Molloy did not threaten legal action - Cowen

Mon, Sep 28, 2009, 01:00

TAOISEACH BRIAN Cowen has said that former director general of Fás Rody Molloy did not threaten legal action during negotiations over his resignation from the State training body which saw him receive a €1 million golden handshake.

In an interview on RTÉ’s This Week programme yesterday he said that his understanding was that Mr Molloy had been reserving his position to see what the outcome would be of the talks with Government officials and the chairman of the board of the organisation on the terms for his departure.

Mr Cowen said that while legal action had not been threatened by Mr Molloy, “that is a matter that could have emerged subsequently if there was not an agreement”.

The Taoiseach defended the terms of the agreement reached with Mr Molloy on the basis that it was in the best interest of Fás and of the taxpayer generally. He said that the terms of the deal with Mr Molloy were in line with legislation and guidelines in place.

Asked if the package was “fair and right”, he said that he thought so when all the circumstances and considerations were taken into account.

Mr Cowen said that if a person was reaching the end of their term of employment and was not going to be reappointed, there were provisions that if they had more than 15 years’ service and were over 50 years of age, for enhanced years of service to be added on to their pension as part of a severance package. “It was analogous to that in this situation,” he said.

A Government spokesman said later that the retirement package for the departing Fás chief had been calculated on the same basis as that approved by the Fine Gael-Labour government of John Bruton for the former head of the attorney general’s office, Matt Russell, who resigned in 1995 following the controversy over the Brendan Smith affair.

However, Labour Party leader Eamon Gilmore asked why the Government had given Mr Molloy a pension top-up if there was no threat of legal proceedings. He said that the issue was looking more and more like a “sweetheart deal”.

Fine Gael’s Leo Varadkar called on Minister for Enterprise Mary Coughlan to clarify whether Mr Molloy had threatened legal action in advance of receiving a “golden handshake” as part of his resignation deal.

He said that the Taoiseach’s interview had contradicted previous statements she has made as well as those of her department’s secretary general, Seán Gorman, at the Public Accounts Committee.

“The Taoiseach’s continued contention that the payment to Mr Molloy was ‘fair and right’ and in the realm of normal rights and entitlements is astounding when we’re talking about a public servant who presided over flagrant waste.”

Labour’s Róisín Shortall said that Government’s position on the Molloy severance package was changing by the day. She urged the Government to specify exactly what guidelines it claims permitted the additional payments made to Molloy in three areas: the ex-gratia payment, the increased retirement lump sum, and the additional years for pension purposes.

Fine Gael leader Enda Kenny said he would have fired Mr Molloy for incompetency.

Speaking during a Lisbon referendum canvass in Dún Laoghaire, he accused the Government of “hiding behind the process” involved in awarding a €1 million “golden handshake” to Mr Molloy.

Mr Kenny said “in view of the incompetence of the former director general of Fás, I would have sacked him and I would have allowed the law to take its course”.

However, Mr Cowen said that the Government had to act lawfully and act within terms and conditions that applied.