Company sheriff hands in star

After 10 years in the job, Paul Appleby steps down as Director Of Corporate Enforcement next week and one of his last acts has been, he says, to get the investigation into Anglo Irish Bank ‘to the end line’

I MET Paul Appleby this week in a large room on an upper floor of the Parnell Square, Dublin, building that houses the Office of the Director Of Corporate Enforcement, an office with which he has become synonymous.

Appleby (58) was the founding director of the office and will have been more than 10 years in the position when he leaves on Tuesday of next week.

It has been something of a roller coaster ride for him. Not only has he been involved in the setting up of a new public agency; he has investigated some of the biggest scandals in Irish society over the past decade.

That involvement in controversy has continued right up to the end, with Appleby’s office and the Garda Bureau of Fraud Investigation being involved in investigating suspected criminal offences at Anglo Irish Bank, the bank that did so much to contribute to Ireland’s current financial woes.

“It has been a massive undertaking for us and for the guys in the Garda Bureau of Fraud Investigation because of the scale and complexity of the investigation, but we have got it to the end line and we have got some decisions out of the Director of Public Prosecutions and obviously she has more files which hopefully decisions will be made on in the next few months.”

The office has come in for criticism because of the pace of the investigation, something which no doubt explains a small bundle of downloaded newspaper articles that Appleby has with him and which he hands over at the end of the interview.

One is a recent column from the Boston Globe noting that the former chief executive and chairman of Anglo, Sean FitzPatrick, has been charged with a number of offences. “When are we in the United States going to start indicting the financial executives who caused our economy to crash?” asks the US journalist in her column.

Another series of articles deals with the fall-out from a bungled inquiry by the Serious Fraud Office (SFO) in the UK, which could see multi-millionaire businessman Vincent Tchenguiz suing the agency for very substantial damages.

Much of the coverage is along the lines that efforts by the SFO to perform quicker, better, more cost-efficient inquiries into suspected corporate crime,

has proved be a form of fool’s gold.

Appleby makes the general point that the difficulty that exists around securing convictions for white collar crime, is an international phenomenon.

There is an appetite in Ireland and in his office, he says, in securing convictions for white collar crime.

“There is a lack of white collar criminals but I think that is not so much to do with any lack of commitment or interest, it is more to do with the nature of the offence and the fact that many white collar crimes are committed beyond public view and there are significant challenges involved in getting quality evidence to prosecute in many cases.”

In particular it can be difficult to secure witnesses within organisations who will attest to who did what and when.

Changes to the law in 2011 now oblige people with information to co-operate with investigations into such areas as fraud and offences in the banking sector.

Likewise there have been changes to the law so that people who hithertofore could only be held for a 24-hour period can now be held for 24 hours but with that period of arrest being broken up into chunks.

This allows investigators to ask questions, release the suspect while they make subsequent inquiries, and then arrest the suspect for further questioning again.

Nevertheless, Appleby believes further powers are needed in this area.

“You might want to put thousands of pages of documents which you have uncovered in your investigation to your suspect but 24 hours is not enough to enable you to do that. Certainly we would like to see a longer period or periods involved. With drug offences and other offences it is possible to interview suspects for up to seven days. So there is probably more work to be done in that area to enable the interviewee or suspect to be able to address the issues you want to put to him.”

As a general point, Appleby says that what can appear to the public to be blatantly criminal behaviour by a corporation does not necessarily mean that it is easy to identify an individual who can be shown to have to been culpable and for this to be proved to a court beyond reasonable doubt.

The Minister for Justice and Equality Alan Shatter has made restoring the public’s trust in the ability of the State to prosecute white collar crime his top priority.

The department held a consultation process in relation to the topic in 2010, to which the ODCE contributed a submission. (The document can be accessed at www.odce.ie.)

The submission suggests consideration of such matters as the extension of criminal liability to some new areas, such as reckless trading (reckless trading is not a criminal offence), and the creation of new offences such as mail fraud.

It also seeks clarification as to the extent to which accused persons can defend themselves on the basis of having received erroneous legal advice that the act at issue was not a breach of the law.

Appleby says ignorance of the law is not a defence and that in some cases the fact that a person received incorrect legal advice should not necessarily be a bar to conviction.

“I think every situation has to be examined closely as to whether or not the advice was secured in good faith or sought in good faith, and I guess that sort of situation has to be examined very carefully before you can consider prosecution.”

In its submission to the Department of Justice, the office said it was concerned that there was not necessarily any certainty that lawyers who advised their clients on a basis that directly contributed to a client committing a criminal offence would face any consequences. The firm might suffer reputational damage, but from the point of view of society, was that enough?

