I am grateful to you, Sir, and the Ceann Comhairle for having given me permission to raise the matter of the fine proposed be imposed on Ireland in respect of malpractices within the beef industry.
Indeed since I put this topic down for debate yesterday the position has deteriorated further by the news that it is now proposed to increase the fine by a possible additional £25 million in respect of breaches of the tendering regulations and because of the loss of beef in intervention in a fire at a cold store in County Roscommon in respect of which there appears to be a problem about insurance on the part of the Department of Agriculture, Food and Forestry.
In addition to these penalties, which amount to slightly in excess of £100 million, I established, at the meeting of the Committee of Public Accounts this morning, that the taxpayer suffered a further loss of £65.4 million in intervention exchange losses on foreign currency transactions in 1993, not reimbursable from the European Union. I find it incredible that, whereas the Department was liable to make payments in Irish £s, it conducted nearly all its borrowings in foreign currencies and seemed to have done nothing to cover the exchange risk involved. Because it is taxpayers' money nobody seems to be terribly concerned about its loss but, if this were to happen in a private company, there is no doubt that those responsible would be dismissed from their employment. It also appears that the Department of Agriculture and Food has no proper treasury management system even though it deals in vast amounts of foreign currency. For example, its outstanding borrowings in 1993 in foreign currency appear to have exceeded £650 million, held without any hedging or cover. That amounts to gross negligence, again the beneficiaries being Irish beef companies who never appear to lose out in such circumstances but for whom the Irish taxpayer carries the can if by any chance the European taxpayer fails to carry it for them.
It is worth noting that the penalties by the European Union Commission in respect of the years 1990 and 1991 were at the highest level possible, namely, 10 per cent of all intervention payments. Earlier smaller penalties had been increased to the maximum level when the relevant financial controller within the Commission saw the extent of the malpractice and the extremely limited, half-hearted efforts on the part of our Department of Agriculture and Food to cope with or control them.
It is also worth reminding ourselves that as far back as 1989, when various malpractices were raised and accurately referred to in this House, the then Taoiseach accused the Members concerned of "trying to sabotage the entire beef industry in this country". The then Minister for Agriculture, Deputy Michael O'Kennedy, replied "all requirements of European Community and domestic law are being adhered to". Of course, that statement was untrue and the question arises whether he knew that when he made it.
It has now been further established that, although various bonds and other securities were in place, when the different intervention and export refund payments were made by the Department, all those bonds and securities appear to have been allowed to lapse. Several of the companies involved have since gone out of business or changed hands. It appears that the prospects of the Exchequer recovering any worth-while proportion of the penalties likely to have to be paid are fairly poor. Frankly, I find it very hard to stomach. The profits made in the Irish beef processing industry over the past ten years were enormous, a proportion of which were earned in circumstances which, to say the least, were dubious. Nonetheless, there is rarely an attempt by the Department to recover anything which is due or improperly obtained.
There has been a climate of fraud in this industry. The latest of many demonstrations of that is the fact that two people found it necessary to plead guilty in the Circuit Court to conspiracy to defraud as recently as yesterday. Those people are junior employees of a firm. It is remarkable that it is junior employees and a journalist, who blew the whistle on much of this activity some years ago, who are the only people who have stood in a court as a result.
I would like an assurance from the Minister that what has been going on during the past six or seven years will come to an end and that this type of activity will not be tolerated any longer. There is at least some advantage in that it has now come out into the open that huge penalties are being imposed on Ireland as a result of what has taken place. It has made people conscious of what has been happening. Hopefully a handful of people like myself and a few others will no longer be voices in the desert crying out, almost on our own, and trying to call a halt to what has gone on for so long.
