Labour demands Central Bank be called to account

The Governor and senior managers at the Central Bank should be called before the national parliament to explain its “systematic failure” surrounding the establishment of an illegal bank in Dublin, Labour said today.

Enterprise spokesman Tommy Broughan told a special parliamentary debate that there should also be an independent review of the Central Bank following last week’s report into Ansbacher (Cayman) bank.

Some of Ireland’s most wealthy and powerful individuals and businesses used Ansbacher, which was not authorised to operate in Dublin, to evade tax between the early 1970s and late 1990s.

The report described the Dublin operation, which had 190 clients including former Taoiseach Charles Haughey, as “little more than a charade, a sham and a legal fiction”.

Following a three-year investigation, High Court-appointed inspectors detailed evidence “tending to show that Ansbacher was guilty of a number of criminal offences” including conspiracy to defraud tax authorities.

The Dail returned from its summer recess today for a special debate on the issue.

Tanaiste Mary Harney said: “The Ansbacher report takes us directly to issues at the heart of our democracy. A state that cannot collect taxes, through lack of will, lack of authority or a degeneration of its political culture is a failed state.”

She said the inspectors had identified some people embroiled in the scandal as targets for disqualification as company directors.

She added that the authorities would “pursue the cases of wrongdoing identified with the utmost vigour and I can assure the house that they will have the full backing of the Government”.

Phil Hogan, enterprise spokesman for the main opposition party Fine Gael, said the public was so “desensitised” by scandal they were not shocked at Mr Haughey’s involvement in the scam.

“What can be in no doubt is that the inclusion of Mr Haughey as an Ansbacher depositor is perhaps the single most alarming finding of the report,” he said.

“A man who held the office of Taoiseach, who lectured us all on financial probity and restraint and who presented himself as a man of the people, in fact had a Walter Mitty existence.”

He said comments by Ms Harney and Justice Minister Michael McDowell, that prosecutions may be unlikely, were “defeatist”.

He added: “It is my earnest hope that the people identified in the report as likely to have committed criminal offences should be charged and brought before the courts.”

The report stressed that not all those it named as Ansbacher clients were evading tax.

For Labour, Mr Broughan said the report confirmed “what many people have long-suspected - that there was in existence in the 1970s, 1980s and early 1990s an effective golden circle of rich individuals and professional advisors who engaged in a criminal conspiracy”.

He insisted that “all evidence of tax evasion, criminal conspiracy and breaches of company and banking law must be followed up with prosecutions”.

He went on: “In this era, senior Central Bank officials seem to have been terrified of clear evidence of tax evasion.

“This seems to have created an atmosphere where prudential vigilance was lacking.

“The Labour Party today is calling for an independent review of the Central Bank’s past regulation of the banking sector and for the speedy establishment of the Financial Regulatory Authority.

“We also intend to request the new Enterprise, Trade and Employment Committee of the 29th Dail to call in the present Governor and senior management of the Central Bank to discuss the findings of the High Court Inspectors report.”

The debate was expected to last into early evening.