§ MR. WHITESIDEI wish to call attention to the facts proved on the recent trial in Dublin of Hamilton Conolly, a clerk in the Ordnance Department, and of John M'Ilvaine, a contractor with the Government; and to ask Mr. Chancellor of the Exchequer, or the Secretary to the Treasury, to explain in what manner the Ordnance Accounts are kept and audited, which allowed the proceedings by the parties convicted at such trial; and whether any and what changes have been effected in the mode of keeping the Public Accounts calculated to prevent a repetition thereof? These two persons were tried for conspiracy. The one, Hamilton Conolly, was a clerk in the Ordnance Department, drawing a very respectable salary, and bearing, of course, a good character. The other, John M'Ilvaine, was a contractor with the Government, and, according to the evidence of several witnesses who were called on his side, one of the most respectable men that ever lived. The frauds for which they were brought to trial and convicted were committed in the following manner:—It appears that when a contract is made in Ireland—say, for the repair of barracks—the estimate is considered and the prices are fixed in a most methodical manner. When the work is done, it is carefully examined. The head of the department in Dublin, Colonel Durnford, an officer of Engineers, and, I need hardly gay, a man of unexceptionable character, retains a facsimile of the Account, and gives the counterpart to one of the clerks to forward to the Ordnance Department in London. Conolly availed himself of this practice to alter the account before sending it away. Sometimes he inserted £300 or £400, or sometimes £500 extra. The account which bore Colonel Durnford's signature was next examined by a number of very able gentlemen in London. When, however, they were satisfied of the correctness of the account, they did not communicate with Colonel Durnford or any of the officials in Ireland, but sent a check direct to the contractor. In this case the contractor, M'Ilvaine, was in collusion with 1926 the clerk Conolly, and therefore, when he received a letter authorizing him to draw on the Treasury for a sum perhaps twice the amount of his account, it was thankfully received and immediately obeyed. In passing sentence on the offenders, the Judge enumerated some of the instances of fraud which occurred between February and July, 1861. A sum of £323 17s. was altered into £628 7 s.. 2d.; another of £271 11s. in £576 1s.; another of £361 14s. into £706 17s.; another of £221 16s. into £445 18s.; and another of £268 into £501. Of course, had the head of the department in Dublin caught sight of any of the altered accounts or orders to pay, the fraud would have been at once detected. But, with singular ingenuity, all the checks were arranged so that there was no safeguard whatever against conspiracy between a clerk and a contractor. It was chiefly in the items for slating that the figures were altered. A gentleman told me that there were charges for slates enough to cover the Isle of Wight. Any one who knew anything of the barracks for which it was pretended that these slates were required, could see at a glance that it was utterly impossible such a preposterous quantity could have been used. On the trial the Judge observed, that although he was, of course, bound to confine himself to the frauds disclosed in the evidence, he had a shrewd suspicion that they were but a small portion of the system which had been carried on in the department for a series of years. I have been told that these two gentlemen, one very religions, and the other a very fashionable man, have been making nearly £2,500 a year by their dishonesty. Indeed, they might, perhaps, but for an accident, have been still pocketing large sums. The report is, that the fraud was discovered only through a clerk from Dublin happening, when in the London office, to set eyes on one of the cooked accounts. Upon that the law officers were called in, and the two gentlemen were arrested, one of them as he was going to a dinner party, which was clearly very inconvenient for him, and very distressing to his feelings. It was discovered that the two rogues had an agreement to divide the spoils. They were convicted, and the justice of the country was vindicated. I wish to know from the Government what sums of money have been abstracted from the public treasury in this manner; and what steps, if any, have been taken to 1927 prevent a repetition of this systematic and long-continued plundering?
SIR GEORGE LEWISThe statements of the right hon. Gentleman are perfectly correct as far as they went. The information I have received is, that a clerk named Conolly, who was formerly in the Ordnance Department, and afterwards on the Consolidated Staff of the War Department as chief clerk of his branch, conspired with a contractor named M'Ilvaine to defraud the Government. My information leads me to the belief that their frauds extended over the years between 1848 and 1861. It is plain that as the amalgamation of the Ordnance and War Departments took place in 1854, these offences were not due to that measure. The manner in which the frauds were committed was this:—The Commanding Officer of Engineers certified the value of the work done, and delivered the certificate to the chief clerk, who, in collusion with the contractor, increased the amount, and transmitted it to the War Office in London, where it was examined, and whence the order for payment on the paymaster was sent to the contractor. That was the system of checks; the chief clerk was supposed to be a check upon the officer of Engineers, and the contractor to be a check upon these two officers. It was the practice of the old Ordnance Office, and no alteration was introduced by the combined departments. The right hon. Gentleman said, that if payment had been made on the order of the officer of Engineers, the possibility of fraud would have been avoided. But, without intending to cast any imputation upon the honour of officers of the army, he must say, that if there bad been collusion between the officer of Engineers and the contractor, such a system would have led to a precisely similar result. [Mr. WHITESIDE: Then we have no hope?] Your hope is in this, that you may have a system of checks which will make fraud extremely difficult. Quis custodiet ipsos custodes? No system of checks can be devised which, by means of forgery and conspiracy, may not be defeated. I believe that at first the frauds were not large, but impunity rendering the parties bolder in late years the amounts of which the public were defrauded became more considerable. As these persons were only convicted of frauds to the extent of £1,400, I feel some difficulty in stating, upon what may be con- 1928 sidered official authority, the extent of the frauds which they actually committed, as they may have friends and relations whose feelings would be hurt by such a statement. If the House thinks I am justified in making the statement I have no objection to do so; but I will hot voluntarily state the amount, though I may say that it considerably exceeds that which was proved at the trial. The frauds were detected by a clerk in the office, who suspected something was wrong, and wrote to London. Inquiry was made, and the irregularity was at once found out. The rule which has been adopted to prevent the recurrence of such practices is, that the Commanding Officer of Engineers should send to the London office a duplicate statement, which will be a check upon the clerk. This will prevent the recurrence of any precisely similar frauds, but it is impossible to provide securities against every possible fraud which ingenious rogues may devise. Means have also been taken, with which I need not trouble the House, to prevent such frauds as these leading to the expenditure of more money than has been voted by this House.
SIR FREDERIC SMITHsaid, that in England the system was very simple. The works were executed by contract and measurement, and when complete the contractor, the clerk of the works, and the executive officer of Engineers, each of whom kept a book, checked one another. The check was complete, for there must be collusion between all four persons before any fraud could be effected. It appeared that in the instance referred to the amount paid was more than the work could cost. It should be known that in these cases there was an estimate, and every sum paid upon it was entered in a hook. Now it was the duty of the clerk who made the entries, the moment there was an excess of payment over the estimate, to state the fact; and therefore the contractor would be called upon to know why there was an excess. He contended that the practice should be that no bill in which there was an erasure or interlineation should be paid, and he would suggest that there should be a positive order to that effect.