McDowell can pursue unfinished business of beef fraud

On May 8th, 1995, Michael McDowell, then a TD, wrote to the attorney general, Dermot Gleeson, drawing his attention to the findings of the beef tribunal report, published in August of the previous year. The relevant findings (pages 335 and 336) included:

"There was a deliberate policy in the Goodman Group of companies to evade payments of income tax by way of under-the-counter payments to employees. The making of such payments was concealed in the records of the company by recording fictitious payments to hauliers and farmers. The records of the company were misleading and calculated to deceive the Revenue Authorities in the event of an investigation and did so deceive them . . .

"The system of concealment was common in all relevant plants, was known to the top management of the group, undoubtedly authorised by them and, in the words of Mr O'Donoghue of the Revenue Investigation Branch, was `very well and professionally put together and had been organised by a large organisation and had been organised by professionals'." The amount involved in the tax fraud was £4.7 million (page 333).

Mr McDowell inquired of Mr Gleeson: "Is it your intention to take steps to ensure that the office of the Director of Public Prosecutions should immediately commence High Court proceedings to seek the disqualification of certain persons from acting as a manager or director of a company (under Section 160(2)(a)(b)(c) of the Companies Act, 1963), having regard to the finding that a fraud of the approximate value of £4 million was carried out by the `top management of the group'. . . and having regard to the fact that no criminal prosecutions seem to have been instituted against any of the `top management' in respect of this unprecedented crime of tax fraud."

Mr McDowell referred to newspaper reports, which stated that those in the top management of the Goodman Group had returned to the management and control of the group, and commented: "Either the law is going to be upheld by those who are charged with upholding it or it is going to be deliberately allowed to fall into disrepute on the grounds of political convenience". He inquired what consultations on the matter had taken place between the attorney general and the director of public prosecutions (the DPP).

Mr McDowell wrote in similar terms to the DPP, the Taoiseach and the minister for enterprise and employment. Over two weeks later, on May 25th, Dermot Gleeson replied to Michael McDowell, saying he had forwarded his letter to the DPP and consultations between the attorney general and the DPP were confidential. The DPP replied to Mr McDowell on the same day. He said the issues involved were more complex than first appreciated and he would write again to Mr McDowell.

Mr McDowell replied to Mr Gleeson saying, inter alia, he did not accept that the 1974 Act which set up the office of the DPP necessarily imposed confidentiality on consultations between the attorney general and the DPP.

On June 16th, 1995, the DPP replied more substantively to the representations from Michael McDowell. He wrote: "No individual has been specifically named by you (as a member of the `top management' responsible for this massive tax fraud) and my purpose in writing to you now is to inquire as to whether or not you are making specific allegations against, or are aware of any specific activity by, any named individual which might warrant disqualification (as a manager and/or company director)."

Michael McDowell responded to the DPP on August 1st, 1995, naming three people who were members of the "top management" of the Goodman Group at the relevant time.

Over the following months, Mr McDowell made several further representations to the DPP on the matter. On February 5th, 1996, a legal assistant in the office of the DPP wrote: "I can assure you the matter is still receiving attention in this office. It is expected that a definitive reply to your correspondence will issue in the very near future."

A year later Michael McDowell wrote again to the DPP saying: "Despite constant assurances that there would be some development, I am now left in a position that so much time has gone by since the Hamilton tribunal (report) was referred to your office that there is no realistic prospect of criminal proceedings or disqualification procedures under the Companies Act. I regret the failure of the State to take any effective action in this matter as nothing short of a huge scandal. I had hoped that there would be a more just outcome."

This elicited a response from the legal assistant in the DPP's office: "Lest silence on our part be misunderstood, it should be stated that the question of an application being made under s. 160 of the Companies Act 1990 is still being pursued".

(This correspondence was made available to me by Michael McDowell over two years ago for the purpose of making it public.)

The correspondence raises a number of issues and, first, an observation. It shows a determination on the part of Michael McDowell to pursue the impartial administration of justice and the concept of equality before the law, perhaps in contrast to the easy assumptions about his political inclinations.

However, it also raises questions about the capacity of the DPP's office to deal with white-collar fraud.

One of the factors that prompted this correspondence was the welcome on the part of certain ministers of the John Bruton government for the restoration of that same "top management" to the management and control of the Goodman Group.

Michael McDowell is in a position now to influence action on this issue. Although, as he himself observed in one piece of correspondence, the passage of time will not facilitate a prosecution for fraud or disqualification under the Companies Acts, surely an application for disqualification should be made in the High Court and a prosecution instituted for one of the greatest frauds in the history of the State, that is, other than frauds perpetrated by financial institutions?

One assumes he will have no compunction about making public the representations he makes to the DPP in this connection and the responses obtained. After all the 1974 Act setting up the office of the DPP does not require confidentiality. He is also in a position to influence the future organisation and policy of the office of the DPP. The present DPP is about to retire, and a decision is soon to be taken on the appointment of a successor. This offers an opportunity to reappraise the office and the role of the DPP.

It is not fair that only the crimes of the poor result in prosecution, especially when the harm caused by the crimes of the rich are so often so much more extensive.