Whistleblower warned that abuse of inheritance tax loophole used by the wealthy was about to take off

The Department of Finance failed to act on warnings from a whistle-blower in the “wealth management” industry who told them a loophole in inheritance tax law was being rampantly abused by high-wealth individuals.

The unidentified wealth manager had a meeting with officials from the Department of Finance after discovering evidence of suspicious transactions where individuals had gifted houses worth €1 million or more to their children without paying a cent in tax.

Even before that meeting took place, a detailed submission had been prepared for Finance Minister Michael Noonan by his own officials warning of the scale of abuse.

However, Minister Noonan – for reasons that are not explained in documents released under FOI – opted to do nothing to close the loophole. The submission seeking a change is bluntly marked: “No.”

Noonan Decision

The Department of Finance were also contacted by the office of Tánaiste Joan Burton, who had been contacted by a concerned constituent.

That constituent had described a number of cases where people were missing out when trying to buy houses, which ended up being bought by wealthy individuals for their children as a tax avoidance measure.

A proposal to restrict the availability of inheritance tax to a single primary residence had already been put forward in the Department of Finance in 2014 but Minister Michael Noonan decided against reforming it.

It explained how wealthy parents were using the loophole.

Cases Attention

In January 2015, officials from the Department of Finance met with an unnamed wealth manager who told them the loophole was bringing the law “into disrepute”.

He told them that in the previous eighteen months, abuse of inheritance tax had “taken off” where high-wealth individuals were buying houses in cash.

The wealth manager told them of a case involving one family, where the parents had bought each of their four children a house worth more than €1 million and gifted it to them entirely tax-free.

In a follow-up email in February, he wrote of further cases he had come across.

Whistleblower Warning

Two months later, a decision was made that reform of the inheritance tax loophole would not be included in the Finance Bill for the budget that took place in late 2015.

“One of the reasons for this was a view that the collection of data and evidence necessary in order to take a view on the need for and scale of any changes to the existing provisions might not be available in the truncated timespan available,” it said.

However, other emails released under FOI show how both the Department and Revenue Commissioners were fully aware of numerous cases of blatant abuse.

Under the rules, the person who is “gifted” the house must be living in the property for three years, and is supposed to remain there for a further six years afterwards.

9.5M Gift

Another case concerned three siblings, each of whom received – or was about to receive – a house tax-free from their parents.

In two out of the three cases, it was discovered that the houses had actually ended up being rented out because the new owners had gone abroad to work.

One of them was gifted a house worth €850,000, which was subsequently rented out for close to €3,000 a month while they worked abroad as “a condition of [their] employment”.

A second one of them was given a house worth €1 million, which was also rented out for €5,500 per month. The person involved was again working abroad and again stated that was a “condition of [their] employment”.

The third sibling had been gifted a house by their parent, and almost exactly three years later sold it for close to €700,000.

The documents also reveal that the Department of Finance has at last begun a closer examination of inheritance tax abuse.

A senior official explained in an email in March: “One of the things they [Revenue] were keen to do was show me examples of, among other things, abuses of the dwelling house exemption.”

A statement from the Department said: “This issue is still under consideration and it is not the case that a final decision has been taken or that there is no potential for movement here.

“The Department has previously been contacted by a member of the public with information regarding ways in which the exemption may have been used for tax planning. The Department is grateful for this assistance.”

You can read the full set of documents (with my redactions for personal email address, phone numbers etc) below.

Posted in Uncategorized | Tagged , , , , , , , | Leave a comment

How one public servant retired with a lump sum of €428,000 and an annual pension of more than €140,000

A TOTAL of 66 former public servants have received lump sum payments worth in excess of €200,000 over the past five years.

That includes one individual who received a golden handshake worth an incredible €428,000 and another who was paid out €382,000 from state coffers.

In all, 142 people – including departmental secretaries general and other former public servants – received lump sums worth more than €160,000, at a total cost to the state of €28.8 million.

That means an average pay-out of just over €200,000 per person, with tax only paid on lump sums in excess of €200,000 under rules introduced on 1 January 2011.

Ten Highest Lump Sums

The figures were revealed following an FOI request to the Department of Public Expenditure for the highest-earning pensioners from the public sector, but do not include politicians nor former employees of the garda, or HSE etc.

Details of the highest pensions being paid have also been revealed with two people – who retired in 2010 and 2011 respectively – getting €142,670.50 each year, although those rates are likely to have been cut since.

