Dáil Éireann díospóireacht -
Tuesday, 30 Sep 2003

Vol. 571 No. 1

Leaders' Questions.

Mr. Kenny

I remind the House of the words of the Taoiseach on 28 May 1998, when he said, "What matters most is how a political party reacts to knowledge when it becomes available." These are the words of the Taoiseach in a debate on matters relevant to the former Minister, Mr. Raphael Burke. These are the standards set down by the Taoiseach as head of his party and as Head of Government.

The Taoiseach has openly admitted that, several months ago, he had information to the effect that Deputy Michael Collins, a member of his party, had serious difficulties with the Revenue Commissioners regarding compliance with tax regulations. What did the Taoiseach do? Did he report this to the public watchdog, the Ethics in Public Office Commission? No. Did he call in Deputy Collins and ask him about the extent of his liabilities or otherwise? No. Did he ask his party to investigate the difficulties Deputy Collins was having? No. He did nothing.

The Taoiseach has fallen below the standards he set himself. He pronounced in this House that what is most important is the way a political party reacts when information is brought to its attention. Why did he do nothing in respect of Deputy Collins and his problems? Why did he not call him in and ask him about the extent of his liabilities? Why did he not ask his party to investigate the Deputy several months ago and why did he not report this information to the public watchdog, the Standards in Public Office Commission? Will he explain that to the House and to the thousands of compliant taxpayers who are absolutely appalled by this continuing litany of abuse of privilege and by the activities, in some cases, of Members of this House?

The Taoiseach

I reiterate what I have said many times across the floor of the House, to be absolutely clear, that the Government and the parties in Government do not and will not tolerate tax evasion in any form. That is why the Government, particularly the Minister for Finance, has given powers to the Office of the Revenue Commissioners to investigate and catch tax cheats. We have done more in this area than any other Government in the history of the State and we will continue to do so.

I believe that those who seek election and those who want to be legislators in this House have a particular responsibility to ensure that their tax affairs are in order. This is why the Government introduced a specific requirement under the standards in public office legislation for elected representatives to make a statutory declaration within one month of their election confirming that they are tax-compliant and to obtain, within nine months of their election, a tax clearance certificate from the Collector General stating they are in compliance with their tax obligations. These are the orders of the legislation and everybody in the House is duly bound to live by them. It is clearly inherent in the legislation that its effective implementation requires individual Members of the House to take personal responsibility to ensure that they fulfil their obligations. However, we also gave the Standards in Public Office Commission power to investigate any potential breach of the legislation. Fianna Fáil and the Progressive Democrats in Government have introduced more stringent regulations pertaining to standards in public life than any other Administration.

Mr. Connaughton

They had to.

The Taoiseach

Deputy Collins approached me in the second half of June. He informed me that he had personally sorted out a tax issue with the Revenue Commissioners, that his name would be published shortly in its report and that when this was published he would make a public statement and make himself available to the authorities dealing with the matter. He understood that because the Fianna Fáil Party had a ruling on tax certificates, it could create problems and that he would have to make his position clear. He also knew the Fianna Fáil ruling, Article A4 of the mandatory code for public officeholders and candidates, which stipulates that where any investigation, inquiry or trial is being undertaken by any court, tribunal or statutory body which concerns the issue or the officeholder who is the subject matter of an investigation by the Standards in Public Life Committee in the interests of natural justice it may postpone, suspend or adjourn its own investigation pending the outcome of that other inquiry. Deputy Collins knew quite clearly that when the Office of the Revenue Commissioners published his name – he had be been informed of this matter either by his accountants or solicitors – he would have to deal with the Fianna Fáil position. To the best of my knowledge – maybe he told me or I told him – it emerged in our conversation that he was aware that he was also in breach of the guidelines of the Standards in Public Office Commission and would also have to deal with that body.

By way of due process I set up the commission and we passed the Bill. I worked hard to set up the commission and to give powers to the Revenue Commissioners on the basis of natural justice and due process. When a Member tells me in confidence that his name is in the Revenue domain, it is not for me to ring Revenue, which would not give me the details, nor is it for me to circulate this information in the public domain. In this case, Deputy Collins was absolutely clear his name would enter the public domain and that he would have to deal with the issues both in the party context and with the Standards in Public Office Commission. I hope and know from his public statement that he will do so.

