[Sinn Fein]

11 July 2002

Speech by Deputy Aengus Ó Snodaigh on Ansbacher Report

Ansbacher now stands fully revealed as a massive scam operated for years for the benefit of some of the wealthiest people in Ireland. Its purpose...to hide their money in offshore accounts so they made no contribution to Irish society through taxation.

Lets never forget...all this was going on throughout the 1980s and early `90s when our people were suffering the worst effects of cutbacks in health and education and other public services. While people died on waiting lists, others queued up to be part of the exclusive and secretive Ansbacher banking club.

Nuair a bhí difhostaíocht ag méadú, nuair a bhí eisimirce ar ais ag leibhéal na 50í, nuair a bhí fadhb na drugaí ag marú daoine óga `chuile seachtain sa chathair seo, nuair a bhí gearrtha siar ar siúl in oideachas agus sláinte agus leas soisialta, bhí uasal-aicme na cathrach seo ar muin na muice. Agus ainm na muice sin ná Ansbacher.

While we were lectured about the need for belt-tightening, lower wages and reduced State spending, the Ansbacher elite were secretly hoarding their tax-free money. While young Irish people had to emigrate to London and Boston the Ansbacher circle of friends enjoyed the high life in Ireland and exported their riches to the Cayman Islands.

Our public services, particularly the health services, still haven't fully recovered from the cuts of that time, but we see from this report...those who could most afford to contribute to the public finances were the very people who made sure they paid little or nothing. They swindled the ordinary PAYE taxpayer who bore the burden of both tax and cutbacks in services.

Successive governments failed to tackle this corruption at the heart of the Irish financial system. Why? Because that corruption reached into Government Buildings, to the Board Room of the Central Bank itself and to the boardrooms of some of the top companies in the State. Leading figures in these institutions were members of the secret and exclusive Ansbacher club.

From 1989 to 1994 the Ansbacher banking club was operated from the offices of Cement Roadstone Holdings, where Des Traynor was chairman of the company. Two other chairmen of the company at different periods, Tony Barry and Michael Dargan, were Ansbacher account holders. Tony Barry was also a managing director of CRH, as was another Ansbacher account holder Jim Culliton.

The report shows clearly...the Ansbacher operation was accommodated by CRH and this was quite open with Ansbacher correspondence coming in with CRH mail and wads of cash being counted in the office and collected and delivered by CRH staff. Yet CRH expects us to believe...as a company, they didn't know what was going on. Apparently their key people knew about it as individuals, and some were account-holders, but they didn't know it collectively. These CRH managing directors, chairmen and board members were being serviced in their Fitzwilliam Square headquarters by Des Traynor's private bank but they passed one another like ships in the night. This is a new and interesting definition of corporate responsibility.

CRH must be held accountable for their role in this affair and for their wider role. For years they've operated as a virtual monopoly in the cement and concrete business in this State, squeezing out, by dubious methods those smaller companies they couldn't buy out. The EU Commission has found CRH to be in breach of competition rules. It is common knowledge in the industry they're the beneficial owners of many businesses, which they don't declare in their annual report and company accounts. It emerged under the Freedom of Information Act in 2000 that they concealed eleven companies, which were not listed in their annual report. In all cases CRH were majority shareholders. Why was no action taken by the Tánaiste against the company for this breach of company law?

Two CRH Ansbacher account holders, Tony Barry and Michael Dargan, were also board members of the Bank of  Ireland. Questions must be asked about this crossover and the influence wielded by CRH in the banking sector. The banks and CRH face very serious allegations of discriminating against banking customers who were out of favour with CRH.

CRH was at the very centre of the web of corruption exposed by the Ansbacher affair. Des Traynor was a key man during the formation of CRH in 1969. As a significant financial contributor to the establishment political parties CRH was always a sacrosanct company as far as successive governments have been concerned. Why else, for example, would the State have sold the quarry at Glen Ding in County Wicklow to Roadstone at a knockdown price and at a major loss to the taxpayer?

The role of CRH in the Ansbacher scandal highlights the need for a full investigation of the Glen Ding affair. This should've been done long before now. It should've been investigated by the Moriarty Tribunal. That can still be done and one route would be the appointment of an auxiliary judge to deal with this aspect.

We also need investigations into the broader role of CRH. I believe their practices have been significant contributors to gross inflation in the construction industry and the knock-on effect on house prices, the spiraling cost of road construction and other aspects of the National Development Plan.

We now know the Ansbacher names. We know the property developers, the politicians, the bankers, the architects, the builders, doctors, solicitors, and self-styled entrepreneurs who participated in just one significant and hugely lucrative tax scam.

