Government proposals for a Standards in Public Office Bill as laid before the Houses of the Oireachtas and forwarded to the Joint Oireachtas Committee on Finance and the Public Service
Order of Dail Eireann on 3rd July, 1998
That, when proposals for a Standards in Public Office Bill are laid before Dail Eireann, the proposals shall thereupon stand referred to the Joint Committee on Finance and the Public Service, pursuant to paragraph 2(a)(iv) of that Committee's Orders of Reference and that it shall be an instruction to the Joint Committee that, in its consideration of such proposals, it shall consult with the Standing Committees on Members' Interests of Dail and Seanad Eireann.
Order of Seanad Eireann on 3rd July, 1998
That, when proposals for a Standards in Public Office Bill are laid before Seanad Eireann, the proposals shall thereupon stand referred to the Joint Committee on Finance and the Public Service, pursuant to paragraph 2(a)(iv) of that Committee's Orders of Reference and that it shall be an instruction to the Joint Committee that, in its consideration of such proposals, it shall consult with the Standing Committees on Members' Interests of Dail and Seanad Eireann.
Contents
1. Proposal 1 - A Standards in Public Office Commission
2. Proposal 2 - Complaints to the Commission
3. Proposal 3 - Powers of the Commission
4. Proposal 4 - Creation of certain offences for contraventions of the Ethics in Public Office Act, 1995
5. Proposal 5 - Provision of a tax clearance certificate and a related statutory declaration by each Member
6. Proposal 6 - No statutory prohibition on persons found guilty of an offence under the Ethics Act from becoming a Member of either House
7. Proposal 7 - Miscellaneous adjustments to the Ethics Act.
Government proposals for a Standards in Public Office Bill as laid before the Houses of the Oireachtas and forwarded to the Joint Oireachtas Committee on Finance and the Public Service
Introduction
The Government Programme "An Action Programme for the Millennium" undertakes to restore confidence in public life through a credible policing mechanism for ethical issues and to follow up on the recommendations of the Tribunal of Inquiry (Dunnes Payments).
The proposals in the following pages represent practical measures to give effect to the Government's commitment to the highest standards in public life and are informed by the recommendations of the Tribunal.
At the outset it must be acknowledged that proposals for legislation on Standards in Public Office must be workable and fair. The existing provisions of the Ethics and Electoral Acts already impose quite significant obligations on those in public life. A carefully balanced approach is therefore required in the development of further legislation in this area.
In framing these proposals the Government has been particularly conscious of the need to avoid undue encroachment on the democratic process and to provide a workable framework and mandate for the proposed Standards in Public Office Commission. The right to go forward for election, which is fundamental to democracy, should not be easily jeopardised. Recognising this, the Government proposals, while seeking to promote necessary change, also aim to ensure that no unreasonable obstacles are put in the way of the democratic process.
It is also accepted that the proposals raise a number of complex legal and practical issues which must be addressed prior to proceeding to a Bill. For this reason the Government welcomes the opportunity for consultation with the Houses of the Oireachtas and wishes to secure agreement to the greatest extent possible on the way forward.
Overview of main features
The main features of the proposals are:
The establishment of a Standards in Public Office Commission with a wide ranging brief to investigate possible financial irregularity by those in public life, as well as overseeing the Ethics and Electoral Acts,
A legal requirement for the provision of a tax clearance certificate and a related statutory declaration by those elected to either House of the Oireachtas,
The creation of offences for certain contraventions of the Ethics Act,
Technical adjustments to the Ethics Act to address implementation issues and to secure a better alignment between it and electoral legislation.
More details on each of these proposals and issues arising are set out in the following pages.
Proposals for a Standards in Public Office Bill
Proposal 1 - A Standards in Public Office Commission
1.1 It is proposed that a new Standards in Public Office Commission be established. This Commission would subsume the existing work of the Public Offices Commission under the Ethics in Public Office Act, 1995 and the Electoral Act, 1997. In addition the Commission could investigate complaints it receives against a person in public life which concern either the financial affairs of that person (i.e. a Minister, a Member of the Houses of the Oireachtas, a civil or public servant, a special adviser, a member of a state board), or his/her involvement with the financial affairs of "a connected person". The complaint would be on the grounds that the circumstances involved are/were not consistent with maintaining confidence in the discharge of public office by the Minister, Member of the Government, civil or public servant etc. involved. Such complaints might concern gifts, investments, or other financial transactions and relate to current or past events.
