Dáil debates

Wednesday, 14 September 2022

Irish Bank Resolution Corporation Commission of Investigation Report: Statements

 

4:55 pm

Photo of Micheál MartinMicheál Martin (Taoiseach, Department of An Taoiseach; Cork South Central, Fianna Fail)
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I welcome the opportunity to discuss the report of the Irish Bank Resolution Corporation, IBRC, commission of investigation on the Siteserv transaction today.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is there a copy of the speech available?

Photo of Micheál MartinMicheál Martin (Taoiseach, Department of An Taoiseach; Cork South Central, Fianna Fail)
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There may not be. I will have to try to secure a copy. I apologise. It is important to debate the contents of this report in the Dáil for two reasons. The first is that the commission was established as a result of issues raised on the floor of the House and its terms of reference were the subject of extensive discussions between all parties in the Oireachtas both at the outset and during the lifetime of the commission. The second is that the commission has made very serious findings, which are of great concern, with regard to the behaviour of some parties during the course of the Siteserv transaction with consequent implications for both our taxpayers and the reputation of Ireland's corporate sector. While we all might share some frustrations at the length and cost of the commission's work, to which I will return, it is important to state at the outset that this has been a worthwhile exercise. What the commission discovered and has reported shines a light on completely unacceptable practices and vindicates the effort that has gone into it. I thank Mr. Justice Brian Cregan, the sole member of the commission, for his comprehensive and detailed report. Before discussing the report, I also want to confirm that while, as Taoiseach, I am responsible for certain administrative functions in relation to the commission, the commission is entirely independent in all respects of its work.

Deputies will recall that the commission was established by the Government in June 2015 following approval of a draft order by both Houses of the Oireachtas. Deputies may also recall that the commission submitted an interim report in November 2015 which raised significant issues regarding legal professional privilege, banking confidentiality and its terms of reference. As a result, following consultations with all Oireachtas parties, bespoke legislation was enacted in 2017 to provide a new legal basis for the commission.

The commission's terms of reference were also amended following consultations between Oireachtas parties. Under these amended terms of reference, the commission was required to investigate all transactions, activities and management decisions at the IBRC, other than those relating solely to the acquisition of assets by the National Asset Management Agency, which occurred between 21 January 2009 and 7 February 2013 and which either resulted in a capital loss to the IBRC of at least €10 million or are specifically identified by the commission as giving rise or likely to give rise to potential public concern in respect of the ultimate returns to the taxpayer. The commission had established that 38 transactions came within these terms of reference and, in its first module, it was charged with investigating the Siteserv transaction, which had been identified by Dáil Éireann as a matter of significant public concern. The commission was also charged with, in the first module of its work, reviewing and reporting on the principles and policies within the IBRC in respect of the setting of interest rates generally during the relevant period.

The commission's terms of reference also extend to investigating: matters relating to the processes, procedures and controls which were operated by the IBRC; whether there is prima facieevidence of material deficiencies in the performance of their functions by those acting on behalf of the IBRC, including the IBRC board, directors, management, the staff of the wealth management unit and agents; whether it can be concluded that the transactions were not commercially sound; whether any unusual share trading occurred; and whether the Minister for Finance or his Department was kept informed, where appropriate, in respect of the transactions concerned and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them.

My Department received the report on the Siteserv transaction on 29 July and it was published and laid before the Houses of the Oireachtas on 7 September 2022 following consultation with the Attorney General. The commission's report is more than 1,500 pages long, goes through all aspects of the Siteserv transaction in an extraordinary level of detail and makes extensive findings of fact. The Government has noted the findings of the commission with considerable concern. The commission has determined that it can be concluded that the bank made its decision to approve the sale of the Siteserv Group in good faith but based on misleading and incomplete information provided to it by the company.

The commission found there were two parallel processes during the sale process. The first was the "above the surface" sale process organised by Siteserv and its advisers, in which the company chose bidders, evaluated the bids, decided to grant exclusivity to Mr. O'Brien's company's bid and then signed and completed the sale to Mr. O'Brien's company.

Second was the so-called "below the surface" process, where certain events occurred in the course of the Siteserv sale process without the knowledge of the bank. This "below the surface" process meant steps were taken and decisions made in the course of the Siteserv sale process in a manner that was clearly and manifestly improper and undermined the integrity of the Siteserv sale process.

The commission has also determined that it can be concluded the Siteserv transaction was, from the perspective of the bank, so tainted by impropriety and wrongdoing that the transaction was not commercially sound. It states that the bank might, subject to certain assumptions, have recovered up to €8.7 million more than the €44.3 million it agreed to accept in the sale. Of course, this is not the only loss to the taxpayer. The very significant costs arising from the commission are also as a result of this impropriety and wrongdoing.

It is also worth putting on the record that some of the allegations made in this House and elsewhere were not upheld by the commission. Many aspects of this transaction, and the behaviour of most parties, including IBRC itself, were appropriate, and this should not be lost in commentary either. The commission found that the procedures and controls that were operated by IBRC at the relevant time in relation to the Siteserv transaction were fit for purpose. The commission found there is no evidence that any unusual trading in Siteserv shares occurred. The commission established the approach taken by the IBRC in relation to the setting of interest rates for individual loans, and how those decisions were reached, and made no adverse findings. I would also like to take the opportunity to place on the record that the commission found there was nothing inappropriate in me, as then Leader of the Opposition, in meeting with Mr. Neil Ryan, then of the Department of Finance, in 2015. It also found Mr. Ryan did not disclose any information gained in the course of his official work to me.

While it is important not to prejudge the outcome of follow-up investigations, people should clearly be held responsible for any breaches of the law. In this regard, the commission recommended the report be brought to the attention of relevant authorities concerning a number of taxation, company law and bankruptcy issues. Accordingly, as per the commission's recommendations and on foot of advice from the Attorney General, I have arranged for the report to be brought to the attention of the Revenue Commissioners, the special liquidators of IBRC, the Corporate Enforcement Authority, the Central Bank and the official assignee in a bankruptcy case. These bodies are now responsible for conducting any appropriate investigations on foot of the report.

The commission is currently preparing a report with its recommendations on the investigation of the other 37 transactions that fall to be considered as part of its work. It is required to submit this report before the end of October 2022. Upon receipt of this report, the Government will make a decision on the future of the commission. However, the commission has previously indicated there will be significant, if not insuperable, difficulties in progressing the investigation into the other 37 transactions. This is because, for example, many of the companies involved are located outside the jurisdiction of the State or no longer exist as they have been dissolved or gone into receivership. In making that decision, the Government will also be cognisant of the time and cost of the commission to date.

In fact, the length of time this commission has taken to complete the report on the Siteserv transaction raises broader questions about the effectiveness of the commissions of investigation model. When the Commissions of Investigation Act was enacted in 2004, it was hoped it would enable quick and cost-effective investigation of matters of significant public concern. However, it is now more than seven years since the IBRC commission was established. In that time the estimated cost has been around €12 million. This does not include third-party legal costs that have been incurred but not yet paid and which are a matter for the commission to determine. The commission also acknowledged that it involved a substantial degree of uncertainty regarding the amount of costs actually recoverable by the parties before it and assumed its legal costs guidelines are not successfully challenged. The final cost will only be known when the commission makes its determinations on third-party costs. The cost is clearly going to be too high in any case.

In light of the length of time that has elapsed since the commission was established and the level of costs arising, I suggest the Oireachtas might wish to consider whether we can do anything to improve the regulatory framework for statutory investigations. Of course, in saying this we need to tread carefully because commissions must be independent in their investigations and must adhere to fair procedures and natural justice. It must also be borne in mind that some commissions of investigation have been able to complete their investigations in a quicker and more cost-effective manner. However, the broad range of investigations completed to date under the commissions of investigation model might suggest the model is not entirely or equally suitable for all types of investigations. For example, it may be that using this model for investigations into complex corporate transactions is not as suitable as using it for issues related to public administration, where it is possible to confirm facts more easily. There are broader questions about the cost and efficiency of our legal system more generally, which remain a matter of concern to the economy and society. We also need to examine the role and effectiveness of the permanent regulatory and investigatory framework.

The Government is open to ideas from other Oireachtas parties on these issues because, clearly, our ultimate objective is to ensure that, as far as possible, we have a regulatory framework that promotes and ensures a culture of compliance and good ethical standards in matters of both public and corporate affairs. Indeed, pursuit of this objective has been a core value of this Government since coming into office. To date, we have made significant progress with initiatives to combat corruption and white-collar crime. For example, earlier this year we established the Corporate Enforcement Authority, which will have the autonomy and resources to investigate suspected wrongdoing thoroughly. We are increasing staffing levels by nearly 50%, including doubling the number of gardaí, and the authority's budget has also been increased by almost 30%.

An all-of-government implementation plan to progress the recommendations in the Hamilton review into economic crime was published in April 2021. This sets out 22 actions to enhance enforcement and prevention capacity in the criminal justice sphere. Five actions have already been completed in full, and a number of others have been significantly advanced. For example, the Criminal Procedure Bill has been enacted, the Judicial Council has been engaged with in relation to the development of judicial training in respect of complex economic crime or corruption cases, a forum of senior representatives from the relevant operational bodies was established in June 2021, and the Competition (Amendment) Act was signed into law on 29 June. There has also been significant progress to implement other recommendations, including greater powers for investigating agencies to tackle economic crime and corruption; the establishment of an advisory council against economic crime and corruption; reform of the ethics Acts; and additional resourcing for enforcement agencies.

The commission's report has highlighted improper, wrong and unacceptable behaviour on the part of some in the Siteserv transaction. It is right and important the impropriety and wrongdoing in this process has been brought to public attention. It is right and important the relevant statutory bodies will now have the opportunity to investigate this impropriety and wrongdoing and take the action deemed appropriate. This experience raises a question mark for us as a Legislature over what we might do to make any future such investigation more timely and less expensive, but critically, it also demonstrates the need for us to keep refining and improving the regulatory framework, and indeed the culture in corporate and public affairs in our country, to prevent the need for future investigations of this nature in the first place.

5:05 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Cuirim fáilte roimh an deis a bheith ábalta labhairt inniu ar an tuairisc seo agus an fiosrúchán atá ag dul ar aghaidh anois le blianta fada ó thaobh an díolachán de Siteserv a tharlaigh in 2012. Tá sé seo ar na bacáin le tamall fada. Caithfimid díriú isteach agus achoimre a dhéanamh ar cad chuige a raibh an coimisiún bunaithe sa chéad dul síos leis an bhfiosrúchán seo a dhéanamh, anois go bhfuil sé foilsithe sa tseachtain a chuaigh thart.

