Senior civil servants have begun giving evidence on the first full day of the Dáil committee investigation of bogus off shore accounts. The first four of the 112 people called to testify outlined the damage that could be caused by any flight of capital out of the country. Two former senior civil servants at the Department of Finance, Maurice Doyle and Sean Cromien, have pointed to the failure of politicians to deal with the problem of DIRT tax evasion during the 1980s.
During his evidence in both the morning and afternoon sessions, Maurice Doyle the former Secretary General of the Department of Finance and subsequently the governor of the Central Bank trenchantly defended the role of civil servants in the affair. He insisted that they repeatedly made politicians aware that the Revenue Commissioners were not able to enforce DIRT tax because they could not verify which non-resident accounts were genuine and which were bogus. Mr Doyle insisted that in the economic climate of the 1980s, both officials and Ministers were keen to avoid a flight of capital, and feared that any extension of powers to the Revenue Commissioners could have dire consequences for the economy. Deputy Sean Doherty suggested to Mr Doyle that he had attempted to blame politicians for the problem of bogus non-resident accounts. Mr Doyle denied he was trying to blame them exclusively.
This afternoon, Sean Cromien, who was Secretary General to the Department of Finance, made a similar claim. He insisted that although public servants could advise politicians, they could not force them to act. He acknowledged that politicians came under pressure from lobby groups and that during the 1980s politicians feared the electoral consequences of tightening up on Revenue's rights to scrutinise accounts.
Earlier, evidence was also heard from Padraig Mullarkey and Maurice O'Connell, both of whom also referred to the economic difficulties of the 1980s. The first of the 112 people called to testify on the issue of bogus non-resident accounts, used to evade DIRT tax was the Secretary General to the Government, Frank Murray. He told the Committee that the Government had released all documents that had been requested by it. He was followed by the Secretary General of the Dept of Finance, Pádraig Mullarkey, who emphasised that throughout the 1980s the flight of capital was a key concern for his Department and that this had to be balanced against the prevention of tax evasion. Maurice O'Connell, the governor of the Central Bank, reiterated the weakness of the economy during the '80s and said that the central bank did not interfere with tax collection, which was the job of the Revenue Commissioners.
The sub-committee of the Dáil Committee of Public Accounts is investigating the alleged abuse of off shore accounts. Over the next five weeks the committee will hear evidence from 112 witnesses including senior figures in banking, taxation and the civil service as well as from senior politicians. The proceedings are being broadcast live on TnaG. The hearings will resume at 11am tomorrow morning with the continuing cross-examination of Padraig Mullarkey on the key question of communications between the Revenue Commissioners and the Department of Finance on bogus non-residents accounts.