TD’s daughter not allowed make savings investment because of family relationship to him

Anti-money laundering and terrorist financing legislation makes a presumption that all elected officials “are guilty until proven innocent” of siphoning off money amid additional scrutiny of their bank accounts and those of family members and associates, the Dáil has heard.

Politicians’ relatives have either been refused loans and other financial services or their applications are delayed because of their connection.

TDs, senators, councillors, their family members and associates, including parliamentary assistants and ushers are also considered “politically exposed persons” (PEPs), Fianna Fáil TD and chairman of the Oireachtas Finance Committee John McGuinness said.

Ceann Comhairle Seán Ó Fearghaíl said that when his children opened credit union accounts as teenagers with proceeds from their part-time jobs, each year they received a request “to explain where they got their money from, that I hadn’t pilfered it or siphoned it off from somewhere”.

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He added that his older daughter who works in the financial services sector was refused permission to acquire a savings product because, within 24 hours of her application which made no reference to PEPs, she was told “she was politically exposed so she couldn’t have the savings product”.

Mr Ó Fearghaíl added: “Meanwhile I look around me and I see considerable numbers of properties being acquired in cash sales and I see very little happening about that and that raises issues, in my view, about money laundering.”

They were speaking as the Dáil debated the committee’s report about PEPs, and a 2010 EU directive subsequently transposed into Irish law that subjects politicians and those close to them to additional banking scrutiny to prevent corruption.

Mr McGuinness said the implications were that “our family members have to disclose that they are associated with a politically exposed person, as if we were all criminals.”

He said many TDs had told him “they were not refused loans but that the process was so difficult that they did not bother with it”. He added that TDs’ and senators’ secretaries and Leinster House ushers are “all politically exposed” as well.

“No one involved in the House, or indeed in councils, is objecting to a process that will make it all transparent and clear and that will keep us all honest, but this has gone too far,” and “someone has to call stop to the mad bureaucracy involved here”.

The legislation refers to “‘associates’ but there is no definition around what that is,” he said, asking if it meant that “the person cleaning my office” is politically exposed.

Independent TD Catherine Connolly said “it is extremely dangerous for democracy that we would be framed like that. I have repeatedly advocated openness and accountability.

“We should absolutely monitor what we get but not in this manner. It is positively disgraceful.”

She said that under “very vague legislation, accounts can be closed and money can be frozen”. She said every transaction was scrutinised unknown to politicians.

“What we’re doing here is making a presumption that all elected officials are guilty until proven innocent and we don’t even know the process.”

“This measure is absolutely disproportionate and unfair and not achieving its purpose,” Ms Connolly said. “There is a complete absence of data on who is doing what and for how long, on the prosecutions and convictions there have been and on whether the measure has achieved its purpose.”

Sinn Féin spokeswoman Rose Conway-Walsh highlighted the report’s discussion of the risk of money laundering being facilitated through the misuse of legal entities. “Anti-money laundering is completely ineffective against more sophisticated approaches that use trusts, shell companies and section 110 companies,” she said.

“The trusts are more commonplace in Ireland than in many other EU member states due to the common law-based legal system.”

Minister of State for Finance Neale Richmond said a review of the legislation will take place and Minister for Finance Michael McGrath has asked officials “to commence the necessary preparatory work to address this recommendation immediately”.

He understood TDs’ frustration and he had similar financial experiences. But he said “the effective implementation of these measures is vital for ensuring Ireland has a robust domestic framework for combating money laundering and terrorist financing”.

He added that “they are also in accordance with best practice and international standards”.

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