Social welfare and corporate fraud
Deputy Pringle raised concerns that Government attention focused on social welfare fraud rather than white-collar crime and asked about corporate enforcement staffing. The Minister said all fraud must be tackled, defended the social welfare fraud campaign, and stressed enforcement across all forms of fraud.
I wish to take this opportunity to wish the Taoiseach, Deputy Enda Kenny, well following the announcement of his retirement as Taoiseach in the coming days. I wish him well on a personal level. For many in Fine Gael, his has been a very successful tenure. There will be other opportunities to debate his legacy but I would like to wish him well at this stage.
Last month the Minister for Social Protection, Deputy Varadkar, launched what is essentially a State sponsored, self-promoting public campaign calling on people to report those they suspect of engaging in social welfare fraud.
The claim that over €500 million was saved in 2016 through a range of anti-fraud measures within the Department of Social Protection is central to this public campaign. The Minister has been found to have embellished and manipulated the social welfare figures. The actual figure for fraud is closer to €41 million, or 0.2% of the social welfare budget. It has been revealed that the estimate figures include moneys that would have been saved over 52 weeks in the cases of some payments and over 136 weeks in other cases, rather than what has actually been saved. It is possible that the inaccuracy of €450 million in the Minister's calculations can be attributed not to a miscalculation but to a calculated tactic as part of his leadership challenge. The Minister's campaign targets a vulnerable cohort of people including the elderly, lone parents, people with disabilities and the unemployed.
This level of scrutiny is not replicated when it comes to tackling white-collar crime. Over the past ten years, Ireland has lost approximately €25 billion through economic crime. This loss of €2.5 billion a year equates to more than 60 times the annual level of social welfare fraud. The Exchequer has lost tens of billions of euro through the activities of NAMA in extremely suspicious circumstances involving the current Government. The sale of NAMA's Northern loanbook led to a recorded loss of €162 million. NAMA recorded total losses of €800 million in respect of its Northern Ireland loan portfolio between 2010 and 2014. The Government is refusing to accept that there is anything wrong with this. When 15,000 people were defrauded by Irish banks on their mortgage interest rates, it caused misery and led to considerable losses for families. What about the 100 families that have lost their homes as a result of this fraud? It has been calculated that over the lifetimes of these mortgages, the amount of money involved in this criminal action is at least €500 million.
The Government has never taken white-collar crime seriously. The staffing levels of the Office of the Director of Corporate Enforcement have decreased by more than 18% since 2010. The number of gardaí working in the office has been reduced by 25%. Furthermore, the 2015 Garda Síochána Inspectorate report noted that "the Garda Bureau of Fraud Investigation are struggling to manage the volume of suspicious financial transaction reports forwarded to them as part of money laundering and terrorist financing legislation". We do not even collate statistics on white-collar crime. The figures that are drawn up are combined with welfare fraud statistics in an effort to massage the figures. If the Government had paid as much attention to white-collar criminals as it is now paying to potential social welfare fraud, it could have saved tens of billions of euro, which is far more than the €41 million that is lost in social welfare fraud each year. When will the Government begin to address this scandal by targeting the corporate criminals and tax cheats who have escaped its public campaign? When will it target criminals in suits as vigorously as it is targeting those who depend on social welfare?
Comment on this
I thank the Deputy for his gracious comments in response to the announcement made by the Taoiseach yesterday.
All fraud is wrong and illegal and should be subject to the fullest possible enforcement response from the State. All of the issues raised by the Deputy with regard to white-collar crime and corporate fraud are dealt with by the Office of the Director of Corporate Enforcement with the support of An Garda Síochána. As we all know, Revenue pursues tax fraud relentlessly and successfully. Given that the social welfare system involves annual expenditure of almost €20 billion, I suggest that fraud involving forms of income support that are designed to support and protect people on low incomes who are in need at vulnerable points in their lives is particularly worthy of investigation and should be dealt with. That is what the Minister, Deputy Varadkar, is attempting to do. I would have hoped that when the Deputy was acknowledging the Minister's motives in this regard, he would also have acknowledged that the first set of comprehensive increases in social welfare payments since 2007 or 2010, depending on the payments in question, was provided for in budget 2017. Those increases were put in place because all members of the Government recognise the need to support our social welfare system and those who rely on social welfare payments.
I would argue with the Deputy that we need to tackle those who have been involved in defrauding the State from a form of payment that is meant to be used to support those who are vulnerable and need additional income. This must be tackled and more needs to be done on it.
Regarding the figure the Deputy raised, the Department of Social Protection has outlined that the €506 million figure relates to both control and anti-fraud activity. All the material relating to that campaign recognises that. Since this campaign was launched on 1 May of this year, the Department has received more than 1,250 reports of social welfare fraud from members of the public, which represents an increase of more than double the figure for the previous year. Up to May 2016, the figure was 575, and that figure has now more than doubled. That is as a result of the campaign the Department of Social Protection put in place. Its purpose is to stop the abuse of taxpayers' money, which is meant to be used to support those who need it.
Comment on this
It is interesting the Minister in his response said that all fraud is wrong but in his eyes and those of Fine Gael and the Minister, Deputy Varadkar, all fraud is not wrong, only social welfare fraud is wrong and that is the only fraud that is being actively pursued. When one puts such fraud in context it pales into insignificance compared to white collar crime and white collar fraud that is rampantly in this State. Will the Minister advise us of the way in which staffing levels in the Office of the Director of Corporate Enforcement have been maintained since 2010 and by how much they have reduced? How many forensic accountants does that office employ who can investigate fraud issues? When we have those figures, that will reveal the real attitude of the Government to tackling fraud.
The Minister said that the first comprehensive increases were in 2017. We could have had far better increases before now if the Government had been tackling white collar crime and the proceeds of that crime had been retained in the Exchequer. NAMAleaks has received many reports of employees of NAMA using NAMA information for personal gain in contravention of the NAMA Act. That is the type of white collar crime to which I am referring. When will the Minister start to investigate that?
Comment on this
I am not sure if the Deputy welcomes the fact that we are now seeking to do more to tackle those who abuse the system that is meant to support those who are in need.
Comment on this
Why does the Minister not tackle white collar crime?
Comment on this
I am not sure if the Deputy supports the fact that the number of reports of social welfare fraud has doubled since that campaign was launched. He is wrong to even infer that this Government, this party or any of those who are associated with it do not take seriously the issue of fraud in all its different manifestations. It all needs to be tackled. The Government is committed to doing that. It is appropriate regarding the Government expenditure of €20 billion that all steps be taken to ensure that is no abuse of that funding and that nobody is defrauded of it. That is what the Department of Social Protection is seeking to do. I would have hoped that the Deputy would welcomed the fact that the number of reports of alleged fraud has doubled since that report was launched.
Comment on this
That is "alleged" fraud.