I say `just one' because we don't know how many other Ansbacher-type schemes there are.

In recent weeks we've seen the report of the Revenue Commissioners detailing action being taken against 1,800 holders of illegal non-resident bank accounts, accounts which were opened knowingly for them by every major financial institution in Ireland.

Then there was National Irish Bank's Clerical Medical Insurance tax scam.

One of the most damning conclusions of the Ansbacher Report is its finding that the Central Bank failed to ``test, appraise and gather the information available to it'' and that this ``resulted in the true nature of Ansbacher's activities going undetected for longer than ought to have been the case''.

Governments lacked the political will and resolve to tackle this problem of tax fraud by financial institutions and their wealthy clients. They can't say they didn't know and weren't aware of the scale of the problem. But it wasn't tackled. What was the approach instead? It was the establishment parties in this House who in 1988, 1989 and again in 1993 set up the tax amnesties.

At the same time the prisons were being filled with thousands of people, many of them drug addicts, who were involved in non-violent theft where the value of goods was often less than 100.

For example Garda statistics for 1993, the year of the last tax amnesty, show that there were 47,000 larcenies recorded. Almost 45% of these involved amounts of less than 100. Just under 63% of the thefts involved amounts of less than 200.

There are no Garda statistics in this or any other year for tax crimes. The Garda don't even attempt to record it. There are a handful of Gardaí seconded to the new Office of Corporate Enforcement.

Ansbacher reveals a tale of two Dublins. There is the city of the elite at one end of the scale who have the inside track on business and government. This is where a man called Des Traynor lived in a pleasant, respectable and obviously wealthy community. Traynor's friends often approached him for advice and usually help in investing their money. He set them up accounts, to hide their money from the Revenue Commissioners. Traynor was not alone in the advice business. Often his clients were referred to him by accountants and tax consultants.

One Cork businessman Corneilus Collins told the Inspector, how he was advised by Stokes Kennedy Crowley to invest his money offshore, and out of sight of the Irish tax authorities. Stokes Kennedy are now known as KPMG, one of the largest accounting firms in Ireland and part of one of the largest accounting companies in the world.

However the co-operative nature of this business community does not end there. Sometimes Traynor would arrange loans for his clients. Loans where it was unclear how much interest was being paid. Unclear in that it seemed considerably below commercial market rates.

Friends in this financial community help friends in trouble. Independent News and Media chairperson Tony O'Reilly spent more than 1 million paying the debts of Vincent Ferguson and Jim McCarthy. The three had all been directors of Atlantic Resources. Ferguson, McCarthy and the already mentioned Corneilus Collins had used the Ansbacher accounts to secretly buy shares in their company. It all went wrong, and they lost their money. In stepped O'Reilly who in 1997 and 1998 paid the debts of Ferguson and McCarthy.

So what about the other Dublin? It's the city where people don't have the helpful bank manager or accountant to call on. They don't get the help of the private banking services that all the banks offer to their wealthy clients. They don't get preferential loan rates or debts written off when in financial difficulties. In some cases there aren't even banking services in their local areas, not even an ATM machine as these banking customers are not profitable enough for AIB and Bank of Ireland and the rest to bother with.

There are over 60 money lenders licensed by the Director for Consumer Affairs who can charge loan rates of up to 195%. Alongside this we know there are illegal money lenders who charge even higher and more extortionate loan rates.

Families in this other Dublin, this other Ireland in fact, get into debt to buy school books and uniforms, communion and confirmation clothes, and Christmas presents.

While in Ansbacher Dublin, those who have large amounts of money find the opposite experience. Take for example the case of David Doyle who with other family members ran one of Ireland's best known hotel chains.

He set up an offshore account in 1983. Unlike Ferguson and McCarthy he made money from buying and selling Atlantic Resources shares. These and other share dealing profits were hidden from the Revenue Commissioners. He did, though, make a settlement with the Revenue Commissioners in 1993. And one of the last withdrawals of funds from his Ansbacher account was to buy himself a new car in 1990. It was a Mercedes SL and he thinks it was ``about 80,000 or 90,000''. Somehow if David had to live in that other Dublin, I think he would know exactly how much his car cost.

The real question to be answered now is whether any action will be taken against the financial institutions who facilitated white-collar crime in the Ansbacher scandal and other scams. White-collar crime, facilitated by hugely profitable financial institutions, has enjoyed a virtual amnesty in this State up to now. If the Ansbacher report is not a turning point for the accountability of financial institutions then it will have been a wasted exercise.

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