Department of Justice looked for €65 million extra for gardai including a million-a-day for Joe Biden visit

The Department of Justice asked for €5 million to cover the cost of security for the visit of US Vice President Joe Biden to Ireland.

The money was sought in a letter from Justice Minister Frances Fitzgerald as part of a €9.45 million bill for policing VIP visits and commemorative events this year.

It also included a plea for an extra €950,000 to cover the security costs for the short visit of Prince Charles and Camilla, Duchess of Cornwall, to Donegal in May.

The letter, released under FOI, was sent to the Department of Public Expenditure as part of a formal request from Ms Fitzgerald’s Department seeking sanction for an extra €65 million allocation for policing in 2016.

Remarkably, almost 8% of that related to the Biden visit, with the Department of Justice also told it must find savings in prisons and others services to help ease their overrun in spending.

The €5 million for the Biden visit was the same as what had been allocated to a high-profile policing operation in Dublin to tackle gangland crime earlier this year.

In the letter to party colleague Paschal Donohoe, Ms Fitzgerald wrote: “In addition, extra costs will arise in the context of necessary security arrangements relating to the protection of visiting dignitaries.

“The costs associated with the recent visit of HRH Prince Charles and the Duchess of Cornwall on 25 May 2016 are in the order of €0.95 million.

“Vice-President Biden is scheduled to arrive for a 5 night visit next month and it is likely that some €5 million will be required to provide necessary security services.”

The Department of Justice said the final bill for the Biden trip was “not yet available”.

Mr Biden’s six-day visit to Ireland took place in June, when he travelled here along with his brother and sister, his daughter, and five grandchildren.

As well as several days spent in Dublin, he also visited Newgrange, and the Cooley Peninsula in Co Louth where his ancestors had lived.

He also stopped off in Co Mayo where he watched Ireland’s Euro 16 match against Italy in a pub in Taoiseach Enda Kenny’s home town Castlebar.

Although the trip was described as deeply personal for Mr Biden, that made no difference to security arrangements which involved hundreds of gardai and Defence Forces personnel.

The extra €65 million was sought by Minister Fitzgerald in May to deal with the “unprecedented level of policing activities” that were to take place this year.

However, following negotiations with the Department of Public Expenditure, that figure was reduced to €55 million.

Ms Fitzgerald explained how significant resources had already been spent trying to tackle gangland crime, particularly related to the Kinahan Hutch feud.

Ms Fitzgerald wrote: “In light of recent atrocities, particularly in the Dublin inner-city area, considerable garda resources are currently being deployed to disrupt and investigate activities connected with serious organised crime gangs.”

She said that €5 million had already been allocated for the feud but that more money – the exact figure for which has been redacted from the letter – was needed to keep going.

“These operations, while labour intensive, are clearly having an impact – both in detecting and interrupting the criminal gangs and reassuring the public,” she wrote.

The Minister also said she was looking for extra money (with the amount again redacted) to continue Operation Thor, a crackdown on burglary gangs particularly in rural areas.

She explained that there had been 19,000 anti-crime patrols and 23,000 targeted checkpoints, which had “achieved notable success”.

Lastly, money was also needed to keep on track programmes for increasing garda numbers, both full-time and reserve, increasing civilian staff, and investment in IT, cars and stations.

In an email between senior civil servants, the Department of Justice was told it should review its figures to try and bring them down.

It said: “Your Department must re-examine and pursue all opportunities to reallocate/redeploy resources from other less priority areas.”

In the email, the Department of Justice was told it was “not acceptable” that with a €2.2 billion budget, there was not room to look for savings elsewhere.

“It would be much better for the outcome if your Department tables a reassessment of the ask for additional Exchequer funding, which this time includes a more acceptable and realistic component of … savings,” it concluded.

In a summary document prepared for the Department of Public Expenditure, it was explained that ultimately a total of €55 million would be needed.

That was made up of €50.9 million in garda overtime, €2.648 million in travel and subsistence expenses, €226,000 for other expenses, and €2.139 million for operational equipment.

