Criminal Justice (Corruption) Bill – Submissions

Posted by Elaine Byrne

The Joint Committee on Justice, Defence and Equality has invited written submissions from interested groups or individuals in relation to the Heads of the Criminal Justice (Corruption) Bill. If you wish to make a written submission you can send it to the Clerk to the Committee at: justiceanddefence@oir.ie before the end of August.

My Sunday Independent article on the Corruption Bill.

The following is a piece I also wrote for the University of New South Wales on the Corruption Bill.

“The collapse of the domestic banking sector in Ireland has created the greatest challenge to the State since it was founded in 1922.” The Irish parliamentary Committee of Public Accounts did not mince its words when it published its Report on the crisis in the domestic banking sector in July.

The ‘unprecedented’ direct cost to the State – through the recapitalisation of the banks – is now estimated to be €64.1 billion, the equivalent to 41% of GDP in 2011. In other words, approximately seven times what the State spends annually on education; over four times what it spends annually on health and almost twice the State‘s total tax revenue.

An IMF Working Paper last June was just as blunt. “Ireland holds the undesirable position’ it said, as having ‘the costliest banking crisis in advanced economies since at least the Great Depression.’

My book, Political Corruption in Ireland 1922-2010, A Crooked Harp? makes the argument that the extraordinary depth of Ireland’s economic collapse was partially due to undue influence in policy making.

Key political decisions on property tax reliefs and incentives schemes for property developers, which ultimately inflated the price of land and overheated the market, were executed within a closed system, allowing regulatory capture to occur. Ireland had the highest per capita building rate in Europe in 2005 and by 2007, Ireland, along with Spain, was producing more than twice as many units per head of population than elsewhere on the continent.

Over a third of the disclosed donations to Fianna Fáil, the main party of government from 1997-2007, originated from the construction and property related sectors who directly benefited from these tax incentives. The decision makers who failed to counteract the property-market bubble were dependent on these same vested interests for their political funding.

The upshot of the Ireland’s property crash was the subsequent intervention by the troika of the International Monetary Fund, the European Central Bank and the European Commission in 2010 and the loss of Irish economic sovereignty. It is in this context that the Criminal Justice (Corruption) Bill 2012 is revolutionary.

Under this statute, the Minister for Justice and Equality will consolidate a raft of legislation dating back to the Prevention of Corruption Act 1889. It will also meet the obligations of the United Nations Convention against Corruption in 2011, which Ireland finally ratified in late 2011. The proposed legislation incorporates measures recommended by the Mahon corruption tribunal report.

The Corruption Bill introduces new concepts which capture broader definitions of corrupt activity. The concepts and penalties are innovative and fly very close to the wind in terms of the presumptions of innocence and the right to privacy of an individual’s financial affairs. It will make it easier to prosecute corruption and provides new tools in the armoury of the judiciary, prosecutors and police.

The offence of ‘Active and Passive Trading in Influence’ is one of the most radical measures. The direct or indirect inducement by means of corruptly offering, giving, attempting or agreeing to give any gift, consideration or advantage, in order ‘to exert an improper influence over the acts or omissions of an Irish public official’, is deemed an offence.

The ‘Presumption of Corrupt Enrichment’ shifts the onus of proof to the individual under suspicion. If an Irish public official has a standard of living above their official income then it is presumed that it comes from corruption.

This clause comes too late for Charles J Haughey, a Prime Minister for seven years in the 1980s and 1990s and subsequently found corrupt by an official inquiry. The controversial politician had  dismissed his unexplained wealth, which included an island, a 60 foot steel-hulled yacht and a 270-acre estate as “jealousy” of political opponents.

The offences of “Active and Passive Corruption” and “Making Reckless Payments” recognize that impropriety is as much implicit as it is explicit. For instance, if a businessman ‘gives, attempts or agrees to give any gift, consideration or advantage’ to a politician for the purpose of inducing or rewarding her for a decision or omission they made, then that is deemed corrupt.

An implicit threat or intimidation of a public official is to be an offence as is the employing an intermediary to bribe or corrupt a public official. Disclosure by a public official of confidential information for gain is outlawed, for example, tipping off to facilitate insider dealing.

The onus of responsibility is shifted to business under Head 13 of the Bill, “Offences by Bodies Corporate and Unincorporated Bodies.”

