A watchdog without any bite

BRENDAN Howlin, the public expenditure minister, has said that long-awaited legislation needed to reform the ethics laws for people in public life will be brought to the Government early next year.

The measures had been promised in order to deliver on the reforms called for following the publication of the Mahon Tribunal report earlier this year.

Mr Howlin’s department said substantial preparatory work has been completed and it is on course for consideration by the Cabinet early in 2013.

However, until a new system emerges the watchdog responsible for policing the existing ethics rules, the Standards in Public Office Commission (Sipo), continues to exist in a difficult space.

Over the past decade its work has taken root in a difficult area, caught between the demands for public accountability and its restricted terms of reference.

Despite the constraints it has now decided that, for only the eighth time since its establishment, to task an inquiry officer to examine a complaint against somebody in public life.

This will result in the preparation of a report into the ownership of land by Michael Lowry in Wigan.

It will have to ascertain whether he was obliged to declare it in his register of members’ interests or if its value was so low that this was not required.

Sipo has been efficient in delivering reports.

However, the outcome of its previous investigations have showcased a range of difficulties with its operation.

Even its most high-profile moments have been tempered by conflicting outcomes in other areas or reminders of its own limitations and the narrow remit given to it by the rules it is asked to enforce.

In some cases it has been conspicuous in its absence from scandals, particularly those obviously showing up poor standards in public life.

Despite all the findings of various tribunals, not one of the primary political witnesses or public officials cited in these reports has justified a follow-up inquiry by Sipo.

Instead a number of former councillors have been charged with criminal offences relating to planning offences away from its remit.

The conviction of Fred Forsey Jr for corrupt behaviour as a member of Waterford County Council was not examined by Sipo.

Michael Lowry’s ownership of land in Wigan, which did not appear on his declaration of members’ interests between 2003 and 2012, is the first issue remotely linked to the work of a tribunal that has provoked an involvement by Sipo.

When it was called on to investigate the tax issues raised by Bertie Ahern’s explanation of his finances Sipo could not get involved because his dig-outs predated the laws preventing them.

Sipo polices a number of different laws. These include the Ethics Act, the Local Government Act and the Electoral Act.

It also is called on to operate as a portal for transparency into the interests of public figures and state appointees.

Declarations of interest, tax clearance certificates, and election spending returns are all filed with Sipo.

However, its ability to act on suspected abuses is limited.

This was demonstrated in the extreme case of tax-dodging by former TD Michael Collins.

In his case the tax clearance certificate he filed with Sipo was found to be fraudulent because when he submitted it he held an offshore account established to avoid paying DIRT.

Initially Sipo could not act on the case because it cannot initiate inquiries without receiving a complaint.

Instead it had to alert the Dáil committee on members’ interests and the Department of Finance in the hope that it would be referred back to its office for inquiry.

By the time it was called on to investigate Collins, the DPP had decided to press charges. Collins received a conviction and, in light of the large fine, Sipo decided to drop its own probe.

Its most successful efforts have been the result of previous decisions of the standards commission to appoint an inquiry officer.

In Killarney this resulted in a report that found former town councillor and hotelier, Patrick O’Donoghue, had failed to declare his lobbying for a land rezoning decision voted on by his fellow councillors. Two years later this resulted in a conviction of O’Donoghue and a fine.

Last year the then Fine Gael councillor Terence Slowey was found to have wrongly double claimed on his expenses for one trip to the Cork and Kerry region.

During its inquiries Sipo has held hearings to probe the issues of concern and has published transcripts of the process.

However, it is not a court of law and its findings are open to contradiction.

In the case of Kieran Lynn, a senior engineer at Mayo Council, it acted on a complaint and, following an investigation, produced a report that said he had wronged the council by getting it to spend money to improve a road to add value to his property.

But the same allegations were subsequently the subject of a defamation action that saw Mr Lynn awarded €38,000 in damages and a judgment that contradicted the main tenant of Sipo’s report.

In other areas where it has been asked to bark it has very little bite. This year it highlighted what it deemed to be serious breaches in tax compliance rules by Arthur Spring TD and Senator Pat O’Neill.

But, as in the past, TDs and senators have been able to purge the faults highlighted in the reports of Sipo by belatedly obtaining a tax clearance certificate.

Both politicians who were singled out this year escaped sanction because they came up with a tax clearance certificate after the event.

In the case of election spending, parties and individual politicians have been asked to asked to account for conflicting explanations of donations but amended statements were enough to end the process.The lack of punishment has led to a perception that politicians are free to ignore the rules because they only need to backdate compliance if they get caught.

Sipo has frequently sought reforms and the introduction of an ethics system that is more principles-based than rules-based.

This would help avoid escapes by technicality. However, it remains hamstrung in its inability to instigate inquiries off its own bat.

Even in the case of Mr Lowry 380 complaints to the Clerk of the Dáil had to be vetted by him and considered by the Dáil committee on members’ interests before Sipo was called on to act.

The history of Sipo’s work, documented on these pages, shows a limited legacy in which it scratched at the surface of political indiscretions.

But its caseload should be considered alongside some of the major scandals and the level of wrongdoing that has been exposed.

Over the past 25 years:

* The Glackin Report exposed the controversial sale of lucrative land owned by Telecom Éireann in Dublin;

* The Beef Tribunal examined allegations of fraud and malpractice in the beef industry;

* The McCracken Tribunal revealed payments from Ben Dunne to Charlie Haughey and Michael Lowry;

* The Moriarty Tribunal followed up where this inquiry left off and looked at how the country’s second mobile phone licence was awarded;

* The Ansbacher Report dug into how public figures evaded tax using an offshore trust.

