Trevor Sargent (Dublin North, Green Party)

I thank the Ceann Comhairle for allowing this matter to be raised. I wish to deal with three issues pertaining to a particular credit union but which are of interest to every member of a credit union, including myself. Whistle-blowers may wish to report a matter that is not in accordance with the code of ethics for credit unions. That code for directors of a credit union board and the effectiveness of the regulator charged with overseeing the proper implementation of the legislation governing the running of credit unions must also be addressed. The Minister should take on board this matter and outline the mechanisms open to any member or members of any credit union board who become aware of a possible conflict of interest for any other member or members.

The Minister should examine the reported failure of arbitration at St. Joseph's Aviation Credit Union and ensure the issue is urgently investigated and resolved in the interests of the credit union itself and the good names of the whistle-blowers who are frustrated with the lack of progress in this matter.

This is not a new matter, as the Minister of State knows. In October 2005 The Sunday Business Post reported:

The former president of a credit union that is being investigated for improper practices had resigned because he could no longer continue "defending the indefensible".

[This individual] resigned from the board of St. Joseph's Aviation Credit Union in June.

The credit union — which has 18,000 members in branches in Dublin, Cork and Shannon Airports — was last week instructed to stop selling insurance products after the Financial Regulator became concerned about management practices.

The credit union has €120 million in assets.

[This individual] said he could no longer associate himself with the running of the credit union. "I have to hold my hands and say I defended the indefensible . . . It took me five years, but I just could not stand over it anymore".

He said he was "disappointed and upset" with the regulator and Registrar of Credit Unions, whom he accused of failing to act on information he had provided about improper practices at the credit union.

"The majority of people on the board are decent people," he said.

The majority of the board members are frustrated to the point of despair and wonder if the State has any concern for their plight. The issues they are bringing to my attention, with reports of attempted fraud, misuse of members' funds and using the position of credit union director in a conflict of interest, need urgent resolution for the continuing normal operation of the credit union.

The whistle-blowers in question should be protected. This is a matter being debated worldwide. Sharon Watkins, the former vice president of Enron and the world's best known whistle-blower, was chosen by the World Council of Credit Unions as its keynote speaker on the subject of identifying wrongdoing and fraud in financial institutions such as credit unions. She strongly argues that the credit union movement must be vigilant in this area.

Credit union board members in their work life must have a more comprehensive code of ethics with which they must comply. The Minister for Finance must take note of this and I ask him to address it in line with other reform being considered for the 1997 Act. The Irish League of Credit Unions is also seeking reform of that Act. The example highlights the need for reform of the code of ethics and the need to enforce it to control the minority who flout it.

The regulator visited the St. Joseph's Aviation Credit Union and has all the relevant documentation. Instead of interviewing each of the 15 board members and the three supervisors, however, he set up an arbitration board. The Fingal Independent has reported that this process is likely to fail. In the event of failure, the Minister must ask the regulator to carry out the direct interviews with each board member so the credit union can return to working on behalf of its 18,000 members and have this cloud lifted.

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