Dáil Éireann díospóireacht -
Thursday, 17 Dec 1998

Vol. 498 No. 6

Adjournment of Dáil under Standing Order 31: Collection of Taxes.

Mr. Noonan

With the permission of the House I wish to share time with Deputies John Bruton, Quinn, Rabbitte, Gormley and Joe Higgins.

In 25 years of public life I have never experienced such outrage among taxpayers. Their outrage is matched only by their cynicism — that the system has failed them, that it does not work in a fair and just manner, that there is one law for ordinary taxpayers and another for the well heeled and influential and that, in the memorable words of Mrs. Helmsley, "taxes are for little people".

The Ceann Comhairle has accurately measured the mood of the nation today in allowing this motion and I thank him for it. GUBU is back in town in all its former ignominy.

Judge McCracken in his report said he "became satisfied beyond all reasonable doubt that all of the moneys paid by Mr. Ben Dunne were received by or on behalf of Mr. Charles Haughey for his benefit or, in one case, for the benefit of a member of his family." Anybody who has even scanned the McCracken Report should not be surprised at this conclusion as Mr. Ben Dunne had in sworn evidence said he gave £1.5 million to Mr. Haughey, and Mr. Haughey in his last appearance before the tribunal admitted this was so, that he had received the money and that it was for his personal benefit.

Members of the House are well aware that "beyond reasonable doubt" is a legal phrase which describes the highest level of proof required in a criminal court. A judge or jury must find "beyond reasonable doubt" before they can convict. In simple terms they must be certain. There is no higher level of proof. Judge McCracken was certain that Mr. Dunne was the donor and that Mr. Haughey was the beneficiary. Both are quite clearly domiciled in Ireland and it defies reason that a Revenue appeals commissioner struck down an assessment by the Revenue Commissioners made against Mr. Haughey on the grounds that the evidence of the McCracken Report was an insufficient base on which to move to collect outstanding capital acquisitions tax.

Much of the work of this House, I believe, will be set at nought as a result of this decision. We have had scandals, controversies, parliamentary debates, motions, rows about terms of reference, the establishment of tribunal after tribunal, evidence and legal arguments before tribunals, reports of tribunals and findings of tribunals, and when the taxpayer had hoped payback time had finally come and that outstanding tax would be collected from those who had evaded it, the very ground on which the Revenue Commissioners were standing has been taken out from under them.

Currently there are two tribunals of inquiry sitting. The tax evasion issue is a central issue for both, particularly the Moriarty tribunal. If the findings of these tribunals cannot be relied on as a basis for collecting tax which has been evaded, then the effectiveness of the tribunal process is substantially diminished and the intent of this House is set aside.

In the Finance Act, 1998, the Oireachtas made provision that rulings of Revenue Appeal Commissioners could be published at the discretion of the Appeal Commissioners. It is vital in this case that Mr. Kelly's ruling and the arguments which led to his conclusions are published without delay. Until this happens we will not know what the policy implications of this decision are or what amending legislation the Minister for Finance may have to bring forward. I invite all Members of the House to join with me in calling for the immediate publication of Mr. Kelly's ruling.

One of the most astounding aspects of this debacle has been the fact that the Appeal Commissioner who made the decision is the brother-in-law of the Taoiseach. The brother-in-law of the present Fianna Fáil Taoiseach judged the case of a former Fianna Fáil Taoiseach. I am not questioning Mr. Kelly's probity, but I believe it was extraordinarily imprudent of him not to have disqualified himself from hearing this case. There is a provision in section 856 of the Taxes Consolidation Act, 1997, which disqualifies a commissioner in cases of personal interest. A commissioner is debarred from involving himself or herself in any income tax appeal, proceedings or matter in which he or she has an interest either on his or her own behalf or on behalf of another person. Mr. Kelly did not in my view have an interest under the terms of section 856 in Mr. Haughey's appeal, but the existence of the section should have acted as a red flag to him when he decided to adjudicate on Mr. Haughey's appeal. If he had stepped aside as, for example, Mr. Justice Andrias O'Caoimh did at the time of the arms trial, he would have saved the Government and the current Taoiseach much embarrassment. Why did Mr. John O'Callaghan, the other appeal commissioner, not take the case? Was he conflicted?

The Minister for Finance, as a matter of urgency, should return to the practice of appointing at least one of three appeal commissioners from the senior ranks of the office of the Revenue Commissioners. The two current office holders were political appointments from the private sector, made by the then Minister for Finance, Deputy Ahern, after the 1992 general election when it was unclear whether Fianna Fáil would form part of the new Government.

Appeal Commissioners drawn from the private sector, because of their professional background, have contact over their working lives with a very significant number of clients. Their function as Appeal Commissioners is semi-judicial and the possibility of conflicts is quite high simply arising from their professional practice over so many years. Senior officials at the Revenue Commissioners have less possibility of conflict and the Minister for Finance should appoint a third appeal commissioner with a public service background who does not have a background of dealing with so many clients.

