Seven Goodman firms face legal action, official says

 

Legal proceedings have been issued against seven Goodman companies over intervention yields, the Secretary-General of the Department of Agriculture has said.

Mr John Malone also told the Dail Committee of Public Accounts yesterday that the way was clear to proceed with a Government decision in 1994 to remove control of EU grants from the Department and give it to an independent body.

Mr Malone was replying to a scathing attack on the Department by Mr Desmond O'Malley of the Progressive Democrats who told the committee that officials had failed to recover money lost through irregularities, negligence or fraud.

"I deplore the reluctance, the studied, continued, deliberate reluctance [of the Department] . . . to recover large sums of money due," Mr O'Malley said.

Mr Malone said the impression had been created that the Department was somehow reluctant to proceed. It was pursuing a number of cases - one against Shannon Meats, which it hoped to bring to court this year, and also against Rathkeale.

"There are also legal proceedings concerning the whole issue of yields. Legal proceedings have begun against seven companies in that regard, seven Goodman companies," he said.

The yields issue would generally allege a failure to produce all the meat on intervention contracts.

Mr O'Malley had written to the committee urging that a Government decision taken in March 1996 that the control of EU grants be removed from the Department be implemented.

"There should be an entirely independent body looking after these funds, probably from an accounting point of view, rather than [that it] be done by people who feel it is their duty to be close to those in the processing industry," he told the committee yesterday, when he was called as a witness.

Mr Malone denied that the Department had ignored the decision. There was also another Government decision at the time to decentralise Department staff to Wexford, he said. There were 300 staff and they were mainly from the FEOGA unit. FEOGA funds included EU intervention funding, export refunds and other agricultural grants.

There was then a change of government. The incoming government wanted a Food Safety Authority established.

"The way is now clear to proceed [with the previous decision]. The Minister, Mr Walsh, will be submitting proposals to the Government very shortly," Mr Malone said. Replying generally to Mr O'Malley's criticisms, Mr Malone said that the Department had forfeited £11 million from the Goodman Group over the years.

Mr O'Malley, in his statement, said that there was a £250 million shortfall in the FEOGA beef accounts for Ireland - an operational loss concerning the intervention scheme. It was noteworthy, he said, that in the first 10 years there was a shortfall of £28 million, but in the next 10 years it was £220 million. In the second 10 years, the rate of loss was 10 times greater. He said he only had figures up to 1994.

Then there were the disallowances or fines imposed. In the first eight years the system was operated - from 1980 to 1987 - the total disallowances were £76,000. From 1988, when things began to hum in the beef industry, the rate of disallowances increased alarmingly, he said. In the next eight years they amounted to almost £120 million.

He said that the EU had imposed fines of £71.9 million on Ireland. "The fines were imposed because of the failure of the Department to make any effort to recover the sums lost by irregularities by processors in the industry. So the Irish taxpayer had to pay the £71 million because of the failure of the Department and the Minister," Mr O'Malley said.

"The monies concerned were lost as a result of irregularities which enriched certain people and those certain people who were enriched by their own irregularities the Department did not do anything about," he said. "Those monies were allowed to be kept by those people."

Mr O'Malley said two officials concerned in changing documents at Rathkeale had been promoted.

The chairman, Mr Jim Mitchell, said that the committee wanted a forensic audit of the Department.

"If it was a private company, the High Court inspectors would have been sent in by now. There will be no more nonsense, no more prevarication," he said.

The matter was adjourned until January 21st.