On Friday July 11th, the chairman of the Revenue Commissioners, Cathal Mac Domhnaill, gave evidence at the Mc Cracken tribunal. Having been examined by counsel for the tribunal, Denis McCullough, he was then examined by counsel for the Dunnes trustees, Paddy MacEntee.
Mr MacEntee asked: "Would it be right to characterise the Dunnes Stores group overall as compliant taxpayers?" Compliant is a safe, undemanding concept and the use of the term in the question by Mr MacEntee invited Mr Mac Domhnaill simply to answer yes, but compliant was too limp a term for Mr Mac Domhnaill.
His response was: "I think, subject to whatever may emerge from this tribunal, up to this point I would have regarded them as a model."
"A model?" Mr MacEntee inquired, apparently surprised by the effusiveness.
"Yes," responded Mr Mac Domhnaill.
According to the McCracken report, in November 1991, Ben Dunne asked his solicitor, Noel Smyth, to get three bank drafts for him for £70,000 sterling each from a company called Tutbury Ltd in the Isle of Man. These drafts were made out to fictitious names. Ben Dunne said they were drawn for personal reasons. Mr Justice McCracken did not consider it necessary to explore what those reasons were.
The cheques were drawn on the account to Tutbury Ltd in an Isle of Man bank. They were delivered by courier to Noel Smyth, who handed them to Ben Dunne. These three bank drafts were later handed by Ben Dunne to Charles Haughey, when Ben dropped in at Kinsealy and found Charlie looking depressed. But that is not the issue of relevance here.
In his evidence to the tribunal on April 22nd, Ben Dunne said that in earlier proceedings between him and members of his family, he had claimed that the three bank drafts had been given to members of his family. However, on further investigation, he had realised this was not so.
In her evidence to the McCracken tribunal, Margaret Heffernan was asked by Denis McCullough: "I think it is right to say, Mrs Heffernan, is it not, that from time to time your brother would give you and your brother and sisters cheques or bank drafts, isn't that right?"
She replied: "Occasionally."
Later she was asked: "Has he ever given you such a draft or cheque made out to a fictitious name?"
She replied: "To my knowledge, no."
She was asked: "You sure about that? Is it possible that he has?"
She replied: "If he has I can't actually remember it."
It should be stressed here that Margaret Heffernan was one of the most impressive witnesses to give evidence at the tribunal and that on all crucial issues in which her evidence was disputed, the tribunal found her account was the truth.
However, questions arise about these bank drafts.
It is quite evident that Ben Dunne believed he had given the three bank drafts, made out in fictitious names and drawn on an account in the Isle of Man, to his brother and two sisters. It is also evident from Mrs Heffernan's evidence that she was less than emphatic in denying that her brother had previously given her bank drafts or cheques made out in fictitious names.
What conceivable reason would there have been for Ben Dunne to transfer money to his siblings via the complicated means of bank drafts, drawn on an Isle of Man account and made out to fictitious names? A question hangs there. Questions also hang over the operation of a trust in Switzerland by the Dunnes Stores group. Evidence was given to the tribunal about this trust and this was later summarised in his report by Mr Justice McCracken.
It states: "Ben Dunne had funds available to him which appear to be profits generated by Dunnes Stores transactions in the Far East and these funds were managed by a Swiss trust company called Equifex Trust Corporation AG in Zug, Switzerland."
It may well be that there is a perfectly legitimate reason for the existence and operation of this Swiss trust, but the question arises whether this is being used, for instance, for transfer pricing. It may be that Dunnes Stores has been purchasing supplies from the Far East at a low price and then selling them on to Dunnes Stores in Ireland for an inflated price.
The effect of this would be to diminish profits in Ireland and to enhance profits in the lower tax environment of Switzerland. Again, the point here is not at all to suggest that anyone in Dunnes Stores or connected with it has engaged in anything improper.
ALL of this evidence about the bank drafts was given well before - almost three months before - the chairman of the Revenue Commissioners, Cathal Mac Domhnaill, gave evidence.
Given the obvious questions that arise from the odd transaction concerning these bank drafts, is it not a little surprising that the chairman of the Revenue Commissioners could have described the Dunnes Stores group as "model taxpayers?".
Yes, there was the qualification about "subject to whatever may emerge from this tribunal", but did that qualification not disappear when pressed further? "A model?" Mr MacEntee inquired. "Yes," responded Mr Mac Domhnaill.
I raise these issues in the context of a concern about the effectiveness of our regulatory agencies. It is obvious that at least some of the £38 million plus in the Ansbacher accounts in Guinness and Mahon was part of a massive tax fraud, yet the Revenue Commissioners appear to have had no clue what was going on right under their noses. (The claim now that the Revenue Commissioners are the appropriate agency to inquire into these same Ansbacher accounts is laughable.)
Questions also arose about what the Central Bank was up to in all of this. It had a statutory regulatory function concerning Guinness and Mahon and yet seems to have had no idea that bank apparently was in gross breach of several guidelines. The most obvious of these was that the Ansbacher Deposits comprised 35 per cent of all deposits with the bank, whereas the guidelines stipulate that any one deposit or any group of deposits should not constitute more than 5 per cent. The Central Bank refuses to answer questions about whether it undertook the inspections of Guinness and Mahon which it was required to take and, if so, what it discovered, if anything.
Zero tolerance has taken a knock in the last few days, with John O'Donoghue blubbering that he really didn't mean what he said several months ago (we are all the better for that, by the way), but how about a bit of zero tolerance for apparent ineffectiveness by regulatory authorities concerning their statutory functions?