deputy Rabbitte's question concerning what I said yesterday regarding the £50,000, I have no recollection of ever having discussed this with Mr. Gilmartin, even the phone call he made to me. Apparently, his records state that he made a phone call to me to say he was in difficulties and had problems, and that he asked me if I could be helpful to him, because he had found me helpful on previous occasions when he met me at the Department of Labour and at my constituency office. He states that in that phone call he mentioned to me that he had given Pádraig Flynn money or a donation or whatever.

While he stated that he made that clear to me, I have no recollection whatever of that conversation. What I said to the Deputy yesterday and what I have said previously is that I have no reason to say the man is not telling the truth. He said that during the conversation he referred to the fact that he had given money to Fianna Fáil and to Mr. Flynn, who was party treasurer. My point to the House yesterday was that I would not ask anyone for a donation, even when I was party treasurer. I would not ring anybody in that regard or in conversation ask somebody for money for myself or the party. I would of course have sent out letters on behalf of the party over the years.

What other question was I asked?

The Taoiseach was asked about the Minister for Justice, Equality and Law Reform and tax evasion.

I have had no conversation regarding this matter with the Minister for Justice, Equality and Law Reform. As far as I am aware regarding these matters, the Minister was saying no more than what he heard as gossip around the place. He certainly did not raise anything with me in his capacity as Attorney General or as Minister for Justice, Equality and Law Reform in the past or in recent days. I am certain of that.

Is the Taoiseach saying that the Minister for Justice, Equality and Law Reform is given to describing gossip around the place as of the utmost gravity? Is that the kind of Minister we have?

This is a serious matter.

I seem to recall Deputy Rabbitte himself hearing a rumour in a pub in regard to the beef tribunal.

That comes from the man who wants to build a marina on the wrong side of the road, on the side where the water is not.

Deputy Rabbitte has no recollection of the rumour he heard.

While he says he has no recollection of discussing this matter with Mr. Gilmartin, the Taoiseach said yesterday:

I am quite certain I would not have asked him did he give a contribution to Fianna Fáil ..... If he brought up the issue with me I might have exchanged discussion with him about it.

Is the Taoiseach saying he has no recollection but that he might have discussed it with him? Is that right? If Mr. Gilmartin discussed the matter with him, would the Taoiseach be likely to forget a donation of £50,000 at a time when the sum would buy two houses in the area where I live? Does the Taoiseach think Mr. Gilmartin discussed the matter with him or not?

The Deputy's minute is concluded.

That is very interesting. Our time is now less than half of the time for the previous item. I ask you, a Cheann Comhairle, to permit me to finish my question.

Sorry, as the Deputy is well aware, the Chair draws to the attention of Members that their time is concluded

It is a third of the time you allowed for the previous exchange.

It is not a question of the time the Chair allows. The Chair is not in a position to stop Members continuing to speak and it is done on both sides of the House. The Chair would like Members to abide by the Standing Orders that they themselves introduced.

I will have to accept your ruling, Sir. Now will you let me finish?

The Taoiseach said yesterday that Fianna Fáil will consider what remedies are open to it when the tribunal reports. Surely the Taoiseach's lawyers must have advised him that the statute of limitations applies six years from the date of knowledge. We might take the date of knowledge to be 6 October 1998, the day that the Fianna Fáil general secretary dashed off a letter for the sake of appearances — the only letter, which was never followed up — to find whether this money was for Fianna Fáil and where it was. Six years from 6 October 1998, no remedy is open to the Taoiseach. Have his lawyers not advised him of that?

I will try to stay within the Standing Order. Our legal advice is that we must await the conclusion of the tribunal report. That has been the legal advice for several years from a number of different senior counsel. We have no other evidence or proof in regard to these matters.

The Taoiseach would want to get his procedures right.

Even Deputy Jim O'Keeffe would understand what the Taoiseach is saying.

Even in recent times, our senior counsel have stated that.

With regard to the other matter raised by Deputy Rabbitte, I have no recollection whatever of having a discussion with Mr. Gilmartin on the phone. However, Mr. Gilmartin has stated for many years that he rang me and asked me for assistance and whether I knew anybody in Dublin Corporation who would assist him. I subsequently sent a councillor to him and that councillor has confirmed that, so Mr. Gilmartin obviously rang me. I accept that and that I sent somebody to him. That is clear.

Mr. Gilmartin said that during that conversation he mentioned to me that he had given money to the party or to Pádraig Flynn. He may well have. If he said that he gave a donation to Fianna Fáil through Pádraig Flynn who was then party treasurer, it would not have registered with me. It would have registered as a big amount, admittedly, although I do not know how many subscriptions we would have got at that time, but it would not have registered. With an enormous developer who was spending approximately £250 million on one project and a few hundred million pounds on another project, it would not have struck me as anything odd.