The Department of Justice also promised to make savings of €15.5 million through cost cutting in other areas like prisons. The document said that would bring the extra allocation needed down to €40.5 million when the savings were taken into account.

You can read the documents below: the email back to Dept of Justice and the letters from Frances Fitzgerald.

Justice Email

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Ivor Callely claimed there was simply “a level of ambiguity” over fraudulent expense claims for mobile phones

Former minister Ivor Callely claimed there was simply “a level of ambiguity” over fraudulent expense claims in a bizarre set of letters sent to authorities at Leinster House.

The former minister, who was caught red-handed after a newspaper investigation into his claims for mobile phone expenses, said he wished to “withdraw” the claims and repay the money involved.

However, in the letters he made no admission that the claims had actually been forged using invoices from a company that was no longer in business.

In two letters released by the Oireachtas following a Freedom of Information request, he repaid close to €3,000 to the taxpayer.

In the first, he wrote: “As you are aware, I received a payment in November 2007 of €2,879.45 following the process of my claim.

“However, there is a level of ambiguity regarding this claim and therefore I wish to withdraw this claim, refund the monies that I received and attach cheque for same. I regret any difficulties that this matter has created.”

The letter is signed simply Ivor.

In a second letter sent five days later, the then Senator made a further repayment after being allowed to examine expense claims he had made to the Oireachtas.

He wrote: “Thank you for your accommodation of my request to inspect my expense file for mobile phones under the Direct Purchase Scheme.

“I noted that five of the six claims and receipts submitted were from a business operating at Communications House, Fairview Strand, Fairview, Dublin 3.

“Due to the ambiguity associated with this business, I withdraw the April ’08 claim for €737.60 and refund the monies as attached.”

He said he again regretted “any difficulties” the claims had created.

There was in fact very little “ambiguity” over the expense claims, which had been exposed in the Irish Mail on Sunday just a few weeks previously.

He had submitted claims for four mobile phones using invoices from a business in Dublin, which had actually gone bust close to a decade before the claims were made.

Under the so-called Direct Purchase Scheme, TDs and Senators were allowed to claim €750 every eighteen months for the purchase of a new mobile phone.

And in November 2007, Mr Callely submitted a claim to the Houses of the Oireachtas Commission for almost €3,000 using four separate forged receipts.

A declaration on the form said: “I hereby certify that the expenses claimed have been actually and necessarily incurred by me in relation to my membership of Dáil Éireann and the particulars furnished herein are in all respects true.”

Despite the fact that the invoices showed clear evidence of having been fake – including outdated six-digit phone numbers and pounds signs instead of euros – they were still paid out by authorities.

It was only following the newspaper expose that the truth emerged and a garda investigation into the claims was launched.

Mr Callely later pleaded guilty to fraudulently using six invoices to claim a total of €4,207.45 and was given a five-month jail sentence.

The former politician’s troubles did not end there however, and in May, he avoided jail after settling a long-running debt.

The ex-Fianna Fáil minister cleared a debt of €1,755, which had been outstanding for more than three years to an accountancy firm and over which he led the court on a “merry dance”. He was back in the news today.

Mr Callely was one of two TDs discovered to have made fraudulent claims of mobile phone expenses along with another former minister Ned O’Keeffe.

The Oireachtas said they did not have any records of correspondence with Mr O’Keeffe surrounding his expense claims and said a repayment of €3,737.50 was received from him in January 2015.

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Central Bank refused to give government names of staff who had benefitted from controversial top-up scheme

The Central Bank was told to provide clarification on legal advice they had received that allowed them to pay up to half a million euro in top-ups to a select group of staff as “retention payments”.

They were also told that if advance legal advice had not been received allowing the payments, they would have to take steps to recover the money from the workers who had benefitted under a controversial bonus scheme.

In correspondence with the Department of Public Expenditure, a series of questions were raised about the retention payments, which were described as “large [but] ineffective”.

Large But Ineffective

In an email exchange within the Department, a senior civil servant wrote that only three staff had actually stayed long enough in their jobs at the Central Bank to collect the full top-up.

The email also explained how the Central Bank had not received “advance legal advice” and were facing queries from the Comptroller and Auditor General about the payments.

