I move:
That Seanad Éireann calls upon the Government to establish an independent authority to determine the manner in which allocations of National Lottery funds will be made and disbursed.
I am proposing the motion on behalf of the Fine Gael Party. I am doing this for a variety of reasons which I will go into in depth at a later stage in my contribution. First, I will give a broad outline of the initial setting up of the national lottery, its proposed function and how we have strayed from the original idea, particularly when funds from the lottery have greatly surpassed all expectations.
The establishment in Ireland of a national lottery is not, in international terms, a very unusual step. State lotteries exist today in over 80 countries with different economic, cultural and religious characteristics. Countries as varied in political and economic terms as the United States, Australia, Sweden, Brazil and China all have successful state lotteries. Among other partners in the European Communities, national lotteries are established in the Federal Republic of Germany, France, Belgium, the Netherlands, Luxemburg, Denmark, Spain and Portugal. Britain, of course, has its football pools.
The function of the lottery was to generate surplus funds that would benefit our community in a number of ways, without the need for recourse to taxation or other compulsory revenue raising measures. This surplus would be generated through the purchase of tickets by those who wished of their own accord to participate in the national lottery, and not through any increase in the tax burden. In the other countries I have mentioned lottery proceeds are applied to a variety of purposes including sport, health care, the arts and other cultural activities. State lotteries are, therefore a widespread and advantageous phenomenon. The countries I have mentioned are not less sensible than ourselves, and would not operate official lotteries were they not profitable, socially useful and popular.
At the start of 1987 who would have thought that scratching small brightly coloured cardboard tickets would become a national obsession? Yet today this is what half of the adult population do almost once a fortnight. They scratch card products of the national lottery which has been one of the most successful commercial launches in this country for years. In its first week, six million instant pay lottery cards were sold, with sales exceeding the first year's target of £25 million just five weeks later. Admittedly, this figure was a conservative estimate of the lottery's potential but later more optimistic targets of 50 million to 60 million sales were more than doubled in the first year's trading, making the venture the second fastest growing lottery in the world.
The national lottery appeals to different types of taste. Instant games are for those who want immediate excitement and there is a wide variety of these. Lotto, the latest game, caters for people who like to hold on to numbers for up to a week. The success of the first game, Instant Three, was followed up within weeks by the launch of an almost identical second product called Windfall which offered a £10,000 instant prize and better prospects for higher winnings at the weekly grand prize draw. Windfall chalked up sales of £28.72 million. This was over £8 million more than its predecessor and in turn it was followed by a range of similarly successful games, Extra Chance at £29.9 million, Double Up at £18.3 million. Cash Drive at £21.4 million as well as the newly launched Celebration Bonus and Lotto, the most ambitious project so far.
Lotto is based on a formula dating back to Renaissance Italy where an enterprising Genoan took bets on the selection of a five member council from a panel of 90 nobles. Today it is played in 70 countries worldwide including all 12 EC States. Lotto Irish style is the first fully computerised national lottery on the Continent. It is the biggest dedicated data transmission network in Ireland, linking a 1,000 outlet nation-wide to a central computer. It is an on-line and interactive system. When an agent in-puts a number, it immediately registers on the national lottery's main computer. This means that entries can be accepted up to ten minutes before the weekly draw takes place, thus practically eliminating dead time that had previously eaten into sales.
The computerised Lotto system already operates successfully in the US, Australia and New Zealand but Ireland is the first European country to have such a modern system. In its first annual report which covers the period to 31 December 1987 the national lottery records a net surplus of £41.69 million, all of which was paid into the national lottery fund. From this, £26.3 million was allocated for sport, youth and recreational facilities, £8 million for culture and the arts, the Irish language was to receive £4 million and £6 millions was to go into the health projects. A further £700,000 was set aside for projects linked to Dublin's Millenium.
The idea of a national lottery was mooted as far back as 1979 when a submission was presented to the then Minister with responsibility for sport, Deputy Tunney. Deputy Geoghegan-Quinn and Deputy Keating had a concept of a national lottery for sport and so had other people. They brought it a certain distance, but there was no lottery. It was not unitl such time as Deputy Donal Creed, my constituency colleague, became Minister of State with responsibility for sport that the national lottery was taken seriously. I wish to congratulate him on his courage and conviction in initiating what is now a very successful lottery.
