Ivana Bacik (Independent)

Like the other speakers, I welcome the Minister of State and the Bill. I believe it was welcomed on all sides in the Dáil too on Second Stage in November, followed by the Committee and Report Stages in January and February, respectively.

Like Senator Regan, however, I am somewhat critical of the Government in terms of the delay in bringing forward this legislation which we all agree is needed. The main aim is clearly to transpose the third EU money laundering directive of 2005, which was supposed to have been implemented by 15 December 2007. By late last year Ireland was one of only three countries in the European Union that had fallen behind in implementing the directive, with Belgium and Spain being the others. As Senator Regan and others have said, we were heavily criticised at EU level and were subject of court judgments because of this delay. While I acknowledge we need time to debate such legislation, it should have been introduced earlier to enable us to have time for the full debate that is required and to enable us to meet our obligations.

It is not just that we need to be seen to be good Europeans as Senator Regan said. Ireland's credit rating is low because we are seen to have failed in the regulation of our banking and finance systems generally. Important legislation such as this adds substantially to our reputation as an ethical and sound place in which to do business. The Minister, Deputy Dermot Ahern, has acknowledged — it was acknowledged in the Dáil earlier — that the Bill is important for our reputation, apart from being important in a substantive way in terms of redrafting offences, etc.

It is worth talking about that more general context on a day when almost all contributors on the Opposition side and also some on the Government side called for a debate on banking. We are seeing the cost of the bailout of Anglo Irish Bank, in particular, rise at an alarming rate. We see the great concerns about the costs we will incur through NAMA. We have seen Postbank going to the wall. It is worth reflecting on our failures to regulate efficiently and effectively in the past to ensure our banking sector did not get carried away in the testosterone-fuelled orgy of lending to those who should not have got loans, which we all now acknowledge.

I wish to mention the more general issue of enforcement regarding white-collar crime. When Edwin Sutherland, the American criminologist, first developed his thesis on white-collar crime he could not get a publisher for his study of corrupt, illegal and fraudulent practices in a range of different professions, which makes a very good read even today. Owing to fears during the McCarthy era, publishers were unwilling to take anything that named big business as being complicit in fraud. Of course, the book was eventually published and went on to be one of the leading criminological texts and put white-collar crime on the map.

Unfortunately, in this country for far too long we had a similar view to the McCarthy era potential publishers of Edwin Sutherland's work in that we have been afraid to name the shady practices that were going on in our banks. For example, we were fearful about raising concern about interbank lending, which we now know was going on among financial institutions, seeking to hide an outflow of deposits from Anglo Irish Bank, in particular. We are now told the regulators were telling the banks that they had to wear the green jersey. We are told that people who talked about this were talking down the economy and being in some way unpatriotic. As a result, we saw fraudulent practices among banks being treated at arms' length and not undergoing the full rigours of the criminal process to which they should have been treated. We saw fraudulent practices that were not investigated or prosecuted in the way they should have been. For far too long we turned a blind eye to this sort of high-level crime or fraud.

We have not used the Criminal Justice (Theft and Fraud Offences) Act, which remains the leading Act dealing with offences against property, including offences of fraud. We have not extended that Act in practice to cover offences of money laundering and offences involving millions and billions of euro rather than the petty crime that is routinely prosecuted every day involving shoplifters, burglars and so on under that Act. I have previously quoted the famous words of Jeffrey Reiman who said: "The rich get richer and the poor get prison". Sir Kenneth MacDonald, the former British DPP, was quoted in the Dáil debate on this Bill referring to somebody who steals a small amount and gets caught going to prison, but somebody who steals a large amount from pension funds or people's savings ending up getting a yacht rather than prison. There has clearly been a disconnection for far too long between the crimes of the powerful and the crimes of the powerless.

Senator Ross's book on the bankers points out in very graphic terms how many shareholders — ordinary pensioners who had invested their life savings in what they saw as gold-standard stocks and shares in the banks — lost their lifesavings as a direct result of the reckless risk taking of those at the top in the banks, yet those men at the top in the banks — they were mostly men — walked away with golden handshakes, large bonuses and enormous salaries. It has been said before that if Lehman Brothers had been Lehman sisters this would not have happened and certainly might not have happened to the same extent. It is probably no coincidence that in Iceland the people turned to women to restore some sort of sense to its economy when the crash came. We have not, unfortunately perhaps, taken that route yet.

