Michael D’Arcy, who resigned his Seanad seat today to join a funds lobbying group, spoke in the Seanad last week in favour of a bill for which funds have been lobbying for the last five years.
Mr D’Arcy issued a statement today saying that he was leaving the Seanad to take up a role as chief executive of the Irish Association of Investment Managers (IAIM), the representative body for the funds and investment industry in this country.
Last Wednesday in the Seanad he spoke in favour of the Investment Limited Partnership bill for which the funds industry has been lobbying.
“From my experience, investors are significantly ahead of everyone else,” he told the house.
“They are the people with private equity funds and who administer the monies that will be crucial if we are serious about sustainable finance.”
He also stated that the financial services sector is “quite a large employer, of about 16,000 people currently".
"The sector has been arguing, for about four and a half to five years, that without this legislation it cannot advance the private equity side of investment in Ireland," he said.
Michael D’Arcy was the junior minister for finance in the last Dáil, his term ending when the new government was formed 93 days ago.
The Investment Limited Partnership bill was published by the Minister for Finance, Paschal Donohoe, on September 21.
It is designed to widen the possibilities for investment in funds in order, according to the industry, to bring Ireland in line with other European countries.
Thereported this morning that Michael Darcy would be leaving politics to take up a role with the Irish Association of Investment Managers.
At around 10am, Mr Darcy issued a press release saying he had tendered his resignation to Leo Varadkar and was leaving politics to take up his new role.
Tánaiste and President of Fine Gael, Leo Varadkar, said he was sorry to lose Mr D'Arcy but that he understood his decision.
“I would have loved to have seen Michael return to the Dáil as a TD and a Minister after the next election but understand that after 20 years in public life he wants to start a new chapter of his life.
"He will always be welcome should he decide to run for election again.
"His new employers are fortunate to recruit someone of his calibre."
Mr Varadkar said the process of selecting a candidate to contest the by-election has begun.
During the second reading of the bill in the Seanad last Wednesday, then-Senator Darcy went on to say the current law was out of sync with other European countries in terms of the limits on partnership investment for funds.
“In essence, if a business is part of such a partnership, and if it invests €2million in an investment vehicle worth €100 million, it can be liable for losses to the value of the entire sum.
As a result, investors do not invest in Ireland because, in other jurisdictions, the structure is such that they can be liable only for the sum they invest.
That is a very easy decision for investors to make, whereby they decide not to invest here.
“This legislation has been on the books for almost five years, which is a criticism of the Department of Finance and the way we get to legislation.
"It is important to be advanced and pass this legislation so we can be competitive with other jurisdictions.”
Meanwhile, questions have been raised around the legality of Mr D'Arcy's appointment.
Sinn Féin finance spokesperson Pearse Doherty has now asked if his appointment is lawful, claiming that former Ministers and Ministers of State are banned from lobbying or being employed by a group that engages in lobbying for a year.
The Standards in Public Office Commission (SIPO) states that there should be a 12-month cooling off period. Exemptions to this rule can be given, however, it is understood that Mr D'Arcy has not requested such an exemption.
Mr Doherty said: "This is simply unacceptable, Michael D'Arcy was the minister with responsibility for this area less than three months ago.
"The real question here is is this lawful or not?"
He said there is now an onus on Tánaiste Leo Varadkar to explain the situation as leader of Fine Gael.
"It's unbelievable that the Tánaiste came out this morning cheerleading this."
Mr Doherty said the appointment is another example of the "revolving door between Fine Gael and high finance".
The Donegal TD told RTÉ's News at One that his party has now written to SIPO to get clarification on the rules.
The IAIM issued a statement today about Mr D’Arcy’s appointment saying that as per the guidelines of the Standards in Public Office, he “will not be engaging in any lobbying activities in accordance with the cooling-off period for the first twelve months of leaving office.
“Michael D’Arcy has always been fully compliant with the guidelines during his time as a politician and will continue to strictly adhere to them now in his new role with the IAIM.”
In a statement published this evening, the IAIM published a statement saying they had obtained legal advice and are happy that Mr Darcy's appointment is not in breach of any regulations related to lobby.
"The IAIM obtained legal advice and are satisfied that Michael Darcy's appointment as CEO is not in breach of Section 22 of the Lobbying Act.
"IAIM has not engaged in any lobbying in 2018, 2019 and 2020 to date, as evidenced by filings under the Act.
"Michael D'Arcy and the IAIM will not be engaging in any lobbying activities until the 12-month cooling off period has been completed, in adherence with the regulations," the statement said.