More must be done to protect whistleblowers working in the financial sector, a Government committee has heard.
The Oireachtas Finance Committee discussed the Law Reform Committee’s (LRC) Report on Regulatory Powers and Corporate Offences on Tuesday, which is aimed at raising accountability standards in the corporate sector after the banking crisis that emerged in 2008.
The president of the Law Reform Commission, Ms Justice Mary Laffoy, and other commissioners, Tom O’Malley and Raymond Byrne, addressed the committee.
“The public and regulatory accountability of Irish banks needs to be strengthened on many fronts,” said the committee chairman, Fianna Fail’s John McGuinness.
Mr McGuinness noted the experience of Jonathan Sugarman, a former bank executive, and whistleblower, who notified the Central Bank of issues he had witnessed at Unicredit in 2007.
Mr Sugarman then appeared before the finance committee in 2017 to detail his experience as a whistleblower, which he said severely affected his ability to find work.
“In the context of regulators, those who regulate their own profession, regardless of what happened in 2008, it wouldn’t have cost a cent to put their hand up and say ‘Stop, there is something wrong here’.
“And they didn’t do it and nobody gets penalised for it, and that’s what is sad, and our constituents tell us that the law is for them and not for those up there, some ‘elite’ as they might describe them,” Mr McGuinness said.
“The protected disclosure legislation is great, but it’s amazing that in most cases of whistleblowers, they will say they are sorry they came forward.
“The law must be strengthened to the extent that that is not the case – if we can’t learn from our mistakes, we learn nothing, and I think all of that rests, to a degree, on your shoulders.”
Pearse Doherty, Sinn Fein finance spokesman, also floated the idea of a reward scheme for whistleblowers similar to the practice they have in other countries.
However Mr O’Malley said that although he did not personally disagree from a moral standpoint, he “would be anxious the rewards should be kept very modest so as to avoid the temptation to engage in false allegations”.
Mr McGuinness interjected, saying: “A better step would be to protect the whistleblower, to a far greater extent.”
The key LRC recommendations, which were published in October, include a statutory Corporate Crime Agency and that a dedicated unit in the Office of the Director of Public Prosecutions be established, and that regulators should have the power to impose significant financial sanctions, which should include consumer redress schemes.
Their recommendations on regulatory powers would apply to regulation of financial services, but also to the wider economic context, such as in competition law, communications regulation and health products regulation.
The recommendations on corporate offences would clarify the circumstances in which a corporation could be held criminally liable for failures by its senior executives.
The report also recommends that, in order to address reckless risk-taking, Ireland’s existing fraud offences should be amended so that conscious recklessness by a person would amount to fraud.
- Press Association