The Taoiseach, Deputy Ahern, has not adequately explained the circumstances of the appointment of his brother-in-law. There are questions which he must answer before the Dáil goes into recess, including the considerations he took into account when he appointed Mr. Kelly? Was Mr. Kelly selected from a list of suitably qualified persons, or did Deputy Ahern simply pluck him from the private sector after forming the view that he was the most suitably qualified person for the job? Did Mr. Kelly personally seek the office or was the office sought on his behalf by a third party? Were representations made to Deputy Ahern by persons in politics or in other professions to appoint Mr. Kelly? The Taoiseach claims he has not spoken to Mr. Kelly in the past five years. What was the nature of his contact with Mr. Kelly in 1992? Did Deputy Ahern inform the then Taoiseach, Deputy Albert Reynolds, of the appointment and that Mr. Kelly was his brother-in-law? Was the appointment mentioned by him or discussed in Cabinet? Was the Cabinet informed that Mr. Kelly was Deputy Ahern's brother-in-law?

The Taoiseach is very familiar with the findings of the McCracken tribunal. He is uniquely well briefed on the findings and, like every other Deputy in the House, he knew that the Revenue Commissioners intended relying on Judge McCracken's findings in pursuing Mr. Haughey's unpaid tax. Did it ever strike the Taoiseach that if Mr. Haughey disagreed with the assessment of the Revenue Commissioners, there was an even money chance his brother-in-law would hear the appeal? Did he take steps to avoid the potential embarrassment?

The central figure in this debacle, however, is not Mr. Kelly, but Mr. Haughey, and as Mr. Bruce Arnold wrote in this morning's Irish Independent:

. the recent revelations about his receipt of large sums of money have inextricably linked together his exercise of power, his by-passing of constitutional requirements, his arrogant interference on a wide range of financially sensitive deals — on property, on beef, on passports, on unspecified favours which earned handsome cash presents — with his occupation of the highest political office.

This by definition is corrupt. It was seen as such and challenged as such by intrepid politicians from within his own party, led by men like George Colley and Deputy Des O'Malley, and their fate, like that of other lesser names, was confrontation and isolation. The rest of the Fianna Fáil Party, the vast majority, watched and did nothing. They saw the abuse of power. They saw the acquisition of gross unexplained and unjustifiable wealth. And they simulated incomprehension, bewilderment, ignorance, amnesia, stupidity.

They were intelligent, in some cases, gifted men and women. Yet through their inertia, they subscribed to a constitutional nonsense, to a leader of their party, of successive Governments and of the country over long periods of office, acting against the country's interest and increasingly in his own personal interest. Several are in power at this moment, including the Taoiseach who enjoyed an extremely close and intimate association from the time he was Assistant Chief Whip of Fianna Fáil to his enjoyment of the powerful position of Minister for Finance.

Despite his attempts in recent years to distance himself from the Haughey era, this debacle has again reminded the public that the Taoiseach, for much of his political career, was Mr. Haughey's closest lieutenant. No amount of spin doctoring will erase this fact from the public consciousness.

Mr. J. Bruton

At the heart of this issue is a sense among the Irish people that if one is powerful enough, one does not ultimately have to pay tax. The House, in response to these revelations, must prove that is not true. If that belief were to take hold, the damage it would do to the House, the respect in which it is held and the respect in which the laws it enacts are held would be extremely serious.

I will deal with six issues. The first is equality before the law. A sufficiently wealthy person who receives an unfavorable tax assessment can appeal it all the way to the Supreme Court because he can afford to pay the lawyers to represent him and the accountants to find the loopholes in the law so that he does not have to pay the tax. On the other hand, if one is not sufficiently wealthy, one cannot afford the lawyers or accountants to make a case to the Revenue Commissioners or the Appeal Commissioners, or to appeal any determination by the latter to the Circuit Court or higher. This fundamental issue of resources, which disqualifies ordinary people from taking full advantage of the law while wealthy people can, is at the heart of the deep sense of public outrage felt at present.

Second is the apparent abuse of company law. The abuse of limited liability, whereby a person can make a payment through an offshore company with nominee directors acting on their behalf and, as a result of availing of the anonymity of the legislation in other countries, avoid their true liabilities, goes to the heart of the integrity of our business system. If limited liability and company law continues to be abused in the manner it was by Mr. Haughey to receive this money, the situation is serious as far as business ethics is concerned, let alone political ethics. Third is the apparent abuse of domicile which is a related issue in the sense that, by domiciling a company offshore, the same responsibility can be avoided.

Fourth is the issue of the stupid decision of a Minister for Finance to appoint his brother-in-law as Appeal Commissioner, given that it is well known that there must be a clear distinction between the responsibilities of the Minister for and the Department of Finance for the making of tax law and the responsibility of the Revenue Commissioners and the Appeal Commissioners for the administration of that law and the collection of taxes. Putting a close relative in the position of appeal commissioner while one is Minister for Finance places that person in an acutely embarrassing position and lays him open to the type of difficulty now facing Mr. Kelly. It was not fair to him he was placed in that position and the person who made that unfair decision and who is accountable for it is the Taoiseach, who was then Minister for Finance.

Fifth, the decision of the Appeal Commissioner is contrary to the express wish and understanding of the House when it enacted the relevant legislation, and I propose to demonstrate that. Sixth, why did the Appeal Commissioner hear the case on his own? I understand it is normal in an important case for both commissioners to hear it together. Why did only one and not both hear it?

