THE MINISTER for Finance has pledged to take action on the recommendations in a forthcoming report on what he suggested were “overpriced arrangements” for remuneration of senior public servants.
Answering questions from journalists on the early retirement package provided to Fás chief executive Rody Molloy, Brian Lenihan said that, at the time, his officials had “briefed me on the matter verbally”.
When asked why he did not demur from the arrangement, Mr Lenihan said: “I inquired as to whether the payment was within the guidelines that applied to such payments and I was advised that they did.” Mr Lenihan said it was seen as an early retirement rather than a dismissal issue. He noted that the advice of the Attorney General was now being sought.
For him, the issue was “whether these are overpriced arrangements. That’s why I set up a commission into overpriced arrangements, to see what reductions can be made there. We know from all the economic analysis that we have to reduce our expenditure and the example for that has to come from the top.”
Asked if he was advised of any threat of legal action by Mr Molloy, he replied: “It was an early retirement context in which this arose, that’s what I was told. The question didn’t arise, one way or the other.”
A commission had been established some months ago to look at the pay and remuneration of senior public servants. “It’s due to report in the next few weeks: the report is imminent.”
Fine Gael enterprise spokesman Leo Varadkar said the party had submitted a Freedom of Information request “to see exactly what was agreed” and how the decision was made. He said it “beggars belief” that Mr Lenihan was simply verbally briefed on the matter.
Labour leader Eamon Gilmore said on RTÉ that Tánaiste Mary Coughlan had not acted in time and that when he was a junior minister in the rainbow government he had acted decisively when a similar situation had arisen.
A spokesman for the Labour Party later said Mr Gilmore was referring to a problem that had arisen in relation to one of the regional fisheries boards. “He is not saying it was on the same scale,” said the spokesman. “He was pointing out that where there was a problem he moved on it.”
Mr Gilmore also said the circumstances were entirely different when an enhanced severance package was agreed in 1995 with Matt Russell, a senior official in the attorney general’s office.
Mr Gilmore said that the attorney general had also resigned and that the government had fallen.
But a government spokesman later said that the arrangement with Mr Russell was agreed the following year when the rainbow coalition of Fine Gael, Labour and Democratic Left was in power.
The Department of Finance has also made public its guidelines for severance and early retirement for chief executives of State-sponsored bodies. They show that the agreement with Mr Molloy fell within the guidelines. They allow one added year of pensionable service for each year in excess of 15 years’ overall actual service in the public sector subject to a maximum of five added years.
The Tánaiste said in Letterkenny, Co Donegal, that “everything would have been signed off by the Department of Finance”. It was her “considered political view” that the matter could have ended up in the courts.
Meanwhile, the union organiser in Fás has accused the Government of operating double standards in relation to the pay-off to Mr Molloy.
Siptu organiser Brendan O’Brien said 40 fixed-term contractors, who were laid off in January, had to fight for statutory redundancy in contrast to Mr Molloy’s enhanced pension which is estimated to have cost €1.1 million.
“None of that generosity was ever seen by any of the rank-and-file members.”