Wallace has slipped away almost unnoticed
AMID the controversy and justified questioning over James Reilly’s business interests, Mick Wallace has slipped away almost unnoticed.
But he shouldn’t have been allowed to, given the manner in which he frustrated a Dáil committee examining the fallout from his fraudulent declaration of Vat.
The committee wrapped up its work this week and published its report on the affair.
It was a most unsatisfactory document — hardly the fault of the committee, but further proof of the utter inability of the Oireachtas to get to grips with wrong-doers in its midst. One of the key conclusions of the report?
“Unless and until Deputy Wallace provides the information sought, together with supporting evidence from the Revenue Commissioners, the committee is of the opinion that it will be unable to determine its jurisdiction in the matter and in the circumstances is making this report to Dáil Éireann.”
In other words, Mick Wallace failed to provide essential information that the committee requested to do its work. As a result, it could not determine whether it had jurisdiction to investigate the matter fully.
At a time when political reform was never more badly needed, and when Wallace himself stood on a ticket of reform when entering politics, it was a thoroughly disillusioning outcome, and utterly undermined Wallace’s integrity as a TD, or whatever was left of it.
He now looks no different to any of the other TDs who failed to meet the standards expected of them as public representatives in years past, and who simply thumbed their noses at parliament and, by extension, the public.
The background to the affair was straightforward. On Jun 7, a newspaper reported the details of the fraudulent tax declaration.
Wallace admitted that he had understated Vat to the tune of €1.4m in 2008/2009 at a time, he said, when the economic crash had left his business, M&J Wallace Ltd, struggling.
A settlement of €2.1m, including interest and penalties, had been agreed with Revenue, which subsequently published confirmation of such in their quarterly tax defaulters’ list on Jun 12.
By then, the Ceann Comhairle, Sean Barrett, had already asked the committee on members’ interests to look into the “grave” issue.
The committee met on Jun 13 and decided that, in order to determine whether an investigation was appropriate, it first needed to establish whether Wallace’s interactions with Revenue post-dated or pre-dated his election to the Dáil.
If the latter, the committee was always likely to find it had no jurisdiction. But it had to get full and frank information from Wallace before it could arrive at any such conclusion.
The committee decided it was necessary to establish a timeline of events&.
It wrote to Wallace and his company on Jun 13 seeking the following seven key pieces of information:
* The accounting period or periods relevant to the understatement of Vat receipts by M&J Wallace Ltd;
* Wallace’s role in the making of any such understatement;
* The date or dates on which the return or returns which understated such Vat receipts were made to the Revenue Commissioners;
* The date and circumstances of the aforesaid understatements becoming known to Revenue;
* The dates of commencement and conclusion of the settlement negotiations between Revenue and M&J Wallace Ltd;
* The date of the settlement agreement entered into between M&J Wallace Ltd and Revenue;
* The details of the settlement agreement including details as to any repayment schedule contained therein.
The committee also requested that Wallace’s company consent to Revenue disclosing the above information.
On Jun 21, Wallace and his firm replied, advising that the accounting periods relevant to the understatements were the years ending Aug 31, 2009, and Aug 31, 2010, and therefore before he became a TD in the 2011 election. He provided a letter from Revenue confirming as much.
At its meeting the same day, the committee reached the view that Wallace had dealt only with one of the seven questions and wrote back requesting him to address the other six.
However, Wallace decided to bring in the heavy guns.
On Jun 25, the committee received correspondence from his solicitors, who said the under-declaration of Vat was done prior to him becoming a TD and thus was outside the committee’s jurisdiction.
Therefore, it was “manifestly clear that this issue can be conclusively disposed of based on the information already provided”, they said, arguing that the additional information sought by the committee “goes beyond what is necessary to determine the issue of jurisdiction”. It was, the solicitors argued, “wholly inappropriate for the committee to embark upon expansive and unnecessary enquiries before the jurisdiction of the committee is conclusively established”.
They ended their letter by stating: “All future correspondence in relation to this matter should be addressed to this firm.”
On Wednesday, the committee concluded its work, and dropped the matter.
In its conclusions, the committee declared itself satisfied “that the accounting period relevant to the under-declarations of Vat in respect of M&J Wallace Ltd, being prior to Deputy Mick Wallace’s tenure as member of Dáil Éireann, fell outside of the jurisdiction conferred on the committee by the ethics legislation”.
Having taken legal advice on the matter, the committee said it was satisfied it had “no jurisdiction to investigate the tax compliance of Deputy Wallace and or M&J Wallace Ltd, as this is a matter which falls solely to the Revenue Commissioners and, if appropriate, the DPP”.
But the committee noted its attempt to establish the timeline of events, and its inability to do so.
The committee finished on a forlorn note about the weakness of existing legislation hindering its ability to operate effectively.
“The committee is of the view that the Ethics in Public Office Act 1995 and the Standards in Public Office Act 2001 pose ongoing difficulties for the committee from both a legal and procedural perspective in effectively carrying out its functions and accordingly recommends that the legislation be extensively reviewed.”
And that was that. As far as a committee investigation goes, Wallace is off the hook.
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