The Appeal Commissioner's decision was not only wrong but was contrary to the understanding of Deputies in 1975 when they enacted the legislation. The two arguments advanced to justify Mr. Kelly's decision in media reports are: one, the gift was made to Mr. Haughey by a company outside the jurisdiction and, two, the shareholders could not be identified. In both cases, the Appeal Commissioner can be demonstrated to have acted in a fashion contrary to the understanding of the House when it enacted the legislation.

In the debate on 18 November 1975, Deputy Enright asked the Minister for Finance:

In the event of an owner of a large estate who lives in Ireland giving a gift of shares in a foreign company or property or land in a country outside this State, do I take it this will be liable for tax because he is domiciled in Ireland?

The answer given to that pertinent and prophetic question by the Minister for Finance was "yes". The understanding of the Dáil when it passed the legislation was that Mr. Haughey would be liable if Mr. Dunne was the original source of the gift, regardless of the fact that the gift came from a company controlled by Mr. Dunne outside the jurisdiction. Mr. Kelly's decision clearly defied the will of the House as expressed and understood on 18 November 1975.

Regarding the other issue of the identifiability of shareholders in the company, it can be demonstrated that it was clearly intended that gifts provided indirectly by a disponer through another party to an ultimate beneficiary would be liable to tax. The provisions of section 2 of the Act, the definition section, make clear that a disposition includes one made directly or indirectly. Section 35 of the Act makes clear that the giver of a gift can be liable for tax if the recipient is not made liable. It is clear from section 35 that, in the case of a gift, those who may be accountable for the tax include the disponer.

It is clear to me it was the intention of the House at the time in 1975 that, if Mr. Haughey could avoid paying the tax, Mr. Dunne could not. Either one or the other would have to pay and that is clearly demonstrated in my reading of sections 2 and 35. It is also clear from a question on this matter posed by the late Deputy Colley to the then Minister for Finance, Deputy Ryan, on 18 November 1975, the clear answer to which was that, even if the donor had given the money earlier to a third party to be received later by someone else, either the recipient or the donor would be liable to tax, regardless of the intermediate third party.

This decision by the Appeal Commissioner is completely and demonstrably wrong and not in line with decisions of the House. It should not have been made. The inexplicability of that decision creates even more concern. It would be normal for people to expect in this instance that the Dáil might not have done its job property and there might have been a loophole in the law but the quotations I have read from the debate show the Dáil did its job and, in particular, Deputy Tom Enright in asking the relevant question of the Minister for Finance, from the then Government benches, made sure the Dáil established the facts before it passed the legislation. Those facts are such that clearly either Mr. Haughey is liable for the tax or Mr. Dunne is liable for the tax but there is no case in which neither could end up failing to pay.

I draw attention to the fact that it is strange that Mr. Kelly sat alone on this case. I understand that in other cases it is normal, where there are two Appeal Commissioners and the case is important, to sit both of them so that they are collectively responsible for the decision. If ever there was an important case where one would want collective responsibility among the Appeal Commissioners to apply, surely it is the case of a former Taoiseach and his tax liability where one of the Appeal Commissioners happens to be the brother-in-law of the Taoiseach and both Taoisigh happen to be members of the same party.

The sense of outrage in the country is of immense proportions and I advise the party opposite not to underestimate it. There are times when we in this House, where we are meeting one another in the corridors and where our only contact with the outside world is by telephone, may not be in touch. I can assure all Deputies that the idea that a former Taoiseach shamelessly frustrated a tribunal, shamelessly told lies to a tribunal and shamelessly abused the law to evade tax liability is causing outrage. The outrage is deepened by the fact that there has never been the slightest hint of contrition. There has never been the slightest demand for contrition from Mr. Haughey from the party he led. There has never been a demand from Fianna Fáil, which gave so much to Mr. Haughey and reposed so much trust in him, for a genuine heartfelt apology for the way in which he conducted himself over so many years. It is time now for Fianna Fáil, which contains many honourable people who would never dream of doing anything of the kind Mr. Haughey did, to rise up and ask this man to say he is sorry for the appalling things he did and for the way in which he misled this country and demeaned our profession.

Mr. Quinn

Today is a test of how much progress we have made in recent years and a test of the Taoiseach and his new model Fianna Fáil. So far he has failed to understand the absolute outrage among the public which believes, now more than ever, there is one law for the rich and one for everybody else and that the golden circle is not dead but is still alive and thriving. The Taoiseach is the only leader of Fianna Fáil to whom the public has given the benefit of the doubt since Mr. Haughey took out Jack Lynch in 1979. He should not believe for one second that the high poll rating he currently enjoys has anything to do with the performance of those sitting beside him. Not one of them is responsible for his Government's poll rating. The Irish people have placed their trust in the Taoiseach and in him alone. The people have been battered and bruised by the revelations of recent years. He promised them a new beginning and from day one, from the appointment of Ray Burke and his refusal to have the Ansbacher accounts investigated by a tribunal, he has failed them. Despite the talk, the rhetoric and the annual Fianna Fáil Ard Fhéis speech about ethics in Fianna Fáil Nua, he has failed them miserably and they know it. They are hurt because they feel codded, fooled and duped. If he does not know it he should ask his backbenchers and also about the phone calls they, like me, have received over the past 24 hours.