I welcome the opportunity to speak following the long-awaited publication of the commission of investigation concerning the Siteserv transaction, which took place in 2012. This report has had a long gestation. Before making a number of comments and observations regarding the findings of the commission, it is worth recalling the very reason this commission was established and this investigation was carried out, so long has it been. Back in 2012, households, businesses and the taxpayer were all still reeling from the effects of the financial crash. Many banks were still trying to recover as much money as they could. One such bank was IBRC, formerly Anglo Irish Bank, which was then State-owned following a €34 billion bailout from the taxpayer in 2009.

Three years later, in 2012, Siteserv, then a business services company group, was under significant financial strain and owed IBRC, and ultimately the Irish taxpayer, €162.2 million. It was in 2012 that Siteserv was sold at a price of €45.4 million euros to Cathkin Investments Limited, or Millington. Following the sale, Siteserv paid €44.3 million as a final settlement of its debts with IBRC, with IBRC writing off €118 million of the €162 million that had been owed to the bank by Siteserv.

This transaction was of interest to the public and to the taxpayer for a number of reasons. First, it emerged there were other companies, such as Altrad and Anchorage, that had made bids for Siteserv, with claims made that Anchorage had even made a higher bid than Millington but the bid had not been accepted. This led to justifiable concerns regarding whether IBRC could have recouped more money on behalf of the taxpayer and whether Siteserv had been undervalued as a result. This question was of crucial importance. This was not simply a normal commercial transaction but one in which the interests of the taxpayer were involved. This led to further concerns regarding the management of the sales process, whether favourable treatment had been conferred on Millington and its owners, and why higher bids were rejected if they had been made.

Second, it later emerged that, following the transaction, Siteserv shareholders would be paid €5 million. This was highly unusual given that, in the normal course of events when a bank is writing off unpaid obligations, shareholders are never in such a position. This raised further questions regarding the propriety of the transaction and the entire process surrounding it. These questions were reasonable, given the revelations that had emerged, and it was in the public interest that answers be sought. In June 2015, the commission of investigation was established following an order under the Commissions of Investigation Act. The following month, Mr. Justice Brian Cregan was appointed to lead the commission. It should also be noted that, under the legislation, the commission is not only tasked with investigating the Siteserv transaction, but any transactions in which Anglo Irish Bank wrote off €10 million or more. There were 38 such transactions, and a key question following this report into one of these transactions is the future of the commission. I will come to that at the end of my contribution.

I wish to comment on a number of the findings and conclusions made by the commission in the report. The first point to note is that the commission has determined, "It can be concluded that the Bank made its decision to approve the sale of the Siteserv Group to Mr O'Brien in good faith, but based on misleading and incomplete information provided to it by the Company." The conclusions with respect to the actions of Siteserv are very different, with the commission finding that the decision by Siteserv to offer Millington and its owner exclusivity on the deal was "so tainted by impropriety and ... wrongdoing" that, from the perspective of the bank, the transaction was not commercially sound. In this regard, the commission also found that the manner in which the transaction was conducted, the decisions and actions taken in the course of the transaction, and its outcome were all unreasonable from the perspective of the bank and, therefore, the taxpayer.

The commission further found the decision made by Siteserv to grant exclusivity to Millington and its owner was a decision made "without even considering whether to contact Anchorage, the other leading bidder" before exclusivity was granted to Millington and its owner. Further, the commission found this decision favoured Millington and its owner by conferring a "significant advantage over other bidders in seeking to acquire the Siteserv Group". As a result, the report found that by failing, or even refusing, to consider the offer that had been made by Anchorage, Siteserv had shut out IBRC from considering the offer. Given the €162 million owed by Siteserv to IBRC at the time, this failure to consider and disclose the Anchorage offer was totally improper.

The commission also found that, throughout the Siteserv sale process, two parallel processes were at play, as the Taoiseach mentioned. One was above the surface, seemingly conducted by the company in plain view. The other was below the surface, in the shadows, carried out without the knowledge of IBRC. The report states, "This "below the surface" process meant that steps were taken and decisions made ... in the course of the Siteserv sale process in a manner that was manifestly improper and which undermined the integrity of the Siteserv sale process."

The report of the commission also made findings with respect to those in Siteserv most intimately involved in the transaction, and I will take a few moments to put some of those findings on the Dáil record. In March 2012, I asked the then Minister for Finance a question, which is on the Dáil record, about why IBRC had agreed to write down the value of its loans to Siteserv by more than €100 million, while at the same time shareholders of the company were paid €5 million as part of the deal, with a further question posed the following month. It was the first time it was raised in this House. The report we now have reveals that these questions led to a series of communications between the Department of Finance and IBRC, and led to meetings in the upper echelons of IBRC. IBRC then sought information from Siteserv, KPMG and Davy.

In August 2013, I made a freedom of information request for all copies of all Anglo Irish Bank's board papers that had been sent to the Department and the Central Bank in the relevant period. The report finds that IBRC did not furnish the Department with all of the relevant documentation. With respect to the payment that was made to shareholders as part of the Siteserv transaction, the commission has found that the credit committee at IBRC failed to pursue its own request for further information on the €5 million payment and approved the transaction without that information. The report concludes that failure contributed to IBRC recovering up to €2.1 million less from the proceeds of the Siteserv sale, a failure that, ultimately, undermined the interests of the taxpayer.

Mr. Dix was a director of the company and served as chair of Siteserv's sale committee. The report found he played a crucial role in the decision to grant exclusivity to Millington and its owner. The report found the decision conferred significant advantage to Millington above other potential bidders. In addition, the report reached the damning conclusion that "Mr Dix gave false, misleading and untruthful evidence in his sworn affidavits to the Commission" regarding his skiing and fitness bootcamp trip with the owner of Millington, Mr. O'Brien, in St. Moritz, Switzerland. His attendance at this so-called bootcamp with the owner of Millington was not disclosed to the board of Siteserv, its sale subcommittee, its company advisers or the bank. The report further found that this non-disclosure was not accidental but was deliberate. The commission reached the reasonable conclusion that if the relationship between Mr. Dix and the owner of Millington had been known at the time, including the fact they spent a weekend together on a skiing and fitness bootcamp in the Swiss Alps, it would have "given rise to a perception on the part of a reasonable, objective person that Mr Dix was not impartial in his role as chairman of the Sale Sub-Committee".

At the time of the Siteserv-Millington transaction, Mr. Harvey was CEO of the company. The report reaches no less damning conclusions about him. The relevant section of the report in this regard states the commission found that although Mr. Harvey attended a Siteserv board meeting on 4 March 2012 and voted to approve the sale of Siteserv Group to Mr. O’Brien, "he concealed from the Board the fact that he had a significant financial interest in Mr O’Brien’s bid succeeding". Those are the words of this report. The report continues, "He also concealed from the Board that Mr McFadden was arranging a plan whereby Mr Harvey would purportedly not have to pay tax on his Siteserv bonus." It later states that those were clearly material interests to be disclosed to the board and yet Mr Harvey failed to do so. These findings are damning and reveal a corporate culture that rode roughshod over the principles of openness.

With respect to Mr. McFadden, who was cofounder of Siteserv, the report makes damning findings that must now be investigated by Revenue as a matter of urgency. These findings are shocking and reveal the disregard which some in high places have for the requirements which ordinary citizens abide by every day. The commission found that Mr. McFadden set out to put forward two scenarios. One scenario is described as a story and the other is described as the reality. These scenarios were to ensure the €350,000 bonus to be paid to Siteserv’s CEO would not be declared to Revenue. On the afternoon that IBRC was to clear the sale of Siteserv to Millington and Siteserv was to approve the sale, Mr. McFadden met with the owner of Millington’s adviser beforehand to finalise a plan through which Mr. Harvey and Mr. McFadden would take shareholdings in the company that bought Siteserv.

Through a chain of emails, Mr. McFadden set out these two scenarios. Its purpose was to set out the money that would be given to Mr. Harvey from a Siteserv bonus and the proceeds of the Siteserv shares, and the money he would need to repay the €1.7 million debt to the Irish Bank Resolution Corporation, IBRC and to buy shares in the company that would acquire Siteserv. The story Mr. McFadden told was that Mr. Harvey would pay income tax and PRSI on his expected bonus. The reality Mr. McFadden described was that Mr. Harvey would waive his bonus, never pay tax on it, and still receive the full amount.

Although the commission found that Mr. Harvey did not waive the bonus, a scheme was established whereby the new company took on the obligation to pay the bonus, which was then bartered for shares in such a way that “no tax was ever paid on this bonus or on this grant of shares”, to quote the commission's report. The report goes on to say: “It is clear from the "story/reality" document that was sent by Mr McFadden ... that [he] constructed a scheme that was designed, from start to finish, not to disclose Mr Harvey’s bonus to the Revenue Commissioners at any time.”

The findings of the report are shocking, and lift a veil on the reckless and elitist culture that infected certain echelons of Irish business and high finance during a dark chapter in our State’s history, especially when it concerns a bank that the taxpayer had bailed out at huge economic and social cost. It is clear that there were those to whom the ordinary rules that bind ordinary citizens were seen not to apply.

The findings of the report also reveal the sad fact that has bedevilled the State and its citizens for far too long. This is a small place, with a small population, in which those with power and money often swim in the same circles, rub shoulders and even go skiing together in the Swiss Alps. This leaves open the possibility and perception of impropriety or even corruption. I am extremely concerned at the reckless disregard with which highly confidential information passed hands without authorisation before making its way to those who had an interest in accessing it.

We know that the revolving door between the corporate world and the State is one that opens at times when it should in fact be closed. In my opinion, we still do not have robust enough safeguards in place to ensure that individuals do not move freely and with ease between the corridors of corporate Ireland and the corridors of power. It exposes our State to undue risks and casts doubts over the State’s ability to act independently on behalf of its citizens.

The report of the commission of investigation on the Siteserv transaction runs into thousands of pages, and Dáil time does not allow for an exhaustive consideration of all of its findings. We have, however, come to the end of a seven-year process, one that will cost more than the €30 million that had been previously anticipated. I am aware that under the commission’s remit, there are another 37 transactions with respect to IBRC that could be investigated. We now need to take stock of this process and whether it is fit for purpose, whether it delivers value for money for the taxpayer and whether it acts as an incentive or disincentive for further corporate malpractice.

That reaching findings regarding the propriety or impropriety of a commercial transaction and the actions of those involved should depend on a process that has proved costly and slow cannot be the model we pursue. Ensuring our corporate enforcement procedures are fit for purpose is essential to ensuring that we can deter malpractice and wrongdoing. It is important that, following this report by the commission of investigation, the Government charts a path forward, one that sees us get to a point a lot more quickly, with less costs involved, but which gets to the truth in a fair and transparent way.

