Seanad debates

Wednesday, 16 April 2014

Electoral (Amendment) (No. 2) Bill 2014: Second Stage


Question proposed: "That the Bill be now read a Second Time."

11:45 am

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I welcome the Minister to the House and I invite him to speak.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Electoral (Amendment) (No. 2) Bill 2014 is a short but important Bill. It provides for the repeal of the bankruptcy disqualifications for election to and membership of the Dáil and of the European Parliament. By virtue of the provisions in Article 18.2 of the Constitution the bankruptcy disqualification for membership of the Seanad will also be removed. The bankruptcy disqualification has been in place in Ireland since 1923 and it was there before that under the Westminster Administration. This disqualification was removed for local elections in 1974. My Department has made inquiries of other EU member states and confirmed that it is not a disqualification for elections to the national or European Parliament in at least 18 member states. Anomalies exist under the current legislation whereby an Irish citizen adjudicated bankrupt in another jurisdiction is eligible for election to the Dáil, or to the European Parliament to represent Ireland, but an Irish citizen adjudicated bankrupt in Ireland is not eligible for election to either.
Similarly, where a Deputy or an MEP is adjudicated bankrupt in Ireland they cease to be a Member but if a Member was adjudicated bankrupt in another jurisdiction a vacancy in the Dáil or the European Parliament would not arise. The same anomalies apply to membership of the Seanad. It is difficult in the 21st century to identify a valid reason for retaining this disqualification. When the provision was originally introduced, well over 100 years ago, there would seem to have been valid reasons. That is not the case now having regard to recent insolvency legislation in Ireland and having regard to the altered view of bankruptcy as a protection or remedy rather than a punishment.
The commitment in the programme for Government was to reform our bankruptcy legislation to bring us into line with best international standards. This reform has been delivered in the Personal Insolvency Act 2012 which amended the Bankruptcy Act 1988 to provide for a more enlightened, less punitive and costly approach to bankuptcy. Those amendments continued the reform of bankruptcy law which was started in the Civil Law (Miscellaneous Provisions) Act 2011. We have now taken a 21st century look at the relevant parts of our electoral law and decided that it needs to be changed too.
In the past the disqualification from election to or holding elected public office by dint of being an undischarged bankrupt partly reflected a concern that a person in such circumstances could be more susceptible to inappropriate influence. This might have had some validity when the provision was originally conceived in a previous era, in another century. However, we need to consider the disqualification provision in the present day taking into account the legislative framework that exists to guard against corruption, to uphold ethics in public office and to restrict the potential for inappropriate influence of private and corporate political funding.
Between 1889 and 2010 seven separate Prevention of Corruption Acts were brought into force, along with a range of other criminal justice legislation that addresses corruption. Further significant reforms are planned. When enacted, the Criminal Justice (Corruption) Bill being developed by my colleague the Minister for Justice and Equality, will not simply be a consolidation of the existing legislation, it will clarify and strengthen the main corruption provisions and offences. Head 18 of the general scheme makes provision for the courts to remove from office Irish public officials who are found guilty of corruption. That includes Members of the Oireachtas and of the European Parliament. The Bill is currently being drafted and it is hoped that it will be ready for publication in the coming months. We have an ethics framework covering public office holders. This is set out in the Ethics Act 1995 and the Standards in Public Office Act 2001. The requirements of this legislation are overseen by the Standards in Public Office Commission.
There is a comprehensive legislative code covering political donations which has been substantially strengthened by this Government through the Electoral (Amendment) (Political Funding) Act in 2012. Corporate donations are now restricted. The maximum political donation that an individual can receive was reduced to €1,000 and every donation above €600 must be reported, with details of the donor published. Cash donations above €200 are now banned, as are anonymous donations above €100. Experience in the past has, unfortunately, shown that some individuals are willing and capable of circumventing the rules, and that bankruptcy is no predictor for such behaviour. No system will guard against every possibility and there is a constant need for us all to be vigilant in reforming our laws and regulations to appropriate and proportionate effect. However, in this day and age an absolute ban on bankrupt persons standing for election can be regarded as a disproportionate measure with questionable justification. There are better and more targeted ways of dealing with concerns about the inappropriate influence of office holders. These should apply whether the person happens to be bankrupt or not. This approach is reflected in the range of necessary laws and regulations dealing with political funding, ethics in public office and anti-corruption measures. In these circumstances, it is right and reasonable that the bankruptcy disqualification be repealed.
I will take the opportunity now to outline the main provisions in the Bill. Section 1 - amendment of the Electoral Act 1992 - provides for the removal of the disqualification of bankruptcy for election to the Dáil by repealing paragraph (k) of section 41 of the Act and for removal of the disqualification of bankruptcy for membership of the Dáil by repealing section 42(3) of the Act. Section 2 - amendment of the European Parliament Elections Act 1997 - provides for the repeal of the bankruptcy disqualification for election to the European Parliament by removing the reference, in section 11 (2)(a), to paragraph (k) of section 41 of the Electoral Act 1992.
No amendment is required to remove the bankruptcy disqualification for membership of the European Parliament because section 11(5)(a) of the European Parliament Elections Act 1997 simply provides that a person shall cease to be a member of the European Parliament if they become subject to any of the disqualifications referred to in subsection (2)(a) of section 11.
Section 3 contains standard provisions dealing with short title, construction and collective citations.