Three more former state employees received a pension of €126,817.50 with all three of them having left their jobs in 2011, the data reveals.

Four people, three of whom retired in 2015, are in receipt of annual pensions worth €107,795.

In total, there were ten people in receipt of six-figure pensions, with five more people getting over €90,000 a year for their pension.

In total the 142 top earning state pensioners are receiving close to €10 million between them annually, at an average rate of around €68,000 each.

Top Ten Pensions

The figures include a range of different professions, including management of certain state bodies, former secretaries general, other senior civil servants. However, the areas they worked in have not been released.

Their identities have not been disclosed either in the table of the highest earners, which was released by the Department of Public Expenditure.

Individual lump sums and pensions are generally exempted from Freedom of Information requests unless they relate to political figures.

The highest earning pensioner in the State has been enjoying a remarkably high standard of living over the past five years, the figures do show.

In addition to his or her €428,000 lump sum payment, that person has also received €142,670.50 annually although that figure may have fallen somewhat due to the public service pension reduction, which was introduced on 1 January 2011.

Irrespective of that, the person involved has been paid – even using the most conservative calculations – at least €1 million since their retirement.

Long-serving senior public servants are entitled to a severance package worth one and a half times their annual salary on their retirement.

In addition, they receive an annual pension at the rate of half their salary on retirement. Often, there is no adjustment to this figure if they choose to retire a few years early.

The availability of such golden handshakes has been dramatically cut for all new public servants, with their annual pension calculated on their salary over the entirety of their career, rather than on final day of service.

As this new regime only applies to newly employed public servants, the effect of those changes will not be felt for decades.

These figures are separate to the enormous pensions paid to former government Ministers and politicians, which cost €65 million between 2011 and 2014.

The highest earners there have been former Taoisigh Bertie Ahern and Brian Cowen, who both received golden handshakes of approximately €175,000 in 2011.

Since then, both Mr Ahern and Mr Cowen have been paid a six-figure annual pension, which in 2014 was worth just over €134,000 each.

You can see more on political pensions here

You can find details of all the former state employees who have received lump sums in excess of €160,000 in the spreadsheet uploaded here.

Posted in Uncategorized | 1 Response

Full text of letter from Alan Shatter to Taoiseach Enda Kenny

Letter from Alan Shatter to An Taoiseach re O’Higgins Commission Report

An Taoiseach Mr Enda Kenny TD
Government Buildings
Dublin 2

 

12th May 2016

Dear Taoiseach

I write to you in connection with the O’Higgins Commission Report and, in particular, Chapter 13.

The findings of the O’Higgins Report, like the earlier Cooke and Fennelly Reports, have unequivocally established that, when Minister for Justice, I dealt properly and truthfully with Garda related matters that gave rise to substantial controversy in the Spring of 2014 and many false allegations by opposition politicians.  The conclusions of the O’Higgins Commission totally contradict and are incompatible with the adverse findings made against me in the Guerin Report.  I am surprised that neither you nor Frances Fitzgerald acknowledged that in your comments yesterday.  On such a serious issue affecting a former colleague in Government, I expected this would be acknowledged.

You will recall that, prior to my resignation from Government on 7th May 2014, and in my resignation letter, I detailed to you some of my reservations concerning the manner in which the Guerin Inquiry was conducted and the lack of fair procedures.  Further reservations included Mr Sean Guerin SC prematurely concluding his work without reading and considering what GSOC described as “voluminous documentation” of relevance to his inquiry in their possession.

I again wrote to you on 22nd May 2014 detailing my concerns and reservations which we also discussed on the day of my resignation and again when we met in your office on 12th June 2014.  These were again detailed by me in a speech in the Dail Chamber on the 19th June 2014 in which I criticised Mr Guerin’s rush to judgement and detailed some of the difficulties that had arisen subsequent to receipt of Sgt McCabes complaints of 23rd January 2012 of which Mr Guerin appeared unaware.

I was disappointed that at no stage were my concerns and reservations responded to or addressed by you nor, as far as I am aware, did you, at any stage, seek to clarify the issues of concern with Mr Guerin.  You also did not inform me that you knew, before he completed his report, that Mr Guerin did not intend to read relevant GSOC documentation or to meet with GSOC.  I was taken aback to discover this, some 17 months after my resignation, following my  receipt of documentation as a result of an FOI request which was originally refused by your Department and only released after I appealed the refusal to the Information Commissioner. Moreover, my Dail speech on 19thJune 2014 was not responded to or indeed even acknowledged, in any way, by my former Cabinet colleague and successor as Minister for Justice, Frances Fitzgerald.