5:25 pm

Photo of Gerald NashGerald Nash (Louth, Labour)
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The Siteserv report brings us back to the year 2007 and to the calamitous events that unfolded in this country and across the world, events from which we, arguably, have yet to recover. We are still dealing with the fallout. It was in June of that year that Bear Stearns bailed out two of its hedge funds with $20 billion of exposure to collateralise debt obligations as sub-prime mortgages. At that stage Bear Stearns famously said that the problem was "contained". As we know, it later had to be bailed out by the Federal Reserve Board. It was in August 2007 that BNP Paribas blocked withdrawals from three of its hedge funds, with a total of $2.2 billion in assets under management, due to what they termed "a complete evaporation of liquidity". In September 2007 Northern Rock had to receive support from the Bank of England, which led to investor panic and a bank run, and to Northern Rock's subsequent nationalisation.

At precisely the same time that Anglo Irish Bank lent €156.4 million, in tranches over just seven months, to Siteserv to refinance its existing borrowings and to provide debt financing for acquisitions, it became the sole lender to Siteserv. Anglo Irish Bank collapsed and Siteserv was seriously overborrowed. In fact, its debts exceeded the value of its business. Meanwhile, Siteserv's CEO, Mr. Harvey, personally owed Anglo €1.7 million. Its co-founder, Mr. McFadden, who became a Siteserv consultant, was also a significant borrower from Anglo. He was at the receiving end of a €15 million judgment from Anglo in 2009.

Although the specifics of some certain allegations of themselves may not have necessarily stood up, the Cregan report did uncover a series of undisclosed meetings and communications with Mr. O’Brien’s company Island Capital in relation to “management incentivisation arrangements” for Mr. Harvey and Mr. McFadden. This was despite the fact that Island Capital and Siteserv had entered into a confidentiality agreement under which Island Capital had agreed not to contact any Siteserv officers or employees without prior consent.

The report also discloses that Mr. Robert Dix, a Siteserv non-executive director and its senior independent director, at a crucial stage in the Siteserv sale process when second round bids were due to be submitted, travelled to St. Moritz - as we know - with Mr. McFadden to spend a week with Mr. Denis O’Brien and Mr. McFadden on a skiing holiday. On this holiday Mr. McFadden and Mr. O’Brien discussed the amount of shares that Mr. McFadden and Mr. Harvey could acquire in Mr. O’Brien’s new company if Mr. O’Brien’s bid was successful, and they agreed a figure of 15%. As we know, Mr. Harvey later voted in favour of the grant of exclusivity to Mr. O’Brien in his capacity as a Siteserv director without disclosing his agreement in principle to acquire a shareholding in the new company and thus that he had a significant financial interest in Mr. O’Brien’s bid succeeding.

Mr. Dix chaired the Siteserv sale sub-committee meeting assessing all the bids, without ever disclosing his holiday with the successful bidder to either the committee or the board. The report arrives at a judgment that one can reasonably disagree with. On the one hand, it concludes that Mr. Dix’s relationship with Mr. O’Brien, his friendship with Mr. McFadden and his holiday with them both, “would, if known at the time, have given rise to a perception on the part of a reasonable, objective person that Mr Dix was not impartial in his role as chairman of the Sale Sub-Committee”.

On the other hand, the report states that Mr. O’Brien was not at fault in going on this holiday with Mr. Dix and Mr. McFadden, or in relation to any of the other improprieties uncovered. It is perhaps a testament to Mr. O’Brien’s ethical and moral standing that he can continue to behave seemingly entirely without fault even while all around him, for some strange reason, his associates and colleagues are behaving quite improperly.

Judge Cregan found that not only did Mr. Dix’s behaviour give rise to a perception of a lack of impartiality but that Mr. Dix “did not act in an impartial manner in his role as Chairman of the Sale Sub-Committee, but instead acted in a manner that improperly favoured Mr. O’Brien’s bid”. In particular, he found that Siteserv’s decision after two rounds of bids to grant exclusivity to Mr. O’Brien was, from the perspective of the bank, not reasonable and was tainted by impropriety. It is worthwhile listing why. Mr. Dix did not disclose to Siteserv or its advisers or the bank his relationship with Mr. O’Brien; his relationship with Mr. McFadden; Mr. McFadden’s role in advising-assisting Mr. O’Brien in relation to his bid; that Mr. McFadden would benefit financially if Mr. O’Brien’s bid were successful; and his holiday with Mr. O’Brien and Mr. McFadden at a key time in the transaction. The decision to grant exclusivity to Mr. O’Brien was, coincidentally, made just four days after Mr. Dix had returned from his holiday with Mr. O’Brien and Mr. McFadden.

5 o’clock

That decision was one of the most important made in the course of the Siteserv transaction.

As chairman of the sale subcommittee and as director with primary responsibility for execution of the Siteserv transaction, Mr. Dix played a vital role in the decision to grant exclusivity to Mr. O'Brien. The exclusivity decision favoured Mr. O'Brien as it conferred on him a significant advantage over other bidders. Mr. Dix thus acted in a manner that favoured Mr. O’Brien, and did so while not disclosing any of these matters.

Meanwhile, Mr. Harvey concealed from Siteserv, its advisers and the bank that he had a significant financial interest in Mr. O’Brien’s bid. Mr. Harvey also concealed from them the fact he had passed on confidential information about the sale process. Mr. Harvey did not disclose to them that Mr. McFadden had a role in advising and assisting Mr. O’Brien in his bid, nor did he disclose to them that Mr. McFadden would also obtain shares in Mr. O’Brien’s new company if Mr. O’Brien’s bid were successful.

However, above and beyond the ins and outs of this striking narrative, the stark fact is it involves large sums of money that are nonetheless dwarfed by the cost of the commission itself. Under the Commissions of Investigation Act, none of the oral evidence gathered by Mr. Justice Cregan is admissible in any civil or criminal court proceedings. The quid pro quois that the judge can arrive at the truth effectively and expeditiously. Clearly, this has not happened. Instead, reading the report is like examining a long-buried time capsule that includes a story from long ago.

These investigations do not serve a useful purpose if they cannot be completed in a reasonable time frame and as expeditiously as possible. There can certainly be no question of any further modules along these lines.There are doubts whether any further modules on these lines can occur and they cannot take place unless and until we know what went wrong in the management of this commission. Was it the legislation, the terms of reference, or some other factor? We need to learn from our mistakes instead of repeating them. We need to figure out how we can undertake examinations of issues of public importance in a much more timely and expeditious way. Clearly, the system we have is not serving the public interest given how long this inquiry took. There are other modules on the agenda.

Let us recall how an attempt was made to try to empower the Houses of the Oireachtas to carry out certain kinds of inquires almost ten years ago and the decision was taken by the people. Should we, as part of the Oireachtas, consider better ways of examining matters of public interest than the legislation, the 2004 Act, that was used for this? It is something this House and the committees could usefully examine.

5:35 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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We now go to the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Calleary. It is his first time to speak since he reassumed office. We congratulate the Minister of State on his appointment.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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Go raibh maith agat, a Cheann Comhairle. I thank you for your good wishes.

The findings of the commission of inquiry shine a light on very unacceptable practices by certain parties during the course of the Siteserv transaction. The commission’s report reminds us we must be ever vigilant in ensuring our laws are upheld. One purpose of company law is to facilitate entrepreneurial activity. It does so by providing for separate corporate legal personality and limited liability, thereby limiting personal exposure to financial risk. In return for these privileges, and privileges they are, company law sets down a framework within which companies and their directors are expected to operate. Certain reporting and transparency requirements must be complied with; certain protections are afforded to shareholders, creditors and the wider public; and sanctions, civil and criminal, are provided for in respect of certain non-compliance.

The law demands that in return for the privilege of limited liability, those availing of it act in good faith and abide by minimum requirements of governance, transparency and commercial probity. Companies are governed and managed by individuals. Most company directors want to do, and indeed do, the right thing. They act in accordance with the law. In the event of non-compliance, investigation and enforcement and individual accountability are important.

As I have recently assumed office as Minister of State with responsibility for company regulation, I want to reiterate that the unacceptable practices by certain parties as described in this report are very concerning. I welcome the commission’s recommendations, especially those which prompt further consideration by public bodies with enforcement functions including, the Corporate Enforcement Authority, CEA, which falls under my responsibility. The commission recommends that the CEA should investigate the matters set out in chapter 17 of the report relating to shareholdings. There is also a recommendation that the CEA and the Revenue Commissioners investigate matters set out in part 1 of chapter 26 relating to a €780,000 loan scheme.

Officials from my Department have already sent the CEA the commission’s report. Deputies will appreciate that, by law, the CEA is independent in its functions, but I have no doubt whatever the CEA will very carefully consider the report and its findings and assess what further actions may be appropriate for the authority to pursue. While there are no findings or recommendations arising in respect of my Department, officials in my Department will also consider the report in the context of any possible wider implications for company law.

It has long been justifiably argued that Ireland must maintain a conducive environment for enterprise to develop and grow, leading to increased levels and quality of jobs, which in turn provide for higher standards of living. A vital component of a conducive environment is business regulation.

My Department is responsible for a range of independent bodies that have important roles in respect of business oversight, supervision, regulation, protection and enforcement. Such bodies include the Corporate Enforcement Authority, the Competition and Consumer Protection Commission, the Irish Auditing and Accounting Supervisory Authority, and the Companies Registration Office, under which are the Registry of Friendly Societies and the Registrar of Beneficial Ownership. These bodies, along with others, provide the framework on which businesses operate and can rely upon to ensure there are clear rules for business that protect all in the value chain, from consumers to suppliers, that there are registration and governance requirements that provide transparency for stakeholders, including investors, and so on.

A key focus of my new role will be to support a strengthening of the regulatory bodies under my remit, especially those commonly regarded as watchdogs, in light of the growing economy and the additional functions ascribed to them over the past two years. First and most important in respect of the matter we are debating, the recent establishment of the new Corporate Enforcement Authority is intended to ensure consumers and businesses have confidence that alleged breaches of company law will be effectively investigated and prosecuted. A well-resourced authority with effective enforcement tools at its disposal will meet the challenges it faces in its investigation and prosecution of alleged breaches of company law. The total increase in the overall headcount for the new CEA will be nearly 50% over previous levels, and the number of Garda assigned to the CEA is doubling. The authority is equipped with significant enforcement powers, including prosecuting detected breaches of the Companies Act 2014 and referring cases to the Director of Public Prosecutions for prosecution on indictment. I believe company law should always be responsive to new developments. My Department will continue to work with the new authority to ensure it has the appropriate legislative tools necessary to enhance Ireland’s company law framework and to undertake modern, complex corporate law enforcement

I want to recount the broader reforms the Government has made and those planned, all of which have at their heart a rebalancing of the rights and obligations of companies and their stakeholders. We took into account the distinctive challenges facing our small companies by introducing a dedicated rescue process for small and micro companies, the small company administrative rescue process, SCARP, which came into effect in December 2021.

