I wish to follow up an issue raised with the Minister for Finance by my colleague Deputy Eamon Ryan and pursued by Deputy Boyle. Yesterday the Minister made some remarkable revelations. He changed the Irish tax code, as he said, to level the playing pitch in favour of a bid for Eircom by Valentia. Does the Taoiseach consider it proper practice for a Minister for Finance to intervene in a bidding war between two large private companies for one of the State's most important assets? That particular Act is estimated to have ultimately cost the taxpayer about €50 million.

Were the Taoiseach and other members of the Cabinet informed by the Minister for Finance, Deputy McCreevy, of this decision prior to his agreeing to the amendment of tax law in this case? Is the Taoiseach aware of what involvement the then Minister for Public Enterprise, Senator O'Rourke, had? She was the Minister responsible for telecommunications at the time. Did the Government have any strategic thoughts on the development of telecommunications? For example, was it policy to get venture capitalists to operate telecommunications?

Does the Taoiseach consider this sweetheart deal was fair to the 550,000 ordinary shareholders who were taken in by television advertisements about what a good deal this would be, who were forced to sell their own shareholdings at a loss due to the deal the Government helped arrange? The takeover panel, for example, certainly had concerns.

What does the Taoiseach say to the likes of a caller we had this morning, Mr. Edward Moran, of Belmullet in Mayo, who took a court case at the time to maintain his shareholding rights against the back room deal that the Government, the unions and the Valentia consortium had cooked up?

Does the Taoiseach not think there is an important issue to answer on how taxpayers were defrauded of money and how, in this case, one private company was helped by the Government against another?

The Deputy asked if amendments to the Finance Bill come before Government. Yes, they do and the Minister for Finance clears them with Government. The Minister for Finance has made numerous changes to the ESOT legislation to facilitate the ESOTs in changing circumstances to ensure they retain the benefits available to them. This is because of their nature; ESOTs are tailor-made to particular circumstances.

In the particular case raised by Deputy Sargent, I understand that the ESOT workers lobbied for this change. Section 13 of the Finance Act 2002 provided that the transfer and appropriation of securities, other than ordinary shares, to the beneficiaries of the ESOT APSS in the circumstances of certain takeovers, may take place in a manner which preserves the tax benefits to the participants.

How did the half million other shareholders lobby the Taoiseach?

Deputy Ryan is not the leader of his party.

It should be noted that the legislation contained in section 13 does no more than preserve the existing tax benefits to the beneficiaries of an ESOT in the event of such a takeover and provides no further tax advantage beyond that. It did not change the position.

Two takeovers were in a position to take immediate advantage of these legislative changes. The first was the takeover of the landline business of Eircom by the Valentia consortium and the second was the takeover of ACC Bank by Rabobank. The background to this in June 2001 was that the ESOT's tax advisers contacted the Department of Finance on behalf of the workers as they wished to discuss the tax implication for Eircom's ESOT of the proposed takeover of Eircom. Having considered the issues involved, the Minister indicated the following June that he was prepared to propose an amendment and this was duly done the following year in the Finance Act 2002. This was made known in the Minister for Finance's response to the Dáil question by the then finance spokesperson of the Labour Party, Senator McDowell, on 14 November 2001. The provision in section 13 simply provided the membership of Eircom's ESOT with a level playing field to choose to support whichever bid they wished.

All the relevant papers described in the media in the last few days were released by the Department under the Freedom of Information Act. The decision to release the papers was made by the Department on 6 December 2001.

It is incredible to hear the Taoiseach say there was no change. It is clear there was a significant change. What public interest was served by that change in the tax code? The answer has to be, none. The union was effectively acting for Valentia in this case. The Taoiseach refers to "the workers", as if these were ordinary people, the reality is that the 550,000 shareholders were at a considerable loss and that remains the case.

On 9 October, the Minister for Transport, Deputy Brennan, announced another ESOP arrangement, the Air Lingus ESOP, by stating it was Government policy that the full 14.9% union stake is only given out in circumstances such as when the State is exiting from the company. It is a valid question to ask if the real purpose of these ESOPs is to get privatisation through at any cost. It is effectively a pay-off, a sweetener. Is this not a classic example of what the Irish Independent calls pay-back time culture that characterises this sleazy Administration? Is that not the real policy here — that this is a sweetener deal to try and buy off workers for privatisation?

Deputy Sargent should withdraw a comment like that. It does not merit him making an allegation like that, but I will not get myself too excited about it. The question of cost here is totally hypothetical. Any sensible person would ask if it is conceivable that an ESOT would have agreed to any takeover from whatever source if it involved the ESOT losing the tax relief available to it. That is the question, which is why the advisers did it. The answer is that they would not. Deputy Sargent would not do so either, nor would anybody else. Certainly an adviser to a trade union would not do it.

Deputy Sargent has made a comment that does not usually come from him; obviously someone has wound him up to ask this. The Minister for Finance in this Administration did not introduce this ESOT, it was done by a previous Administration and by a previous Minister for Finance who is not a member of either Government party.

Leopards do not change their spots.

It was not introduced by either a Fianna Fáil or Progressive Democrats Minister. There is nothing wrong with it whatsoever. It was actually brought in by a Labour Party Minister for Finance, but it is absolutely in order.

Deputy Sargent referred to "this sleazy Administration". There is nothing whatever wrong with it. The Deputy will probably say now that it is fine, but there is nothing wrong with it. There was absolutely nothing wrong with it. Deputy Sargent should withdraw that comment.