Mr. Kenny

The Taoiseach's reply amounts to cowardice dressed up as ethics. What is involved is not Deputy Collins but the Taoiseach's leadership. I refer him again to his own standard and his statement that what matters most is how a political party reacts to knowledge when it becomes available. The Taoiseach was given such knowledge by Deputy Collins and he failed to act. In the same debate, he said:

Where controversy or legitimate public concern arises or facts that have not hitherto been known come to light, they must be fully disclosed to the appropriate authority.

What did the Taoiseach do about that? Nothing. Did he ask Deputy Collins to go to the proper authorities? No. Did he ask the Fianna Fáil Party to investigate this? No. Did he ask Deputy Collins what his problems were? No. The issue is not about Deputy Collins but about the Taoiseach and his leadership. It highlights the cynicism that exists among thousands of compliant taxpayers who see this as part of a continuous litany of such issues that have been evident for the past ten years. The country is mired in tri bunal after tribunal and inquiry after inquiry, thanks mainly but not exclusively to members of the Fianna Fáil Party. Will the Taoiseach explain to those compliant taxpayers what he, as Taoiseach, did when this knowledge became available to him last June and what he is doing now. This is appalling leadership and disgusting government and it does the Taoiseach, as leader of his party, no justice to have to admit in the House that he did nothing in respect of the standards he set down in the House in 1998. He has fallen short of his own standard and let down hundreds of thousands of people who pay their way day in and day out and have to put up with another failure of the Government to manage the affairs of the nation properly.

Deputies

Hear, hear.

The Taoiseach

I could say to Deputy Kenny, but I would not spend too much time doing so, that it seems Deputy Collins has a difficulty that will be dealt with and that Deputy Kenny's entire party had a problem with its tax affairs. However, we will not go back over all that.

Mr. Timmins

The same as Fianna Fáil.

An Ceann Comhairle

Allow the Taoiseach, without interruption.

The Taoiseach

The fact is that Deputy Collins informed me he had been informed, either by his accountants or solicitors, that he was to be named in a Revenue report which created a problem for him in respect of a matter which he said had been resolved. He was quite aware, as was I, that this created a difficulty for him. It may or may not be a very serious one. It was not for me to investigate the facts. I am not in, nor will I get into, the business of breaching due process and natural justice. Thankfully the Office of the Revenue Commissioners is the statutory agency to make reports on people who have either offshore accounts, bogus accounts or whatever else a Deputy may be guilty of.

When this matter was coming into the public domain, there was no secrecy and for Deputy Kenny to infer otherwise is incorrect. It was quite clear that the matter would be investigated, on the publication of the report, by Deputy Collins's party – he was well aware of this – and, more importantly, by the Standards in Public Office Commission.

We set up the commission statutorily to deal with these issues and therefore it is not my job to do so. When a Member tells me he has a difficulty, my job, as far as I am and will be concerned, is to highlight to him that he must deal with this through the commission. I will not check the Isle of Man or wherever else people have offshore accounts. I informed the Deputy that he should comply with the law of the land and in this case he agreed to do so. Deputy Collins believed the Revenue report, about which he was told, would be published in a matter of days. It was not; it took a matter of weeks. I look forward to his coming before the Standards in Public Office Commission or dealing with the matter in whatever way it indicates, in accordance with the legislation, and to his explaining the matter to my political party.

Mr. Rabbitte

I have raised with the Taoiseach many times in the House, including on four consecutive days last February, the question of the deal entered into with religious congregations. I made a number of points about the deficiency in the deal, but I made two points in particular. I said the Government grossly underestimated the liability and exposure of the taxpayer, which could amount to a total of €1 billion, and I pointed out that the Attorney General was not involved in the deed of indemnity

After the Taoiseach denied my charges, defended the deal and misled the House as to the number of complainants, the Comptroller and Auditor General decided to undertake his own assessment, published today. In it he concludes that the total exposure of the State will be between €869 million and €1.04 billion and points out that, at the time, the Attorney General was excluded from involvement in the critical negotiations. Initially, the then Minister, Deputy Woods, had him excluded and refused even to reply to his letters. Later, at the critical time, he was campaigning in the general election, ironically seeking to prevent the Taoiseach from spending €1,000 million building on a football stadium at a time when a deal for €1,000 million was being concluded in his office when he was not present.

The report published today by a constitutional officer, the Comptroller and Auditor General, is the most serious indictment ever to come before the House of a scandalously reckless, negligent and profligate deal entered into in the name of Irish taxpayers by a Government, the facts surrounding which the Taoiseach attempted to cover up, deny, refute and then defend in this House. The findings of this report are far more serious than anything ever concluded on behalf of the State by the Taoiseach's mentor, the former Taoiseach, Charles Haughey, who has been the subject of much odium in the House. Any Government that concluded a deal like this does not deserve to be in the charge of the affairs of the country.