Opinions expressed and conclusions reached by Sean Guerin SC not only caused my resignation from Cabinet but also had an enormously damaging effect on my good name and reputation both as a politician and as a lawyer.   I assume the Government, as it must, fully accepts the outcome of the O’Higgins Commission.  Following publication of the O’Higgins Report, I believe it is not tenable and that it would be grossly unfair if the Guerin Report in its original form remained in circulation. The Guerin Report was originally accepted in full by the Government and this was expressly stated on the Dail Record.  The O’Higgins Report has resulted from a comprehensive sworn statutory investigation in which fair procedures were applied and in which all relevant parties were legally represented, gave evidence on oath, were available to be and were cross examined, and had the opportunity to make relevant submissions.

I believe that it is reasonable to ask that you, as Taoiseach, correct the Dail record and acknowledge in the Dail that Chapter 13 of the O’Higgins Report clearly and unambiguously concludes that, at all times, I dealt professionally, promptly, appropriately and truthfully with the allegations contained in Sgt McCabe’s letter of 23rd January 2012 and that contrary opinions and conclusions contained in Chapters 19 and 20 of the Guerin Report are in error.  In the circumstances, as you proposed the appointment of Mr Sean Guerin SC,  and as your Department was the lead department with regard to the Guerin Inquiry, I am asking that contact be made with Mr Guerin  requesting that the now discredited adverse conclusions contained in and opinions expressed by him in his Report, concerning both my conduct as Minister and my knowledge of the law in addressing Sgt McCabe’s allegations, be deleted from the Guerin Report and such other necessary amendments as are required be made to his Report.  I am asking that this be done so that continuing damage is not wrongly caused to my good name and reputation by the content of the Guerin Report.

On the day of my resignation, the 7th May 2014, you mistakenly informed the Dail that when resigning, I “took responsibility” for the “inadequacy of the action” taken by me “in responding to the allegations made by Sgt McCabe” as depicted in the Guerin Report.  No such acceptance of “responsibility” was either expressed by me or contained in my letter of resignation and it is clear, as a consequence of the O’Higgins Report, that there is no question of the action taken by me being inadequate.  On this, I believe that it is reasonable that the Dail record should also be corrected and I am asking you to do so.

As you know, as a consequence of no steps of any nature being taken in response to the concerns raised by me, I believed I had no choice but to issue Court proceedings, within the prescribed time limit, challenging the manner in which Mr Guerin carried out his Independent Inquiry.   Unfortunately, those proceedings were unsuccessful in the High Court.  Of course, at that stage the O’Higgins Commission Report had not been published.  An appeal against the High Court decision is scheduled to take place on 21st June next in the Court of Appeal.   Whilst I personally have incurred substantial expense funding my own legal costs for these court proceedings, Mr Guerin’s costs are indemnified and may be discharged by the State i.e. taxpayers.  I hope that you would acknowledge that it is not in the public interest that the State continues to support a defence of conclusions and opinions shown to be in serious error by the O’Higgins Report which has resulted from an independent sworn statutory investigation.  I believe it is in the public interest, following on from the O’Higgins Report, that these proceedings be rightly resolved without the necessity for a further contested court hearing.   As your Department is the responsible Department in this matter, I believe it is reasonable that I ask that you address this issue.

Finally, independent preliminary inquiries can play a helpful role in investigating an issue of controversy and ascertaining the need or otherwise for a full independent sworn statutory investigation.  At present, while there are constitutional principles and protections of relevance, there are no statutory provisions which expressly detail the fair procedures to be applied in the conduct of a preliminary inquiry, nor which prescribe the permissible engagement that can take place between the person conducting such inquiry and the designated lead Government Department responsible for the inquiry’s administrative arrangements and expenditure on required personnel.  There are also no statutory provisions which detail the parameters of any such inquiry nor which prescribe the extent to which it may express conclusions or opinions in relation to individuals or merely frame questions to be better addressed by a Commission of Investigation.  Speaking in the Dail on 19th June 2014, I drew a distinction between the proper application of fair procedures by Judge Cooke in the conduct of his inquiry into matters relating to GSOC and the different approach taken by Mr Sean Guerin SC.   I believe it is of crucial importance before any future such preliminary independent inquiry may be required, in order to protect the good name and reputation of individuals and to ensure no questions can arise about the proper conduct and integrity of any such inquiry that legislation be enacted to address the issues detailed.   I hope this issue will be addressed by the new Government.

