Committee Reports > List of Committees > Dáil > 1993 > Select Committee on Enterprise and Economic Strategy > Interim report - Glackin report

DAIL EIREANN

SELECT COMMITTEE ON ENTERPRISE AND ECONOMIC STRATEGY

INTERIM REPORT ON THE GLACKIN REPORT

INTRODUCTION

1.The Select Committee on Enterprise and Economic Strategy was established by Order of Dáil Eireann of 7 April 1993. The Committee’s Terms of Reference and membership are included in Appendices 1 and 2.

2.The Select Committee reports progress in the matters referred to it and has agreed the following interim report.

REFERRAL BY DÁIL

3.The Report of the Inspector appointed under section 14(1) of the Companies Act, 1990 to investigate the membership of Chestvale Properties Limited and Hoddle Investments Limited (hereinafter referred to as the Glackin Report) was referred to the Select Committee by Dáil Eireann on 9 July, 1993 in accordance with paragraph 1(iv) of its Order of Reference empowering it to discuss the matter and make observations and recommendations thereon.

INADEQUACY OF THE COMMITTEE’S TERMS OF REFERENCE

4.The scope of a Committee’s deliberations is defined by the Order of Reference and must be confined within the limits so imposed. The four new legislative Select Committees were expressly not given the power to send for persons, papers and records, which power would allow for witnesses to be examined in public and minutes of evidence to be published subsequently. In addition Members understand that the scope of the draft legislation on privilege and compellability which is on the Government’s legislative programme for this session initially will only encompass those committees which already have the power to call for persons, papers and records. In the light of this development and the fact that many issues it might wish to pursue will be outside its remit, the Committee recommends that early consideration be given to extending the powers of this Committee to bring it within the ambit of the draft legislation.

5.Whilst the interpretation of a Committee’s Order of Reference is a matter for the Committee itself, Members are conscious that they cannot seek to make any arrangements which would be ultra vires and that they cannot adopt arrangements which could be interpreted by the Dáil as expanding the Committee’s powers, however restrictive they may interpret them to be. The fact that the Committee might not be acting within its terms of reference, might in certain circumstances have implications for privileges enjoyed by virtue of membership of the Dáil under the Constitution and membership of the Committee under the Committees of the Houses of the Oireachtas (Privilege and Procedure) Act, 1976. The Select Committee therefore agreed to continue its deliberations within the limits imposed by its Terms of reference and to report to the Dáil on any inadequacies in its powers encountered in the course of its investigations.

OVERLAP WITH OTHER OIREACHTAS COMMITTEES

6.Other Oireachtas Committees with greater powers of inquiry and to whom the draft legislation on compellability will apply could also in due course examine issues arising from the matters investigated by the Inspector. The Committee of Public Accounts may examine issues such as the loss of revenue to the State or the cost of the Inspector’s inquiry. The Joint Committee on Commercial State-sponsored Bodies, under its terms of reference, has the power to take evidence from Telecom Eireann in relation to its reports, accounts and overall operational results; and in the light of these reports to examine issues relating to board responsibility, structure and organisation, accountability and financing, together with the relationship with central Government and the Houses of the Oireachtas.

7.The Select Committee accepts that such matters of accountability relating to Telecom Eireann itself would more appropriately come within the ambit of the Joint Committee which has the power to hear evidence in public. The Select Committee’s examination of the Glackin Report in no way precludes at a later date the initiation by the Joint Committee of an inquiry into Telecom Eireann’s role in the events which led to the appointment of the Inspector.

ISSUES FOR CONSIDERATION

8.The narrow statutory remit of the inspector was limited to determining the membership of and the true persons who are, or have been, financially interested in the success or failure (real or apparent) of the aforementioned companies or able to control or materially to influence their policy. For this reason the Select Committee decided from the outset that its deliberations should not parallel the investigations already carried out by the Inspector but should address in a political fashion the deficiencies and inadequacies that have been exposed by the Report.

9.At its first meeting to consider this matter on 21 September the Committee decided that the following issues of public policy should be examined and recommendations made thereon:-

WRITTEN SUBMISSIONS

10.Although the Committee lacks the power to call for persons papers and records it does have the power to request written submissions and it was agreed that this would be the point of departure. The Chairman wrote to the Departments and bodies to whom the Report had been referred by the Minister for Enterprise and Employment for information on their investigations into the implications arising from the Inspector’s conclusions. The replies received are reproduced in Appendix 3.

11.Some of these replies are peremptory and inadequate for the Committee’s purpose and also contain points which would require to be teased out with the relevant officials. However, the Committee has no appropriate means for such scrutiny and it will be extremely difficult to proceed in its investigation of the issues without civil servants, public servants and other individuals appearing before it to answer questions from Members.

