Hospital procurement fraud inquiry began in September

A Garda investigation into allegations of impropriety among staff working in the procurement departments of a number of hospitals has been ongoing since September last year.

The Garda fraud squad began its investigation last autumn and a number of people at the centre of the allegations have been interviewed and statements taken, well placed sources said.

The allegations being investigated were highlighted in a RTÉ Prime Time programme on Thursday which revealed some senior members of hospital staff were in receipt of expensive holidays and gifts from a supplier, in breach of their rules of employment.

St Vincent's Hospital said two staff members had now been "put off duty", and it will establish an internal inquiry.

A third hospital employee was suspended by the Beacon Hospital.

“Beacon Hospital has strict procurement policies and procedures in place. Any alleged breach of these policies is taken extremely seriously,” it said in a statement.

It said it was also carrying out an internal investigation into the allegations made in the Prime Time programme.

The programme also showed some purchasing officers passing on commercially sensitive information to Dublin based medical supplies company Eurosurgical Ltd, which included competitors' price lists.

Payments stopped

The HSE has now stopped all payments to Eurosurgical pending further enquiries.

Minister for Health Leo Varadkar, speaking at an event in Dublin, responded saying:

“Obviously I’m very disappointed to see that anyone working in our health service, in any part of the health service, would behave in a brazen, unethical or greedy way.”

He said his department was made aware of allegations against a number of hospitals back in September/October, but the allegations were “actually different” and “we didn’t have the evidence that RTÉ presented last night. That was the first time any of us had seen that evidence.”

He said the allegations were passed on to the HSE, the Department of Justice and the Garda fraud squad.

“I understand that they are considering them, and also the HSE carried out an internal audit into their hospitals and didn’t find anything untoward, but I’d now ask that they examine that again.”

Although an investigation into procurement procedures in St Vincent’s Private Hospital had already been under way, Mr Varadkar said revelations regarding officials from St Vincent’s public hospital included in the RTÉ programme constituted a new development.

No engagement

In a statement, St Vincent’s Healthcare Group denied an investigation was underway at its private hospital into allegations about procurement irregularities “which were apparently the subject of a report by a ‘whistleblower’ to the Department of Health in September of last year.

“We now understand, however, that such allegations, concerning a total of seven hospitals and made to the department at that time, were passed to the HSE by the department for investigation, and that the HSE discussed the issue with the Garda fraud bureau,” it said.

“However, neither the Department of Health, nor the HSE, nor the Garda fraud bureau sought to engage with SVPH, or the wider group, at any stage about this.”

It said management first heard of these allegations when they were raised by Mr Varadkar on the radio at lunchtime on Friday.

“However, now that this matter has been raised, St Vincent’s Healthcare Group will seek from the Department and the HSE whatever evidence they have relating to these further allegations, and will investigate them as thoroughly as they are investigating the allegations raised about procurement irregularities in St Vincent’s University Hospital in the RTÉ Prime Time programme last night.”

The Oireachtas Joint Committee on Health and Children has decided to invite representatives from the HSE, St Vincent’s and the Beacon Hospital to a meeting next week so they can respond to accusations.

Eurosurgical Ltd

According to its most recent set of financial accounts, Eurosurgical Ltd had cash in the bank amounting to €2.4 million.

The company, with a registered address of Orchard House, Beaumont Avenue, Churchtown, Dublin, has net assets of €4.9 million.

Its directors are listed as Raymond Kane Snr, Raymond Kane Jnr, Alan Kane, Gary Kane and Alison Kane.

Directors’ pay, including pension entitlements, amounted to €641,403.

The accounts, which were approved by the board in June 2014, indicate that Mr Kane Snr owns 55 per cent of the business, with the remainder split evenly between Raymond Kane Jnr, Alan Kane and Gary Kane.