Shane Ross – 26 January 2014
'There is the Fianna Fail charity and
there is the Fine Gael charity," whispered one of my Public
Accounts Committee colleagues to me at a private meeting last
We were discussing inviting Rehab, the
so-called Fine Gael charity, to enlighten us about its litany of
troubles. My colleague was interested in whether Rehab would get the
CRC treatment from a Fine Gael-dominated PAC.
It was a good question. The PAC had
united in its grilling of CRC. To his credit there had been no
hesitation from FF chairman John McGuinness in calling in the board
of the 'Fianna Fail' charity. The members had united, happily carving
the CRC board into little pieces.
The appearance of three members of the
CRC board was swiftly followed by their resignation and a special
meeting to quiz the recently departed CRC chief executive, Brian
Conlan. The PAC was resolute. They have now invited the entire board
back again for further questions. Public money, and charity money was
at stake. No delay was tolerated.
Last Wednesday it was Rehab's turn. A
far bigger charity was in the frame. Public money and charity money
was again at stake. Just like the CRC, the chief executive's salary
was in the spotlight. Questions needed to be answered about the chief
executive, Angela Kerins' remuneration. Was Rehab hiding its secrets
behind opaque accounts? We needed to know. Rehab proved a different
kettle of fish.
CRC was branded as the Fianna Fail
charity because of the board's connections to both Charlie Haughey
and Bertie Ahern. Chief executive Kiely was one of Bertie's mafia
while chairman Jim Nugent was one of his "dig-out" pals.
Director Vincent Brady was a cabinet colleague of Haughey. Fertile
territory for Fine Gael diggers.
Rehab was linked to Fine Gael mainly
because – until the death of Enda Marren last year – both he and
current board member Frank Flannery were directors. Both Marren and
Flannery were Fine Gael "national handlers" in the days of
Garret FitzGerald, while Flannery remains a key figure in the Fine
Gael hierarchy today. Its Fine Gael image survives despite the past
associations of Angela Kerins with Fianna Fail. Indeed she once ran
for the National Executive.
The heat has been directed at Kerins
because she has refused to reveal her salary. But Rehab has wider
questions to answer, specifically ones raised by Justice Minister
Alan Shatter in the Dail last Tuesday night.
It was widely expected that the PAC
would decide to call in Rehab last Wednesday. It didn't. It bottled
it. Instead, it decided to seek reports – within a week – from
the Department of Justice and the HSE about Rehab. Then – but not
until then – would it apparently, be in a position to decide
whether to invite Rehab into the bowels of Leinster House.
A week's breathing space is a long time
in the speedy politics of the charity world. Rehab won a delay. In
the meantime the top guns in FG moved to defuse the Rehab explosive.
Suddenly, last Thursday Angela's salary
became a casus belli for Fine Gael ministers. First Leo Varadkar
called for her to declare her salary. Next the Taoiseach – from
faraway Davos – waded in demanding transparency. Eamon Gilmore
repeated the mantra, followed by Richard Bruton. Angela's salary
would have to be revealed. And now, of course, it will be.
Just after the four coalition cabinet
ministers had demanded that she tell all, Rehab chairman Brian Kerr
made an announcement. A special board meeting would be called in
three-and-a-half weeks' time to consider the issue. It could have
been done last Thursday. The message is clear. After the meeting the
board will reveal Angela's salary. Problem solved, crisis over.
Indeed the unwritten script could be that there is no longer a need
to call Angela, or Frank Flannery, or anyone else from Rehab into the
It will be fascinating to see what the
PAC decides when it receives those "reports" this coming
week. Something deep in my gut suggests that they will now insist on
waiting until the Rehab board meeting on February 17 before making a
decision. There is a sceptical voice in my head suggesting that once
Angela has come clean with a few added gestures towards
accountability, the majority of the PAC will see no need for the PAC
to interview the now "open and transparent" Rehab.
