Seanad Éireann debate -
Wednesday, 17 Dec 1997

Vol. 153 No. 5

Tribunals of Inquiry (Evidence) (Amendment) Bill, 1997: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue)

The background to this Bill is that in the tribunal of inquiry under the chairmanship of Mr. Justice McCracken, on 28 October 1997, two issues arose in relation to the matter of costs. The first question was whether the tribunal had power, of its own motion, to order costs to be paid to persons before it by any other person; the second question was whether the tribunal had power to award costs to itself against any person where the tribunal had incurred costs because of the non-co-operation of a person before it.

Section 6(1) of the Tribunals of Inquiry (Evidence) (Amendment) Act, 1979, gives a tribunal of inquiry power to order that the whole or part of the costs of any person appearing before it be paid to that person by any other person named in the order, including the Minister for Finance. The tribunal must be of the opinion that, having regard to its findings and all other relevant matters, there are sufficient reasons rendering it equitable to make such order. The costs which may be ordered are those as taxed by the Master of the High Court.

Judge McCracken indicated that, on the basis of the provisions of section 6 of the 1979 Act, he was satisfied that the only persons who can get costs are those persons who have been given representation and are represented by solicitor or counsel before the tribunal. He concluded that he had no power to order a person to pay the cost of any of the tribunal's expenses as such under the Act of 1979.

The solicitor on behalf of the public interest before the tribunal had sought counsel's opinion in the matter and, on the basis of the advice that was given, decided not to proceed with an application to have any person pay some or all of the costs of the tribunal. Judge McCracken indicated his concurrence with this approach. It was also established in the McCracken tribunal that costs could only be awarded by the tribunal on the application of a person appearing before the tribunal and that in the absence of such an application the tribunal had no power of its own motion to award costs to any person.

The Bill takes those findings in the McCracken tribunal into account and strengthens the power of tribunals of inquiry in relation to costs. In framing the Bill, I have also taken into account that two important tribunals, one under the chairmanship of Mr. Justice Moriarty and the other under Mr. Justice Flood, have recently been established under resolution of both Houses and the orders governing the work of both those tribunals include reference to the desire of the Oireachtas that:

all costs incurred by reason of the failure of individuals to co-operate fully and expeditiously with the inquiry should, as far as is consistent with the interests of justice, be borne by those individuals.

The Bill also amends and significantly strengthens the power of a tribunal of inquiry to have its orders enforced and it provides for immunity from suit of persons who supply written statements or documents to such a tribunal.

I now turn to the main provisions in the Bill. These are section 2, which deals with the certain immunities I have mentioned, section 3, which deals with the matters in relation to costs, and section 4 which deals with the enforcement generally of orders made by a tribunal.

Under the law as it stands in section 1(3) of the Tribunals of Inquiry (Evidence) Act, 1921, a witness before a tribunal is entitled to the same immunities and privileges as if he or she were a witness before the High Court. However, the Act makes no reference to the position of persons who produce or send documents to a tribunal pursuant to an order of the tribunal. I am, therefore, proposing in section 2 of the Bill to amend section 1 of the Act of 1921 by the insertion of a new subsection (4) which provides that a person who produces or sends a document to a tribunal pursuant to an order of that tribunal shall be entitled to the same immunities and privileges as if he or she were a witness before the High Court.

Section 3 of the Bill substitutes a new subsection (1) in section 6 of the 1979 Act in relation to costs. The new subsection repeats the substance of the existing subsection but provides, in addition, that a tribunal may recover its own expenses and, in making such order, may take into account the terms of the resolution passed by both Houses relating to the establishment of the tribunal or any failure to co-operate with or provide assistance to it, or knowingly to give false or misleading information to the tribunal. I have provided also that the tribunal may, of its own motion, order that the costs of any person coming before it be paid by any other person named in the order. Section 3 will apply to costs incurred after the Bill comes into effect. The section 3 provisions will, therefore, apply to both the Moriarty and Flood tribunals as soon as the Bill is enacted.

Section 4 is designed to strengthen the position of tribunals of inquiry to ensure that their orders can be enforced. The section provides that where a person fails or refuses to comply with, or disobeys, an order of a tribunal of inquiry, the High Court may, on application to it in a summary manner in that regard by the tribunal, order the person to comply with the order and to make such other order as it considers necessary and just to enable the order to have full effect. In framing section 4, I have taken into account section 3 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, which provides that where a person disobeys a direction of a committee, the committee may seek an order of the High Court to have the direction met. Section 4 is a significant advance on the current law in that a tribunal may itself apply to the High Court to have its orders enforced. The current law does not enable a tribunal to apply direct to the High Court in that way. It merely provides that the actions of a person before a tribunal may constitute an offence. The prosecution of that offence may result in delay for a tribunal. Section 4 as now framed will obviate unnecessary delay.

The scope of the Bill is confined to amending the Tribunals of Inquiry (Evidence) Acts of 1921 and 1979. The provisions are mainly technical but nonetheless they are an important development of the law in relation to tribunals of inquiry at this time. I thank Senators for agreeing to take all Stages of the Bill today so that it can proceed expeditiously onto the Statute Book. I commend the Bill to the House.

Mr. Connor

This side welcomes the Bill. Its purpose is to close off a loophole which was uncovered by the recent McCracken tribunal when an aspect gave rise to enormous costs on the part of the tribunal in terms of its investigation, but it had no power to levy those costs against the person involved. My regret about the Bill is that it will not apply retrospectively and the person who committed that offence at the McCracken tribunal will get off scot-free.