Certainly everybody now acknowledges there was an orgy of reckless lending. It is not something for which we are all to blame. The Labour Party believes blame should fall squarely on the Government. For 13 years it failed to regulate the banking sector and failed to ensure some stop was put on the mad over-reliance on construction. It was not that people did not know about this. I clearly recall in 2007 both major Opposition parties, the Labour Party and Fine Gael, stating there was an over-reliance on construction, which was not healthy for the economy, and that the lending and spending spree had to be reined in, yet Fianna Fáil and its junior partners in government at the time kept insisting that the fundamentals were sound and that we were talking down the economy, and as a result they were re-elected in 2007.

Since then we have all seen the extent of the crash. However, there has still been a tendency on the Government benches to blame international causes. Undoubtedly the international climate contributed, but when one considers the Irish economic collapse compared with other countries, we see that here it is also very much our own Government's policies that brought about the extent of the collapse and the extent of the rise in jobless figures and so on. Shareholders who have lost their life savings and pensioners of Waterford Glass and other places who have lost their pensions also know this was a crisis caused as much by national policies and national failures as much as by international ones. Future generations will also know this as they are saddled with the NAMA debts and saddled with bailing out zombie banks like Anglo Irish Bank. However, we are still being told these are of systemic importance. The myths are still being peddled.

I have digressed from the point of the Bill, but it is worth considering the context. The Bill deserves a welcome because it takes white collar crime seriously. All sides of the House agree for far too long in this country we have not taken white collar crime seriously. Although the Bill is long overdue, we welcome it. It recognises one of the truisms of the international financial system on which Deputy Higgins commented in the Dáil. A great failure of the international financial system is that it has chosen to be silent on the issue of the transmission of dirty money in the world. With his characteristic eloquence he describes what others call "hot money" as "dirty money" — money that is being laundered. He pointed out the enormous cost of dirty money and unregulated financial corruption to the developing world. Senator Quinn rightly focused on Switzerland as a country where for far too long there was far too much fraud and corruption in banking and far too little regulation. The complicity of Swiss banks in corruption is usually blamed on African countries. Deputy Higgins rightly pointed out that Nigerian corruption is seen as an African problem and yet for every Nigerian dictator who has impoverished his country, there has been a Swiss bank in which he could lodge his billions. There has been an enormous cost for developing countries. Figures have been quoted. For example in Russia €20 billion was looted out of that country in the two-year period 1988 to 1989.

An analogy which I believe is useful and which was mentioned at the justice committee recently is the enormous cost to the Exchequer and internationally of cigarette smuggling and the complicity of the big tobacco companies in facilitating this to happen and not regulating it enough. Similarly, the transmission of dirty money, as Deputy Michael D. Higgins has described it, is being done with complicity by western banks and the western banking system. This EU initiative we are now transposing into Irish law is an important step in the process of trying to change that and restore some sort of ethical compliance within our banking system as much as within the European banking system. It is about restoring our international reputation as a place in which financial services are conducted in an ethical and reputable manner but it also plays a much bigger part in restoring confidence generally within the European Union.

In the time remaining I will examine the specifics of the Bill but I also want to make a general point about the principle of consolidation. The Minister, Deputy Dermot Ahern, referred to the consolidating nature of this Bill. It certainly refers to a great deal of earlier legislation and repeals a large number of regulations under the Criminal Justice Act 1994 which until now was the main legislation on money laundering. It is somewhat regrettable, however, that the opportunity was not taken in the Bill to do a proper consolidating or codifying job as was done in the Criminal Justice (Theft and Fraud Offences) Act 2001 where an attempt was made to try to bring every statute dealing with theft or fraud offences against property into one piece of legislation.

Unfortunately, in this area of money laundering offences and terrorist financing we still have a range of legislation dealing with it. The Bill amends various provisions of the Criminal Justice Act but it does not repeal the Act in total and, in a way, that is regrettable. A previous Minister for Justice, Equality and Law Reform, Michael McDowell, had a pet project of codification of the criminal law. I am aware work on that is ongoing but this could have been an opportunity to codify at least one area.