Republican News · Thursday 11 July 2002

sbacher - the untold stories

BY ROBBIE MacGABHANN

There are a handful of Gardaí seconded to the new office of corporate enforcement. The rest were obviously needed on the beat, policing the double standards that permeate our society today

So now we know the Ansbacher names. We know the architects, the builders, the property developers, the bankers, doctors, solicitors, and self-styled business entrepreneurs who participated in one small but hugely lucrative tax scam.

We can say small because we don't know how many other Ansbacher type schemes there are. In recent weeks, we have seen the Revenue Commissioners' report, which details 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. There was also National Irish Bank's Clerical Medical Insurance tax scam.

This is what we know of and throughout the media we are told there must be more Ansbacher type operations. But no one is telling us how they will seek out these tax criminals. In fact, we are told it might be difficult to successfully prosecute any of the Ansbacher account holders who are found guilty of fraud.

AMNESTIES FOR THE WEALTHY

Why are we stepping delicately around this issue? Why do we have to have news reports that carry the caveat that we cannot say that among the most wealthy in our society, among the decision makers and the institutions of the state, we will find fraudsters and criminals, thieves and liars.

It seems that we are not supposed to say that, even though in just one small example of one small bank, we can point to the banks, the accountants, the solicitors and private companies who broke the law. We can point to the institutions of state that are at best unable but more likely just unwilling to halt this fraud.

We can point to the governments that lacked the political will and resolve to tackle this problem of fraud and tax crime. They cannot say that they didn't know and weren't aware of the scale of the problem. It was the establishment parties who in 1988, 1989 and again in 1993, set up tax amnesties to allow the tax criminals go free. At the same time, the same parties were filling prisons with thousands of young men involved in non-violent theft, where the value of goods was often less than a £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 involve amounts of less than £100. Less than 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 Gardaí don't even attempt to record, let alone detect tax crime. There are a handful of Gardaí seconded to the new office of corporate enforcement. The rest were obviously needed on the beat, policing the double standards that permeate our society today.

ROTTEN APPLES

So why were the politicians in Fianna Fáil and Fine Gael especially so reluctant over the years to act against tax criminals? One obvious answer is to look at the roll call of shamed TDs in recent years, with Burke, Foley, Flynn, Haughey, Lawlor and Lowry listed.

However, this is dangerous ground. It would be completely misleading to suggest that just because of a few rotten apples, the body politic is diseased too and of course, then there are the legal issues. Just because you have one or two or even three tax fraudsters in a government, and even if one of them is Taoiseach, it would be completely misleading to say that they are a corrupt government. That would be illegal.

But who wrote this legal code? Who compiled these laws that protect the wealthy, punish the poor and overlook the misdemeanours of the rich professionals? Who practices the law and fills it with terms and language that nullifies the righteous anger of those who weren't stockpiling their wealth in illegal bank accounts, who don't have vast sums of money unspent and don't have access to the professional advice that would let them defraud the Irish taxpayer.

It is the very same group of people who are defrauding us in the first place. The politicians, bankers, accountants and legal eagles who coerce, legislate, police and prosecute us are the very ones who have compiled laws and codes that apply to us but not to them. Nice one, lads. You must have been laughing into the whiskey decanters while puffing on the overly large cigars every weekend.

UNTOLD STORY

However, there is still one story left untold from the Ansbacher saga. It is the tale of two Dublins. You see, in one city, there was a nice man called Des Traynor who lived in a pleasant respectable and obviously wealthy community. Traynor's neighbours and friends often approached him for advice and usually help in investing their money.

Traynor did help not just with advice; he set them up accounts to illegally 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, Cornelius Collins, told the Inspector how he was advised by Stokes Kennedy Crowley to invest his money offshore and out of sight to 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 healthy cooperative 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.

O'REILLY BAILOUT

Then there was the case of friends in this financial community who 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, an oil exploration company.

Ferguson, McCarthy and the already mentioned Cornelius 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 is one where people have the problem of not too much money but too little. They don't have the helpful bank manager or accountants 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 their 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 others to be bothered with.

MONEY LENDERS

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

Families in this other Dublin, this other Ireland in fact, get into debt to fund communion and confirmation clothes, to buy Christmas presents. Their lack of money leads to their being exploited over what are often incredibly small amounts of money.

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

David 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.