I would appreciate a substantive response to this letter. I believe transparency is important.  Both the O’Higgins and Guerin Reports have been published.  I believe it is in the public interest that there be transparency to the issues raised by me in this letter.  In the circumstances, I believe it is appropriate that I make this letter public.

 

Yours sincerely

Alan Shatter

Posted in Uncategorized | Leave a comment

So who did your local TD hire in the wake of the general election?

Every TD is entitled to make a number of appointments immediately after their election. Under current arrangements, they can hire a secretarial assistant and also a parliamentary assistant. There is also an option open to them to hire their parliamentary assistant temporarily instead, although very few choose this.

Not for the first time (nor presumably the last), the list of appointments includes no shortage of examples of family members getting the jobs.

The Sunday Times has done a good job already of teasing out many of these connections.

Their news editor Colin Coyle wrote: “They include Fine Gael’s Peter Fitzpatrick, who employs his daughter Grace, Bernard Durkan (son Tim), Kate O’Connell (sister Theresa Newman), Maria Bailey (father John), Sean Barrett (daughter Jaci), Catherine Byrne (daughter Clare), and Ciaran Cannon (wife Niamh Lawless).

“Among Fianna Fail TDs employing relatives are Brendan Griffin, who employs wife Róisín and his cousin Tommy; John McGuinness (son Andrew); Michael McGrath (brother Seamus); Seán Fleming (wife Mary); and Timmy Dooley (wife Emer).

“Seán Sherlock of Labour employs his sister Úna Willis, while Willie Penrose employs a brother, Johnnie, as his parliamentary assistant. The independent TD Michael Healy-Rae, employs his son Jackie Jr, while Mattie McGrath employs a daughter, Tríona.

“Dermot Connolly, the partner of independent Joan Collins, job-shares a role as parliamentary assistant in her office.”

Not included on their list is Andrew Doyle, whose sister Eithne has worked with him since 2007. He told me that she is officially employed with him for two days a week but does “a lot more” than that.

He said: “If you’re good enough for the job, you’re good enough for the job. The only question is do they do the job well?” He said a blanket ban on hiring family members was “too simplistic”.

Below is an up to date spreadsheet of all the appointments made since the general election. If you happen to spot any other ones that merit further scrutiny, feel free to email me at ken.foxe@gmail.com.

There is at least one mistake (since corrected) in the spreadsheet and if you spot further errors, feel free to contact me and I will amend the file, which was provided by the Oireachtas.

I won’t be taking down the list though as I don’t think that transparency would be served by its removal.

You might notice as well that some TDs are not listed – this is because the FOI request was submitted a month ago and is accurate going back to that date so not all employees were finalised.

Further down is the document circulated to TDs on how the appointment process works.

Posted in Uncategorized | 1 Response

Minister Brendan Howlin and his general election “promise” of a motorway extension that may not be delivered

Less than a month before the general election, Labour’s Brendan Howlin announced that agreement had been reached for the bypass of Enniscorthy, Co Wexford to continue further south to bring it much closer to Wexford Town.

That was before the election though.

Now, the national transport infrastructure authority is saying it has made no decision on extending the bypass motorway and that the only funding in place for the project is a €100,000 grant to the local authority for a feasibility study.

TII No Records

The announcement that agreement had been reached on the extension was made at a sod-turning ceremony for another road scheme in Co Wexford on February 1, where Brendan Howlin gave a speech.

According to a report in the local Wexford People newspaper, Mr Howlin told the assembled crowd that agreement had been reached with Transport Infrastructure Ireland to bypass Oylegate.

I subsequently submitted an FOI request to both Transport Infrastructure Ireland (TII) and Minister Howlin’s Department of Public Expenditure about the decision.

As we all know, pre-polling day “promises” are always in need of inverted commas. As Pat Rabbitte famously put it: “Isn’t that what you tend to do during an election?”

TII responded to the FOI request to say they held no records on the decision, simply because none existed.

The Department of Public Expenditure also said they held no records relating to the decision.