The bankruptcy disqualification also applies to Members of Seanad Éireann. However, the Bill does not provide for an amendment to Seanad electoral law. Article 18.2 of the Constitution states, "A person to be eligible for membership of Seanad Éireann must be eligible to become a Member of Dáil Éireann.” Section 16(2) of the Seanad Electoral (University Members) Act 1937 provides that “No person who is for the time being disqualified from or incapable of being elected as a Member of Dáil Éireann shall be a candidate at an election in a university constituency.” Having regard to these cross-references to the Dáil provisions, the bankruptcy disqualification will, therefore, be removed for the Seanad as a consequence of the amendments in the Bill.

As I noted earlier the bankruptcy disqualification was removed for local elections in 1974, 40 years ago. We are only now removing it for general elections and European elections and, as a consequence, for membership of the Seanad. This could and probably should have been done long before this. The Government is now taking action to repeal a provision that is disproportionate and no longer necessary in this day and age.

I commend the Bill to the House.

11:55 am

Photo of Mark DalyMark Daly (Fianna Fail)
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I support this Bill and the change to the electoral laws that disallowed a bankrupt to be a Member of Parliament. As the Minister pointed out, that disqualification was removed for local authority elections some time ago and is an anomaly in the EU in this regard. Whereas bankruptcy could end in the debtors’ prison, society has moved on in its views on bankruptcy. We have 100,000 mortgage holders in arrears and many people have gone to the UK seeking redress from bankruptcy under UK law. It must be treated as an everyday occurrence rather than a matter for which someone must be punished.

Fianna Fáil supports the Bill. While it is being rushed, the cut-off for nominations for candidates in the European elections is coming soon and we want to ensure this legislation is enacted before then. The provision has been in place for local authority elections for the past 40 years. It is unfair that a hardworking Member of this House could be precluded from running for elected office because of bankruptcy during the downturn. This is an issue of fairness and that is why we will support this legislation.

Photo of Caít KeaneCaít Keane (Fine Gael)
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I welcome this Bill and it is time we caught up with European electoral laws on bankruptcy. The Bill amends the European Parliament Elections Act 1997 to allow a person who has been declared bankrupt to run for the European Parliament. The Government has already changed bankruptcy law to ensure it does not stigmatise individuals as it did in the past. Small businesses might fail the first time but may be successful the next time. That is not to say that the bankruptcy law should be taken advantage of by people.

As the Minister said, no amendment to the electoral laws for the Seanad is required because what pertains to the Dáil pertains to the Seanad. There was the anomaly that one could be declared bankrupt in another jurisdiction but run for election in Ireland. This Bill will deal with this anomaly by removing the disqualification of undischarged bankrupts. European, local and by-elections will be coming up soon, so this legislation is necessary. The Minister also pointed out what the Government has done for the accountability and transparency of funding of political parties accountability.

The provision on bankrupts goes back to the 1832 Reform Act which substantially extended the franchise. It was not until 1867 that many categories of working people were given the vote. The Representation of the People Act 1918 extended voting rights to women in a limited way. The Minister has introduced 30% female quotas to encourage more women to run for election. He has been advocating change and advancement throughout the electoral system. Disqualification due to bankruptcy was removed for local authority candidates in 1974. Hopefully, we will see this legislation enacted shortly.