1.2 The proposed Standards in Public Office Commission would therefore be provided with a wide ranging mandate going well beyond that of present arrangements under the Ethics Act: its investigations would not be confined to possible contraventions of the Ethics Act; it could investigate financial irregularities involving any person in public life (or, where relevant, those of a closely connected person), regardless of whether these happened before or after commencement of that legislation, and regardless of whether or not the person was technically subject to the requirements of the Ethics Act. Subsequent to an investigation, the Commission would provide its report on the matter to the person the subject of the investigation, and the complainant. Where the investigation finds against the person a report would be forwarded for laying before the Houses of the Oireachtas.
1.3 It is also proposed that the Commission would investigate and report on failure by a Member to produce a tax clearance certificate and a related statutory declaration within six months of election to either House (Proposal 5 refers).
1.4 The Government proposes that the existing functions and remit of the Select Committees on Members' Interests, established on foot of the Ethics Act, would be left intact. This means that these Committees would continue to oversee implementation of the Ethics Act in respect of Members of their respective Houses. They would also continue their present role of providing guidance and investigating allegations of possible contraventions of that Act. However, it is proposed that a Select Committee could, if it so wished, invite the Commission to investigate a possible contravention by a Member, on its behalf. It is also proposed that the Commission would have jurisdiction to investigate the financial affairs of any Member, or former Member in respect of matters referred to at paragraphs 1.1 and 1.2 above which fall outside the Ethics Act.
Possible issues for consideration
1.5 Membership of the proposed Commission. The Joint Committee may wish to make recommendations as to the membership of the Commission and the appropriate arrangements for their appointment. In this regard Government wishes to emphasise the importance of a Commission whose membership would be well informed, clearly independent and secure full public confidence.
1.6 The proposed remit of the Commission. The Joint Committee may wish to consider the new mandate proposed for the Commission at paragraph 1.1 above. In particular its remit to investigate the financial affairs of a person in public life (i.e. a Minister, a Member, a civil or public servant, a special adviser, a member of a state board), or their "connected person" where relevant, on the grounds that the circumstances involved are/were not consistent with maintaining confidence in the discharge of public office by the Minister, Member civil or public servant etc. involved, warrants consideration. The Government wishes to provide a wide ranging mandate to the Commission, while at the same time avoiding encumbering it with minor or vexatious matters. It would welcome proposals as to how such a role should be appropriately developed.
1.7 The Joint Committee may also wish to comment on proposed arrangements in relation to Members of the Houses and, in particular, in relation to preserving the existing arrangements regarding the Select Committees on Members' Interests in each House.
1.8 Connected person. Many of the existing obligations of the Ethics Act extend beyond the individual Minister, Member etc. and also concern his/her "connected persons". For example in a conflict of interest situation a Minister is required to make a statement to the Taoiseach and the existing Commission where s/he knows that s/he or a connected person would be likely to particularly benefit from a decision s/he proposes to take. (A connected person for the purposes of the Ethics Act means a relative, business partner, company in which s/he has a controlling interest, or a person with whom s/he enjoys a trustee/beneficiary relationship.)
1.9. While it would appear unduly restrictive to limit the Commission's investigations of financial irregularities to only those directly involved in public life, the nature of its remit to third parties such as "connected persons" may need careful consideration.
1.10 The Joint Committee may wish to reflect on this issue, having regard in particular to
the optimal terms of reference for the Commission,
the constitutional rights of third parties,
possible alternative definitions of "connected persons" for this proposed legislation.
Rights of those in public life
1.11 The Joint Committee may also wish to consider the broad proposals against the background of the constitutional rights of persons in public life.
Sanctions
1.12 Following from the recommendations of the Dunnes Payments Tribunal, Proposal 4 envisages the creation of offences for certain contraventions of the Ethics Act. Sanctions are also envisaged where a Member fails to provide a tax clearance certificate and a related statutory declaration to the Commission within six months of being elected to either House.