Mr. O' Flynn

There have been none.

Mr. Quinn

Or has the public simply stopped ringing Fianna Fáil?

A Deputy

It has.

Mr. Quinn

If it has stopped ringing, that is even worse. It is amazing how some things hurt. There is an old maxim: justice not only needs to be done but must be seen to be done. Make no mistake about it, nobody among the wider public believes that justice has been done in this case. A former leader of the Fianna Fáil Party, a former Taoiseach, a patron, a mentor is making a fool of the institutions of the State and of the people he once claimed to serve, with the active support of his party by its silence. He will not like to hear this but it is the truth: Jack Lynch once said he would not stand idly by. That is precisely what the Taoiseach and others did for more than a decade.

During all his visits to Kinsealy, did the Taoiseach ever ask where Mr. Haughey's wealth, all that unexplained fortune, came from? Will he continue to stand idly by as he did when others, including the Tánaiste and Deputy Des O'Malley, asked the same questions? The public want to know if he will hold Mr. Haughey to account? Will he ever be held to account or is the blasé approach displayed by the Minister for Finance to continue? Quite frankly, the performance of the Minister, Deputy McCreevy, beggars belief. Either he has no understanding, no comprehension of the damage being done to the systems for which he is responsible or he does not care. If the Taoiseach doubts me, or if the press gallery do not know to which I am referring, I invite him and his backbenchers to read the Minister's contribution in the Seanad yesterday. The only conclusion I can come to is that the Minister for Finance does not care.

The Taoiseach has a number of questions to answer, not just to this House but to the public. Does he believe it is appropriate that his brother-in-law, appointed by him, should sit in judgment on his former mentor, Charles Haughey? Does he believe that Mr. Kelly, notwithstanding his competency, should have stepped aside so that justice could not only be done but be seen to be done? Did he — as this morning's newspapers allege — recruit his brother-in-law for this position and, if so, why? Those are key questions for the Taoiseach. He has a responsibility to outline clearly the process of recruitment. His failure to answer them thus far has tainted him in the public mind. On television last night the public saw Deputy Rabbitte drag information from him which he should have offered to this House as soon as this matter was raised yesterday. What the public did not see was the shocked expression on the face of every other Fianna Fáil Deputy behind him, because the camera was on him.

Why did the Taoiseach choose not to speak yesterday? Did he think the issue would go away, that no one would cop on or was he, like the Minister for Finance, hiding behind the law? I know there is no obligation under the ethics legislation for the Taoiseach to make a declaration. However, if he was true to the spirit of that legislation, the Taoiseach would have done so. If he had, he would have spared Members the ignominy of seeing yet another Fianna Fáil Taoiseach being called to account.

Like my predecessor, Deputy Spring, I stated on numerous occasions that Fianna Fáil and its political culture are destroying politics in Ireland.

Mr. Treacy

Hypocrite.

Mr. Quinn

I will repeat the charge for the Minister of State if he so desires. I know the truth hurts. Where stands the "people before politics" slogan which Fianna Fáil Members championed in the last election campaign?

Mr. Roche

Deputy Quinn knew about the appointment in 1993 and he was satisfied with it.

Mr. Quinn

Deputy Roche knows that the eternal truth of politics is this: Fianna Fáil comes before everyone else. Once again the House has been damaged by Fianna Fáil. The Taoiseach has talked a good game but actions speak louder than words. Inaction speaks louder than anything else. That, sadly, is the Taoiseach's record to date.

Make no mistake, damage has been done to the most valuable yet fragile of commodities, namely, trust in politics and trust in our political institution. The Taoiseach cannot undo that damage but he can begin to repair it. He should publish the decision in respect of the Haughey case, discover who is responsible for this mess and vindicate the people's right to know. The people want and deserve to know what happened in this case. If the Taoiseach comprehends the trust they have placed in him, he should discover the truth on their behalf. The bottom line is that no one — no former Taoiseach or Leader of Fianna Fáil — should be above the law.

(Interruptions.)

Mr. Rabbitte

On a point of information, at what time will the Taoiseach make his contribution?

An Leas-Cheann Comhairle

The Taoiseach will make his contribution at 4.25 p.m. The Deputy has ten minutes to make his contribution.

Mr. Rabbitte

I believe I am entitled to injury time and I propose to share five minutes of my time with Deputy Gormley.

An Leas-Cheann Comhairle

That is acceptable.

Mr. Rabbitte

My first point relates to the Appeal Commissioners and the question of secrecy. Many Deputies and members of the public did not know of the existence of the Appeal Commissioners and they certainly had no idea of what their work entails.

Mr. M. Ahern

Some of us knew.

Mr. Rabbitte

I would expect the chairman of the Joint Committee on Finance and the Public Service to be privy to such knowledge. I have no doubt the Deputy appeared before the commissioners in a professional capacity on more than one occasion. However, it is clear that a number of Members did not know about the existence of the Appeal Commissioners.

