Annual Report of thePublic Offices Commission 1999

Tuarascáil BhliantúilAn Choimisiúin Um Oifigí Poiblí1999

© Government of Ireland

© Rialtas na hÉireann

Public Offices Commission

18 Lower Leeson Street

Dublin 2

Coimisiún um Oifigí Poiblí

18 Sráid Líosain Íochtarach

Baile Átha Cliath 2

Tel: (01) 6785222

Fax: (01) 6395684

email/ríomhphost: poc@ombudsman.irlgov.ie

Internet/Idirlíon: http://www.irlgov.ie/poc

Foreword

I hereby present the Annual Report of the Public

Offices Commission for 1999 to the Minister for

Finance pursuant to the provisions of section 27(2)(a)

of the Ethics in Public Office Act, 1995.

Kevin Murphy

Chairman/Cathaoirleach

June 2000/Meitheamh 2000

Brollach

Déanaim leis seo Tuarascáil Bhliantúil an Choimisiúin

um Oifigí Poiblí don bhliain 1999 a thíolacadh don Aire

Airgeadais de bhun fhorálacha alt 27(2)(a) den Acht

um Eitic in Oifigí Poiblí, 1995.

John PurcellComptroller and Auditor General

Ard-Reachtaire Cúntas agus Ciste

Kieran CoughlanClerk of the Dáil

Cléireach na Dála

Séamus Pattison,T.D.Ceann Comhairle

Kevin MurphyOmbudsman(Chairman)

(Cathaoirleach)

Deirdre LaneClerk of the Seanad

Cléireach an tSeanad

Public Offices CommissionCoimisiún um Oifigí Poiblí

Tá leagan Gaeilge den Tuarascáil seo ar fáil ag tosnú ar Leathanach 45.

contentsIntroduction 2

Part 1 - Ethics in Public Office Act, 1995 6

- The operation of the Ethics Act during 1999 8

- Complaints to the Commission - general 11

- Complaints received by the Commission in 1999 12

- Resignation of a special adviser 13

Part 2 - Electoral Acts, 1997 and 1998 20

- Donations received by TDs, Senators and MEPs disclosed in 1999 22

- Donations received by political parties disclosed in 1999 23

- European Parliament election of 11 June 1999 27

- Dublin South-Central Dáil bye-election of 27 October 1999 33

- Exchequer funding of political parties 34

Appendices 38

- Appendix 1 Costs in 1999 38

- Appendix 2 Statements of interests furnished by Designated Directors 39

- Appendix 3 ‘Nil’ statement of interests forms 40

11

Introduction

This is the fourth Annual Report of the Public

Offices Commission (the Commission) since its

establishment in November 1995.

Because of the continuing work of the

Moriarty and Flood Tribunals of Inquiry and

other events during the course of the year,

including the Public Accounts Committee

hearings into matters relating to Deposit

Interest Retention Tax, questions concerning

ethics in public life remained centre stage

during 1999. As in 1998, public debate was

again focused on the need to ensure that rules

are in place setting out in clear terms the

standards expected to be observed by

politicians and others in discharging their

public service functions and, just as

importantly, that compliance with these rules,

both in the spirit and the letter, is being

supervised and reported on where necessary.

Most systems which seek to guide the ethical

conduct of those engaged in the public service

rely on self-assessment on the part of

individuals and assume that disclosure

requirements and other compliance measures

will be honestly observed. However, to ensure

credibility, such systems are open to public

scrutiny; there is provision for complaints to be

made which will be independently examined

and for appropriate sanctions where breaches

of the rules are substantiated. Underlying

2

33

...disclosure requirementsand other compliancemeasures will be honestlyobserved.

these systems is the fundamental principle that those

who are involved in the public service should discharge

their functions exclusively in the public interest without

regard to their own personal interests. Where breaches

do occur, they may vary from those which are

essentially technical to those involving serious conflicts

between personal and public interests. The laws

governing behaviour and the sanctions for

contraventions must reflect that reality and must

provide sufficient flexibility so that the consequences of

unacceptable actions, including inaction, can be fairly

weighed and dealt with in a manner which is balanced

and which reflects the gravity of a particular situation.

Any serious observer of the various scandals which

have emerged over the last decade in Irish life, whether

in the political arena, taxation, business and

commercial life or in social and health matters, would

undoubtedly find the connecting thread between them

all as lack of transparency, resistance to openness and

failures in accountability. The exposure, particularly by

the media, of these scandals, while clearly in the public

interest, has tended to overshadow the significant

legislative developments which have occurred in recent

times in the area of openness and accountability. The

Ethics in Public Office Act, 1995, the Electoral Acts,

1997 and 1998, the Freedom of Information Act,

1997, the Committees of the Houses of the Oireachtas

(Compellability, Privileges and Immunities of Witnesses)

Act, 1997, and the Public Service Management Act,

1997, are all very important pieces of legislation. The

combined effects of these Acts will, in the

Commission’s view, contribute significantly, over time,

to the development among politicians and public

servants, in their dealings with business, with other

important groups in Irish life and with the public

generally, of standards of behaviour which should be

beyond reproach.

The Commission, in discharging its mandate under the

Ethics in Public Office Act, 1995 and the Electoral Acts,

1997 and 1998 has also contributed to the

development of higher standards. These are two very

important pieces of legislation providing, as they do, a

framework within which Government, the legislature,

the public sector generally and those who seek elective

office must abide by certain norms of behaviour,

whether in the discharge of their public service

functions or as participants in the electoral process.

The Acts have been operating successfully not merely

as instruments of sanction but, much more importantly,

as benchmarks for behavioural standards. The extent

to which observance of the requirements of the

legislation is being achieved is a matter of public record

through publications such as this Annual Report and

other reports by the Commission which have been laid

before the Houses of the Oireachtas. Unfortunately,

the concentration of the public debate on events which

occurred before the passing of this legislation and the

establishment of the Commission has tended to

diminish what has been achieved and to result in a lack

of recognition of the changes which have taken place.

In supervising the Ethics and Electoral Acts, the

Commission has, subject to the requirements of the

legislation, sought to be pragmatic, consistent and fair

in relating to its large body of clients which includes

Ministers and other office holders, TDs, Senators,

MEPs, political parties, Ministerial special advisers,

senior civil servants, directors and executives of more

than one hundred state-sponsored bodies and

candidates, agents and others who are engaged in

Dáil, Seanad, Presidential and European Parliament

election campaigns. The remit of the Commission has

not, to date, been extended to members or employees

of local authorities and health boards or to local

election campaigns. In making its decisions, the

Commission has been, and will continue to be,

primarily concerned with maintaining the authority and

reputation of the Commission as an independent

statutory body.

The Commission is satisfied that present practice in

Ireland compares well with that in other countries and,

indeed, many countries are at present looking to the

Irish model with interest. However, no legislation is set

in stone and the Commission has already made a

number of suggestions aimed at correcting what it

considered were deficiencies in the legislation. As

outlined in last year’s Annual Report, some of these

suggestions were reflected in the Electoral

(Amendment) Act, 1998; others were put to the Joint

Oireachtas Committee on Finance and the Public

Service when it was considering the Government’s

4

proposals for a Standards in Public Office Bill. A

number are also raised in this report because they

became relevant to cases considered by the

Commission during 1999.

The Commission would like to thank its Secretary Mr.

Brian Allen and his staff for the support and assistance

which they have continued to provide during the

course of the year. The demands which are placed

upon them are many and varied and they deserve the

highest commendation for the efficient and effective

manner in which they have discharged their duties.

55

Part 1

The Ethics in Public Office Act, 1995 is based on

the premise that parliamentarians and public

servants should make decisions based on the

merits of an issue alone and not as a result of

pressure or inducements or influence from

external sources or because of their own or

their family’s personal interests. The Ethics Act

tries to ensure transparency in relation to

matters which might influence the performance

of official functions by requiring statements of

personal interests, including gifts received from

third parties. In fulfilling their obligations

under the Act, those persons to whom it applies

are supported by the publication of statutorily

binding guidelines and the availability of

advice. They are regulated, in the case of office

holders and public servants, by monitoring and,

where appropriate, by investigation by the

Commission.

Under the Ethics Act, members of both the Dáil

and Seanad, including office holders, disclose

their interests in the form of annual statements

covering eight categories of registrable

interests as prescribed by the Act. These

statements are furnished to the Clerk of the

appropriate House and are the basis for the

establishment of the annual Registers of

Members’ Interests. The Registers are laid

before the relevant House and are published in

Iris Oifigiúil. For office holders, there is a

further requirement to provide an annual

statement of the interests (under the same

eight categories as mentioned above) of a

spouse or child which could materially influence

the office holder in relation to the performance

6

Ethics in Public Office Act, 1995

7

...parliamentarians andpublic servants should makedecisions based on themerits of an issue alone...

of the functions of his or her office. These statements

of additional interests, which are not published, are

retained by both the relevant Clerk and the

Commission.

The public servants who are covered by the Ethics Act

are required to provide an annual statement of their

own registrable interests and those of a spouse or child

which could materially influence them in relation to the

performance of their official functions. Interests are

deemed to be capable of material influence where the

performance of an official function could so affect

those interests as to confer on, or withhold from, the

person, or the spouse or child, a substantial benefit.

The statements of special advisers to Ministers are

provided to the Commission and are laid before both

Houses of the Oireachtas. All other statements from

persons in the executive offices of Government and

State are held by the public bodies concerned and, in

the case of directors of state-sponsored bodies, also by

the Commission. Statements furnished by office

holders and public servants are retained and are

available to the Commission for a period of fifteen

years.

Initially, many of the specific requirements of the Ethics

Act were seen by some as irksome and an invasion of

privacy. Recent events, however, are leading to a

greater understanding of the importance of an ethics

code and of the need for those at the top levels of the

public service to promote and maintain a high standard

of ethical behaviour among all who are engaged in

public service. There is also a greater appreciation of

the need for and the role of an independent regulatory

body to enforce those requirements and to provide

advice and consultation on the ethical dimension of the

conduct of public office. In a world of competing

interests and increasing interaction between business

and public life, an ethics regime can be viewed not only

as a means by which those in public service can regain

the respect of the general public but also as a means by

which individuals holding public office can be guided

and protected against false accusations.

It is, however, important, in the Commission’s view,

that the backlash against those in public service, which

understandably may arise as a result of the revelations

at the Tribunals of Inquiry, does not result in a code

which is so excessively technical that it may hinder

rather than support the main objective of ensuring

acceptance of and commitment to the fundamental

principle of honesty in public life. It is important that

legislation in this area strikes the appropriate balance

between the necessary level of monitoring and control

and the individual’s right to privacy and good name.

The degree of supervision should not, as may have

happened in some other countries, become part of the

problem. Ethics regimes generally should not be seen

as a collection of reactive rules designed to punish

unsuspecting participants but rather as a set of

parameters designed to foster an open, accountable

environment which, of itself, encourages a self-directed

ethical approach to public service. Perhaps the most

important requirement of all is that those who are in

charge in the public service - be they Ministers or

Secretaries General of Departments, leaders of political

parties, City and County Managers, Chief Executives of

state-sponsored bodies - should demonstrate by their

actions and decisions their commitment to good and

honest governance and their determination to deal

severely with those who impugn the integrity of the

decision making process.

The operation of the Ethics Actduring 1999

Scope of the Ethics Act

The Ethics Act, which applies directly to members of

the Houses of the Oireachtas, to specified office

holders (e.g. Ministers and Ministers of State) and to

special advisers to Ministers, is extended to civil

servants and directors and executives of state-

sponsored bodies by means of regulations made by the

Minister for Finance. The current regulations, which

specify the public bodies and prescribe directorships

and positions within those bodies for the purposes of

the Ethics Act, have been in place since early 1997.