A meeting had been scheduled to take place between Minister Howlin, the CEO of TII Michael Nolan, and Wexford County Manager Tom Enright on 20 January.

However, it had never taken place as Mr Howlin got waylaid by “a series of votes called in the Dáil Chamber during the scheduled time”.

Asked if he had jumped the gun on announcing that the extension had been finalised, Minister Howlin’s spokeswoman said money had been allocated “to commence design works on a scheme”.

However, Transport Infrastructure Ireland have said the €100,000 in funding is intended for a preliminary feasibility study.

A spokesman for TII said: “There is no decision as yet and this process will be looking into whether or not it would be value for money.

“They are in the process of appointing a consultant and it [the feasibility study] would be a stand-alone project.”

Asked to comment further, Mr Howlin remained confident his promise would be delivered on notwithstanding the fact his time in office is getting shorter by the day.

Howlin Response

The project is a major issue in Wexford as the town of Oylegate will be the only urban centre on the entire route running from Belfast all the way to the port at Rosslare, which will not have been bypassed.

Concerns have been raised locally that the existing traffic bottleneck on the N11 – which are particularly bad on Bank Holiday weekends – will simply move further south to the village.

Newly-elected Fianna Fáil TD James Browne TD: “The impression everybody got was that the extension was going ahead and now it seems that it’s only at a feasibility stage.

“Everybody was of the view that this was confirmed. In fairness to Brendan Howlin, he did ensure the delivery of the Enniscorthy bypass but there was always this concern that the bottleneck would be moved to Oylegate and if it is not extended, it will become a bottleneck, there’s no question about it.

“I think people will be very concerned to find out that this is nowhere near as advanced as was being suggested.”

Minister Howlin was the first politician to be elected in his Wexford constituency despite the wipeout that Labour faced in the rest of the country.

Enormous expenditure in the county may have played a part with one quarter of a €2.25 billion stimulus plan in 2012 earmarked for the county.

As part of that package, two motorway projects – including the Enniscorthy scheme – were given the green light, while Wexford town also secured money for a new courthouse, new garda divisional headquarters, a primary care centre, and significant schools investment.

An edited version of this article appeared in the Sunday Times at the weekend.

Posted in Uncategorized | 2 Responses

How the Freedom of Information Act can help save money for the taxpayer – Leo Varadkar’s repayment of €1,970.40

Some of you may remember a story I did last year about how Minister Leo Varadkar had made a double claim for expenses at a higher mileage rate than he was allowed.

These are the background documents to that, which show how Mr Varadkar ended up making a repayment of €1,970.40. This is a copy of the note from the minister that accompanied the refund he had to make.

Cheque Submission

This extract from an internal email sums up what happened quite well. All that I would say is that if you don’t notice an over-payment of close to €2,000 into your bank account, then either you – or your personal staff – need to start looking a lot more closely at what you are claiming for.

Briefing Note Varadkar

For reasons best known to themselves, it took the Department of Health the best part of six months to respond to the original FOI request I submitted on this.

It was only answered following an internal review when the original request was deemed a refusal.

Something to keep in mind for anybody dipping their toe into FOI requests is the fact that if a public body fails to meet the deadline for dealing with a request without reason – then you are entitled to seek an internal review free of charge.

Any redactions in document below are my own where I’ve removed unnecessary personal details:

 

Posted in Uncategorized | Tagged , , , , , , , , , | Leave a comment

Guide to political salaries and expenses

These are the latest guides issued to TDs and Senators to tell them about how they are going to be paid and how they can claim expenses.

It takes all of 32 pages to give a full run-through of the political expenses system, and 48 to explain how the pay and pensions system works.

I’ve already raised the issue of the €1,200-a-year that TDs get in “petty cash” as part of their entirely vouched system (payment slightly smaller for Senators).

Petty CashSocial media platforms will also be delighted to learn that Facebook promotion and so on is now considered an allowable expense.

 

Posted in Uncategorized | Leave a comment

The scourge of politicians and their “private papers”

ONE of the most common criticisms politicians have of journalists is that they are obsessed with TD’s expenses and government waste.

Quite aside from the fact that this obsession is in the public interest, there is actually another much more practical aspect to it.

Ireland’s Freedom of Information law is severely limited, containing a raft of exemptions that cover issues like commercial sensitivity, security matters, personal information, deliberative processes … the list is endless (maybe not quite).

