Clare Daly TD has resigned from the Socialist Party over her "political connection" with Mick Wallace, the party said.
The Dublin North TD, who was elected in last year’s general election, refused to call for Mr Wallace to step down from the Dáil following
the disclosure in June that his building firm M J Wallace Ltd, was on the Revenue Commissioners’ list of defaulters, with a total liability of €2.1 million.
According to a statement on the party's website, Ms Daly handed in a letter of resignation yesterday.
The party said it believed Ms Daly had resigned because she placed more value on her political connection with Independent TD Mick Wallace than on the political positions and work of the Socialist Party.
“Over the last number of months, Clare's political connection to Mick Wallace, who engaged in tax evasion and the falsification of VAT returns, has damaged her reputation but also, by implication, has potentially damaged the reputation of the Socialist Party,” the statement said.
It said Ms Daly’s approach had "given the establishment and sections of the media the opportunity to attempt to undermine the Campaign Against Household & Water Taxes which is a vital campaign in the battle against the disastrous policies of austerity".
"Clare Daly's promotion of Mick Wallace in the anti-household tax campaign late last year and early this year, despite his tax evasion, was a reckless misjudgement," it added.
While the party said it regretted Ms Daly’s decision, they described it as a setback they would recover from.
“Members of the party and its public representatives, including Paul Murphy MEP, Joe Higgins TD and our six councillors, will continue with our principled approach to campaigning and will continue to argue for the socialist alternative so desperately needed at this time of profound capitalist crisis.”
The Socialist Party responded sharply last July to “derogatory” remarks in the Dáil by Mr Mick Wallace.
In a debate on the Personal Insolvency Bill, Mr Wallace said members of the Socialist Party and the People Before Profit Alliance had been “lecturing” him. “It is difficult to take lectures from people who never employed anyone in their lives. Many of them never did a day’s manual work. It has been a bit nauseating,” he said.
The party said the comments “reflect poorly" on a TD who claims to operate in the public interest.
“The fact that Mick Wallace attacked the Socialist Party because we called on him to act in the public interest regarding the controversy surrounding his VAT payments will baffle PAYE workers who work hard and whose taxes are deducted at source.”
Mr Wallace’s company, M J Wallace Ltd, was on the Revenue Commissioners’ list of defaulters in June, with a total liability of €2.1 million.
Under the agreement with Revenue, MJ Wallace Ltd, which is 99 per cent owned by Mr Wallace, was found to have under-declared VAT by €1.418 million. With interest and penalties, the settlement came to €2.13 million.
He later resigned from the Dáil technical group.
Ms Daly confirmed this evening she had resigned from the party and called their statement inaccurate.
"I can confirm that yesterday I resigned from the Socialist Party and redesignate myself as a United Left Alliance (ULA) TD. I believe it is time to prioritise the building of the ULA," she said.
"I note with some regret the inaccurate content of the Socialist Party statement issued today. I have no intention of engaging in a public war of words with the Socialist Party leadership. I am proud of my record as a Socialist Party activist and public representative, as a shop steward representing Aer Lingus workers and a campaigner with people across Dublin North and beyond."
She said she would continue to represent working people "with intensity and passion" and said she would be judged on her record.
"I have the highest of regard for the members of the Socialist Party especially those past and present who worked tirelessly with me on numerous campaigns over the last 25 years. I hope to maintain good working relations with Socialist Party members and look forward to working together as ULA members."