Surely the Coalition TDs are not scared
of quizzing Frank Flannery, the Fine Gael guru with the Fianna Fail
I know Frank Flannery pretty well. And
I like him. He is affable and charming, but he is a permanent power
house within Fine Gael. Frank picks FG candidates, has influence over
their budgets, recommends running mates and divides constituencies
into various no-go areas for Fine Gael candidates in general
elections. I am a realist. I do not expect his TDs to savage him when
he comes into the PAC, but nor do I expect them to delay the arrival
of Frank of Rehab for a legitimate quizzing from others.
If the Fine Gael members of the PAC
wish to declare an interest when he arrives that is perfectly fair.
But Angela, Frank and others are in the public gaze and must account
for their stewardship of public money and the use of charity
So far there has been a deafening
silence from Angela and Frank. Wisely, Rehab has sent the less
political director, John McGuire, out to bat on Rehab's behalf.
But we need to hear from Angela and
Frank. We need answers to questions not just about Angela's pay but
also her pension arrangements. How big are the pension pots for top
executives? Are they topped up by money from the collection boxes?
Rehab is believed to receive as much as
€50m a year from the State. We are not even certain if this is the
correct figure. We have a right to know. It produces consolidated
accounts, making it almost impossible to detect the various sources
of its funds. The success or otherwise of its subsidiaries across
Europe is not visible from its 2012 annual report.
The issues raised by the Minister for
Justice about the uncannily small profit margins from Rehab's gaming
products should get a full airing. The suggestion made in the Dail
that they are exploiting the matching funds provided by the State
must be dissected. There are questions about how much money it
receives directly from the State, how much from FAS, how much from
the HSE and how much from the UK state. We need to see inter-company
transfers, exactly as we did from the CRC. Rumours that senior staff
were paid salary increases in 2013 must be rebutted, or confirmed and
Flannery needs to be quizzed about a
€66,000 payment to his company Laragh Consulting in 2012. Kerins
should be asked a multitude of questions, not least how much she and
Rehab have spent on travel in recent years. Her recent refusal to
reveal her salary on RTE's Morning Ireland came from outer Saudi
She seems to like it out there.
According to my sources in Rehab she is
set to return to sunny Saudi in less than two weeks for a four-day
confer- ence. So we could ask her about that too.
But do not bank on it. The blue blood
of Fine Gael runs deep.
Shane Ross – 19 January 2014
WHY was Paul Kiely in such a big rush
to the exit? Last March, the Central Remedial Clinic (CRC) board
heard that Paul Kiely was in an awful hurry to leave. He was
determined to be gone by June 16. One board member insisted that this
date was unrealistic, leaving far too little time to find a
According to the board minutes, there
was "universal agreement" on this point. They should not
have worried. Of course it would normally take more than two and half
months to pick a successor to a boss of Kiely's calibre. But Kiely
was not for turning. He wanted to be shot of the place before
mid-June. Was he planning to leave the CRC in the lurch?
Normally, a board would expect at least
six months notice to fill a position at this level. Kiely was neither
old nor sick. Yet, without explanation, he was retiring more than
three years early. Perhaps he sensed the trouble coming down the
line? Perhaps he feared that the top-ups controversy was about to
break.? If that was the case, he would have been wise to target an
available and sympathetic successor to ensure a rapid transition.
The board moved fast. It decided to
limit the selection to "internal" candidates. That would
short- circuit the process. For unknown reasons they went to the
trouble of asking recruitment firm Amrop to advise them. They even
set up a sub-committee to hasten the appointment. On the
sub-committee sat a long-time CRC director, a man called Brian
The board need not have worried. The
gods rode to Kiely's rescue. Sometime after the recruitment process
began, in a flash of divine inspiration, Conlan saw the blindingly
obvious. He had found his vocation. He himself was the man for the
job. So he applied. He was short-listed. He attended one interview,
where fellow board members ushered him past the winning post. He was
even allowed to attend the board meeting where his appointment was
Conlan took the gig on July 1. Kiely
must have been mightily relieved. What had the board been worrying
about? Why had they not recognised such outstanding talent sitting
among their number?