Given the extent of change since then in the public

sector, where many new public bodies have been

established and bodies previously covered by the

regulations have been privatised, amalgamated,

renamed or otherwise changed (including titles of

executive positions), the regulations appear to be

deficient in a number of respects. It is understood that

the Department of Finance has made substantial

8

progress towards updating and consolidating the

regulations. However, the process of change will

continue. In those circumstances, it might be better if

Government decided that where new legislation

establishing or reorganising a public body is

introduced, it should include a provision which would

have the effect of immediately applying the Ethics Act

to the body in question if the body fell into the broad

categories covered by the present regulations. It is

anticipated that the remit of the Ethics Act in relation

to public bodies will increase substantially over the next

year or so and the Commission is likely to require

additional resources to provide assistance and advice to

those coming within the scope of the Act for the first

time.

The Ethics Act and the Freedom of

Information Act

The Freedom of Information Act, 1997 came into

operation on 21 April 1998 for a range of public bodies

including the Commission. The Freedom of Information

Act gave the general public and corporate bodies the

right:

to access information held by public bodies;

to have personal information relating to themselves

held by public bodies amended where it is

incomplete, incorrect or misleading;

to be given reasons for decisions made by public

bodies which affect them.

The Freedom of Information Act, generally, supports

the right of access to official information to the

greatest extent possible with due respect to the public

interest and the individual’s right to privacy. As a body

prescribed for the purposes of the Freedom of

Information Act, the Commission has, as is required,

published a reference booklet which informs the public

of its structure, of the nature of the documentation

held and of the process by which requests for

information can be made. A member of the

Commission’s Secretariat has been designated as

Freedom of Information Officer for the Commission.

The Ethics Act contains a prohibition on the disclosure

of information obtained under the Act or by being

present at a sitting of the Commission held in private.

This prohibition obviously does not apply to the

Registers of Members’ Interests which are laid before

each House of the Oireachtas and published in Iris

Oifigiúil. Neither does it apply to statements of

interests furnished by special advisers to Ministers and

other material relating to persons in that category

which, in accordance with the Ethics Act, is laid before

each House.

The Freedom of Information Act provides that a head

of an organisation shall refuse to grant a request for

access to records if the disclosure of the record

concerned is prohibited by any enactment other than a

provision expressly specified in the Freedom of

Information Act. The prohibition on disclosure

contained in the Ethics Act is not specified in the

Freedom of Information Act and, therefore, is not

affected by the Freedom of Information Act.

The Ethics Act prohibition on disclosure of information,

which is absolute to the extent that an offence attaches

to any contravention of the prohibition, is lifted only in

very specific circumstances as follows:

(i) where information is disclosed in the public interest

by a Minister of the Government; or

(ii) where the person who has statutory custody of a

statement of interests under the Ethics Act is of the

opinion that the information is such as to show

that a conflict may exist between an interest

specified in the statement, or an undisclosed

interest, and the public interest.

In relation to (ii) above, disclosure of information may

occur as follows:

a statement furnished by an office holder could be

provided to such Minister of the Government, as

the custodian of the statement considered

appropriate;

a statement of a designated director of a

prescribed public body could be provided to other

directors of, or persons occupying designated

positions in, that public body, as the custodian of

the statement considered appropriate;

a statement of a person occupying a designated

position in a prescribed public body could be

9

provided to directors of, or other persons

occupying designated positions in, that public

body, as the custodian of the statement considered

appropriate; or

a statement of a special adviser could be provided

to such person as the custodian of the statement

considered appropriate.

(Note: The “custodian of the statement” could be the

Commission, one or other of the Clerks of the Houses

of the Oireachtas or a “relevant authority” in a public

body as, for example, in the case of senior civil

servants, the Secretary General (Public Service

Management and Development) in the Department of

Finance.)

Additionally, the exemption from absolute prohibition

on disclosure extends to a person who would disclose

information:

in the performance of his or her functions;

in the public interest, to a Minister of the

Government, to the Secretary General to the

Government, to the Committee on Members’

Interests of the Dáil or Seanad, to the Commission

or to a “relevant authority” in a public body;

pursuant to an order of a court; or

with the consent of the person to whom the

information relates in a case where the report of an

investigation by the Commission or a Committee

on Members’ Interests has not been laid before

either House.

Determination of the public interest consideration

attaching to statements provided under the Ethics Act

is assigned by the legislation to those persons to whom

statements are statutorily furnished. In other words,

total responsibility for decisions relating to the release

of information contained in statements is assigned by

the Ethics Act to the custodians of those statements.

Definition of a “friend”

The Ethics Act, in dealing with gifts to Ministers and

Ministers of State and certain other office holders,

provides exemption from disclosure or possible

surrender to the State (or the making of an appropriate

refund) by the recipient, where the benefactor is a

“relative” or a “friend” of the office holder. Neither of

these terms is defined in the Act. The exemption is

repeated in the guidelines for office holders published

by the Government and also applies, in relation to

disclosure, to other categories of persons including

members of the Houses of the Oireachtas who are

covered by the Act. A decision on whether or not

persons are relatives is normally a reasonably

straightforward matter. It is considerably more difficult,

however, to make a determination as to what

constitutes a friend. In its examination of complaints

received during the year (which are discussed later in

this report), alleging contravention of the Ethics Act on

the part of two Ministers, the Commission found that

the absence of a statutory definition of a friend was a

complicating factor in dealing with the complaints.

The Commission had earlier, in December 1998,

conveyed its views on foreseen difficulties in this area

to the Oireachtas Joint Committee on Finance and the

Public Service to whom draft proposals for a Standards

in Public Office Bill had been referred for consideration.

That Committee has since published its report.

The Commission is conscious of the difficulty in

attempting to construct a definition of what

constitutes a friend. It may be that a solution will have

to be found by setting out, in legislation, parameters

within which a claim to friendship will have to be

supported by the person who is relying on the

existence of a friendship. If the matter is not resolved

it will remain the position that the value threshold of

£500, which determines whether the Ethics Act applies

or does not apply to receipt of a gift, is effectively

redundant where a friend is the benefactor. There is

currently no specific provision in the Ethics Act allowing

for arbitration where it is held out that the benefactor

of a gift is a friend. In contrast, there is provision

whereby the Secretary General to the Government may

be called upon to determine both the value of a gift

and the question of whether a gift is given to an office

holder by virtue of his or her office.

Having regard to the fact that the Ethics Act is founded

on the concept of openness, of which disclosure to

public scrutiny is an essential element, it seems to the

Commission that even the appearance of a conflict of

10

interests is at odds with the spirit of the Act and that,

in the absence of a reliable and objective definition,

there may be a case for removing friends entirely from

the exemption category. Alternatively, and bearing in

mind that long-standing friendships should not be

prejudiced because one party assumes public office,

consideration might be given to applying a higher value

threshold when dealing with a gift from a friend or to

excluding from exemption a gift from a friend where

the friend is also involved in a business or other activity

which is, or could be, affected by decisions of the office

holder either in his or her own Department or as a

member of Government.

Definition of a “connected person”

This matter also was brought to the attention of the

Joint Committee on Finance and the Public Service by

the Commission in December 1998 when the

proposals for a Standards in Public Office Bill were

under consideration. The term “connected person” is

used in the Ethics Act to deal with situations where an

office holder or a public servant could, in making a

decision or performing a function, cause a specific

benefit to accrue to themselves and/or to a person who

is connected to them. This is deemed by the Act to

constitute a material interest in a matter and, in such

cases, a statement of the facts and of the nature of the

interest must be provided. As currently defined, a

connected person means a relative or a person or

company with whom an office holder or public servant

has a trustee or formal business relationship.

The Commission, based on its experience, would not

regard this definition as sufficiently inclusive and feels

that it should be extended to any person who has

given, or agreed to give, a gift for personal reasons in

the previous three or so years or who has, during that

period, bestowed, or agreed to bestow, advantage,

economic or otherwise, on an office holder or public

servant who is covered by the Ethics Act.

Complaints to the Commission- general

The Ethics Act includes provisions for the making of

complaints where it is considered that a contravention

of the Act may have occurred. Complaints are directed

to the Committees on Members’ Interests where they

involve TDs and Senators and to the Commission in the

case of office holders and public servants.

In the context of the Ethics Act, the term “office

holder”, as currently designated, means:

a Minister of the Government or a Minister of

State;

a TD or Senator who holds the office of Attorney

General;

the Chairman and Deputy Chairman of Dáil

Éireann; and

the Chairman and Deputy Chairman of Seanad

Éireann.

The term “public servant”, as currently prescribed for

the purpose of a complaint, means:

a person who occupies or occupied a designated

position in a Government Department or Office;

a person who holds or held a designated

directorship of a specified public body in the wider

public service;

a person who occupies or occupied a designated

position in a specified public body in the wider

public service; and

a person who is or was a special adviser assigned to

a Minister or a Minister of State.

In the case of a complaint about a TD or Senator, where

the complainant was not a member of either House,

the complaint would be made to the Clerk of the

appropriate House. If the Clerk was of the opinion that

the complaint was not frivolous or vexatious, it would

be forwarded for examination to the Committee on

Members’ Interests of the House. If the complainant

was a TD or Senator and the complaint was about

another TD or Senator, it would be made directly to the

Committee of the House of which the subject of the

complaint was a member.

The following table illustrates the route by which a

person would make a complaint to the Commission

regarding an office holder or public servant where it is

alleged that a contravention of the Ethics Act had

occurred.

11

Complaints received by theCommission in 1999

During 1999 the Commission received complaints under

the Ethics Act from two private citizens. The complaints,

which related to the holiday arrangements in August

1999 of Ms. Mary Harney, TD, Tánaiste and Minister for

Enterprise, Trade and Employment, and Mr. Charlie

McCreevy, TD, Minister for Finance, were referred to the

Commission by the Clerk of the Dáil in accordance with

the procedure outlined in the table above. In essence,

the complaints centred on a view that the office holders

in question should not have accepted hospitality, in the

form of holiday accommodation in France, from a

person whose company, at the time or potentially, had

considerable business interests with the State and that,

in accepting the hospitality, the office holders had

contravened certain provisions of the Ethics Act and of

the Government Guidelines which were published

thereunder.

The Commission considered the complaints primarily in

the context of three sections of the Act, i.e. section 15

which sets out how gifts to office holders are to be

treated; section 5 and the Second Schedule which deal

with statements of registrable interests and section 14

which is relevant to circumstances where office holders

are required to disclose any material interest they, or a

connected person, might have in the performance of

certain functions of their office.

The Commission’s consideration took particular

account of the following:

the estimate of the value of the holiday

accommodation which, according to details

provided to the Commission by the office holders,

exceeded the threshold of £500 specified in the

Ethics Act by a relatively small amount;

the provision in subsection (4)(b) of section 15 that

Government Guidelines in relation to gifts to office

12

Complaints to the Commission

Who can complain? About whom? To whom is the complaint addressed?

A member of the public An office holder, The Clerk of the Dáil

e.g. Minister or Minister of State (if the office holder is a TD)*

The Clerk of the Seanad

(if the office holder is a Senator)*

A TD or Senator A public servant The Public Offices Commission

An office holder

The Minister for Finance A public servant The Public Offices Commission

Any Minister A public servant in a body where The Public Offices Commission

(with the consent of the the Minister has charge or has

Minister for Finance) functions conferred on him/her

A specified public body A designated director of the body The Public Offices Commission

A person in a designated position

in the body

The “appropriate authority” A civil servant in the body The Public Offices Commission

in certain civil service bodies

* A complaint is considered by the Clerk. Where the Clerk is of the opinion that a complaint is not frivolous or vexatious, it is referred to the Commission.

holders do not apply to a loan of property supplied

by a friend for personal reasons only. The

Commission was not aware of, or provided with,

any evidence to refute the statements, made to the

Commission by both office holders, that the

accommodation was provided by a friend and for

personal reasons only;

the provision in paragraph 1(6)(b) of the Second

Schedule to the effect that the term “registrable

interest” does not include living accommodation

supplied by a friend where it was in the nature of a

gift given for personal reasons only, unless

acceptance might reasonably be seen to have been

capable of influencing the person in the

performance of his or her functions as an office

holder. The office holders in this case had each

informed the Commission of their intention to

voluntarily disclose the holiday accommodation as

a gift in their annual statements of registrable

interests, although they did not necessarily regard

acceptance of the accommodation as being a

registrable interest. The Commission advised the

office holders, bearing in mind the general public

reaction, media coverage, debate in Dáil Éireann

and the receipt of complaints, that acceptance of

the accommodation might reasonably be seen to

have been capable of influencing them in the

performance of their functions, including their

functions as members of the Government, and

was, therefore, a registrable interest. Both office

holders were advised that, as a registrable interest,

disclosure would be required to the Clerk of the

Dáil in their statements of registrable interests for

the registration year ending 31 January 2000; and

the requirement in section 14 of the Ethics Act that

an office holder should disclose a material interest

in the performance of a function is activated in

circumstances where the office holder has actual

knowledge that he or she, or a connected person,

has a material interest in the office holder’s

performance or decision (i.e. would stand to

benefit significantly and specially from the effect or

consequence). In the absence of any evidence to

the contrary, the Commission accepted the

statements of each office holder that section 14 of

the Act did not apply because neither they, nor any

connected person, as defined in the Act, had a

material interest in any decision made, or proposed

to be made, by either office holder, or by the

Government, affecting the provider of the

accommodation.

