Statement by the Taoiseach, Mr. Bertie Ahern, T.D. in Dáil Éireann on Wednesday, 14 February, 2007 in relation to The Report of the Tribunal of Inquiry (Moriarty Tribunal) into Payments to Politicians and Related Matters.
Ceann Comhairle
What came home very forcefully to me as I read this report is the sheer scale of the amounts of money – over €11 million (or some €45m in today’s values) – found by the Tribunal to have been either privately donated to Mr Haughey or misapplied by him during the period under inquiry from 1979 to 1996. What struck me even more forcefully were the devices employed to conceal the fact of and the nature of those transactions. We are indebted to Judge Moriarty and the Tribunal team for their outstanding work in painstakingly stripping away the layers of secrecy and obscurity surrounding Mr Haughey’s financial affairs and exposing them to public scrutiny. We look forward to receiving the second part of their report soon.
To those of us who knew Mr Haughey, who worked with him over the years, who saw him as a dynamic colleague and leader of exceptional abilities, the detailed revelations in this Report come as a grave disappointment. Even now, I and others who worked with him in government find it difficult to comprehend the complexity of the man and the other life he led.
To quote Judge Moriarty:
“ Apart from the almost invariably secretive nature of payments from senior members of the business community, their very incidence and scale, particularly during difficult economic times nationally, and when Governments led by Mr Haughey were championing austerity, can only be said to have devalued the quality of a modern democracy”
It is a harsh and damning indictment. It is also a great tragedy.
I said hard things about Mr Haughey and my disappointment at his lapses from the expected high standards on numerous occasions. I said it at our Ard Fheis in 1997 and in subsequent statements and in interviews. I stand over those criticisms.
I also stand over my comments made at Mr Haughey’s funeral and on other occasions that he did a lot of good work for this country. I believe I was right in those comments and there is no denying that he delivered much political progress but history will be the final judge of that.
Here, in this forensically detailed Report, we have a judgement on a politician and statesman, who had it in him to be great, but who was seduced by a conviction of personal entitlement that ultimately undermined his vocation to be a true servant of our country and of our people. Regrettably, the account now presented to us, is that of the private person who failed to live up to the high standards that we are entitled to expect of those in public life, as elected representatives or as office holders.
It is a cause of deep personal hurt that the Report has also found serious misappropriation of donations intended to assist with the medical treatment of the late Brian Lenihan. The revelation that Mr Haughey, for his own personal benefit, redirected those and other donations, such as the political donations intended for the Fianna Fáil Party, was a matter of grave disappointment for me and for those who worked with him.
In those times past, the lack of a formal, developed, ethics code and oversight machinery for those in public office no doubt facilitated the years of evasion and deceit that characterised Mr Haughey’s financial dealings, but does not excuse them. Today we have a highly developed ethics framework that not only provides a mechanism for keeping holders of public office honest, but sets out clearly for them the highest standards of behaviour that they need to meet to earn the public trust. I refer specifically to the enactment of the Ethics in Public Office Act, 1995 and the Standards in Public Office Act, 2001.
The 1995 Act provided mechanisms for dealing with conflicts of interest in relation to members of the Houses, Ministers and officials in the Civil Service and the wider public service. It established the independent Public Offices Commission and provided for a Select Committee on Members’ Interests in each House of the Oireachtas to oversee its key provisions. It required Members of the Oireachtas, senior civil servants, public board members and senior executives of State bodies to disclose their personal interests in order to provide transparency in decision-making and accountability. It regulated the acceptance of gifts by office holders.
The 2001 Act, for which I personally pressed, established a new Standards in Public Office Commission (the Standards Commission), to be chaired by a judge or former judge of the Supreme or High Court. It was given wide investigative powers into acts or omissions of public servants or officeholders that are inconsistent with the proper performance of their duties, or that would be inconsistent with the maintenance of public confidence in that performance.
The Commission can engage inquiry officers to conduct preliminary investigations of complaints and indicate whether a case exists for further investigation by the Commission of a matter of significant public importance. The Commission has tribunal powers; it can summon individuals and papers, administer oaths, order discovery and preservation of documents and require the giving of evidence. It is an offence to obstruct an investigation of the Commission or an inquiry officer.
The 2001 Act also provided for the preparation of Codes of Conduct, in consultation with the Commission, for Members, for Office Holders and for directors or others employed by public bodies. These Codes of Conduct deal with the standards of conduct and integrity appropriate to the performance of their public duties by the persons concerned.
The Act also requires Members of the Houses to furnish a tax clearance certificate within nine months of an election. A statutory declaration that the Member’s tax affairs are in order must be made one month either side of the election. Similar arrangements apply to persons appointed to positions as judges or senior public officials. Penalties for a false declaration were increased from a fine of £50 to one of £2,000 and a term of imprisonment from three to six months.
The result is a strong ethics statutory framework, overseen by a powerful, independent, Standards Commission.
The strengthening of the ethics framework has also led to the imposition of vigorously enforced standards for the treatment of political donations and expenditure, as set out in the Electoral Acts.