Taxpayers will have to pick up the tab for the costs involved in the tribunal team having to travel to the Cayman Islands, London and elsewhere to investigate accounts, particularly the Ansbacher account, to follow Mr. Haughey's notorious money trail. This was a result of his lack of co-operation and denials of having ever received the funds which were placed in the accounts for his benefit. The tribunal was forced to expend an enormous amount of time and travel great distances to investigate the matter. If the Minister has the figure, I ask him to tell the House the exact cost to the tribunal of undertaking those tasks and that travel. The Minister and his officials are shaking their heads, but that is not good enough. The House and the public are entitled to know the amount of money the tribunal had to expend. This amount must be voted by the Houses of the Oireachtas and will be paid ultimately by taxpayers. It is in the public interest to know exactly what is involved. It is a pity that this legislation is not retrospective. Then those who caused this problem could have the costs levied against them.

The law covering tribunals of inquiry stems from a Westminster Act of 1921 and the Tribunal of Inquiry (Amendment) Act, 1979. Experience has shown us that we need to look closely at section 5 of the 1979 Act, which gives immunity to those giving evidence to such a tribunal. It is like the Fifth Amendment to the American Constitution, which allows one the freedom not to incriminate oneself. Evidence given by a person to a tribunal of inquiry cannot be used in criminal proceedings against that person. Serious evidence of criminal activity was heard at the beef tribunal. There were huge breaches of EU and Department of Agriculture regulations as well as tax evasion. That was proven at the beef tribunal, yet because of section 5 of the 1979 Act it could be used to bring Mr. Larry Goodman and his cohorts to justice. There was serious public disquiet about that matter, as people could not understand that this hugely expensive inquiry brought forward clear evidence of wrongdoing and crime, yet nobody was brought to book, apart from some minor protagonists in Mr. Goodman's meat factories. Those persons were found guilty of breaches of the animal disease regulations or other minor offences. None of the main protagonists were brought to book.

I recognise people's civil right not to incriminate themselves. Nevertheless, this matter must be looked at very closely. I will seek to amend this legislation on Committee Stage in order that this problem can be addressed, and I hope the Minister will be sympathetic to my amendments.

This sordid affair arises from Mr. Haughey's lack of co-operation with the McCracken tribunal. He repeatedly denied that he received funds from Mr. Dunne, although Mr. Dunne told the tribunal in evidence that he had paid £1.3 million to Mr. Haughey in three instalments. Mr. Haughey denied this and refused to co-operate with the tribunal, trying to suggest that Mr. Dunne was not of sound mind. Finally, Mr. Haughey tried to subvert and overthrow Mr. Justice McCracken and his tribunal by attempting to show that Mr. Justice McCracken was guilty of a conflict of interest as he had, while a barrister, acted for another party involved in the tribunal. That was like the last throw of a scoundrel.

Out of all of that we have come to this sorry pass. I congratulate the Minister and the Government because this is not what might have happened in times past. A serious loophole in terms of the cost of the tribunal — costs caused by the lack of co-operation of one the chief actors in the Tribunal — has been closed under this legislation. I congratulate the Minister on that. I am delighted to hear his assurance that this legislation will apply to the Moriarty and Flood Tribunals. Nevertheless, there remain unanswered questions about the Ansbacher accounts in the Guinness & Mahon bank. The Government decided that the tribunal would not investigate the legal standing of the ownership of those accounts.

I read recently a series of articles by Denis Coghlan on this issue. It would appear that, arising from comments in the McCracken Report, the Minister for Finance sought a report from the Central Bank on possible breaches of exchange controls in the operation of the Ansbacher accounts in the Guinness & Mahon bank. The terms of reference of the Moriarty Tribunal, which is about to sit, require it to make broad recommendations for enhancing the role of the Central Bank as the regulator of the commercial banks and of the financial services in general. What exactly does this mean? If the Moriarty Tribunal is to have any effect it must be able to examine the way in which the Central Bank operates its regulatory controls. It must be able to look at the way the Central Bank related itself to Guinness & Mahon and, in particular, to the Ansbacher accounts. The Central Bank has an overseeing and regulatory role in the financial sector. Every bank must report to the Central Bank as to the conduct of its affairs on at least an annual basis.

The Central Bank has very wide powers to look into the affairs of any bank. It must have had sight of the Ansbacher accounts in Guinness & Mahon if it was exercising its proper regulatory function. Did the Central Bank uncover any breaches of exchange control regulations? Some years ago it was forbidden to export money without the permission of the Central Bank. This was, clearly, happening on a regular basis in the case of the Ansbacher accounts. Did the Central Bank find any breach of exchange control regulations? Did it report them to the Minister for Finance? Can this House and the public be told of the relationship between the Central Bank, Guinness & Mahon and the Ansbacher accounts? Central Bank regulations lay down that no more than 15 per cent of its deposits can constitute the liabilities of any bank yet the auditor for Guinness & Mahon, in 1989 when this account was particularly active and Mr. Traynor was in control of it, was alarmed to note that the Ansbacher account constituted 35 per cent of the value of the deposits at Guinness & Mahon, in other words it constituted 35 per cent of its liabilities. That was a serious breach — by more than 20 per cent — of the regulation of 15 per cent laid down by law and which must be operated by the Central Bank in its role as overall supervisor of the commercial banking sector.