In light of the foregoing, the Commission decided that

it would not be appropriate to carry out a formal

investigation under the Act. However, in its

examination of the matter, it was conscious of the

principles underlying the ethics legislation, in particular,

the intention to improve public confidence in the

integrity of office holders and the decision-making

process in Government and the public service. In its

letters to the office holders, the Commission drew

attention to observations it had already conveyed, in

December 1998, to the Oireachtas Joint Committee on

Finance and the Public Service during the course of that

Committee’s consideration of Government proposals

for a Standards in Public Office Bill. These

observations, some of which are outlined earlier in this

report, included the suggestion that consideration be

given to extending the definition of “connected

person” in the Act and a view on the need to establish

some parameters in relation to gifts from “friends”,

particularly those friends who, either personally or

whose companies, have, or might have, significant

business interests with the State. In making these

points to the office holders, the Commission

acknowledged that the Act ought not, and was never

intended to, interfere with long-standing relationships

between office holders and personal friends.

Resignation of a specialadviser

In early June 1999 the Commission became aware,

through media reports initially, that circumstances

existed which appeared to have implications relating to

compliance with the Ethics Act. The reports concerned

Mr. Paddy Duffy, a special adviser at the Office of the

Taoiseach, who was found to be registered as a director

of Dillon Consultants Ltd., a public relations company

which had advised the telecommunications group NTL

on its successful bid to buy Cablelink from two State

companies in May 1999. Mr. Duffy resigned from his

special adviser post on 4 June 1999, the day of the

initial media reports. The obligations under the Ethics

13

Act attaching to a special adviser and the employing

office holder are contained in section 19 of the Act.

Mr. Duffy was covered by the Act since his

appointment to the Office of the Taoiseach on 26 June

1997. His obligations under the Act were threefold:

to provide, to the Taoiseach and the Commission,

on an annual basis, a statement of any registrable

interests of his own or of a spouse or child, of

which he had actual knowledge, which could

materially influence him in the performance of his

functions as a special adviser;

where, at any time, a function as a special adviser

fell to be performed by him and he had actual

knowledge that he, or a connected person, had a

material interest in a matter to which the function

related, to provide to both the Taoiseach and the

Commission a statement in writing of the facts of

that interest. (He would also have been prohibited

from performing the function unless there were

compelling reasons requiring him to do so. If he

proposed to perform the function, he would be

required to provide both the Taoiseach and the

Commission with a statement in writing of the

compelling reasons.); and

to undertake not to engage in any trade,

profession, vocation or other occupation which

could reasonably be seen to be capable of

interfering or being incompatible with the

performance of his functions as a special adviser.

As the employing office holder, the Taoiseach was

obliged to lay certain documents pertaining to Mr.

Duffy’s employment before each House of the

Oireachtas, i.e.

a copy of the contract , or a statement in writing of

the terms and conditions, under which Mr. Duffy

acted as a special adviser;

a statement as to whether Mr. Duffy was a relative

of the Taoiseach;

a copy of the annual statement of interests

provided by Mr. Duffy; and

a statement of the qualifications held by Mr. Duffy

which were relevant to his functions as a special

adviser.

The Commission published guidelines in February 1996

which provide details of the steps which are required to

be taken by special advisers in order to comply with the

requirements of the legislation. These steps are also set

out in the Commission’s guidelines for office holders.

Additionally, where persons are unsure about the

meaning of any particular provision of the legislation,

or its application, they can avail of an advice facility

which is provided by the Commission pursuant to

section 25(1)(b) of the Ethics Act.

Compliance by the special adviser

Under the Ethics Act, the Commission is a body

nominated to receive and consider statements of

interests of certain categories of persons coming within

the scope of the Act, i.e. office holders, special advisers

and directors of state-sponsored bodies. In

circumstances where a complaint alleging a

contravention of the Act is made, or referred, to the

Commission, or where the Commission decides of its

own volition that it would be appropriate to initiate an

investigation, the investigative process would, in the

normal course, commence with an examination by the

Commission of any statement of interests furnished by

the person in question in relation to the period under

investigation.

As is the case with other public servants, a special

adviser who has no registrable interests to disclose is

not legally required to furnish what would be a ‘nil’

statement. The Commission has, however, expressed a

preference towards the furnishing of such a ‘nil’

statement, rather than the non-furnishing of any

statement, so that a person can demonstrate that he or

she has considered his or her position under the Ethics

Act and is satisfied that there are no interests which

could materially influence the person in the

performance of his or her public service functions.

Mr. Duffy furnished statements of interests under

section 19 of the Ethics Act for the registration years

ending on 31 January 1998 and 31 January 1999.

Both of these were ‘nil’ statements. On 8 June 1999,

four days after his resignation as a special adviser, Mr.

Duffy notified the Commission for the first time that he

was registered as a non-executive director of Dillon

Consultants Ltd. in December 1998.

14

Consideration by the Commission

The Commission, having carried out a preliminary

examination based on the facts available, decided that

the circumstances of the case were such as to warrant

further more detailed consideration, including the

possibility of a formal investigation being carried out

under the Ethics Act. On 14 July 1999 the Commission

notified Mr. Duffy of the legal obligations attaching to

him as a special adviser and requested his comments

on the matter of his compliance with those

requirements. Mr. Duffy was informed that the

Commission was considering whether or not it would

be appropriate to carry out an investigation and that, in

arriving at a conclusion, account would be taken of the

following :

On 2 March 1999 the Commission received from

him a statement of interests in respect of the

registration period 1 February 1998 to 31 January

1999 confirming that he had no registrable

interests during that period.

On 8 June 1999 he notified the Commission that

he was registered as a non-executive director of

Dillon Consultants Ltd. in December 1998.

On 16 June 1999 in response to a letter to him from

the Commission dated 9 June 1999 which

requested detailed clarification of his relationship

with Dillon Consultants Ltd., the Commission

received a letter from him acknowledging that while

he was unaware of any listing as a director of Dillon

Consultants Ltd., he was so listed from December

1998 to January 1999. The letter went on to state

that no discussions or actions of any sort were

undertaken by him with any office holder relating to

any public sector business in which Dillon

Consultants Ltd. had any involvement at any time.

In the course of his statement to the Dáil on 16

June 1999 the Taoiseach confirmed that Mr. Duffy

was made a director of Dillon Consultants Ltd. on

9 December 1998 with effect from that date, on

the basis that he would take up employment early

in the New Year. The Taoiseach went on to say that

part of the deal was that Mr. Duffy would take up

a five percent share in the company and that the

relevant forms with Mr. Duffy’s signature were

subsequently lodged in the Companies Office on

12 March 1999.

Dillon Consultants Ltd. acted as consultants to NTL

in relation to their successful bid to purchase

Cablelink.

The Commission suggested to Mr. Duffy that, on the

basis of the foregoing, it appeared that he may have

failed to comply with his obligations under the Ethics

Act and may have contravened Part IV of the Act. In

order to determine whether it should undertake an

investigation, the Commission requested Mr. Duffy to

provide his comments in writing.

Mr. Duffy’s response to the Commission included the

following :

He cited the essence of the controversy which

caused him to resign from his special adviser

position as being the allegation made by an

Opposition Deputy that he was a director of Dillon

Consultants Ltd. (which managed the affairs of NTL

in applying for the purchase of Cablelink) and that,

in exercising such an improper dual role, he

influenced the outcome of the bid. He rejected this

allegation as completely unfounded.

He stated that he signed a document in December

1998 which would make him a non-executive

director of the company, if, having considered the

matter over the Christmas period, he decided to

leave the position he held as special adviser and

enter the private sector. Immediately after

Christmas he informed the company that he was

not taking up the offer but would probably do so

at the end of 1999. As far as he was concerned,

they (the company) knew exactly what he meant

and the proposal was not to be proceeded with.

He believed that his signature on the share

document was neither a definitive nor operational

acceptance of a position but, rather, a conditional

offer to be considered.

He knew nothing about the registration of his

name as a director; about a brochure including him

as a team-member (of Dillon Consultants Ltd.)

which was produced and distributed on behalf of

the company or about a Website which included

him as a full-time working member of the

company. He was never given sight of any such

15

documents; he never profited in any way from such

unauthorised publicity and, if he had known, he

would have taken steps immediately to rectify the

situation. With regard to declarations of interests,

he argued that he could not declare something he

knew nothing about.

He stated that, as it turned out, the company had

no role whatsoever in the application, evaluation or

approval of NTL for the purchase of Cablelink. This

was decided, according to the highest standards of

public probity, by an international firm appointed

by the Minister. He played no role either in any

matter pertaining to that issue.

Mr. Duffy concluded by acknowledging that the

affixation of a personal signature is a serious act

which should be undertaken with much more care

and diligence than he exercised in the case, albeit,

in his view, in an agreed, honest and understood

manner. Mr. Duffy stated that he regrets that

singular lapse of judgement because of which he

had resigned his position as special adviser.

Evaluation by the Commission

The Commission took the view that Mr. Duffy’s actions,

relative to section 19 of the Ethics Act, fell short of

compliance in three areas:

(1) Section 19(3)(a)(i)

Under section 19(3)(a)(i), he did not declare, to the

Taoiseach and the Commission, a registrable interest

(Second Schedule, Item 3 - a directorship or shadow

directorship of any company held by the person

concerned at any time during the appropriate period*

aforesaid or Second Schedule, Item 7 - a

remunerated position held by the person concerned as

a political or public affairs lobbyist, consultant or

adviser during the appropriate period* aforesaid)

which seems to have had the potential to materially

influence him in relation to the performance of his

functions as a special adviser by reason of the fact that

such performance could so affect those interests as to

confer on, or withhold from, the person a substantial

benefit.

(*from 1 February 1998 to 31 January 1999)

Mr Duffy’s relationship with Dillon Consultants Ltd. was

dealt with in detail by the Taoiseach in a Dáil statement

on 16 June 1999. In this statement, the Taoiseach also

clarified the role of both Mr. Duffy and Dillon

Consultants Ltd. in relation to the business activities of

NTL. He went on to deal with Mr. Duffy’s role as a

member of the National Millennium Committee and its

consideration of an application from the Gaiety Theatre

for funding. Dillon Consultants Ltd. had acted on

behalf of the Theatre. The Taoiseach expressed the

view that “there is a potential for conflict of interest

where a person is adjudicating on, and maybe backing,

a proposal on its own merits but which is, nonetheless,

being promoted by a firm with which he expects to

have a future contractual relationship”.

