Dáil Éireann díospóireacht -
Thursday, 29 Feb 1996

Vol. 462 No. 4

Ceisteanna—Questions. Oral Answers. - Reply to Parliamentary Question.

Desmond J. O'Malley

Ceist:

3 Mr. O'Malley asked the Minister for Agriculture, Food and Forestry if he has satisfied himself with the accuracy of the reply to Parliamentary Question No. 25 of Wednesday, 11 October 1995; if not, the reason this incorrect information was given to Dáil Éireann; the proceedings that have been instituted for the recovery of sums fraudulently obtained by beef processing companies selling beef into intervention; and the reason Ireland did not fulfil its obligations in this respect, imposed by Article 8 of Council Regulation 729/70. [4751/96]

Mr. Yates

I regret that the wording of the reply to the Parliamentary Question No. 25 of Wednesday, 11 October 1995 was inaccurate. However, it was not my intention to mislead the House and I have apologised to the Ceann Comhairle and do so now to the Members of the House. The correct response should have been that my Department had taken steps through the office of the Chief State Solicitor to institute legal proceedings for the recovery of the funds in relation to Rathkeale AIBP. Indeed, I conveyed this to the House in response to supplementary questioning as the record shows.

I understand that proceedings in this matter were issued yesterday.

The Commission services have proposed a financial correction based on their view that the Irish authorities did not fulfil obligations arising in Article 8 of Regulation 729/70. This is a general rather than a specific correction and arises because of the Commission view that deficiencies in control arrangements led to some loss of EU funds which it did not quantify.

I have not contested the fact that there were inadequacies in the control functions having regard to the massive and unprecedented intake of intervention beef in 1990 and 1991. These control inadequacies were recognised in the beef tribunal report. However, the tribunal fully accepted that the control improvements begun in 1990 and continued into 1991 and 1992 went very far in dealing with the weaknesses of the controls system. For this and other reasons I have argued that the level of correction — that is the time proposed — is disproportionately high.

The obligation to recover sums which can be shown to have been lost as a result of irregularities or negligence is being discharged in accordance with legal advice available to me.

As indicated I am in the process of seeking the recovery of sums in one case and am working in consultation with our legal advisers with a view to instituting further proceedings aimed at the recovery of other sums lost due to alleged irregularities in the beef industry.

Mr. O'Malley

I am grateful to the Minister for his apology to the Ceann Comhairle and, presumably, to everyone else but he omitted to apologise to the Deputy to whom he gave the wrong information — we will pass over that.

The Minister repeated the wrong information in his reply to the supplementary questions I asked on that day when he said, as reported in column 1793, Volume 456 of the Official Report: "This is why we have instituted legal proceedings.", using in each case the past tense about proceedings that had actually started. We now discover that instead of having started prior to 11 October 1995, the proceedings were instituted yesterday. Were the proceedings instituted in respect of Rathkeale only and was it in respect of only one of the frauds in Rathkeale?

Mr. Yates

To take the latter question first, the proceedings instituted yesterday relate to Rathkeale boning hall. I am advised by the legal officers of the State that similar steps will be taken in a matter of days, I hope within a week, in relation to the Shannon Meats Cannery. That is the best advice available to me.

May I refer the Deputy to what I said when responding to supplementary questions on that day. In column 1792, Volume 456 of the Official Report of 11 October 1995 I said:

Consequently, on the advice of the Office of the Attorney General, the Department has taken steps through the office of the Chief State Solicitor to institute legal proceedings for the recovery of the funds.

Today I apologised to all Members, including Deputy O'Malley. I will go through the detail of this matter. We wrote to the Attorney General about it on 11 October 1994, we sent a reminder in November 1994 and we were advised in February 1995 that a barrister had been appointed.

In a minute dated 23 February 1995 issued to the Chief State Solicitor's office setting out the facts and asking that legal proceedings be instituted, we asked that regular progress reports be sent to us as proceedings are proposed. I have investigated the matter thoroughly and will set out what happened. The barrister who was appointed was sent several reminders by the Chief State Solicitor's office, assured us it would be done and some considerable time later said he was too busy to do it. Subsequently, another barrister was appointed and he issued proceedings and further proceedings in regard to the cannery are due to take place. I am determined to expedite all aspects of proceedings and I regret the delay.

Mr. O'Malley

Does the Minister now intend to take proceedings in respect of irregularities, frauds and misappropriations by these companies in factories other than Rathkeale, because there are dozens of others? Will he tell the House why his Department did not comply with the obligations placed on it by article 8 of the regulation in question where it is stated that the member state shall recover sums lost, as a result of irregularities or negligence, and prevent and deal with irregularities? In particular, will he explain to the House why he allowed this country to come within the sole exception set out in paragraph 2 of article 8: namely, that the European Union will bear all losses relating to this with the sole exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the member state? In other words, if his Department had fulfilled the duties cast on it by this article, no fine would have resulted and the European Union would have been content to bear any losses that arose.

