In July 2007, before the Irish banking system, and the wider Irish economy, collapsed under its own hubris, Sean FitzPatrick, then a doyen of the Irish business community, launched a very public tirade against what he called ‘‘corporate McCarthyism’’.

Addressing a recent gathering of businesspeople, FitzPatrick, then chairman of Anglo Irish Bank and Smurfit Kappa,  said that the tide of regulation had gone too far. The increasing burden of regulation and compliance, he said, was threatening the entrepreneurial zeal that had made the Irish economy the envy of the world.

‘‘It is time to shout stop,” FitzPatrick told the Experian business lunch. “In my humble opinion, our wealth-creators should be rewarded and admired, not subjected to the levels of scrutiny which known criminals would rightly find offensive. We should be proud of our success, not suspicious of it.”

Within 24 hours of the speech, the then director of corporate enforcement, Paul Appleby, took the unusual step of writing to FitzPatrick, asking him if he had any particular problems with his office or his methods (FitzPatrick replied that he did not). 

Appleby’s office was then just six years old, having been established to help clean corporate culture in Ireland – before it, there was little appetite to police white-collar crime, and the light sanctions for those who were tackled acted as little deterrence.

Within a short number of years, FitzPatrick would face multiple investigations by the state’s corporate enforcer. But his 2007 comments were in keeping with the mood of the time.

We now live, of course, in different times. The financial crisis exposed the fatal flaws of light touch regulation, and despite occasional industry lobbying that regulation has gone too far, there is little political or public desire to release the regulatory handbrake.

The ODCE has been bulked up as a standalone entity, and recast as the Corporate Enforcement Authority (CEA). 

When I caught up with Ian Drennan, chief executive of the newly-minted CEA, for an in-depth interview, I was keen to get his view of the shifts in Irish corporate culture since he replaced Appleby in 2012.

“I’m old enough to remember tax amnesties, we had a particular approach to paying tax or not paying tax in this jurisdiction,” he said. 

“I had a role many years ago in the Dirt inquiry for similar sort of cultural issues. Have we moved on from then? I think it probably fair to say yes and I would think fair to say that we’re a much more compliant culture and society, and society is much more respectful of the rule of law and why that’s important. I think that’s reflected in boardrooms for the most part.  

“Are there issues in boardrooms? Yes, of course, there are. I mean boardrooms are a function of people and people are imperfect creatures, as you know. So, we’re not naïve either.” 

Under Drennan, the CEA has been busy. In the 18-month period between July 2022 and December 2023, it secured 107 court orders and five search warrants, took 213 witness statements, and effected 12 arrests. It also submitted 12 files to the Director of Public Prosecutions.

However, Drennan is not motivated by those numbers. Far from it. The way the corporate enforcer sees it, he could bulk them up dramatically by hounding small businesses for low-level misdeeds and misdemeanours. 

But he has no interest in doing that. Instead, he promotes a compliance and regulatory culture of “proportionality”, “dissuasive enforcement” and engaging with businesses “behind the scenes”.

Drennan explained he could stroll down O’Connell Street, identify 20 businesses without the appropriate brass plates outside, and begin a slew of prosecutions.

“That potentially would be useful in terms of inflating statistics. But is that an appropriate use of public money? Is that an appropriate use of the time of the people here?” he questions.

In most cases, he said a letter to the company is enough to ensure compliance. 

Instead of being overwhelmed by small cases, his team can look at the bigger picture. 

And as Drennan knows better than most, the large cases take an awful lot of time and a massive amount of resources.

We have seen this in the cases of INM (the CEA appointed inspectors to the company following a governance controversy) and it is also investigating the FAI. Both cases have been ongoing for many years. 

The report into INM is due to be published shortly and follows a six-year investigation. Meanwhile, the CEA’s lengthy probe into controversies at the Football Association of Ireland (FAI) remains live. The association’s former chief executive John Delaney recently lost a Supreme Court appeal against a decision to allow the CEA to access certain documents it seized in 2020 as part of a criminal investigation into the soccer organisation.

I asked Drennan whether he had concerns about the length of time it takes to investigate such cases. He was forthright in his response, arguing that there needs to be more nuance around the conversation. Plus, he argued that there is no real alternative to the current regime. 

“The alternative is to deprive people of rights or… it can get done more quickly. Is that a society you want to live in? That’s ultimately a societal judgment for all of us. As you know, we’ve been struggling in this jurisdiction for many years to come up with what’s the appropriate mechanism for doing tribunals or commissions of inquiry or whatever,” he said.

Drennan is right. Ireland has a history of tribunals and commissions of investigation that cost too much, take too long and uncover too little. 

However, investigations taking multiple years to work their way through the system is far from ideal, particularly when it comes to deterrence. Corporate culture has improved dramatically over the last 25 years. But, there are still significant issues about the time it takes to investigate alleged corporate wrongdoing.

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