Vol. 472 No. 4
17 Mr. O'Malley asked the Minister for Agriculture, Food and Forestry the final amount of forfeiture of export refund bonds; whether this figure was agreed with UCLAF and DG 20; and the amount outstanding in respect of these guarantees. [23546/96]
I assume the Deputy is referring to the recent Government decision relating to forfeitures amounting to £7,302,241.73 in respect of one beef company because of a failure to fulfil the regulatory conditions. These forfeitures have now been paid and the relevant guarantees were released back to the company in November. Further guarantees amounting to £17 million approximately against which there were no forfeitures were released at the same time.
These files were the subject of a thorough investigation by UCLAF, the European Commission's anti-fraud unit, which agreed with the Department's proposed forfeitures and releases. DG 20, the Commission's financial control unit, which is concerned with the clearance of accounts procedure, was not involved in this work.
The only outstanding beef export refund guarantees of this company relate to an amount of approximately £6 million of pre-1990 guarantees which are being held separately at the Commission's request until its assessment has been completed.
Will the Minister explain how the amount forfeited increased from £7 million, which was announced by the Government, to £7,302,000 and its decision of 12 October 1995? Is he aware UCLAF is under the impression that the figure which would be properly forfeited is £8 million? Can he reconcile the differing figures and Government decisions and announcements?
After the original Government decision to which the Deputy referred concerning the lower figure of £7 million, new information came to light from informants who had approached UCLAF and, subsequently, the Irish authorities. Arising from that, further detailed investigations took place. Other investigations led to a revision of the figure and the net position was an extra forfeiture of £302,000. When these informants contacted the Irish authorities, we immediately approached UCLAF so that we could work hand in glove and pool our information. Before the matter was brought by me to Government, UCLAF indicated it was satisfied that the files were being dealt with correctly, with the exception of the £6 million which has still to be determined between the Commission and other authorities.
Why is £6 million in guarantees still outstanding given that all these guarantees are in respect of export refunds payable on beef sent to Iraq by one company prior to 1990? Most of it was sent in the mid to late 1980s — some of it as long as ten years ago. If this money is due to the State, why not collect it? Why allow the question of forfeiting these bonds to extend for such a prolonged period?
It is important to point out that the Irish authorities are the agent for the EU authorities. At the request of the EU Commission to allow for further scrutiny of these transactions, this residual amount of £6 million is still being deliberated to see if all the performance aspects of this trade were properly concurred with. I am not prepared to release them until we get clearance from the Commission and I am anxious that whatever amount of the £6 million has to be forfeited is forfeited properly.
As regards the rest of the money, the £17 million, litigation was pending against me to release the moneys. We were caught both ways in that we faced disallowance from Europe and we could have been sued by the person involved. This £7,302,000 is the largest forfeiture in the history of the State. I am satisfied a correct decision was taken. I took the unusual step of not only bringing it to the attention of Government, which would not be normal, to UCLAF and the Commission, but also to other authorities. I got independent legal advice as well as that of the Attorney General before a final release was implemented.
I hope the Minister did not get the Attorney General's advice——
I got the advice of the Attorney General's office.
——in view of the serious conflict of interest which exists for him in this and other matters.
I would like to clarify that. In cases involving former clients of the Attorney General, the senior legal officer in his office has dealt with the work. Mr. Gleeson had no personal involvement, although his office which is staffed with legal expertise was involved. Given the sensitive nature of these files, we got independent advice from a senior counsel who recommended the course of action subsequently taken.
What stage had proceedings against the Minister reached when he caved in on the £17 million which he gave back?
I did not cave in. I had taken all possible care to try to get the correct decision. The proceedings were not instituted but were threatened in the form of an injunction.
In view of the fact that further disallowances against the State in respect of export refunds have been highlighted in the 1995 report of the Comptroller and Auditor General, will the Minister explain why his Department has not been able to get these matters to ensure the forfeiture of the bonds concerned where they are not in order? The taxpayer should not be called on to make the payment but rather those who gave the bonds on behalf of the exporter.
The Deputy will be aware that these files involving the £30 million relate to the late 1980s and 1990. I was not Minister at the time, but I understand there is now greater scrutiny. The paper trail and the computerised system have been vastly improved in terms of resources, staff and IT. Senior officials in the Department will admit that they only now have proper checks and balances in the system. While any forfeiture must go through the due process, controls now in place are superior to those which existed heretofore.