Mr. Yates

This is a very significant point because Deputy O'Malley said here today, at the Committee of Public Accounts last week and on "Morning Ireland" that there would be no fine if we had recovered the individual fines. I want to make it absolutely clear that in all discussions I have had in regard to the unenviable job of trying to mitigate this fine, at no stage has it been said by any commissioner, any chef de cabinet or any technical services officer of the Commission that the issue of recoverability has been in any way relevant to the mitigation of the fine. It is factually incorrect and untrue to say there would not be a fine if we had proposed recoverability.

The second issue is that the largest fine is unspecific, general and not quantified to any particular meat plant. It follows an article 9 inquiry in relation to general problems in terms of the control function. That is the particular difficulty. Therefore, it is not open to me to institute proceedings other than in the instance of recovering specific losses relating to specific breach of contracts under EU rules.

Mr. O'Malley

Why did the Minister not do that? The first proceedings we had, in spite of what the House was told incorrectly last year, was yesterday. They were only issued yesterday because this question was tabled for answer today and the Minister could not come back in. I hope the Minister will answer that question. I also want an answer on the following matter. Article 8, paragraph 2, states: — in spite of what was said to him —"in the absence of total recovery the financial consequences of irregularities or negligence shall be borne by the Community with the exception of the consequences of irregularities"——

An Leas-Cheann Comhairle

I must dissuade the Deputy from quoting during Question Time.

Mr. O'Malley

——"or negligence attributable to administrative authorities or other bodies of the member state".

Mr. Yates

I can answer that question. It relates to specific fines and that is the case in relation to Rathkeale. If there is any inference by the Deputy that I failed to act other than rigorously against Mr. Goodman and the Goodman group, my ministerial record will refute it as it will show that there has been a rigorous, relentless and ruthless pursuit of Mr. Goodman and his company over and above any previous Minister. I have instituted the proceedings. I have been in constant touch with the legal officers to institute proceedings not only against Rathkeale but against Shannon Meats. I will also take any other proceedings that are necessary.

I have written to the Director of Public Prosecutions to see if he will bring any case in relation to the statements made about the Rathkeale case. Also — and the Deputy would not be aware of this — I recently authorised raids on a particular Goodman plant in the Border region in respect of allegations of abuse concerning illegal substances. As Minister for the past 15 months, knowing what I know now about Mr. Goodman, and following the exasperating experience I have had in dealing with files relating to intervention and export refunds, I would shed no tears if Mr. Goodman was to withdraw from the beef industry. As far as I am concerned he is the major culprit for the tarnishing of the beef industry and the damage that has been done to our international reputation. I am in the invidious position of having to go around the corridors in Brussels trying to defend the good name of Ireland, because of the malpractice of the past, by not only Mr. Goodman but other people in the beef industry. This is totally unacceptable and I assure the Deputy that I will be unrelenting in doing everything I can to discharge the functions of my office and the wider legal services of the Government to pursue Mr. Goodman fully, properly and effectively.

Deputy O'Malley rose.

An Leas-Cheann Comhairle

This question has taken an inordinately long time. I will call the Deputy for a brief, final question.

Mr. O'Malley

Is the Minister aware that five employees — managers and others — at Rathkeale have been convicted on pleading guilty to conspiring with a person or persons unknown, to defraud the Minister for Agriculture, Food and Forestry? Now that six have been charged, five of whom have pleaded guilty, will the Minister, in view of his statement just now — which I greatly welcome and appreciate — take steps to ensure that this person or persons unknown, with whom these five people conspired, is prosecuted? The five employees did not gain anything by this conspiracy, it was the person or persons unknown who gained by it and who should be prosecuted.

Mr. Yates

I was deeply concerned about that case. There is public concern that people who would be construed to be beneficiaries have not been brought to book and have not been brought before the courts. As far as I was concerned this was a matter for the Director of Public Prosecutions to whom I wrote, in the strongest possible terms, suggesting that all the facilities of my Department, or any other information that could assist in the direction the Deputy has alluded to, would be provided. The Director of Public Prosecutions replied to me in terms that did not encourage me to believe there would be such further prosecutions.

An Leas-Cheann Comhairle

I very much regret I may not call Deputy Ellis who is anxious to ask a supplementary. Before coming to Question No. 4, I would remind Members that we should be aware of naming people outside this House in this privileged assembly. They cannot defend themselves, regardless of who they are. We may take Questions Nos. 4 and 5, in accordance with new regulations, in the category of other questions.