It may be some time before either House revisits tribunals of inquiry legislation. The base legislation was enacted in 1921 and was not amended until 1979; 19 years later it is being amended again. Everything should be done to make the legislation as comprehensive and relevant as possible to the needs of today.

In view of this, it is a pity that the beef tribunal cannot be revisited. There continues to be disquiet at the enormous cost — between £35 million and £38 million — of that tribunal and at all the wrongdoing which was uncovered going unpunished. The Minister should amend this legislation to provide that the costs of that tribunal are levied against those whose actions necessitated its establishment. It was disgraceful that Mr. Larry Goodman was not only awarded his legal costs but was also awarded his costs for consultants, for paying spin doctors to put a spin on the version of the story he wanted the public to hear. It is a pity that this legislation does not provide that the funding that had to be disbursed would be reimbursed to the taxpayer.

I was present when the Dáil debated the report of the tribunal of inquiry into the beef industry. The Minister was one of the most aggressive defenders of the then Government. While he was not Minister for Justice at the time he attempted to justify what had been uncovered by the tribunal. I invite him to comment and, now that he is Minister for Justice, Equality and Law Reform, to revise some of his remarks on that occasion. In the Official Report, September 1994, vol. 445, column 800 he stated:

The late 1980s will go down in Irish political history for one remarkable reason. It was the time of the business scandals when politicians came into this House and did everything they possibly could to ascribe the scandals in the business world to the then Leader of Fianna Fáil, Charles Haughey. It mattered little that he had no involvement in Telecom Éireann, Greencore or the other events of that time which indeed, subsequent inquiries established. All that really mattered was that it was imperative to bring him down and in doing so it was possible to damage Fianna Fáil as much as possible. Allegations became the order of the day, innuendo was the way to proceed, rumour became fact and misrepresentation and character assassination was the way to proceed with political life in this country.

I have no doubt the Minister would not say that today. I know we all have the benefit of hindsight but the Minister should comment on that broad, veiled defence of what the beef tribunal uncovered about Mr. Haughey. He tried to put the sole blame on Members of the Opposition for making wild accusations and spreading innuendo without addressing the issues raised by Mr. Justice Hamilton, although we now know that report was not the best in the world. On that day the Minister and the present Minister for Health, Deputy Cowen, were the most aggressive defenders of what had taken place. Note should be taken of that in this debate.

We welcome this necessary legislation which will govern tribunals of inquiry. We have had a number of such tribunals in recent years and we have learned something from each of them. Regrettably, there is no doubt we will have many more tribunals of inquiry into other scandals and issues of public concern where the courts and these Houses cannot get at the truth. It is important to equip such tribunals with the wherewithal to comprehensively and properly carry out their inquiries. It is also important that the costs which arise out of the non co-operation of any witness are levied against that person and that the full rigours of the law should be applied to people who breach the regulations.

Mr. O'Donovan

I welcome the Minister and compliment him on his courage and commitment in bringing this legislation before the House. There are three main planks in the Bill: the immunity of witnesses and those who provide statements before the tribunal; the issue of costs, which my colleague on the other side addressed in some detail; and the question of enforcement.

For some time I have been critical of the overall benefit of tribunals. One of our first major tribunals occurred as a result of an incident near my home town, the Betelgeuse disaster in Bantry Bay on 8 January 1979, in which 50 lives, seven locals and 43 French sailors, were lost as the result of a tanker explosion. That tribunal cost the State about £2 million. I concur with my colleague in this regard in that the main culprit was the company, Gulf Oil/Chevron, which was running the storage depot and port facilities at Whiddy; it was not held responsible and the taxpayer bore the brunt of the cost of the inquiry. Judge Costello who chaired that inquiry produced a voluminous and detailed report after several months and many hearings in west Cork, Bantry and Dublin. Regrettably, most of the recommendations of that report have never been implemented. The oil storage depot in Bantry was somewhat mothballed for a while but was subsequently reactivated.

The next major tribunal was the Stardust tribunal, which also arose out an incident in which there was huge loss of life. It was probably the tribunal with the greatest impact and results relative to the amount of money spent on it. As a result, every fire officer was instructed to ensure that public places such as cinemas, public houses and hotels were made safe. It was regrettable that it took the Stardust disaster to bring about this approach but that tribunal gave an important return to the citizens of this country.

Senator O'Connor referred in great detail to the Goodman tribunal. Several years ago I said on the "Pat Kenny Show" that the cost of that tribunal to the taxpayer would be in the region of £40 million to £45 million. He said to me that he thought £3 million or £4 million would cover the cost. We now know that the direct cost to the taxpayer was in the region of £50 million. The indirect cost to the beef industry ran to billions of pounds. I am not defending Larry Goodman or any of his agents or employees, but that tribunal was unsuccessful. All the costs were met by the taxpayer and those who were found guilty did not have to pay anything.

In my view, not as a party politician but as a lawyer, there should be another method to investigate such matters which would be as effective as tribunals but much less costly to taxpayers. In other jurisdictions a senior inspector is given strong powers to investigate such allegations. It might be possible to second a High Court judge to such a role.

In any of the tribunals since the Betelgeuse disaster, a select set of lawyers — although I might be condemning my own profession in this regard - almost became millionaires. The Whiddy and Goodman tribunals certainly did not have the desired effect. It remains to be seen whether the two current tribunals, in relation to which the Minister had the courage to introduce these amendments, will have the desired effect.