Equally conveniently, Conlan had
surprisingly jumped ship from his job as boss of the Mater Hospital
barely three months before Kiely's decision to create a vacancy. What
a wonderful coincidence that the vacancy arose less than three months
after he had left the Mater. He denies that he was in an advantageous
Happily, the board felt that Conlan and
the clinic were the perfect fit. Conlan sailed into the job.
Kiely had retired early. So had Conlan.
It was the clinic's good fortune that Conlan was hanging around,
bored and jobless, at the very moment that Kiely stepped down! Kiely
handed over the CRC to Conlan in an almighty shambles.
The staff worked miracles in keeping
the operations thriving, but the financial and governance structures
were a disgrace. Nevertheless, his timing was impeccable. Its only
subsidiary, CRC Medical, was in big trouble having lost money for
four years. The CRC's expenditure was too high despite a government
subsidy of €16m. It was dependent on the Friends and Supporters,
the fundraising arm, for resources to support some utterly dubious
items of expenditure. The 2012 accounts would reveal a €3m 'loan'
from the fundraising arm to top up the pensions of senior people in
By the time that little timebomb had
come into the open Conlon would be in the saddle and Kiely would
probably be on the high seas. No doubt, all interested parties hoped
that the €3m "loan" would never attract unwelcome
attention. When I discovered it in the accounts it looked innocent
enough, accompanied by a note from auditors Ernst & Young that it
was "not repayable in the short term". A second glance
raised my curiosity. I knew it wasn't right and brought it to the
attention of the Public Accounts Committee (PAC). Then the dam burst.
Within two weeks the entire board was
forced to resign. Last week the HSE revealed that the former
directors had taken no chances with the second, far better hidden,
explosive device -- the board's decision to give Kiely a €740,000
golden handshake. This item was buried, described in the 2013 draft
internal accounts as a "donation". On the same day in June
as he received his final salary payment , Kiely was given a cheque
for €473,336. Additionally, €268,689 was paid to pension
professionals, Mercers, to ensure that Kiely received a pension, as
if he had worked until November 2016.
The deal was artificial and shameless.
No one was ever meant to know about it; but just to be sure, a
legally binding agreement was drawn up to protect Kiely's sordid
little secret. The method of enforcement was positively masonic. The
sense of entitlement was stunning.
The board must have known that this
concoction stank. It had a special stench with few known parallels in
Irish business life. We can forgive tax dodgers, we are accustomed to
padded expenses, we have great tolerance for greed. Even the bankers,
in their worst moments, would not stoop so low as these guys. It was
clear that the directors were ashamed, even frightened of their own
They knew that the Irish public would
never tolerate the big pillage: they were taking millions away from
the needs of paralysed children to enrich the CRC's elite. So they
resolved to keep the deal under wraps. For ever. What the disabled
children did not know about they would never miss. Their wheelchairs
could wait. Luckily for the directors, as it later turned out, the
succession solution ensured that the secret would be in little danger
of leaking as Conlan would be in pole position, unlikely to spill the
beans on his former comrade Kiely or his fellow directors. Last
Thursday, when Conlan appeared before us at the PAC, he was spilling
Instead he was in denial mood. He knew
no secrets. He knew nothing of Kiely's €740,000 pay-off until
He had not been at the crucial board
meeting. He had read no minutes. He had asked no questions. His
evidence was not just unconvincing. It was insulting.
The big rush, the coup that saw Conlan
take over from Kiely, has not worked. The outcry demanding that Kiely
returns the full €740,000 is getting louder every day. The public
anger is palpable. This CRC catastrophe is a successor to FAS. The
pattern is similar. The giant FAS budget was meant for the vulnerable
jobless, but was partly spent on junkets to Florida. The CRC's funds,
earmarked for the even more vulnerable disabled, were used to enrich
the boss's pension. The episode reflects an ugly part of Ireland that
still flourishes in powerful places. The culture of cabals, secrecy
and entitlement survives .