Having regard to Article 34 of the Constitution, which requires the law to be administered in public, there are causes for concern as a result of this case which involves extremely powerful people who are seized of decisions which amount to millions of pounds and no one knows anything about their work. In this case we have seen the significance of that. Is there any other position in the public service in respect of which people are not required to submit an application and curriculum vitae, attend for interview, etc. ? Judicial appointments in respect of courts up to and including the Supreme Court are made by means of a process which includes application, interview and selection. However, in this instance, a person appointed as an Appeal Commissioner was not obliged to do any of that.

It is important that the Taoiseach indicates whether it is true that he headhunted the person appointed in this case. It is extraordinary that a vacancy was not advertised, that the appointment was made during the interregnum and that confirmation to the House was made on 8 January during that interregnum when no Deputies were aware of it. The Taoiseach should state whether he headhunted this individual.

There are a number of matter which are cause for concern. I do not believe people outside the House are interested in whether Mr. Haughey "got off" because of a technicality, a stroke or a deficiency in the law. The fact is that he got off. The cavalier fashion in which the Minister for Finance dealt with questions yesterday would leave one with the impression that taxpayers ought to be thankful that Mr. Haughey did not receive a rebate.

The Minister for Finance's thoughts on tax evasion in the wake of the banking scandals are a matter of record. He trivialised, poured scorn upon and ridiculed the story broken by George Lee and Charlie Bird in respect of those scandals. It is easy to divine where the Minister's heart lies on this matter, namely, with the "nod and wink" men. There is no doubt about that. Legitimate questions of public policy were put to the Minister yesterday and he chose not to address them. He simply ignored the whole affair.

Confidence in the tax system must be a cardinal precept of our democracy. People believe in equality before the law in respect of tax collection, in the efficacy of tax collection procedures and in the fairness of assessment. These are cardinal principles.

What is at issue here is whether everyone is equal before the law. The only conclusion people are in a position to reach is that we are not all equal in that regard. One need only consider what happened in this case. At the 11th hour, although the information was ultimately dragged out of him, Mr. Haughey stated that he received the money. The person who donated the money confirmed that Mr. Haughey received it and the judge at the tribunal declared that he did in fact receive it. Given that the High Court judge presiding over the McCracken tribunal found that a former Taoiseach had received a donation of £1.3 million, that the identity of the donor was known and that the Revenue Commissioners made an assessment that almost £2 million in taxes should be levied against Mr. Haughey, how does one explain to the ordinary taxpaying citizen that an Appeal Commissioner could decide that Mr. Haughey's liability is zero? I know the Government came to office on the basis of zero tolerance but this will give an entirely new meaning to the term.

It is the responsibility of the Taoiseach to indicate what he proposes to do about this matter. I find it as difficult as does Deputy John Bruton to understand the decision of the Appeal Commissioner. Having regard to the facts set out in the McCracken tribunal report I cannot understand how he could decide to set it aside. What are his qualifications to set it aside? He is not trained in the law. A High Court judge decided on the evidence adduced in public hearings before the tribunal that Mr. Haughey got the money and that the donor was Mr. Ben Dunne but an Appeal Commissioner who was headhunted by his brother-in-law, the Taoiseach, during the Christmas holidays and appointed to the office has decided to set his findings aside. I agree with Deputy Noonan that if the findings of a tribunal of inquiry can be set aside in this way, irreparable damage has been done to tribunals so much so that I cannot see what purpose they serve. We do not know what arguments the Appeal Commissioner can advance because the findings are given in secret.

The Minister for Finance, Deputy McCreevy, was especially annoyed yesterday when I sought to make what I thought was a reasonable point in the circumstances. What message is sent to the public if a brother-in-law of the leader of Fianna Fáil is seen to be adjudicating on the taxes of a former leader of Fianna Fáil?

An Leas-Cheann Comhairle

The Deputy should be careful not to reflect on the integrity of a public servant who is not in the House to defend himself.

Mr. Rabbitte

I am making a different point.

Mr. J. Bruton

Why was he appointed?

Mr. Rabbitte

That is what the people want to know. I gave an example yesterday — I do not want to go into the same graphic detail — about what would happen if it happened on this side of the House. It is relevant. How is it that the tax affairs of Deputy Lowry were considered by two Appeal Commissioners? Why is it that one Member involved in this controversy has had his affairs raked over by two Appeal Commissioners but the case of the most prominent politician in the land for 25 years has been studied by only one who happens to be — this is a coincidence — a brother-in-law of the Taoiseach? The Taoiseach has to answer that question.

It is widely known and written that the boys from Malahide are back in town. How come the Taoiseach did not know that this matter was before the Appeal Commissioner? I am puzzled by this. I understand that many of the downstairs staff at Kinsealy have had to be left go and that land might have to be sold to clear the tax bills. It is a bit like the member of the royal family in "Spittin' Image" asking for the letter opener and being informed in reply, "He is on his day off". If the Revenue Commissioners had raised an assessment, it is extraordinary that the Taoiseach had no knowledge of it.

How could somebody considered to have the nous to sit in a quasi judicial capacity on major tax matters not have the cop on to say he would stand aside and not allow himself to deal with this case? It is extraordinary that, when the most notorious case in the land appears on his desk, he decides, given his connections, to hear it on his own. Why was it not heard by both commissioners?