The Taoiseach

I have previously said many things about this agreement. I disagree with Deputy Rabbitte that I misled the House. It will take at least two years before an assessment of how many people will be included under the terms of the agreement can be known and the figures I have previously indicated continue to be the figures indicated by the various Departments and the Attorney General.

Deputy Rabbitte and I will never agree on the indemnity agreement but we can at least listen to each other's points of view. I will at all times listen to his. The Government was committed to giving redress by way of compensation to victims of abuse and we intend to do so. The redress board was established for this purpose. If we had not agreed to compensate victims of abuse through this mechanism, then each and every court case brought to the High Court – at that stage there were approximately 2,000 cases – would have had to be fought in the court. It would have been necessary to bring a claim for financial contribution in respect of each case against the religious orders, which would have taken years. The compensation payments would have been delayed in thousands of court sittings. There would also have been debates about limitation periods and the responsibility of religious orders for abusers, which would have been a nightmare scenario for the victims. Given that she could not get the legal people involved, Ms Justice Laffoy was seeking to introduce a redress system and there was pressure on the Government to do so.

There is a commonly held belief, fostered by those who wish to confuse, that somehow the State was unwise to enter an indemnity agreement. I accept that Deputy Rabbitte continues to make that point.

Mr. Rabbitte

I did not make that point and I never did so.

The Taoiseach

A number of facts demonstrate that this argument is without foundation. Indeed, in the view of this and the previous Government, concluding an agreement with the religious orders was in the best interest of the State. I remind the House that when the issue of responsibility between the state and the institutions was raised in the Canadian courts, according to a court decision the allocation of blame was 70% to the state and 30% to the religious orders. It is important in showing that the State had a major responsibility for what went on in these institutions. As I have said continually, and it is why I apologised, we abandoned the children of another generation in these institutions and failed miserably to ensure their interests were protected.

Mr. Rabbitte

We know that.

The Taoiseach

It seems that everyone agrees with that proposition, as Deputy Rabbitte has said. However, the logical conclusion that arises from this is that the State has to bear a significant proportion of the responsibility towards victims, and that is our view. In entering into the indemnity agreement, the State was conscious of the fact that victims could lose cases brought against religious orders, which would have been an appalling scenario. To arrange for the religious orders to make payments to the State, totalling €127 million, was in our view a sensible way to proceed.

As I have done so before, I can set out the reasons we believe many of these people would lose their cases. There are several problems in this area, one of which I wish to highlight. Under our law, where a victim obtains a judgment under civil liability legislation for a monetary sum, the total amount of the judgment would have to be paid by the State. It is a fundamental principle of our code that those who committed wrongs are liable for all of the injury or loss, even though they bear different degrees of responsibility. This means that even if one is only 1% responsible in law – the State's responsibility was certainly far higher than that – all of the damages must be paid, with recovery to be sought from other wrongdoers. The State would have ended up paying the money in any event.

I do not know what will be the final figure. Our view continues to be that it will not be anything like what the eminent Comptroller and Auditor General has said. We still believe it will be far smaller. However, we continue to faithfully hold the view that we would not have been able to deal with this issue if we did not establish a redress board and if we did not properly agree a compensation indemnity claim. We could have ended up with the worst of all scenarios, where the individuals would have received no money. That was our legal opinion then and now, and it remains the Government's view.

Mr. Rabbitte

It is disgraceful for the Taoiseach and his office to dismiss in this House the findings of the Comptroller and Auditor General as if it were an unfounded charge. Why did the Department of Finance recommend a 50-50 arrangement and why did the Government initially pursue that strategy if the Taoiseach considers it to be an unfair apportionment? Any Taoiseach who would say that a contribution of €127 million by the religious orders is a sensible way forward in a deal that the Comptroller and Auditor General estimates could cost of the order of €1 billion does not deserve to be in the Taoiseach's position. How could he have entered into such a deal in circumstances where, according I understand to page 85 of the Comptroller and Auditor General's report, the Department of Education and Science said it was not legally competent to permit its Minister to sign the indemnity without the involvement of the Attorney General, while yet proceeding to sign off on it? When the deal went to the Cabinet on the last day of the previous Government's term of office, the Department knew it was inadequate. On 29 June 2001, the Minister for Finance, Deputy McCreevy, had written to say he was disappointed with the contribution from the religious congregations based on the then assessment of €200 million to €400 million. If it was disappointing in that context, it is certainly disappointing in the context of €800 million to €1,000 million.