However, Deputy Creed's vision of how the proceeds of the national lottery should be distributed has not come to fruition. He envisaged that a minimum of 75 per cent of the proceeds would go directly to sport and to sporting organisations. It was never intended that funds from the national lottery would go to Departments which would normally have been funded by Exchequer payments. Sport and sporting organisations have always been very badly treated by all Governments over the years. We have some excellent athletes who have done us proud on the world stage. They have been excellent ambassadors for our country — people like Stephen Roche, Seán Kelly, John Treacy, Barry McGuigan and others.
It is also opportune to mention the Irish soccer team who did us proud in Germany during the week and have been our greatest ever ambassadors in promoting this green isle of ours. We should remember the tremendous success we had abroad in the area of sport. Likewise we should remember that we are handicapped through lack of facilities, proper training and funding for those people who cannot afford it themselves.
The wording of the motion tonight deals with the way the money is being allocated and calls for an independent commission to be set up to monitor its distribution. The way in which profits are distributed is to be looked at. First, the national lottery has become a mini bank which Ministers and Ministers of State raid when there is a public demand for a service which is not provided for in departmental Estimates.
Secondly, in relation to grants for community activities, political considerations are the major if not the only criteria on which these allocations are judged. It is regrettable that in distributing the proceeds, Ministers and Ministers of State are seeking to give the impression that they themselves or their Departments have provided the funds. This is nothing more than short-sighted political expediency. Apart from any other consideration, it is no way to promote the advantages and the benefits of the national lottery. If Fianna Fáil continue with their present operation of looting national lottery funds in order to provide "hello money" for their anxious backbenchers, the days of the national lottery are numbered.
Figures of disbursements up to the end of April 1988 provide hard evidence that the moneys are being distributed by politcal whim, as a national Fianna Fáil reelection slush fund, and that the era of the stroke politics has returned. It is a fact that the average level of pay-out of lottery funds to date has been £10 per head of population nationwide. It is also true that the levels vary from county to county in accordance with the political demand of the governing Fianna Fáil Party. Sligo, the base of the Minister, Deputy MacSharry, has received a massive £27 per head of population which is nearly three times the national average. The entire Dublin region, the base of five further Cabinet Members has received £18 per head of its population and this is nearly twice the national average. It also received future commitments of further substantial amounts in order to fund the proposed national sports centre. Galway, the base of the Minister of State, Deputy Fahey, a curator of some of the lottery funds, has received £16 per head of its population, also well above the national average. My own native county of Cork has received the derisory sum of £4 per head of its population and if we are to believe what we read in The Cork Examiner, we would have not got any of this expert for the hard work of Deputy Batt O'Keeffe who claims to have brought practically all of the lottery money to County Cork. He even claims to have brought money to clubs that did not even contact him with a request for lottery funds, much to the annoyance of his Fianna Fáil colleagues in County Cork.
It is this kind of political one-up-manship or political hypocrisy that has given politicians a bad name. We read in the national papers practically every day how lottery funds are being misused and abused. A banner heading in The Cork Examiner, dated 20 April 1988 reads: “O'Keeffe Claims Big Grant Coup”. The article went on to state that the Cork TD claimed that by his personal efforts he had secured grants totalling £125,000 for the area. Fianna Fáil Deputy Batt O'Keeffe contacted The Cork Examiner to say that he had got £50,000 for Riverstick Community Centre in amenity grants from the Department of the Environment. When asked to explain his role in the allocation of the money given by the Minister for the Environment, Deputy Flynn, Deputy O'Keeffe said he had processed the matter on behalf of the local people who had applied for the grant. Asked if he was suggesting that the grant would not have been forthcoming but for his efforts he replied: “You can take that as being absolutely certain”.
He went on to state that he got £40,000 from the same Department for the regional park in Ballincollig and also that he secured £25,000 for the Grange Frankfield Community Centre in Douglas. When commenting on the grants as a whole he said: "I am absolutely delighted that as one Deputy I have ensured that £125,000 has come into the area from the Department". Also he was hoping to have over £100,000 coming from other Departments.