1.13 Where following an investigation, the Commission concludes that the circumstances are/were not consistent with maintaining public confidence in discharge by the person of the duties of public office a report on the matter would be provided to the appropriate authority and laid before the Houses of the Oireachtas. It would then be for the relevant body to decide on the sanctions to apply. At this juncture it is not proposed to specify a particular sanctions regime. The views of the Joint Committee on this approach are sought.
Proposal 2 - Complaints to the Standards in Public Office Commission
2.1 It is proposed that any member of the public could complain to the new Commission concerning an alleged contravention of the Ethics in Public Office Act 1995, or other matter referred to at Proposal 1 above. In practice this would mean that Members of the Oireachtas can also make complaints. It is also envisaged that the Government could approach the Commission in relation to such matters. The Commission could itself undertake an investigation on its own initiative. As mentioned previously a Select Committee on Members' Interests would have the power to refer an investigation of a contravention by an ordinary Member to the Commission under powers granted to such Committees under the Ethics in Public Office Act.
2.2 However, for a complaint concerning a matter outside the Ethics Act to be followed through to investigation, it is suggested that the following basic requirements would have to be met: the matter would normally have to concern an interest worth over £10,000; it would concern a serious and substantial allegation; and clear evidence would have to be provided at the outset in its support. The threshold of £10,000 would not be absolute and the Commission could investigate allegations concerning a lesser amount where it deemed this appropriate. It is envisaged that the Commission would have discretion to require a complainant, at the outset, to produce material in support of an allegation.
Possible issues for consideration
2.3 The Joint Committee may wish to consider whether:
The mechanisms for complaints from Members of the Houses to the Commission are adequate,
The discretion proposed for the Commission to require complainants to provide supporting material is appropriate,
The proposed ground rules under which a complaint would be investigated are sufficient.
Anonymous letters should be considered by the Commission
Proposal 3 - Powers of the Standards in Public Office Commission
3.1 It is proposed that the Commission would enjoy the powers to summon individuals and papers, administer oaths and require the giving of evidence. These broad powers are already conferred on the existing Commission by the Ethics Act. It is also proposed that additional powers akin to those of a Tribunal would be provided to the Commission. These would include requiring the person the subject of an investigation to attend before and provide evidence to the Commission. Failure to provide evidence, attend, or the giving of false evidence would be an offence. It is however acknowledged that the powers of existing tribunals of inquiry under current legislation are the subject matter of appeals to the Supreme Court.
3.2 It is also envisaged that the Commission would be empowered to seek letters of request from a court in this jurisdiction to courts abroad. This would enable witnesses to be examined and documents to be produced abroad.
3.3 If the Commission is to be given the full powers of a Tribunal, it could request a person the subject of an investigation to give evidence. Self incrimination may arise, as can currently happen with a Tribunal. Such evidence is not subsequently admissible in a court in the context of a criminal prosecution (other than in respect of offences committed under the Tribunal Acts). Any departure from such privilege could constitute a breach both of a person's constitutional rights and of the European Convention on Human Rights.
3.4 A key function of the new Commission would be the conduct of an investigation where a Member fails to produce a tax clearance certificate and a related statutory declaration within six months of election. Subsequent to this investigation, a report on the matter would be laid before the relevant House. Following action by the House, possible loss of membership for the person involved may arise (Proposal 5 refers). In these circumstances it is important that the powers and functions of the Commission are consistent with constitutional provision.
Possible issues for consideration
3.5 The Joint Committee may wish to consider:
The appropriateness of the powers proposed for the Commission,
Reasonableness of the proposed arrangements in respect of self incrimination,
Consistency of the proposed terms of reference, powers and remit of the Commission with the constitutional rights of the individual.
Proposal 4 - Creation of certain offences for contraventions of the Ethics Act
4.1 Offences are proposed for certain contraventions of the Ethics Act. A contravention can arise in a wide range of circumstances such as: failure to disclose, or properly disclose a registrable or an additional interest in one's annual statement; failure to make an ad-hoc declaration when faced with a proximate conflict of interest; or failure by an office holder to surrender a gift worth over £500 given by virtue of office. In addition technical contraventions can arise for example where a person is late submitting their statement etc.