There is no explanation for this. The Attorney General was not at his desk. When he was, he was excluded by a decision by the then Minister for Education and Science, Deputy Woods, who attended the two critical meetings at which the deal was entered into. The then Minister has never told us why that happened. All the Taoiseach's Cabinet colleagues were involved, including the Tánaiste and Minister for Enterprise, Trade and Employment. Who would have thought we have come to the stage where the Minister for Justice, Equality and Law Reform will not even come into the House? He was up lamp posts when this major deal was being concluded and was nowhere in sight. On the last day he said it was a deficient deal and that it contained no mechanism to deal with the rising number of complainants, yet the Taoiseach signed off on it anyway. The Taoiseach sent out "Woodsie" to agree a secret indemnity that was never debated in this House, he signed off on it and hoped it would never come back to haunt him, but it has done so.

Dr. Woods

For the record, there was debate in this House on numerous occasions.

An Ceann Comhairle

Deputy Woods must find another way of making his point. I ask him to resume his seat. As it is Leaders' Questions, only party leaders may intervene.

The Taoiseach

Whatever about the accusations Deputy Rabbitte makes about people being out campaigning, what he has stated is not true either. This matter was discussed repeatedly in the House and was long in the public domain.

Mr. Rabbitte

The indemnity deal was never discussed.

An Ceann Comhairle

Deputy Rabbitte should allow the Taoiseach to speak without interruption.

The Taoiseach

The Government agreed in principle to establish a compensation scheme on 3 October 2000. There were meetings with the congregations on 10 November at which they indicated their intention to make a meaningful contribution. Further meetings were held on 27 November 2000, 2 and 21 February, 6 and 23 March, 4 and 30 April, 10 May, and 5 and 26 June. All meetings were attended by officials of the Department of Education and Science, the Department of Finance, the Office of the Attorney General and representatives of the congregations.

Mr. Rabbitte

They went nowhere.

The Taoiseach

As discussions proceeded, the then Minister for Education and Science became involved resulting in a deal being agreed.

There is no comparable situation for these issues of which the Government is aware. The Canadian arrangement has worked. The State must bear a significant liability given that, in many cases of abuse, children had been taken from their homes by the State and placed in the care of religious orders, some of whose members abused them. In many cases State agencies were aware that institutions were being run under abusive regimes. Some institutions covered by the redress scheme were run by the State. There was 100% liability in many cases.

Mr. Rabbitte

There was 100% liability?

The Taoiseach

In many cases the State turned its back on its responsibility to cherish the children of the nation. If we were to adopt an alternative approach that would force victims to face—

Mr. Rabbitte

That is not the issue.

The Taoiseach

It is.

An Ceann Comhairle

Allow the Taoiseach to speak without interruption. His time has concluded.

The Taoiseach

If we were to follow through Deputy Rabbitte's point, something on which he continually misleads the people—

Mr. S. Ryan

The Taoiseach is trying to mislead to remove himself from this situation.

The Taoiseach

—victims would face traumatic cross-examination by lawyers. It would take many years for the courts to finish hearing 2,000 to 4,000 cases. Many could be thrown out by the courts because of the amount of time that had elapsed since the abuse occurred. Much of the property of the congregations is tied up in trusts and would not be taken, even by the courts. The legal fees would be enormous. Some of the congregations which have contributed have few or no claims against them.

The suggestion that the congregations have a great deal of money which can be taken is not true. The idea that schools, homes and institutions can be taken to be sold to put money in the redress fund is not true. Deputy Rabbitte continues to mislead people on this and he is wrong.

Ms Shortall

On a point of order—

An Ceann Comhairle

There cannot be a point of order. Only the Taoiseach and the leaders of the parties are entitled to speak.

Ms Shortall

The Taoiseach misled the House in his statement.

An Ceann Comhairle

There cannot be a point of order from Deputy Shortall. The Chair wishes to make a statement. Perhaps the Deputy would resume her seat.

I remind Members that the leaders of Fine Gael, the Labour Party and the Technical Group are entitled to two minutes to ask questions and the Taoiseach is entitled to three minutes to reply. Party leaders are entitled to one minute each for supplementary questions and the Taoiseach is entitled to one minute to reply to each. Perhaps Members would stay within those time limits contained in the Standing Order.