We have also reformed our examinership laws under the European Union regulations to help bring about a pan-EU regime for helping companies in difficulty while ensuring their creditors have rights. The Sale of Tickets (Cultural, Entertainment, Recreational and Sporting Events) Act 2021 also reflects our reform philosophy in striking a new balance for consumers. The Competition (Amendment) Act earlier this year enables the Competition and Consumer Protection Commission to crackdown on rogue operators. Cartels where they exist will be broken up and companies abusing a dominant position will be punished with heavy fines of up to 10% of global turnover.

I am determined that the ambitious agenda of reform to strengthen our enterprise regulatory enforcement bodies undertaken by my predecessor, Deputy Robert Troy, will continue. I wish to acknowledge the great work that he put in in this area. I will shortly bring to the Seanad the Consumer Rights Bill which represents the biggest overhaul of consumer rights in nearly 40 years. This new law is good for consumers and good for business. Most businesses are responsible and treat their customers fairly when things go wrong. For those that do not, it can give them an unfair advantage over their competitors. This new law consolidates legislation and updates it to make it fit for the modern digital age. Within the next few months, I will also publish new laws to permit for the first time a third party to represent a group of harmed consumers. This is an important development to improve consumers' access to justice.

I will shortly introduce legislation to enhance and reform the Personal Injuries Assessment Board, PIAB, providing it with new functions and improving the legislation to make the PIAB process more effective. Officials in my Department are developing new legislation to reform our limited partnership laws as well as business name laws. I expect to bring to Government shortly a general scheme of a Bill to reform laws on co-operative societies and encourage their development. All this work is designed to ensure our body of legislation is fit for purpose in the 21st century and our regulatory bodies are equipped to undertake their important statutory functions.

The report we are debating today goes through all aspects of the Siteserv transaction in an extraordinary level of detail and makes extensive findings of fact. Government accepts the findings of the commission. It is clear that there were unacceptable practices by certain parties during the course of that transaction. As the Taoiseach said, he is bringing the relevant recommendations of the commission to the attention of the relevant authorities as appropriate. I have no doubt that these bodies will carefully consider the report and in line with their statutory role take the appropriate action where considered necessary.

Despite the unacceptable behaviour of a minority, the vast majority of businesses in Ireland do not engage in such practices. We have a valuable reputation as a good place to do business overseen by effective laws and regulatory bodies. This has been hard won and must be maintained. White-collar crime damages our economy, breeds cynicism in our society and is a threat to our domestic and our international reputation. It cannot and will not be tolerated.

As the new Minister of State with responsibility for trade promotion, digital and company regulation I will work to continue to ensure that the framework on which businesses operate is built on clear rules for business which provide transparency and protection for stakeholders, employees and consumers.

I acknowledge that a number of Deputies and their staff were involved in this process from the start and took considerable personal courage to pursue the issues.

5:45 pm

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I take the opportunity to congratulate the Minister of State on his promotion.

I welcome some of what he has said on the Corporate Enforcement Authority. If ever there was a place that needed such an entity to be fit for purpose it is obviously this State. Unfortunately, as we get a lesson about 2012, it is a further reminder of the perception of the connectivity certain people have. There are relationships that exist. People have trips and holidays together and have conversations, meaning that at times things can be arranged no matter what the paperwork actually shows at the end.

Anyway, we are dealing with the Siteserv transaction. People have spoken about unacceptable behaviour tainted by impropriety. That is the biggest issue. I do not know what term to use. The Minister of State spoke about underplaying. It goes without saying that it is absolutely underplaying given the circumstances we are dealing with.

A number of Deputies have gone through the ins and outs of this. Siteserv was founded in 2004 by Mr. Harvey and Mr. McFadden. By 2008, it owed Anglo Irish Bank €155 million. We know the whole sordid history relating to Anglo Irish Bank and the bailout of approximately €36.4 billion. We know that in 2008 Mr. McFadden had borrowings of €7 billion with the bank and had signed personal guarantees up to €74 million. He seemed to be on the road to bankruptcy. We know there was a very close relationship between Mr. McFadden and Mr. Harvey. We now know of the relationship with Mr. O'Brien. We know of Mr. Robert Dix's involvement with this. It is fair to say they all knew each other very well and that seemed to work out reasonably well for people.

People probably find it difficult to understand given the relationship and the money owed that Mr. McFadden was on contract with Siteserv to find buyers, arrange for sales and all the rest of it. Some of this report makes for very interesting reading and we know that whatever happened from September 2011 until the close of this deal, the fact is that there was an enormous write-off of €118 million of the money owed by Siteserv to IBRC, which had previously been Anglo Irish Bank. The sale went through to, I believe, Millington for €444.3 million. This whole thing was started on the basis of another company stating it would have paid more and all the rest of it.

I agree with some of the previous speakers who said that at this point in time or at least when the commission prepared this report, we did not have the wherewithal to deal with the whole issue of corporate enforcement. I would love to see the relevant authorities in place and taking action. If we have anomalies or missing parts, be they legislative or whatever else, we need to make it happen. We know the pain people went through at the time of the economic collapse, which is again on our minds with what we are facing now. We need to ensure that we have the wherewithal to deal with all this.

We are dealing with the issue of financial impropriety in the case of Siteserv. We are talking about a time when people were going through austerity. As the Minister of State is in front of me, I wish to speak about a company that is suffering real difficulties. I refer to Suretank in Dunleer. A representative of that company spoke on LMFM radio of this morning. I spoke to Martin Winters myself. There were other businesses such as McGeough's, Rocksalt in Dundalk and also Anglo Printers in Drogheda. I would like a bit of leeway to read out a couple of lines:

We have been informed our electricity bill which was €15,000 will increase to €50,500 with effect from October 1st 2022. We have also been informed our gas bill which was €3,200 per month will increase to €18,000 per month also with effect from October 1st 2022.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The Deputy is wandering.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I know that. We really need business supports. As much as we need to deal with those who have acted wrongly, which is an absolute understatement, we need to look after businesses that are under severe pressure at this point in time.

I understand there is an international and domestic part to this, but we really need to make sure we can deliver.

5:55 pm

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I wish the Minister of State, Deputy Calleary, well in his new and very important role.

As we know, the IBRC had been created to wind down Anglo Irish Bank and the Irish Nationwide Building Society, which had been nationalised and the citizens acquired a huge debt of approximately €35 billion. In 2012, the troika was still in town; the austerity programme was under way; the national debt had ballooned; new taxes such as the universal social charge, USC, were introduced; some people lost their homes and businesses and there was a lot of fear and distress. IBRC had allowed Siteserv to sell itself and it was assisted by Davy and KPMG. Mr. Robert Dix, who was a non-executive member of the company, was appointed as chairperson of the Siteserv sales committee. As chairman of the sales committee, he was described as a key decision maker, yet he travelled to Switzerland with Mr. McFadden to spend a week with Mr. O'Brien on a fitness holiday which was described as a boot camp. The attendance at the boot camp just four days before Mr. O'Brien's company was given exclusivity, was not disclosed to the Siteserv board. This was judged to be deliberate by the commission, which stated Mr. Dix gave untruthful evidence to the commission. It went on to say he was not impartial in his role as chairman of the sales sub-committee. Exclusivity, according to the commission, favoured Mr. O'Brien in the bidding process. The commission deemed this to be one of the most important decisions in the course of the Siteserv transaction and it conferred a significant advantage on Mr. O'Brien. Despite the fact that Mr. O'Brien's company's second round bid was reduced by €3 million, the reduction was not disclosed to the IBRC, which seems extraordinary. This non-disclosure was deemed to be deliberate and the decision to do this was made by Mr. Dix. The commission found that Mr. Harvey, the CEO of Siteserv, concealed significant financial interest in the O'Brien bid from the board. He also concealed from the board the fact that he had passed confidential information about the Siteserv sales process to Mr. McFadden, who in turn passed it on to Mr. O'Brien's adviser. The CEO and some of the directors of Siteserv were aware of Mr. McFadden's role in relation to the entry of Mr. O'Brien into the Siteserv sale process. The report states:

These undisclosed negotiations led to the extraordinary situation in which Mr. Harvey, as CEO of a Plc, and Mr. McFadden (the two co-founders of, and major shareholders in, the Company) negotiated a 15% shareholding in Mr. O’Brien's new company without anyone in the Company or the Bank being aware of it – even though the process was monitored by the Board of Directors of Siteserv, the Sale Sub-Committee, two sets of corporate finance advisers (KPMG and Davy), the Chief Financial Officer...the Company’s solicitor (Arthur Cox), a representative of IBRC [and] the Bank.

It really looks like they ran rings around them. One wonders why questions were not being asked when that transaction was being discussed. Even more incredibly, the bank agreed to receive a fixed amount of €44.3 million in full repayment of the Siteserv debt. This allowed surplus cash to be paid as bonuses to directors of the company rather than a further reduction of Siteserv's huge indebtedness to the bank. It would be obscene for those who manipulated the sales process to the point where the commission described it as "not commercially sound" to retain those bonuses. The bank must demand the return of the bonuses. The leaking of a key confidential document by a person in Davy who was running the process, and who is now a very senior official in the Department of Finance, cannot be ignored. Was that known or declared in advance of his move to the Department? We need to hear from the Minister on the issue and what action he proposes to take.

I note Mr. Dix, who is so prominent in this report, who withheld a letter with a lower offer from Mr O'Brien, after he was awarded exclusivity, is a director of one of the companies the Government is currently doing very lucrative deals with for long leases of social housing. We cannot see the same people emerging all of the time, even at this point. The payment to shareholders in the context of such large write-downs was beyond controversial and the payment could have been reduced had IBRC asked Davy for an updated analysis on the performance of Siteserv. That resulted in a direct loss to IBRC and, by extension, the State.

The year 2012 was when Siteserv, together with its subsidiaries such as Sierra - later to become GMC Sierra - was bought. I refer to GMC Sierra because it started preparing to bid for contracts to install water meters, with the company hiring water meter specialists in mid-2011. People had accepted so much following the crash, it was only after water charges were introduced that they started to take to the streets in significant numbers. Having taken part in most of these protest marches myself and talked to people along the way, it was clear this was about more than water charges: it was a breaking point. There was a feeling that all the pain was being felt by ordinary people, while another cohort of people were gaining from their misery. So much for us all being in this together. I began looking into this and it led me to Siteserv and its subsidiary, GMC Sierra, one of three companies appointed to manage the installation of water meters across six regions. I make no apology for constantly banging that drum by all the means available to me and doing my best to make sense of all the material that was coming my way. I believe that at all times I acted in the public interest. While all of the information I received did not prove to be correct, I believe it was given to me in good faith.

