GOVERNMENT guidelines on Dr Eddie O'Connor's pay as managing director of Bord na Mona had not been complied with, the Dail was told.
The Minister for Transport, Energy and Communications, Mr Lowry, said recommended rates of remuneration were intended to include salary and all other benefits apart from superannuation and expenses approximating to those applying in the Civil Service which they took as the norm.
If additional benefits were provided, the salary paid should be reduced by the value of those benefits below the remuneration rate recommended. These conditions had been accepted in writing by the managing director, he added.
"On November 12th, 1993, July 7th, 1994, and July 6th, 1995, the former chairman [Mr Brendan Halligan] affirmed to the then Minister, Deputy Cowen, and to myself, that Government guidelines on the pay of the managing director were being complied with. Clearly this was not so," said Mr Lowry.
"I am adamant that there has to be the highest standards of corporate governance and behaviour in all State companies under my aegis."
The Minister was answering questions in the House at 2.30 p.m., shortly after his lunchtime meeting with the chairman of Bord na Mona, Mr Pat Dineen, and before the matter was discussed by the Cabinet.
He had earlier received a copy of the resolution adopted by the board on Monday night, which stated Government guidelines relating to the managing director's remuneration would appear to have been breached during the period of its review of the managing director's remuneration arrangements since his appointment in 1987 to 1995."
The board had also advised him that the remuneration arrangements, originally entered into between the former chairman and the managing director, were not disclosed to the board or its remuneration committee.
"The issues arising concern more than simple breach of pay guidelines. There are also matters of corporate governance and standards of integrity and behaviour which would be addressed by any board of any company.
"I, therefore, consider the communication I received this morning from the board to be unsatisfactory in that I would have expected the board to have advised me of their findings in relation to the following questions among others.
Did the board have the power to deviate from the Government pay guidelines? Did they have power to delegate their functions in relation to pay to the chairman and for him to carry them out in a confidential manner? Why was there not a normal budget line in Bord na Mona for public affairs.
"Why was cash handed to the managing director to cover unvouched expenses? What are the fiduciary duties of the managing director and chairman of the board? I have now asked the chairman to address those questions urgently."
Challenged by the Fianna Fail spokesman on energy, Mr Seamus Brennan, to say if the board's resolution was a motion of censure relating to Dr O'Connor, the Minister said that it spoke for itself. He would report to a Cabinet meeting later in the evening.
Mr Lowry was not aware of the full detail of a report given to the board, by the former chairman, but it was his understanding he had made a verbal agreement with the chief executive in respect of a remuneration package. He also understood there was nothing "signed in writing" on the minutes or otherwise of the board's records. He said the conditions of Dr O'Connor's appointment specified his remuneration as managing director and his fee as a member of the board.
The conditions also stated that the allowance for expenses to be paid to him as a member of the board should be the amount of the "actual travelling expenses reasonably and necessarily incurred by him and such subsistence allowances as are usually given to a civil servant of the highest grade".
The Minister said the conditions further specified that no other remuneration was to be payable in respect of any other services rendered by him for or on behalf of the board in his capacity as a board member, save with the concurrence of the Minister for "Finance. Dr O'Connor had confirmed acceptance of his appointment on these conditions on July 22nd, 1992.
Mr Noel Treacy (FE, Galway East) asked if the Minister had "both personally and politically" sponsored Mr Dineen's appointment. Was he aware that on the date of the appointment, "at a private dinner in this city", the Tanaiste, Mr Spring, had announced to an international gathering, seeking his support for the second mobile phone licence, that he had secured Mr Dineen's appointment and that Mr Dineen, in response, had said he would "deal" with the chief executive.
Mr Lowry said Mr Treacy's comments were "so outrageous and outlandish" they did not merit a response. "But what I can say quite clearly is that the appointment of Mr Pat Dineen as chairman was done in accordance with normal procedures."
Earlier, denying an assertion by Mr Brennan that he had "declared war" on the board of Bord na Mona, the Minister said he was concerned about the damage to the company while the dispute raged on.
The chairman and board members had been very cautious and prudent and had given every opportunity to the chief executive to answer questions raised in the Price Waterhouse report. While there had been delays, they were not due to the membership of the board entirely.
The PD spokesman on energy, Mr Robert Molloy, said the board had completed its duties, but the Minister seemed to be reluctant to make a decision.