Call for corporate CAB-like body for corporate crimes

A powerful agency modelled on the Criminal Assets Bureau (CAB) should be established to investigate corporate crime, the State’s legal advisory body says.

The Law Reform Commission (LRC) emphasised that its proposed Corporate Crime Agency “must be” properly resourced to enable it to do its job.

It said the agency needs to be supported by a dedicated, properly resourced unit in the Office of the Director of Public Prosecutions.

The LRC cited the 2017 Sean Fitzpatrick case —where the court directed the jury to find the Anglo chairman not guilty — in its argument for a powerful multi-disciplinary body to replace the Office of the Director of Corporate Enforcement (ODCE), which was heavily criticised by the court.

In an 800-page document, the LRC also recommends that the agency:

• Has new regulatory powers, including notices demanding information, enter and search powers, power to demand people attend before it and give evidence or produce documents
• Can issue administrative financial sanctions (subject to court oversight) for companies of up to €10m or 10% of turnover and for individuals of up to €1m
• Is able to impose regulatory compliance agreements, including consumer redress schemes, which have to be publicised

In addition, the LRC recommends that the DPP should have a new power to issue Deferred Prosecution Agreements, in which prosecution is suspended pending a company complying with strict conditions.

The LRC report also proposes an expanded offence to deal with reckless fraudulent behaviour.

The document, Report on Regulatory Powers and Corporate Offences, examines the prosecution of Mr FitzPatrick by the ODCE.

It said the trial lasted 126 days — the longest criminal trial in the State’s history —and involved prosecution costs of up to €3m.

The basis of the trial judge’s ruling centred on a series of failings by the ODCE in its preparation of the prosecution.

This included: That one solicitor compiled the “enormously complex” case; that the solicitor had no prior experience in criminal prosecutions on indictment; some prosecution witness statements were drafted in violation of basic requirements of criminal procedure, and that an unknown number of draft statements were shredded.

The LRC report said: “These were clearly fundamental failings in the preparation of the prosecution in the FitzPatrick case.

It said it raises the question “as to whether the current system is capable of taking effective action”, though it did note that some ODCE prosecutions connected with Anglo resulted in important convictions.

It recommends a new body would have experienced forensic accountants, experienced Revenue and Social Welfare staff and experienced garda – backed up by experienced criminal practitioners.

The LRC said this was “precisely the mix” within CAB and that the Corporate Crime Agency should be set up on a statutory basis “without undue delay”.

However, the LRC repeatedly emphasised that the agency, along with a dedicated unit within the DPP, “must be sufficiently resourced”.

In relation to risk-taking, it said Patrick Honohan, former governor of the Central Bank, used the term “egregious reckless risk-taking” to describe the extreme behaviour that contributed to the economic and financial crash of 2008.

The LRC said the relevant offence under the Theft and Fraud Offences Act 2001 should be amended to include “a specific reference to recklessness”, as distinct from the current offence of “knowingly or intentionally” committing a fraud.