The top-ups have been heavily criticised because bonus and performance-related payments were expressly forbidden under the FEMPI legislation introduced right across the public service to deal with the financial crisis.

However, the Central Bank – unlike all other state bodies – did not have to seek express sanction from the Department of Public Expenditure for payments.

According to a memo for then minister Brendan Howlin, which was obtained under FOI, this was because there was a provision under the Maastricht Treaty, which gave them a special status that they “guard jealously”.

Jealously Guards

That memo also explained how the payments were to be “kept confidential”, but expressly warned that “news that these payments are being made available to a small group may become publicly known”.

The retention payments did become public and were the subject of a flurry of correspondence after the payments, which then totalled around €234,000, were criticised at the Public Accounts Committee last November.

In a letter sent to the Central Bank late last year, the Department of Public Expenditure demanded all documentation relating to the scheme along with the names and amounts paid to each individual.

DPER Demands

In response, the Central Bank said that “retention payments” had been sanctioned for eight employees in May 2011 amid concerns these staff could be tempted into the private sector by better pay.

The bank refused to provide the names of the individuals who received the payments on the “basis of confidential contractual provisions”.

Non-Disclosure

It also said: “Specific legal advice were not obtained at the time but we have since consulted with our external legal advisers and, based on the advices received, we are satisfied that the Bank had a valid and legal basis for making the payments at the time.”

An internal Department email commented: “No advance legal notice, but a general assertion that the payments were compatible with the purpose of FEMPI, as opposed presumably to the strict letter of it.”

The Department responded to the Central Bank again seeking confirmation that they had legal advice that the payments were in compliance with law.

“In the absence of such advice, or agreement, I would be grateful if you could detail what steps will be taken on behalf of the Bank to recover monies paid to employees,” it said.

In a further short email response, the Central Bank said: “I stated in my [previous] letter … that the Bank had received legal advice in respect of the 2011 retention payments and the Bank was satisfied, on the basis of that advice, that the Bank has a valid and legal basis for making the retention payments at the time.”

The Central Bank said they were satisfied the payments were in order and that there was “no question of repayment of funds”.

A statement said: “This policy was developed in response to the Bank’s risk of losing key employees who are in certain strategic roles critical to strategically significant projects.”

The Department of Public Expenditure said they had nothing to add.

Two sets of documents below on the discussions for those interested (redactions of personal email addresses and mobile phone numbers are mine):

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Why do TDs living a relatively short drive from work in commuter towns get €15,000-a-year in “accommodation” expenses?

TWELVE TDs are each being paid over €25,000 in travel expenses per year which includes a generous allowance for overnight accommodation, despite living a relatively short commute to Leinster House.

The politicians all live within a 60 kilometre radius of their place of work, travelling to Dublin from popular commuter towns like Navan, Co Meath, Drogheda, Co Louth, and Newbridge, Co Kildare.

But while many of their constituents take the bus or train to work each day at their own expense – the TDs are paid a tax-free sum of €25,295 each to cover the cost of their travel and accommodation.

That allowance is calculated on the basis of 150 overnights paid at civil service rates according to a statement from the Department of Public Expenditure (which makes up around 60% of the annual payment).

The only ones who don’t get the accommodation element included are the Dublin TDs.

dper on accommodation bigger

The rest of the €25k-a-year allowance is based on travel to and from work, and whatever additional travel they undertake in their constituency or nationally as TDs.

For these TDs, it is hard to see the issue of overnight accommodation would arise in the same way as for those travelling from say Kerry, Mayo, or Donegal who have no choice but to stay in Dublin or face very lengthy drives back home.

The twelve politicians are all in what is categorised as “Band 1” for the purposes of their Dáil expenses, living between 25 and 60 kilometres from the Dáil.

In the latest publication of Dáil expenses for April, they are all listed as being in receipt of €3,803.75, which includes their monthly travel and accommodation of €2,107 and a separate payment to cover the costs of public representation.

Another politician, the Labour TD Brendan Ryan also qualifies for Band 1 expenses for his address in North Co Dublin. However, he has opted to take a lower monthly amount and was paid €445 less than the others in April.

