News Shane Ross

Monday 22 September 2014

Noble vision hijacked by FF cronies

Shane Ross

Published 01/12/2013 | 14:30

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STATE OCCASION: Lady Valerie Goulding with then president Eamon De Valera and children at the Clinical Remedial Clinic in the early Seventies

DID Charlie Haughey save the Central Remedial Clinic (CRC)? In 1987 Lady Valerie Goulding, CRC's great founder, declared that "but for Charlie, we'd have no centre today".

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Haughey would have loved the nod of approval from the British aristocrat. She was referring to the former Taoiseach's role as a fundraiser in the Seventies. Haughey spent some of his wilderness years drumming up public and private funding for the CRC. It helped his image. And it helped the CRC.

Lady Goulding soon joined Fianna Fail and became a senator. It was an unlikely alliance between a member of the British nobility and an Irish rogue. Yet it seemed to work. She broadened Fianna Fail's appeal. Fianna Fail arranged funds for the clinic.

Ever since then the CRC has received generous state grants. In turn it has been peopled by many Fianna Fail loyalists. Today the presence on the board of Haughey's former minister for defence Vincent Brady is a constant reminder of the Haughey link.

Brady has been on the board since 1998. Not nearly as long as another Fianna Fail loyalist. Paul Kiely had been chief executive for 25 years, until his retirement this year. Kiely is not Haughey's man. Kiely is Bertie's crony. Just like Bertie, he emerged from the Mater Hospital stable. Just like his successor, the former head of the Mater, Brian Conlan, appointed this year.

Brian Conlan had already been perched on the board of the Central Remedial Clinic for nine years before he was appointed to Paul Kiely's job. He resigned as a director and took Paul's job downstairs. Paul moved upstairs and took Brian's job on the board of the CRC. Pretty cosy stuff.

The board antics at the CRC and its related companies would have amused Charlie Haughey. They would give today's corporate governance gurus nightmares.

Charlie would no doubt have been pleased to see his personal accountant Des Peelo as chairman after his death.

Peelo was the accountant Fianna Fail rogues turned to in times of trouble. He bridged the Haughey-Ahern gap, doubling as Bertie's accountant in his hour of need.

Yet few CRC directors have played a bigger part in the clinic's activities than James Nugent, the man who told the Mahon Tribunal that he gave ex-Taoiseach Ahern €2,500 as part of the whip-round when he was in the financial manure. Nugent was appointed a director of the Central Bank under Bertie and served three terms as chairman of CERT.

He sits on the board of all four companies now embroiled in the CRC controversy. According to the 2012 accounts, he is a member of the CRC's remuneration committee and chairs the key audit committee. As Nugent was on the remuneration committee in 2012, it means that he approved the extraordinary €136,000 top-up to €242,000 given to his friend Paul Kiely last year.

As Nugent was on the board of the fundraising outfit, the 'Friends and Supporters of the Central Remedial Clinic' (which he has been since 2010), it means that he was party to the transfer of all charity funds that headed for the Central Remedial Clinic itself and, in turn, were used to top up the already bloated salaries of the chiefs at the clinic. The CRC looks like a charity that has run amok.

No one has ever challenged the musical chairs or the inter-company transfers at the CRC. Thankfully, that has now changed. The Dail's Public Accounts Committee is limbering up for a battle.

The PAC will be particularly interested in Nugent's take on the news of the transfer of €3m from the 'Friends and Supporters of the Central Remedial Clinic' to the Central Remedial Clinic itself.

When I discovered this transfer buried in the 2012 accounts last week, it completely threw me.

Nugent's evidence on the bizarre travels of this €3m sum, originally collected for charity, but ending up in the Central Remedial Clinic's pensions pot, will be crucial. Nugent is a director of both the lender and the borrower. It will be fascinating to hear whether he took legal advice on the potential conflict of interest he faced when acting on behalf of citizens who generously donated for charity.

The note to the Friends and Supporters accounts accompanying the news of the €3m "loan" is mind-boggling. "During the year the company advanced an unsecured , interest-free, long-term loan to the Central Remedial Clinic to assist in financing that company's pension liabilities.

"Provision has been made for the amount advanced due to uncertainties regarding the long-term ability of the Clinic to repay the loan."

It is crystal clear from the weird words of the accountants Ernst & Young (now where have they surfaced before?) that there is but a snowball's chance of the CRC ever repaying this money to the 'Friends and Supporters of the CRC'. The money from the collection boxes appears destined to line the pockets of the plutocrats in charge of the charity. Technically speaking, it has already been written off. It is a gift.

So much for the CRC's feeble plea in Thursday's statement that the 'Friends and Supporters' funds pay for "the ongoing capital development of the Central Remedial Clinic". So now we know what happens to the minority of its funds. The CRC admitted in the statement that they had used supporters' funds "to pay any additional salary amounts over the Department of Health's consolidated pay scales".

The CRC board failed to give a hint of the real extent of the largesse lashed out to its top staff, hidden in a nugget that lurked in the small print of the 2012 accounts .

So the PAC, currently being led into new territory by John McGuinness, will be asking Nugent some key questions about his dual role in this transaction.

We will need to know if this €3m payment covers a single person, a few bosses or is to be spread among all of the CRC's 250 employees. As a betting man I would not wager much for the chances of the ordinary staff, the second victims of our revelations after the disabled children.

We will need to trace full details of his friend Paul Kiely's top-ups in the 25 years that he served in the chief executive's job. We will ask him how much Mr Kiely cost the State and how much more he cost the funds collected for sick children.

We will need to ask Kiely about his unorthodox elevation from chief executive on to the board, about the appointment of his successor, about the interview process and about the implications of cross-directorships between all four companies in the Central Remedial Clinic stable.

We will need to know how board appointments are made. Is there a formal nomination committee in any of the companies – or do they recruit directors over a pint in Fagan's pub?

And we must not fear to tread into the area where business and politics overlap. Was the CRC a masonic-style haven for 'Friends of Fianna Fail'? We need to know why Haughey's and Bertie's accountant landed in the chair.

We need to know how Charlie's running mate and Cabinet Minister found himself on the board. We need to know how an influential member of the Drumcondra mafia held the top post for 25 years. We need to know how one of Bertie's "dig-out" supporters is a director of all four companies associated with the CRC.

When Valerie Goulding embraced Charlie Haughey and Fianna Fail she hardly foresaw that her noble creation would be hijacked.

Sunday Independent

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