“Intuitively we feel that the law needs to include something which acts as a strong incentive for lawyers, etc, to be extremely careful when giving advice on the basis of which a client may be encouraged to embark on a transaction which may amount to a breach of the criminal law.”

For the sake of discussion, the office suggests that in a case where a person successfully defends himself against a criminal charge on the basis that lawyers advised him that the act was legal, the court might rule on whether the law firm should pay compensatory damages to the client and, also, be open to having to pay exemplary damages payable to the State.

The document also points out that, for reasons to do with how Irish law treated Ireland becoming a member of the European Union, some serious offences can only be prosecuted in the District Court, with the attendent limits on the penalities that can be imposed.

An instance cited is the offence of managing a credit institution contrary to sound administrative and accounting principles.

The ODCE has suggested that this issue be looked at so that a range of white collar offences that exist, could be prosecuted in higher courts thereby allowing for greater penalties.

Back in the mid-1990s, when journalist Sam Smyth’s report about Ben Dunne’s dealings with Michael Lowry led, in time, to the establishment of the McCracken (Dunnes Payments) Tribunal, Appleby was one of two or three civil servants involved in the administration of company law in Ireland.

The explosion of company law inquiries that flowed from the unveiling of the secretive Ansbacher Deposits system, as well as the disclosure by RTÉ of outrageous practices at NIB, led the then Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney to establish the ODCE, with Appleby as the first director.

He says he is pleased with the outcomes of the NIB and Ansbacher inquiries, saying the reports produced by the inspectors appointed in each case served their purpose in that they outlined the facts and allayed public concern.

The reports also led to some individuals being restricted by the High Court from serving as company directors.

When it is put to him that, to many people, Ansbacher looked like an unlicensed financial service designed to help some very senior figures evade tax, and the NIB scandal appeared to involve simple theft, yet no one went to jail, Appleby refers to the difficulties in reducing such matters to criminal acts committed by particular individuals and for which quality evidence exists sufficient to secure a conviction to the standard of criminal proof.

Aside from these headline-grabbing inquiries, his office has been involved in more bread-and-butter stuff involving more mundane instances of suspected or actual breaches of the companies acts.

In its 2011 annual report, the office reviewed the fruit of its first 10 years, pointing out that it had prosecuted more than 100 companies and company directors on approximately 300 criminal charges as well as being involved in the disqualification and restriction of a large number of people from acting as company directors.

This punitive element of the work has been matched by an advocacy role that has involved the publication of company law guidance notes and the attendance of staff at more than 600 conferences and such events.

The result, says Appleby, has been a huge improvement in compliance with company law in the period since the establishment of the office, (at which time, he says, the requirements of company law were widely ignored).

He believes the credibility of the ODCE has been firmly established.

Appleby was surprised by the Government’s reaction to his decision earlier this year to

avail of its early retirement scheme.

Following his telling Minister for Jobs, Innovation and Innovation Richard Bruton of his intention to retire, the cabinet discussed the issue and a special arrangement was made to allow Appleby stay on for another six months past the deadline for the early retirement scheme.

The arrangement allowed him retire in February on a pension of €75,356. In March he took up the position of acting director for a period of six months with his pension being topped up to his former salary of €150,712 for the period.

Under the terms of his retirement, he is also entitled to a lump sum of €226,028.

He says he decided to retire having considered the matter during the Christmas break last year and that it wasn’t he who established the deadline for the retirement scheme.

He has been working since the age of 18, felt the ODCE was well established, and that the Anglo inquiry was, by then, in essence concluded.

“Clearly the Government was somewhat concerned and asked me to stay on. I have done so. But I certainly felt that my decision when I made it was justified and was in accordance with the terms of my contract.”

“It has been a source of considerable surprise to me that there were many others at senior levels in the public service who resigned without any difficulty and I was uncomfortable with the notion that the ODCE would fall apart if I had resigned at the end of February. That was not going to happen in any event.”

A replacement is ready to take over from Appleby next week, though the person’s name has not as yet been officially announced.

Appleby has plans for a walking holiday and then for a few personal projects that he intends to give some time to. He has no plans for any new role at present.

“I have no intention of taking anything on in the next few months. After that I will know if the idea of a return suits me or not.”

FRIDAY INTERVIEW

Name: Paul Appleby

Job :Outgoing Director of Corporate Enforcement

Age: 58

Lives: Dublin

Family: Married with two children

Hobbies: Hill walking and golf

Something that might surprise: His office has been praised in the US for having brought charges against Anglo Irish Bank executives while his US counterparts have yet to have anyone charged arising from the banking collapse there.

Something you might expect: He has little to say when asked what his next career move may be, other than to say he is going to take a few months off to review his situation.