Joan Burton (Dublin West, Labour)

I understand from the Minister of State's reply that he was just landed with dealing with this Bill today and therefore he may just be answering to the Minister's tune. However, what the Minister is doing is deeply unwise and totally anti-democratic.

There are a number of Report Stage amendments that have not yet been considered and they have a profound effect on the structure of the regulatory penalties and sanctions. In addition, the Minister has tabled an amendment dealing with compliance statements by directors. We have not considered it either. Bearing in mind the events we heard about this weekend, the reality is that we now have a financial services regulatory authority Bill and a penalties and sanctions Bill that make no serious reference to the internal audit or to the role of audit committees within the banks. There are references to options that banks may wish to exercise in this regard but no mandatory requirements.

We know from today that none of the disclosures of recent weeks emerged as a result of any kind of investigation by IFSRA. Rather, in the case of foreign exchange they emerged because of the activities of a whistleblower and, in the case of the activities of the offshore investment company Faldor, the tax implications of which are so profoundly repugnant to ordinary, decent taxpayers who are now paying tax at 42% in the euro, I understand they emerged because of moves on the part of one of the parties involved in Faldor to clear up his own tax affairs with the Revenue Commissioners.

IFSRA is now beginning to run after the hare although others have already started running. The Minister of State is now proposing to give to the authority penalties and sanctions powers that are profoundly discretionary, do not require publication and are not, according to the legislation, subject to freedom of information. Therefore, we may never know when things go wrong. We will proceed no further than Mr. Hurley's confessions to the committee today. He stated that, until 1995, there was no way of enforcing regulations regarding companies such as AIBIM. This is an astonishing revelation. The governor was at pains to assure us today that circumstances have changed. How can they really have changed if guilty people who hold powerful positions, who, in the case of many of the directors and executives, earn more than €1 million per year, more than many workers earn in half a lifetime of work, are not seriously held responsible?

Today I had an opportunity to examine what Mr. Douglas, one of the parties to the Faldor controversy, had to say. On 14 September 1999, it was reported that he denied that the Ansbacher procedure was a fairly extraordinary legal construct, as it was described by the leader of the Labour Party, Deputy Rabbitte. He said he believed it concerned the simple straightforward set of relationships that exist between a depositor and a bank. This is what he had to say about the Ansbacher scandal in 1999. He himself was a beneficiary of an offshore investment scheme, apparently without his knowledge.

The Minister of State is now implying that Fianna Fáil will ram through a set of amendments but these amendments fail to take account of the most recent revelations. We will only get a crack at this once. The Minister has already softened his tune substantially. We do not know if the banks got at him, but we do know that if they come forward and put their hands up, the system that will apply will be discretionary. We now know that the penalties and sanctions process will be discretionary if any of the penalties give rise to a risk of bankruptcy on the part of a financial institution or an individual. The penalties are not discretionary in the case of a motorist who breaks the speed limit and travels on a four-lane highway at 60 mph rather than 50 mph.

The Opposition, including the Labour Party, is prepared to sit down and have a reasoned discussion but it has been receiving a drip-feed of allegations and scandalous information from AIB in recent weeks. IFSRA is exercising its limited inquiry powers. It cannot sanction. For God's sake, will the Minister not wait until we receive the report so we can give powers to the internal auditors, for instance, and reconsider why the financial services ombudsman will also be under the thumb of the Central Bank? We should consider why the Minister's amendments deal only with compliance statements by directors given the confession made in the past two days that two of the bank's most senior directors knew absolutely nothing about the offshore vehicle.

In 1989 one of the directors, through his wife, invested approximately €79,000 in an offshore scheme, which at the time would have bought a four-bedroom house in Rathgar. They claim they did not know anything about it. They popped it in as one would pop a cake into the oven. Did the investment produce fruit? It doubled in value at a time when many workers' pension funds were earning less than 3% or 4% per year, and even less still when the charges were deducted. The top executives had a vehicle available that had miraculous rates of return, yet nothing in these late amendments tabled by the Minister addresses these issues. For the sake of sense we ask that the Bill be recommitted so that the Minister along with the officials from the Department of Finance and the Central Bank can re-examine the very clear gaps and lapses in this legislation. It will also allow us to reconsider the outcome of several current inquiries.

I refer to a person the Minister knows and for whom he has expressed admiration in the past, Ms Dorothea Dowling, chairperson of the PIAB. The Government has referred to her work in a laudatory manner. She put the following questions to members of the committee today by e-mail:

What commission earnings are there for the bank, then and now, for selling "payment protection insurance" which the media says was sold to customers without their prior knowledge or consent when top-up loans were being sought? If the original loan was 40k and top up was 5k, was an insurance policy sold for just the extra 5k or a new policy effected for the full 45k and could the sum insured on the original policy not just be increased to 45k for those who wanted such insurance; do higher rates of commission apply for selling a new policy than renewing an existing one?

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