I thank you, a Chathaoirligh, for allowing me raise this matter. Last October the Minister took on board my concerns and I look forward to his continuing interest in this matter. This issue affects not only the people of north Cork but local communities throughout the country who support local charitable lotteries.
According to the available figures, North Cork Community Radio collected a total of £1.7 million in the local lottery from 1990 to 1995. However, £49,559 — a mere 3 per cent of the total — was donated to local charities. This pittance contrasts with the remaining expenditure which was as follows: £542,807 or 32.3 per cent was paid in commission; £582,644 or 34.7 per cent was paid in prizes; £72,275 or 4.3 per cent was spent on printing and £264,000 or 15.7 per cent went to community broadcasting. The community broadcasting element was paid to a private company, Radio County Sound Limited, which received £7,000 per month during the years the lottery was operating.
North Cork Community Radio used Mallow General Hospital as a focus point for the lottery promotion over a six month period in 1992-93, yet the hospital received only £16,000, a tiny amount compared to the lottery's takings and the benefit the lottery gained by exploiting the hospital as a marketing tool. At the end of 1995 North Cork Community Radio decided through its management committee to sell its shares in Radio County Sound Limited as part of a management buy out — the shares held constituted about 9.7 per cent. North Cork Community Radio subsequently received a letter from the legal representatives of a company involved in the buy out informing it that certain difficulties had arisen in connection with the financing of the proposed management buy out of Radio County Sound Limited. It is significant that its venture capital partners pulled out because of concern over "due diligence".
These concerns arose primarily over the exposure of £350,000 in royalties due and the potential tax exposure in respect of income paid to senior employees and to the parent company. This arose as a result of agents refusing to sign an agreement that they were agents rather than employees. As a result, considerable unpaid income tax accumulated. It appears that some of those acting as agents for the lottery failed to sign an agreement with the co-operative and, as a result, they were deemed to be employees for whom the co-operative carried income tax and PRSI liability.
It has come to light that the names of five prominent people were publicly nominated to supervise the distribution of lottery funds. This appeared in a local newspaper which discussed the matter with three of them and it emerged they were never consulted about any distribution of funds. In addition, the applicant for the licence also acted as a manager in respect of which he was paid £200 per week.
I am advised the group has decided to discontinue the draw with effect from this week. The licence for the draw was granted last November. I am aware some Garda investigations have taken place locally into this matter. I raise the issue to find out what progress is being made in this regard. I would also like to know whether the Revenue Commissioners are investigating matters relevant to its remit. I do not doubt the Minister of State shares my concerns and I trust the regulations relative to the operation of charitable lotteries will be reviewed to ensure the goodwill of local communities is not exploited purely for commercial purposes.
