The Appleby of the Cabinet's eye

PROFILE:CHILDREN HAVE a propensity to copy their parents when it comes to careers. A conscientious criminal, then, considering his children's prospects and the recent history of the Republic, might advise them to get an education before launching their lives of crime. And whatever you do, the dad might add, get a white collar.

That’s a bit too cynical. It is both unfair and untrue to say that Irish commercial life is shot through with criminality, venal or otherwise. On the other hand, corporate scandals have been a constant through both the Celtic Tiger years and the subsequent, and no less spectacular, Celtic Crash.

Ireland is not alone in having a concern about the apparent feebleness of the system when it comes to identifying and prosecuting white-collar crime. In recent years debate on the topic has merged with criticism of how capitalism itself has developed internationally over recent decades. Privatised gains and socialised losses are key elements of the current crisis – and one many people feel is on a par, in terms of outrageousness, with straightforward fraud and other forms of criminality.

The salaries and bonuses paid to people for decisions that, some years down the line, have been shown to be not only catastrophic for the companies they were supposedly so effective at managing but also for society generally are a legitimate cause of outrage.

The whole concept of shareholder value, by which ambitious and often enormously greedy people can concentrate solely on maximising profits without a sense of legal obligation, is also coming in for sustained criticism. It is as if some people involved in business believe that once you’re incorporated, morals don’t apply.

And yet most people agree that capitalism has proved to be the most effective wealth-producing system mankind has come up with, and a key component of the most successful societies mankind has as yet produced.

All of which, in a way, brings us to Paul Appleby, the 57-year-old Director of Corporate Enforcement, who earlier this week announced his intention to retire at the end of the month. People’s faith in the system needs to be restored, and his office is one of the places to which many people are looking.

The announcement that Appleby was going to retire came as a surprise, and the press releases issued early on Tuesday by both his office and that of Minister for Enterprise Richard Bruton made sure to say that the development would not impede the biggest investigation so far of the Office of the Director of Corporate Enforcement (ODCE): its mammoth inquiry into certain huge transactions at Anglo Irish Bank.

Appleby said he had been considering retiring over the past few weeks and had discussed it with his family. On Friday last week he told Bruton’s department, and on Monday he met Bruton to assure him about the Anglo inquiry, among other matters. He said he would be available if his assistance was needed after he had retired. The Minister, in his statement, wished Appleby well in the future.

It was when the Cabinet met that afternoon that Minister for Public Expenditure and Reform Brendan Howlin, who is overseeing the scheme for the early retirement of public servants, first learned of Appleby's decision. He later said on RTE's Six-One Newsthat he had been very surprised by Appleby's announcement, and pointed out that he had asked that people give as much notice as possible about their decision to retire.

Just before 6pm it had been announced that Appleby had agreed to stay on for a further six months after February, and it seemed obvious that when Bruton told his Government colleagues of Appleby’s decision, the reaction had been one of serious concern. The extent to which the Attorney General, Maire Whelan SC, contributed to the debate is unknown, but the desire to get Appleby back on board was clear. In the context of the Anglo inquiry, the government wanted a seamless transition between Appleby and whoever succeeds him.

Appleby has been a public servant for almost 39 years and is at assistant-secretary level. He is paid at the top of the assistant- secretary grade, at slightly more than €150,000 a year. By deciding to retire at the end of February, he was availing of an offer of a lump sum of €226,068, with the first €200,000 of that being free of tax, and an annual pension of €75,356. Given his years of service, he would have been able to retire at age 60 in the normal course on a full pension, but that pension would have been based on the new, reduced salary scale that will apply for assistant secretaries. The lump sum would have also been lower.

He is to be paid his current salary for the six months from the end of this month, when he will be acting director of the corporate enforcement agency. The Government feels certain that what has happened has not introduced any infirmity into the ODCE’s Anglo inquiry.

Appleby’s view when running the OCDE is that it should both advocate and enforce. “Clearly, we need to strike a balance between going over the top and acting appropriately,” he has said.

In his statement on Tuesday he said he believed “that the ODCE has realised the long-dormant investigative and enforcement potential of the Companies Act 1963 and its successor Acts.”

In the mid-1990s Appleby was one of a small team that operated in the Department of Enterprise, Trade and Employment and had, as one of its functions, the enforcement of company law, then one of the wallflowers of official life in Ireland. It was the revelations about huge payments being made to the late Charles Haughey – not to mention the very-much-still-with-us Michael Lowry – that led to company law enforcement being invited on to the dance floor.

The McCracken tribunal was established and led to the dusting-down of the companies acts and a range of inquiries being initiated by the Department of Enterprise, Trade and Employment, of which Mary Harney, then leader of the Progressive Democrats, was minister. When she set up the Office of the Director of Corporate Enforcement, in 2001, Appleby was the obvious candidate for the job.

In 2007 it emerged that the office had been in something of a struggle with the government over the allocation of more resources. The former taoiseach Bertie Ahern seemed to get a bit annoyed in the Dáil one day when questioned on the matter. “He has 36 [staff], so it seems extraordinary that he could want another 20 . . . One would not receive such an increase in any department . . . He will have to wait his turn,” he said.

In 2009, Leo Varadker, as an opposition TD, linked the issue of resources for Appleby to Fianna Fáil’s Galway tent operation and said, “White collar crime has now brought this country to the brink.”

The ODCE now has 50 staff, including 11 seconded gardaí. Last month Mr Justice Peter Kelly expressed surprise at the relatively low number of gardaí (11) working on the ODCE’s Anglo inquiry, given the scale of the issue involved. (The overstretched Garda Fraud Bureau is also investigating matters to do with Anglo.) The same hearing was told that charges could be brought “within weeks”.

Given the egregious nature of some of the activities that former titans of Ireland’s commercial world engaged in as the Tiger years slammed into a wall, the public is understandably interested in seeing someone go to jail.

On the other hand, it seems fair that, as the law accepts, a person has to know he or she is committing a criminal offence in order to be guilty of committing that offence. And to secure a conviction, a prosecution has to show, beyond reasonable doubt, that the person concerned knew he or she was committing a crime.

Frustration over apparent white-collar crime going unpunished is an international phenomenon. Any judgment arrived at about the performance of Appleby and his office needs to bear that in mind.

Curriculum vitae

Who is he?A career public servant who has been the Director of Corporate Enforcement since the establishment of the office, in 2001.

Why is he in the news?His decision to retire surprised the Government when he announced it this week.

Most appealing characteristicHis caution and lack of bombast.

Least appealing characteristicHis refusal to leak sensitive information to the media.

Most likely to say"Let's get up early and go for a long walk in the mountains."

Least likely to say"Let's suck it and see."