There are so many exemptions in fact that government departments and public bodies will, when refusing access to certain records, often frequently list four or five separate reasons why they do not have to disclose them.

One area, where it seemed that there were none, or at least very few, restrictions was in the realm of political expenses, and their release to the public.

Back in 1999, the Information Commissioner (in a case involving Richard Oakley, then of the Sunday Tribune) decided that political expense claims could not be considered “private papers” of TDs and Senators and that the public interest in releasing them outweighed any right to privacy.

Four years later, the original Freedom of Information Act was gutted by the then Finance Minister Charlie McCreevy, which included  the introduction of charges for journalists to make requests.

Yet the changes in 2003 made little difference in the area of political expenses, and they remained one of the most easily requested categories of public records.

In 2009, controversy over political expenses claimed its first high-profile casualty when then Ceann Comhairle John O’Donoghue was forced to resign amid a furore over his travel expenses.

Then, two ex-Ministers – Ivor Callely and Ned O’Keeffe – were discovered to have made fraudulent claims for mobile phone expenses and were subsequently convicted of that.

All the time, pressure had been growing for reform of political expenses and a new system for paying TDs and Senators was eventually decided upon.

It actually ended up being much less transparent than what came before.

Henceforth, TDs and Senators would be paid an allowance for travel and accommodation, the level of which is based on how far they live from Leinster House. They do not submit receipts or invoices to cover that.

A second allowance to cover their political day-to-day expenses was also created. This part of their parliamentary standard allowance is, we are often told entirely ‘vouched’, but it’s nowhere near that simple.

By vouched, it actually means a system whereby TDs and Senators could be selected for random audit each year but otherwise, they would never actually hand over the receipts and invoices to the Oireachtas.

This, it was planned, would protect those records from public scrutiny as if they never left the possession of the TD or Senator, they could more easily be designated as “private papers” or personal information.

There was a weakness however, and that was the fact that the unlucky 10% of politicians selected for audit each year did actually have to hand over their receipts and invoices to the accountancy firm Mazars for scrutiny.

And it was access to those records, held by Mazars under a contract from the Oireachtas, which I first sought access to.

As I suspected they would, Leinster House refused my request. I appealed it, lost. And in a final appeal to the Information Commissioner, I lost again.

The Information Commissioner Peter Tyndall effectively overturned the original decision from 1999 on political expenses saying the new Freedom of Information Act of 2014 had introduced a new provision on what constituted the “private papers” of members.

“It is quite broad in nature and affords a more significant protection for private papers of members of the Houses than previously existed,” wrote Mr Tyndall.

I don’t agree and am still trying to get access to those receipts and invoices (this time for a different year), a process which is still ongoing with the assistance of Right to Know.

Separate to that, the battle over what constituted “private papers” opened on a second front when the Oireachtas introduced new standing orders to expand the definition of what could fall under this umbrella.

It was brought before the Dáil on 17 December, which was the final sitting day before Christmas. From start to finish and without debate – it took just seventeen seconds to introduce.

The definition of “private papers” has been dramatically widened and it is not just requests for political expenses that will suffer.

A separate request I made for the diary of the former Ceann Comhairle Sean Barrett has also been refused on the grounds that calendar entries in his email account are “private”.

Ceann Comhairle

This is despite the fact that diaries of other officeholders like government ministers – even senior civil servants – are being routinely published by other departments.

The idea of “private papers” has its root in the Constitution; where it talks about protecting TDs and Senators from anybody “interfering with, molesting or attempting to corrupt its members in the exercise of their duties”.

This idea had in mind private communications between politicians and their constituents, material relating to official inquiries or committees, perhaps even communications with whistle-blowers … the type of material that needs special protection.

It was never intended simply to keep expenses – or other material – out of the public domain, simply because the release of them might be inconvenient or embarrassing.

Posted in Uncategorized | Tagged , , , , , , , , | Leave a comment

Government orders new expenses regime for all public servants with one notable exception … Irish politicians

THE government wanted to introduce a new system of travel and subsistence expenses right across the public service with one exception … and it’s no surprise to know that it is once again politicians who are deemed exceptional.

An internal submission released by the Department of Public Expenditure explained how the travel and accommodation regime for politicians was drawn up to reflect their “constitutional obligations to attend Leinster House” as well as the “constituency obligations” of TDs and Senators.