I have no recollection whatever. We have encountered large amounts of money in regard to different parties so we should not get into that. While I have no recollection whatever of the conversation with Mr. Gilmartin, I accept it must have taken place because I sent somebody to try to help him.

The Higher Education Authority in a submission has stated that leading universities and third level institutions in this State could be privatised. This would effectively mean third level colleges becoming the creatures of big business corporations on which they would be dependent for finance, more or less in the same way as, during the Irish EU Presidency, the Government is relying on Kerrygold to provide free butter for all the EU nosh-ups over the next six months.

What is the Government view on this issue? The Minister for Education and Science said he has no objection to colleges leaving the public system to become private colleges. InThe Irish Times, the Minister is quoted as saying that the one caveat he has in this regard is that there would have to be systems in place to ensure that people from disadvantaged backgrounds would be able to get into such colleges and that, therefore, there would have to be scholarships and bursaries as in the American system. This means that working class youth will be sent to beg at the doors of multinationals and major corporations for their third level education.

Is this another of the big ideas of the Minister for Education and Science? Before the Taoiseach accepts this, I caution him that this is the Minister who in his five year tenure at the then Department of the Environment and Local Government lectured us on the need to divert waste going to landfill. We assumed that was by way of major recycling programmes which some have been carrying out for a long time. However, this morning we know what a farce this Minister's policy was when a ship carrying household waste from nine local authorities was impounded in the Netherlands on its way to India. The authorities in Rotterdam were apparently alerted by the smell.

The privatisation of third level colleges would create just as big a mess for our society and its youth. Can the Taoiseach state precisely the Government view on this issue?

I do not know what County Kerry did wrong this morning. A Mayo Deputy wanted to stop marinas in County Kerry and now a Kerry man wants to stop the promotion of butter from Kerry.

He has been a long time out of Kerry.

On a point of order, I did not want to stop marinas. I questioned the spending of money.

That is not a point of order.

The Taoiseach should stop the gravy train.

Deputy Kenny is against the west. He is against Knock Airport.

I did not try to stop the marina.

Allow the Taoiseach to speak. The Deputy has put his disclaimer on the record.

What we are trying to do is build the marina.

I did not try to stop the marina.

That is fine. If the Deputy did not try to stop the building, we are both in favour of it.

Why was it knocked down?

It had to comply with planning regulations, as does every other development.

We are not building it.

Deputy Higgins made two points on the education report. There are many proposals on how we should continue to do what we are doing successfully, that is, to increase the number of people going through third level education. There are no proposals to privatise any third level colleges. There are many proposals to try to increase the participation of people from all classes in third level colleges and to ensure we can link up, wherever possible, with private business to allocate resources to help research and development and the advancement of third level colleges. This is generally seen as a good thing. It happens all over the world. It is particularly successful in the United States, where the most advanced colleges have such participation.

On the shipment of waste, I understand the difficulties in regard to the consignment of waste referred to centre around the appropriate classification of the assignment of shipments in which recycled materials are segregated.

I referred to the waste issue to caution the Taoiseach against accepting any more big ideas from the Minister for Education and Science, considering that his last tenure finished with such a mess.

Is it not the case that the taxation policies of the Government, by which, for example, it gives back to the major corporations €600 million in tax reductions in a full year and gives generous tax regimes to the multinational corporations, mean that between €15 billion and €20 billion is repatriated out of the country each year? Is it not the Government's policy to slash corporate taxes? This means that when crucial public services need to be funded, such as third level education, the idea comes forward that we should direct people who need funds for these services to the local offices of major corporations and the multinational companies. Is that any way to provide for public services or has the ethic of privatisation so infected official thinking in parts of this State that this is what we get?

Who gives the Higher Education Authority the right to make a submission to the OECD, with no discussion whatsoever among third level students, intending students or society generally? I know there are no Government proposals currently on the table with regard to the privatisation of third level institutions but does the Taoiseach rule it out completely as a matter of policy for the future? I would like the Taoiseach to state his position on this issue.

There have been no discussions by Government on any of these proposals yet. The Government is not in the business of privatising colleges. I have already said that we should try to seek ways of getting private sector companies to put money into research and development, which is the key.

I disagree with Deputy Higgins's thinking on this matter. The reason we moved from 1 million people just over a decade ago to 1.8 million people in work today is that there is a strong base of multinational companies in this country. These include chemical and pharmaceutical companies, information and communication technology and finance houses. Our low tax regime, which successive Governments have followed, has generated more corporation tax for this country, not less. We moved away from the shelters and allowances of the past, which successive Governments, with the support of all parties, except the Deputy's party, have continued to advocate. This is what has driven the Irish economy. This is how we have managed to put €26 million more into third level education than a few years ago.

These are assertions. There is no proof.

The reason we were able to expand our third level colleges is that we had more corporation tax. That high rates are the way to generate resources is the wrong thinking. It was the thinking of the 1950s, but it is time to move on.