(2) Section 19(3)(a)(ii)

In any case where a function falls to be performed by a

special adviser and the adviser has knowledge that he

or she has a material interest in a matter to which the

function relates, the adviser, under section 19(3)(a)(ii)

of the Ethics Act, is required to notify the office holder

and the Commission in writing of those facts, decline

the performance of the functions unless there are

compelling reasons to do so and, if the latter situation

prevails, notify the office holder and the Commission of

the compelling reasons. There was no such notification

from Mr. Duffy. The Ethics Act is structured in such a

way that there is no presumed relationship between

the furnishing of an annual statement of interests and

the necessity to furnish a statement at any time during

a year where it arises that there is a material interest in

a function falling to be performed. In other words, it

could happen that in furnishing an annual statement

in, say, early March 1998 covering the period 1

February 1997 to 31 January 1998, a special adviser

would reasonably take the view that there were no

registrable or additional interests to declare. However,

in, say, June 1998, circumstances could arise requiring

the immediate disclosure of the existence of a material

interest in a matter to which a function as special

adviser relates. It would not meet the requirements of

the Ethics Act to defer making such a disclosure until

the next annual statement was due. In fact, even if the

interest had been declared in the annual statement of

the previous year, it would still be necessary to make a

further disclosure at the time the circumstance arose.

16

The Commission considers that compliance with this

requirement is particularly important in the case of

special advisers who may be seconded to their posts

from business or consulting firms which may have, or

may be seeking, business with public bodies.

(3) Section 19(3)(a)(iii)

Under section 19(3)(a)(iii), Mr. Duffy was required to

undertake not to engage in any trade, profession,

vocation or other occupation, whether remunerated or

otherwise, which might reasonably be seen to be

capable of interfering or being incompatible with the

performance of his functions as a special adviser.

The need to comply with this provision, and the other

provisions of section 19(3) referred to above, would not

seem to have been dependent on Mr. Duffy having a

formal contract of employment as a special adviser

which, from the Taoiseach’s Dáil statement on 16 June

1999, it is known he did not have. This assumption is

based on section 19(6) which provides that the terms

on which a special adviser occupies the excluded

position or is employed under the contract for services

shall be deemed to include a term that the person shall

comply with section 19(3).

Again the Commission would stress the need to ensure

clear lines of demarcation when special advisers are

performing functions which may interact with the

activities of firms from which they are seconded or in

which their long term career interests may lie.

The process of investigation

While it was clear to the Commission, from its

correspondence with Mr. Duffy and from the

Taoiseach’s Dáil statement, that both the parties

accepted that there had been breaches of the Ethics

Act (albeit, in Mr. Duffy’s view, inadvertently), the

Commission was not in a position to determine that

there had been a contravention without carrying out a

formal investigation under the Act. The investigation

process is set out in detail in the Act. Effectively the

Commission operates as a tribunal of inquiry holding

hearings (which may be in private) and interrogating

witnesses who may have legal representation. It was

clear to the Commission that such a process would

require the Commission to employ its own legal

representatives and that the process would not only be

time-consuming but could involve considerable

Exchequer expenditure. The Commission, therefore,

considered what would likely be achieved by

embarking on this process.

If the Commission was to carry out an investigation in

this case the ensuing report would be furnished to Mr.

Duffy and to the Taoiseach. The report would set out

the findings of the Commission together with its

determinations in relation to whether there had been a

contravention of Part IV of the Ethics Act and whether

it was continuing. If the Commission decided that

there had been a contravention, there are four

secondary levels of determination which the report

would also have had to deal with, i.e.

it would have to prescribe, in the case of an

ongoing contravention, the steps and the timescale

required to secure compliance with the Act;

it would have to determine whether the

contravention was committed inadvertently,

negligently, recklessly or intentionally;

it would have to indicate whether the

contravention was, in all the circumstances, a

serious or a minor matter;

it would have to indicate whether Mr. Duffy acted

in good faith and in the belief that the action was

in accordance with guidelines published or advice

given, in writing, by the Commission. (Mr. Duffy

had not, on any occasion since his assumption of a

special adviser position, approached the

Commission for advice.)

If the occurrence of a serious contravention was

determined by the Commission, it would be necessary

to lay the investigation report before both Houses

where it could be noted. The application of the

sanctions, provided for under the Ethics Act, involving

censure or suspension by a House when such a report

is laid is, logically, confined to members of the Houses

(including office holders). The Act does not set out the

potential consequences of the Commission having

determined that a serious contravention had occurred

17

in the case of a person in the special adviser category.

That would appear to be a matter exclusively for the

office holder where the person concerned was his or

her special adviser. Mr. Duffy no longer held a special

adviser position, the loss of which would have been the

maximum direct penalty he could suffer arising from a

critical investigation report by the Commission. If, in

the course of an investigation, the Commission came

to the view that an offence (as distinct from a

contravention of the Ethics Act) may have been

committed, the investigation would be suspended and

the papers sent to the Director of Public Prosecutions.

The Commission considered the position carefully and

decided, on balance, that it would not be appropriate,

in all of the circumstances of the case, to carry out an

investigation. It was made clear by the Commission

that the decision not to conduct an investigation ought

not be interpreted as a finding that no contravention of

the Ethics Act had taken place. In its formal

notifications to the parties directly involved, the

Commission commented on the issues which had been

raised by the case. The comments included reference

to the importance of isolating private from public

function; to ensuring that sufficient information is

made available within public service bodies to persons

who have obligations under the Ethics Act; to the role

played by Ministers in completing the disclosure

requirements relating to special advisers and to the

overall responsibility attaching to the Minister for

Finance for the effective operation of the legislation.

Correspondence arising from the case was made

available to the Minister for Finance. The Minister

subsequently confirmed to the Commission that the

issues raised were being examined in his Department in

the context of a code of conduct for civil servants and

a proposed Standards in Public Office Bill.

Compliance by the office holder

Material relating to Mr. Duffy, including his statements

of interests furnished under section 19 of the Ethics Act

for the registration years ended 31 January 1998 and

31 January 1999 was laid before the Houses of the

Oireachtas, by the Taoiseach, on 11 June 1999. While

the Act itself is silent on any time period within which

the material should be laid, the Minister for Finance has

adopted the practice of establishing a time limit. For

1999 that date was 31 March; all office holders were

informed of this date by letter from the Minister for

Finance in February 1999.

The Commission considered that the delay by the

Taoiseach, in not laying the material within a reasonable

period following its receipt, indicated a lack of attention

to a statutory duty and that, while it is recognised that

the absence of a statutory time limit removes the

possibility of a technical breach of the Act, the intention

of the legislature could reasonably be assumed to have

been that the material would be laid within a short

period following expiry of the registration year. The

Commission would not regard giving attention to this

matter as placing an undue burden on any

administration and would encourage the introduction

of simple procedures to ensure that the laying

requirements are properly adhered to in future.

Some issues arising

In the light of its consideration of this case, the

Commission wishes to draw attention to the following

issues:

whether or not more needs to be done to ensure

that special advisers and, indeed, career civil

servants are always conscious of the potential

conflicts which may arise where they are exercising

functions which impinge on the activities of firms

or companies with which they may have working

relationships at some future date;

the possibility of the Commission being enabled to

operate a preliminary examination process in

relation to complaints, or on its own initiative, and

to reach preliminary conclusions, with the formal

investigation process being initiated only where

these conclusions are disputed by any party or

where the Commission considers it would be

appropriate to have an investigation;

whether or not the investigation procedures laid

18

down in the Ethics Act should be reviewed. The

Commission set out its views on these procedures

in its submission to the Joint Committee on Finance

and the Public Service and in last year’s Annual

Report;

the desirability of extending the obligations of

office holders, when laying documents about

special advisers employed by them before each

House of the Oireachtas, to include details of any

continuing links with private sector employment,

even if unpaid.

19

Part 2

The 1999 calendar year was the first full year

when all of the provisions of the Electoral Act,

1997 and the Electoral (Amendment) Act, 1998

were in operation. The Commission’s Annual

Report for 1998 provided a description of the

main provisions of both pieces of legislation

and an outline of some of the reasons why it

was necessary to amend the 1997 Act.

In this part of the report, the position relating

to the disclosure in 1999 of political donations

received by TDs, Senators, MEPs and political

parties is examined. A number of related

issues are also discussed such as donations

received from outside the State, disclosure

requirements for certain types of donors and

the treatment of payments passing between

political parties and their members.

The European Parliament election in June 1999

was the first national election which was

subject to the new rules governing the

disclosure of donations and the limitation of

expenditure. The Commission’s views on the

operation of the legislation during that

election are set out. Of concern to the

Commission in regard to that election was an

apparent lack of attention on the part of some

candidates and agents in areas such as keeping

of adequate records and maintaining strict

control over expenditure.

Another event covered in this part of the

report is the Dáil bye-election in Dublin South-

Central which was held in October 1999. Also,

during the year, the Commission received, for

20

Electoral Acts, 1997 and 1998

...an important aspect of thelegislation is the access it provides

to information...

21

the first time, details of how Exchequer funding of over

£1m paid out to qualified political parties under the

Electoral Acts was spent by the parties. Payments

commenced in 1998 and a report on spending had to

be furnished to the Commission by each qualified party

not later than 31 March 1999.

It should be noted that the mandate of the

Commission under the Electoral Acts does not extend

to members of local authorities or health boards.

Accordingly, the Commission has no role in relation to

the disclosure of political donations received by such

persons nor was it involved in monitoring and reporting

on expenditure at the local elections held in June 1999.

Donations received by TDs,Senators and MEPs disclosed in 1999

The legislation requires TDs, Senators and MEPs to

furnish an annual Donation Statement to the

Commission disclosing any contributions received for

political purposes which exceed a value of £500. If the

same person makes more than one donation to the

same TD, Senator or MEP, the values of the donations

must be aggregated and disclosed if the total amount

exceeds £500. The annual Statement must be

provided by 31 January each year in respect of the

preceding calendar year. Donations cover money,

property, goods or services, and include items supplied

at below commercial cost. The penalty for failing to

furnish a Statement is a fine of up to £1,000. If the

failure continues after a conviction, there can be a

further fine of up to £100 per day until such time as the

Statement has been provided. If it is proven that a false

or misleading Statement has knowingly been furnished

to the Commission, the person concerned is liable to a

fine of up to £20,000 and imprisonment for up to 3

years.

Guidelines were issued by the Commission to TDs,

Senators and MEPs on the steps to be taken by them

concerning the disclosure of donations and the

treatment of anonymous donations. (Anonymous

donations are donations valued at more than £100

which are offered or received and the intended

recipient does not know the name and address of the

donor. Such donations must be refused or, if received,

must be surrendered to the Commission. It is an

offence to do otherwise.) The Commission’s guidelines

were revised to take account of the 1998 Act which

commenced on 31 March 1998. That Act introduced

two changes of significance for TDs, Senators and

MEPs :

(i) a donation made to a TD, Senator or MEP which is

passed on by the person to his or her political party

will be regarded as a donation to the party and not

to the person if a written acknowledgement of the

donation is received by the person from the party;

and

(ii) spending by the national agent of a political party on

its candidates at a Dáil or European Parliament

election will not be regarded as a donation to the

candidates unless it consists of money exceeding

£500. (Such spending must come from the amount

assigned by the candidate to the political party from

within the expenditure limit available to the

candidate and will, of course, be subject to the

spending limits now applying to elections. Spending

limits are discussed in more detail later in this report.)

Donation Statements

Donation Statements for 1998 were received by the

Commission from all 166 TDs, 60 Senators and 15

MEPs. These Statements were the first to be covered

by the provisions of both the 1997 and 1998 Acts and

were the first to cover a full calendar year. A summary

of the donations disclosed in the Statements is set out

in Table A.

The Statements, together with a report by the

Commission to the Ceann Comhairle, were laid before

the Dáil and Seanad. A Press Release was issued by the

Commission and notices were placed in national and

local newspapers advising that the Statements were

available for public inspection and copying at the

offices of the Commission. There was, however, a very

low level of uptake when it came to the public availing

of the invitation to inspect or copy the material. This is

unfortunate given that an important aspect of the

legislation is the access it provides to information

22

which, heretofore, was not open to public scrutiny. It

is disappointing that, notwithstanding the

understandably high level of interest in events in other

fora (which have been dealing with matters pre-dating

the current legislation) and the widespread debate

concerning donations to politicians, there appears to

be little interest in the factual information which is

being made available by the Commission on a regular

basis. This information, being on public display, affords

every citizen the right to consider and, if appropriate,

question and require an explanation in relation to any

aspect of the statutory Statements.

