Taoiseach defends relationship with chair of firm that HSE chief has joined

Varadkar backs Minister’s consent granted to O’Brien to take up board role at US firm

Tony O’Brien, director-general of the HSE, arriving  for a meeting of the Joint Committee on Health, on issues  surrounding the CervicalCheck Programme, at Leinster House on Wednesday. Photograph: Dara Mac Dónaill

Tony O’Brien, director-general of the HSE, arriving for a meeting of the Joint Committee on Health, on issues surrounding the CervicalCheck Programme, at Leinster House on Wednesday. Photograph: Dara Mac Dónaill

 

Taoiseach Leo Varadkar has defended his relationship with the chairman of the Mater Hospital, who chairs the board of a US firm that HSE director-general Tony O’Brien joined in January.

Mr Varadkar also supported the decision of Minister for Health Simon Harris to give permission to Mr O’Brien to become a non-executive director of the San Diego-based contraceptive manufacturer Evofem Biosciences while Mr O’Brien continues to run the national health service.

The Irish Times reported on Wednesday that the HSE boss joined the board of Evofem on January 17th, less than two months before he publicly announced that he would be leaving his job at the health service in August. He received written ministerial consent to take up the role.

Speaking in the Dáil, the Taoiseach said the director-general’s contract of employment permits him to serve on boards if there is no conflict of interest and with the consent of Mr Harris.

“There is no conflict of interest with this appointment as the company does not have a relationship with the HSE and it does not trade in Ireland, ” said Mr Varadkar.

The Taoiseach said Mr O’Brien’s work for the company would total five hours a month and would be done on his own time, while he will attend meetings of the Californian firm’s board on his annual leave.

Mr Varadkar confirmed, responding to questions from Social Democrats TD Róisín Shortall, that Mr Lynch had hosted a fundraising event for him last year, weeks before he became Taoiseach.

“I know Thomas Lynch. He is well known to lots of people in business circles. He is a successful businessperson who is the chair of a number of bodies including that board,” he said.

Largest hospital group

Mr Lynch is chairman of the country’s largest hospital group, Ireland East Hospital Group, and the Mater. He previously worked for prominent pharmaceutical companies Amarin, Elan and Warner Chilcott and was a board member of IDA Ireland, the Government’s investment agency.

Mr Harris approved Mr O’Brien taking the job on June 6th, 2017 on the basis that he was coming to the end of his term of office, he would be paid normal director fees and his work would be performed in his own time “without any detriment” to his work at the HSE, said Mr Varadkar.

Public records filed by Evofem, which is listed on Wall Street’s Nasdaq stock exchange for technology companies, show that Mr O’Brien will be entitled to annual fees of $65,000 (€54,000) and share-buying options of up to $450,000 in his first three years with the company.

Fianna Fáil leader Micheál Martin said he was “very taken aback” Mr Varadkar did not consider Mr O’Brien’s new role when a “clear conflict of interest is staring the Taoiseach in the face”.

It was “simply not reconcilable” that an individual can be the director-general of the HSE and also serve on the board of a company whose chair, Mr Lynch, is also the chair of the Mater Hospital which will be “putting forward projects which the Mater Hospital will want”.

“I do not understand why the Taoiseach does not get that,” he said.

‘Grave error’

Mr Harris “made a grave error” in approving Mr O’Brien joining that board, he added.

“If one holds the most senior position in the Irish health service, that is the person’s position. If a person wants to do something else, the person should resign or retire and do something else but not do both,” he said.

Mr O’Brien clearly would have enough on his plate even if we weren’t in the midst of a very serious crisis

Ms Shortall said Mr Harris showed “extremely poor judgment” and that it was “entirely inappropriate” that the head of the HSE should be permitted to take up a boardroom position with a female contraceptive manufacturer while holding down his important day job as a public servant.

“As the most senior publicly paid official at the helm of the HSE, Mr O’Brien clearly would have enough on his plate even if we weren’t in the midst of a very serious crisis over how CervicalCheck has handled smear test audits for hundreds of women,” she said.

Mr O’Brien joined Evofem on the day it completed a reverse merger with a stock market company called Neothetics, giving lucrative future share-buying options to Mr O’Brien and the rest of the expanded board, which increased from four to seven as part of the transaction.