4.2 However, contraventions of the Act can arise unintentionally. For example, given the breadth of Members' involvement in Oireachtas Committees and other parliamentary business, a Member could easily find him/herself voting at very short notice on a matter in the House in which a closely connected person has an interest. It is not possible to guarantee that the Member will be able to make a statement on time. Contraventions can also arise through genuine human error and oversight. In these circumstances it would seem difficult to justify such infringements attracting offences.
4.3 In the light of the foregoing, the proposals envisage that, in certain circumstances, the making of a false declaration would be an offence. This could come about where a person failed to disclose an interest, or provided an inaccurate or misleading disclosure, or an office holder failed to disclose/surrender a gift over £500 given by virtue of office. For an offence to arise it would also be necessary that the contravention be committed intentionally and the person would know s/he was not acting in accordance with the guidelines or advice of the Commission or Select Committee. These latter criteria, derive from sections 10 and 24 of the Ethics Act.
4.4 The Government propose to create a distinction between serious and lesser offences for such contraventions. It is proposed that, in general, where the value of the interest not properly disclosed (i.e. income, investments etc.) is less than £10,000, a fine of up to £1,000 would apply. In the case of interests worth over £10,000, and where the contravention was in all the circumstances a serious matter, on conviction on indictment, substantial fines of up to £20,000, and/or imprisonment of up to three years would apply. Section 29 of the Ethics Act sets out arrangements for the making of late statements, corrections, and updates. It is envisaged that the proposed offences regime would take account of such arrangements.
4.5 Section 7 of the Ethics Act requires a Member, before speaking or voting in the Houses, or a Committee thereof, on a matter in which s/he, or a connected person has a material interest, to provide a statement of that fact. However, it may sometimes happen that it is not possible for a Member to make such a written statement before voting etc. In such circumstances it would not appear reasonable to create offences for a delay in making the statement. Accordingly, and so as to avoid undue interference with the business of the Houses, it is not proposed that a contravention of section 7 would be an offence.
Issues arising
4.6 Gifts. The issue of gifts given to Members and office holders warrants careful consideration. The Second Schedule of the Ethics Act requires Members to publicly disclose certain gifts received worth over £500. In addition, section 15 of that Act requires the surrender of gifts worth over £500 given to an office holder (e.g. a Minister) by virtue of office. Gifts need not be tangible goods: a loan of property, or below cost charges; or a benefit in kind all come within the scope of the Act. Difficulties can arise in determining the value of a gift, particularly where it is a matter of subjective opinion (e.g. engraved glass), or an intangible benefit. Problems can also arise in fairly determining the nature of the relationship between the donor and the recipient, and whether or not a gift is given by virtue of office.
Possible issues arising
4.7 Against this background, the views of the Joint Committee are sought as to whether:
the arrangements and thresholds to apply in respect of offences should be more diverse and have greater regard to the nature of the interest involved,
existing arrangements in relation to gifts are adequate and practical,
the broad sanctions regime proposed at paragraphs 4.3 to 4.4 is appropriate to be applied to gifts, possible alternative approaches, and whether there is a need for improved consistency between the Ethics and Electoral Acts in relation to gifts,
other contraventions of the Ethics Act, additional to those mentioned above, should constitute offences,
there may be possible adverse effects arising from the creation of offences for relatively minor contraventions. Taken in conjunction with provisions under electoral legislation it might be argued that the unintended consequence of such arrangements could be to deter many from participating in political life.
Proposal 5 - Legal requirement on each Member to provide a tax clearance certificate and a statutory declaration to the effect that his/her tax affairs are in order
5.1 The Government proposes that each Member of the Houses would be required by law to produce to the Commission a tax clearance certificate and a statutory declaration stating that his/her tax affairs were in order. This material would have to be provided within six months after election. The tax certificate could be obtained from Revenue at any time during the six months before or after the election. It would concern the period up to the date of its issue and assert that, based on the information available to Revenue, the Member's tax affairs are in order in respect of payment of tax due and filing of returns.
