The escalation of tension means no going back for Dineen and O'Connor

THERE can be no more telling moment in the Bord na Mona affair than the decision by managing director Dr Eddie O'Connor and chairman Mr Pat Dineen to leave the board room table to allow their 10 colleagues to make the final decision. The animosity that has built up between the two men means that whatever the final outcome, they cannot work together as chairman and managing director.

What started out as a request by Mr Dineen to examine Dr O'Connor's remuneration has turned into an 11 week battle between the two fought out both in the boardroom and through the media. Both sides know that the board may try to look at issues on their merit, but when it moves into the political arena the public perception and the media coverage will also play a role.

After remaining silent for some time after the controversy over his pay package broke, Bord na Mona chief executive, Dr Eddie O'Connor, has been increasingly vocal in his own defence in recent weeks.

For the first time yesterday he presented his full case to the board in a 56 page statement, which, as well as answering questions put to him, also posed some for his fellow directors. His argument has been for some time now that the real questions do not surround his remuneration package but relate to leaks to the media of sensitive information.

Meanwhile the board under Mr Dineen has tried to retain the focus on Dr O'Connor's package.

Dr O'Connor's defence rested on two central points. One is that his package was fully agreed with the former chairman, Mr Brendan Halligan, and that he thus did not breach company rules or Government guidelines. The second was that he has been the victim of a campaign of media leaks designed to undermine his reputation yesterday he is believed to have pointed this out in no uncertain terms to his fellow directors.

The board would no doubt have preferred that the public debate be centred on the issues it has examined, which are the internal procedures and practices of the company and particularly the £66,000 claimed by Dr O'Connor in his nine year term as unvouched expenses. Clearly there are questions to be answered in this area about whether the agreement reached between Mr Halligan and Dr O'Connor was an appropriate one and whether Dr O'Connor was within the terms of his contract.

However, the controversy has now been broadened in a way which will make it much more difficult for the Government to handle. Dr O'Connor has pointed out that documents with a very limited access have found their way into the media and, in some cases, have been interpreted in a way damaging to him.

By pointing to his record at the company, he has raised the whole issue of the pay of semi state executives. Dr O'Connor may have breached Government guidelines, but at least a half a dozen other senior semi state executives are on contracts which drive a coach and horses through these very rules.

One result of the saga will be a much greater focus on the work of the committee and AIB executive Mr Michael Buckley which is looking at pay in the public service. The most likely outcome is a system where senior semi state executives are offered salaries, which are modest by private sector standards but with attractive performance related, bonuses.

However, while these wider issues may have preoccupied the media, the board hash remained unhappy with elements of the remuneration package and with the way Dr O'Connor's package was arranged and controlled in particular, it has objected to the unvouched expenses, the level of which has gradually risen over the years.

Dr O'Connor has said that these expenses were to allow him to conduct the "public affairs" role of his brief and Mr Halligan has confirmed he agreed to such a budget.

As the meeting continued late last night, it appeared that, due to its concerns, the board would to refer the whole issue to the Minister for Energy, Mr Lowry, and the Government. Ministers will realise that Dr O'Connor and Mr Dineen cannot work together.

Some ministers are known to be unhappy with the handling of the affair. However the Government may share the board's reservations about part of Dr O'Connor's package and will now have to resolve yet another boardroom mess at a semi state company. Last summer it was, the CIE board that was torn apart by controversy. This year it is Bord na Mona. In any steps the Government takes, it will realise that whatever happens, the affair appears to be heading ultimately towards the courts.