Saturday 27 December 2014

Shane Ross: A legacy of 'stuffing' the patients

Shane Ross

Published 15/12/2013 | 13:01

QUIZZED: (L to r) David Martin, Jim Nugent and Paul Kiely following a Public Accounts Committee meeting to examine top-up payments at the Central Remedial Clinic, in Leinster House, Dublin, last week

What a legacy the departed directors of the Central Remedial Clinic will leave! Corporate Governance, Central Remedial Clinic-style, will be the font of many doctorates of philosophy in years to come.

There was a telling, but unreported, moment at the shoot-out at the Dail's Public Accounts Committee (Pac). When chairman John McGuinness suggested a break -- followed by an extension -- one of the Central Remedial Clinic's (CRC) three witnesses became a bit shirty. David Martin, the solicitor who sits on the board of the clinic, mentioned "the day job". He would have to move the deck chairs around.

McGuinness was not amused when he overheard it. The chair and the witness exchanged a few brisk words. Martin remarked that he had clients to meet and that he didn't get paid for being at the hearings.

McGuinness riposted that the Pac had a "slightly larger client base".

"And mine pays me but this does not," retorted the CRC director.

Martin is a member of the professional class, a principal in Gore & Grimes, solicitors to the clinic. He is an unknown, carrying none of the baggage of many CRC insiders. He was not a former Fianna Fail cabinet minister like Vincent Brady, nor a member of the Drumcondra mafia like Paul Kiely, nor one of Bertie's 'dig-out' gang like Jim Nugent, not even a friend of Charlie Haughey or Bertie Ahern like former chairman Des Peelo. Martin was just plain David Martin, an honest-to-God, non-political solicitor.

Somehow, Martin got right up the noses of some Pac members. He was far from being the understated fresh face of the clinic. He was positively assertive, hard-nosed and pushy. While CRC chairman Jim Nugent unsuccessfully tried to present a portrait of helpful humility, and former CRC boss, a tieless Paul Kiely, did his best to appear casual, Martin barged into the testy exchanges, uninvited.

At an early stage, when I was quizzing chairman Nugent, Martin tried to elbow into the dialogue but was forced to withdraw. On the day of the hearing, the Irish Independent's Dearbhail McDonald and Cormac Quinn had broken a story about the CRC chairman's accident-prone commercial adventures. The article told how Nugent had been humiliated in another forum. Down in the Four Courts, Danske Bank had registered a judgement for €8.4m against him. It was not the only one. Worse still, we already knew that he had been a hero of the Mahon planning tribunal, due to the €2,500 he claimed to have given towards Bertie Ahern's 'dig-out'. Jim suffered the indignity of the tribunal rejecting his evidence.

How did a man with such a chequered record land in the chair of a charity with a €16m annual government grant? Did any of the other directors, like David Martin, ever think of tapping him on the shoulder to suggest that his talents were better suited elsewhere? Far from it. Jim is not only chairman of the charity, he is chairman of the key audit committee. Better still, he is on the remuneration committee that approved all the top-ups, including his old pal Paul Kiely's. Just the sort of guy you need in times of crisis.

Two weeks ago, when all the trouble erupted at the clinic and chief executive Brian Conlan fell on his sword, the board needed a replacement. To whom did they turn? To Unlucky Jim. Yes, presumably they scoured Jim's cv, dismissed the €8.4m judgement as irrelevant, overlooked the 'dig-out' episode, rejected the Mahon tribunal's findings and plumped for Jim as the interim solution. Ah well, they all knew Jim.

Just like they all knew Brian Conlan when they appointed him as the clinic's short-lived chief executive last summer. Brian had been on the board with them for donkey's years. Keep the gig in the family. All too often, in the case of the CRC, the Fianna Fail family.

Nugent did not dispute his Fianna Fail links last Wednesday, but tried to make them sound irrelevant. When I asked about them, he did not counter with a list of his business qualifications. He hardly could. Instead, he trumped my question with an ace of an answer. His connection with the clinic goes right back to its founder, Lady Valerie Goulding. Just like Des Peelo, the friend of Bertie Ahern had done earlier, Jim clasped Ireland's Florence Nightingale, the patron saint of all invalids, to his bosom. As he did it, you could almost hear him muttering the words "Bertie who?"

David Martin intervened to give Nugent the Martin seal of approval. David had never seen a sign of political influence on the board. And David added that he himself was not a member of any political party.

Perhaps he did not know that the third witness, Paul Kiely, was a leading member of Bertie's Drumcondra mafia? Perhaps he was not aware of another board member, Vincent Brady's impeccable FF pedigree? Perhaps he did not know that Kiely was not only the top dog at the clinic but had also been given a board seat at CIE during Bertie's reign? Did he know that Paul, although not an accountant, had been chairman of the audit committee at CIE?

'Volunteer' Martin gave a second endorsement. He gratuitously granted Paul the Martin seal of approval: "I thought Mr Kiely was a magnificent chief executive officer", volunteered Martin. Nobody had asked him. Nobody gave a hoot, because the Martin currency was fast running out.

All these guys, whose commercial talents are so readily recognised by political patrons, never seem to make it in the private sector. Nugent's adventures in the private sector have been disastrous. Neither he nor Kiely are believed to have suffered the burden of private companies snapping them up for non-executive directorships. Admittedly, Jim served on the board of the Central Bank, but that appointment had been made in Bertie's time. Fianna Fail alone seems to have spotted their talents.

Once on the main CRC board, chosen directors participated in a maze of connected companies. Kiely was secretary of the Central Remedial Clinic and secretary of its charitable arm -- the Friends and Supporters of the CRC -- at the same time. He was deeply conflicted, as money from the 'Friends' was transferred to the CRC to pay his top-ups.

Nugent was on the board of both companies. So when a controversial €3m pension 'loan' was made from the charitable business to the main company, both men held key posts in not only the borrower but also in the lender. Many Pac committee members felt that the transfers "stuffed" the patients -- as beneficiaries of the depleted funds in the Friends and Supporters -- while the top brass (including Kiely) -- as beneficiaries of the topped-up funds in the CRC -- were enriched.

The three witnesses' defence was feeble. They maintained that they were an independent outfit with obligations beyond the public purse or the patients, that they could not break the contracts with Kiely or anyone else, and that the Health Service Executive knew about the top-ups -- which hardly suddenly makes them acceptable. And of course they used the "Lady Valerie Goulding defence" when challenged about their chumminess with each other and Fianna Fail.

The departed directors should be succeeded by at least three representatives of the clients/patients; three members of the staff of all grades; one director from the department of health and three independent outsiders. And the board should be declared a Fianna-Fail-free zone.

Irish Independent

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