Tuesday 26 September 2017

National Concert Hall's legal costs rise tenfold to hit €213,000

Arts Minister Jimmy Deenihan
Arts Minister Jimmy Deenihan

Shane Phelan, Public Affairs Editor

LEGAL costs incurred by the National Concert Hall (NCH) jumped more than tenfold in the course of 2013.

Records seen by the Irish Independent show the NCH spent €213,086 in legal fees during the course of last year.

The average legal spend in previous years had been a mere €18,000.

The increased costs came against the backdrop of divisions on the NCH's board, which culminated in the resignation of five board members last month.

Among issues which created tension was a proposed link-up with the Lincoln Centre in New York, which acts as an international fundraising consultancy.

If the deal had gone ahead, it could have cost the NCH about €500,000 in its first year and more than €1m if it continued for a number of years.

Along with ticket sales, sponsorship and membership fees, the National Concert Hall receives significant funding from the taxpayer as well as individual donors.

The NCH had hoped the link-up would help it to raise tens of millions of euro from international donors.

But fears were expressed that there would be no guarantee of a return for the NCH on this outlay and the board decided not to proceed. It also considered setting up a separate philanthropic foundation.

However, this was rejected by Arts Minister Jimmy Deenihan after he was advised by Attorney General Maire Whelan that this was not possible under the NCH's memorandum of association.

Legal fees associated with examining the Lincoln Centre proposal came to €22,000, while there was a further outlay of €41,000 on legal advice related to the foundation proposal.

Part of the reason for the explosion in legal fees was that a lawyer, John King, from Ivor Fitzpatrick & Co, was requested to sit in on board meetings. The attendance of a legal adviser at meetings and associated advice cost the NCH €29,000.

Legal costs of €30,000 related to a fraud case where an accounts clerk, Mary O'Toole, embezzled €49,820 from the NCH.

A court heard she stole the money by directing legitimate payments due to creditors into her own bank accounts by manipulating the NCH's computer system.

A further €20,000 was spent on a consultant's report advising on procurement, while €10,000 was spent getting legal advice on a human resources issue.

There was also an €11,000 spent on legal advice related to a catering contract. The NCH installed new caterers after a tendering process last year.

In a statement, the NCH said the board had sought legal advice and services on a broad range of matters during the year "with varying degrees of complexity".

Fraud

"Many of these were one-off items, such as the foundation, Lincoln Centre, fraud case and consultancy tender, while others occur at intervals but not annually," the statement said.

"It is expected that costs in 2014 will therefore be substantially lower as most of these will not recur this year."

Board members Pat Heneghan, Bruce Arnold, Artemis Kent and Patricia Slavin resigned from the NCH last month.

Board chairwoman Margaret Ryan, who was due to step down as she is joining Failte Ireland, also quit the board of the NCH.

A letter sent by fellow board member John McGrane to the board, the chief executive Simon Taylor and Mr Deenihan was cited by some members as the reason for the resignations.

In the letter, Mr McGrane raised concerns about legal costs. He has said he "disagreed professionally" with some board members.

A review of governance at the NCH commissioned last year is currently being conducted by former Department of Education secretary general Brigid McManus.

A spokesman for Mr Deenihan said the minister expected it "to be completed in the near future".

The spokesman said Mr Deenihan, who plans to give the Government more influence over the running of the NCH by placing it on a statutory basis, will "take its findings into consideration in his plans".

Irish Independent

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