Wallace to pay half Dáil salary to Revenue

INDEPENDENT TD Mick Wallace will put half his €92,000 Dáil salary towards repaying the €2.1 million Revenue debt of his construction firm MJ Wallace Ltd.

In an emotional personal statement to the Dáil about his tax affairs and under-declaration of VAT, the Wexford TD apologised for “an error of judgment” and said he would “not defend the indefensible. The company understated its VAT liability and we were wrong to do so.”

He told about 50 TDs in the chamber that he had considered resigning and running in a byelection or walking away altogether from politics, but “I was never very good at quitting”.

Mr Wallace also apologised “to the members of this Dáil for bringing any dishonour on a profession which hardly needed it”, adding: “I want to especially apologise to the people of Wexford”.

He was “answerable to the people of Wexford who elected me and they will discard me when they see fit. It is their seat, not mine.”

His voice cracking at the end of his speech, Mr Wallace was applauded politely and very briefly by about four TDs.

The former member of the technical group made his statement at the end of Dáil business yesterday evening, after which no questions or statements from other TDs were allowed. Almost all members of the group were in the chamber for his address.

“I want to apologise to people all over Ireland, particularly to those who have supported and continue to support me.” He had done “many things in my life that I should not have done and now I have disappointed many people who believed in me.”

Outlining his plans to make repayments, he said because “I now work for the people and am paid by the people, I feel obliged to look beyond the bounds of company law”. He acknowledged many people were upset at his statement that the company would not be able to repay the tax debt.

“This was not a cavalier comment but an honest statement of fact. I understand PAYE workers and social welfare recipients are not afforded this flexibility.”

He added: “I will strive to personally make repayments in relation to the tax debt of M J Wallace Ltd and to this end starting immediately I am taking steps to organise for half of my Dáil salary to go towards paying M J Wallace Ltd’s VAT liability with the Revenue.”

He said that when he stood for election he personally had a tax clearance cert “and so too did M J Wallace Ltd as it was meeting the terms of its arrangement with the Revenue”.

In early 2008 his company got the go-ahead for a project in Dublin but the bank subsequently pulled the plug, resulting in serious and unforeseen cash-flow problems. The company “had to let some men go, pay redundancy . . . it was coming under pressure for payment from suppliers and sub-contractors and having to deal with four banks becoming increasingly aggressive”.

The company was not able to pay the VAT at the time but was convinced it could work through the crisis. M J Wallace believed it would be able to pay the full amount within a year, but feared if the problem was revealed at the time, the Revenue or banks would move and put the firm out of business. “The manner in which the VAT was dealt with was, in hindsight, an error of judgment made under pressure at a time when the approach of the banks was changing dramatically.

“There was never any intention that that the money owed would not be paid to Revenue and the motive behind the under-payment was to delay payment in order to trade out of difficulty.”