Charges should not be made against this side of the House for raising these questions. I remember the row that continued for weeks when the Deputy sitting beside me, when Minister of State, employed his brother-in-law as a driver. That was supposed to be the biggest scandal until Michael D. won £1,200 on a race night. We now have a brother-in-law sitting in a quasi judicial capacity who decided to exonerate the man who played ducks and drakes with us in this House and is now doing it outside.

We can become inured to the impact on public opinion. The people are scandalised. Deputy Quinn mentioned the number of telephone calls he received. The people's outrage is not conditioned by the party they support in this House. Members of Fianna Fáil make telephone calls to radio programmes and to Members on these benches who are small business people or who are self-employed explaining what happened in their circumstances. Last night I received a telephone call from a woman in Rome — I will give her name if she permits me to do so — who on the death of her mother in this jurisdiction had to dispose of her house to pay the tax levied. She was outraged by what she picked up on the internet yesterday. Throughout the country ordinary tax compliant citizens, members of every party in this House and none, have had a similar experience. The Revenue Commissioners have put them through the hoops.

When Mr. Haughey paraded his retinue like an Arab sheik for many years the Revenue Commissioners did not see anything wrong with it. It did not occur to them that they should ask questions. When Mr. Justice McCracken found certain facts for them they could not effectively defend their assessment before the Appeal Commissioner. The Minister for Finance should ask the chairman of the Revenue Commissioners why was that allowed to happen. Like their colleagues in the Department of Agriculture and Food in the case of the beef tribunal, did they just photocopy the page out of the McCracken report and send it to the Appeal Commissioner? Did they call Mr. Justice McCracken to defend their assessment? Did they call Mr. Ben Dunne and Mr. Noel Smith?

How come the Revenue Commissioners whose job it is to collect tax fairly could raise an assessment of £2 million against Mr. Haughey and have it reduced to zero? The people are unable to understand this. One would expect the Revenue Commissioners, independent of Mr. Justice McCracken, to use the information to compile a case to defend their assessment before the Appeal Commissioner. Most people are mesmerised. After parading his great wealth for years the old boss is finally caught but with one bound he is free. This has to be explained to the people who pay their taxes as best they can. It is unconscionable that something like this could come about.

Mr. Gormley

I am sure many Deputies have had the experience, when showing friends around Leinster House, of coming to the portrait of Mr. Charles Haughey in a prominent position. Invariably, people ask what it is doing there after all the scandals and disgrace associated with him. Many Deputies will be familiar with the portrait. Charles J. Haughey looks down on us with those famous gimlet eyes and that imperious gaze. What does the portrait say? It says, "You are mere minions. I am above you. I am above the law. I am untouchable." Let the message go out to Mr. Haughey from Dáil Éireann today that he is not untouchable or above the law, that his day will come and justice will be done. At the very least, that portrait should be in the basement where it belongs because we need a gesture of censure. The people want justice to be done.

They want leadership from the Taoiseach. The Taoiseach's response to the question of Mr. Haughey has been equivocal, to say the least. Recently, on the Late Late Show, the Taoiseach said he would be quite happy to have tea with Mr. Haughey. What would he talk about? Would he talk about Manchester United Football Club? I believe Mr. Haughey visited Old Trafford last week. Would the Taoiseach have the courage to tell Mr. Haughey that he is a disgrace and should apologise to the country for his behaviour? That is what people want.

Despite all his talk about honesty and integrity, the Taoiseach has not severed the link with Mr. Haughey. He is umbilically tied to Mr. Haughey and that umbilical cord will strangle him and his Government if he does not act decisively. I ask the Taoiseach to close all loopholes pertaining to tribunals and insist that the reasons for this bizarre Appeal Commissioner's decision be published. The Taoiseach should not underestimate public anger. He is driving into GUBU land and he is at the wheel. He can decode which way to go, but he and his Government are indecisive on this matter.

If the Taoiseach wishes to restore public confidence in the body politic he must act decisively, distance himself from Mr. Haughey and condemn his actions.

Mr. Higgins

(Dublin West): We have here a tale of two Irelands. In one, on 25 January next, Dublin householders will be dragged in front of the Dublin District Court facing threats of entry into Stubbs Gazette, seizure of goods by a sheriff, steep court costs and judgments registered against their mortgages. This will be because they owe £210 arrears of an unjust and discredited water tax, now abolished, which they had objected to paying. A very sick heroin addict was sent to prison for six years for stealing a handbag. A Galway man is serving two weeks in prison for putting up posters. In the other Ireland, powerful bankers who facilitated tax evasion systematically over ten years have yet to darken the doorway of a courthouse. Will they ever? A former leader of Fianna Fáil, former Taoiseach and millionaire property owner who, following a tribunal of inquiry which found he had evaded substantial amounts of tax, is judged to owe nothing.

The Ireland of the golden circle used, abused and sucked dry the Ireland of the majority of tax compliant citizens, especially PAYE workers and now walks away scot-free. It is high time our people called an end to this and pulled down the corrupt edifice.