Taxpayers need to know how their money is spent. I am not defending the wrongdoings which emerged in some tribunals. A huge amount of money was badly spent at the Goodman tribunal. There were also indirect losses as a result of damage to the beef industry. An inspectorate could be set up by the European Commission which could carry out an independent, less costly and successful examination.

I take issue with the point raised by Senator Connor on immunity for those who give evidence to a tribunal of inquiry. The system of immunity has worked invaluably to the benefit of justice, fair play and equity. We are giving powers to tribunals of inquiry that already exist in the High Court. The established doctrine of vicarious responsibility gives immunity to an employee, agent or servant of a particular person. In the case of the Goodman tribunal, as mentioned by Senator Connor, there would be major conflict if employees, agents and servants of the company were compelled to give evidence under this doctrine. That is why the provision of immunity is important and welcome and should be included in this legislation.

Otherwise, I could envisage a difficulty where servants, agents or civil servants who could make a valuable factual and honest contribution by making a statement or giving viva voce evidence before a tribunal are not protected. These people need and deserve protection, unlike the main players. There should be immunity for those who are compelled to come before a tribunal and are forced to make a statement and give facts about bank accounts, etc. If there was no provision of immunity there would be difficulty getting people to give evidence.

Another central feature of this legislation is the question of costs. I compliment Deputy Quinn, the Leader of the Labour Party, who made a special contribution in this regard. This is the most important aspect of this legislation. Up to now, any tribunal of inquiry was unable to award costs against someone who caused delay or obstruction in the setting up of the tribunal. This was a serious defect in the legislation. Senator Connor asked whether this provision could be made retrospective. There would be major constitutional difficulty in doing this. However, the Minister, the Government and the Taoiseach acted quickly and responsibly in ensuring the implementation of this legislation. I am glad my colleagues in Opposition accept the thrust of this Bill.

Another aspect of the legislation is enforcement. There is no point in the chairman of a tribunal awarding costs against someone if the decision cannot be enforced. The new provision under section 4 enables the tribunal to seek an order from the High Court if there is a problem with enforcement. This is an important facet of the Bill.

I compliment the Minister on introducing this legislation so quickly. I compliment the Opposition for consenting to deal with it expeditiously as there are two outstanding tribunals. It is important legislation but I have misgivings about the economic benefits of tribunals. Given the spiralling costs of tribunals, an alternative method should be looked at. If one asks Joe Soap about this matter he will say the greatest benefactors of the tribunals are lawyers. There is much apathy towards, and criticism of, the value of tribunals.

The only tribunal which had a successful conclusion was that on the Stardust disaster. As a result, every public house, dance hall and cinema improved their fire exits and made their premises safer for the public to visit. This was an indirect benefit of that disaster. We should distinguish between tribunals dealing with disasters such as the Whiddy Island and Stardust disasters where 50 and 27 lives, respectively, were lost and those dealing with other matters. In these human tragedies, the public, whether in Dublin or West Cork, demanded answers. In the Whiddy Island disaster tribunal which I attended, despite several months work and a report by Mr. Justice Costello, very few of the recommendations were implemented and despite speculation, the true cause of that disaster in Bantry Bay on 8 January 1979 was never ascertained.

I commend this Bill to the House and trust my colleagues will see the importance of its implementation as soon as possible due to the two tribunals which must sit soon. I welcome the provisions on immunity, costs and the enforcement of any decision of the tribunal.

It was mentioned to me today that so far in this term the Government has introduced 26 or 27 legislative measures which is tremendous work by this Minister. This should be compared to the first term of the previous Government when nine legislative measures were introduced. The Minister dealt with four Bills last week which were initiated in this House. As Fianna Fáil spokesperson on Justice, Equality and Law Reform, I hope he takes it easier in the new year because I am worked off my feet. He is working to a Government and personal agenda to introduce a great deal of legislation and this is welcome. Hitherto, this House has been neglected. As late as today, the Taoiseach told our group he welcomed this initiative and would like to see more legislation initiated in this House in the future. We have an important role to play and should not play it down.

Mr. Norris

This is a short practical Bill that refines the focus of tribunals, which is welcome. It was introduced in a short practical speech by the Minister. I also intend to be brief because I do not need to go further than the few pages the Minister read into the record. The Bill clearly refines the focus and meets some of the concerns expressed during the tribunal.

While I listened to the debate on the monitor, I noticed an opportunity was taken to attack a former politician who has recently been in difficulty. I am not sure this was the appropriate place to do so. If there is a tribunal of inquiry investigating the practices of that person or any other named individual, that is the place in which to do so. It is a pity that the Houses of the Oireachtas should be so adversarial and that anybody should seek to score advantage from the discomfiture of another.

Politicians are unique among the professions. We will not find lawyers attacking each other. There is good reason the public should be a little sceptical of the legal profession. Enormous costs are placed on the backs of taxpayers by the legal profession whose eyes light up with any possibility of a tribunal and a little bit of compensation which might spread through the total deafness of the entire Army, Navy and Air Corps.

In the old days the legal profession pretended to be gentlemanly and it was not regarded as such to tout for business.

Mr. O'Donovan

We still are.

