An Independent agency with powers of investigation and prosecution should be established to inquire into financial payments to politicians and public servants, counsel for Fianna Fail told the
Dunnes payments tribunal yesterday.
Failure to disclose relevant transactions to the appropriate authorities would constitute a criminal offence. This would be "the greatest inducement" for public representatives to disclose all payments.
Bankers, accountants and other professional advisers would also be obliged to disclose unusual or large financial transactions involving politicians. Meanwhile, an ethics commission should be established to investigate complaints made by the public about politicians.
No matter how eminent a person might be, no politician or public servant should enjoy immunity from the tax laws, whatever service they might have given, said Mr Rory Brady SC.
Politicians and public servants should be obliged to produce a tax certificate and swear a statutory declaration that their tax affairs were in order.
Making his submission to Mr Justice McCracken, the chairman of the tribunal, Mr Brady said Fianna Fail wished to congratulate the tribunal on its thorough professionalism and efficiency.
The party also recognised the commitment and dedication of counsel, solicitors and Mr Justice McCracken to the completion of the task.
The public disclosure of events surrounding the relevant payments had been a "great service to the Irish people", he said.
The early, and successful, conclusion of the tribunal's deliberations was a vindication of the decision to establish it as an independent and investigative body. This decision was encouraged and wholeheartedly supported by Fianna Fail.
"The evidence, as it unfolded before this tribunal, has been a cause of great concern and public anxiety. The concerns and fears of the Irish public can only be assuaged by effective and transparent disclosure obligations, combined with active and ongoing investigation of suspected irregularities in the financial affairs of politicians or public servants," said Mr Brady. It was, however, important to keep these past events in perspective. The vast majority of public representatives who had served in the Dail and the Seanad did so solely in the public interest, and not to promote their self-interest, he said.
However, additional legislative and administrative procedures must now be implemented "to avoid, in the future, the risk of politicians and public servants being exposed to conflicts of interest, suspicion of favouritism, or the perception of bias in favour of generous contributors, either to the politician or public servant personally, or to the politician's political party".
The party believed the only way in which the risk of conflict, bias or favouritism could be avoided was by public disclosure and scrutiny of the amount and source of payments to politicians and public servants, particularly those in high office.
It was the fact of disclosure of contributions, combined with ongoing scrutiny of certain financial transactions by an independent agency, that represented "the optimum formula to avoid a repeat of the past".
With this in mind, Fianna Fail wished to make a number of recommendations to be contained in the tribunal's report to the
Houses of the Oireachtas.
Mr Brady said it was important to observe that the matters considered by the tribunal all occurred prior to the enactment of the
Electoral Act 1997, and the Ethics in Public Office Act 1995.
Accordingly, Mr Justice McCracken should take this into account when making his recommendations. number of lacunae in these pieces of legislation should be addressed to improve transparency and to introduce the element of supervision and investigation on an ongoing basis of payments made to politicians and public servants.
The primary deficiencies in the legislation were the lack of disclosure by persons other than politicians or public servants and the absence of a vibrant and independent investigative agency.
A structure should therefore be established to allow members of the public to make complaints and to have such complaints investigated. An Ethics Commission might be the way forward, he said.
The proposals were as follows:
Where sums of money are paid, directly or indirectly, to a politician or public servant intent on concealing the same, one can assume that he or she will not make full and proper disclosure of such payments under existing legislation.
The essence of his or her objective is to avoid public scrutiny.
But it is clear that transactions involving the incorporation of offshore companies, the establishments of trusts and the international transfer of funds to exotic tax havens involves a host of bankers, accountants and other professional persons.
While such individuals may not themselves be engaged in any wrong-doing - and are acting on a client's instructions - it is submitted that, in future, such bankers, accountants or other professional advisers be obliged to make disclosure of any unusual or large financial transactions involving politicians or public servants.
To be effective, this disclosure should be made to an independent third party appointed by the Dail and Seanad and funded out of the public purse and who is incapable of removal from public office except by a vote of two thirds of the Dail and Seanad.
In short, the person to whom reports are to be made should enjoy the same independence and security of tenure as a member of the High
Court.
Legislative provisions should be put in place to vest this individual with powers of investigation and, where necessary, prosecution.
Such powers will enable such an independent agency to investigate the propriety of any payment and, where it has not been disclosed by the politician or public servant in question, to take steps to ensure that the sanctions provided for in the Ethics in Public Office Act are implemented.
This person should be obliged to produce annually a report that is read into the record of the Dail and Seanad dealing with all matters investigated by him or her.
An express statutory obligation imposed on such intermediaries is an essential ingredient of the success of ongoing public disclosure and scrutiny of payments to politicians and public servants.
In order to ensure that the duty imposed on such persons is meaningful and effective, it is submitted that you, Mr Chairman, should recommend that it be a criminal offence for such persons not to notify a relevant transaction to the appropriate authority.
The presence of a criminal sanction should be the greatest inducement to disclosure.
It is trite law to state that every citizen in the land must comply with the tax laws of the State. No matter how eminent that person is, or has been, his or her duty is the same as any other citizen.
The mere fact that someone has, in the past, been involved in public office, whether in elected office or otherwise, does not entitle that person to immunity from the tax code no matter how good the quality of his or her service may have been.
In our constitutional democracy everyone has the same rights, entitlements and obligations. Those who elect our public representatives are entitled to expect the highest standards in financial and tax affairs.
Any public representative who falls short of such standards is betraying the trust and confidence placed in him or her by the Irish people. Such conduct is unacceptable and deplorable.
In order to introduce a threshold for compliance by those elected to public office, the following recommendation is made.
There is already in being a procedure whereby certain businesses seeking work from State agencies must furnish a tax compliance certificate. This is a standard set by our legislators and it is a standard which should be applied by them to themselves.
Accordingly, it is respectfully submitted that members of the
Dail, the Seanad, local authorities and other statutory bodies be obliged, upon taking office, to produce a certificate from their tax accountant or adviser stating that their tax affairs are in order.
In addition, Mr Chairman, each such person, upon furnishing the relevant tax certificate, should be obliged to swear a statutory declaration under the Statutory Declarations Act 1938, to the effect that his or her tax affairs are in order.
By Section 6 of the Statutory Declarations Act 1938, the making of a statutory declaration that is false or misleading in any material respect is a criminal offence, punishable by fine or imprisonment for a term not exceeding three months.