Mr Denis Foley should have absented himself from the Dail Public Accounts Committee inquiry into the DIRT scheme, the Taoiseach told the House.

Mr Ahern also announced that Mr Foley's resignation from the Fianna Fail parliamentary party.

He was speaking during the resumed debate on the Fine Gael private member's motion that demanded to know the details of Mr Ahern's conversation with Mr Foley before Christmas.

Mr Ahern was interrupted a number of times during his speech by Opposition demands that he answer questions, including whether he had asked Mr Foley if he had an Ansbacher account. Mr Ahern said: "All the questions listed I have comprehensively answered."

In his prepared address to the House, the Taoiseach said: I was gravely disappointed to learn that a member of my own party in this House would be called to give evidence to the Moriarty tribunal. My disappointment deepened on learning that he had over a long period evaded his responsibility as a citizen to observe and fulfil his obligations under the tax code.

The first inkling I had of the possible involvement of Deputy Denis Foley in the Moriarty tribunal was from the Government press secretary, who was picking up a report circulating among journalists. This was in early December. I subsequently checked the Ansbacher list that had been furnished to me, but found that Deputy Foley's name was not on it.

I next had a report to the same effect from the Attorney General. He had been informed by the Tanaiste, who had learnt from her officer, Gerard Ryan, that Deputy Foley was likely to be called before the Moriarty tribunal. At that time, the PAC subcommittee's hearings were complete, and the publication of their report was believed to be imminent.

On Wednesday, December 15th, the day before the House went into recess for the Christmas period, I asked Deputy Foley to come and see me so that I might question him about the matter. I wish to emphasise that I always regard such conversations with deputies in my party as strictly confidential. However, given the circumstances involved, I will convey the essential and most relevant points.

It was a fairly short meeting. He admitted to me that he had been before the Moriarty tribunal in private session and that he was co-operating fully with the tribunal. I asked him what it was about, because he was not on the Ansbacher list that I had. He said it related to investments going back 26 or 28 years when he was involved in the hotel near his house in Tralee, and not a TD at the time. He informed me that the accountant who did work for the hotel was Des Traynor and that he was putting money, that he was getting through his business, into an investment account with Mr Traynor.

I reminded him that it was Fianna Fail's policy to co-operate fully with tribunals. I told him that the co-operation was essential and that total and full disclosure was critical. He assured me that he had already done that and would continue to do it. Deputy Foley also told me that he had been with his accountant and that they were in the process of making a full and voluntary disclosure to the Revenue Commissioners, with a view to settling his liabilities.

I asked him whether he had considered his position on the PAC. The DIRT sub-committee's work was now finished, and its report had been published that day. He informed me that he would resign from the committee. He said that he would do this at the earliest appropriate opportunity, which he thought would be prior to his scheduled public appearance at the tribunal, which was due early on the tribunal's resumption after the Christmas break.

Deputy Foley has since stated that he believed, until recently, that his offshore account did not create a conflict of interest, vis-a-vis either his membership of the Public Accounts Committee or the DIRT inquiry. This view failed to exercise the political judgment that would be expected of him after long years in the Dail.

The Tanaiste and I discussed the fact that Deputy Foley was facing difficulties, and was going before the Moriarty tribunal. We did not have any detailed discussion on the matter, because we both respect her statutory role in relation to the investigation of the Ansbacher and related accounts. As reported in newspapers recently, I informed the Tanaiste that I had spoken to Deputy Foley and that he had assured me that he intended to resign from the PAC.

Deputy Foley's conduct is now a matter for the tribunal and for a number of other authorities. I am aware that his conduct is also being brought before the Committee of Procedure and Privileges of this House. On foot of a formal complaint from Deputy Ruairi Quinn, the Committee on Members' Interests, which is a statutory committee under the Ethics in Public Office Act 1995, is today commencing a formal investigation of Deputy Foley's position and will report to this House without delay as required by the Act.

On a previous occasion in this House, in the case of another deputy who admitted to having an offshore account and evading tax, the then Taoiseach, Deputy John Bruton, said on December 3rd, 1996, that nobody is above the law and that: "There is not, and never will be, a system of conviction by denunciation. Independent authorities, not rivals nor those with an axe to grind, made judgments as to culpability."

All of us in this House are concerned about the standing of politics. I have on many occasions over the last three years, and from both sides of the House, set out my views on what constitutes acceptable standards for a public representative. I have stressed the fundamental issue of public trust, and above all our duty to respect the rules which we ourselves legislate for.

The work of the Public Accounts Committee, and its report on the operation of the DIRT tax, have been highly praised on all sides. It is, apart from any other consideration, deeply disappointing to find that a member of the House, and that a vice-chairman and past chairman of the PAC was, prima facie, conducting his financial affairs in a manner analogous to that being investigated by the sub-committee.

In light of these circumstances, Deputy Foley has properly informed me of his resignation from the Fianna Fail parliamentary party. He has also today informed me of his decision not to contest the elections to the Fianna Fail national executive. He is now in effect an Independent TD.

But I think we should also acknowledge the very full and sincere apology that he made at the tribunal yesterday to his family, colleagues and constituents. In fairness to Deputy Foley, his is the first apology of its kind that has been heard from anyone involved in any of the tribunals. I applaud his courage and decency in that regard.

We have to make it clear that certain behaviour from any quarter is completely unacceptable. The Fianna Fail parliamentary party this morning approved a code of conduct, which will be submitted first to the national executive, and then to the Fianna Fail Ardfheis early next month, to come into effect immediately thereafter.

It covers the requirement that all relevant interests must be declared, and that public representatives must act at all times with honesty and integrity. Anyone standing for election must be able to confirm that their tax affairs are either in order or being finally put in order.

I wish to point out that Fianna Fail is the first, and thus far the only, political party in this House to take such an initiative. Legislation to establish an ethics commission will be brought before this House later this year.

Other than clear rules, and the deterrent of an adverse effect on both reputation and personal finances if they are flouted, there is no early warning system that can be put in place to alert us to problems of this kind. These situations can exist for some time, before they are brought to anyone's attention. I am satisfied in this case that the correct and proportionate action has been taken without any undue delay.

There are those in this House, who have a "heads in baskets" approach to politics, and who are always urging instant political executions without allowing any time for consideration, reflection or adjustment.

I am second to no one in my concern to see the right thing happen, but I believe that where action is required, it should, consistent with the public interest, be done in a humane way, with some compassion for the feelings of the individual concerned who finds himself in a difficult and humiliating personal situation, and for their family.

It is better from every point of view if the individual can be brought to understand the action that is required, and that they acknowledge the justice of it, by taking the necessary steps themselves. On occasion, a little space may need to be given.

I do not consider that in this instance the public interest suffered in any way by the short delay that occurred over the Christmas recess. It has been beneficial that many of the questions raised by Deputy Foley's conduct could be put to him as soon as possible thereafter in the tribunal, even if not all questions have necessarily received completely satisfactory answers. I do believe that the proper course of action would have been for Deputy Foley to absent himself from membership of the DIRT committee altogether.

Members of this House, and those who aspire to take part in political life, will, I hope, have taken note once again of the high standards that are expected of those in public life, which the present Government have shown a determination to uphold.

Seamus Heaney's new translation of Beowulf contains the lines:

Behaviour that's admired

Is the path to power among people everywhere.

We need hardly remind ourselves that the converse is especially true in a democracy.