In April 2015 I received a heavily redacted response to a freedom of information, FOI, request. This response escalated the issue. Here is a flavour of what it contained. It stated: "The Minister is very concerned with how a large number of transactions have been handled over the past number of months and this has led the Department to question the effectiveness of the CEO and the current Management Team." It included quite a bit about Siteserv. What was the basis for the Department coming to those conclusions? Were there further complaints to the Department like the one that some of the bidders made to it about Siteserv? If the Cregan commission is wound up, we need to hear from the Minister and the Department about what was the basis of it, because there are lessons to be learned. There should be a sharing of information between Departments in that regard.

Ms Ann Nolan from the Department of Finance gave the following evidence to the inquiry:

The relationship with the Bank was unquestionably more strained than the relationship with the other banks in which the State had invested despite the fact that there was no material difference between how the relationship with the Bank was managed by the Dept. vis-à-vis the other banking investments of the State (AIB, Bank of Ireland and Irish Life & Permanent)...The only rationale I can offer is that the Bank resented being accountable to its sole shareholder, confused independence with lack of accountability...[The report goes on.]

During the time I was raising issues around the transaction I talked to a lot of people and business culture in this country was repeatedly raised with me. I had no doubt there was an aching desire by many business people for wrongdoing to be exposed and dealt with appropriately. People wanted a business culture that was fair. They told me that they did not mind fair competition but they wanted an honest process, and they wanted to be assured that was the case. It is depressing to read the view of Anchorage, the other second-round bidder for Siteserv, which had increased its final round bid. It said that the sales process was not conducted in a neutral fashion. It is clear from the report that it was more than keen to acquire Siteserv and perhaps to further invest in Ireland. It believed the process was "rigged" and described Ireland as a "banana republic". Anchorage was not the only bidder with concerns.

The Commissions of Investigation Act was an attempt to provide for inquiries that would substantially reduce the legal costs. Mr. Justice Cregan insisted that there was a need for legislation to enhance his powers, and bespoke legislation was passed by us in this Oireachtas to provide for that. This had the effect of turning this inquiry into a tribunal, but behind closed doors, with 42 individuals or organisations gaining legal representation at the inquiry, as of 2019.

Indeed, the Taoiseach did suggest that different types of inquiries may be needed for different types of wrongdoing but we really need to catch this in real time without getting to that in the first instance. Where inquiries have to be held in retrospect, it is essential that they are independent, timely and cost-effective. We in the Social Democrats looked elsewhere for solutions and believe an independent, anti-corruption agency with strong powers, including the power of arrest, is required. When researching this, the example we used was the model we found in Queensland in Australia but that is not the only model we can look at. We need to look outside this jurisdiction at how other countries do things to find good examples of models we can introduce here.

This is a very sizeable document. I nearly went blind reading it in the last week. I hope that when the commission finally reports in relation to the other transaction we will have the opportunity to have another debate on how we will deal with these issues into the future.

6:05 pm

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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I welcome today's debate on the IBRC Commission of Investigation report. It is a 1,500 page report but I am not going to pretend I have read it. I know others have done so but I certainly have not read it. I have read summary reports of it and it has been well documented in recent days. It goes into great detail on the Siteserv transaction, making extensive findings of fact. The Government accepts the findings of the commission and believes the report shines a light on unacceptable practices by certain parties during the course of the transaction. Amongst its findings, the commission determined that the IBRC made its decision to approve the sale of the Siteserv group in good faith but based on misleading and incomplete information provided to it by the Siteserv company itself. It also found that there was a "below the surface" process whereby certain events occurred in the course of the Siteserv sale process without the knowledge of the bank. This "below the surface" process meant that steps were taken and decisions made in the course of the Siteserv sale process in a manner that was manifestly improper and which undermined the integrity of the overall sale process. The commission also determined that it can be concluded that the Siteserv transaction was, from the perspective of the bank, so tainted by impropriety and wrongdoing that the transaction was not commercially sound. It concluded that the bank could have recovered up to €8.7 million more than the €44.3 million it agreed to accept in the sale.

Just before Deputy Calleary leaves the Chamber I want to join others in congratulating him. I am delighted to see him on the front benches of the House again, deservedly serving as a Minister for State. It is a proud day for his family and for County Mayo.

I will now make a few more general points about this commission of investigation. Tribunals of investigation are hugely important in terms of providing transparency, identifying corruption where it has happened and uncovering how it has manifested itself but the length of time it has taken for this report to be laid before the Houses of the Oireachtas is absolutely astounding. The inquiry was set up ten years ago. I read in an article in January of this year that €80 million was spent on three tribunals over the past decade. I am sure there have been more but the three in question are the IBRC investigation, the Moriarty Tribunal which ran for an incredibly long time and investigation into the NAMA Project Eagle loan book sale. Those three investigations together had a cumulative cost of €80 million. They carried out very important work but the expenditure on that work needs to be scrutinised, as does the length of time it takes to report back. The Office of the Director of Public Prosecutions, which deals with an inordinate amount of criminal law cases each year operates on a very small budget. It does not have a hugely resourced department behind it but it is able to get cases through the courts system at all levels every day of the week. It concerns me that, while we are right as a body politic to extract the truth and deliver transparency on behalf of the taxpayers and citizens of our land, it takes an inordinate amount of time for these tribunals, inquiries and investigations to conclude their work.

All of these tribunals have, I hope, cleaned up the body politic in terms of how the State, big business, banks and everyone does their business. One of the upshots of all of this is that there is an incredible level of scrutiny of politicians and we put ourselves forward for all of that. However, I would like to home in on an issue that some Deputies, Senators and councillors would have mentioned to Government figures in the past, which is the idea of politically exposed personnel. Any Member of this House, any Member of Seanad Éireann or any member of a local authority is considered to be politically exposed from a banking and financial point of view. We all know what that means in this House but for the record, it means that in the eyes of our banking system, there is a potential conflict of interest in terms of holding public office with an elected mandate and transacting with one's local financial institution, be it a bank, credit union or whatever. However, it is not just applied to the individual who has chosen the elected way of life and who has a mandate from the people. The politically exposed categorisation extends to family members to such an extent that if the 19 or 20 year old son or daughter of a Member of this House and or of a local councillor tries to raise a loan to go to college or to buy their first car, a clapped-out Ford Fiesta, he or she is deemed to be politically exposed and it can take eight months to get the loan processed. It is wrong. There have been people who have come through this House and abused their position. Some of them have been found out and have been all over our national press and some of them have not been found out. However, most people, and I say this with respect to people of all colours and creeds, who have been elected and who have come through the doors of the Chamber to stand up for their communities, counties and constituencies do it for the very best reasons, not for corruption and not for ill-gotten gains. The idea of being politically exposed is wrong. The political exposure, the transparency here is being recorded, being all over the press, having a record of everything we say and do. We have the offices of SIPO just down the street. This is where the accountability lies but I cannot fathom why the son, daughter, niece or nephew of a county councillor in west Clare, Roscommon, Mayo or Dublin is considered to be politically exposed and cannot go off and raise a simple, basic loan at the start of the 2022-23 academic year. It is wrong. It is bonkers.

This did not come in under this Government or the previous one. I think it came in about nine or ten years ago. It was a major reaction to tribunals, corruption and people abusing their positions but somebody should scream that this is madness and stop it, or at least row back on it a bit. Certainly, we need accountability and I am sure there is more we need to do in that regard. Maybe the fobbing in system needs to be looked at. Maybe there is lots of stuff we need to do here. I heard the Ceann Comhairle on the radio yesterday speaking about how Parliament can improve but good Lord, one would want to be living like an altar boy, leading a life of absolute purity with white smoke coming from the chimney of one's house to have any chance of sitting in a seat here and representing one's constituency. Someone needs to look at the politically exposed issue. By all means, put us under the lens but not our sons, daughters, in-laws, nieces and nephews. I have not even told my in-laws that they are politically exposed but the bank will tell them when they go down and that is wrong. That is absolutely wrong. Someone needs to stop the madness.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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My own 25 year old daughter was refused the opportunity to buy a savings product with a reputable savings agency because she was considered to be politically exposed. One can imagine how an adult child feels about his or her parent when that sort of thing happens.

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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The example the Ceann Comhairle has given is perfect. Seven or eight months before I was elected to this House, when I was a teacher and a county councillor, I went down to the INTO credit union, of which most teachers are a member, to raise a loan to improve the family car. I could not get one, despite having a good income. I have no qualms about saying that I had two incomes. I worked damned hard but I had to go to the bank of mom and dad in my late thirties to get a car and set up a standing order to pay mom and dad back. It is bonkers. It is absolutely bonkers. Shame on the people who took backhanders in this House previously, for political gain or for other reasons but most people who come through this House come in here for good reasons. We really need to look at this issue. I am sorry I digressed a bit but it is a point that should have been made a long time ago. It is often mentioned over coffee breaks but never really gets mentioned in the Chamber.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Yes, both of us got a bit carried away there, I suppose, but not without some good reason. Deputy Patricia Ryan is next with the view from Monasterevin.

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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Where does one go after that?

I welcome the publication of the report and commend Mr. Justice Cregan and his team on their diligence. The report runs to more than 1,500 pages as everybody here is aware. As I have only a short amount of time I will focus on the issues that stood out for me.

The report of the commission of investigation into the IBRC sale of Siteserv to Millington for €45 million showed that as part of that deal, IBRC, which succeeded Anglo Irish Bank, wrote off €119 million worth of Siteserv's €150 million debt. It is clear from reading the report that the integrity of the Siteserv sales process was compromised from the very start. The phrase, "tainted by impropriety", is mentioned on more than 40 separate occasions within this report.

The detail in the report leaves the reader in no doubt that certain individuals manipulated the process for their own self-interest. These individuals concealed information and behaved in a manner described in the report as "manifestly improper and wrong". The report also stated the Siteserv transaction was not commercially sound in the manner in which it was conducted, the decisions made and the outcomes achieved. There are a number of examples of undisclosed conflicts of interest, something to which we have become accustomed with regard to other matters that will be discussed in this House tomorrow.

The report found that in March 2012, the Siteserv board proved in principle the sale of the group. It said Siteserv CEO, Mr. Brian Harvey, attended this meeting and voted to approve the sale. He concealed from the board the fact that he had a significant financial interest in this particular bid succeeding. Mr. Harvey also concealed from the board that Siteserv co-founder, Mr. Niall McFadden, was arranging a plan to avoid Mr. Harvey paying tax on his bonus. The report found Mr. Harvey did not pay tax on his €350,000 bonus or on the receipt of shares in the new company and that Mr. McFadden paid no tax on the almost €500,000 finder's fee paid to him in shares by Mr. O'Brien.

