Privateprosecutions,again - Village Magazine

22 March 2015

The failure to jail white-collar criminals remains egregious

AST year the prosecutions of Anglo Irish bank bosses ﬁzzled out in

community service for Pat Whelan and William McAteer, guilty of

10 counts of providing illegal loans to the group of investors known

as the Maple 10 to prop up the Anglo share price. Sean FitzPatrick, the

bank’s former chairman, was acquitted of engaging in an illegal share-

support scheme.

As the ‘Ansbacher’ tax scandal took brieﬂy again to wing in Decem-

ber, the outgoing chair of the Revenue Commissioners, Josephine Feehily,

reminded us again that although 289 cases of illegality were identiﬁed in

relation to the largest tax evasion scheme in Irish history, not one person

has been prosecuted over Ansbacher.

In July 2013 the DPP withdrew corruption charges against four county

councillors and a businessman ending a 21-year saga of the rezoning of

lands at Carrickmines in South Dublin because of the medical condition

of former government press secretary and lobbyist Frank Dunlop who

was the chief prosecution witness.

Corrupt ex-planning oﬃcial George Redmond won his legal battle last

month to have all adverse ﬁndings against him removed from the plan-

ning tribunal report following a Supreme Court ruling on the evidence

of whistleblower, James Gogarty. Tribunal ﬁndings of corruption against

(corrupt) former Minister for Justice, Ray Burke, and (corrupt) business-

men Michael Bailey and Joseph Murphy Jr were quashed for the same

reasons. Findings that they hindered and obstructed the tribunal were

rescinded.

Mr Redmond was convicted of corruption in 2003 and sentenced to

12 months imprisonment following a majority jury verdict. That con-

viction was overturned on appeal as unsafe and he was released after six

months. He was retried in 2008 on two separate corruption charges but

the jury failed to reach a verdict on the ﬁrst count and he was acquitted

on the second.

Sean Quinn is back at his glass plant though his family seem to have

hidden €500m in assets all over Europe.

So far so bad.

However, there has been some ambiguous momentum. Sean FitzPatrick

still faces 12 counts of failing to disclose to auditors Ernst & Young the

true value of loans worth at least €139m given to him or people connected

to him, by Irish Nationwide Building Society from 2002 to 2007. The

Garda are ﬁnally considering a ﬁle concerning the Ansbacher accounts,

after “a delay in the system”. The State has sought the extradition of

former Anglo CEO, David Drumm.

Democracy is subverted by the ﬂagrancy and impunity of white-collar

crime. At every level the criminal system has been set up to ensure main-

tenance of the status quo, and certainly not to challenge the privileges of

the wealthiest or most powerful, who ravaged this country.

For example, since its inception, the Competition Authority – now the

Competition and Consumer Protection Commission – has secured 33

convictions against companies and individuals, but the yield has been

low: €629,000 in ﬁnes and no one sent to jail, though nine people were

given (suspended) custodial sentences. The ODCE has secured around

300 convictions, mostly in the District Court where ﬁnes and penalties

are derisory. In its 14-year history, the Oﬃce of the Director of Corporate

Enforcement (ODCE) has never secured a single prosecution for insider

trading or market abuse, though in 2012 it did ﬁnally secure a three-year

prison sentence arising from a company law conviction and in 2014 it

secured the convictions of Whelan and McAteer, though Sean FitzPatrick

was acquitted.

The only convictions related to the drawn-out tribunals have been of

Ray Burke for tax evasion, George Redmond (eventually overturned)

and Frank Dunlop for corruption, and Liam Cosgrave for oﬀences under

the ethics acts; as well as of Liam Lawlor for blatant obstruction of the

Planning Tribunal. More are needed. The idea that Bertie Ahern’s digout

story which the Planning Tri-

bunal discounted, was never

looked at for possible perjury

or obstruction of the tribunal,

is inﬂamingly iniquitous.

Comparisons have inevitably

been drawn with the US where

$65bn-Ponzi-scheme supremo,

Bernie Madoff, is serving a

150- year jail term. But, even

there, though over 800 bankers

served jail time for the savings

and loan crisis in the 1980s,

not one was imprisoned for the

sub-crime crisis of 2007-9.

The US prosecutor’s panoply

of wire-taps, plea-bargaining,

monetary incentives for wit-

nesses to testify against former

colleagues and the wholesale

removal of discretion in sentencing from judges are alien to the Irish

judicial system.

The recent protected disclosures bill ushers in US-style immunity from

prosecution to corporate whistleblowers, though in the US they are now

even oﬀering enormous ﬁnancial rewards to whistleblowers. It is also

time to consider introducing pre-trial hearings that would force prose-

cutors to show their hand at an early stage, ﬂushing out frivolous cases,

and reducing delays. This would undoubtedly have helped with the ﬁrst

Anglo prosecutions.

But above all we need a change in the ethos of the criminal justice

system. A rigorous programme of training for judges, lawyers, Gardaí,

ODCE, Central Bank, Competition and Consumer Protection Commission,

Revenue and DPP must be prioritised.

Eighteen months ago Village announced, in frustration, an initiative to

promote private prosecutions of tribunal villains and corrupt bankers. We

pursued the matter with banking whistleblower Jonathan Sugarman.

After some frustrating false starts, lawyers – including senior counsel

Michael McDowell and Newry-based solicitor Kevin Neary who handled

the £10,000 reward that ultimately led to the instigation of the planning

tribunal – generously undertook to provide their services for the initia-

tive. However, Mr Sugarman, whose career was devastated by his bravery

in disclosing breaches of banking regulations by Unicredit Bank, decided

in the end not to pursue his commitment to the case. This was a pity as a

senior ﬁgure in the enforcement apparatus had made contact about the

matter. After this Village has had to deal with four separate and unlikely

defamation cases, which it has dispatched. It all sapped our energy for

the private prosecutions. That energy has now returned.

Village is looking for another case to pursue and will return to this issue

over the next few issues. •

Private prosecutions, again

EDITORIAL MARCH 2015