Revenue's inactivity kept tax frauds alive

Around Christmas, 1997, or in early 1998 I telephoned Denis Foley and asked him if he had an Ansbacher account. Ursula Halligan, now political correspondent with TV3 and then an investigative reporter with Magill, of which I was then editor, had been told he and others were Ansbacher account-holders. The information came from what is known in the business as "an impeccable source", someone who could be expected to know who had and who had not Ansbacher accounts.

Denis Foley expressed astonishment at the question and went on to say at some length how ridiculous it was even to suspect he would ever have had the kind of money that might be lodged in an Ansbacher account. He said he was a simple Kerry TD who had no money and no need for such things. I did not know Denis Foley then (nor have I got to know him in the meantime), but I was entirely convinced by him. I told Ursula Halligan I did not believe someone who had denied any involvement in such affairs or having any money with the conviction and vehemence he conveyed could possibly have misled me.

She checked back with her source, who repeated that Denis Foley did indeed have an Ansbacher account. But I had been convinced and we published nothing about Denis Foley. Nor did we publish anything about the others named by the same source as having Ansbacher accounts.

What is remarkable about this, apart from my gullibility, is not that Denis Foley has been found to have had an Ansbacher account. What is remarkable is that a well-placed person was able to give Ursula Halligan the names of people who had Ansbacher accounts when, at that time and for a long time afterwards, the inspector appointed by Mary Harney to inquire into these accounts, Gerry Ryan, and the Moriarty tribunal did not know about it.

It could hardly be that neither the inspector nor the Moriarty tribunal interviewed this person about Ansbacher accounts, which suggests there was a conspiracy on the part of certain individuals to subvert the work of the inspector and the tribunal and that they were engaged in this right through last year.

Certainly, it is difficult to fathom why Padraig Collery did not divulge to the Moriarty tribunal the documents he gave to the safe keeping of his former secretary and which contained at least some of these previously undisclosed names. It seems some of the people who had these accounts continued to operate them right up until recently and, quite possibly, are still at it. This bespeaks a confidence that they can continue to operate outside the law and the tax authorities no matter what inquiries are under way.

It is now perfectly obvious that at least by last May Denis Foley knew he was the holder of an Ansbacher account - he was given a statement then of his account on Ansbacher notepaper.

It seems obvious also that, like the other Ansbacher account-holders who continued to operate their accounts, he remained confident that nobody would find out about it even while he was part of an inquiry into another tax fraud as vice-chairman of the Committee of Public Accounts. He and they had good reason for believing that they would never be caught.

We know from the DIRT inquiry that AIB got away with a tax scam for several years while the files on the fraud remained on the floor of the office of an inspector of taxes. Throughout these years the tax authorities knew full well what AIB had been up to and chose to do nothing. But much more remarkable than that is that these same tax authorities knew the DIRT fraud was the cover for a far more major fraud - the wholesale cheating on income tax, amounting to billions of pounds.

Right at the time when the Exchequer was strapped for cash, as a result of which hospital wards were being closed around the State and social welfare payments remained well below the poverty line, the Revenue Commissioners knew full well there was massive tax evasion and did nothing about it. This was although they had the knowledge and the powers to do so, as they proved in one of the few cases they pursued in relation to the bank accounts in Milltown Malbay. Not alone did the tax authorities do nothing about this, but the Committee of Public Accounts did nothing about it, apart from remarking briefly on it and then passing rapidly along.

That same committee has been showered with lavish praise from all quarters, including its own quarter, but what did it find out that we did not know already from what had been published in the media and, more significantly, what the Comptroller and Auditor General discovered in the course of his inquiry? The committee failed to find out by whom and why a directive was issued within the Revenue Commissioners in the mid-1980s not to investigate the non-resident accounts and why no action had been taken on the AIB fraud for seven years.

Worse than that it made no effort to inquire into the scale of the income tax fraud that lay behind the non-resident accounts and why the Revenue Commissioners did nothing about it. Would it be any wonder if Denis Foley did not feel even a quiver of anxiety as he took part in a tax inquiry, when that inquiry was missing the main issues?

Right at the heart of the tax frauds is a belief that, fundamentally, taxation is theft - that the tax authorities are taking "our" money, monies which we are entitled to, not the "freeloaders" on the social welfare system. This conviction in the ownership of the monetary return on our labours is now part of conventional ideology, best represented by the Progressive Democrats.

There is no appreciation of the arbitrariness of the market system which rewards so highly work that often is relatively socially useless (stock-broking, for instance), or actually socially harmful (choose your own), and rewards so little work that is often so socially useful (the rearing of a family, for instance, or teaching or nursing or waste disposal or fire-fighting).

There is little acceptance then of the necessity for the State to intervene to even out this arbitrariness, and to do so essentially through the tax system.