The Taoiseach

Equity in the tax system is one of the foundations of a fair society and the Government and I are totally committed to it. None of us could accept a situation in which major tax evasion escapes the net for whatever reason and where relatively minor offenders or the majority of compliant taxpayers face the full rigours of the law. Such a position would, I agree, amount to a public outrage and would be intolerable. It would be very wrong, however, to jump to conclusions at an intermediate stage of any process.

It can often happen in emotive cases, in any area of law, that in the course of a lengthy procedure involving multiple appeals an unexpected or unwelcome verdict is given for essentially technical reasons. It has been suggested by some tax practitioners that the law in relation to the case presented may have left no choice in the matter. Those who administer the law are entitled to an absolute presumption of their professional integrity and that any decision they take is based on sound, objective and defensible grounds without any personal or political bias.

Because of the confidentiality to which every taxpayer is entitled, with such exceptions as are provided by law, and because of the absolute independence of the Appeal Commissioners, it is not possible to question the details of any particular case or the grounds of their decision. Legal provision exists for later publication of the grounds for decisions abstracted from the particular case. However, the Appeal Commissioner's decision is far from being the end of the matter.

Under section 942 of the Taxes Consolidation Act, any person aggrieved by the determination of the Appeal Commissioner may, on giving notice in writing to the inspector, appeal within ten days to a judge of the Circuit Court. It is specifically provided by section 52(5)(b) of the Capital Acquisitions Tax Act, 1976, that in a capital acquisitions tax appeal, the Revenue Commissioners, if unsuccessful before the Appeal Commissioners may also appeal to a Circuit Court judge. Any such appeal amounts to a complete rehearing by the Circuit Court judge of all the relevant issues. It is also provided by section 943(9) of the Taxes Consolidation Act that any such appeal shall be held in camera.

However, it should be noted that should either party to an appeal to the Circuit Court require that a case be stated to the High Court for its opinion on any point of law, that issue is heard in public. Similarly, in the event that either party appeals the decision of the High Court on that point of law to the Supreme Court, the Supreme Court hearing would also be held in public. This is provided for in section 9 of the Finance Act, 1983.

It can be taken as axiomatic that the Revenue Commissioners will pursue due process, if necessary to its ultimate limits, to recover the liabilities which they believe are due and recoverable. There will be no let or hindrance on the part of the Government to that. On the contrary, we are prepared to grant the Revenue Commissioners any powers they may seek to combat tax evasion, consistent with any reasonable balance of rights. We cannot have a situation where anyone, either high or low, visibly fails to pay his or her dues to society, as that is demoralising to all other taxpayers. If one person can get away without fulfilling his or her obligations, it creates a deep resentment and feeling of unfairness. We cannot override anyone's constitutional rights but we can and will go to any lengths to ensure equity is upheld in the tax system. If, at the end of the process, there were shown to be serious deficiencies in the law, we would have to consider all options necessary to repair them, to ensure that the letter of the law is brought into line with its spirit and to recover any tax due but for some technical gap in the law. However, we are far from that stage now.

I have been asked about the process of appointing Appeal Commissioners. In this case the appointment was made at my instigation. I was not lobbied. I asked a person whom I know to be highly qualified and highly competent and who was switching from one employment to another if he would be interested in the position. All the correct procedures were followed. Appointments are made by many Governments. This is one of the few cases in which the names of appointees must be laid before the House on their appointment by the Minister for Finance. I laid the name of my brother-in-law before the House, a procedure which allowed any Member of the House to raise questions about it over a number of days. No such question was raised by any Member. The name of Ronan Kelly, along with that of John O'Callaghan was laid before the House on 8 January 1993. Mr. Kelly had 25 years experience as a chartered accountant, holding senior positions in Coopers and Lybrand and Sedgwick Dineen and was eminently well qualified for the position. All other due processes connected with the appointment were followed. The relationship of the appointee to myself was publicly referred to at the time in a number of publications. It was mentioned in a Sunday Tribune article of 31 January 1993.

Mr. J. Bruton

Will the Taoiseach give way?

The Taoiseach

Yes.

Mr. J. Bruton

Why did the Taoiseach not wait until the new Government was formed? Was there a particular urgency in making this appointment at that time?

The Taoiseach

There were many urgencies. There was an urgency to get on with an enormous amount of work. At that time there were four commissioners but now there are only two.

There has been ample opportunity long before now for anyone to express any difficulties or reservations about that appointment or about the manner in which the person concerned has adjudicated on literally hundreds of cases since then. Deputy Quinn was Minister in that Department and, to the best of my knowledge, he did not find any difficulty and neither he nor any members of his party raised any issues about that appointment when Deputy Quinn had full access to the details of it.

It has been brought to my attention that an article in The Sunday Times, a newspaper by no means noted as being favourably biased towards my party, on 9 August last states that Mr. Kelly is regarded as a model professional. The same article makes the point that any decision whatever he might take in this case might be open to political misconstruction. I am sure if he had any fears about his ability to deal with the case in an absolutely impartial manner he would have declined to sit.

