Ansbacher - the untold stories

Sunday July 14, 2002 08:20

by McMean

So now we know the Ansbacher names. We know the architects, the builders, the property developers, the bankers, doctors, solicitors, and self-styled business entrepreneurs who participated in one small but hugely lucrative tax scam.

We can say small because we don't know how many other Ansbacher
type schemes there are. In recent weeks, we have seen the Revenue
Commissioners' report, which details action being taken against
1,800 holders of illegal non-resident bank accounts, accounts
which were opened knowingly for them by every major financial
institution in Ireland. There was also National Irish Bank's
Clerical Medical Insurance tax scam.

This is what we know of and throughout the media we are told
there must be more Ansbacher type operations. But no one is
telling us how they will seek out these tax criminals. In fact,
we are told it might be difficult to successfully prosecute any
of the Ansbacher account holders who are found guilty of fraud.

AMNESTIES FOR THE WEALTHY

Why are we stepping delicately around this issue? Why do we have
to have news reports that carry the caveat that we cannot say
that among the most wealthy in our society, among the decision
makers and the institutions of the state, we will find fraudsters
and criminals, thieves and liars.

It seems that we are not supposed to say that, even though in
just one small example of one small bank, we can point to the
banks, the accountants, the solicitors and private companies who
broke the law. We can point to the institutions of state that are
at best unable but more likely just unwilling to halt this fraud.

We can point to the governments that lacked the political will
and resolve to tackle this problem of fraud and tax crime. They
cannot say that they didn't know and weren't aware of the scale
of the problem. It was the establishment parties who in 1988,
1989 and again in 1993, set up tax amnesties to allow the tax
criminals go free. At the same time, the same parties were
filling prisons with thousands of young men involved in
non-violent theft, where the value of goods was often less than a
#100.

For example, Garda statistics for 1993, the year of the last tax
amnesty, show that there were 47,000 larcenies recorded. Almost
45% of these involve amounts of less than #100. Less than 63% of
the thefts involved amounts of less than #200.

There are no Garda statistics in this or any other year for tax
crimes. The Gardai don't even attempt to record, let alone detect
tax crime. There are a handful of Gardai seconded to the new
office of corporate enforcement. The rest were obviously needed
on the beat, policing the double standards that permeate our
society today.

ROTTEN APPLES

So why were the politicians in Fianna Fail and Fine Gael
especially so reluctant over the years to act against tax
criminals? One obvious answer is to look at the roll call of
shamed TDs in recent years, with Burke, Foley, Flynn, Haughey,
Lawlor and Lowry listed.

However, this is dangerous ground. It would be completely
misleading to suggest that just because of a few rotten apples,
the body politic is diseased too and of course, then there are
the legal issues. Just because you have one or two or even three
tax fraudsters in a government, and even if one of them is
Taoiseach, it would be completely misleading to say that they are
a corrupt government. That would be illegal.

But who wrote this legal code? Who compiled these laws that
protect the wealthy, punish the poor and overlook the
misdemeanours of the rich professionals? Who practices the law
and fills it with terms and language that nullifies the righteous
anger of those who weren't stockpiling their wealth in illegal
bank accounts, who don't have vast sums of money unspent and
don't have access to the professional advice that would let them
defraud the Irish taxpayer.

It is the very same group of people who are defrauding us in the
first place. The politicians, bankers, accountants and legal
eagles who coerce, legislate, police and prosecute us are the
very ones who have compiled laws and codes that apply to us but
not to them. Nice one, lads. You must have been laughing into the
whiskey decanters while puffing on the overly large cigars every
weekend.

UNTOLD STORY

However, there is still one story left untold from the Ansbacher
saga. It is the tale of two Dublins. You see, in one city, there
was a nice man called Des Traynor who lived in a pleasant
respectable and obviously wealthy community. Traynor's neighbours
and friends often approached him for advice and usually help in
investing their money.

Traynor did help not just with advice; he set them up accounts to
illegally hide their money from the Revenue Commissioners.
Traynor was not alone in the advice business. Often his clients
were referred to him by accountants and tax consultants.

One Cork businessman, Cornelius Collins, told the Inspector how
he was advised by Stokes Kennedy Crowley to invest his money
offshore and out of sight to the Irish tax authorities. Stokes
Kennedy are now known as KPMG, one of the largest accounting
firms in Ireland and part of one of the largest accounting
companies in the world.

However, the healthy cooperative nature of this business
community does not end there. Sometimes Traynor would arrange
loans for his clients - loans where it was unclear how much
interest was being paid. Unclear in that it seemed considerably
below commercial market rates.

O'REILLY BAILOUT

Then there was the case of friends in this financial community
who help friends in trouble. Independent News and Media
chairperson Tony O'Reilly spent more than #1 million paying the
debts of Vincent Ferguson and Jim McCarthy. The three had all
been directors of Atlantic Resources, an oil exploration company.

Ferguson, McCarthy and the already mentioned Cornelius Collins,
had used the Ansbacher accounts to secretly buy shares in their
company. It all went wrong, and they lost their money. In stepped
O'Reilly who, in 1997 and 1998, paid the debts of Ferguson and
McCarthy.

So what about the other Dublin? It is one where people have the
problem of not too much money but too little. They don't have the
helpful bank manager or accountants to call on. They don't get
the help of the private banking services that all the banks offer
to their wealthy clients. They don't get preferential loan rates
or their debts written off when in financial difficulties. In
some cases, there aren't even banking services in their local
areas, not even an ATM machine, as these banking customers are
not profitable enough for AIB and Bank of Ireland and others to
be bothered with.

MONEY LENDERS

There are over 60 moneylenders licensed by the Director for
Consumer Affairs who can charge loan rates of up to 195%.
Alongside this, we know there are illegal moneylenders who charge
even higher and more extortionate loan rates.

Families in this other Dublin, this other Ireland in fact, get
into debt to fund communion and confirmation clothes, to buy
Christmas presents. Their lack of money leads to their being
exploited over what are often incredibly small amounts of money.

Meanwhile, in that other Dublin, those who have large amounts of
money find the exact opposite experience. Take, for example, the
case of David Doyle, who with other family members ran one of
Ireland's best known hotel chains.

David set up an offshore account in 1983. Unlike Ferguson and
McCarthy, he made money from buying and selling Atlantic
Resources shares. These and other share dealing profits were
hidden from the Revenue Commissioners. He did, though, make a
settlement with the Revenue Commissioners in 1993. And one of the
last withdrawals of funds from his Ansbacher account was to buy
himself a new car in 1990. It was a Mercedes SL and he thinks it
was "about #80,000 or #90,000".

Somehow, if David had to live in that other Dublin, I think he
would know exactly how much his car cost.