“Therefore, it would not be intended that these changes would apply to Members of the Oireachtas, particularly since their travel and accommodation regime was cut by 10% (25% in the case of Dublin members) from 1 January 2013 and that … [it] also took account of the 2009 25% reductions,” it said.

It should be pointed out that the payments to Dublin members (the ones subject to those later 25% cut) is the €9,000 a year for TDs (€5,250 for Senators) they get simply for managing to get to work.

You can read the full submission here.

 

Plans to introduce the new regime for travel and subsistence expenses across the wider public sector have also hit a series of obstacles with difficulties introducing the scheme for soldiers, gardai, prison officers and the judiciary.

The reform of expenses for the civil service was introduced last summer, which saw overnight rates increased to €125-per-night, a rise of 14%.

However, an even more significant change was made to almost double the distance a civil servant must be away from home – to 100 kilometres – before they are allowed to claim an overnight.

The Department of Public Expenditure and Reform believe the new system will save €2 million-a-year within the civil service, according to a ministerial submission released after an FOI request (but which was released outside of FOI for those interested in such things).

The submission reveals how the Department had originally planned to extend the new regime – to cover gardai, prison officers, soldiers, and the judiciary – and that this would save another €5 million-a-year.

The changes are being resisted by some however, with at least one representative body arguing that there are strong reasons why different rules should apply for their members.

The Department briefing document said that differences in systems for paying expenses existed for “largely historic reasons”.

“It would be difficult to defend having significantly different occupational regimes in place for different groups of public servants,” it said.

However, the soldier’s representative body PDFORRA said that there were clear “operational reasons” why a different expense regime should apply for the Defence Forces.

General Secretary Gerry Rooney said soldiers did not work normal office hours, and that a system put in place for civil servants would not be suitable.

Soldiers have traditionally been paid a 15-hour subsistence rate, for when they might have to travel long distances between barracks or for extended duty. That special rate would face abolition under the Department’s plan for a blanket scheme.

Significant issues also arose in negotiations with prison officers who have been seeking to keep their old system in place for payment of expenses.

The Department of Public Expenditure confirmed that an adjudicator had said earlier this month that prison officers should be allowed to retain the old system.

They said: “The Irish Prison Service is considering the decision and will be consulting further with the Prison Officer’s Association in its implementation.”

That adjudication could mean some prison officers will now have to be repaid expenses, which they would have been entitled to under the previous system – but which have not been paid since July of last year.

Plans to extend the scheme to An Garda Siocháná were also dropped and have instead only been applied to civilian staff of the force.

The Department of Public Expenditure explained that the Department of Justice had been in discussions with gardai about the new scheme.

However, “garda management pointed out that the administrative burden of applying two different systems to this category, depending on whether the travel and subsistence arises from their 9-5 duties or occasional duty on the front-line, would be overly burdensome.”

This may be interesting in light of the Toland report findings last year of a “deferential relationship” between the Department of Justice and gardai and one could be forgiven for wondering just how far this was pushed. The tail may still be wagging the dog here.

Garda StatementNegotiations are also taking place with the Association of Judges of Ireland about applying the new rules to their members, some of whom travel frequently, particularly if serving in the District Court.

The Department said: “Discussions are ongoing with the Courts Service and the Association of Judges of Ireland on the implementation of [the circular] to the Judiciary.”

An edited verison of this story appeared in the Sunday Times at the weekend. You can read it here

Posted in Uncategorized | 1 Response

How long did it take to change the rules to keep political expenses secret? All of seventeen seconds

There was an interesting discussion on Broadsheet following my last post on the battle to bring the expense claims of TDs and Senators out into the open. You can read a selection of the comments here

One of the things on which questions were raised was this idea that something could be “quietly” introduced in the Dáil, without journalists or politicians even really noticing what was happening.

And some suggested this was not an accurate description of what had happened.

“If it went through the Dáil, it wan’t quietly introduced, it just probably wasn’t noticed,” said one poster, and maybe that’s a point.

So, I thought it would be worth a look back to see just how long it did take to change the rules so that politicians could keep their expenses secret.

And the answer was … all of seventeen seconds. Scroll to around 4:12.26 on the day (blink and you will miss it, well almost).

Notice the way this happened “without debate”. You can watch the edited clip via my Twitter account here

And so you see this big long descriptive account of what happened, as we would read it on the Oireachtas website (via kildarestreet.com) – none of that detail was made public.

Posted in Uncategorized | Tagged , , , , , , , | Leave a comment