Ministers say they were unaware of Flannery links

Minister for Finance

Michael Noonan

and Minister for the Environment Phil Hogan have both confirmed they were unaware

former senior Fine Gael strategist Frank Flannery was paid €60,000 per annum by a charity seeking tax changes to encourage philanthropic donations from wealthy people.

Spokesmen for both Ministers told The Irish Times yesterday they were unaware that Mr Flannery had worked for Philanthropy Ireland, which had engaged him in mid-2012 to promote such charitable donations from wealthy individuals.

A year before he began working for Philanthropy Ireland, Mr Flannery was appointed by Mr Hogan as the chairman of the Forum on Philanthropy, a Government- backed body to encourage such activities.

Philanthropy Ireland, which is backed by American businessman Chuck Feeney's Atlantic Philanthropies and by the One Foundation of Declan Ryan, son of the late Ryanair founder Tony Ryan, is a member of the forum.

But Mr Flannery did not disclose to either Minister when lobbying for tax changes that besides being chairman of the Government-backed forum, he had also been retained on an annual fee by the private group, Philanthropy Ireland.

One of the major proposals made by Mr Flannery, in his capacity as chairman of the Forum on Philanthropy, was changes in the tax laws that would benefit wealthy tax exiles.

Made contributions
Under his proposals, if those individuals made contributions totalling €15 million over a period of 10 years, they could avail of an extra 62 days in Ireland in a two-year period (at present they can stay 182 days in a single year but only 280 over two years: the proposal would allow them spend more than 340 days in Ireland over two years).

In a letter sent to the Department of the Taoiseach in November 2012, Department of Finance secretary general John Moran stated he did not favour the ideas. He referred to negative public perception and the reintroduction of the controversial "Cinderella rule" that allowed rich exiles to be present in Ireland but not to have that day counted as a residency day if they left before midnight.

Similar proposition
However, six months later, in May 2013, Mr Noonan wrote to the Oireachtas Committee on Finance asking it to consider a very similar proposal from Mr Flannery and the Forum on Philanthropy as well as the Worldwide Irish Funds.

He said the idea was an “attractive” one that would boost job creation in Ireland.

However, Labour members of the committee including Kevin Humphreys and Gerald Nash opposed the measure. Mr Humphreys said allowing such a concession to multimillionaires who did not pay their tax in Ireland would "make my stomach churn".

“I think the citizens will be very annoyed that we give them extra days for €36,500 a day. For those guys it is not a lot of money,” he said.

The committee responded to the proposal affirmatively but with strong reservations from Labour members. Ultimately, Mr Noonan did not include the proposal as part of his budget in October or in the subsequent Finance Act.

Meanwhile, Tánaiste Eamon Gilmore told a meeting of the parliamentary Labour Party yesterday he was lobbied at home and abroad by people seeking such changes, but insisted Labour was not going to allow "tax exiles have an easy ride".

Some Labour sources claimed senior party figures had stopped a push by Fine Gael to have it include changes to the tax code in the budget. This was disputed by the senior Coalition partner, who in turn said it was Mr Gilmore’s idea to refer the proposals to the finance committee.