On the following day, 21 April, The Cork Examiner again carried a big heading which stated: “Cork TD's Grand Claims Rejected”. The article went on to say that claims by a Cork Deputy that he had personally secured £125,000 in grants for his local area were yesterday knocked by other Dáil Deputies and led to further allegations that national lottery money was being abused by Fianna Fáil Deputies and Ministers. Deputy Batt O'Keeffe told The Cork Examiner that a £50,000 remedial grant for the Riverstick Community Association, amongst others, would not have been forthcoming but for his efforts. The Cork Examiner were told that the £50,000 was national lottery money channelled through the Department of the Environment. The article went on to state that the annoyance at Deputy O'Keeffe's claim was not just confined to Opposition parties and inside Fianna Fáil it was known there was considerable private resentment at this attempt at stroke politics.
In another front page article in the Irish Independent of 26 May the heading was “Lottery Forked Out Unrequested £175,000”. In the article Fine Gael accused the Government of abusing the system and claimed that £175,000 had been misappropriated in the County Dublin area. It accused the Government of allocating money to 23 projects for which no official applications were made. Surely this is ridiculous when we are talking about taxpayers' money being dished out without any accountability whatsoever.
I have in my possession a letter from the Department of the Environment, signed by Mr. P. Sweeney, Assistant Principal Officer, to the Manager of Dublin County Council. It relates to a number of projects which are being grant-aided and he was informing the manager of Dublin County Council of this. The letter states:
Dear Manager,
I am directed by the Minister for the Environment to refer to previous correspondence regarding grants under this Department's 1988 amenity grant scheme finance from National Lottery surplus funds and to inform you that grant allocations have been made by the Minister for the following projects in your area....
The letter specifically deals with a total of 49 projects and includes the 23 which I have already mentioned, where there was no proper application form for them. I hope to mention a few of them in passing. The list is as follows: first, the Malahide Castle Regional Playground Park and the allocation was £15,000; followed by improvements at Kingfisher site, Portmarnock, £10,000; Inisfails GAA Club, Balgriffin, £15,000; St. Bridget's GAA Club, Navan Road, £50,000; Coolmine RFC, Palmerstown, £15,000; planting at St. Anne's National School, Esker, £500; CBSI provision of trees at Larch Hill, £500; Knocklyon Community Centre, £5,000; shrub and tree planting at Seagrange, £100; Donabate Scouts, £10,000; Garristown Hall, £5,000; Loughshinny Motor Cycle Club, £3,000; Lusk United FC, £5,000; Naul Hall, £2,000; St. Maurs Boxing Club, Rush, £1,000; Rush Scouts, £1,000; Swords Family Care, £2,000; Swords Historical Society, £2,500; Swords Tennis Club, £3,000; Broadmeadow Anglers' Association, £1,000; St. Colmcille's CBSI Swords, £3,000; Tallaght United Football Club £25,000; Loughshinny CYMS, £1,000. The letter goes on to state:
...To assist in administering the scheme, copies of the application forms submitted to the Department in respect of the projects being grant-aided are also enclosed.
The next line of the letter is the important line. It states:
In some cases fully completed application forms are still awaited from project sponsors. These are especially indicated in the list above.
These are the 23 projects that I have mentioned.
Another item to which I would like to draw attention is the grant conditions whereby national lottery money is being given out to amenities. This is covered under a list of conditions — 12 in all — from the Amenity Grant Scheme, 1988 (Finance from National Lottery). Condition No. 2 on that list states:
The grant allocation is made on the understanding that a local contribution of at least 30 per cent will be made towards the cost of the project.
This has led to a section 4 motion being put down in the names of Councillors Nora Owen, Joan Maher and Tom Hand on 13 June 1988. It states:
We the members of Dublin County Council pursuant to Section 4 of the City and County Management (Amendment) Act 1955, hereby require and direct the Dublin City and County Manager or any Assistant Manager having delegated powers to report to the Council how he proposes to spend the £15,000 from the Lottery for provision of a playgound in Malahide Demesne indicating in his reply:
(a) where the Council will find the 30 per cent of costs for the project as required under condition 2 of the Lottery grant conditions published by the Department of the Environment and
(b) the total cost of the provision of this playground.
