Tackling white-collar crime in Ireland poses many challenges

It is important that we commit to law reform and allocate resources to ensure effective investigation and prosecution, says Shane Kilcommins.

Tackling white-collar crime in Ireland poses many challenges

Judge John Aylmer made the decision earlier this week to acquit former Anglo Irish bank chairman Sean FitzPatrick in the Circuit Criminal Court of 27 charges of misleading the bank’s auditors and furnishing false information about multi-million euro loans to him and to people connected to him between 2002 and 2007. He refused to allow a jury to make a determination of innocence or guilt as a result of ‘fundamental errors’ in the investigation, particularly in relation to the taking of witness statements and the shredding of evidence.

On the one hand, the judgment reflects the need for our criminal process to ensure, as far as possible, the quality, integrity and legitimacy of the information emanating from an investigation. The procedural demand for accurate fact and verdict findings is woven into the framework of the Irish criminal process. In addition to ensuring accuracy, it is designed to protect individual freedoms, check abuses of power and preserve basic fairness in State-accused relations. The justification for these procedural safeguards is rooted in the notion that a wrongful conviction is a deep injustice and a fundamental moral harm. When these safeguards are breached, it is difficult, if not impossible, to stand over the integrity of the investigation process.

More broadly, the judgment also, to some extent, reveals the difficulties and challenges posed in investigating and prosecuting alleged white collar offences. This is so for a number of reasons. To begin with, the line between poor business decision-making and criminal activity is far from clear cut. It is also the case that proof is difficult in these cases, and often resource intensive. White collar crime is hard to detect because it often occurs in private, behind closed corporate doors.Another difficulty relates to the expansion in agencies which have the power to investigate white collar crimes in specific areas and to prosecute summarily. They have increased dramatically in Ireland in recent years. They include: the Revenue Commissioners, the Competition Authority, the Director of Consumer Affairs, the Environmental Protection Agency, the Health and Safety Authority, and the Office of the Director of Corporate Enforcement. This enlargement in scope, however, is fragmented in nature, occupying diverse sites and modes of operation.

Governance, therefore, is no longer defined by centralising tendencies. Rather it is much more dispersed. Despite extensive powers to share information, there is no unifying strategy across the agencies or with other law enforcement institutions such as the DPP or gardaí. Staffing levels, resources, workloads and working practices vary from agency to agency. Indeed, and apart from respective annual reports, there is little in the way of an accountability structure overseeing the policy choices of the various regulatory agencies, the manner in which they invoke their considerable investigative and enforcement powers, or the way in which information is shared between them and with the gardaí.

In addition, many aspects of the law on white collar crime are influenced by regulatory impulses which are designed to make up for the difficulties of proof in serious cases. As these regulatory criminal practices become more embedded, they are subjected to judicial scrutiny.

When due process, regulatory values and outlooks meet, as they increasingly do, it makes for an interesting battleground, a site for struggle and competing claims about security, instrumental effectiveness, governance, and principled protections. These tensions occur in relation to justiciability; legal privilege, definitions of crime; double jeopardy; privacy; the privilege against self-incrimination; the burden of proof; proportionality of punishment; and culpability requirements.

Another difficulty is the emphasis that the law of evidence traditionally places on oral testimony. This may sometimes pose a dilemma in the arena of regulatory wrongdoing where documentary trails may form a central part of an investigation. Recently, for example, a former senior official in Anglo Irish Bank, Tiarnan O’Mahoney, successfully argued, among other things, that a substantial number of documents that the prosecution sought to adduce in support of their case were wrongly admitted in evidence. His conviction was accordingly quashed on appeal.

At an institutional level, many of our regulatory criminal laws, which are designed to deal with white collar crime, have been added on to our ordinary criminal law infrastructure. This has largely been ad hoc in manner, as opposed to a properly synthesised approach with an overarching strategy in mind. Information trails and information gateways cut across civil, administrative, criminal and regulatory domains of action. When the option is a serious criminal charge, this can have consequences for information gathered, particularly having regard to due process safeguards.

It is important that we take the threat of white collar crime seriously, by committing to law reform and allocating resources to ensure effective investigation and prosecution. Though it may appear more remote, more victimless and may often be less dramatic, misconduct in the banking and corporate sectors, in the workplace, in the environment, in the political arena and in the distortion of competition in the market poses as much, if not more, of a threat to our everyday lives as ordinary crime, with the potential to impact upon more people.

Despite the challenges, we should continue to use the criminal law in tackling serious white collar wrongdoing. We should not underestimate the powerful cathartic effects that the proper use of criminal law can provide in society. It acts as an important safety valve, limiting the ‘demoralising effects’ on society of the consequences of serious misconduct. Its effective use will also ensure that we do not have a two-tier system of justice. This is something which would make a mockery of the notion of equality for all citizens before the law.

Professor Shane Kilcommins is head of School of Law, University of Limerick

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