Mr. Norris

I know the Senator is; he is almost too gentlemanly. When I made a scrotum of myself on today's Order of Business — I refuse to employ the other word — had I said "bags", people would have noted that bags occasionally contain balls as well so I would have been in considerably worse trouble.

The serious question is the iniquitous costs borne by the taxpayer. I remember a Member of this House, who is a distinguished financial journalist, raised this question in a newspaper and referred to a person who claimed for every day, including Christmas Day, and used the word "buccaneering". I believe the person concerned got £0.5 million, £1 million or some vast amount of money — I cannot count beyond 20 so it is a mystery to me — and promptly sued the newspaper for libel and got another £70,000 tax free. We should bear this in mind. We will not find lawyers attacking each other and will rarely find doctors doing so. However, we find politicians trashing each other at every available opportunity. This is terribly dangerous because it invites the contempt of the public in which I regret the noble and honourable profession of politics is held. It will be a pity if there are too many of these attacks.

I am glad the costs which are ordered are those as taxed by the Taxing Master of the High Court. Traditionally, honourable people have been in this role. Does the Minister believe it is a little unusual to have a member of the legal profession deciding on what is appropriate? Would it be better to remove this and have an independent person look at this matter to let us know if we are getting good value for money, for example? One person had a bill taxed and reduced from £30,000 to £15,000. Obviously, people will chance their arm if we put in a fee on the basis that it will be reduced. People are worried about expenses. It would be unfortunate if the public was induced to believe that tribunals were a bad idea because of the unnecessary expense involved.

I noted that some of my colleagues mentioned the question of expenses and suggested, for example, that the beef tribunal was a waste of money. If it was a waste of money, it was that the Houses of the Oireachtas, in framing the terms of reference of the tribunal, were perhaps less exact than they should have been. Many will have noticed that Mr. Goodman, whose operation was found to be in default by the tribunal on a number of occasions, was able to claim back taxpayers' money on behalf of that operation. It would seem quite absurd to people that somebody could claim expenses for having been found guilty. As a lay person I may have oversimplified this and if so, I apologise. I speak about the public perception as well as everything else.

We are also dealing with the question of immunity from suit of persons who supply written statements or documents to such a tribunal and, specifically, people who produce such documents pursuant to an order of the tribunal. It is perfectly reasonable that if a tribunal orders a person to produce a document they should be immune because they have been instructed to do so. It would be monstrous to penalise somebody for doing what they were told by a respected legal institution of the State. My only concern about immunity is that persons sometimes make allegations or statements for a variety of reasons which require a defence by a third party. This happens in other areas. I know of situations where people have had to go to court to defend themselves and who have engaged in considerable outlay to do so. Immunity from libel must be matched by the other power in the Bill to direct the State or a witness to pay the costs of a third party.

I would welcome the opportunity to talk about the question of tax costs, which the Minister might bear in mind. A matter that those of us who are addicted to litigation and who are naturally litigious run up against is the difference between costs where one may get an award for costs but may face a bill because the person acting on one's behalf believes they would have got more if one was paying them privately as a client. The Minister should do something about that phrase contained in the Bill. If the State believes costs as taxed by the Taxing Master are appropriate, they should stand as such and should be held to be enough for the legal person involved. It is wrong that costs should be awarded and then usually about 35 per cent is added on because the amount for which the taxpayer is held liable is not considered enough by the legal person involved. I welcome the Bill which will make tribunals more efficient. We have seen this happen, particularly with the McCracken tribunal.

Ms O'Meara

I welcome the Minister and appreciate the time he is spending in the House. I welcome the fact he has largely taken on board what was a Labour Party move to close off a loophole identified during the operations of the McCracken tribunal. This Bill is a replica of one produced by my party so I naturally welcome it and thank the Minister for accepting it.

As others have outlined, the Bill builds on and updates the law on tribunals. The last two decades appear to have been the era of tribunals. When we find it necessary to strengthen the law, it is our duty as legislators to do so. Tribunals in the past did not have to deal with the complex relationships between financial institutions, money trails, etc.

It is necessary for our democracy to have a mechanism whereby matters of major public interest and concern and which directly relate to the working of our democracy are investigated in a public and thorough manner and that subsequent reports are presented in a particular light. The House discussed the report of the McCracken tribunal, with almost every speaker congratulating its author for its clarity and brevity. However, there are more tribunals, and the Moriarty tribunal is starting its work in the near future.

This is a clear and constructive Bill. My party will be tabling a few amendments designed to strengthen its provisions and ensure a number of matters of public concern are dealt with, in particular the workings of the Central Bank.

We seem to be living in an era of tribunals, something that may appear strange to the public. However, tribunals are an essential part of modernising our democracy and the reforms initiated in the last number of years, many at the behest of my colleagues who were Ministers in the previous Government, including the ethics in public office and freedom of information legislation and the electoral Acts which continue to be developed. We are opening our democracy and changing the relationship between the public and the Oireachtas in a manner which brings us into line with a modern European style. This is to be welcomed. There will be hiccups along the way but we need to change our culture.

The resistance of and concerns expressed by Members when the Ethics in Public Office Act was passing through the House and on occasion the fears expressed by public representatives regarding the implications of publicly declaring their interests, are symptoms of the changes necessary in our political thinking and culture which defines the relationship between public representatives and the public. We are here to serve the public, not ourselves, and we must have a basic recognition of this fact in modernising our democracy.