It also found that there was a below-the-surface process where certain events occurred in the course of the sale process without the knowledge of the bank. This below-the-surface process meant steps were taken and decisions made in the course of the sale process in a manner that was manifestly improper and which undermined the integrity of the Siteserv sale process. Bonuses of more than €800,000 to Siteserv directors on completion of the sale were “lavish ... and entirely unacceptable for a Company that was costing the taxpayer almost €118 million in loan write-offs and losses”. Yet again, the taxpayer is on the hook, given the IBRC could have recovered up to €8.7 million more than it agreed to accept in settlement of Siteserv's debt.

Urgent reform is needed with regard to how inquiries like this debt are dealt with. The commission took seven years to publish its report; clear evidence that we need a much more efficient way of getting to the bottom of matters such as those dealt with in this report. Seven years is far too long. The current system is broken and absolutely needs urgent attention.

Yesterday, I spoke to a struggling business owner who received a sheriff's warrant letter for an unpaid tax bill of almost €2,500. Added to that bill was almost €400 in interest, €72 in bailiff's costs and €160 in sheriff's poundage, bringing the bill to just over €3,000. Small business owners are struggling but as long as the vested interests are seen to, the Government seems to look the other way. That is my opinion anyway. Ireland is a great little country to do business in but only if you are part of the old boys club network. As the saying goes, if I owe you €1,000, that is my problem, but if I owe you €1 million, that is your problem. Sinn Féin in government will change this and we certainly will. We will turn the tide away from those vested interests in favour of ordinary workers and small business owners and their families. This has to stop.

6:15 pm

Photo of Bríd SmithBríd Smith (Dublin South Central, People Before Profit Alliance)
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I will start unusually by quoting a tweet from the renowned Mr. Vincent Browne:

Isn’t it unfortunate for Denis O’Brien that so many of his involvements result in controversy: the award of the Irish mobile phone licence; INM; Digicel; Beacon hospital over vaccines; and now Siteserve. Perhaps it has all to do just with poor communications.

We have to look at the bare facts of this report, however. They are pretty astonishing, as is the fact that it seems the commission will not investigate the other 37 transactions in which the State-owned IBRC wrote off €1.88 billion in aggregate between 2009 and 2013, the special liquidation.

There is no ambiguity in the case of Siteserv, however. The heavily-indebted company debt manoeuvred the State via the IBRC to not only write off €118 million of a €162 million debt it had accumulated but it manoeuvred the sale of Siteserv to benefit its own shareholders and directors. It did this by giving one bidder, Mr. Denis O'Brien, preferential and exclusive status in the bidding, not because it was the best offer for the company or, indeed, for the State, but because it was the best offer for them and their own self-interest. Members should remember this was a company near collapse and likely to be unable to repay its loans. Despite the 1,500-page length this report, it is careful to state that Mr. O'Brien was not guilty of any misdoing, nor it seems was the IBRC. It just appears again, as so often has done in the history of this State, that Mr. O'Brien was unfortunate - it was a series of unfortunate events for him, which, oddly, yet again, while unfortunate, seems to have left him with an even larger fortune.

Mr. O'Brien's adventures in his interactions with this State would make a wonderful and entertaining movie; one in which our hero, despite the odds, always seems to come out on top. This recent farrago must be set beside the good fortune, which sees another associated company doing very well from the national broadband contract. Indeed, few here will have forgotten that while the water charges campaign delivered a major blow to the Fine Gael and Labour Party Government in its plan to charge for water and, undoubtedly, eventually privatise it, the national turmoil did at least provide a lot of contracts for Mr. O'Brien's companies in attempting to install meters on ordinary people's properties.

This report is fascinating and chapter 8, which is entitled The Trip to Bootcamp and the Role of Mr. Dix, is worth a read. I urge everybody to read it; it is immensely entertaining. I will read a portion of it for the record:

On Saturday, 28 January 2012, the Chairman of the Sale Sub-Committee, Mr Robert Dix, ... travelled to St Moritz in Switzerland with Mr Denis O’Brien and Mr Niall McFadden to spend a week on a skiing and fitness holiday, which they called “bootcamp”. This was at a crucial stage in the Siteserv sale process, when second round bids were due to be submitted.

Mr. McFadden, we are told was "a highly experienced and sophisticated corporate financier". The chapter continues:

Mr McFadden had, over the years, organised a number of bootcamps ... [and he] and Mr O’Brien had attended at least three such bootcamps together in Kenya and in Crete. ... On both of these occasions [they] had flown home on Mr O’Brien’s private jet. ... If Mr O’Brien’s bid were successful, Mr McFadden hoped to get a finder’s fee from Mr O’Brien for his introduction. ... [A]pparently, the exercise regime was [extremely] arduous ... participants rose at about 6.30 am to do an early morning run before breakfast and [after breakfast all of them] went out cross-country skiing.

The chapter continues by noting that keen to go to dinner to another restaurant in the local village:

Mr Dix and Mr McFadden went to their rooms to change before ... dinner. Whilst in his room, Mr Dix participated in an important telephone conference call at approximately [six o'clock] with the Company’s corporate finance advisers (i.e. KPMG and Davy) during which he was updated on the second round bids.

This is a glimpse into the world of the other Ireland hidden from most people; an Ireland of corporate dealing facilitated by the State and made possible by the funds of ordinary people. It is an Ireland where a ski trip to a high-end Swiss luxury resort is called a "bootcamp" and in which a deal the report found cost at least €8 million more than perhaps it should have in reality cost us more than €118 million in a write-off. It was a deal that would bestow enormous benefits on all present if it went ahead and which, at a crucial stage, was not discussed by those present in the boot camp. As they were all very sophisticated businessmen, they would not dare to discuss it. The report confirms that our intrepid skiers did not say a word about the deal. The commission found that the trip to boot camp did not have any influence on Mr O’Brien’s second round bid. It found that "Mr Dix and Mr O’Brien did not discuss any Siteserv bids at bootcamp".

So ends the entertaining chapter. It seems that while the lads were quite properly never discussing the deal at the bootcamp, the company co-founder, Mr. Niall McFadden, sent an email with confidential information to Mr. Dermot Hayes, an adviser to Denis O’Brien, who was in the race to buy the troubled building services firm.

Something else was happening at that very moment in a nearby Swiss resort.

The 2012 World Economic Forum at Davos had just ended. It was the famous one where the then Taoiseach, Enda Kenny, told the great and the good of the world of finance that the crash and collapse of the Irish economy was explicable as a result of everyone having gone mad with borrowing. We all partied, as a previous Fianna Fáil Minister for Finance explained. That same week, Mr. O'Brien was boot-camping with friends and TheNew York Timesreported:

Anglo Irish Bank is poised to pay more than a billion euros on Wednesday to unsecured creditors, drawing criticism from Irish taxpayers who are paying the enormous bill for the country's bank bailout. The payment is part of Ireland's effort to shore up Anglo Irish, a state-owned bank now known as the Irish Resolution Bank Corporation, in a rescue that ultimately could top 47 billion euros, or $61 billion.

To be honest, given the sums dispensed by the State and the IBRC at the time, €8 million was hardly likely to be a major issue for those gathered in Davos or St. Moritz.

We all partied, we all went mad borrowing. That was the context of this deal. That was how the great and good explained the crash and the merciless austerity they imposed on people here. I do not believe that Enda Kenny had in mind the reckless borrowing of the great and good when he made his remarks up the road from Denis O'Brien and his mates in St. Moritz, nor the borrowing of Siteserv, which had accumulated other companies like an overenthusiastic collector in previous years, racking up unsustainable debts as it did. No. It was the workings of sophisticated businessmen. Anglo Irish Bank dealt with a large number of sophisticated businessmen. Many of them are back in business as we speak, having recovered fully from, or are even unscathed after, the financial collapse. It is not so for ordinary people, who paid for their sophisticated schemes. Far from St. Moritz and Davos, the bill has ultimately been paid by the people of this State, and it continues to be paid by them.

Let me end by remembering some of the measures from which we are still trying to recover, for example, housing and health, including waiting lists for operations for children crying in pain. Consider the measures that the State, through the budget, forced on people in the very month that our heroes were at boot camp and our Taoiseach described us all as having gone mad borrowing. The State imposed household property charges, it scrapped mortgage interest relief for new homeowners, it reduced the age limit in respect of children whose parents were trying to access the one-parent family payment, it reduced the earnings disregard for this group, who had consistently lived in high levels of poverty, it cut the back to education allowance, it attacked community employment schemes, it cut child benefit payments for families with three children, it cut the back to school clothing and footwear allowance, it cut benefits to carers, it cut fuel allowances, it cut hearing aid grants, and it cut the contributory and widow's pension entitlements. We cannot forget the major cuts to the budget for Traveller education and funding either. It was a war on the famous low-hanging fruit. Beside the previous austerity, it made its mark on ordinary citizens and the public services on which they relied. We have yet to recover from that.

The Siteserv deal and, indeed, Anglo Irish Bank itself were not the causes of that austerity, but these things and events are connected. We should remember that, while some were in St. Moritz manoeuvring the State bank into a deal for their benefit, the ultimate bill was paid in our schools, hospitals, emergency housing centres and vital public services.

I hope that the shareholders and directors of Siteserv and, indeed, the countless other developers and sophisticated businessmen enjoyed their bailout. This country still carries the scar of that as well as the continued servile attitude of our Government to serve their interests.

6:25 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Next is Deputy Berry, who is sharing time with Deputy Tóibín.

Photo of Cathal BerryCathal Berry (Kildare South, Independent)
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I am grateful for the opportunity to contribute on this debate on the Siteserv scandal. Once again, we have a detailed and comprehensive report that outlines dubious and poor practices and conduct in the performance by certain elements of corporate Ireland ten years ago during the banking crisis. As Deputy Bríd Smith pointed out, the legacy of that crisis is unfortunately still with us.

I welcome the publication, belated as it is, of the report and thank Mr. Justice Brian Cregan for his hard work. I agree with his findings, and it is now up to the statutory bodies - the Revenue Commissioners, the Corporate Enforcement Authority and the IBRC special liquidators - to follow up on his comprehensive report.

Many people have been let down by the performance, first among them the taxpayer. We are potentially down €7.8 million already but, as the Taoiseach outlined, there is at least €12 million on top of that. The costs will be multiples of that amount by the time they are determined by Mr. Justice Cregan. The taxpayer has been let down.

Second, corporate Ireland has been let down. There are many good executives and hard-working business managers who behaved ethically throughout. Unfortunately, they are branded with the same brush. Anchorage, the underbidder for Siteserv, described in some of its correspondence that interacting with corporate Ireland was like working with a banana republic or one of the "stans". That is certainly not the image we want to portray of our modern republic.

