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White collar crime costs far outweigh those of gangland crime, but it's not a priority

There is a lack of political energy around reform, writes John Devitt.

BEFORE THE ELECTION, Stephen Collins of the Irish Times suggested that corruption would likely be an election issue. Unfortunately, he couldn’t have been more wrong.

With the exception of a brief exchange on cronyism during the final leaders’ debate white collar crime and political reform barely registered as issues in the media.

Corruption is just one of a number of cross-cutting issues, including climate change, that will have long-term impact on the future of the country but that were relegated to the fringes of political debate.

Even those parties that made relatively detailed commitments to stamp out corruption and white collar crime found it difficult to steer media attention away from the grizzly spectacle of a gangland crime feud and the Taoiseach’s ill-judged use of the word ‘whingers’.

Lack of political energy behind reforms

The lack of attention paid to ethics and reform issues during the 2016 campaign was in stark contrast to the election of 2011, when every main political party had ambitious proposals to reform our democratic institutions, stamp out corruption, protect whistleblowers and regulate lobbying.

Perhaps the biggest parties, believed that there wasn’t much more to be done. Indeed, the outgoing government has some significant achievements to its name.

It introduced one of the strongest whistleblower laws in the world in 2014. It ratified the United Nations Convention against Corruption, and signed up to the Open Government Partnership which commit Ireland (at least in theory) to adopting stronger measures aimed at tackling corruption and promoting transparency.

The Freedom of Information Act was also strengthened and rules around political donations were tightened somewhat. Lobbyists found themselves subject to regulation and their activities subject to a greater level of public scrutiny.

A factor in all this was the establishment of the Department of Public Expenditure and Reform, which ensured that the public-sector reform programme had a ring-fenced budget and political leadership for the first time.

However, critics of the government will point to a number of failures. The Public Sector Standards Bill that would help address some of the concerns raised by the Mahon Tribunal and in the RTÉ story on standards in public office, was not passed before the election.

Promises made after Mahon Tribunal not delivered on

The Department of Justice failed to even publish draft anti-corruption legislation that was promised in the wake of the publication of the final Mahon Tribunal report in 2012.

Promises of garda reform have also been underwhelming. A Police Authority was established but the powers to appoint the Commissioner and oversight of ‘security issues’ remain with the minister. Proposals for a Planning Regulator have been watered down considerably and are going nowhere fast.

More importantly, the government’s record in equipping law enforcement agencies with powers and resources to hold to account corrupt public officials and the business people that bribe them was a dismal as its predecessors’.

One leading white collar crime lawyer, Remy Farrell, has pointed out that it is nearly impossible for the gardaí to investigate most cases of corruption such is the lack of resourcing and expertise available to it.

Given the lack of political energy invested in tackling corruption and other serious fraud offences in Ireland, it is unlikely that the emasculation of law enforcement agencies is unintentional.

Whistleblower allegations

Transparency International Ireland’s helpline is receiving an increasing number of calls from whistleblowers reporting wrongdoing across the public and private sectors. It has also identified numerous red-flags and risks of corruption that are not being addressed.

Late last year, the European Commission found that over 30% of Irish companies believed that they had lost out on a public contract due to corruption.

It shouldn’t surprise anyone to find that a similar percentage of Irish managers seem prepared to use ‘gifts and entertainment’ to secure business.

The impact of all this has can be seen in growing inequalitypoverty and homelessness in Ireland. It will be manifested in raised opportunity costs due to lost investment and slowed economic growth.

The direct financial cost of corruption and fraud is also staggering. In 2007, the accounting firm RSM Robson Rhodes estimated that Ireland was losing €2.5 billion a year from economic crime.

That’s €25 billion potentially lost to the Irish economy over a decade.

The economic and social costs of corruption and white collar crime far outweigh those of gangland crime and yet they receive far less media attention.

Money is being sucked out of the economy by white collar criminals, but unfortunately for its victims (which is most of us), white collar crime doesn’t sell newspapers and so is unlikely to be the political priority it ought to be.

John Devitt is Chief Executive of Transparency International Ireland @Transparency_ie @jkdevitt

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