There must also be a basic recognition of the need for accountability, openness and transparency, matters which are at the heart of a democracy which functions well and which commands the respect of the people it attempts to serve. The current phase we are passing through, which may last for 20 years and which necessitates tribunals of inquiry, will help build a democracy which is solid in its foundations and which is marked by good relationships between Members of the Oireachtas and the public we serve. It will also result in a democracy in which our institutions work well; where openness, accountability and transparency are taken for granted and where the institutions of State, including the Civil Service and the public service, serve the public rather than themselves.

It might take ten years before the provisions of the Freedom of Information Act, which apply from next April, are fully operational, but I welcome the changes. I also welcome the tribunals, painful as they have been and will continue to be, because they open facets of our democracy and its workings to the public and expose to public view matters which should be in the public domain. Such matters include the manner in which the Central Bank has conducted its public duty and how the Revenue Commissioners have served the public and conducted their statutory duties given it by the Oireachtas. If tribunals discover that such institutions have not performed appropriately on behalf of the public and subsequently correct the problems, they will have done a good day's work. The McCracken tribunal, in particular, did a good day's work and I look forward to the Moriarty tribunal conducting itself in a similarly concise and efficient manner, communicating with the public it serves in a comprehensible way.

We are seeing a chapter of unfinished business in the necessary growing up of our democracy but we still have a long way to go in this regard. Specifically, there is unfinished business in relation to the McCracken tribunal concerning the Ansbacher accounts, which will be taken up by the Moriarty tribunal. The McCracken tribunal identified £38 million held in the Guinness & Mahon bank, ownership of which has only been partly ascribed.

There is a huge resistance at political, and not just Government, level to examining the Ansbacher accounts. The longer that resistance continues the greater will be the public demand to know what is in those accounts. It might take ten years — I hope it does not take so long — but the public will find out. I am convinced that the day will come when the full details of the Ansbacher accounts will come into the public domain because there is a huge demand among the public to know the circumstances in which the Ansbacher accounts were established. We are foolish if we try to resist the irresistible. The information must come into the public domain and those who resist such a move will not be thanked.

There is other unfinished business regarding the operation of the Revenue Commissioners and the Central Bank with which the Moriarty tribunal will deal. Yesterday's editorial in The Irish Times referred to the Dáil debate on this legislation correctly pointing out that that debate and the Government's response have done nothing to reassure the public in relation to its concerns about the role of the Central Bank in the Ansbacher accounts and the enforcement of exchange controls. Institutions such as the Central Bank have a responsibility to enforce the laws passed by these Houses. The Irish Times in its editorial pointed out that last month's response from the Central Bank to the Minister for Finance, who rightly expressed his concern that the bank may have failed in its supervisory role, was dismal. I do not know how long this situation will continue but the Central Bank must be under no illusion. The public will not tolerate an institution such as this failing to carry out its statutory functions given it in the public interest and will not accept excuses.

I have no doubt we will be returning to this unfinished business. This legislation concerns unfinished business in relation to the McCracken tribunal. The era of tribunals will continue into the next century as long as the Ansbacher accounts, the role of the Central Bank and the Revenue Commissioners and other matters hang like clouds over the political system. If that is how it must be, so be it. The emergence of the truth is ultimately unstoppable.

I welcome this legislation and look forward to Committee Stage. We have tabled some amendments in which we are attempting to strengthen and improve the provisions of the Bill and ensure that future tribunals of inquiry have the necessary powers to do the work required of them in the public interest.

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue)

I thank the Senators who contributed to this debate. I appreciate their comments and their general welcome for the legislation.

I indicated at the outset that this Bill concerned strengthening the powers of tribunals of inquiry. Its purpose is threefold. First, it provides for immunity from suit of persons who supply written statements or documentation to a tribunal. Second, it provides that a tribunal may order the costs incurred by it to be paid by any person named in the order and that a tribunal may, of its own motion, order the costs of any person appearing before it to be paid by any person named in the order. Third, it gives powers to a tribunal to apply to the High Court to have its orders enforced.

This Bill is just one of a number of measures which the Government is taking on foot of the findings of the McCracken tribunal. The Government is also giving consideration to extending the jurisdiction of the Ombudsman to include the functions of monitoring and investigating possible breaches of the Ethics in Public Office Act. This would involve extending his powers to enable him to carry out investigations by making certain forms of orders, such as orders for the discovery of documents and possibly by allowing him to have recourse to the courts to seek letters of requests to courts in other jurisdictions to enable witnesses to be examined or documents to be produced in such jurisdictions.

The Government is examining the recommendations concerning the extension of the powers of the Ombudsman to carry out investigations for breaches of ethics in public office. Government considerations will include reconciling the tribunal recommendation with the recommendation of the all party committee on the Constitution in relation to the establishment of an electoral and ethics commission. As the all party committee states in its first report, a single commission, incorporating the public offices commission, the constituency commission and the proposed independent referendum commission, under the Constitution would guarantee the independence and impartiality of the commission. It would generate greater confidence in public life, create greater transparency in public institutions and provide an independent source of advice and information in the areas of ethics in public life and electoral law reform.

On the question of making it mandatory for any candidate for either House of the Oireachtas to produce a tax inspector's certificate to the Clerk of the Dáil or the Seanad to the effect that his or her tax affairs are in order and are accompanied by a statutory declaration to that effect, the Government's action programme outlines its support for such a proposal and the matter is currently being examined.

