Committee told of CRC chief pay-off
Published 16/01/2014 | 11:57
The former head of the scandal-hit Central Remedial Clinic (CRC) walked away with a gold-plated pay-off worth 742,000 euro despite previously only admitting a pension pot of 200,000 euro.
The Public Accounts Committee was told some of the money came from charitable donations to the clinic and that health chiefs may attempt to claw back some of the secret fund.
An audit by the Health Service Executive revealed the deal included 200,000 euro tax free, 273,336 euro which was taxable and 268,689 euro paid to Mercer's consultants for Paul Kiely's pension fund.
The third payment was intended to make sure the former clinic chief had a pension pot as though he had remained in the senior post up until November 2016.
John McGuinness, PAC chairman, suggested a fraud squad investigation might be needed over the affair with the Office of the Director of Corporate Enforcement and gardai being called in.
The committee heard details of the package as Brian Conlan, who took over from Mr Kiely as head of the CRC but lasted only four months in the job, denied all knowledge of the arrangement.
He said the lucrative and secret pension deal was wrong.
"What I'm saying to you is that I was not aware that these payments were being made to Mr Kiely," he said.
"I was not aware of the payment. This is completely new to me. And I am as surprised as anybody at what has transpired here today."
Mr Conlan was told repeatedly that he lacked credibility - including by committee chairman John McGuinness, who cautioned him to reveal the full facts of his knowledge of the pension deal and the recruitment of Mr Kiely's replacement.
He said he was on honeymoon in the US for three weeks when the controversy emerged late last year and returned in December.
Mr Conlan claimed he did not attend a committee hearing on the scandal when first invited as he was under intense stress, was forced to move out of his house for several days to avoid the media and would have been an ineffective witness.
He resigned as chief executive last month as the committee sought to question him over the remuneration issue. He claimed he did not have access to files and records from his time at the CRC.
Mr Conlan said there was no information on Mr Kiely's pension deal in any files he saw in the four months he was chief executive.
Committee member Independent TD Shane Ross said he was "gobsmacked" and said he did not believe the former health chief's evidence.
"There was obviously an intention that this should never see the light of day," he said.
Mr Kiely retired in June last year on a pension of around 90,000 euro a year from a private scheme - which was also propped up by a three million euro loan from donations paid to the CRC and held by the Friends and Supporters of the CRC.
The committee was told today that his 750,000 euro retirement package was in addition to money being paid out of the three million euro fund.
Barry O'Brien, HSE national director for human resources, told the committee that it would attempt to recover some monies paid to Mr Kiely if they are found not to be "reasonable and proper".
Mr Kiely only detailed a pension pot on top of his salary of 200,000 euro when he was before the committee in December.
Demands were made for him to be recalled to answer questions on the secret deal.
The staggering pension fund was revealed after the HSE appointed an internal administrator to the CRC on December 18 following weeks of scandal regarding top-ups and financial mismanagement.
Auditor John Cregan has told the HSE that the pension fund was finalised around the time that two transfers - 450,000 euro and 250,000 euro - were made out of the accounts of the Friends and Supporters of the CRC.
These are described as donations.
Mr Conlan said: "I did not know that the money was being used to fund Paul Kiely's pension.
"When I joined the CRC first I had other priorities. My understanding was that Paul Kiely's pension had been sorted (as he explained to the committee that it was 200,000 euro).
"I'm telling you the truth. I was not aware of this payment going through. I was the new CEO and I was finding my feet."
Mr Conlan retired as chief executive of the Mater Hospital aged 58 after eight years in the job and subsequently applied to take over the CRC as an internal candidate following Mr Kiely's retirement.
He explained his decision to leave the Mater, saying that he had become tired in the role.
The committee was told that before he applied for Mr Kiely's job he was appointed to a sub-committee, as part of his role as a board member at the CRC, to oversee the recruitment process.
Mr Conlan claimed that when he decided to run for the CRC chief executive's position he left the sub-committee.
During his evidence he also said only 1% of the overall budget of the CRC is under scrutiny and that it was not his understanding that donations were being siphoned off to pay top-ups for executives.
Mr Conlan said the practice was wrong and should cease.
But he added: "Sometimes decisions have to be made that are practical and pragmatic."
Mary Lou McDonald, Sinn Fein deputy leader, said: "I had the very strong feeling that you were attempting to palm us off but I now have the feeling you came in here to tell us downright lies.
"Don't tell me that you have only learnt about this gold-plated pensions package. I don't accept that."
The committee has also been told that the 750,000 euro retirement package could not have been paid without money coming from the Friends and Supporters of the CRC - the group which brought in charitable and public donations to help the running of the clinic.
Late in the hearing the committee also heard of exotic travel arrangements for some senior management in the CRC including Simon Hall who from 2006 went to Nashville, Orlando,Vancouver, Buenos Aires and New Delhi on eight different trips.
Questions were also raised about a Visa credit account linked to the CRC Medical Devices company.