Third, the thousands of people who worked so hard in Siteserv were let down by some of their senior executives.

On a positive note, at least we can draw some comfort from the finding that IBRC acted in good faith. The chief financial officer comes out of this report quite well. It found that he conducted himself correctly and properly throughout the process and he had no prior knowledge of the under-the-surface behaviour. I was struck by how he declined legal representation at the commission's oral representations because he had nothing to hide and he wanted to reduce the liability on the taxpayer. That should be commended.

This point lends itself neatly to what I want to say lastly on the cost of the inquiry. It will cost tens of millions of euro and has lasted seven years. I agree with the Taoiseach that we must devise a better system, one that allows for statutory inquiries to be done more swiftly and more cost effectively.

I welcome the report and agree with its findings. I look forward to a follow-up investigation by the Corporate Enforcement Authority and the Revenue Commissioners to ensure that those who have had adverse findings made against them are held accountable for their actions.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
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Who is going to be held to account for what happened at Siteserv? That is the major question that is not being answered in any of our debates. It is incredible that the Siteserv sale by the IBRC included a significant write-down of €119 million to Millington, a firm controlled by Denis O'Brien. That money was to come out of the taxpayers' pocket. This happened at the same time that Siteserv was giving €5 million to its own shareholders. That a debt-laden firm in receipt of a €119 million debt write-down could simultaneously afford to shell out generously millions of euro in dividends to shareholders is incredible and wrong. We also see from the report that Arthur Cox acted for both sides of the transaction, those being, Siteserv and Denis O'Brien. This is extraordinary.

The sale of any product usually has the objective of attracting as many bidders as possible in order to increase the price. That is the dynamic in an auction and most sales. What we have in this situation, though, is a finding by the commission of investigation into IBRC that the opposite happened. Anchorage was not contacted about the granting of exclusivity to Mr. O'Brien. It was wrong that this would happen in a State organisation. The commission found that the sale process conferred on Denis O'Brien a significant advantage over the other bidders seeking to acquire the Siteserv group. This is incredible for our country. It shows that maximisation of the financial return to the taxpayer was not the primary goal of the actors involved in the sale.

That the chairman of the sub-committee in Siteserv, Robert Dix, would holiday with one of the proposed buyers in St. Moritz, Switzerland, during the sales process is incredible.

6 o’clock

Anybody with any idea of impartiality would have recognised that they were not doing their job right in that regard. The key point here is that one person gave another person an advantage. A person or persons, as quoted in the report, gave misleading or incomplete information to the IBRC, which led to an advantage being given to another individual at a massive cost to the State. What is the next step? This is where accountability has to be achieved by the State. There is no point in anybody talking about this issue here unless we achieve some mechanism to get accountability. If there is no accountability, then there will be no change. If there are no consequences, then it will be repeated again in the State administration in the future.

I have written to the Garda National Economic Crime Bureau, GNECB, requesting that it would investigate the authors of the misleading and incomplete information. I believe that An Garda Síochána needs to be given the necessary legislation so it can be the location of these types of investigations in future. Someone needs to be charged as a result of these actions. The Siteserv crisis was a massive crisis ten years ago. I remember at the time the Government was nearly in danger of falling. What happened? A commission of investigation was created to neutralise that political crisis on behalf of Fine Gael. It is a well-used political tactic used by governments. The investigations go for on so long that most people forget what they were about in the first place. The investigations are held in secret so that nobody knows what is happening. This is not justice. This report is not transparency, it is not accountability and it cost too much. Not only have the citizens had to pay for the loss of nearly €10 million in the original write-down, but the cost of the investigation was incredible. We were meant to have the final report in 2015 and it was meant to have cost €4 million, but here we are in the second half of 2022 and we just received the first of the original 38 modules.

In this Chamber the Tánaiste, Deputy Varadkar, gave me an estimate that the final cost would be north of €30 million and, if they were to proceed to all of those 38 modules, it would be more than €70 million. Some €30 million is a multiple of the cost of the initial write-down of the commission’s investigation. It is no small money. It would have paid for seven primary care centres in this State in the year that the commission of investigation was created. This is not justice. It is incredible that an investigation of wrongdoing in Ireland costs so much. It have to be a bureaucracy that would end up spending €30 million investigating a wrongdoing that led to a cost of €8 million to the State. No business or individual would spend multiples of the initial wrongdoing cost to find out what the wrongdoing was and, at the end, have a report that is meaningless in terms of accountability.

My worry is that we will get this particular report, that it will end up on a shelf somewhere in a Department, that it will gather dust and that, in a number of years, what happened in this area will just be part of a table-quiz answer. So far, I have heard no meaningful expression in the Government about the next steps in terms of accountability.

The Taoiseach, interestingly, is also responsible for another investigation that went on for a long time, which is the €1.4 billion sale of NAMA's Project Eagle portfolio to Cerberus in 2014. The original finishing date for that was meant to be 2018. It got extension after extension and excuses were given for the delay. At one stage, an excuse was given that there was a skeleton staff in terms of the commission. The Moriarty tribunal is still happening, believe it or not. It still has a staff, a cost and a budget 24 years after it was established, at a price tag of €65 million.

There is a real problem here and that has to change. The commission of investigations system is not working. It is not producing justice, it is not producing transparency and it is costing way too much. It needs to be overhauled. There should be a permanent commission of investigation that builds up the skills and staff necessary to deliver, within legislation. It should have to do that work within budgets and within time scales. If we do not do that, we will simply create commission of investigation after commission of investigation, each providing a report, each of those gathering dust and with nobody being held to account. Those actions that caused the crisis and the consternation in the first place will be repeated ad nauseum. The question is whether that is actually the purpose of the Government. Is that the solution? It is not the solution for the people of Ireland.

6:35 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputy Mattie McGrath will be sharing time with Deputies O’Donoghue, Danny Healy-Rae, Michael Collins and Michael Healy-Rae.

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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Having looked at this report, I can see where the financial crash started. I can see an Ireland that was not about the ordinary person in the street who was not able to pay back a mortgage. It was about total corruption during a time when people had to emigrate, when people lost their homes and when many people lost their lives worrying about repaying loans. I remember clearly someone asking me a simple question back in 2008 or 2009. They asked where had all the money gone. They said it cannot just have disappeared. It did and that is what this report has told me.

Imagine any business being offered a restructuring loan of €70 million of interest only and approximately €80 million of interest-free debt, which was offered to Siteserv. It was a time when share options, commissions and valuations were not even being considered. Where did the compassion go when it came to the ordinary person who was trying to manage their debt? The banks at the time asked mortgage holders to fill out standard financial statements. What an embarrassment. However, nobody cared, not the regulator, not the Central Bank of Ireland and not the Government. What has changed today? The ordinary person on the street and in a rural area is at the bottom of the barrel compared to the Government. The Government does not care. It is looking after the big conglomerates. It is not looking after the ordinary people.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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I am glad to get the opportunity to speak about this today because this is serious. These tribunals will have to be banned completely and gotten rid of because they are costing the State millions and maybe billions. There is no law that is being meted out to the people who have done wrong back over the years. The people to whom they have done the most wrong are the taxpayers, the hard-working people around the country who are out in the dark in the morning, who do not come home until after dark at night and who are paying savage amounts of tax.

We hear that this tribunal or investigation will cost €100 million to go after the figure of €8 million which is ridiculous, as previous speakers said. If that was a business, a company, a businessman or any single entity, they would not go after it like that. I am saying to the Minister of State that this should be delegated to An Garda Síochána. There should be a special unit in An Garda Síochána to deal with this kind of carry on because there is much too much of it. Denis O’Brien’s name was mentioned. He was totally cleared and exonerated from any wrongdoing. I do not know who initiated this investigation, but this kind of carry on will have to stop, because the taxpayer is paying for every inch of it.

There are treasonable offences going on. There must be someone to look after the Government because it has a write-down as well. Irish Sugar was sold and at the same time a factory was erected over in Bulgaria. I was told today that one of the power plants in the midlands that was closed down has been put up in Poland. To think that the people here are on the road every day now trying to pay multiples of what it is worth for diesel and petrol. The extra tax is going into the coffers of the Government.

6:45 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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What is at the core of all of this is that people's confidence in institutions of the State is being completely eroded. We can go back through the history of many of the tribunals that we had, and the overruns in what they actually cost. The IBRC commission of investigation and what is costing is like a runaway train. It is as if, when people are working for the State and when they are engaged by an arm of the Oireachtas to carry out some function, that they literally have a blank cheque, there are unlimited resources, it can take as long as it likes, and it makes no difference what the outcome is because it is only all a puff of smoke at the end of the day. The people actually never see any good for their money. They do not see any meaningful results. If there are not going to be meaningful results, would it not be a fine thing to spend the money on something that would produce a result for the hard-pressed taxpayers of this country? People are suffering at present. The one thing people want to see, feel and be assured of is that when their money is being spent, it is being spent wisely and prudently and that they are getting value for it. Looking at our track record, and what we have done with investigations and look-backs, we are looking back so much that we will fall over what is in front of us. We will not see what is in front of us because we are so hell-bent on looking backwards. It is actually a massive industry. It seems to be a very lucrative thing and the people involved are making vast amounts of money, giving vast amounts of time and coming up with very little at the end of it all. All I want to say is that now is the time to call this out for what it is, which is, to be honest, a waste of money.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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This commission was established in June 2015 to investigate certain transactions, activities and management decisions at the IBRC. The report of the commission of investigation on the transaction in relation to Siteserv and principles and policies within IBRC on the interest rates was published by the Taoiseach on Wednesday, 7 September 2022. I ask the Ministers of State what has changed today. There is no accountability in the banks. Will it take seven years to get answers from this Government to what happened in July of this year, when AIB stated that no cash would be available in its branches in my own constituency of Castletownbere, Dunmanway and Kinsale? What Minister has answered the questions on this issue to date in the Dáil? None. Who was responsible for this fiasco? We have not got an answer. The people of Ireland are not puppets. We know that the Irish Government is the largest shareholder of the bank. Ministers must have known that this was happening. If the Minister of State gets up and tells me today that he did not know, when there are two senior Ministers and two junior Ministers for finance, I would have to accuse him of gross incompetence.