Photo of Fiach MacConghailFiach MacConghail (Independent)
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Cuirim fáilte roimh an Aire go dtí an Seanad. I support this common-sense Bill. It is a perfect example of the Government being practical and reasonably swift in dealing with a historical anomaly and out-of-date prohibition on citizens standing for election in European and general elections. It also proposes to remove the clause to allow Members who might become bankrupt from losing their position. Article 16 of the Constitution defines eligibility for Dáil membership. Article 18 makes eligibility for membership of the Seanad the same as that for the Dáil. Article 16 allows the Oireachtas to prescribe that certain categories of persons will be ineligible for membership of the Dáil in accordance with the fundamental norms of the legal order as set out by the Constitution. On that basis, section 41 of the 1992 Electoral Act sets out that certain categories of people who are ineligible for candidacies or membership of the Dáil. Section 41(k) states “a person who is an undischarged bankrupt under an adjudication by a court of competent jurisdiction in the State” shall not be eligible to run in a Dáil or European Parliament election. Section 42(3) sets out the procedure for disqualifying an elected Member from the Dáil if he or she is declared bankrupt. This Bill proposes to repeal both sections.

We have Ms Jillian Godsil to thank for this amending legislation. Her High Court case against the Attorney General is due to be heard in July. She is arguing, quite rightly, that the exclusion of bankrupts from standing for election breaches the constitutional principle of equality, as well as interfering with her right to a free choice as a voter on her own behalf and on behalf of the electors in the constituency in which she wants to run. It also constitutes discrimination on the grounds of social and economic status. Ms Godsil was declared bankrupt in February this year. Under current law she cannot stand for election to the European Parliament in May. Ironically, she could stand in the local elections because the disqualification of an undischarged bankruptcy was removed by the Local Elections (Petitions and Disqualifications) Act 1974.

Without going into Oireachtas Members' private financial circumstances, the Bill also means that should an existing Member of the Dáil or the Seanad be adjudicated as being bankrupt, he or she will not be disqualified as a Member of the Oireachtas. Ireland is one of only five countries in Europe, including the United Kingdom, France, Malta and Turkey, which prohibit bankrupt persons from running in parliamentary elections.

I am dismayed that there is no plan to arrange a plebiscite in the city of Dublin to deliberate on whether its residents would like to have a directly elected mayor. It would show great leadership and be an example of swift political reform were the Minister to offer an opportunity for the electorate in the Dublin metropolitan area to have their democratic say in how their city should be administered. There is a democratic deficit in the capital city which hinders its full economic, social and cultural development. I look forward to the Minister's response and will raise the issue in more detail on Committee Stage. While some of our amendments may be ruled out of order, I will challenge this and look forward to the Minister's response on Committee Stage.

12:05 pm

Photo of Denis LandyDenis Landy (Labour)
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I welcome the Minister. Where a few words suffice, I will not use too many.

This Bill is welcomed by both sides of the House. I read the transcripts of the speeches made in the Lower House. Although one colleague of mine expressed some reservations, it was fair comment. The Bill seeks to update dated legislation. I did not know until I read the legislation that a bankrupt person could stand for election to a local authority but not to the Dáil, the Seanad and the European Parliament. I wonder if there are statistics for the numbers of bankrupt members of local authorities. We are coming into line with best international practice. As the Minister outlined in great detail, we have many checks and balances in the system such as the Standards in Public Office Act 2001, the corporate donations restrictions and new regulations under the Criminal Justice (Corruption) Bill which will further strengthen the system to ensure those who engage in corrupt acts are not allowed to stand for national office. It is very important that we close this loophole. I welcome Fianna Fáil's positive response to the Bill. I also read that Sinn Féin had supported it in the Lower House. Are candidates waiting in the wings and will this legislation be passed before the closing date for nominations to run in the European elections campaign?

Photo of Sean BarrettSean Barrett (Independent)
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I, too, welcome the legislation. The Minister has summarised it very well that there is an alternative view of bankruptcy as a protection or remedy rather than a punishment. We had many late-night discussions on the issue of insolvency with the Minister for Justice and Equality and it was interesting to see how the matter had evolved. We must question what caused the bankruptcy. Was there reckless lending by financial institutions? Why should the odium and criminality be borne only by the person who accepted a loan which might have been irresponsible? We need legislation for the regulation of banking regarding loan-to-value and loan-to-income ratios. Reckless lending rather than reckless borrowing may have caused people to go bankrupt. We have developed subtlety and nuance in how we respond, for example, having attachment orders, conciliation, negotiation and community service as options. These are welcome developments as part of a reform agenda and the Bill deserves the support of the House. It is a modernising and forward-looking measure.