Mr. Sargent

I will leave aside the allegations of corruption for a moment to deal with the equally serious charges against the Government of a lack of competence and cohesion and, in the case of the Taoiseach, a certain lack of leadership. This is being increasingly revealed in the disagreements between high level members of Fianna Fáil, the most recent example being the Leader of the Seanad disagreeing with the Minister for Transport. The Minister informed us of the length of time it takes to bring a public transport project to fruition while the Leader of the Seanad informed us that it is the Minister's fault that we do not have a resolution to the problem.

Will the Taoiseach inform us when the Government will decide on these matters, especially the metro? He will be aware that the Government decided to proceed with a metro system for Dublin 20 months ago. He will also be aware that, a year ago, the Rail Procurement Agency presented a business case proposal for the metro to the Minister for Transport for a final Government decision.

We have seen repeated changes to the story in the newspapers. The Sunday Tribune of 5 January last stated that the Minister was planning to present to Cabinet within weeks a proposal for a €2 billion metro line which would be in place before he left office. The Irish Independent of 13 February last informed us that the price had increased to €3 billion but that the proposal would still come before the Cabinet before the end of the month. By the end of the month, The Sunday Business Post stated it had been reliably informed that the Minister now had a price tag of €4 billion and that the proposal would come before the Cabinet within five weeks with construction to commence in late 2004. In March, the price had increased to €4.8 billion, at which point the Minister for Finance said the proposal was unrealistic.

Will the Taoiseach inform the House whether, following the Minister's escapade in Madrid and a revision of the price to €3.4 billion, this issue will finally be decided on by the Government at tomorrow's Cabinet meeting or whether we must wait another ten months and endure more dithering?

The Taoiseach

The RPA has advised that construction of the Luas system, while encountering difficulties over the summer, is progressing and it is hoped that all phases will be completed next year. The reason there is a difference in costs and cost analysis for the metro is because they relate to different proposals and projects. It is natural that there would be different cost structures in such an event.

The experience of planning and delivering major infrastructural projects, of which there have been many, has shown that there is scope for improved efficiencies. The Minister and his officials visited Madrid to examine what is recognised in Europe as the most efficient and cost-effective model that exists. This was examined by the Cabinet sub-committee to see if we could learn from the experience in Spain. Measures under construction include shortening and streamlining statutory powers in respect of applications for orders to construct the metro infrastructure and many other issues relating to compensation. The experience is that the rules and regulations that apply in other countries are not the same as those which apply here. That accounts for most of the price differential.

The RPA has responsibility for the Dublin metro project. It is finalising its report based on the experience of Madrid and elsewhere and it will bring that to the Minister during October when the Government will examine the proposal. The Minister for Finance made it clear that the original cost was outside what we could afford in the capital programme, given all the other projects contained therein. It is his obligation to do that. The costs were enormous for one project, which meant we had to examine alternatives, which is what the Government is doing.

Mr. Sargent

Examining alternatives is all very well when one is in Opposition, but when one is in Government, one must make decisions. Given that a consortium awaits a Government decision on this, how much longer must the people and those engaged in the business be kept waiting? There is no doubt that there are differences between proposals. When will the Cabinet make a decision? That is a basic question to which I want an answer. Is this matter on the agenda for the Cabinet meeting tomorrow?

Who does the Taoiseach believe talks sense on this issue? Is it Senator O'Rourke, the Minister for Transport, Deputy Brennan, or the Minister for Finance? Will the Taoiseach, in turn, show some leadership by indicating when he believes a decision will be made, or is the real Taoiseach the Minister for Finance who calls the shots in a similar manner to Gordon Brown in the United Kingdom? Have we lost the Taoiseach and does he now reside in the Department of Finance?

The Taoiseach

It is always the same during Question Time and Leaders' Questions. One Deputy asks why we give away taxpayers' money while another says we should spend it.

Mr. Gormley

Why does the Government misspend taxpayers' money?

The Taoiseach

We are trying to obtain the most cost-effective proposal. It is not possible to invest billions of euros in one infrastructural project. The Minister for Finance—

Mr. Gogarty

The indemnity deal agreed with the religious congregations was not cost-effective either.

The Taoiseach

—with the support of the Government was not in a position to fund the metro project, nor was the Minister for Transport asking him to do so. The Minister, Deputy Brennan, is driving this and many other projects forward successfully, in spite of some overruns, especially in Deputy Sargent's constituency where a project had to be entirely altered because he and others were concerned about a few swans which are now quite happy.

(Interruptions).

The Taoiseach

We have to continue to try to find the most cost effective system.

Mr. Sargent

Will the Taoiseach make a decision?

The Taoiseach

The matter will come before Government in the next few weeks when we will make the decision.