Who's to blame for Fás waste?
WHEN A PRODUCER from Today with Pat Kenny on RTÉ's Radio 1 contacted the Fás press office on Dublin's Baggot Street on Monday morning, she did so with little expectation her request would be responded to. Stories of waste of taxpayers' money by the huge State training authority had been running in the media for months, and had led to the establishment of a dedicated inquiry by the Dáil Public Accounts Committee (PAC), writes Colm Keena
Earlier requests to Fás for comment had met with the response that the matters the show wanted to question the authority about were the subject of a Dáil inquiry, and it would be improper to comment. A classic get-out clause.
But the station got a different response on Monday when it sought comment on a Sunday newspaper report detailing lavish expenditure by top Fás executives on trips to Florida, where the authority has a successful science programme with a modest €1.5 million per year budget. The response was that Rody Molloy, the combative top man at Fás who had already had a bruising encounter with the PAC when he appeared before it on October 2nd, was willing to take a call. "We got the impression his attitude was: hold my coat, let me at them."
Molloy came on air at the outset of the programme and stayed on air for more than 20 minutes. He was asked about first-class and business-class flights to Florida, flights that cost the taxpayer more than €640,000 over a four-year period. He was asked about a $942 bill for a game of golf at the Hyatt Regency Grand Cypress hotel in Orlando, the hotel where the former supermarket tycoon Ben Dunne famously had his cocaine-induced panic attack in 1993. A receipt for the resort associated with the hotel showed the money was spent on a game for three in January 2005, and that name on the receipt was Molloy.
"We are out there developing relationships," Molloy said. "I had an opportunity to work with some people as part of building that relationship and I took that opportunity. If that is a major sin then I hold my hands up and say 'very sorry'." He was also asked about a $410 bill from a hair and nails salon called Solutions in West Cocoa Beach, near Cape Canaveral.
"With all due respect," Molloy said, "getting into detail of the preparation of somebody for a particular event, again the amount of money in terms of the total package is very, very small."
In time it emerged that the salon provided services to residents of the nearby Radisson Hotel, that the bill had been paid with an executive credit card in the name of former Fás director of corporate affairs Greg Craig, and that the expenditure had been signed off by former assistant director general of Fás, and Craig's immediate superior, Gerry Pyke.
A €12,097 round-the-world trip in November 2007 for Pyke and his wife, paid for by Fás, also featured in the Kenny interview. "The individual in question, who was at an event in Tokyo, on official business to do with the World Skills Competition and with a graduate programme we have in Japan, . . . then at his own expense spent some time on the way back coming back through the US," said Molloy.
IT WAS CAR-CRASH radio - boom-era lavish expenditure at the taxpayers' expense being aired on national radio against a backdrop of rising unemployment, massive cutbacks in public expenditure, and falling property prices. Molloy was his usual combative self, seeking to deflect the interview towards the training and apprenticeship programmes run by Fás, as if that in any way explained the profligate expenditure of taxpayers' money. Very shortly after going on air the phone lines into RTÉ began hopping, the e-mails began landing, all expressing anger. It was when he used the word "entitlement" in relation to first-class travel that the anger turned to consternation. Molloy had made a number of trips to the US with his wife over the four-year period. The prices of the tickets were in the €4,500-plus range, each. Molloy said that it had been appropriate at times that his wife travel with him, and that on other occasions he had traded down the first-class ticket, to which he was "entitled", and taken out two business-class tickets, for himself and his wife, in return. In this way, there had been no extra expense to the taxpayer.
"I mean listen, all I can say to you on that is that when a spouse travels in Fás they do so at no additional expense to the organisation unless there is a very specific reason for it. There are occasions when it is appropriate. In my own case when my spouse would be with me . . . any time she has been with me there was no additional expense to Fás, because I traded down my travel entitlement to allow her to travel . . . at the expense . . . so it comes in at less expense to the organisation."
"I'm entitled to travel first class," he said, and his career as a senior public servant was over.
By 11pm the next day, having negotiated pension and other terms with the Department of Enterprise, Trade and Employment, his resignation was announced.
On Monday, as the controversy was gaining momentum, the Taoiseach, Brian Cowen told reporters that he knew Molloy personally and knew him to be an excellent public servant. "I have every confidence in him," he said.
Molloy is a native of Birr, Co Offaly, in the Cowen's constituency. Fás last year spent €1.5 million on a plot of land outside the town with the intention of building its new headquarters there as part of the now stalled Government decentralisation plan.
It also took out a lease last year on high-spec offices in a business centre in Birr, as a temporary headquarters. When The Irish Times visited the offices on Tuesday, there was no one there apart from a receptionist. Documents released to this newspaper under the Freedom of Information Act - the piece of legislation that has proved more effective in getting information out of Fás than the PAC - show that the fitting-out of the temporary and apparently little-used offices in Birr cost more than €1 million. The rent runs at about €15,000 per month. A boardroom table cost €11,307.
Molloy was appointed in 2000 by Minister for Health Mary Harney, when she was Minister for Enterprise and Employment, and he is generally regarded as being close to Fianna Fáil and Cowen. This formed a subtext to much of the Opposition criticism of Cowen's expression of support for Molloy on Monday. Craig, who is a key player in the controversy at Fás, is also close to Fianna Fáil and worked in the constituency office of the late Brian Lenihan up to his being sacked from Government by the late Charles Haughey in 1990.
By Tuesday, during expressions of outrage in the Dáil, Cowen had changed his tune, saying he would not stand over any "profligate spending" at Fás, and he said he intended having inquiries made into whether similar waste of taxpayers' money occurred in other State agencies.
