Just over 20 years ago, when the oil price recession was inflicting its worst on industry here and abroad, executives struggling in the private sector were prone to mutter uncomplimentary observations about their counterparts in semi state companies. Phrases such as "cushy number" and "job for life" were bandied about. If the charge of "cushy number" ever had any merit, certainly today it does not. The uproar over Bord na Mona illustrates how semi state executives have to expect the most public scrutiny of their conditions. And why not? They control public assets, constructed with the taxpayers' money.
The Bord na Mona controversy comes in two parts; there are items such as wine purchases and a Portuguese time share, the other involves the more serious issue of the pay and expenses of the managing director, Dr Eddie O'Connor. Seemingly, Bord na Mona purchased some £16,000 worth of wine over a four year period. It may be "inappropriate", to quote the newly appointed chairman Mr Pat Dineen, but for a company with sales approaching half a million pounds a day it hardly constitutes a grave misuse of funds.
The investment in a Portuguese apartment should also be kept in perspective. The weeks which the company owns are given to senior executives as an incentive; it is a practice which is not unknown in the private sector. Mr Dineen says that it too is inappropriate; he may not be right. Companies are entitled to provide incentives for employees, especially where pay norms mean that the hard working are on the same rates of pay as the shirkers. The apartment's existence, however, should be known by the board and declared to the Revenue Commissioners.
And this is where Dr O'Connor's salary and expenses pose problems. His basic salary of £62,000 a year is indeed comparatively low; the latest IMI survey suggests that £110,000 would be the going rate in the private sector. On the other hand, his expenses, running at an average of £47,000 a year, are large and the nature of some of them disconcerting. The picture painted by Dr O'Connor in interviews last week was far from complete. It is troubling that more than a third of the expenses were not supported by documentary evidence (receipts etc) of the expense which was incurred. It is unforgivable that the board was unaware of all the expenses or that the company, last year, paid £15,000 to the taxman in settlement of an income tax claim against Dr O'Connor. It matters not that Dr O'Connor may have had an agreement with the previous chairman Dr Brendan Halligan (written? verbal? a nod?); what matters is whether other directors were fully informed. Directors have responsibilities. They are not sitting ornaments.
Dr O'Connor and Dr Halligan, it must be remembered, have given the State great service in turning around what was one of the most moribund of companies. In addition, top people's pay in the semi states remains riddled with inconsistency and inequity with some chief executives operating as "consultants" in order to get around the pay limits. The Review Body on Higher Remuneration is hopefully contemplating radical reform. Dr O'Connor's pay package would seem to have been constructed on a basis which was casual and sloppy and it must be rectified. But Mr Dineen and the Government (and Mr Lowry in particular) should resist any temptation to play politics; there's already been more than enough of that from this administration.