The new law provides that corrupt practices by ‘a director, manager, secretary, officer, employee, subsidiary or agent of a body corporate’ are to be automatically imputed to the company. Businesses are accountable for the sins of their employees and must “take all reasonable steps” and “exercise all due diligence” to avoid criminal liability.

Punishments have been strengthen so that unlimited fines now apply for all offences. If a public officeholder is found guilty of an offence, a court can order the forfeiture of her public office for up to ten years. This also applies to elected office. The sovereignty of the people is deemed to be overruled when the public trust has been broken and a politician removed from office is constitutionally barred from running in an election for a decade.

The last of Ireland’s three corruption inquiries finally reported in 2011. Established in 1997, these inquires into political donation scandals, local government graft and unorthodox procurement decisions, found that misuse of power had occurred due to trading in influence and not just explicit corruption.

The proposed new law signals an intent by government and the wider political class that past “political culture” and influence by vested interests is no longer acceptable. This Bill is part of a quartet of laws to update the Irish ethical framework, the others being proposals on whistle-blowing, lobbying regulation and political donations.

An ethical revolution.

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18 thoughts on “Criminal Justice (Corruption) Bill – Submissions

  1. Absolutely wonderful. A great big golden bolt on the stable door when all the horses have bolted – and the mares that will foal the next generation of horses needing restraint won’t be conceived for years.

    Even if this proposed legislation were to be enacted as it stands – unlikely given its assault on the presumtion of innocence and the shift in determining the burden of proof – it won’t make a blind bit of difference to the snail’s pace at which Ireland is recovering economically from this fiasco or to its future economic performance.

    Sufficient domestic changes have been made and EU institutions and procedures are being put in place to prevent the fiscal stupidity, financial regulatory blindness and property market greed and lunacy that caused this fiasco. And I would contend that the corruption this legislaion is intended to deter and punish played a relatively minor role. Inevitably, there will be another major screw-up again sometime in the future. But it will be occasioned by a completely different – and difficult to forecast – combination of stupidity, blindness, greed and lunacy.

    Sufficient anti-public interest and corrupting, but officially and legally sanctioned, power relations remain intact (and are totally insulated from the reach of this legislation) to prevent the political and structural reforms that are required to secure a timely and effective economic recovery. Having outlined this context, it would be potentially libellous to name the offending parties, so I won’t as I don’t want to expose this site to such a risk. But everyone knows who they are.

    • Thanks, Elaine. But I think I’ll leave this to them what know about these things. In the meantime, I’ll continue to focus my fire on the big beasts that are roaming free, continuing to cause havoc and who would be totally untouched by this legislation.

  2. If you don’t mind me saying Paul, but that sounds like a cop-out. A submission can of course include suggestions of those untouched by the legislation and proposals for change. Posting comments on this forum about how terrible the legislation is, yet not contributing to that legislation when the opportunity is given, is a bit of a waste of time.

    • No problem with you calling it a cop-out, if you so wish, but one has to question the Government’s motivation for introducing this legislation at this time without any apparent overt internal or external pressure. A government acts voluntarily for three reasons – and for three reasons only: 1. to enhance its chances of re-election, 2. to prevent a diminuition of these chances and 3. to damage or cause mischief for its political opponents. When one sees how far it has cunningly and deviously deviated from the commitment to political reform (even in the watered down PfG version) and the structural reforms spelled out in the original EU/IMF MoU (and subsequently whittled down almost to nothingness), one is entitled to be a tad sceptical about this effort, given the displacement activity it will generate and the public and media distraction it will cause.

      My suggestion is that one should avoid getting caught up in the displacement activity or being distracted. When a government says: ‘look here’, that’s the last place one should look.

    • I’ve participated in public consultation processes for the last nine years in Ireland, in the UK and at the EU level. I’ve even participated in public consultations on the process of public consultation. They are a total and utter farce. What time does your spaceship leave for your planet?

  3. Jeez, Paul, you are a fierce one! 🙂 Which is a great characteristic for cutting through all the mountains of BS, but please do cut the girl some slack! (though no doubt she’s well used to robust debate, just my paternalistic side showing here I think 😉 )! I suspect Dr. Byrne was still only in kindergarten when this particular horse was stabled. Can’t say I know all that much about this “golden bolt”, but hopefully there’ll be a horse back again in the stable someday. And a “golden bolt” might be no bad thing then! Of course if the golden bolt is merely used by the owner to distract from the current crappily constructed stables (as I think may be some of your point) then it could ultimately do more harm than good. But wouldn’t blame “golden bolt” makers for that!