With such a heavy debt-to-GNP ratio, having some people in public life who have personally experienced the problem could assist the Cabinet and Ministers to explain from personal experience what it is like. It is the personal expression of what has happened to the country. We have all had to live in grim negotiations with the people who loaned us the money. The country and public representatives will be in harmony in dealing with the problems of debt with a certain fellow feeling. Perhaps they might resolve to have better lending institutions and better recognition by the country and citizens that those seeking to lend money are not always out to do one the best of favours, as the advertising people maintain, and that old-fashioned thrift might have much to recommend it. I compliment the Minister on the legislation which we will support from these benches.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I welcome the Minister and the Lord Mayor of Dublin, Oisín Quinn, who is in the Distinguished Visitors Gallery. I was delighted to meet him earlier.

Fianna Fáil supports this important Bill. I pay tribute to Ms Jillian Godsil who brought the case arguing that legislation banning her from contesting the forthcoming elections was in breach of her constitutional rights. I very much agree with her. I also agree that the legislation is long overdue and should have been brought forward many decades ago.

Unfortunately, debt is not a new concept. Sadly, during the past six or seven years it has marred and tortured the lives, minds and families of many ordinary, decent people who did nothing wrong when they borrowed money in an open lending culture to improve their homes or create or expand businesses, thus creating employment. They also borrowed money to better the lives of their families and, often, the wider community from which they came. Bankruptcy should not be a punishment, as it still is, despite our recently amended legislation compared to the legal protocols abroad, to some of which the Minister alluded. Bankruptcy should focus on assisting the two main parties, namely, the creditor and the genuine debtor. It is remarkable that as far back as 1934, 80 years ago, the American Supreme Court ruled that bankruptcy "gives to the honest and unfortunate debtor ... a new opportunity in life and a clear field for future effort unhampered by the pressure and discouragement of pre-existing debt". That is a very enlightening and important quotation from 80 years ago that is very relevant to this day, especially here. In Ireland, as some speakers have said, although we are on the way to changing our attitudes to bankruptcy, we are not there yet. We now see it as a fresh start for people who are, by and large, creators of wealth and jobs or ambitious home-makers. Bankruptcy must be a starting point for new opportunities. How could it be fair that parliamentarians with commercial skills and ambitions used in good faith should forfeit their careers because of honest endeavour? I very much welcome the legislation and congratulate the Minister on bringing it forward. There are other anomalies regarding other professions and callings where it is mandatory or inferred that being judged a bankrupt demands resignation or disbarment. Legislation should also be brought forward in this regard.

12:15 pm

Photo of David NorrisDavid Norris (Independent)
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I had not thought about the question of judges, which I think requires a bit more consideration by people like myself who had not thought about it, because one expects judgment from judges and one expects them to be of good judgment and so on. They should live within their means and if they go around spending money on property speculation, then I would not have a huge amount of sympathy for them. It is probably a dangerous thing to say since I am often in court myself but, at the same time, I am afraid I would have to think about that.

The idea of not allowing bankrupt people to stand for Parliament, or ejecting them from Parliament if they become bankrupt, seems to be undemocratic, particularly in these circumstances. I congratulate the Minister on his introduction of this legislation, because in this time of very considerable financial difficulty, with large numbers of people facing financial ruin as we speak, theirs is a voice that actually needs to be heard, so I would quite welcome somebody who had been bankrupted by the mess this country got itself into. I will not divide the blame between any party, Government or otherwise, because I was here when the whole mad Gadarene rush was going on, and very few people have clean hands in this, so it is a waste of time dividing the blame. Blaming is a waste of time anyway, but I think this is a voice we need to hear. I would have to think a bit more about the judges and I might very well come around to the side of Senator Wilson, but I simply had not thought of it, so I do not know. I do not think there is any point in pontificating in this House when one simply does not know.

However, I would like to indicate to the Minister a related situation in which people are bankrupted or eviction orders are served against them. I will bring a Bill before the House, so I would like the Minister to take note of this. One of his colleagues will probably take the Bill, which Senator Barrett has very kindly agreed to support. It is a very short Bill called the enforcement of court orders (amendment) Bill 2014. As the Minister may or may not be aware, it is one of these esoteric areas of law, but it actually has a very strong impact on people. The Enforcement of Court Orders Act, which has not been changed since 1926, permits people who are placed in this situation of financial vulnerability to be entitled to a certain value of clothing and bedding, that is, £15 sterling. That is ridiculous in this day and age, and our Bill will raise it to the very small amount of €2,000. Since the Act was enacted in 1926, it was long before the advent of computers. People who go bankrupt or people who are evicted should be given a second chance. With computers, they can start another business. They also have personal data stored on computers. It is important that this very small Bill should be allowed to go through.

