Well-judged and adroit speech by Wallace but questions unanswered

ANALYSIS:The TD has regained some respect, but is likely to find the going a lot tougher

IT WOULD take Mick Wallace decades to repay his debts to the Revenue Commissioners at the rate he offered last night. The period ranges from 46 years if he gives half his gross salary to about 92 years if he pays more than half his net income.

But while his offer to hand over half his Dáil salary to the Revenue will make only a tiny dent in his €2.1 million tax debts while he remains in the House, the gesture at least will go some way to restoring his battered reputation.

Wallace’s 10-minute address to the Dáil was well-judged and adroit, mixing contrition with self-abasement and accepting there was no point in attempting to “defend the indefensible”. There was no attempt to engage in political mudslinging, self-pity or blaming others.

The blue-shirted deputy, his voice catching with emotion, appeared genuine in his willingness to apologise for lying to the taxman.

Yet the Wexford Independent said nothing by way of explanation of his underdeclaration of VAT that he didn’t tell The Irish Times a week ago when he first went public on the issue.

The reason his construction firm, MJ Wallace Ltd, underdeclared VAT on the sale of apartments by €1.4 million was because he feared that if he revealed the truth, either the Revenue or the banks would move on him. It was an error of judgment, but “the company meant a lot to me”.

Crucially, Wallace failed to address some of the questions which have arisen since he first spoke to this newspaper. He had said he went to the Revenue on his own initiative in late 2010 about his underdeclaration of VAT in the two preceding years, but did he do this only after the Revenue told him he was going to be audited? If this were the case, his evasion would have emerged anyway.

In addition, he has yet to explain why he and his son Sasha, the directors of MJ Wallace, paid themselves almost €300,000 in 2008, double the amount in the previous year, at a time when the VAT difficulties arose and the company was losing money.

While he has said he has “nothing” apart from his Dáil salary, we still don’t know exactly what his assets are. For example, he wouldn’t say last week whether he still had an interest in a vineyard in Tuscany, though it has been reported that ownership has been transferred to a family member.

Perhaps these issues will be dealt with at the committee on members’ interests, which has written to him seeking information about his tax affairs. Wallace may be called before the committee, but it conducts its affairs in private.

The committee appears reluctant to deal with matters which occurred before Wallace became a TD last year, but regardless of its decision it is still likely that a motion of censure will come before the Dáil. Wallace would then get a second opportunity to respond and perhaps explain his actions.

“Let he who is without sin cast the first stone,” he told this newspaper last week, speaking of his fellow public representatives. Strangely enough, his fellow TDs have been remarkably reluctant to cast stones over the past week, in contrast to the general population. First, the technical group went missing for a day before responding to public sentiment and forcing Wallace to disengage. And since then the Government has been slow to push the issue forward.

The fact is that most of the parties have had tax difficulties in the past, either as an entity or with individual members. Yet the controversy is still likely to result in a motion of censure, which could mean that Wallace is suspended for up to 30 days.

The attitude of Revenue to his offer to use 50 per cent of his Dáil salary to pay the tax bill remains to be seen, but the process of engaging with the taxman will take years. For now, Wallace has retrieved some of the respect he enjoyed as a straight-talking but somewhat contradictory TD.

However, he is likely to find the going tough. Now that he is outside the technical group, he will find it hard to get speaking time in the Dáil. Three other TDs are non-aligned, but unlike Wallace they are instinctive constituency workers whose interests are local rather than national or global.