Committee does not have information to investigate Wallace

Thu, Jul 12, 2012, 01:00

A DÁIL committee has concluded it is powerless to proceed with an inquiry into the tax affairs of Independent TD Mick Wallace because it did not receive all the information it requested of him.

The Committee on Members’ Interests said it would be unable to consider whether it could sanction Mr Wallace arising from his admission that he deliberately underdeclared the VAT liability of his construction company by €1.4 million.

It had sought information that would have determined if contact was made with the Revenue Commissioners before or after his election to the Dáil in February 2011.

In a statement issued following its meeting yesterday, committee chairman Thomas Pringle said he was satisfied that it had “no jurisdiction to investigate the tax compliance” of Mr Wallace or his firm MJ Wallace Ltd as it was a matter that fell to the Revenue Commissioners and, if appropriate, the Director of Public Prosecutions.

“Unless and until Deputy Wallace provides the information sought, together with supporting evidence from the Revenue Commissioners, the committee is of the opinion that it will be unable to determine its jurisdiction in the matter,” said Mr Pringle, an Independent TD for Donegal South West.

Mr Wallace’s company was on the Revenue Commissioners list of defaulters last month. Its total liability came to €2.1 million, €700,000 of which was made up of fines and penalties. Mr Wallace was a director of the company and admitted the money owed to Revenue would probably never be paid back.

In an interview with The Irish Times last month, Mr Wallace told how he had come to make the false declaration. He said his construction company had run into difficulties in mid-2008 over a €7.5 million bank loan drawn down in April 2008.

He said he approached the Revenue in late 2010 about the VAT underdeclaration that had been made in January 2009, beginning the process that culminated in the company being named on the defaulters’ list.

The committee was of the view that it would have jurisdiction to inquire if Mr Wallace had breached standards or Oireachtas rules only if he had made contact with the Revenue Commissioners over the VAT underdeclaration after his election to the Dáil in February 2011.

In its report, the committee notes that it initially sought seven pieces of information from Mr Wallace. These included a number of dates it deemed important, details of his involvement in making the VAT underdeclaration and of the settlement agreement reached with the Revenue.

The report said Mr Wallace’s initial response dealt with only one of the questions posed. When the committee sought further details, it received a letter from Mr Wallace’s solicitors which it said argued the information sought “went beyond what was necessary to determine the issue of jurisdiction”.

It also said the solicitors had deemed it “wholly inappropriate for the committee to embark on expansive and unnecessary queries before the jurisdiction of the committee was conclusively established”.

The committee said it responded and reiterated that it was only attempting to determine whether the issues raised by Mr Wallace’s admission were matters that it might and should investigate.

The report said a final response from Mr Wallace’s solicitor on Tuesday “again questioned the purpose of the committee’s request for additional information”. Attempts to contact Mr Wallace last night were unsuccessful.

Mr Pringle said the episode highlighted that the Ethics in Public Office Act 1995 and the Standards in Public Office Act 2001 posed difficulties for the committee from legal and procedural perspectives in carrying out its functions.