Four other politicians also live in Band 1, but have all been appointed as Ministers or Ministers of State and will be paid expenses under a different ministerial system. Another has been incorrectly listed.

One of the Band 1 TDs, Fianna Fáil’s Frank O’Rourke, has already been the subject of controversy over his claiming of the full amount.

He lives exactly 25.5 kilometres from the Dáil in Celbridge, Co Kildare … just five hundred metres above the threshold for Band 1 expenses. If he lived just one kilometre closer to Leinster House, he would be paid €16,000 less each year.

The other eleven TDs all live in the commuter belt counties of Wicklow, Kildare, Meath and Louth.

They include five Fianna Fáil TDs: Pat Casey, who lives in Glendalough, Co Wicklow, Shane Cassells in Co Meath, Fiona O’Loughlin in Newbridge, Co Kildare, James Lawless in Sallins, Co Kildare, and Thomas Byrne in Co Meath.

Three Fine Gael TDs are also listed in Band 1 including former minister Fergus O’Dowd in Drogheda, Co Louth, Martin Heydon in Newbridge, Co Kildare, and Bernard Durkan in Co Kildare.

Two Sinn Féin TDs are also listed in Band 1 in Oireachtas records, Peadar Toibín in Navan, Co Meath, and Imelda Munster in Drogheda, Co Louth. Social Democrat Stephen Donnelly is the last of those listed, and he lives near Greystones, Co Wicklow.

I contacted each of the twelve to ask them if they thought the allowance for their travel and accommodation was too high. Four responded.

Fianna Fáil’s Thomas Byrne lives 52 kilometres from Leinster House in Co Meath, not far from the town of Drogheda, Co Louth.

He said: “The allowances in place apply to all TDs and relate not only to our commute to Dáil Éireann as you suggested, but to all travel and accommodation expenses incurred in the course of a TD’s constituency and national responsibilities. I will comply in full with whatever expense regime the Oireachtas introduces.”

Sinn Féin’s Imelda Munster said: “Yes it is a generous allowance but that is the one that has been set down and currently in place. Sinn Fein believes all expenses should be fully vouched and have called for change in this process. Sinn Fein has already submitted motions to reduce salaries of TDs and Senators.”

Fine Gael’s Bernard Durkan, who lives 32 kilometres from the Dáil, said he regularly travelled right around the country on party business.

He said the rates of expenses for Dublin TDs were in fact the problem, as they were too low and putting serious pressure on them to cover their political costs.

“I think that the Dublin band is too low and I believe they have difficulty doing all of the work they need to do. I would be strongly of opinion that any changes that might be made would benefit them. They are disadvantaged, there is no doubt about it,” he said.

“I don’t look for any special arrangements. Whatever the band is, I didn’t set the band. It’s not my manufacture. The distance from my home to the Houses of the Oireachtas is whatever it is.”

Fianna Fáil’s Fiona O’Loughlin, who lives 49 kilometres from Dublin in Co Kildare, said: “I will comply in full with whatever expense regime the Oireachtas introduces or that it has in place.

“The allowances that you are referring to are not only relevant to the daily commute to the Dáil but also to any travel or accommodation expenses that I may incur as I carry out my constituency and national responsibilities.

“I find myself on the road seven days a week and often find that plans change at the last minute, which brings extra expenses when trying to book accommodation at short notice.”

Chartered accountant and campaigner on political expenses Enid O’Dowd said: “I can’t understand why the allowance includes a generous overnight rate when so many of them only have a normal commute.”

In a statement, the Oireachtas said that rates for the allowance system were set by the Department of Public Expenditure and that they administer the scheme.

They pointed out that the allowance also allows for constituency travel, and that this must be factored in. They also said that it was open to TDs at the end of each year to refund part of their allowance if they wished.

A version of this article with a very useful graphic appeared in this weekend’s Irish Mail on Sunday where you can often find my work.

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Government jet records of Irish President could be released for the first time following landmark decision

RECORDS of travel aboard the government jet and other state aircraft by the Irish President should be released publicly, according to the Office of the Commissioner for Environmental Information.

