Appleby's team is too small to catch big fish

Business Opinion: Suddenly the Ansbacher scandal (remember that?) is back in the news. Padraig Collery, assistant to the architect of the Ansbacher Deposits, the late Des Traynor, has been disqualified from involvement in the management of any company for nine years.

Mr Collery, some readers may recall, used to drop into the CRH chairman's office in Fitzwilliam Square, Dublin, on Saturday mornings, to work on the secretive accounts kept by Mr Traynor. After Mr Traynor's death in 1994, Mr Collery continued to operate some of the accounts. One day when giving evidence to the Moriarty Tribunal, a few years ago, he used both hands to show how large a packet containing £50,000 in cash would be. He had, he explained, an expandible briefcase.

The Ansbacher inspectors found that from 1989 to 1994, Mr Collery knowingly assisted Ansbacher in its affairs so as its customers could evade tax.

Mr Collery, a banking technology consultant, is not a director of any company. The High Court disqualification came on foot of an application from Paul Appleby, the Director of Corporate Enforcement (ODCE), and it is the first court punishment arising out of the whole Ansbacher scandal.

Last week a case involving another former associate of Mr Traynor's, auditor Patrick McCann, was also before the High Court. Mr McCann wanted to have Mr Appleby's application against him struck out on the grounds of inordinate delay.

Mr McCann acted, variously, as auditor and director of a company run by Mr Traynor called Kentford Securities. Mr Appleby contends Mr McCann was both auditor and director at the same time, but Mr McCann hotly disputes this. Kentford Securities was used by Mr Traynor to withdraw £2.75 million from the Ansbacher accounts, for clients who did not wish their affairs to come to the attention of the Revenue. Its accounts at the time described it as a £2 company.

The judge ruled against Mr McCann's application and the case will in time go ahead. Mr McCann has said it would be disastrous for his business, an auditing and accountancy firm, if he is disqualified from acting as an auditor, director and various other roles, as sought by Mr Appleby.

The most striking aspect of all of this is how long it has taken for any cases to come to court in relation to the Ansbacher scandal, and how relatively minor are the (civil) punishments at issue.

The point applies to the NIB and DIRT scandals as much as to the Ansbacher one. No-one ever goes to jail for corporate offences in Ireland.

Perhaps all criminals giving advice to children intent on following in their footsteps should say; first get a degree.

Contrast the situation here with the US, where WorldCom's Bernard Ebbers is in jail and the Enron trial is currently under way. In the US millionaires sometimes walk out of court in chains.

The point is made in a general way and is not meant to imply anything concerning Mr Collery or Mr McCann.

It may be a cultural thing, but a greater factor is no doubt one of scale. New York State Attorney General Elliot Spritzer probably has 10 times or more lawyers than Paul Appleby has staff. Mr Appleby's office has some 37 to 40 employees and an annual budget of €4 million. He sought 20 more staff a year ago but has not yet been granted this by the Government.

Meanwhile, as well as dealing with hundreds of auditors' reports and public complaints and God knows what else, he has to thread the complicated and very expensive waters of major corporate investigations.

In other words, he must pick and choose. After he's paid his staff and dealt with the ordinary cases that flow into his office, how much discretionary spending does he have? Probably very little. Already his office, though getting through increasing amounts of work, is nevertheless seeing an increasing backlog of cases to be dealt with.

In such a scenario there is a danger that the only ones who will be held to account in terms of corporate law, will be smaller and middle-range individuals and businesses. The ODCE may simply not be equipped with the expertise and resources necessary to take on a multimillionaire or billionaire entrepreneur, not to mention an Irish or foreign multinational with Irish registered companies. And then there is the issue of IFSC or financial services companies generally, with billions swishing back and forth between Ireland, the Cayman Islands and God knows where else.

The combination of huge incentives and scant likelihood of being brought to book is a dangerous cocktail.