Deputies Mattie McGrath, Danny Healy-Rae and I decided to go to AIB headquarters, on behalf of the people of Ireland and our constituents, to force a meeting with the CEO of AIB, Colin Hunt, find a solution to the crisis, or we were not leaving that day. We were successful in our efforts to put an end to the ridiculous idea. A bank with no cash is equivalent to a restaurant with no food or a bar with no beer. The Minister who allowed this decision to be announced with no debate here in the Dáil needs to answer questions. Why was this announced after the Dáil was in recess for the summer? Did the Ministers of State know that this was going to be announced? If so, what did they do to try and stop it? Will we have to wait seven years for an answer, as we have waited seven years for this report? The people of this country want answers.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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They knew since June. I found that out today.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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I am delighted to be able to speak on this matter, as one who was here on the night we voted for the bank bailout. It is the worst political decision I have ever made in my life. I have said that countless times. I suppose I will not be forgiven by people. I will not forgive myself, because it was a con job. Reckless behaviour went on, and unfortunately, it is still going on. On the night that NAMA was set up, I said that it was like a wild animal released in the woods. Nobody had any idea where it would end up. I am not saying that I am a prophet, but my God, how right I was, when we saw what went on and what happened with Project Eagle. I named the case of the Clonmel Arms Hotel Project Jackdaw, because that it what it was. The owner was able to get it back again when a new owner wanted to buy it. Within five minutes he put in the bid. A phone call came from agents working for NAMA to tell him that somebody else was interested in this business. The corruption and skullduggery that went on inside those organisations was shocking. It is still going on. Fool me once and it is my fault, but fool me twice and it is your fault. The people are aghast. The people are facing this winter with no heat. They are having to choose between buying food, heating their homes or buying clothes for their children. They are extremely irritated and annoyed. Would you blame them? The Government has taken them for porkies. Fine Gael and Fianna Fáil have been in power for the last God knows how many years - ten, 12 or 15 - since 2011. Now the Green Party is dictating policy to put people in penury. All the while, these tribunals are going on. They are only fodder machines that are creating fodder for the barristers, solicitors, legal eagles and the whole lot that are out there. It is a downright disgrace that it costs this kind of money to prove nothing and to tell us all what we already knew. It is shameful, corrupt, disgraceful and disgusting.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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They knew since June that they were going to take the money out of the banks.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I will not take a deep breath, although one should at the result of this report. If I take a deep breath, the time will be up. I have approximately six minutes to deal with a report that is over 1,500 pages long and has taken seven years. The conclusions are absolutely damning. It is significant that the Dáil Chamber is empty. The first senior Minister to be present since the Taoiseach left the Chamber is here. That is telling. No backbenchers are coming in to take their slots. I seldom make these points because I realise how busy people are but this is a very significant report.

What is the report about? Seven years after the commission was set up, the report tells us that there was a sale of Siteserv, a business. It sold for €44.3 million. At the time it was sold, Siteserv owed €162 million to the entity that is known as IBRC. The business was sold for €44.3 million. At that point, the taxpayer had put €43 billion into IBRC. What is all this about? The business was sold at such a low value that there was a write-off of €118 million that the taxpayer is accountable for. We are hearing today that this is a waste of time and we are rushing in to get rid of commissions of investigation. I would say that is all premature. I would ask the Deputies, and particularly the Government and the Minister, to actually read the report. Let us find out what happened here. The entity which was Anglo Irish Bank, on the one side, is declared a saint. That is the corporate angel. On the other side is Denis O'Brien, the personal angel who did nothing wrong. In the middle, we have Siteserv, which was sold, and inexplicably it was left to sell itself with absolutely no oversight. If I have the chance, I might return to the issue of the theoretical oversight that was in place. Three gentlemen are named in the report, Mr. Harvey, Mr. Dix and Mr. McFadden. They seem to have run rings around the angel on one side and the angel on the other side, the angel on one side being Mr. O'Brien, who did not know anything about anything, and the IBRC on the other side, in respect of which the judge found it acted in good faith, all its procedures were right and all its policies were okay. How did this happen, then? How did these three wise gentlemen run rings around everyone for their own benefit? How did they conceal? How is there a list of unauthorised disclosures and disclosures that were never made? How did that happen? How were the minutes of the official meetings of the board given to the Department on a regular basis in a board pack, but the ad hocones were never given? How did all of this happen? How did a boot camp take place in St. Moritz, with two of the important figures in this, the mere mortals in the middle of the two angels that did everything wrong, of course? They misled and told untruths.

I will read some of those in a minute but they have been already read out by various Members. How did that happen? The sale was "tainted by impropriety". The report states that, "non-disclosures and concealments undermined the integrity of the Siteserv sale process and tainted it with impropriety." It goes on to state that, "The Company's decision... to grant exclusivity to Mr. O'Brien" and then continue with exclusivity to him was "tainted by impropriety". It further states, "The Company’s decision not to disclose Mr O’Brien’s Final Offer letter to the Bank... was tainted by impropriety". There is a whole list of these. In the time I have I cannot possibly set out it all but the report sets out details on Mr. Dix - a slip of the tongue might call it Mr. Fix but we will stick with Mr. Dix - Mr. Harvey and Mr. McFadden disclosing confidential information which, "was manifestly improper and wrong and undermined the integrity of the Siteserv sale process." The report states, "Mr Dix gave false, misleading and untruthful evidence in his sworn [evidence]". Mr. McFadden's evidence was not credible, according to the judge, on various aspects. The report states that, "The Commission does not accept Mr McFadden’s evidence or his submissions" on the matter and further states that it was, "entirely implausible" and so on and so forth.

All of the time the angel on the left knows nothing and the angel on the right knows nothing. These undisclosed negotiations that were going on led to the extraordinary situation, according to the report, in which Mr. Harvey, as CEO of Siteserv and Mr. McFadden, one of the two co-founders, negotiated a deal for themselves and nobody was aware of it, even though the process was monitored by the board of directors of Siteserv; the sale subcommittee; two sets of corporate finance advisers, KPMG and Davy; the chief financial officer, who has been mentioned already; the company solicitor advising both sides, Arthur Cox, with Chinese walls of course; and a representative of the IBRC, Mr. Hobbs. I said I would come back to the monitoring. We have an inexplicable decision by the IBRC to allow the sale to be managed by these men who have now been found not to be credible in any way. I do not know why that was allowed but then they think about that and say they will monitor it and they talk about getting PwC in to monitor it. They then do not do so but they get in Mr. Hobbs with his company. Mr. Hobbs is paid €5,000 per month into his company to monitor this situation. He is supposed to be at all of these meetings and report back but of course there is no written agreement with the IBRC. Even though it is angelic in all of this there is no written agreement so Mr. Hobbs goes to Siteserv and it determines what he should say and not say. There is a little bit of upset over that so something better is agreed but nothing is agreed on paper.

That is how this was monitored and we have Deputies here saying there is nothing in this. This is a shocking and damning indictment of how business was done. I will leave the conclusions to the judge but what I find difficult is an IBRC that knows nothing about anything and the judge says it acted in good faith. Nobody is asking how the procedures and processes in place allowed this to happen, what Mr. Hobbs was doing and what he was being paid for. Then we have the Department of Finance making a good decision to recommend an independent review, which was overruled by the Minister for Finance at the time, which he was entitled to do, so there was no independent review. Tremendous work is being done by internal members. The only time I see females mentioned is when they are doing the work in this. The rest was all male-dominated. They did tremendous work cataloguing and compiling everything. Later on it all goes missing and the judge finds it extraordinary that various documents go missing.

To be fair to my colleague I will stop but if the Ceann Comhairle has any influence I say this is a document that should be discussed for quite a number of hours on the floor of this Dáil so that we analyse what has happened and learn from it.

6:55 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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In fairness to those who sit on the Business Committee, this was discussed there on Thursday last. It was the opinion of many members present that this needs a lot of further discussion, as does the process that gave rise to the protracted process of producing the report in the first instance.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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This report was of the Houses, rather than of the Government, so the House should be in control of how it is debated rather than the Government deciding what the time is for a debate. We need to find a method that allows the Houses to set aside time to have this debate and then we might have a real debate. I would love to be able to hear a lot more of my colleagues' analysis of what went on within the report because that is vitally important.

We have been waiting a long time for this report, seven years in fact, and the fact that it has taken this long calls into question whether the manner in which public inquiries are undertaken in this country is adequate. It seems to me, based on this, that they are not adequately long but at the same time this is an important report and it is important that what went on is summed up here. It is my understanding that, due to the long duration of this investigation and the accumulation of large costs to the State, there are now talks of closing down the commission. I note that the Taoiseach said earlier that he will wait for the tribunal to comment on that before he makes his decision and of course he will wash his hands of it and say it is not his decision but the decision of the tribunal that we should go away from this. Once again the political system walks away from this scot-free and has no involvement.

There is no doubt that urgent reform is needed and I would hope that if there was a question of closing down the commission then a vote on that motion would be brought to the Dáil to consider because surely that is something this House should decide on and we could discuss why it needs to happen. Although it took far too long to come to a conclusion, the findings in this report are absolutely in the public interest. The report details a catalogue of issues which showed the sale process was undermined from the very beginning. It explicitly states that the Siteserv transaction was so "tainted by impropriety and wrongdoing" that the "transaction was not commercially sound". Chapter 15 of the report details bonuses that cost Siteserv more than €800,000, which was more than the amount of Siteserv’s corporate finance advisers’ fees combined. It goes on to state that, "In the context of Siteserv, these were bonus payments on a lavish scale and entirely unacceptable for a company that was costing the taxpayer almost €118 million in loan write-offs and losses." I understand that the Taoiseach has said the cost of the Siteserv inquiry "could exceed €30 million" and I agree this is an indication of a broken system. However, we are talking about the sale of a company that has cost the taxpayer more than €118 million, in a time of real hardship in this country, when people were struggling to stay afloat, facing constant cuts and being hit with tax after tax, while Siteserv was lining its pockets with extravagant bonuses and charging ordinary people for it. It is an absolute disgrace.

There is no doubt this investigation was absolutely necessary and I would like to assure the Government that I have not forgotten that we were initially told by the then Minister for Finance, Michael Noonan, that an inquiry into the transaction was not necessary. It took three years of opposition pushback before an inquiry was sought and I would like to take this opportunity to commend Deputy Catherine Murphy on her pursuit of this. I have no doubt this inquiry would not have happened if it were not for her endless work.

There are many areas of concern in the report, including the fact that Denis O’Brien was offered exclusivity on the deal; the fact that a finance official leaked confidential Siteserv sale details that would ultimately alert Denis O’Brien to the sale; the fact that IBRC wrote off €119 million of the €150 million that Siteserv owed; the fact that IBRC lost out on between €700,000 and €2.1 million by not investigating shareholder payments; and the fact that the Commission found that no tax was paid by individuals on the capital gains on the sale of the 500 shares in Siteserv for €2.3 million. Denis O'Brien was innocent in all of this and knew nothing of it, yet he gave more than 15% of the new company to individuals because he knew nothing about it. That stretches anybody's belief that this report finds everything that should be found and that was certain to be found.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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It is interesting that all the speaking slots on this particular matter were not taken up. I do not know if it is something we will be returning to in the future. It warrants a return.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I will take the extra time.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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So be it.