Haughey overcomes the garlic and returns to haunt the Dail

The midnight stake at the crossroads and the clove of garlic didn't work

The midnight stake at the crossroads and the clove of garlic didn't work. Charlie Haughey was back to haunt the Dail yesterday with the news that an appeal commissioner had set at zero a tax assessment for £2 million raised against him by the Revenue Commissioners.

Worse than that, from Fianna Fail's point of view, was the disclosure that the man who adjudicated on Mr Haughey's appeal was Bertie Ahern's brother-in-law, Ronan Kelly.

Pat Rabbitte put on his "rocking the foundations of the State" voice in the morning when he asked the Taoiseach to confirm the linkage. And he rubbed salt into the wound by saying that Mr Kelly's appointment had been made by Mr Ahern in 1993 without advertising the post.

The Taoiseach bit the bullet and confirmed the link. And he sought protection from public outrage by declaring his belief that the matter would be appealed to the courts by the Revenue Commissioners.

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Elsewhere the fallout was having an enervating effect.

The Progressive Democrats gathered to assess the damage. They clutched at a section of the 1998 Finance Act and demanded that the grounds for the decision by the appeal commissioner should be published. Such action was necessary, they said, "to maintain public confidence in our tax system."

Charlie McCreevy gave them the back of his hand. The Minister for Finance was well aware of the section, having introduced it himself. But he said it had been designed to inform tax practitioners about general points of law. It could not be used to identify individuals.

What had seemed to be a step towards transparency and openness turned out to be something else. And the Minister for Finance appeared to be blissfully unaware of the public fury building beyond the gates of Leinster House.

Mr McCreevy went into the Dail and stone-walled. The Progressive Democrats were somewhere else. And, as an incandescent Opposition howled for information and for reassurance that Mr Haughey would be pursued and punished, the Minister dived for cover.

He wasn't involved, and he had no intention of becoming embroiled. These were matters solely for the Revenue Commissioners and for the appeal commissioners. To hear him talk, you would think the Kildare TD was a babe in the wood, knowing only what he read in the newspapers.

He had not been in touch with the Revenue Commissioners, he told the Dail. He did not intend to become involved. But all the while the phone lines between his Department and the Revenue Commissioners hummed.

And as they hummed officials complained about the oral ruling given by Mr Kelly in his rejection of the Revenue's claim for £2 million in capital acquisition tax. A written judgment was the least that could have been expected.

Mr Kelly was living in the worst of all possible worlds. Mr Rabbitte, the soon-to-be Labour Party TD, nodded peremptorily in the direction of "due process" and stated his belief that Mr Kelly was "a man of integrity who carries out his duties in a fair and impartial manner".

That said, the Democratic Left spokesman on finance wondered what the public was to make of a case where an assessment of £2 million against the former leader of Fianna Fail should be dismissed by the brother-in-law of the current leader of Fianna Fail.

Mr McCreevy regarded it as a cowardly way to go about character assassination. The appeals system was there for all taxpayers, he said, and the law regarded all persons equally. It was a comfortable illusion. And Michael Noonan, Derek McDowell, John Gormley and Joe Higgins told the Minister in their various ways to cop himself on.

The most Mr McCreevy could offer the tax-compliant punter as a sop was a promise to look at requests from the Revenue Commissioners for extra powers to examine irregular bank accounts and the affairs of banking institutions. Even there, he gave the strong impression that no radical or early action should be expected.

And he refused, point blank, to say whether the decision by Mr Kelly meant that the findings of McCracken - and of Moriarty and Flood - might have no effect in ensuring that the law was applied and due taxes paid.

It was on a par with his recent behaviour. Only last Tuesday the Minister for Finance brought legislation before the Dail designed to investigate the behaviour of Allied Irish Banks and its customers concerning DIRT tax and illegal offshore accounts. The Comptroller and Auditor General was to be given special powers of tax investigation.

But while details of tax evasion could be sent to the Revenue Commissioners, no names would be published. And the special powers would lapse immediately the investigation ended.

Only in special, limited circumstances could the affairs of tax criminals be examined. It brought back memories of the 1993 tax amnesty, when the Comptroller and Auditor General demanded to see the Revenue Commissioners' books to ensure that the legal terms of the amnesty had been met by its beneficiaries.

The Revenue Commissioners refused on grounds of secrecy. The Comptroller fought the issue to the High Court, and lost.

Now the Comptroller is getting special powers. But only in the short term. When the public storm over offshore accounts abates, and Mr Haughey's case trundles interminably through the courts, the financial world will return to its normal orbit.

Last night Fine Gael turned up the political heat and demanded a special debate or the recall of the Dail to deal with the controversy as a matter of urgency.

Mr Kelly and the appeal commissioners aren't the only ones with questions to answer. The Revenue Commissioners appear to have covered themselves in ordure once again.

In spite of legal advice and the benefits of the McCracken report, they let the State's highest-profile tax-defaulter slip through their hands.

It's just as well the Central Bank wasn't involved. Things could only have got worse.