Donations with a total value of £80,872.73 plus

US$1,000 were disclosed as having been received

during 1998. It should be borne in mind that only

donations with a value exceeding the £500 threshold

are required to be disclosed. The category of persons

which disclosed most donations were members of the

Dáil. Eighteen TDs (10.8% of total members) disclosed

donations valued in excess of £500 as did two Senators

(3.3% of Senators). None of the fifteen Irish MEPs

disclosed donations. Fianna Fáil Deputies accounted

for the highest number of statements (ten) in which at

least one donation was disclosed, followed by the

Labour Party (five) and Fine Gael (three). There was no

disclosure by members of other political parties or by

independents.

The total value of donations exceeding £500 which

were disclosed by members of the Dáil was £78,872.73

plus US$1,000. Members of Fianna Fáil accounted for

the largest portion of this amount with donations to

the value of £55,489.00 plus US$1,000 (71% of the

total). Members of Fine Gael and the Labour Party

disclosed totals of £12,983.73 (16%) and £10,400.00

(13%), respectively. The total value of donations

exceeding a value of £500 disclosed by members of the

Seanad for 1998 was just £2,000, comprising a

donation of £1,000 each disclosed by a member of

Fianna Fáil and a member of the Labour Party.

Donations received by politicalparties disclosed in 1999

The legislation requires the Appropriate Officer of each

registered political party (e.g. the General Secretary) to

furnish a Donation Statement to the Commission by 31

March of each year indicating whether, during the

preceding calendar year, the party received any

donations exceeding £4,000 in value, or donations

from the same person exceeding an aggregate value of

£4,000. The Appropriate Officer is personally

responsible for furnishing the Statement and for the

accuracy of the information contained therein. As with

individual TDs, Senators and MEPs, there are very

serious sanctions for failing to provide a Statement

23

Table A: Summary of donations received during 1998 disclosed by TDs, Senators and MEPs

TDs Senators MEPs

Political Party Donations Nil Donations Nil Donations Nil

disclosed returns disclosed returns disclosed returns

Fianna Fáil 10 66 1 29 0 7

Fine Gael 3 51 0 16 0 4

Labour 5 14 1 3 0 1

Green Party 0 2 - - 0 2

Democratic Left 0 3 - - - -

Progressive Democrats 0 4 0 4 - -

Socialist Party 0 1 - - - -

Sinn Féin 0 1 - - - -

Non-Party 0 6 0 6 0 1

TOTALS 18 148 2 58 0 15

and, more particularly, for knowingly providing a

Statement that is false or misleading.

The annual Donation Statements of political parties

covering the period from 1 January to 31 December

1998 were furnished to the Commission by the

statutory deadline of 31 March 1999. Guidelines on

the disclosure requirements had been sent by the

Commission to the sixteen political parties registered in

the State to contest a Dáil or European Parliament

election. All of these parties were covered by the

legislation. (The number reduced to fifteen in late

January 1999 due to the merger of Democratic Left

and the Labour Party.)

Donation Statements

Donation Statements were received by the Commission

from all of the sixteen registered parties. The Donation

Statements for 1998 are the first party returns to be

covered by the full provisions of both the 1997 and

1998 Acts and are the first such returns to cover a

complete calendar year. A summary of the information

contained in the Statements is provided in Table B.

Eight of the sixteen political parties disclosed donations

valued in excess of £4,000 which were received during

the period in question. Fianna Fáil disclosed the

highest number of such donations, thirty-six, and the

highest total value of donations, £432,501. The largest

donations received by that party (two donations of

£50,000 each) were from Mr. Martin Naughton of

Slane, County Meath, and from O’Callaghan Hotels of

Cumberland Street in Dublin 2. Fine Gael disclosed the

second highest number of donations, five, valued at a

total of £63,528.

The largest single donation, US $184,256.09, was one

of a number received by Sinn Féin from ‘Friends of Sinn

Féin America’. In this regard, to ensure compliance

with the legislation, the Commission sought and

received confirmation from Sinn Féin that the

donations from ‘Friends of Sinn Féin America’ did not

include any individual donations valued in excess of

£4,000. Apart from the ‘Friends of Sinn Féin America’

contribution to Sinn Féin, the largest disclosed

contributor to political parties during 1998 was Irish

Life Ltd. which made five donations with a total value

of £80,000. These were distributed amongst Fianna24

Table B: Summary of donations received during 1998 disclosed by political parties

Political Amount Received Number of Largest donation

Party £ donations £

Fianna Fáil 432,501 36 50,000

Sinn Féin 24,750 + 3 US$184,256.09

US$256,208

Fine Gael 63,528 5 25,000

Labour Party 51,741 3a 27,741

Green Party 13,080 2 6,540

Socialist Party 12,000 1 12,000

Progressive Democrats 5,000 1 5,000

Democratic Left 5,000 1b 5,000

Christian Solidarity Party Nil - -

Communist Party of Ireland Nil - -

Muintir na hÉireann Nil - -

National Party Nil - -

Natural Law Party Nil - -

Socialist Workers Party Nil - -

South Kerry Independent Alliance Nil - -

Workers Party Nil - -

a Two of these donations were included in a supplementary Donation Statement, received on 3 August 1999 b This donation was included in a supplementary Donation Statement, received on 11 May 1999

Fáil (£35,000), Fine Gael (£25,000), the Labour Party

(£10,000), the Progressive Democrats (£5,000) and

Democratic Left (£5,000).

The Labour Party disclosed that its donation from Irish

Life Ltd. was given on the understanding that the

money would be used exclusively for the campaign to

promote the Northern Ireland Good Friday Agreement.

The Appropriate Officer of the party confirmed in the

Donation Statement that the money was used for this

purpose. Fianna Fáil also disclosed that twenty of its

donations, with a total value of £379,000, were given

in respect of the campaign in relation to the Northern

Ireland Peace Agreement.

Copies of the Donation Statements received from the

parties were laid by the Commission before each House

of the Oireachtas and are available for public inspection

at the offices of the Commission. A public notice to

this effect was placed by the Commission in the

national and local newspapers.

Donations received from outside the State

Unlike the position in a number of other jurisdictions,

the receipt of donations from outside the State by Irish

political parties and public representatives is not

prohibited by the legislation governing the disclosure

of donations. The Commission is satisfied that parties

in receipt of such donations have established

procedures which will ensure that they are accounted

for in accordance with the requirements of the

legislation. The Commission has made it clear that, in

terms of disclosure by parties, there is no difference

between donations received from either within or

outside the State. In any case where a donation valued

at more than £4,000 is made to a party, the

Commission would expect to be given full details of the

donation, including the name and address of the donor

and the value and nature of the donation, regardless of

the location of the donor. In that regard, Appropriate

Officers should be fully aware of their responsibilities

and should ensure that they are in possession of all

relevant information concerning donations when

completing the party’s Donation Statement. It would

be unacceptable to the Commission that a donation

would, perhaps inadvertently, be omitted from a

Statement because an Appropriate Officer did not have

all of the facts. This could arise, for instance, where

information about fund-raising events abroad was not

made available to the Appropriate Officer in sufficient

time or detail for inclusion in the Statement.

Disclosure requirements for certain categories

of donors

The 1998 Act introduced a new disclosure requirement

for certain categories of donors (i.e. a donor who is not

a company, trade union, building society or other

society, as described in the legislation) who made

donations exceeding an aggregate value of £4,000 in a

calendar year in either of the following circumstances:

(i) to two or more persons who, when the donations

were made, were members of the same political

party; or

(ii) to one or more persons and to the political party of

which the person(s) were members when the

donations were made to them.

Such donations must be detailed in a Donation

Statement furnished to the Commission by the donor,

regardless of whether the donations in question are

also required to be disclosed by the recipient. In this

regard, the 1998 Act prohibits the acceptance of a

donation where the intended recipient knows or has

reason to believe that the donor in question does not

intend to comply with the requirement to furnish a

Donation Statement to the Commission.

The new requirement was notified by the Commission

to all of the registered political parties during 1998.

The first Donation Statements from donors were

required to be furnished to the Commission by 31

January 1999 in respect of the period from 31 March

(commencement of the 1998 Act) to 31 December

1998. The Commission placed public notices in the

national and provincial newspapers informing donors

of this requirement. The Commission did not receive

any Statements from donors in respect of 1998.

Democratic Left Supplementary Donation

Statement for 1998

On 5 May 1999 the Appropriate Officer of Democratic

25

Left informed the Commission of an error in the party’s

1998 Donation Statement. A donation of £5,000 from

Irish Life Ltd. which had been received by the party

during 1998 had been omitted from the Donation

Statement. A supplementary Donation Statement

disclosing the donation was subsequently received by

the Commission on 11 May 1999.

The party’s Appropriate Officer advised the

Commission that the omission from the original

submission arose due to an administrative error. The

Appropriate Officer was no longer employed by the

party after January 1999 when the party ceased to exist

as a separate entity. For the purpose of completing the

party’s Donation Statement, the Appropriate Officer

had requested a check on party income for 1998.

Records were mistakenly checked for donations valued

in excess of £5,000 rather than the statutory disclosure

threshold of £4,000. On that basis, the Appropriate

Officer was advised that there were no disclosable

donations received by Democratic Left during the

period in question.

The Commission considered the matter and accepted

the explanation given by the Appropriate Officer. It

was decided that the Appropriate Officer had not

contravened the Acts by knowingly furnishing a

Donation Statement which was false or misleading in a

material respect. The Commission advised the

Appropriate Officer that the requirements under

section 24(6) of the 1997 Act to make such enquiries

and maintain such records as are necessary for the

purpose of furnishing a Donation Statement and

making the accompanying Statutory Declaration

should be strictly adhered to in future, i.e. in relation to

the 1999 Donation Statement which would cover the

period up to 24 January 1999.

The above instance, where a political party

inadvertently omitted from its Donation Statement the

only disclosable donation received by it during a

calendar year, is indicative of a lack of sufficient care

and attention being afforded to the completion of

statutory documentation as referred to in the

introduction to this part of the report. It is a matter of

concern to the Commission that this situation, which

was brought about by a misunderstanding of the

statutory disclosure limit, could have arisen some two

years after the commencement of the legislation.

Labour Party Supplementary Donation

Statements for 1997 and 1998

Following publication of the political party Donation

Statements for 1998, the Commission was aware of

media coverage suggesting that the Labour Party had

failed to disclose, in its 1997 and 1998 Statements,

amounts in excess of £4,000 which had been received

by the party from former MEP, Ms. Bernie Malone.

In response to the Commission’s enquiries in the

matter, the Appropriate Officer of the party confirmed

that levies to the party had been paid by Ms. Malone in

1997 and 1998. Some £9,100 was paid between 15

May 1997 (commencement of the 1997 Act) and 31

December 1997. A further £14,000 was paid from 1

January 1998 to 31 December 1998. In addition,

subscription fees of £27,741 had been paid to the

party by an affiliated trade union (SIPTU) in February

1998.

The Appropriate Officer contended that levies paid by

Ms. Malone and the fees paid by SIPTU were not of a

discretionary nature because they were paid in

compliance with the rules of party membership and, as

such, they should not be regarded as donations to the

party, as defined under the legislation.

The Commission considered the comments of the

Appropriate Officer and was strongly of the view,

supported by legal advice, that the payments in

question did constitute donations to the party, as

defined in section 22 of the 1997 Act, and should have

been disclosed in the party’s Donation Statements for

1997 and 1998. In arriving at this conclusion the

Commission had regard to the terms of the legislation

which describe a donation as meaning any contribution

given for political purposes by any person, whether or

not the person is a member of a political party. A

person is described as including an individual, a body

corporate or an unincorporated body of persons.

The Commission did not consider that the Appropriate

Officer had knowingly furnished a false or misleading

26

Donation Statement. The Appropriate Officer was,

however, requested to furnish supplementary Donation

Statements for 1997 and 1998, detailing the donations

from Ms. Malone and SIPTU. He was informed that the

Commission’s advice should be sought where there is

any doubt regarding what might constitute a donation.

Supplementary Donation Statements received from the

Labour Party on 3 August 1999 were laid before the

Houses of the Oireachtas and made available for public

inspection.