    • @Finbar,

      I might appear fierce, because I am angry. I grew up witnessing how long it took to even begin to recover from the malign effects of Dev’s vision of autarky, experienced the impact of the economic lunacy largely perpetrated in 1977 by Martin O’Donoghue and suffered through the subsequent GUBU decade until some limited order was restored. In the following decade some fundamental problems continued to be ignored, but sufficient policy changes were effected to provide a basis for much increased economic prosperity and general well-being. The rot started to set in fairly rapidly after 1997, but the music was playing loudly, the party really started to take off (but not for everyone) and those on the dance-floor felt they had no option but to keep dancing. Anyone who had the effrontery to point out that all this would not end well was either ignored or told to shut up – or even to commit suicide. The lights went out in Sep. 2008 and since then it’s been emergency power supplies and back-up generation.

      The music is still playing for many of the party-goers, but they conduct their affairs much less ostentatiously now. Life has become very harsh for those who never really participated in the party and many who had reasonable aspirations of joining the party when it was in full swing find they are excluded – probably permanently. Most of the higher-ranking party-goers, who could influence the organising of the events and ensure participation was extended, are determined to retain their relative positions in the pecking order; and this means that increased exclusion of the ‘unsuitables’ is the order of the day.

      In an open letter to FDR in 1933 (it should be Googleable – I have a text version) Keynes drew a clear distinction between recovery and reform (he even capitalised them). Recovery was urgent; reform was important. But an excessive focus on reform could dissipate limited political, policy-making and administrative resources and might actually impede recovery. Keynes was too great-hearted a human being to register that governing politicians might not be desperately interested in recovery if the steps required might enrage any of the sectional economic interested to which they were beholden – and if it was possible to project an optical illusion under the rubric of reform that might mollify and distract the masses.

      Welcome to Ireland 2012.

      And as for any offence I may have caused, I suspect your expression of male chivalry might be deemed more offensive.

      • Well said, Paul (interesting point too relating to recovery/reform and the Keynes/FDR letter which I hadn’t seen before and, yes, easily found online: http://newdeal.feri.org/misc/keynes2.htm ).

        And, yes, no doubt by today’s standards I was being terribly sexist. It’ll be some time in a reeducation camp for me then! 😉

  4. @Finbar,

    Thank you. On this reform/recovery distinction – while recognising that both must be pursued in tandem – a perfect example of the ability to waffle on interminably about reform while largely ignoring – and, indeed, waffling on to avoid addressing – what is required for recovery is the MacGill Summer School gabfest on “Reforming and Rebuilding our State” – at which Elaine Byrne spoke and has provided some edited highlights here:
    http://www.independent.ie/opinion/analysis/elaine-byrne-male-over-50-overpaid-official-ireland-still-rules-3182547.html

    The economic policy consensus seems to be that ireland must stick to the fiscal adjustment programme, that some relief will be secured on the Anglo/INBS-related debt burden, that most of the ‘internal devaluation’ has been effected (aided by a decline in the Euro), that only minimal additional structural economic reforms are required – anything meaningful or effective could derail the whole process, that it will take time to work through the overhang of public and private sector debt and that exports will provide the main source of economic growth.

    While elements reflect aspects of the current reality, the only rational response to this cunningly crafted and contrived confection is “sacs that store male sperm”. But it is precisely what Official Ireland (described by Elaine Byrne as predominantly male, over 50 and over-paid – and probably numbering no more than 100,000) wants – and what they will get. The millions of citizens outside these charmed circles will have to shift for themselves.

    Nothing much will happen until enough of these citizens wake up and grasp what is actually happening. We probably just have to keep hammering away at the deceptions perpetrated and illusions projected by Official Ireland in the hope the message will get through. These deceptions and illusions can’t be sustained indefinitely. Like the Provos’ message to Thatcher ater the Brighton hotel bombing, we need to be lucky just once; they have to lucky all the time. Their exercise of power and influence means that they can minimise their reliance on luck – but they can’t eliminate this reliance.

  5. @Finbar,

    Thank you. Submitted a comment in response, but apparently it has gotten lost in the ether. Same thing has happened on another blog. I must be cutting a bit too close to the bone.

  6. Yet again it seems the ‘system’ is to get the blame. Sometimes I feel sorry for the system because it seems to me the system was fine. It was the people within the system who were the problem.

