Jail sentences should be imposed for white-collar crime as a lesson to financial institutions and as a deterrent, the Public Accounts Committee chairman, Mr Jim Mitchell, said yesterday.
Mr Mitchell called for effective deterrents as, he said, fines would mean nothing to the financial institutions. The chairman's remarks came during the DIRT inquiry sub-committee hearing when he asked the banks if disciplinary action had been taken over non-compliance with DIRT regulations.
Mr Mitchell said: "I'm a little taken aback that despite all that's come out in this inquiry to date, there's still the old culture of non-deterrents, non-prosecution, non-custodial sentence for white-collar crime. This committee will not tolerate a Mickey Mouse response, we want effective deterrents. We don't want people in jail just for the fun of it, we want them in jail to make sure a lesson goes out to other people that tax evasion becomes a highly unfashionable thing in this country."
Mr John Hurley, secretary general of the Department of Finance, said the Government had decided it would review the penalties regime.
Mr Mitchell said he would be asking all the banks if they had taken disciplinary action. He asked Mr Liam O'Reilly, Central Bank, what new arrangements were in place to ensure the codes of practice were enforced.
Mr O'Reilly said voluntary codes were useful but they needed statutory codes to ensure that if there was non-compliance, they could have sanctions.
At the moment, they were putting the codes in place. The sanction at the moment was £25,000 for a breach of the code. The Department of Finance was putting in place disciplinary panels which would adjudicate on these matters. Banks would then be charged up to £100,000 but it would be up to new proposed legislation to define how much should be charged, he said.
Mr Mitchell said: "Those sort of sums mean nothing to large banks, sums of £25,000 or £100,000. Are there any imprisonment proposals contemplated?"
Mr O'Reilly said if there were to be imprisonment proposals, they were talking about going through the courts and it was up to the legislators.
Mr Dermot Quigley, chairman of the Revenue Commissioners, said there should be obligations to ensure compliance with statutory requirements, including tax law.
It also emerged at the committee hearing that of £24 billion in Isle of Man accounts, £3 billion was from investors in six Irish banks. Mr Mitchell said this was a disproportionate representation.
"It gives me the feeling that the tax evasion culture is still about," he said.