ODCE FitzPatrick trial collapse
Deputy Micheál Martin and later Deputy Gerry Adams condemned the collapsed FitzPatrick trial as evidence of grave failure in white-collar crime enforcement. The Taoiseach said the ODCE is independent, that the Minister will report to the Dáil, and that the Government should review whether the office needs stronger support or reform.
The collapse of the longest running criminal trial in history, involving charges against Sean FitzPatrick, former chairman of Anglo Irish Bank, represents a damning indictment of the Office of the Director of Corporate Enforcement, ODCE, but also reflects poorly on the Garda and indeed on the office of the Director of Public Prosecutions. In essence, the State's capacity to investigate serious white-collar crime has been shown to be inept, negligible, wasteful and virtually redundant. It raises fundamental questions about the continued existence and effectiveness of the ODCE and makes it an imperative to consider alternative mechanisms to deal with white-collar crime in this country.
This has been, by any measure, a catastrophic systemic failure. The reputation of the ODCE is in shreds. There was a nine-year investigation that cost tens of millions of euro. Documents were shredded and the method of taking witness statements was fundamentally flawed. The judge described them as statements by committee. The ODCE was trying to build a case rather than investigating a case impartially and independently. There was a high degree of coaching and cross-contamination in the preparation of statements. The statement-making process involved negotiations between investigators and solicitors A&L Goodbody, and resulted in witness statements included in the book of evidence that had been drafted entirely by people other than the witnesses themselves.
In the judge's words, the statements of Mr. Bergin and Mr. Kelly were scripted, coached, and contaminated by the views of others, including the ODCE. They were cross-contaminated in every significant detail from start to finish. Significantly, the ODCE accepts this criticism. There had been missing evidence, evidence of innocence had not been pursued and so on.
The handling of this case shatters public confidence in the prosecution of white-collar crime in this country. The jury never got to make the call because of the shambolic handling of the case. This raises fundamental questions. Given the gravity of the case and what it reveals, will the Taoiseach ensure that the Minister for Jobs, Enterprise and Innovation, Deputy Mitchell O'Connor, comes before the Dáil to make a statement on the case and take questions? Can the Taoiseach confirm that the Minister has received a report from the Director of Corporate Enforcement in respect of this case or that she has sought such a report from him? Has the Government considered this? Let us be straight; there were indications of how this case might turn out for quite some time. All the issues have now been revealed in the public domain. It seems that the Government must have considered these matters at some stage. What is its response?
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I agree with Deputy Micheál Martin. Despite all the criticism of and cynicism about politics, at least there is political answerability in the sense that a Minister in charge of something like this would face instant dismissal. The situation is that this person has been acquitted and is not guilty of any offence. As a result, the taxpayer takes up all the costs involved. The indications given by Judge Aylmer are very clear, as the Deputy has pointed out.
The ODCE is a statutory independent body. Its mother Department, the Department of Jobs, Enterprise and Innovation, has no responsibility or power of enforcement. The ODCE takes its own legal advice. There were gardaí attached to the ODCE in the beginning but they were not involved in the way this case was taken. The judge did point out that the most fundamental error was the way in which they went about taking evidence from the auditors of Anglo Irish Bank, who were both from the firm of accountants involved. He said that it was intended that their statements would be taken in the normal way by members of the Garda Síochána who were then attached to the ODCE. Instead, however, the statements were obtained through solicitors from a legal firm.
The ODCE pointed out that it has now undergone substantial organisational change and that it was simply not equipped to undertake parallel investigations on the scale involved. I want to say this: I have not spent the past six years as head of Government and making very difficult decisions only to hear again now the allegation in respect of white-collar crime that people can walk away, that nobody is guilty and that nothing is being done about it.
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It is not an allegation.
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Let us, as a Parliament, decide what we must do with an organisation like the ODCE. I can confirm that when the Minister for Education and Skills, Deputy Bruton, had responsibility for jobs, requests by the ODCE to his then Department for resources were granted. Now I find that the ODCE says it was simply not equipped to take parallel investigations on the scale involved. I can confirm that the Minister has asked the Director of Corporate Enforcement for a full report, including on the role of all professionals involved in this case. That report will cover the issues involved since 2008 when this case commenced - almost ten years ago. Nothing is ruled out.
When Deputy Catherine Murphy had her full group, she put forward a proposition for a statutory standing body in the Dáil to deal with matters of corruption and so on.
The Minister will bring this before Government in due course. The Government will consider it next week, but I want the Minister to carry out an absolute review of what happened. It is not good enough. I agree with Deputy Micheál Martin. We cannot have a situation where an independent statutory agency that does not take legal advice from the Office of the Attorney General proceeds on its own and seeks resources from the Department of Jobs, Enterprise and Innovation. Despite provision of the latter, this trial collapsed. We know why the first trial collapsed.
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We heard the condemnation of a judge yesterday who had said that this case cannot proceed any further.
