I welcome the opportunity to speak on what is a fairly significant piece of legislation. The establishment of a corporate enforcement authority as a stand-alone entity replacing the Office of the Director of Corporate Enforcement, ODCE, is an extremely welcome step, and we are on the record as having welcomed this on more than one occasion. The ODCE has worked hard within the remit that it has had in recent times. Unfortunately, in the course of its work, the ODCE has often suffered from a lack of funding and resources, on the one hand, and a lack of adequate powers, on the other. It is ultimately these shortcomings which precipitated the proposal for the establishment of a stand-alone corporate enforcement authority as far back as 2017. This move was proposed by the then Government in November as part of a series of measures intended to address white-collar crime.
The establishment of this new agency is in part a response to severe criticism by Judge John Aylmer of the conduct of the ODCE in the prosecution of Seán FitzPatrick, the former chairman of Anglo Irish Bank. In May 2017, Judge Aylmer described the acquittal of Mr. FitzPatrick following evidence of severe deficiencies in the ODCE’s handling of evidence and preparation of the prosecution's case. Therefore, if this new agency is to be able to investigate and respond to complex breaches of company law, then, unlike the ODCE, it must have the necessary funding, resources, powers and suitably qualified experts in accountancy, information technology and corporate enforcement in order to do that job effectively.
The need for such resources and funding came to the fore when pre-legislative scrutiny of this Bill was conducted earlier in the year. There was unanimity among the members of the Joint Committee on Enterprise, Trade and Employment on the need for a stand-alone corporate enforcement authority which is funded and resourced to tackle white-collar crime head-on. There is a perception among the public, some of it fairly well founded, that corruption and so-called white-collar crime are not adequately detected and punished. The lack of legislation to tackle corporate and economic crime and the under-funding and under-resourcing of the agencies investigating white-collar crime has been de facto Government policy for decades. Over a decade and three successive Governments later, the lack of appetite to legislate for, regulate and properly tackle corporate and economic crime is simply shocking. The historic under-funding of the ODCE is a political decision. The office gets its funding directly from Government and if that funding is insufficient, then that represents a political failure. In 2007, the accounting firm RSM Robson Rhodes estimated that Ireland was losing €2.5 billion a year from economic crime. Economic cheats cheat us all, as they might say. If that figure is applied to the past 14 years, that is a potential loss of €35 billion to the Irish economy. The economic and social costs of corruption and white-collar crime far outweigh other forms of crime, yet it has consistently received far less funding resources and political attention from successive Governments. It is time the State takes this crime seriously and as the ODCE transitions to a stand-alone corporate enforcement authority, it is imperative that it is not only given additional funding and resources, but additional powers to help keep pace with technological advancements, such as seizing data and information that are stored in the cloud.
The collapse of the retrial of Seán FitzPatrick and the ensuing criticism of the investigation highlighted the need for additional resources and structural changes for the ODCE. Indeed, the ODCE has some crucial work ongoing currently, such as the investigation into the Football Association of Ireland, FAI. It is imperative, given what happened at the trial and the implications of the recent 2017 Supreme Court decision on data and privacy rights, that every single necessary resource requested by the ODCE in its investigation into the FAI is provided so that can be conducted in a timely manner. This is a huge investigation with significant public interest, especially among football fans across the island, and there can be no excuse for the ODCE not receiving additional funding and resources.
This legislation and the establishment of a new corporate enforcement authority must severely crack down on economic and white-collar crime. Not only that, but it must do so with such severity that the public are convinced that the State is finally taking these crimes seriously. There are many positives to this legislation beyond the establishment of the authority, such as granting the authority autonomy over the deployment of its resources, which is important, and I know my colleague, Teachta Quinlivan, will go into this in more detail.
I must come to a point of concern, however. Speaking with my colleagues about this legislation, it was a point that we all have concerns about and I am sure many will speak about it here today. One such area is section 944AE(3), subparagraphs (b) and (c). I would like to ask the Minister why a director who is sanctioned by the authority should be able to escape having his or her name publicised if such a publication would “jeopardise the stability of financial markets”. Furthermore, subparagraph (c) of the section states that a director who is sanctioned shall not have his or her name published if it “would cause disproportionate damage to the relevant director”. These sections seem to offer an almost unlimited get-out for relevant directors who commit offences. I did not come in here with a crystal ball but I would be willing to guess that if it goes through without amendment, we will not see many names in the public domain, which would be regrettable. I do not think that is the intention but having this “get out of jail” card is not a good idea. There is no reason these points should be included to allow directors get away from having their names made public. There is no mechanism for a young working class man or woman to escape their name being splashed in the local paper if a court finds them guilty of being in possession of a joint or some other crime. It seems to be a case of the Government looking after its own and I hope that the Minister will be able to address that concern. It is an area we will be seeking to amend on Committee Stage.
Second, some of the insightful suggestions raised during the pre-legislative scrutiny by Professor Deirdre Ahern in her submission are absent from the Bill that we have in front of us. The suggestion that the authority will consist of at least one member and not more than three members has entered the Bill at section 944F. In her written submission during pre-legislative scrutiny, Professor Ahern stated that to have one member, with an upper threshold of three, is surprising, and she recommended that this be revised upwards to a minimum of two and up to five. The reason for this is that a single member decision-making authority is not a good position to be in, and cost savings should not outweigh important substantive and procedural considerations that help to ensure the integrity of decision-making regarding the compliance and enforcement limbs that are the backbone of the corporate law system. It is an area that we will strongly consider for amendment of the Bill on Committee Stage.
We are supporting this Bill on Second Stage. We are committed to working with the Minister and his Department on this legislation. The Department, to its credit, has been extremely helpful to date through the many pre-legislative scrutiny hearings that have taken place, going back to earlier this year and in the last Dáil term. We intend to work constructively as the Bill goes through Committee and Report Stages and we hope that, through this process, we can pass a very important piece of legislation that is fit for purpose and will ensure a corporate enforcement agency with teeth that can go after crimes and criminals who have evaded the law in this State for far too long.