In his reply, Mr. G.W. Redmond, Assistant City and County Manager stated:
The estimated cost of providing the proposed playground at Malahide Demesne is £45,000. Portion of the Council's contribution will relate to wages of existing staff for which provision has already been made in the current year's estimate.
I reject that. The provision could not have been made already because the Malahide Demesne was a new project being financed by the national lottery. The new project would not have been taken into account when deciding the estimates and indeed striking the rate. In other words, the money referred to must cover existing work which must be dropped and the staff redeployed, or else if that work did not exist, the money was being provided to pay people who were idle. Because the Malahide Demesne is a new project, that statement could not be correct. Perhaps the Minister might clarify that point for me. The reply continues:
On the assumption that it would be the wish of the Council to avail of the opportunity presented by the grant, it is the intention to meet the additional expenditure involved, by overspending in the programme to which the project will be charged and reporting the over-expenditure involved before the end of the year to the County Council, seeking consent of the members under Section 11 of the City and County Management (Amendment) Act, 1955. The over-expenditure involved will be in the region of £23,000.
This is totally contrary to a letter sent out by the Minister for the Environment, Deputy Flynn, last October or November. The Minister's letter sent out to all the local authority areas stated: that under no circumstances was there to be an over-run of expenditure in the moneys allocated to local authorities. Each local authority area would have to live within its means. Now we have a different story. In order to avail of national lottery funds, local authorities are being encouraged to borrow money.
The heading in the Tipperary Star of 20 May 1988 was “Corrupt and Immoral Lottery Allocations Create Uproar.” It states:
The distribution of national lottery funds by Fianna Fáil Ministers to organisations in County Tipperary, seven of which had not fully completed application forms was described during a heated debate in North Tipperary County Council's Chamber as bordering on the corrupt and certainly immoral. The Council had been told that a total of £162,500 had been allocated to 21 projects in the county, seven of which had received £47,500, but had still not furnished fully completed application forms.
In the Kerryman/Corkman dated 6 May the leading article states: “The game is up for the lottery politicians.” It further states:
The manner in which grants from the proceeds of the national lottery are being announced are wholly unacceptable. The affair has taken on all the worst connotations of base political opportunism. Political stroke pulling should have no part to play in the distribution of these funds. Huge cash windfalls which belong to us all, and which should be distributed according to the most stringent and correct conditions should not be rifled by politicians in the narrow interest of personal political capital. It is the unseemly rush back to the constituencies by Fianna Fáil Oireachtas members to announce the goodies which causes concern and annoyance. By the behaviour of some members of the governing party, one would not be surprised if they had the outstanding temerity to claim that the money belonged to them, a kind of personal vote getting slush fund. This tomfoolery must cease at once.
In The Cork Examiner on Tuesday, 24 May the heading was “Lottery Methods Criticised”. In the article it was stated that lottery funds had clearly fallen into political hands, a political slush fund is what the national lottery has become. I could go on and on and give plenty more examples or more extracts from the different papers around the country but the message is the same.
The Government must surely recognise that there is a danger that the general public could become very cynical about the way lottery moneys are disbursed. They do not have to have a specific example in mind, merely a suspicion that no Government could pass up the chance of making political capital out of lottery disbursements. This is an issue which will not go away. The lottery is drawing in millions of pounds every month, far more than had ever been expected. In view of that, perhaps the time has come to review the criteria applicable to disbursements. One of the most worrying aspects of the national lottery is the absence of a single application form, or procedure, whereby groups or communities could apply for funds. Another worrying aspect is the extent of ministerial involvement in the decisions taken and the announcements on how the funds will be allocated. This is the case particularly in the Department of Education because of the size of its allocation.
The national lottery is one of the most significant legacies bequeathed by the Coalition Government to the present Administration. I appeal to the Minister not to undo its success to date and urge him to accept the motion.
