Legal moves put paid to any discussion of pay or pensions

With Frank Flannery and Angela Kerins nowhere to be seen yesterday, five of their former Rehab colleagues had an abject time of it in Leinster House as they endured hours of scepticism at the Public Accounts Committee.

Brian Kerr (75), Rehab's chairman, read a statement in which he reiterated the board's belated acknowledgment of grave failings in its oversight of the disability charity.

The directors recognised their response to the affair was inadequate, he said. “The stark fact is that the reputation of Rehab has been seriously damaged.”

It was the first of many regretful comments. Asked how long he was a director, Kerr was blunt in his reply: “Thirty- two years, unfortunately.” He felt the same about the absence of the two former chief executives. “It’s unfortunate but there’s nothing we can do about it. I think it would have been better if they could have seen a way to appear.”

Kerr insisted that Rehab’s board was not oblivious to the controversy over Rehab’s affairs issues but the directors wrongly believed the situation was being rectified. “We thought we were putting it right, it would appear from what happened that it wasn’t.”

It was not the only blind spot to be exposed yesterday as Rehab faced an onslaught from PAC chairman John McGuinness, Mary Lou McDonald of Sinn Féin, Independent Shane Ross, Fine Gael TDs John Deasy, Simon Harris and Kieran O'Donnell and Ged Nash of Labour.

"Painful lessons"
To the left of Kerr sat Declan Doyle, chairman of Rehab's remuneration panel, to his right was board director Hugh Governey. Also there were board director Liam Hogan and Rehab director of finance Keith Poole. Each con- ceded shortcomings at the top of Rehab. "We have learned painful lessons," Poole said.

After Kerins’s exit , there is no chief executive now.

“The world has changed, we have changed,” Doyle said.

Still, legal moves by both Flannery and Kerins saw to it that he would not discuss their pay or pensions. Saying a letter from Kerins’s solicitor threatened legal action to protect her interests, he was reluctant even to confirm Kerins’s own tacit admission to the PAC of a pay cut this year. This essentially shut down questions over the remuneration and pensions of two former chiefs.

The committee went on to examine Rehab’s dealings in 2010 on a failed coffin venture with Complete Eco Solutions, a start-up company owned by Flannery and by Kerins’s husband and brother. Here there was a noticeable lack of information at board level.

Hogan, a member of the audit committee, did not know of Flannery’s involvement. He said hindsight showed the deal was not appropriate, “but I didn’t realise the level of how serious it was in 2010”.

Not formed
What is more, no one seemed to know that Complete Eco Solutions was not even formed when Kerins first alerted the board to the involvement of family members in the coffins deal in November 2009.

“I certainly was under the impression that it was a company at that time. I wasn’t aware of that,” said Kerr.

Similarly, the fact that Rehab’s lobbying payments to Flannery were made in the first instance to a dissolved company went unnoticed for years.

The company was struck off in 2009 but Poole did not uncover that until January 2013, at which point Rehab insisted on making payments directly to Flannery himself.