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The Taoiseach will have another opportunity. I know it is important, but he has exceeded his time.
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The Government will consider the matter on Tuesday next. The Minister will bring her report in due course. I would expect representatives from the ODCE to go before the relevant Oireachtas committee as well.
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Is the Taoiseach suggesting that the Government had not been forewarned about this catastrophe? Is he suggesting that the Minister, by means of an early warning system, would not have been alerted to the impending disaster? The dogs on the street knew about the impending disaster for some time. Indeed, the Director of Public Prosecutions was alerted to the issue as well as the manner and methodology of the collecting and making of statements as far back as 2010. Hence, I say there has been systemic failure across the system. People are operating in silos, apparently. Did the Minister received any report, any early warning or any notification whatsoever from her Department officials about this case or about the ODCE failures relating to it? Is the Taoiseach suggesting that it is only from now on that the Department and the Government are going to respond to this case? It is inconceivable that there would not have been early notification to the Minister about the impending disaster that was about to unfold in respect of the case.
The Taoiseach mentioned that it is a matter for the Oireachtas. It seems the Government does not yet have a policy response to this matter. I put it to the Taoiseach that the Commission on the Future of Policing in Ireland should be asked about the optimal structural, approach and methodology of dealing with and enhancing the State's capacity to combat white-collar crime. The public will be angry because the capacity of the State to pursue white-collar crime has been laid bare. Something has to happen as a result of this in terms of a proper considered policy response.
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We cannot simply prolong it in terms of reports.
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Will the Minister come before the Dáil this week?
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Yes, the Minister will come before the Dáil, make a full statement and answer all questions in so far as she can at this point.
Two things are important in this instance. First, the ODCE is an entirely independent statutory authority. Therefore, it is not subject to Government direction. Second, the trial was under way. While concerns were being raised, it would not have been possible to interfere with a trial that was under way in the courts.
The comments made by Judge Aylmer speak for themselves. They are an indictment of the ODCE. The ODCE had some success in 2014 and 2016. In April of this year, a person was arrested and charged with fraudulent trading based on an invoice relating to a fraud and entered a plea of guilty.
I think that the ODCE looked for resources and expertise, in so far as I can understand this, and that those requests were granted. When the ODCE says that it was simply not equipped to undertake parallel investigations on the scale involved, one would have thought that there would have been a specific request for the capacity to take in necessary expertise or whatever, either through Government or from outside sources, to deal with parallel investigations. In any event, it was not possible for Government to intervene in any way in a pending court case and was not possible for Government to give directions to an independent statutory body.
Since the current director was appointed, quite a number of changes have taken place. That does not deal with the fact that this case has gone on for ten years and is one of the longest and most expensive in the history of the State. The taxpayer has to pick up the tab here because the person who was acquitted yesterday has already been declared bankrupt.
The Minister will come before the Dáil, make a statement, give a report and answer questions on this. She is to receive a full and detailed report from the Director of Corporate Enforcement-----
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If there is going to be a decision to change Standing Orders, that is fine. While I am here, however, we have to adhere to the current rules. I know that Deputy Adams will adhere to his three minutes.
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I have raised with the Taoiseach on a number of occasions the lack of accountability with the high rollers, with the elites, with the golden circles in this State. This blatant lack of accountability contrasts sharply with how people of few means and little power or influence are treated. This goes to the heart of public alienation from politics and disillusionment with the agencies of this State. The Taoiseach's answers today will not assuage people's concerns.
I have also raised with him the need for this State to get serious about white-collar crime, the need to develop a proper and credible approach to investigating and prosecuting such offences. Yesterday, the State's trial of the former chairman of the Anglo Irish Bank, Seán FitzPatrick, collapsed. My focus is not on that trial, it is on role of the ODCE in this sorry affair and the lack of will by the establishment to investigate white-collar crime. In 2016, there were 35 staff in the ODCE. They were assisted by five gardaí. This gives an insight into the State's attitude towards white-collar crime and corporate enforcement. Under the Taoiseach's watch the staff of this office has been cut from 42 to 35. The number of gardaí has been cut by half. In 2005, 2006 and 2007, the then Minister, Deputy Micheál Martin, refused requests from the office to increase its workforce by 20. The office at that time described its resources as wholly inadequate. The Taoiseach of the day, Bertie Ahern, dismissed this. That was when the bankers were running amok. They cost the people of this State billions of euro and yet there is still no law against reckless lending. In 2014, the lack of resources to which I refer was highlighted by a senior barrister who said, "It's enough to make the tin-pot dictator of a banana republic blush." It was not a Shinner who said that, it was an individual who is an expert in white-collar crime and a senior barrister. Of course, if someone is accused of welfare fraud, the full weight of this Government will be visited on them. When it comes to wrecking the economy, reckless lending, fixers fees and complex interest relating to billions of euro, however, the State looks the other way. This Government spends €5 million on the ODCE. That is €5 million to investigate white-collar crime. As Deputy Pearse Doherty pointed out, by contrast it spends over €17 million on our membership of the European Space Agency. Is that where its priorities lie? It is little wonder that the judge in the Seán FitzPatrick trial pointed out the shortcomings of the investigation conducted by the ODCE.