It would be the first time official records relating to Áras an Uachtaráin have been made public under access to information laws.

The Office of the President is (for both questionable and rarely questioned reasons) entirely exempt from Irish Freedom of Information law.

However, that exemption does not apply under different information laws designed for putting information relating to the environment in the public domain.

The Information Commissioner Peter Tyndall decided that the use of VIP air travel arrangements was environmentally significant because of the level of emissions involved in choosing private jets instead of scheduled airlines.

In what could be a landmark decision, Mr Tyndall said for instance that a government jet flight to Brussels from Dublin would generate 2.6 tonnes of carbon dioxide for a journey of just 428 nautical miles.

Mr Tyndall – acting under one of his other hats as Commissioner for Environmental Information – said the Department of Defence was “not justified” in refusing access to information for the Ministerial Air Transport Service.

He said the information relating to officeholders, including the President, was environmental information and that dates and destinations of travel should also be released.

In his decision, which you can read in full below, he said that unless it was appealed to the High Court, the Department should make a new decision.

This request under the AIE laws was originally made in February of 2015 and refused on the basis that the information did not fall under the environmental regulations.

It was also refused on internal review for similar, but slightly more subtle, reasons.

In March 2015, I looked for a review from the Office of the Commissioner for Environmental Information and his decision issued earlier this week.

In my appeal, I successfully argued that every time a private jet, or a state aircraft is used, instead of a regular flight or indeed a car (for travel within Ireland) – there is a significant cost to the environment.

Use of AIE in Ireland is best known from the successful case that Gavin Sheridan took seeking for Nama to be considered a public body, prior to its inclusion under FOI.

The AIE laws have a number of specific uses and are criminally under-used by journalists:

  • The definition of environmental information should by rights be interpreted very broadly.
  • These requests can sometimes be used to avoid the countless and incredibly broad exemptions that exist within Irish FOI law.
  • They can be used to get access to information relating to public bodies that do not fall under FOI (or only partly under FOI).
  • They also used to be free, when FOI requests cost €15, but that is thankfully no longer an issue.

This decision could for the first time bring the President’s Office under at least some access to information law, so long as it relates to the environment.

This is the type of work we hope to be doing a lot more of at Right To Know in the coming months and years.

The only previous time a record was ever released relating to the Áras was when a bill containing details of a hotel room costing €3,198 for a single night for Mary McAleese was released by accident.

You can read more about that here but the invoice has disappeared from that link so I will endeavour to re-upload it.

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‘Ghost worker’ paid more than €90,000 on government-funded scheme he was not even eligible for

A TAXPAYER-funded jobs initiative paid out in excess of €90,000 to a ‘ghost worker’ who did not qualify to be on the scheme and never actually worked there at all.

The worker – a participant on a controversial FÁS scheme in Tipperary – began his job after forged and falsified application records were created to facilitate his enrolment.

The ‘ghost’ worked on a project aimed at converting a Famine-era workhouse into hostel accommodation; it swallowed €4.2m and was never completed.

It now lies in a state of disrepair with boarded-up and broken windows behind locked gates on which a broken FÁS sign still hangs.

During his enrolment at the project the ghost worker was paid for six years – at a cost to FÁS of €93,000 – before his employment was terminated in 2009.

Details of the existence of the ‘ghost worker’ are contained in a FÁS investigation report into the Tipperary scheme.

The report concluded that during his time on the project the worker concerned ‘did not attend the project site yet continued to be paid’.

Ghost Worker

This discovery was just one in a number of serious irregularities uncovered. Others include forged signatures, falsified records and work carried out to private homes and projects connected to individuals involved with the scheme by workers supposed to be working on the hostel site.

In all, the report found that there was a loss to FÁS of almost €160,000, made up of payments to the ghost worker, inappropriate top-ups to wages and ineligible training costs.

In addition, Pobal – which awarded grants of more than €300,000 to the scheme – lost €86,000 after invoices were improperly used to draw down funds for costs that had not yet been incurred.

