Friday 9 December 2016

How horse-racing boss backed a winner

The agency in charge of horse racing has reason to be worried as it finds itself mired in controversy with a Budget looming

Johnny Ward

Published 01/10/2016 | 02:30

The CEO of Horse Racing Ireland Brian Kavanagh Photo: Martin Nolan
The CEO of Horse Racing Ireland Brian Kavanagh Photo: Martin Nolan

The more one scrutinises the predicament in which Horse Racing Ireland and the Government find themselves, the more damning it becomes.

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When Agriculture Minister Michael Creed was probed at an Agriculture Committee on Wednesday, time was running out. The sitting was cut short. The minister was fortunate that his speaking time was limited and he failed to accept accusations that he had been misled by Horse Racing Ireland (HRI) chairman Joe Keeling.

Agriculture Minister Michael Creed Photo: Tom Burke
Agriculture Minister Michael Creed Photo: Tom Burke

HRI, for its part, had issued a statement on Tuesday in which it rejected suggestions that the chairman "intentionally misled" the relevant Government departments.

Mr Creed on Wednesday repeatedly referred to his main difficulty being "the sequencing" of events that had resulted in HRI CEO Brian Kavanagh getting a third term. The sequencing was perhaps the least of the minister's worries.

Mr Keeling told the Department of Agriculture that "the board" was backing Mr Kavanagh's reappointment as far back as 2014, long before any HRI board discussion had taken place on the matter.

Mr Kavanagh, Mr Keeling said in the letter, had "worked tirelessly on behalf of the organisation and industry and (had) often put these interests ahead of his own".

He reiterated this backing in another letter in 2015, conscious that government guidelines on semi-state CEOs allow for only one seven-year-term.

Kavanagh began his third on Sunday. Professor Niamh Brennan, who established UCD's Centre for Corporate Governance, told RTÉ's 'Drivetime' recently that "the number one critical and most important decision of any board is the appointment of the chief executive". The HRI board did vote for Mr Kavanagh's reappointment but the circumstances leading up to it are perplexing.

The Irish Independent has obtained confidential accounts of meetings of the remuneration committee of HRI, the purpose of which is "to examine all issues in relation to the contract of employment of the chief executive".

These files showed that the remuneration committee added an interim member, Con Haugh, to its meetings this year without any consultation with the HRI board.

Mr Haugh was a one-time secretary general of the former Department of Tourism, Culture and Sport. At two of its meetings, April 18 and May 23, the remuneration committee agreed not to put the matter of Mr Kavanagh's reappointment to the HRI board until the Department of Agriculture had updated the committee on Mr Kavanagh.

Mr Haugh was "subsequently appointed" to the committee by the HRI board on May 30.

The department updated Mr Keeling on July 25 that it had "given sanction on an exceptional basis" for Mr Kavanagh's third term.

Though Agriculture had told Mr Keeling in March of the Department of Public Reform's concern that the HRI CEO's salary was above its specified salary range, it allowed for the salary of €190,773.

The Agriculture Minister also sanctioned a five-year term for Mr Kavanagh. In order to gain his second term, he went through an interview process. This time there would be no interview.

There are also questions to be asked about the relevance of Transfer of Undertakings (TUPE), which is often referenced in the documents this paper obtained. TUPE occurs where there is a transfer of a business, or part of a business, which retains its identity after the transfer. This came into play for Turf Club employees who joined HRI directly when it was founded in 2001, succeeding the Irish Horseracing Authority.

On July 18, the board voted for Mr Kavanagh to stay for a third term. A memo at that meeting included a "background and context" which recalled the CEO's 2001-2008 contract. This contract "provided a clause which enabled Mr Kavanagh to reapply for the position of chief executive after the contract end date or to be given another role within the organisation.

"This specific contract term was in the context of the TUPE which applied to all other Turf Club employees in 2001."

However, when questioned how Mr Kavanagh became HRI CEO back then, its press office told the Irish Independent yesterday: "Brian Kavanagh was appointed following an open application/interview process." He had voluntarily left the Turf Club.

The HRI press office added that "staff of the Turf Club engaged on work related to functions being transferred to HRI had the right, if they chose, to transfer to HRI while retaining their existing terms and conditions of employment."

The much-mentioned "business case" which compelled Agriculture Minister Michael Creed and Public Reform Minister Paschal Donohoe to give their backing for Mr Kavanagh has also been obtained by this paper.

It is effectively a letter from Mr Keeling dated April 7, where Mr Keeling talked about setting out "exceptional business imperatives" for extending Mr Kavanagh's contract, where it described Mr Kavanagh as "the most senior racing administrator in Europe".

Mr Keeling and the HRI board are due to sit before the Agriculture Committee soon to discuss the details of his reappointment. Intense pressure will come from Opposition TDs, many skeptical about the enormous State money which goes into funding racing.

Moreover, there has been limited debate within racing about the HRI CEO's reappointment, reaffirming an aloofness in the sport that is part of the reason why so many within Government and Opposition are sceptical about the funding racing receives.

With a Budget pending, racing has reason to fret.

HRI's chairman is accused of misleading the Dáil; its CEO is earning a salary above a specified range; and he has begun a third term that is entirely contrary to government guidelines.

The severing of the Michael O'Leary-Willie Mullins axis kept this issue out of the headlines on Thursday but it increasingly looks no more than a temporary reprieve for the relevant ministers and Horse Racing Ireland.

Irish Independent

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