Dithering on dirty money shows up limits of zero tolerance

It's tempting to say that two Irelands were under discussion this week - one in Leinster House, where the paths of politics and…

It's tempting to say that two Irelands were under discussion this week - one in Leinster House, where the paths of politics and business crossed; the other in Dun Laoghaire Town Hall, at the first session of the National Crime Forum.

At first blush, they seemed worlds apart: offshore accounts in the Dail; the desperate and dangerous lives of addicts and criminals in Dun Laoghaire.

At the national forum, a Minister promises nothing less than total war on crime; and in the national parliament his colleagues wrestle ineffectually with the legal and political entanglements of half-a-dozen inquiries into the affairs of the well-to-do.

This is not two Irelands; it's one, but less united than the island as a whole. At one end Charlie McCreevy fills the coffers; at the other John O'Donoghue fills the jails.

READ MORE

But if you believe, with Margaret Thatcher, that there is no such thing as society, then anti-social behaviour should come as no surprise. And, once given official encouragement, at either end of the spectrum, it quickly becomes impossible to control.

In this brave new jungle, you'll find the hard chaws - the McCreevys and the O'Donoghues - doing the business; leaving the soft chaws in Independent Newspapers and some of the business magazines to come up with the slogans.

The Irish Independent yesterday carried an editorial headed "Blunderland" offering some mild criticism of the this dangerously inept Government.

This was the paper which crowed on the morning after Mr McCreevy's wretched Budget: "It's payback time" and "Good time Charlie breaks with the past". Slogans and sentiments which even its cousins in the Sunday Tribune found thoughtless and tasteless.

No doubt Mr O'Donoghue - the living image of poor, yelping Shauneen Keogh in Synge's Playboy - had the Independent group's coverage in mind when he said on Prime Time the other night that people like reading about crime, especially crimes of violence.

As an answer by the Minister for Justice to a sensible question from Eamonn Lawlor about crime and the media, it was on a par with Mr McCreevy's comment on the financial turbulence in the Far East: he didn't think it would have much of an effect on us here.

At the forum it was Father Gerry Raftery of the Franciscan Justice office who drew an obvious conclusion: if poverty was a crime, then it was Government, the social and economic policy-makers, who should be called criminals.

And in the reports I've seen or heard, only the criminologist, Paul O'Mahony, raised the question of white-collar crime - on the day on which the names Flood and Moriarty, National Irish Bank and the Big Six accountancy firms were in every mouth.

Of course, Mr O'Donoghue's zero tolerance doesn't stretch to white collars and he may not have heard of those happenings sent to ambush politicians which Harold Macmillan called events.

As events go, the twist which officially revealed Ireland's role as a haven for offshore funds was a cracker.

Mary Harney had been offered sound advice on companies set up here, mostly for nefarious purposes; but someone packed it off to Liz McManus as well. Liz's colleague, Pat Rabbitte, made a meal of it. The question she'd asked - about an Irish Times report by Siobhan Creaton - had been answered in a way that reminded him of the beef tribunal.

In particular, it reminded him of the civil servant in the Department of Industry and Commerce (now Ms Harney's Enterprise, Trade and Employment) who was praised for a cleverly drafted answer that was bound to throw the opposition off the scent.

The demon drafter has been at it again. Ms Harney's good advice was wrapped in a note for the minister's information which ended with a warning: "While references have been made . . . to solutions being sought in the tax and company law area, no specific details have emerged.

"It is strongly recommended that the approach be maintained in so far as the reply to the PQ is concerned."

And so it was. Nothing that could be called specific seeped through in 270 bland ministerial words of the written reply. But the official memo - which ran to 1,150 words - was rich in detail.

The companies in question are, as the name implies, registered in the State by people who don't live here. They don't invest or trade in the Republic; they don't pay tax and they don't provide employment.

So why are they here? Some multinationals use the facility "for tax efficiency purposes" but "essentially the IRNR structure is primarily a mechanism used by US companies to defer indefinitely the payment of US tax".

Or so the note said, in that roundabout style that civil servants - and a lot of journalists - like to adopt when they're talking about money and business. It's a deferential limp.

But there was worse. "Some of these companies have been found to engage in undesirable activities world-wide, such as fraud, money-laundering and other illegal activity," the civil servant told the minister in an uncharacteristic burst of frankness.

And because they are registered in Ireland they damage the State's reputation generally and the reputation of the International Financial Services Centre in particular.

How many such companies are there? No one seems to know. But Siobhan Creaton suggests 40,000, turning over investments worth £20 billion. And the Department doesn't seem anxious to disagree.

The Department, however, seems to have the greatest difficulty finding agreement with the Departments of Finance and Justice, the Central Bank, the IDA, Forbairt and heaven knows how many other interested parties when it comes to deciding what is to be done.

Mr Rabbitte and Ms Harney are at one on the need to avoid scaring genuine users of the system who invest here. But there was a telling passage in the note to Ms Harney which warned that the six major accountancy firms had advised against abolishing the system altogether.

Then, in another burst of frankness, the civil servant notes that the accountants "of course have a vested interest in retaining the status quo because of the business it provides for them".

Siobhan Creaton estimates that those accountants, lawyers, company formation groups and others who help set up the largely useless companies net between £40 million and £60 million for their trouble.

Keep an eye on developments in that quarter. And listen as that bastion of the new right, Ryanair, explains how it came to occupy a key State-owned site at Dublin Airport since 1992, as Eamon Gilmore has told the Dail.

It will continue to do so, as agreed by the first Fianna FailProgressive Democrat government, until 2004. Mary O'Rourke will, no doubt, tell all.