In general, receipt by a political party of levies on party

members or subscriptions from associated bodies must

be disclosed by the party if the amount in any case

exceeds the threshold of £4,000 during a calendar year.

The fact that the payment of such levies and

subscriptions may not be discretionary does not

absolve a political party from its disclosure

responsibilities. In this regard, levies include annual

levies and any other payments (such as pre-election

payments to a constituency organisation or branch)

requested by a political party from its members,

whether or not they are public representatives.

Officials of political parties and members of those

parties are reminded that the advice of the Commission

should be sought if there is any doubt about the

treatment of a particular transaction.

Payments between a political party and its

members

The issue of payments passing between a political party

and its members often leads to enquiries to the

Commission. As outlined above, the definition of a

donation under the legislation does not exclude

contributions made to a party by members or affiliates,

whether discretionary or not. Equally, contributions

made to a member by a party will be regarded as a

donation to the member if the value exceeds the £500

threshold. Loans made by a party to its members may

also constitute donations, unless the recipient of a loan

can show that the transaction was a bona fide loan and

that it has been, or will be, repaid to the party.

Expenses incurred by a political party on behalf of its

candidates at a Dáil or European Parliament election

are excluded from the definition of a donation (unless

such expenditure takes the form of cash payments to

the candidate exceeding £500 which would be

regarded as a donation to the candidate). Similarly,

where a Dáil or European Parliament election candidate

receives a refund of election expenditure from the

Exchequer, the refund, or a part thereof, may be used

by the candidate to reimburse a political party in

respect of expenditure incurred by the party on behalf

of the candidate at the election. The reimbursement

will not be regarded as a donation to the party, where

the reimbursement was agreed in writing prior to the

election and the sum involved does not exceed the

amount agreed or the amount of expenses actually

incurred by the party on the candidate, whichever is

the lesser. This treatment of reimbursements has been

notified by the Commission to all registered political

parties. In determining the position in this regard, the

Commission took account of the fact that in calculating

the amount of the refund which a candidate is entitled

to receive, the legislation permits the inclusion of

expenditure incurred by the political party on behalf of

the candidate at the election but does not afford any

right to the party itself to seek the refund.

The Commission is statutorily obliged to provide advice

and guidelines to persons to whom the legislation

applies. While the Commission seeks to produce

comprehensive guidelines, it may be the case that the

guidelines will not cover all eventualities. The onus,

therefore, is on a person furnishing a Donation

Statement to seek the Commission’s advice where

there is any doubt regarding what constitutes a

donation.

European Parliament electionof 11 June 1999

The European Parliament election of 11 June 1999 was

the first national election where participants were

subject to the disclosure of donations and the

limitation of expenditure. The election was also the

first contest at European level which was subject to

those provisions of the legislation.

Expenditure limits and procedures for the

reimbursement of candidates’ expenses at a European

Parliament election are not set out in the legislation.

Accordingly, an Order (The Electoral Act, 1997 (Section

33) Order, 1999) was made by the Minister for the

27

Environment and Local Government on 5 May 1999

setting the expenditure limit for the election at

£150,000 per candidate. Regulations introduced by

the Minister on the same day (European Parliament

Election (Reimbursement of Expenses) Regulations)

provided for a maximum reimbursement to candidates

of £30,000 in respect of election expenses. This was

available to candidates who were either elected or

secured at least one-quarter of the quota in their

constituency.

Commission contact with candidates, election

agents and political parties

Forty-two candidates and eight political parties

contested the European Parliament election in four

constituencies (Tables C to F below). The Commission

published guidelines entitled: ‘Handbook for the

European Parliament Election on 11 June 1999’, which

were issued to each candidate, their election agents

and the national agents of the political parties.

Representatives of the Commission visited each of the

four constituencies during the election campaign.

Constituency visits are a feature of the Commission’s

activities during election campaigns and they have

proven valuable in developing an understanding of the

legislative requirements amongst candidates, election

agents and party officials. Advice and assistance are

provided by the Commission representatives in an

informal manner which helps to construct good

working relationships with candidates and political

parties, greatly aiding the operation of the legislation

both before and after an election. The Commission has

signalled its intention to political parties that it will

continue these constituency visits at future elections in

addition to providing more formal briefing sessions at

national or regional levels. A number of political

parties attended briefing sessions at the Commission’s

offices prior to the European Parliament election and

these briefings will act as a model for future

developments in this area.

Material furnished to the Commission

The Commission also conducted post-election

constituency visits to ensure, as far as possible, a

correct and speedy completion of the various statutory

forms and to facilitate the prompt processing of

applications from candidates seeking reimbursement of

election expenses. The Commission is disappointed

and concerned at the number of errors and omissions

which were a feature of the statutory documentation

initially furnished by most candidates and agents. This

documentation covered matters such as the disclosure

of donations by unsuccessful candidates, the disclosure

and limitation of election expenditure by agents of

candidates and political parties and the reimbursement

of candidates’ election expenses.

The Commission was obliged to enter into

correspondence, which was occasionally protracted,

with many of the candidates and agents to ensure

correct completion of the statutory documentation,

particularly Election Expenses Statements. A number

of meetings, over and above what should reasonably

have been required, were also necessary to bring the

process to finality. It is evident that, in many cases,

sufficient care was not taken both in advance and

when actually completing the statutory forms. In

particular, it was clear that the requirement to maintain

proper records and invoices relating to election

expenses was not properly adhered to by some of the

participants. It should be noted that failure to maintain

proper records for the purposes of furnishing an

Election Expenses Statement is an offence under the

legislation. It should not be expected that the

Commission, at future elections, will go to the same

lengths in terms of time and commitment in

attempting to assist candidates and agents to

discharge their statutory responsibilities.

On a more positive note, the European Parliament

election was the first electoral contest covered by the

legislation where there was, eventually, a complete

return of all statutory documentation to the Commission

and where the Commission did not find it necessary to

refer a file to either the Gardaí or the Office of the

Director of Public Prosecutions. At previous elections,

files relating to a number of candidates and agents who,

at least initially, had failed to furnish Donation

Statements or Election Expenses Statements or who had

overspent at an election were transmitted by the

Commission to the Gardaí or the Office of the Director

of Public Prosecutions for attention.

28

It was apparent to the Commission that, in some cases,

difficulties arose in furnishing the statutory

documentation because of a delay or failure on the

part of candidates in providing their election agents

with information which was required by the agents to

fulfil their responsibilities under the Electoral Acts. In

one instance, failure by a candidate to provide the

relevant information to an election agent resulted in

that agent not being able to fully complete the relevant

Election Expenses Statement to the satisfaction of the

Commission until almost six months after the statutory

deadline. At present there is no sanction in the

legislation dealing with failure by a candidate to

provide relevant information to an election agent, a

point which the Commission has already brought to

the attention of the Department of the Environment

and Local Government.

On a final note, the Commission would like to draw

attention to the fact that failure to comply with the

relevant procedures, including the maintenance of

proper records, delays the making of reimbursements

of election expenses to qualified candidates and, in

serious cases including long delays, may result in the

refusal of a reimbursement application. The only

person who can legally incur expenditure on behalf of

an election candidate is the candidate’s election agent

and persons authorised by that agent within specific

limits. Only if a candidate acts as his or her own

election agent, or is authorised by an agent, can he or

she incur election expenditure under the legislation. In

any other circumstances, a candidate should not have

control over records or other material connected to

election expenditure.

Analysis of election expenditure at the

European Parliament election

An analysis of the Election Expenses Statements received

by the Commission in relation to the forty-two

candidates and the eight political parties who contested

the election (Tables C to G below) shows that

expenditure of £2,192,585.71 was incurred at the

election. Overall, the forty-two candidates themselves

incurred expenditure of £1,337,979.93 while political

parties spent a further £741,547.08 directly on their

candidates. In addition to spending on their candidates,

political parties also spent £113,058.70 at national level

(Table G). This latter expenditure was not specific to any

particular candidate or constituency.

On a constituency basis, the largest amount spent was in

Dublin, £792,676.64, followed by Munster,

£494,777.19, Connacht/Ulster, £407,398.28, and

Leinster £384,674.90. The highest expenditure incurred

by a political party and its candidates was by Fianna Fáil

at £701,772.18, followed by Fine Gael at £663,605.89

and the Labour Party at £350,739.66. At individual

candidate level, the highest expenditure by a party and

candidate combined was on Mr. Ben Briscoe, TD,

(Dublin) at £133,181.53, followed by Mr. Jim Mitchell,

TD, (Dublin) at £133,102.93, Ms. Mary Banotti, MEP,

(Dublin) at £111,460.69, Ms. Bernie Malone (Dublin) at

£100,167.18 and Mr. Proinsias De Rossa, TD and MEP,

(Dublin) at £100,008.75. Expenditure in respect of all

forty-two election candidates remained within the

statutory limit of £150,000 per candidate for each of the

European Parliament constituencies.

Reimbursement of election expenditure

A total of £833,744.00 was reimbursed to twenty-

eight candidates who were either elected at the

election or who secured at least one-quarter of the

quota in their constituency at any stage of the counting

of votes. Details of amounts reimbursed to qualified

candidates are also provided in Tables C to F below.

The largest amount of expenditure (£240,000) was

reimbursed to candidates in Dublin followed by

Leinster (£207,778.82), Munster (£206,519.70) and

Connacht/Ulster (£179,445.48).

All of the Fianna Fáil candidates (8 = £240,000), Fine

Gael candidates (7 = £210,000) and Sinn Féin

candidates (4 = £113,744) who contested the election

received a reimbursement of their expenses. Four of

the 5 Labour Party candidates (£120,000) and 2 of the

3 Green Party candidates (£60,000) also received

reimbursements as did three independent candidates,

Mr. Pat Cox, MEP, Ms. Marian Harkin and Ms. Dana

Rosemary Scallon, MEP.

29

30

Table D: European Parliament election expenditure by political parties and candidates in Leinster (8 candidates)

Candidate Name Candidate Party Spend Total Spend Reimbursed

(Political Party) Spend on Candidate Expenses

£ £ £ £

Jim Fitzsimons MEP (FF) 48,948.00 21,327.45 70,275.45 30,000.00

Liam Hyland MEP (FF) 18,037.69 22,090.58 40,128.27 30,000.00

Avril Doyle Senator and MEP (FG) 52,356.67 26,790.07 79,146.74 30,000.00

Alan Gillis (FG) 51,471.16 27,817.64 79,288.80 30,000.00

Seán Butler (Lab) 14,785.05 40,433.24 55,218.29 30,000.00

Nuala Ahern MEP (GP) 32,693.53 0 32,693.53 30,000.00

Arthur Morgan (SF) 17,123.56 10,655.26 27,778.82 27,778.82

Des Garrett (NLP) 145.00 0 145.00 Not qualified

TOTALS 235,560.66 149,114.24 384,674.90 207,778.82

Table C: European Parliament election expenditure by political parties and candidates in Dublin (13 candidates)

Candidate Name Candidate Party Spend Total Spend Reimbursed

(Political Party) Spend on Candidate Expenses

£ £ £ £

Niall Andrews MEP (FF) 36,678.31 31,194.71 67,873.02 30,000.00

Ben Briscoe TD (FF) 101,930.99 31,250.54 133,181.53 30,000.00

Mary Banotti MEP (FG) 34,459.27 77,001.42 111,460.69 30,000.00

Jim Mitchell TD (FG) 56,955.49 76,147.44 133,102.93 30,000.00

Proinnsias De Rossa TD and MEP (Lab) 60,154.50 39,854.25 100,008.75 30,000.00

Bernie Malone (Lab) 60,448.55 39,718.63 100,167.18 30,000.00

Patricia McKenna MEP (GP) 36,914.85 0 36,914.85 30,000.00

Seán Crowe (SF) 28,158.22 11,007.30 39,165.52 30,000.00

John Burns (NLP) 239.79 0 239.79 Not qualified

Gerard Casey (CSP) 0 41,953.20 41,953.20 Not qualified

Joe Higgins TD (SP) 0 16,089.99 16,089.99 Not qualified

Adam Goodwin (Ind) 4,326.19 N/A 4,326.19 Not qualified

Ciaran Goulding (Ind) 8,193.00 N/A 8,193.00 Not qualified

TOTALS 428,459.16 364,217.48 792,676.64 240,000.00

31

Table E: European Parliament election expenditure by political parties and candidates in Munster (10 candidates)