    We had the same flawed system when Garret FitzGerald was in government but there isn’t a single example of dodgy goings on when he was in power – plenty of bad decisions made with the right intentions and I can cope with that.

    A bit more effort on why Irish people are so willing to tolerate such low standards might be a higher priority than trying to close the door when the horse is well gone. Don’t the changes imply we expect this to happen again so that when it does we are better prepared to charge those who caused it – instead of making sure it doesn’t happen again?

    Look at the number of people who came out to cheer Sean Quinn – that level of denial is shocking and should be a huge cause for concern. It shows that despite everything we have learnt absolutely nothing and even more worrying, we have even less faith or loyalty to the concept of the state as Quinn was allowed to deflect blame onto the state and ‘them’ inside the Pale.

  7. Nice post, Elaine, and major congrats on the book – that rarest of things n academic bestseller! So the new law seems to bring us up to date with international best practice on corruption. Yet, I’m guessing that there remain mountains of corrupt decisions and processes in our modern history that have made life worse for the many, to enrich a few selfish individuals.

    Do you think there’s any sense in trying to purge some of these decisions, and even claw back some money or property for the taxpayer?

  8. I think Elaine Byrne, like most of us, knows that there is a more fundamental change needed than just changing our anti-corruption regulations, as can be seen from her excellent article below..

    http://www.independent.ie/opinion/analysis/elaine-byrne-male-over-50-overpaid-official-ireland-still-rules-3182547.html

    Her article is very good at tracing the victims and impact of groupthink in Ireland but it does fall short on solutions beyond a cull of Irishmen aged above 50. I’ve written about this topic in this forum before but two areas that get to the heart of the problem are the role of the media in Ireland and the exclusion of Irish citizens from the electorate. Solving this latter issue would go quite some way towards dealing with the first, as the groupthink exhibited by the media would clearly be more circumscribed if all Irish citizens chose our elected officials. The American organisational and quality expert Deming wrote that systems cannot learn from within themselves. Groupthink in Ireland cannot be overhauled without first tackling these two central issues which are clearly less radical than Ms. Byrne’s proposal.

  9. When Official Ireland is minded or moved to identify, condemn and punish what it considers ‘corruption’, what, in many, many cases, it is identifying, condemning and punishing is often perfectly rational behaviour by those who are excluded by the power and influence exercised by Official Ireland. (And there will always be some corruption; the challenge is to minimise it.)

    It seems that FOT may have had some sort of an epiphany in today’s IT:
    http://www.irishtimes.com/newspaper/opinion/2012/0807/1224321629744.html

    The penny seems to have finally dropped with him that there is a world of difference between the constraints and incentives experienced by citizens who live outside the Pale – and their behaviour – and those who exercise power and influence within the Pale, but who seek to project and apply it beyond the Pale. (Conversely, there are many citizens living within the Pale who are even more disenfranchised than their compatriots beyond; and the ‘barons’ who exercise power and influence beyond the Pale transact much of their business in the Pale and derive much of their authority from decisions made in the Pale.)

    Effective democratic governance is the best known means of minimising corruption. With excessively centralised governance, excessive executive dominance and a hugely expansive state apparatus this requires the decentralisation, re-balancing and diffusion of power – and effective constraints on the influence of wealth.

    But these are the last things Official ireland will tackle. It will ‘look up every tree in North County Dublin’ to avoid tackling them and focus on all sorts of displacement and distracting activities. This blog is a perfect example.

  10. No need to panic. The Taoiseach is on the case. From his Beal na mBlath oration:

    “..I am absolutely resolute that the crisis we inherited is one we will never pass to another generation of the Irish people. We’re resolute in our reform agenda. Resolute in making the changes that the people know we need to make in Irish public and institutional life.”

    and

    “With our reform agenda, we too are making difficult decisions, we’re respecting public trust we’re keeping faith with the people. Through radical legislation, we’re tackling political corruption. Through our Constitutional Convention Irish citizens and politicians from both north and south will come together to discuss constitutional reform – a new concept in our country……We are undertaking a major reform of the political system itself. In the Dáil, the Seanad, and in Local Government it’s time for real change.”

    I expect the IT was a bit tongue-in-cheek with its “Beal na Bla” editorial – the mouth of the blah, blah, blah…

    It’s no wonder so many voters exhibit a stoical cynicism while trying to keep depair at bay. But I suspect many are biding their time until they get the next opportunity to cast their judgement – as they did between Sep. 2008 and Feb. 2011.

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