As the controversy continued it emerged that the West Cocoa Beach hairdressing bill had been, at least in part, run up by Mary Harney during a particularly well attended trip to Florida in August 2004. Furthermore, it emerged that Harney had travelled to Florida on that occasion in the government jet along with her husband, the then chairman of Fás, Brian Geoghegan; Molloy and his wife; then secretary general of her department, Paul Haran, and his wife; Harney's press secretary; and Harney's private secretary. Eight tickets to Orlando costing €4,824 per head had been booked in case the government jet had for some reason been unavailable. Given that both Molloy's political boss and Civil Service boss were on the aircraft with their wives, the trip begged the question as to why it was necessary for Molloy to resign.
In truth, the radio interview was a last straw. For months stories have been appearing in the media, mostly based on material released under the Freedom of Information Act, revealing shocking instances of apparent breaches of the Fás rules governing the expenditure of public money. It was an internal audit report into a range of contracts, expenditures and related issues in the corporate affairs division in Fás that led to the PAC inquiry. Not only was the content of the report disturbing, but the former head of the division, the aforementioned Craig, changed what he told the audit inquiry in the course of the investigation and after the auditors had checked his e-mails and spoken with third parties who'd had dealings with him.
The period involved was 2000-2004, and the amount of money he appeared to be in charge of, with apparently very little oversight, was in the range of €50 million. At a PAC hearing on Thursday, which Molloy was originally due to attend, assistant director general Christy Cooney told Labour TD Tommy Broughan that Craig reported to Pyke and to Molloy. He was asked by Fianna Fáil TD Darragh O'Brien if the €50 million "was at the disposal of Greg Craig". Cooney replied: "Broadly, the answer to the question is yes."
Serious problems around the way Craig was dealing with public funds had surfaced in 2001, yet a year later he had been promoted to the level of director. In the wake of the audit report he was disciplined - Fás won't tell PAC what the sanction was, citing legal reasons - but he remained in his post. He went for the position of assistant director general and was shortlisted by an initial interview panel. Close questioning of Cooney by Labour Party TD Róisín Shorthall at the PAC meeting elicited the information that Cooney, who'd played a role in the sanctioning of Craig in the light of the audit report, was on that panel. Cooney said Craig was entitled to put himself forward for interview, but said he wanted to get legal advice before saying if he'd told the other members of the panel about that internal audit matter.
Which begs the question as to whether there is not now a bit of scapegoating of Craig going on by others who arguably bear as much responsibility for what went on. The government, and successive ministers for enterprise, trade and employment, were flinging money at Fás during the boom, and demanding this, that and the other. Craig was seen as a can-do man who could cut corners. At the time, it would seem, this was appreciated.
CRAIG TOOK SICK leave at around the time when aspects of the report began to appear in the media in June, and was due to return to work when new issues arose from further ongoing auditing of his division for the period 2006-2007. He received a letter this week placing him on suspension, on full pay, without prejudice.
So is the sort of lavish expenditure aired this week to be found in other State agencies, and is taxpayers' money being treated as recklessly in other agencies as it was in the corporate affairs division of Fás?
On the issue of foreign travel and lavish expenditure, a senior civil servant with close knowledge of the commercial State agencies says the other agencies are not as bad as Fás. "It's not of the same order," he says. "The IDA is quite professional in how it spends money, in my experience. It has a significant budget but it is very focused and results driven.
"Enterprise Ireland is a bit looser." Ministers' spouses have travelled with that agency in the past, and the regular trade missions its hosts to foreign countries tend to be somewhat driven by PR concerns. 'The largest trade mission ever,' that sort of thing. You have repeat visits by people, especially from the universities and colleges, travelling abroad to sign protocols, that sort of thing, at public expense. It's more about scale than results."
THE SOURCE SAYS that Ireland's attitude to the expenditure of public money abroad is quite different to that of countries that have been wealthy for generations, such as Germany, France and Finland. " are all very flaithiúlach about spending around ministers. Other countries tend to be more careful about costs. I would say this is true also of presidential tours. You sometimes would hear representatives of other countries wondering about how we always go for the top of the range. It's a bit of a flaw in our character, really."
But if a line minister and a line secretary general are on these foreign trips, with their associated lavish expenditure, how can politicians then express outrage when the details of the expenditure become public knowledge? Is there an element of pretence about the outrage expressed in the Dáil, and in the media, this week?
The civil servant doesn't think so. In a week that has also included debate about public service reform, he believes much could be achieved if the Civil Service appointees to the boards of agencies such as Fás did more in terms of reporting back to their ministers.
"They are not fulfilling their task of telling the political establishment what is going on. It has reached the situation where it is very difficult to get information from Fás. If it wants to give you information it will, if not it won't. Ministers tend to be very savvy. If ministers are advised that there is a problem, they will distance themselves.
"Fás is very much a politicised outfit, very much seen as associated with Fianna Fáil. Since the period when Bertie Ahern was minister for labour, it has been seen as a political plaything."
Because of its role in training and community services programmes, Fás reaches into the political life of every community in Ireland. It is awash in political representation. But strangely enough, it is the political nature of the organisation that makes it difficult for the political establishment to manage it, according to the source. "Politics is a huge part of its remit and it leverages that very much."
The Fás board, which is chaired by trade unionist Peter McLoone, who travelled to Orlando in January of last year on a €7,308 ticket, met yesterday to discuss the ongoing crisis. It has a range of new initiatives it wishes to announce, but as of yesterday afternoon was of a mind it should hold its fire until the ongoing PAC inquiry has ended.
What is certain is that reform of Fás will be difficult, and it will require change in how politics here operates if it is to be successful.