And we are presently preparing proposals to further strengthen the ethics legislation to address issues that arose last Autumn.
As a result of these initiatives, the transparency in the financial affairs of public representatives, now required and enforced by law, stands in sharp contrast to the secretiveness and evasiveness of the transactions revealed in the Tribunal’s Report.
The Tribunal’s Report also makes a number of other important findings, not least ones relating to myself.
I refer to the operation of the Leaders Allowance Account and the practice that had progressively evolved for administrative reasons of pre-signing cheques. I accept the view expressed in the Report that the practice was undesirable. I am happy, however, that the Tribunal accepted my evidence and were satisfied that I had no reason to believe the account was operated otherwise than in an orthodox fashion. I am also pleased that the Tribunal said in their report that it is “noteworthy” that at my insistence amendments have since been made to the governing of the Leaders Allowance Accounts.
The important point to emphasise is that the issues, which arose in respect of that account, arose more than 15 years ago. Even before the introduction of statutory controls in 2001, the operation of the account within Fianna Fáil was reformed in 1992 by my colleague Albert Reynolds and was further reformed in 1994 when I became party leader. For example, I arranged for the party’s auditors to present the audited accounts to the party’s National Trustees, its National Treasurers and senior party officials. This further increased the transparency of the account.
In Government, Fianna Fáil has changed the legislation governing such accounts. Under the old system, a party leader had a large amount of discretion as to how the account was to be used, and this gave rise to an ambiguity about what was permissible.
The 2001 amendment set out with greater clarity the purposes for which the leader’s parliamentary allowance are to be applied. The categories of expenditure which are to be included in the meaning of ‘expenses arising from parliamentary activities’ have now been clearly defined.
In addition, the new legislation requires a parliamentary leader to prepare a statement of any expenditure from the allowance. It requires that such a statement be audited by a public auditor. This audited report is then required to be furnished to the Standards Commission.
The Standards Commission:
– considers the statement and the auditor’s report;
– can consult with the Parliamentary leader;
– furnishes a report in writing on the statement and the auditor’s report to the Minister for Finance; and
– causes a copy of that report to be laid before each House of the Oireachtas.
Since the reforms by the Fianna Fáil / PD Government in 2001, the system is far more robust. We did not wait for the Moriarty Tribunal to conclude; we went ahead and changed the system. There are now a large number of restrictions and guidelines as to how this money can be used. We will closely study the Report of the Tribunal to establish whether there are any further improvements that might now need to be made.
On the issue of the pre-signed cheques, it is important to recognise that this was not an uncommon feature of life in past decades. It was done for convenience and to save time. There was no reason for me to believe that any unusual use was being made of any of these cheques, and indeed the vast majority of the cheques drawn on the Fianna Fáil Leader’s Account were put to proper use. A very small number were used otherwise. Because of the reforms introduced by me, first within the Fianna Fáil system and later by legislation, this practice – which ended 15 years ago – cannot be repeated.
We have learned much from the work of this Tribunal, from its predecessor the McCracken Tribunal and from other Tribunals and Inquiries. We have developed a greater awareness and understanding of the need for explicit measures to underpin the high standards of governance that the public deserve and expect. As I already noted, many important legislative and other initiatives have been taken to address this.
In addition to the measures I have already referenced, actions have been taken in relation to:
– individual issues of tax evasion;
– a major reorganisation of structures in the Revenue Commissioners, including the strengthening of anti-evasion operations through the creation of a dedicated Investigations and Prosecutions Division to manage and advance all Revenue prosecutions in cases of tax and duty evasion;
– conferring of substantial additional statutory powers on the Revenue Commissioners;
– development of Codes of Practice and other procedures to guard against conflicts of interest;
– strengthening of the financial regulatory and supervisory framework. The establishment of the Financial Regulator as a Single Financial Regulatory Authority with an explicit mandate for consumers has placed the Irish regulatory system at the forefront of best international practice;
– sharing of information by State agencies. Legislation now allows the Financial Regulator to report suspicions of money laundering (which includes the proceeds of tax evasion) directly to the Gardaí and the Revenue Commissioners. The Regulator is also obliged to report any suspected criminal offences to the appropriate enforcement authority, for example, the Director of Corporate Enforcement;
– the creation of independent regulatory authorities for the enforcement of company law and for the supervision of the accountancy and auditing profession. In this regard, also we are undertaking an ambitious programme of reform of the existing Companies Acts, led by the Company Law Review Group, in order to keep our Companies legislation up to date and appropriate for the needs of our economy; and
– strengthening the prevention of corruption legislation, including a presumption of corruption for non-disclosure of a significant political donation in particular circumstances.
We will continue to apply the lessons learned from the work of the Moriarty Tribunal and other inquiries.
However, the overarching lesson is that the achievement of high standards cannot be taken for granted. They must be promoted, through legislation, through changes in our political culture and, above all, through constant vigilance of which the independent Standards Commission is the ultimate guarantor.
ENDS
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