* The Flood Tribunal was established to look at how politicians were corrupted in planning matters and its work ultimately became the Mahon Tribunal.

The scale of scandal in each of these reports has been far greater than anything Sipo has been called on to investigate.

Bertie Ahern

The party:

Fianna Fáil.

The issue:

When it emerged that Mr Ahern had attended a dinner in Manchester while he was finance minister and accepted the proceeds from a whiparound among friends, two members of the public complained to Sipo. The ethics watchdog was asked to investigate if the loans and gifts, which Mr Ahern had said were the source of the unusual income stream probed by the Mahon Tribunal, broke any law. Sipo was also asked to look at whether anybody who had helped Mr Ahern out had improperly benefited from appointments to State boards.

What happened:

Sipo looked at the matter but decided that most of the issues predated the 1995 Ethics Act and so it would not be appropriate to investigate it. It also said there was no evidence that the ethics law or the code of conduct for office holders had been breached when it came to appointing directors to State bodies.

The resolution:

No Sipo inquiry was completed into Mr Ahern.

Ivor Callely

The party:

Fianna Fáil.

The issue:

Mr Callely disclosed a €1,500 donation from a company called Gannons but the firm itself reported a larger sum on its own annual return to the Companies Office.

What happened:

Mr Callely first said the additional money was paid to the constituency account and not him. This was denied by the constituency organiser. The company was contacted by Sipo and said €1,000 of the money it gave to Mr Callely was for Fianna Fáil. This was not recorded by the party in its donation statement. Sipo ultimately decided the €1,000 passed to Fianna Fáil brought it over the limit it could accept from any one person.

The resolution:

Sipo decided that although the additional €1,000 received from Gannons meant Fianna Fáil had breached the fundraising rules, it had not acted in bad faith. It allowed the party to prepare an amended donations statement which was laid before the Oireachtas in Oct 2008.

Ivor Callely II

The party:

Fianna Fáil.

The issue:

In 2007 Mr Callely claimed €2,907 worth of expenses for buying mobile phones and car kits from a company. But the company had gone out of business in 1994.

What happened:

The Seanad committee on members’ interests asked Sipo to investigate the affair given its ability to appoint an inquiry officer. The officer delivered a report on Apr 11, 2011, and found Mr Callely may have committed a criminal offence.

The resolution:

Sipo referred a file to the DPP and Mr Callely was questioned by the gardaí this year. However, Sipo itself was prevented from acting on the issue because Mr Callely lost his Seanad seat. As a result Sipo said it had no jurisdiction to pursue the case any further as he was a private citizen.

Arthur Spring

The party:

Labour

The issue:

Arthur Spring had failed to produce a tax clearance certificate after his election from the Kerry North constituency last year. Initially he was one of 33 TDs who did not produce a certificate by the deadline, which was on the last week of Nov 2011. However, while other deputies reacted once they were contacted by Sipo, Mr Spring could not comply.

What happened:

After ongoing communication between Sipo and Mr Spring in late 2011 and early 2012, it decided to prepare a report for the Dáil committee on members’ interests. This report was categoric in its assessment of the Mr Spring’s compliance with the rules. “The Standards Commission considers that the requirements of the Standards in Public Office Act 2001 that members must provide evidence of compliance with their obligations in regard to taxation matters are intended to ensure confidence in the probity of persons elected to political office. “It is therefore strongly of the opinion that a substantive contravention of the legislation, as in the present case, is a serious matter requiring an appropriate response,” it said.

The resolution:

In Mar 2012, after Sipo delivered its report on him, Mr Spring furnished the tax clearance certificate it had been seeking during 2011. This update was communicated to the Dáil committee on members’ interests which was already considering the case. In May 2012, the committee finalised its inquiries into the issue. It noted the seriousness of the issue. But it also said that given it was his first contravention of the act and that he apologised, it did not require a censure. The report said “no further action” was required.

Michael Collins

The party:

Fianna Fáil.

The issue:

In 2002 Mr Collins filed a tax clearance declaration with Sipo, as he was required to do as a TD. But in 2003 he was formally listed as a holder of a bogus non-resident account. He got his tax clearance certificate under false pretences while knowingly hiding funds in an offshore account to evade Dirt. He was forced to make a €130,602 settlement with Revenue. Sipo could not investigate because it had not received a formal complaint. Instead it notified the Dáil committee on members’ interests, the finance minister, and the DPP.

What happened:

When the committee was notified, it considered the issue and eventually batted it back to the standard’s office to investigate. This overcame the problem Sipo had before that point because it had no powers to launch inquiries of its own accord. The case was also put before the gardaí.

The resolution:

In Sept 2007, Mr Collins pleaded guilty to obtaining a tax clearance certificate under false pretences. He was fined €25,000 and given a 12-month suspended jail sentence. In light of his conviction Sipo dropped its own inquiry.

Terence Slowey

The party:

Fine Gael.

The issue:

Mr Slowey was elected to Donegal County Council as a representative of Fine Gael. He got into bother when it emerged that over the same three days in Oct 2008 Mr Slowey claimed expenses for attending two different conferences at the other end of the country. One was in Kerry and the other in Cork. Both entitled him to expenses from Donegal as well as subsistence rates and conference fees. Compounding his offence he did not attend all of the conference for which he claimed.

What happened:

He was complained by another councillor and the Donegal county manager. Sipo held a full inquiry, including a hearing complete with legal representation.

The resolution:

In Apr 2011, Sipo delivered its report and said Mr Slowey had acted recklessly and in bad faith. It said his claim for unwarranted expenses was unacceptable and a serious breach of the Local Government Act. He had also broken the code of conduct for councillors. Fine Gael acted on the report and expelled Mr Slowey from the party. He kept hold of his council seat as an Independent.

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