I do not admire everything about America. For example, I do not particularly admire the complete abrogation of international human rights legislation when it uses drones to kill civilians. However, in terms of its financial life, it is aggressively positive and it is not a badge of shame to go bankrupt; nor, as far as I know and to follow on from Senator Wilson, is it a crime. Perhaps people should be put out of Parliament for criminal activities. If there is a criminal element to the bankruptcy, such as fraud, stealing from company funds or even irregularities, then they are unfit to be Members of Parliament but not in the case of ordinary bankruptcy, so I will support the Bill.

I look forward to having something to say about the amendments put down by my colleagues about the matter of the Dublin mayoralty. Since I did not welcome the first citizen of this great city to the House on the Order of Business, I do so now. I am very glad he is taking such a considerable interest in the affairs of Seanad Éireann.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I welcome the Minister and am happy to support this Bill which will remove an outdated ban on people who have been declared bankrupt putting themselves forward for election to the Dáil. It also redresses the anomaly where people can contest local elections if they are bankrupt but not Dáil or European Parliament elections. The law regarding local elections was changed in 1974, so this Bill is timely and should be supported. I suppose at one time bankruptcy was seen as a fairly exotic condition which was rare in Ireland but, unfortunately, when the so-called Celtic tiger collapsed, many people found themselves bankrupt, often through no fault of their own. For those people not to be able to contest elections because of that was unfortunate and the fact we are correcting that is a step forward.
However, we must also be conscious that there were undoubtedly cases where certain individuals and institutions were to blame for much of the collapse and a number of cases relating to that are proceeding currently. It could also be argued that it was expedient for certain people to declare themselves bankrupt in this jurisdiction or in other jurisdictions in order to save some of their assets. That should be put on the record because it is an unsavoury practice. We saw some people go to the UK, the US and elsewhere to declare themselves bankrupt, taking and hiding their assets from the State and banks. Essentially, it is the taxpayer who must then foot the bill.
I think we would regard some of those individuals and institutions, such as Anglo Irish Bank, in a different light from someone who finds himself or herself bankrupt from causes which were not really of their own making or brought about because of circumstances beyond their control. We all know people who found themselves in that situation in recent times. Many of them have lost their businesses and homes and have found themselves bankrupt as a consequence.
This legislation is motivated by the case taken by Jillian Godsil whose home was repossessed and who has expressed an interest in contesting the forthcoming European Parliament elections. It would surely be unjust to deny her the opportunity to contest the European Parliament elections or, indeed, anybody who has found himself or herself in the same position as her, especially as I understand the reason she wants to run is to highlight the plight of people who have had their homes repossessed as part of the fall-out of the financial crisis.
The issue at stake here is whether people who have been declared bankrupt should be denied exercising one of the fundamental rights of any citizen in a democracy, which is to stand for election. Those of us who might question the sanity of anyone who would want to subject himself or herself to that, given that we have travelled that road several times in local, general and European Parliament elections, is a different story. Obviously, it is a matter and a right for those individuals and for any citizen to put themselves forward for election.
It was also not right that someone who was bankrupt was denied the right to run in elections while former prisoners were rightly not denied such a right. Had that been the case in this State, a large number of people on all sides of the House over the years would not have been allowed to run and would not have been elected. There are many anomalies which still could be corrected in regard to the franchise and voting rights for citizens. The Minister has been in the House several times and has been part of debates on Seanad reform. All sorts of issues have come up in regard to voting rights for the diaspora and citizens in the North in Presidential elections. We still have a long road to travel in many of these areas.
However, this Bill is very simple and short and its intent is very simple but it is important none the less. It corrects an anomaly and for that reason, I support it.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I thank Senators on all sides of the House for understanding the reasons for this legislation and for their contributions and general support for the Bill. Committee and Remaining Stages will take place now, so I will not detain the House further.

12:25 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I cannot allow speakers to contribute a second time as it would be unfair. Senator Norris will have time on Subsequent Stages of the Bill.

Question put and agreed to.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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When is it proposed to take Committee Stage?