Investigations and tribunals will cost millions

The wave of investigations into the Ansbacher deposits, corruption in the planning process, National Irish Bank (NIB), Dunnes Stores, and the finances of Charles Haughey and Michael Lowry are set to cost the Exchequer many tens of millions of pounds.

However, inquiries by the Revenue Commissioners into the Ansbacher deposits and the offshore accounts marketed by NIB, should lead to many millions being gathered in interest and penalties, perhaps even more than enough to pay for all the inquiries.

The Public Accounts Committee's (PAC) investigation into DIRT is likely to lead to a windfall in back taxes, interest and penalties. If this is included in the overall picture, it means the State comes out in profit as a result of its vigorous investigation into Irish business.

The variation in the cost of investigations is staggering. The 18-month investigation into Ansbacher (Cayman) by authorised officer Mr Gerry Ryan, which led to the appointment of three High Court inspectors, cost just £9,000. Mr Ryan is an accountant and civil servant with the Department of Enterprise, Trade and Employment.

An inquiry into Faxhill Homes, the building firm which carried out work on Mr Lowry's home which was paid for by Dunnes Stores, cost the Exchequer £135,000. The authorised officer in this case was Mr George Maloney, a partner with O'Hare & Associates, chartered accountants.

The Tanaiste, Ms Harney, has initiated 16 investigations under the Companies Act 1990, while the Government has established two tribunals. The amounts being earned by barristers involved in the tribunals have been the subject of much media attention, but the costs incurred by some of the investigations initiated by Ms Harney are also considerable.

The appointment of High Court inspectors to Ansbacher (Cayman) is the result of work carried out by Mr Ryan. He was appointed to Celtic Helicopters in September 1997 following the report of the McCracken tribunal (Dunnes payments), which found that loans to Celtic Helicopters had been secured by money in the Ansbacher deposits. The Celtic Helicopters inquiry is ongoing and has not led to any significant costs for the State.

Also in September 1997 Ms Harney appointed an authorised officer to Garuda Ltd, the firm owned by Mr Lowry. That inquiry was completed in December 1998, without significant cost to the State, and details have been sent to the Director of Public Prosecutions for his consideration.

On January 8th, 1998, arising out of an interim report on Celtic Helicopters, Ms Harney appointed Mr Ryan as authorised officer to Guinness & Mahon bank and Irish Intercontinental Bank, two institutions linked to the Ansbacher deposits. Two weeks later Mr Ryan was appointed to two Cayman companies linked to the deposits, Ansbacher (Cayman) Ltd and Hamilton Ross Co Ltd.

While Mr Ryan's Ansbacher (Cayman) inquiry is completed, the other three inquiries by him are ongoing. Mr Ryan's report on Ansbacher (Cayman) led to Ms Harney making a successful application to the High Court for the appointment of three High Court inspectors to Ansbacher (Cayman).

Mr Ryan has also, through his work on the Ansbacher deposits, been appointed an authorised officer to Kentford Securities, an Irish company controlled by the late Mr Des Traynor, and College Trustees, a Guernsey-based trust company again linked to Mr Traynor and which manages trusts for high net worth Irish residents.

This company, now owned by Credit Suisse Trust Holdings, is not co-operating with Mr Ryan, however, Ms Harney told the Dail last November her department will not be deflected from completing its inquiry. She said the report would probably be available by June.

Ms Harney also told the Dail that the investigations into Celtic Helicopters, Guinness & Mahon, Hamilton Ross Co Ltd, Irish Intercontinental Bank, and Kentford Securities, are "substantially complete".

In July 1998, Ms Harney appointed an authorised officer to Dunnes Stores Ireland Company and Dunnes Stores Ilac Company. The appointments were connected with matters concerning these companies which were revealed during the McCracken tribunal.

Mr Ryan is conducting these investigations, which have been held up by legal actions taken by Dunnes. The decision of the Supreme Court in an appeal taken by Dunnes is pending.

Following allegations broadcast on RTE in January 1998 concerning National Irish Bank (NIB), the Tanaiste appointed Mr Martin Cosgrove to NIB Financial Services Ltd to investigate that company's marketing of unauthorised offshore bonds allegedly used by depositors hiding funds from the Revenue. Mr Cosgrove, a civil servant, was appointed in March and produced an interim report in June. His work cost the Exchequer £21,787.

Two inspectors appointed by the High Court following an application under the Companies Act by Ms Harney, have taken over Mr Cosgrove's work and are also investigating the extent to which the bank was involved in the overcharging of fees and interest.

Ms Harney told the Dail last November that the inspectors' inquiry had cost £1.4 million and was ongoing. Significant delays have been caused by court actions taken by the bank and some of its managers. Ms Harney said she expects the NIB inquiries to be completed this year.

The two inspectors appointed to NIB and NIB Financial Services Ltd are Mr Justice John Blayney, a former Supreme Court judge, and Mr Tom Grace, a partner with PricewaterhouseCoopers.

Mr Blayney is receiving a payment equal to his pension as a retired Supreme Court judge with a small "top up" for his work as an inspector, while Mr Grace is being paid £210 per hour (excluding VAT).

The inspectors have employed a number of accountants from PricewaterhouseCoopers who are being paid in excess of £1,000 per day. The Department of Finance has expressed concern about the costs of the NIB inquiry, though advice has been received from the Attorney General's office that there is a good possibility the money can be recouped from AIB.

Meanwhile, the two tribunals continue with their work. The Flood tribunal is not expected to finish its work this year, while the Moriarty tribunal is expected to conclude this year. This year's estimates include £8 million allocated to cover legal costs from Moriarty, with this figure meant to cover costs incurred by parties which appeared before the tribunal.

Such costs are only paid after a tribunal has completed its work. Further legal costs are likely to fall due next year, but the total should not exceed £15 million to £20 million.

The Flood tribunal, which is investigating allegations of corruption in the planning system, is expected to cost significantly more than the Moriarty tribunal. In both instances senior counsel appearing for the tribunals are being paid in excess of £1,300 per day. Following changes introduced in the wake of the McCracken tribunal, costs incurred by the tribunal may be recouped from parties found by the tribunal to have been engaged in wrongdoing.