Questions have been raised about the Government's commitment to the introduction of legislation which would provide that any person found guilty of an offence under the Ethics in Public Office Act would be ineligible to become a Member of either House in the future either for a limited period or permanently. The necessary amendments to the Ethics in Public Office Act which would implement the McCracken tribunal's recommendation in regard to the creation of a criminal offence for breaches of the legislation and the consequent barring of a convicted person from standing for subsequent election are being prepared.

Any decisions which will arise from Government consideration of these matters will not prevent existing authorities, such as the Office of the Director of Public Prosecutions, the Revenue Commissioners and the Comptroller and Auditor General, from exercising their statutory powers as they deem necessary.

I remind the House that the Chairman of the Revenue Commissioners has stated publicly that the proceedings of the tribunal had been monitored closely by the Revenue Commissioners and that all appropriate action would be taken. The Minister for Finance has also indicated that any additional investigative powers required by the Revenue Commissioners can be introduced.

In the course of the debate certain matters were raised by Senator Connor and others. I could, if I so wished, reply specifically to certain points made by the Senator but I consider it best not to do so at this stage. The reason for this is that, as Senator Norris pointed out, investigation of certain matters which have arisen in recent times is clearly a matter for the established tribunals to investigate. This is not the appropriate forum in which to do that. The purpose of this particular legislation is quite specific and, accordingly, I do not want to reopen either the debate on the McCracken tribunal or to traverse well worn ground. However, there are other matters which deserve an appropriate response in this House.

The issue of the Ansbacher accounts was raised by a number of Senators, in particular by Senators Connor and O'Meara. There has been a continuing debate on the Ansbacher accounts and the need to have them investigated. It is important to point out that Mr. Justice McCracken found that the Ansbacher accounts certainly did hold funds for the benefit of some Irish residents. He also pointed to the fact — a fact which is often missed — that the holding of such accounts was not, of itself, prima facie evidence that any law had been broken. A difficult legal question then arises which may not satisfy many; nonetheless, it is a question which legitimately arises. On what basis could one establish a tribunal to inquire into a matter in respect of which there is no prima facie evidence of wrongdoing? That may be an unpalatable question for some but it is an extremely important legal question which must be asked.

Mr. Connor

On a point of order, Mr. Justice McCracken did refer to the fact that the Ansbacher accounts, which have not, as yet, been investigated, could be used for tax evasion purposes.

An Leas-Chathaoirleach

That is not a point of order. The Senator may ask questions on Committee Stage.

Mr. O'Donoghue

I fully appreciate that there is a considerable amount of concern in relation to this matter and I want to make it clear that I share that concern. However, that does not mask the fact that a very serious legal question must be faced. I have outlined as best I could precisely what the question is although people may want to avoid it or may find it unpalatable.

The issue of exchange controls was raised by Senators Connor and O'Meara. A number of questions have arisen in relation to exchange controls arising out of the McCracken report itself. While I admit that these are matters for my colleague, the Minister for Finance, to deal with, I feel I should outline for Members the current position on this important matter. On the publication of the McCracken tribunal report on 25 August 1997, the Department of Finance wrote to the Central Bank and asked it to instigate a detailed investigation of the issues raised by the references in the report to exchange controls and to report the outcome to it. A response was received by the Department of Finance on Friday, 17 October 1997. An addendum to this response was received by the Department on 23 October 1997. The response and the addendum have been referred to the Director of Public Prosecutions for his consideration and any action he considers necessary. These documents have also been referred to the Revenue Commissioners for investigation and any necessary action under the Customs and Taxes Acts. The documents have also been referred to the tribunal of inquiry under the chairmanship of Mr. Justice Moriarty. Having consulted the Attorney General, the Minister for Finance has asked the Director of Public Prosecutions for his view as to whether communicating the response of the Central Bank and the addendum thereto to the Houses of the

Oireachtas might prejudice consideration and possible prosecution by the Director of Public Prosecutions. In this respect a response is awaited from the Director of Public Prosecutions.

The Minister for Finance also asked the Central Bank to clarify a number of matters included in the Central Bank response and the addendum thereto. If the clarification from the bank provides additional relevant material in relation to possible exchange control breaches, the Minister will refer the material for consideration to the Director of Public Prosecutions and, if appropriate, to the Revenue Commissioners and to the Moriarty tribunal of inquiry.

The Minister for Finance also wrote separately to the Governor of the Central Bank regarding the general supervisory issues arising from the McCracken tribunal of inquiry. He asked the Governor to report to him on these issues and, in particular, if the board of the bank is satisfied that the bank has the necessary legal powers for the effective execution of its regulatory role, that the procedures and practices necessary to effectively exercise these powers are in place and that these procedures and practices are being implemented effectively.

In reply to a Parliamentary Question on 19 November 1997, the Minister for Finance indicated that he had been advised that, while bank staff engaged in supervision are primarily concerned with prudential matters, there is no barrier on their reporting alleged breaches of exchange controls to their colleagues in the exchange control division of the bank. However, I have been further advised that it is the recollection of officers in the two functions when exchange controls were in force that exchange control issues did not arise from banking supervision.

The Central Bank — by virtue of section 31 of the Central Bank Act, 1942, replaced by section 16 of the Central Bank Act, 1989, and subsequently amended by section 52 of the Central Bank Act, 1997 — is prohibited from disclosing information to the authorities. The situation was modified by the Criminal Justice Act, 1994. This Act has placed an obligation on the bank to report to the Garda any suspicion of a criminal act, such as tax evasion or money laundering by a bank.