12.Issues arising from responses received which prima facie would require further elucidation include the following:

(1) Revenue Commissioners

This response would appear to imply that the tax laws are adequate in any of the circumstances outlined by the Inspector, yet the Glackin Report itself indicates that the various transactions had successfully deferred a capital gains liability. The Committee would like to reconcile both of these conflicting documented views. There are other inconsistencies which the Committee would like clarified. For example, on the one hand the submission states that substantial progress has been made in the Revenue inquiry but later states that absence of agreement as to some basic facts may lead to delays and finally it concludes that in the light of the information which has emerged that Revenue is confident of a satisfactory outcome.

(2) Department of Justice

The committee would like to query the following terse dismissive statement -

“If it appears, after due consideration of the Glackin Report, that changes in the criminal law are needed in the light of that report, suitable provision will be made in the legislation proposed on fraud and dishonesty.”

(3) Department of Enterprise and Employment

This Department states inter alia-

“The merits of using certain other provisions of the Companies Act, 1990 continue to be explored. For example section 19 of the Act empowers the Minister or an officer authorised by him to require the production by a company of books or documents, in various specified circumstances, including the suspicion of fraud or unlawful purpose. However, the use of such provisions might be limited by the availability of relevant resources within the Department and the question of the perceived impartiality of any investigation carried out by an officer of the Department.”

The Committee cannot understand what is meant by the fact that resources might be unavailable in the Department to carry out a statutory function and also the “perceived impartiality” of a Departmental investigation.

(4) Central Bank

The Director of the Central Bank states they are only at liberty to disclose information when required by court proceedings or else in confidence to the Department of Finance. The Committee wonders what the position might be if the Department of Enterprise and Employment were carrying out an investigation under section 19 of the Companies Act, 1990 (see Appendix 5).

(5) Department of Transport, Energy and Communications

In his response the Secretary of this Department states that Mr. Glackin’s reports exonerated Telecom Eireann directors and staff from any wrongdoing. The committee would view the matter in a different light insofar as the charge to be laid against Telecom is not one of fraud or criminal activity but rather managerial incompetence. The Committee is of the view that this issue requires further examination, including if necessary an inquiry by the Joint Committee on Commercial State Sponsored Bodies.

PROCEDURAL OPTIONS

13.The Committee acknowledges that it cannot adopt any arrangements which could be interpreted by the Dáil as expanding its powers, however restrictive it may interpret them to be. Therefore it has sought to examine the possible procedural options open to it in order to fulfil the task assigned to it by the Dáil. These options include the holding of meetings in private session, attendance by Ministers, secondment of relevant officials to assist the Committee or the engagement of consultants.

14.Informal invitations to attend private meetings could issue to civil servants, public servants, other individuals or Ministers and has been done in the past by Oireachtas Committees. However, there is no certainty that such invitations would be accepted because of the committee’s lack of power to call for persons or to compel attendance, uncertainty regarding the privilege of freedom of speech and immunity from suit for witnesses and in view of the contentious nature of the subject matter under review. In any event the Committee is of the view that meetings held in private would run counter to how a Parliamentary Committee should function in investigating issues of public concern.

15.There is also precedent for Ministers and indeed European Commissioners attending committee meetings in private where there was no power to call for persons. Ministers would have the protection of absolute privilege as defined in the 1976 Act by virtue of their Dáil membership. Section 2(1) of the Act [see Appendix 5] states inter alia -

“A member of either House of the Oireachtas shall not, in respect of any utterance in or before a committee be amenable to any court …”

However, the Committee feels that examination of Ministers only would not be the appropriate way to proceed to investigate a matter of public concern which has been referred to it by the Dáil.

16.The Committee is of the view that rather than engage consultants, it would be preferable firstly to exhaust the resources of the public service including Governments Departments and if feasible, the Office of the Comptroller and Auditor General. Therefore, the Chairman sought secondment for short periods of civil servants with the relevant expertise to the Select Committee for the duration of its examination of the Grackin Report to analyse issues and to assist in the formulation of observations and recommendations as is required under the Terms of Reference. The Committee accepts that it may emerge at a later date that independent legal advice is also necessary. The only positive response received at the date of adoption of this report has been from the Minister for Enterprise and Employment which is conditional upon the other relevant Departments also cooperating with the secondment of staff.

CONCLUSION

17.The Committee acknowledges that under its present terms of reference it can only conduct an examination of a very limited nature and that even if full cooperation and asistance were forthcoming from government Departments/agencies it would still be confined to discussing public policy issues in broad terms. However, the Committee is willing to continue the task entrusted to it by the Dáil but this is dependent on acquiring the appropriate expertise.

18.The Committee wishes to acknowledge the effectiveness to date of the new committee system in its legislative function and in the examination of Estimates, but it must be remembered that by virtue of their terms of reference these committees also have a deliberative and scrutiny function. Without appropriate powers and resources thenascent select committee system could lose its relevancy in relation to this latter function, as has occurred to this Select Committee in its efforts to examine a report duly referred to it by the House.

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Toddy O’Sullivan T.D.

Chairman.

20 October, 1993.