Candidate Name Candidate Party Spend Total Spend Reimbursed

(Political Party) Spend on Candidate Expenses

£ £ £ £

Gerard Collins MEP (FF) 61,011.00 22,116.93 83,127.93 30,000.00

Brian Crowley MEP (FF) 72,313.18 22,116.92 94,430.10 30,000.00

Jim Corr (FG) 63,078.84 21,003.35 84,082.19 30,000.00

John Cushnahan MEP (FG) 49,454.74 21,109.74 70,564.48 30,000.00

Paula Desmond (Lab) 18,428.26 34,259.62 52,687.88 30,000.00

Ben Nutty (GP) 743.52 750.00 1,493.52 Not qualified

Martin Ferris (SF) 15,864.44 10,655.26 26,519.70 26,519.70

Stewart Luck (NLP) 408.10 0 408.10 Not qualified

Denis Riordan (Ind) 240.00 N/A 240.00 Not qualified

Pat Cox MEP (Ind) 81,223.29 N/A 81,223.29 30,000.00

TOTALS 362,765.37 132,011.82 494,777.19 206,519.70

Table F: European Parliament election expenditure by political parties andcandidates in Connacht/Ulster (11 Candidates)

Candidate Name Candidate Party Spend Total Spend Reimbursed

(Political Party) Spend on Candidate Expenses

£ £ £ £

Pat Gallagher MEP (FF) 36,020.20 20,922.42 56,942.62 30,000.00

Noel Treacy TD (FF) 67,274.32 21,181.81 88,456.13 30,000.00

Joe McCartin MEP (FG) 54,007.97 16,536.79 70,544.76 30,000.00

Gerard Gibbons (Lab) 14,930.30 26,907.26 41,837.56 Not qualified

Seán Mac Manus (SF) 18,790.22 10,655.26 29,445.48 29,445.48

Paul Campbell (NLP) 328.14 0 328.14 Not qualified

Marian Harkin (Ind) 52,990.16 N/A 52,990.16 30,000.00

Dana Rosemary Scallon MEP (Ind) 56,289.01 N/A 56,289.01 30,000.00

Rev Liam Sharkey (Ind) 6,112.66 N/A 6,112.66 Not qualified

Paul Raymond (Ind) 3,451.76 N/A 3,451.76 Not qualified

Luke Flanagan (Ind) 1,000.00 N/A 1,000.00 Not qualified

TOTALS 311,194.74 96,203.54 407,398.28 179,445.48

Table G: European Parliament election expenditure by political parties atnational level

Political Party No. of candidates Expenditure incurred £

Fianna Fáil 8 67,357.13

Fine Gael 7 35,415.30

Labour Party 5 820.00

Green Party 3 0

Sinn Féin 4 8,968.13

Natural Law Party 4 498.14

Socialist Party 1 0

Christian Solidarity Party 1 0

Non-Party 9 Not Applicable

TOTALS 42 113,058.70

Expenditure by persons unconnected with

candidates or political parties

The legislation provides that notice of intention to incur

expenditure at an election by a person, or a group of

persons, unconnected to either a candidate or a

political party contesting the election must be provided

to the Commission in advance and the expenditure

must be accounted for to the Commission after the

election in an Election Expenses Statement. The

expenditure in question may be to either promote or

oppose a candidate or a political party at the election.

The Commission placed public notices to that effect in

the national and provincial newspapers prior to the

European Parliament election.

The European Parliament election was the first

occasion when expenditure was disclosed by third

parties who were unconnected to either a candidate or

a political party contesting the election. According to

Election Expenses Statements received by the

Commission, expenditure of £1,058.95 was incurred

by Mr. Jay Nolan on behalf of the Immigration Control

Platform in opposing the candidacy of Mr. Proinsias De

Rossa, TD and MEP, in Dublin. Mr. James O’Brien, Head

of the European Parliament Office in Dublin, also

incurred expenditure of £12,831 on behalf of that

office on a newspaper campaign to raise public

awareness of the election. This campaign consisted of

advertisements for the eight political parties (each of

which included a party message and a profile of party

candidates) and the independent candidates

contesting the election.

If future Irish elections follow the pattern of elections in

other jurisdictions where there are limits on election

expenditure, expenditure by organisations unconnected

to either a candidate or a political party contesting an

election will become more commonplace. The

Commission has advised candidates and political parties

that they should notify the Commission if they become

aware of unconnected third parties incurring

expenditure either promoting or opposing a candidate

or a political party at an election. Expenditure of this

nature during an election, including advertisements or

notices in newspapers or other periodical publications,

is expressly prohibited by the legislation, unless the

person or body incurring the expenditure has secured a

certificate from the Commission stating that the

Commission has been provided with prior details of the

proposed expenditure. If the Commission forms the

view that such expenditure is, in reality, being incurred

with the knowledge or approval or at the behest of a

candidate or party, it will be regarded as being part of

the expenditure limits applying to the party or

candidate.

Disclosure of donations

Donation Statements were received by the Commission

from each of the twenty-seven unsuccessful candidates

who contested the European Parliament election. Only

twelve of these disclosed donations valued in excess of

£500 which were received in relation to the election.

The total value of donations disclosed was

£127,798.04. Details of donations disclosed are

provided in Table H below. The Commission was not

notified of receipt of an anonymous donation by any of

the election candidates.

The fifteen successful candidates are required to

furnish an annual Donation Statement, as sitting MEPs,

by 31 January of each year in respect of the preceding

calendar year. Three former MEPs, who either did not

seek re-election or were unsuccessful at the election

(Mr. Mark Killilea, Mr. Alan Gillis and Ms. Bernie

Malone), are required to furnish a Donation Statement

covering the period 1 January to 10 June 2000.

Public availability of statutory documentation

Copies of the Donation Statements, Election Expenses

Statements and a report by the Commission to the

Ceann Comhairle were laid before both Houses of the

Oireachtas on 7 October 1999, in accordance with the

requirements of the legislation. Copies of an amended

Election Expenses Statement from Mr. John O’Dwyer,

election agent for Minister of State, Mr. Noel Treacy,

TD, were laid before the Houses on 9 February 2000.

The material is available for public inspection at the

offices of the Commission. Notices were placed in the

print media advertising this fact.

32

Dublin South-Central Dáil bye-election of 27 October 1999

Nine candidates and eight political parties contested

the Dublin South-Central bye-election to fill the

vacancy created by the death of Labour Party Deputy

Mr. Pat Upton on 22 February 1999 (Table I below).

Guidelines entitled: Handbook for the Dublin South-

Central Dáil bye-election on 27th October 1999 were

issued to candidates, their election agents and the

national agents of the political parties.

Representatives of the Commission visited the

constituency and met with candidates and election

agents, both during and after the bye-election

campaign. The visits were undertaken to provide

advice and assistance on the requirements of the

legislation and to ensure, as far as possible, a correct

and speedy completion of statutory forms.

On 13 October 1999 the Minister for the Environment

and Local Government made an order, The Electoral

Act, 1997 (Limitation of Election Expenses at Dáil

Election) Order, 1999 (S.I. 317 of 1999), increasing the

expenditure limits for Dáil elections to reflect the rise in

the Consumer Price Index since the provisions of the

Act relating to the limitation of election expenditure

commenced on 1 January 1998. The expenditure limits

were increased from £14,000, £17,000 and £20,000 to

£14,453, £17,550 and £20,648 for three, four and five

seat constituencies, respectively. This was the first

occasion that the Minister had varied the monetary

amounts in the legislation. As a four seat Dáil

constituency, total election expenditure incurred at the

33

Table H: Donations disclosed by unsuccessful European Parliament election candidates

Candidate Name Constituency Donations Disclosed (£)

Seán Crowe (SF) Dublin 4,000.00

Adam Goodwin (Ind) Dublin 2,240.00

Bernie Malone (Lab) Dublin 13,714.89

Jim Mitchell TD (FG) Dublin 29,033.50

Seán Butler (Lab) Leinster 5,452.08

Jim Corr (FG) Munster 36,897.57

Paula Desmond (Lab) Munster 2,700.00

Ben Nutty (GP) Munster 1,000.00

Paul Campbell (NLP) Connacht-Ulster 1,000.00

Gerard Gibbons (Lab) Connacht-Ulster 13,234.00

Marian Harkin (Ind) Connacht-Ulster 15,026.00

Noel Treacy TD (FF) Connacht-Ulster 3,500.00

Total value disclosed - £127,798.04

Table I: Candidates, Election Agents and National Agents at the Dublin South-Central Dáil bye-election of 27 October, 1999

Candidate Political Party Election Agent National Agent

John Burns Natural Law Party Candidate Noel O’Neill

Catherine Byrne Fine Gael Brian Hayes TD Tom Curran

John Goodwillie Green Party Candidate Stephen Rawson

Shay Kelly Workers Party Rita Whelan Pat Quearney

Manus MacMeanmain Christian Solidarity Candidate Martin O’Reilly

Michael Mulcahy Fianna Fáil Denis Murphy Hugh Dolan

Eamonn Murphy Independent Candidate N/A

Aengus Ó Snodaigh Sinn Féin Brian Dowling Lucilita Bhreathnach

Mary Upton TD Labour Party Niall Connolly Angus Laverty

Dublin South-Central bye-election had to remain

within an expenditure limit of £17,550 per candidate.

Analysis of election expenditure

Election Expenses Statements were received in respect

of each of the nine candidates and eight political

parties who contested the bye-election. Analysis of the

Statements demonstrates that total expenditure by

candidates and political parties at the bye-election was

£67,918.27 (Table J below). Expenditure of £64,680.27

was incurred by the nine candidates themselves, while

a total of £3,238.00 was incurred on their candidates

by four of the eight political parties.

The highest amount of expenditure at the bye-election

was £17,807.62, which was incurred on behalf of the

successful Labour Party candidate, Dr. Mary Upton, TD,

by her election agent. This figure exceeded the

expenditure limit by £257.62. The election agent

informed the Commission that the overspend resulted

from three factors:

(i) his understanding that rent and insurance costs

incurred on a campaign office in the constituency

in respect of a period prior to the moving of the

writ for the bye-election by the Labour Party would

not be taken into account as election expenditure;

(ii) insurance costs on a campaign office for the

duration of the election period were much higher

than in the case of previous elections; and

(iii) an unanticipated VAT charge had arisen in relation

to a Party Political Broadcast.

The Commission formed the view that the election

agent did not knowingly cause an overspend to occur

and that the amount of the overspend was not

material. The Commission decided, however, that a

contravention of the Act had taken place and,

accordingly, it had no option but to refer the matter to

the Office of the Director of Public Prosecutions. At the

time of writing this report, the Commission is

considering a reply received from the Office of the

Director of Public Prosecutions indicating, inter alia,

that, because of ambiguity in the statute, it is not clear

that the agent’s view as outlined at (i) above is

incorrect. As far as the Commission is concerned,

absolute clarity on this point is essential if the efficacy

of the legislation in relation to election expenditure is

to survive. The Commission, having taken legal advice,

was satisfied that the 1998 Act, which amended a

number of provisions of the original legislation which

were felt to be unclear, had provided that expenditure

incurred prior to the election period on property to be

used at the election during the election period is to be

regarded as election expenditure. The Commission will

be taking steps to ensure that the matter is resolved at

the earliest possible date.

Five candidates at the bye-election qualified for a

reimbursement of their election expenses. These

candidates were either elected at the bye-election or

secured, at any stage of the counting of votes, at least

one-quarter of what would have been the quota in the

constituency had the bye-election been a general

election. This figure was 1,006 votes (5% of the valid

poll). The candidates were reimbursed the lesser of

£5,000 or the actual amount of expenses incurred. As

set out in the legislation, the Commission

recommended that the amount of the overspend by

Deputy Upton’s election agent be deducted from the

reimbursement due to her. The amounts of

reimbursements are set out in Table J.