To date the bank has had no occasion to make such a report to the Garda. There is no authority for the Central Bank to report on matters to the Revenue Commissioners. Given these circumstances, the Minister for Finance asked the Governor to report separately to him on the supervisory issues and, in particular, if the board of the bank is satisfied that the bank has the necessary legal powers for the effective execution of its regulatory role, that the procedures and practices necessary to effectively exercise these powers are in place and that these procedures and practices are being implemented effectively.

A reply has been received from the Governor of the Central Bank which states, inter alia:

On the matter relating to the control and management of G & M, there is no record in the bank that it was informed of the matters in the internal auditor's report carried out by Guinness, Mahon & Company Limited on G & M in Dublin in 1989. It emerged in the Tribunal report that these matters related essentially to inadequate internal controls and possible exposure to fraud relating to a large percentage of G & M's deposits. There is no record that the Bank had discovered the system for operating the Ansbacher accounts during its inspections and review meetings. Prior to publication of the Tribunal report, the Central Bank had no knowledge of the existence of the "Ansbacher Deposits" referred to during the Tribunal hearing or of the role played by G & M in the management of those deposits. I should stress that only in the 1990s has it become standard practice both in Ireland and elsewhere for supervisors to seek all material internal audit reports.

Mr. Connor

That is a disgraceful piece of hand washing.

Mr. O'Donoghue

The reply continues:

Supervision has three main elements; authorisation of new entities; ongoing supervision of existing entities; and policy developments. Entities supervised by the bank are required to submit a regular flow of detailed financial data which represent the basis for assessment of institutions by the bank. Regular reviews and on-site inspections of entities are also undertaken. The reviews are usually on a half-yearly basis. There is a programme in place for the inspection of supervised entities on a regular basis.

I can confirm that the Board is satisfied with its legal powers which are generally adequate to enable the bank to discharge, satisfactorily, its statutory functions.

Mr. Connor

They must not have been adequate in 1989.

Mr. O'Donoghue

The reply continues:

The statutory position in Ireland follows mainstream European law in the area of prudential supervision and all EU Banking and Investment Directives have been transposed into Irish law and have been brought into force. In relation to credit institutions I would mention that the latest review of legislation was undertaken in 1996 and amendments to legislation were introduced in 1997 to take account of that review. In relation to the supervision of investment intermediaries, the Bank is currently in negotiations with the Departments of Finance and of Enterprise, Trade and Employment with a view to amending the governing legislation i.e. the Investment Intermediaries Act, 1995. Several of these amendments are necessary to facilitate the transfer earlier this year of supervisory responsibility for retail intermediaries from the Department of Enterprise, Trade and Employment to the bank. The Bank is anxious to take advantage of this amending legislation to put forward certain changes to the 1995 Act which would enhance its ongoing implementation.

In relation to the supervision of recently transferred investment intermediaries I would like to take this opportunity to highlight what the Bank perceives as a distinct lack of compliance culture among the retail end of this sector. Significant efforts on the part of the Bank will be required to address this problem.

With regard to supervisory procedures and practices, the Board keeps under review the Bank's supervisory practices and its approach to supervision. It endeavours to ensure that these are in line with international best practice and are subject to continuous modernisation and adaptation to meet the needs of a changing global environment.

I can also confirm that the Board is satisfied that the supervisory procedures and practices are being effectively implemented by the Bank. The Board is briefed on all matters of supervisory significance, on a monthly basis. It receives a comprehensive report, on a half-yearly basis, on work undertaken over the previous six months and on significant issues outstanding or likely to arise in the future. All significant proposals are subject to approval by the Board on a case by case basis — e.g. authorisation of banks, acquisition of/by banks and refusal to authorise investment intermediaries. Papers on various topics relating to supervision are circulated regularly to the Board and a significant part of Board meetings is usually concerned with supervisory matters.

That indicates the feeling of the bank in the matter as comprehensively as I can put it.

Mr. Connor

Is the Minister satisfied with the excuses?

Mr. O'Donoghue

Senator O'Meara referred to The Irish Times editorial of yesterday. With regard to the disclosure of information by banks to a tribunal there appears to be a certain amount of public confusion.

Ms O'Meara

Concern.

Mr. O'Donoghue

The confusion was reflected in a portion of The Irish Times editorial to which Senator O'Meara referred. It stated:

Now the Central Bank Act may inhibit an in-depth investigation into how the operations of individual licensed banks were regulated, unless those bodies voluntarily agreed to such disclosures.

This is not, in fact, correct. The Central Bank Act relates to the Central Bank. In so far as banks generally are concerned, I wish it to be noted that, with regard to the disclosure of information, banks have no specific privilege and as such are required to comply with an order of a tribunal to disclose such information. Failure to do so constitutes an offence. The fact that a tribunal has such powers actually contributed to the McCracken tribunal.

In so far as I could deal with the concerns of the Senators in relation to the matters raised, I have done so in as comprehensive a manner as I could. It may be that some of the answers I have given are unpalatable. Many of the matters raised concern me as much as they do Members. However, it is of considerable importance nonetheless that the facts as they exist and the law as it stands be put forward without fear or favour so that everyone knows the precise position and why it has been taken.

Mr. Connor

The Minister covered himself well.

Question put and agreed to.

Agreed to take Committee Stage now.