Even at this late stage would the Taoiseach agree that we should draw on international best practice for tackling white-collar crime and that we should get rid of the ODCE and replace it with appropriate and properly-resourced agencies and strong, robust legislation?
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Deputy Adams makes the point that there was not a seriousness about the investigation. The point is-----
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-----that this office was set up to oversee companies and to deal with those that stepped out of line. It has its independence and statutory authority and therefore it was not subject, and is not subject, to direction by the Minister or the Government, although it was set up by the Government for a very specific purpose. When the current director was appointed with effect from August 2012, the ODCE's investigation on the FitzPatrick case had been completed and the file passed to the Director of Public Prosecutions. The scale and complexity of the investigation into the affairs of Anglo Irish Bank was unprecedented in the history of the State, as Deputy Micheál Martin pointed out.
In light of the complexities of modern corporate law enforcement, the current director has overseen a number of organisational improvements in the ODCE.
Those improvements include reorganising the structures of the office, recruiting additional expertise, most notably five forensic accountants, because clearly in the determination of the case in the first place the forensic analysis was not strong enough. A digital forensic specialist is due to begin with the Office of the Director of Corporate Enforcement in the coming weeks. Fundamentally, it has amended the investigative procedures used by the office with members of the Garda Síochána now taking the lead on all criminal investigations. This is where there has clearly been a weakness in the system. While the ODCE may deal with civil cases at a lower level, when it comes to serious criminal law, we need to be able to deal with it with serious criminal forensic intent. That obviously was not what was followed here, as outlined by Judge Aylmer in his comments yesterday. There have been a number of successful prosecutions. Clearly, the judge has made a decision. The trial is over and Mr. FitzPatrick is a free man. The taxpayer takes up the tab here. The Minister has requested a full and detailed report from the director of the ODCE. The Minister will come before the Dáil, make her statement and answer questions. The director is prepared to go before the appropriate Oireachtas committee. The Government will reflect on this next week and when the report from the director becomes available to the Minister, it will be published and made available for everybody. We need to reflect on the fundamental question here.
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-----or do we need far greater clarity and other expertise to be made available, either from Government level or elsewhere, to deal with complex criminal law?
I am informed the European Space Agency supports over 2,000 high-tech jobs in Ireland, with increasing employment and funding when it is necessary.
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The Taoiseach claims every request was honoured yet in November 2015 the then Minister, Deputy Bruton, turned down requests and said the ODCE, other offices, and their respective management "have had to reconfigure their organisations and adapt to a constrained-resources environment in continuing to deliver their mandates" because of the moratorium. That is a complete, sharp contradiction of what the Taoiseach has just asserted. The fact is there is one law for the elites. This is deliberate and very conscious. There is another law for everyone else. That is endorsed by the successive policies and the historical attitude of the two larger parties here. The fact there is no appropriate and robust legislation dealing with these issues is another example of the way the State turns the other way. The Taoiseach has also acknowledged this principal law enforcement regulatory agency has not conducted its business properly. For example, the chief investigator has no previous experience. He has admitted in evidence he made many fundamental errors, including the destruction of documents. Who appointed him as chief investigator given his lack of experience? To whom was he accountable? Why were gardaí not involved in the taking of statements from the two key witnesses? It goes on and on. The Taoiseach is responsible.
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Tá mé críochnaithe anois. I go back to what I said previously.
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Does the Taoiseach agree we should draw on international best practice for tackling white collar crime with appropriate and properly resourced agencies and strong robust legislation and get rid of this agency?
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Judge Aylmer made the point the ODCE completely lost sight of the nature and extent of the evidence on guilt and innocence. It completely lost sight of what was involved. The Deputy said there is no robust legislation in place here. In 2014 two gentlemen were convicted for the giving of unlawful financial assistance by Anglo for the purchase of its own shares. In 2016 both of them were convicted for fraudulent trading on foot of a plea of guilty. The second conviction was for failing to maintain a bank register of loans to directors on foot of a plea of guilty. The law in those cases actually worked in respect of white-collar crime. The Deputy mentioned comments made by the then Minister in 2015.
When the current director was appointed in 2012, the investigation of the FitzPatrick case had been completed. It is in the space before the current director was appointed that the judge made his damning comments in regard to the structure and management capacity of the Office of the Director of Corporate Enforcement, ODCE, at that time. I would expect that when Mr. Drennan appears before the Oireachtas committee, he will provide every detail necessary to point out the changes in structure that apply now. The question is whether the ODCE is now fit for purpose or whether we need to clarify where the criminal law kicks in.