Disclosure of donations

Donation Statements were received from each of the

eight unsuccessful candidates (Table J). Only two of

the unsuccessful candidates disclosed donations

received in excess of the £500 disclosure threshold.

Exchequer funding of politicalparties

The electoral legislation provides for the public funding

of certain political parties known as qualified parties.

(This is separate from the funding available to parties

under the Party Leaders’ Allowance Scheme in relation

to which the Commission, as yet, has no function.) In

1999, the Commission received details of how the

funding received for 1998, the first year in respect of

which payments were made, was used by the parties.

To qualify for funding, a party must be included in the

Register of Political Parties and must have secured at

least two per cent of the first preference votes at the

last previous Dáil general election (i.e. the general

election of 6 June 1997). Seven parties qualified for

34

public funding on the basis of the 1997 general

election results. The amount of funding payable to

each qualified party is determined by the proportion it

secured of the total first preference votes received by all

of the qualified parties.

The legislation provides that the funding may be used

by the qualified parties only in relation to the following

areas:

(i) general administration of the party;

(ii) research, education and training;

(iii) policy formulation; and

(iv) co-ordination of the activities of branches

and members of the party.

The funding is also deemed to include provision in

respect of spending by the parties on the promotion of

participation by women and young persons in political

activity. It is not permitted to apply the funding to

offset expenses incurred at elections.

Qualified parties must account for their use of the

funding on an annual basis in respect of the preceding

calendar year. The Appropriate Officer of each party

provides an Exchequer Expenditure Statement to the

Commission which details the amount of the funding

and how it was utilised. A Public Auditor is required to

audit the Statement and that Auditor’s report is

submitted with the Statement to the Commission. The

material is laid by the Commission before the Houses of

the Oireachtas and is put on public display. Payments

are not made beyond end-April of any year unless a

party has furnished a Donation Statement and an

Exchequer Expenditure Statement with the

accompanying Auditor’s Report to the Commission in

respect of the preceding year.

Payments made in respect of 1998

Under the legislation, total payments to qualified

parties may not exceed one million pounds annually,

subject to an automatic increase in line with any

general increase in civil service remuneration. There

were two such increases in 1998 under the terms of

Partnership 2000 which increased the total Exchequer

funding available to the seven qualified parties for

1998 by £30,346.98 to £1,030,346.98. The actual

amount paid out, however, was £1,028,299.86 (Table

K) arising from a recommendation made by the

Commission to the Minister for Finance that, because

of an overspend by Fine Gael at the Limerick East bye-

election of 11 March 1998, the amount of the

overspend, £2,047.12, should be deducted from the

sum that would otherwise have been due to the party

for 1998.

35

Table J: Election expenditure, donations disclosed and reimbursements made in regard to the Dublin South-Central bye-election of 27 October, 1999

Candidate Donations Expenditure by Expenditure by Total Reimbursement

Disclosed Election Agent National Agent Expenditure Received

£ £ £ £ £

John Burns Nil 163.00 Nil 163.00 Not qualified

Catherine Byrne 1,720 15,326.40 Nil 15,326.40 5,000

John Goodwillie Nil 2,365.28 85.00 2,450.28 2,450.28

Shay Kelly Nil 1,300.00 1,585.00 2,885.00 Not qualified

Manus MacMeanmain 520 1,258.27 1,448.00 2,706.27 Not qualified

Michael Mulcahy Nil 17,426.93 Nil 17,426.93 5,000

Eamonn Murphy Nil 1,246.30 N/A 1,246.30 Not qualified

Aengus Ó Snodaigh Nil 7,786.47 120.00 7,906.47 5,000

Mary Upton TD N/A* 17,807.62 Nil 17,807.62 4,742.38

TOTALS 2,240 64,680.27 3,238.00 67,918.27 22,192.66

* The successful candidate must furnish an annual Donation Statement by 31 January each year as a member of

Dáil Éireann.

Merger of Democratic Left and the

Labour Party

An issue which impacted on the Exchequer funding of

political parties for 1999 was the merger of the Labour

Party and Democratic Left on 24 January 1999. As

Democratic Left ceased to be included in the Register

of Political Parties from the date of the merger, it failed

to meet one of the qualifying conditions under the

legislation for receipt of Exchequer funding. The party

was, therefore, not entitled to any public funding in

respect of most of 1999. A payment of £1,942.41 was

made for the period from 1 to 24 January 1999.

A question has arisen as to the treatment of the

amount which would have been paid to Democratic

Left had it not merged with the Labour Party. It is

evident that the sums payable to qualified political

parties are determined by the outcome of the relevant

general election and are fixed in relation to that

strength for the duration of the resulting Dáil. As far as

the redistribution of funds is concerned, there appears

to be no mechanism for dealing with situations where

there is a merger of political parties or where a political

party disbands or additional Dáil members join a party.

The Commission has made its views on this issue

known to the Department of the Environment and

Local Government. The question of whether there

should be an amendment to the legislation and

whether such an amendment would be retrospective

are matters for decision by the Minister for Finance and

the Minister for the Environment and Local

Government.

Payments made in respect of 1999

A breakdown of the funding received by each of the

seven qualified parties for 1999 is provided in Table L

below. The parties are required to provide details of

how they utilised this funding not later than 31 March

2000 and this will be covered in the Commission’s next

Annual Report. The amounts paid during the year

include one general civil service remuneration increase

of 1.5% which arose in July 1999 under Partnership

2000. Although the overall amount available for

payment for 1999 was £1,055,924, only

36

Table K: Expenditure of Exchequer funding received by qualified political parties in respect of 1998

Qualified General Research, Policy Co-ordination Promotion Total

Political Admin. Education Formulation of branches of women / Funding

Parties & Training and members young persons for 1998

£ £ £ £ £ £

Fianna Fáil 280,836 Nil Nil 132,173 36,428 449,437.36*

Fine Gael 145,980 62,188 49,199 26,076 33,815 317,257.42*

Labour 91,215 Nil 12,049 9,630 5,905 118,799.00*

Progressive

Democrats 53,476 Nil Nil Nil [6,563**] 53,475.01*

Green Party 3,368 23,952 4,074 Nil 135 31,528.62*

Sinn Féin 27,140 Nil 1,479 Nil 540 29,158.81*

Democratic Left 21,770 Nil 615 6,259 [3,000**] 28,643.64*

TOTALS 623,785 86,140 67,416 174,138 76,823** 1,028,299.86*

* The table does not add across to the precise figures shown under the column headed ‘Total Funding for 1998’

because parties rounded amounts to the nearest £ when accounting for their expenditure.

** Expenditure on the promotion of participation by women and young persons in political activity must be shown

separately, although it may already be included under one or more of the other headings. This was the case in

relation to the Progressive Democrats and Democratic Left. The total shown at the foot of the column (£76,823)

excludes the amounts shown separately for this activity by those two parties.

£1,028,512.19 was actually paid to the qualified

parties. This difference of £27,411.81 is the balance

which would have been due to Democratic Left had

the merger with the Labour Party not taken place.

37

Table L: Exchequer funding of qualified political parties in 1999

Qualified First preference Column 2 as a % Total Exchequer

Political votes as a % of of qualified parties’ Funding for 1999

Parties total first total first

preference votes preference votes £

Fianna Fáil 39.33 43.62 460,594.26

Fine Gael 27.95 30.99 327,231.00

Labour 10.40 11.53 121,748.10

Progressive Democrats 4.68 5.19 54,802.48

Green Party 2.76 3.06 32,311.28

Sinn Féin 2.55 2.83 29,882.66

Democratic Left 2.51 2.78 1,942.41

TOTALS 90.18 100.00 1,028,512.19

Appendix 1

The expenditure outlined below was incurred

in 1999. The expenditure is provided for in

Subhead B of Vote 17 [Ombudsman]. The

amount shown for staff salaries includes

amounts in respect of staff who had been

engaged on duties connected to the

Referendum Commission and who are

currently assigned to the Office of the

Ombudsman. The bulk of the figure for travel

and expenses is accounted for by visits to

constituencies during the European Parliament

election for meetings with agents, candidates,

etc. The figure for incidental expenses mainly

covers the cost of public notices in national

and local newspapers advertising the

availability of material for public inspection.

38

Costs in 1999

Staff Salaries £312,000

Travel & Expenses £7,000

Incidental Expenses £99,000

Postal & Telecommunications £9,000

Office Machinery & other Office Supplies £17,000

Office Premises £8,000

Total £452,000

39

Appendix 2

This appendix contains details of statements of

interests received from Designated Directors of

State-sponsored bodies under the Ethics in

Public Office Act, 1995 for the last three

registration years.

* Given the changes that have occurred since

the regulations were made (see page 8), a

number of public bodies originally specified

are now outside the scope of the Act.

Statements of interests furnished by Designated Directors

Year ending * No. of Public Total Number

Bodies specified of Statements

by S.I. No. 32 Received

of 1997

28 February 1997 113 508

31 January 1998 112 594

31 January 1999 112 583

Appendix 3

40

Ethics in Public Office Act, 1995

Statement of Interests (Nil)

Section 17 - Designated Directors

Name of Person Holding Designated Directorship :

Public Body:

Date of Appointment:

* Period Covered by this Statement:

Address for Correspondence:

* Disclosure is required for each year during any part of which a designated directorship is held.

I hereby state that, in respect of the period covered by this statement, I have no registrable

interests, as specified in the Ethics in Public Office Act, 1995, of my own, or, to my actual

knowledge, of a spouse or child, which could materially influence me in, or in relation to, the

performance of the functions of the directorship described above.

I am also aware of the obligations placed on me by Section 17(1)(b) of the Ethics in Public Office

Act, 1995 (see below) and of the requirement to provide a statement of registrable interests on

leaving the directorship.

Signed: Date:

17(1)(b) in any case where such a function (of the directorship), or a function of any other office or

position held by the person in that public body, falls to be performed and he or she has actual

knowledge that he or she or a connected person has a material interest in a matter to which the

function relates (he or she)-

(i) shall, as soon as may be, prepare and furnish to the other directors of the body a statement in

writing of those facts,

(ii) shall not perform the function unless there are compelling reasons requiring him or her to do so,

and

(iii) shall, if he or she proposes to perform the function, prepare and furnish to the other directors

of the body and to the Commission, before or, if that is not reasonably practicable, as soon as

may be after such performance, a statement in writing of the compelling reasons aforesaid.

41

The forms contained in this appendix have been produced and distributed by the Commission to facilitate the

making of a ‘nil’ annual statement of interests by directors and executives in state-sponsored bodies who are covered

by sections 17 and 18, respectively, of the Ethics in Public Office Act, 1995. It is understood that the Department of

Finance is considering use of the same format in the civil service.

‘Nil’ statement of interests forms

Ethics in Public Office Act, 1995

Statement of Interests (Nil)

Section 18 - Designated Positions of Employment

Name of Person Occupying Designated Position:

Position Held:

Public Body:

Date of Appointment:

* Period Covered by this Statement:

Address for Correspondence:

* Disclosure is required for each year during any part of which a designated position is occupied.

I hereby state that, in respect of the period covered by this statement, I have no registrable

interests, as specified in the Ethics in Public Office Act, 1995, of my own, or, to my actual

knowledge, of a spouse or child, which could materially influence me in, or in relation to, the

performance of the functions of the position described above.

I am also aware of the obligations placed on me by Section 18(2)(b) of the Ethics in Public Office

Act, 1995 (see below) and of the requirement to furnish a statement of registrable interests on

leaving the position.

Signed: Date:

18(2)(b) in any case where such a function (of the position) falls to be performed and he or she has actual

knowledge that he or she or a connected person has a material interest in a matter to which the

function relates (he or she)-

(i) shall, as soon as may be, prepare and furnish to the relevant authority a statement in writing of

those facts,

(ii) shall not perform the function unless there are compelling reasons requiring him or her to do so,

and

(iii) shall, if he or she proposes to perform the function, prepare and furnish to the relevant

authority, before or, if that is not reasonably practicable, as soon as may be after such

performance, a statement in writing of the compelling reasons aforesaid.