What would happen if a Member failed to provide this material?
5.2 Where a Member failed to provide the tax clearance certificate and related statutory declaration to the Commission it would investigate the matter and report to the Committee on Members' Interests of the relevant House. Such an investigation would not however get underway, in the event of an appeal against Revenue's refusal to issue a tax certificate, until such time as the Appeals Commissioners or the Courts had ruled on the matter. Following receipt of the Commission report, and having regard to all the circumstances, the relevant Committee would table it and a motion recommending the following sanctions: removal of Membership; suspension until such time as the Member's tax affairs are put in order; or, censure. Failure to provide the tax certificate and statutory declaration could well result in loss of Membership.
What would happen if a Member provided a tax certificate and statutory declaration but it was subsequently found to be incorrect?
5.3 Much would depend on the particular circumstances. However, under tax legislation, where a person knowingly made a false declaration to Revenue, s/he would be liable on conviction on indictment to up to five years imprisonment and / or 10,000 fine. Also knowingly making a false statutory declaration would be an offence attracting a fine and possible imprisonment. In this context the Joint Committee may wish to consider whether the penalties for breaches of the Statutory Declarations Act, 1938 should be increased.
General
5.4 The Government is deeply conscious of the need to ensure that the right to go forward for election, which is fundamental to democracy, should not be easily jeopardised. It is also concerned to ensure the democratic choices of the electorate are fully respected. Accordingly it seeks to develop proposals which, while respecting these principles, ensure that elected representatives fully comply with their statutory tax obligations.
5.5
Despite this, the Government is aware that constitutional arguments may be advanced that the proposals constitute and unreasonable restriction on the right to stand for election. It is also conscious of a Member in certain circumstances may encroach on Article 15.10 of the Constitution.
Possible issues for consideration
5.6
The Joint Committee may wish to consider:
1. The reasonableness of these proposed new statutory requirement.
2. Possible alternative approaches.
3. Given the adversarial nature of elections, the desirability that tax elections, the desirability that tax certificates and related statutory declarations should only be provided after an election.
4. Whether penalties for breaches of the Statutory Declarations Act, 1938 should be increased.
5. Appropriateness of removal of Membership of the House from a person on the basis proposed.
6.Whether the Commission should be required in its report on failure to produce a tax certificate/statutory declaration to recommend an appropriate sanction.
7. Whether a requirement to produce a tax clearance certificate in relation to any type of connected person would be an unreasonable interference with the constitutional right to stand for election.
8. The implications for a person as a Member if a tax certificate which s/he provided to the Commission is subsequently revoked?
Proposal 6 - No statutory prohibition on persons found guilty of an offence under the Ethics Act becoming a Member of either House.
6.1
Such a provision would be highly vulnerable to successful constitutional challenge because no similar prohibition applies to persons convicted of far more serious offences such as murder, rape or substantial fraud. Under existing arrangements, such persons can hold membership of either House providing they are not serving a term of imprisonment greater than six months. The Government does not therefore propose to prohibit in law a person found guilty of an offence under the Ethics Act from becoming a Member of either House.
6.2
It should also be borne in mind that contraventions of the Ethics Act in relatively minor matters can easily arise.
Possible issues for consideration
6.3
The Joint Committee may wish to consider:
The extent to which it agrees with the approach outlined above,
Whether it is desirable that all persons convicted of serious offences should be prohibited from becoming a Member of either House, and, if so, the appropriate procedures to be followed so as to secure the constitutionality of such arrangements.
Proposal 7 - Adjustments to the Ethics Act so as to address technical/implementation issues and to avoid overlap with the Electoral Acts.
7.1 The Government invites the Joint Committee, having particular regard to the experience of the Select Committees on Members' Interests of both Houses, to make recommendations in regard to technical issues arising from the implementation of the Ethics Act which need to be addressed.
7.2 At this juncture the Government purpose a number of technical adjustments. These essentially concern minor corrections, clarification of the dates for the provision of certain material and improved interaction between certain sections. In addition the Government propose to address issues of consistency between the Ethics and Electoral Acts.
7.3 Further details on the technical issues referred to will be made available directly to the Joint Committee.