For a bit of background on the project, you can watch a documentary I made with the RTÉ Investigations Unit about the Tipperary Hostel scheme here

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How an extra 500 metres can mean an additional €16,000-a-year in the ridiculous world of Irish political expenses

A NEWLY elected TD is being paid an extra €16,000-a-year in tax-free expenses because his drive to work is 500 metres above the threshold for politicians that live close to the Dáil.

Fianna Fáil’s Frank O’Rourke, who was elected in the Kildare North constituency, is being paid travel and accommodation expenses of more than €2,100 per month.

The enormous monthly payment is being made even though Mr O’Rourke lives in Celbridge, where a large number of residents travel to and from Dublin each day.

Under current rules, TDs who live less than 25 kilometres from the Dáil are paid €9,000 a year tax-free to cover their travel costs to work, and also for travel within their constituency.

However, once they live above a threshold of 25 kilometres – their rate of payment makes a dramatic jump of more than 180 per cent. You can see all expense payments made to TDs since the election here and how the system works here.

In the claim form submitted by Mr O’Rourke to authorities at Leinster House, he has said the distance that he must travel to the Dáil each day is exactly 25.5 kilometres.

However, when the trip from his home to Leinster House is entered into Google Maps, the distance is said to be 24 kilometres. Despite that, Mr O’Rourke is correct and when the trip was measured independently, it came in at just above 25 kilometres.

O'Rourke Declaration

Mr O’Rourke for his part said he had personally measured out the drive on several occasions to make sure his declaration was absolutely correct. He even offered to repeat the trip with me.

He said: “I was asked for the distance. I set the clock on my car and on three occasions and following the only way I can go – no long way or manipulation of it whatsoever, I got 25.5 kilometres and on another day I got 26. I averaged it at 25.5 kilometres.

“If it was 22, it would have gone down [as that]. I’m not into that sort of carry-on or stuff whatsoever. All I did was done very honestly and openly. I’ve been a councillor for five years, never went [anywhere] or claimed a cent aside from the bare minimum. You’re quite welcome to join me any day and I’ll zero the clock.”

One of the reasons why the allowance is so high is because many TDs from outside of Dublin have to pay for accommodation when working in the Dáil.

However, Mr O’Rourke said that since being elected he had not stayed in Dublin and returned home to Celbridge each night.

“I commute home and [it’s] dependent on the business [of the Dáil] whether I take public transport or bring my car. It’s a complete mix for me,” he said.

Asked whether he felt the level of expenses paid were justified considering the costs involved for him, he said he had simply abided by the system in place.

He explained: “I’m very genuine and serious about this. Many years as a councillor, I was the councillor who claimed the lowest, [there was] no additional for conferences, or extra committees – [just the] salary and expenses you’re entitled to claim. It’s no different here.

“All I’ve done is I’ve done what I was asked to do. I drove into the Dáil and I measured it, that was the measurement that came up. I handed that into the One Stop Shop [Oireachtas administration] and I signed the forms.

“I would do a huge amount of travelling in the constituency. I was in Naas twice or three times [one day]. I will look at it at the end of the year, it’s too far down to consider.

“The allowance is given dependent on different situations and conditions. That’s as much as I can say. I’m only in the job two and a half months. I’ve done everything that’s been asked from me. If something changes in the [expenses] system, that will be fine as well.”

You can read the full story in today’s Irish Mail on Sunday.

Chartered accountant and expenses campaigner Enid O’Dowd said the case highlights just how ridiculous the political expenses system can be.

She said: “The system needs changing but the current one benefits all members. As they make the rules, they have no incentive to change the current system.

“However, there is a court challenge being taken against the system. Our constitution says all citizens are equal but they are not when it comes to travel to work costs. All other citizens have to pay their own costs to work including Mr O’Rourke’s constituents who travel from Celbridge to Dublin, which is a normal commute.”

That court challenge is being taken by John Wolfe, who recently featured in the Dublin Inquirer. Anybody who would like to help him, especially with fundraising for a legal team, can contact him at malahidejohnwolfe AT gmail DOT com.

 

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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.

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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.

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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

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