Public Sector Standards Bill submission

23 Dec 15

Public Sector Standards Bill can be accessed here

Presentation and debate on the Bill at the Joint Oireachtas Committee on Finance, Public Expenditure and Reform can be accessed here

 

Submission to the Joint Committee on Finance, Public Expenditure and Reform on the Public Sector Standards Bill by Dr. Elaine Byrne, governance consultant to the European Commission.

November 2015

1. Register of Liabilities
2. Office of the Conflict of Interest and Ethics Commissioner – Canada
3. Three additional reforms
• Independent Commission on political funding
• Financial compensation for whistleblowers
• A review of Ireland’s oversight agencies.

1. Register of Liabilities

Head 5 declarable interests (3)

Each of the following interests is a private declarable interest for the purposes of this Bill:
the amount of income from each source declared under 1(a),
any individual asset in excess of €50,000, but excluding pensions or an interest in the family home,
any liability in excess of €50,000 (other than a charge on the family home),

• Why private
• Why not the private home
• Are the liabilities of connected persons included?

It is noted that:

– Members of the National Treasury Management Agency (NTMA), who are assigned to work for NAMA, are legislatively required to so.

– What’s more, if a civil servant is in financial difficulty, ‘through bankruptcy, or insolvency, or by incurring a significant liability to any person, financial institution’; they are required under their code of conduct to report the matter to their superior.

– The Standards in Public Office Commission 2009 recommendation – argue that a public representative ‘who has significant liabilities to, for example, a financial institution, could be materially influenced in the course of performing their duties where such duties involve dealing with that financial institution’.

– According to the Register of Interests, at least a quarter of our TDs and Ministers have holiday homes, rental properties or second properties.

The international best practice for a register of liabilities provided by the committee did not include that of Finland, Poland or Spain, which require politicians to publicly disclose any debts they may have. Inabilities include outstanding loans, debts or mortgages.

In Canada, all assets and liabilities of their own and their family members which exceed $10k must be disclosed. The figure proposed in Ireland is €50,000. In Canada, the Office of the Conflict of Interest Commissioner maintains a public registry of publicly declarable information under the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons.

For example, the former Canadian Minister for Finance, James Flaherty – disclosed to the Office of the Conflict of Interest and Ethics Commissioner that he has two mortgages, a line of credit and a guarantor on a mortgage with the Royal Bank of Canada. His register of interests also outlines his spouse’s liabilities, assets, investments, activities and sources of income.

The Committee may also wish to consult the database of the Institute of Democracy and Electoral Assistance. The database on political financing includes comparable information on conflicts of interest.
http://www.idea.int/resources/databases.cfm

2. Office of the Conflict of Interest and Ethics Commissioner – Canada

Urge the Committee to replicate the searchable website database of the Office of the Conflict of Interest and Ethics Commissioner. All disclosed conflict of interest information is contained in one place and very accessible, unlike the Irish system where information is dispersed across different agencies.
http://ciec-ccie.parl.gc.ca/EN/Pages/default.aspx

3. Three additional reforms

The Public Sector Standards Bill is based on the 22 Tribunal recommendations. Irish reforms are often driven in response to past events rather than international best practice and international debates on emerging issues.

To that end, perhaps the Committee should also consider –

1. Independent Commission on political funding

The establishment of an independent commission to decide how political activity in Ireland is funded. The principle that politicians should not regulate themselves is well established – political actors do not decide constituency boundaries. Ireland’s rules on political funding disproportionately favour incumbents and political parties. We do not trust politicians anymore to decide constituency boundaries so why should we trust them to decide on how politics is financed?

2. Financial compensation for whistleblowers

The Dodd-Frank Act, 2010 established the US Office of the Whistleblower. The Securities and Exchange Commission is authorised by the US Congress to provide monetary awards ranging between 10 and 30 per cent of the money collected in cases where high-quality original whistleblower information leads to a Commission enforcement action of over $1 million in sanctions.

In return for information leading to economic fines, whistleblowers get a “bounty payment” which is a percentage of the overall settlement made as a consequence of their information. The scheme has proved particularly successful in the pharmaceutical and financial sectors.

Greg Medcraft, the chair of the Australian Securities and Investments Commission, has proposed compensation to whistleblowers that risk their careers to expose company misconduct.

Paying whistleblowers is a difficult concept. Yet, how much would the state have potentially saved if an Anglo Irish Bank employee had whistleblowed about lending practices and auditing standards in the mid-2000s? What if the Anglo Tapes had come to light before the bank guarantee?

3. A review of Ireland’s oversight agencies

The UK response to the economic crisis was an independent audit of the capacity and operational ability of its oversight agencies to prosecute financial crime. The De Grazia 2008 Review made 34 recommendations. The Serious Fraud Office was granted substantial financial backing, additional specialist staff, political will and beefed up powers.

The Irish response to economic collapse was rooted in our straitened financial realities. A 2014 review of resources at the ODCE, then conducting the Anglo investigation, observed that the corporate enforcement agency had “an insufficiency of in-house accountancy expertise and the limiting effect of that deficiency.”

Ireland’s perceived accountability deficit should be tackled by a similar De Grazia Review of agencies charged with the prevention, detection, investigation and prosecution of complex economic crime such as the ODCE, Criminal Assets Bureau, Revenue Commissioners, Competition and Consumer Protection Division.

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