I would also like to refer in this regard to an article by a former Member of this House, Mr. Michael McDowell, S.C. in this morning's Irish Independent which states “the Appeal Commissioners enjoy universal respect among tax practitioners for their independence, impartiality and probity”. He goes on to state that it would be very unfortunate if the public were to get any other idea.

Needless to say, I have had no contact with the person concerned, direct or indirect, about this case. Beyond the general issue known to every member of the public, I have no knowledge of the precise points requiring to be adjudicated upon. The decision came as a complete surprise to me, as it did to everyone else. I answered on that yesterday morning. I resent the way Deputy Quinn tried to put the case yesterday morning that I did not declare something. When Deputy Rabbitte asked me if the appeal commissioner was my brother-in-law——

Mr. Quinn

After Deputy Rabbitte had spoken.

The Taoiseach

I answered that question at the first available opportunity.

Mr. Allen

The Taoiseach was hardly going to say "No, he is not."

The Taoiseach

It is unbecoming of Deputy Quinn to present the position as otherwise.

An Leas-Cheann Comhairle

Please allow the Taoiseach to continue.

Mr. D. Ahern

Deputy Quinn has taken the high moral ground.

The Taoiseach

It is natural that grave concern and deep unhappiness should be expressed at the decision and I expressed such concern yesterday. The slant or construction that the Opposition may have put on this story has been deeply embarrassing to me, but I reject absolutely the insinuation that the appeal commissioner, because he happens to be my brother-in-law — he is not particularly close to me, but that is irrelevant — has acted with anything less than total professional integrity or competence in this matter. To the best of my knowledge, he is not a member of Fianna Fáil, he never was and he never worked for the party or any other political party. It is deeply unfair that an honourable public servant should be attacked without any opportunity for self-defence and that the privileges of this House should be abused, as they have been in recent days. If Deputies believe there has been a lapse of standards in the conduct of this case at any level by the relevant authorities, they are profoundly mistaken.

I have no insight into the details of the case or the decision, but I imagine that when the Revenue Commissioners lose any particular stage in an appeal process they will do all they can to fill in any gaps or repair any weaknesses in their case before it reaches the next stage. Evidence or findings produced in a tribunal cannot of themselves of course be taken as proof for purposes of a court of law or indeed for purposes of tax law.

There is very little further that I can add. I assure every member of the public that there has been no breach in the integrity of public administration, that due process will continue to its ultimate conclusion, and that illegal tax evasion will not go unpunished as long as I am in this position. I wish to share the remainder of my time with the Minister for Finance.

Minister for Finance (Mr. McCreevy)

I am glad of the opportunity once again to respond to this issue. The motion refers to public outrage at the appeal commissioner's decision, the issue of publication of the decision and the question of whether the findings of tribunals of inquiry that taxes were evaded may no longer be relied upon as evidence by the Revenue Commissioners in the collection of such taxes.

As I said yesterday, I acknowledge the strength of feeling on this issue in the House. That is why I came in and gave a full reply over 45 minutes to the various questions posed. I had hoped that these explanations and information would be of benefit to the House. I am not privy to the basis on which the appeals decision was made and I can throw no light of the evidentiary issues involved. I am not sure, therefore, what further assistance I can give.

There are a number of points I underlined in my replies to the House in response to the four Private Notice Questions which are worth repeating. First, I made it clear on my part and on the part of the Government that all reasonable or necessary measures will be pursued to counter tax evasion. I also made it clear that I regard evasion as an abhorrence. Second, I pointed out that the issue of an individual's tax affairs is a matter for the Revenue Commissioners. The Minister for Finance does not get involved in the question of tax liability, and I intend to follow this practice. Third, I said the appeals system is there for all taxpayers to use. Every taxpayer, irrespective of whether they pay a large or a small amount of tax, has the right to use the law to vindicate his or her position if he or she wishes to do so. Fourth, I said the Appeals Commissioners are independent in the exercise of their duty. The current Appeals Commissioners were appointed validly within the law by the Minister for Finance in December 1992, and, as required by law, their appointments formally notified to the Houses on 8 January 1993. Fifth, I said the Appeals Commissioners are only one step in the process of establishing and enforcing a tax liability. I made it very plain that, in my experience, in cases such as this where a large tax liability is at issue, it would be normal for either side to appeal the matter further within the provisions of the law. The publicity surrounding this case suggests that the decision of an Appeals Commissioner is final. That is not the case. It is only the first stage in a process. Sixth, I reiterated what I said in my Budget Statement, namely, that the issue of Revenue powers is under active review; that the Revenue Commissioners have recently made proposals to me in this regard; and that I will be examining these in the context of the Finance Bill, 1999.

The issue arose yesterday of making a tribunal finding into a form of binding tax assessment. I said that the Oireachtas could consider that under the Finance Bill or at any other time. Naturally advice would have to be taken on such a proposal before it could be included in the law. I pointed out that as regards the case in question the law is there for the further pursuit of the tax liability and that this was the best course of action.

As regards Appeals Commissioners' decisions, I pointed out that it was I who had provided the Appeal Commissioners with the discretion to publish their findings under certain conditions. If there is any further assistance I can give the House on this matter, I am ready to respond constructively as I did in the Chamber yesterday.

Mr. Quinn

Will the Minister publish their findings?