‘A twisted web’: Credit cards, foreign trips and 5 other things we learned from the CRC hearings

Update 5.10pm

THE PUBLIC ACCOUNTS Committee has held nearly four hours of revelatory hearings on spending by the Central Remedial Clinic (CRC) with it disclosed that hundreds of thousands of euro of charity money was used to pay-0ff at least one outgoing executive.

The main revelation today has been that former CRC chief executive Paul Kiely received a retirement pay-off more than double what he had previously disclosed to TDs on the powerful Oireachtas committee.

But as Kiely’s successor Brian Conlan gave evidence there were also fresh claims about the use of thousands of euro for travel and entertainment as well as foreign trips – all allegedly funded by the CRC.

Here’s what we found out today…

1. Paul Kiely’s pay-off was more than he said it was

The HSE’s Barry O’Brien told TDs that the CRC’s interim administrator, John Cregan, found that €700,000 was taken from the charitable fund, Friends and Supporters of the CRC, to help fund Kiely’s retirement package.

The package included a €200,000 tax-free lump-sum and a €273,336 taxable payment, in total amounting to €473,336.

There was also €268,689 was paid to Mercer’s to ensure pension and lump sum benefits would not be less than if Kiely had continued as CEO until November 2016.

This meant a total of €742,025 was paid out in respect of Kiely’s pension and pay-off.

This €700,000 was disclosed on the CRC’s draft accounts as a ‘donation’ – a move which was described by Fine Gael TD John Deasy as deceitful.

Kiely (above) told the committee in December that he received a lump-sum pay off of €200,000 and would be getting an annual pension of €98,000, but did not disclose the €273,336 taxable payment.

There have been calls for Kiely to pay back the money and the HSE did not rule out seeking repayment.

2. Brian Conlan did not know about his predecessor’s pay-off

Conlan, who stepped down in November, said he was not aware of the Kiely pay-off arrangement until this morning and said that he was on holiday when the board meeting to approve the pay-off would have been agreed.

Fine Gael’s Simon Harris said “a man blindfolded on a galloping horse would have been more aware of what was going on” and asked Conlan if he had read the minutes of that meeting when he returned to work.

“Did you not scan the minutes and think: ‘Jesus, God, Paul’s getting a lot of money there, isn’t he?’” the TD asked.

It appears Conlan did not read the minutes.

“I was not privy to Mr Kiely’s pension settlement,” he said. “That is the truth. I was not part and parcel of the remuneration committee.”

He also said: “I would say that the decisions made by the board to award Mr Kiely [that] level of remuneration in his pension was wrong.”

He later admitted to Sinn Féin TD Mary Lou McDonald that he bore responsibility for the decision of the board to remunerate Kiely to that level.

3. Conlan was “overwhelmed” by media coverage

The CRC scandal was all over the media last month and Conlan’s initial refusal to appear before the PAC led to it seeking ways in which him to compel him, before he relented and agreed to appear.

Speaking today, Conlan said that when he was first asked to appear he was “not in a position to be an effective witness”.

“I had just returned from my honeymoon in the US,” he said, adding that he was “overwhelmed” by media coverage.

He later said: “Circumstances surrounding my return from US in December were quite stressful, I wouldn’t have been an effective witness, I had no documentation and I couldn’t get into my home.”

He described how his home was “literally besieged for days by journalists, forcing myself and wife to leave” and said he meant no “disrespect” to the committee.

Conlan also claimed that the media had portrayed the top-up issue as one in which there was a special bank account to pay top-up. PAC chair John McGuinness asked for examples.

Conlan had none and McGuinness said his claims were “nonsense”.

4. Conlan was part of a CEO recruitment process before a subsequent recruitment panel hired… him

Note: Following contact from representatives of Conlan, this section has been amended.

Conlan succeeded Kiely as CEO in July 2013 – he resigned four months later – but claimed ignorance about the process under which he was recruited.

That was until members of the Oireachtas committee were handed the minutes of a special meeting that took place in the Spring of last year and discovered he was in fact part of an initial CRC panel commissioned by the board to work on the recruitment process.

Conlan and another CRC official met with recruitment consultants MERC to discuss using them to find a CEO, but MERC were not subsequently appointed. Conlan told the committee he attended “just one” meeting.

Conlan told the PAC he had been asked to serve on that panel, but at that stage had “no intention” of becoming CEO. Eventually, Amrop was appointed to head to recruitment process.

YouTube: Sinn Féin

Conlan’s representatives have told TheJournal.ie that he “was not on the recruitment panel that subsequently ran the recruitment process” and selected him.

Conlan gave evidence as to the names of the three CRC board members that were on the recruitment panel that interviewed him along with an executive from Amrop.

Conlan said he did not become interested in the position until he saw “the internal ad, the job spec”. McGuinness accused him of being “economic with the truth here, with the facts”.

5. Credit card used for travel and entertainment expenses

Conlan admitted that CRC Medical Devices Ltd – a failed business venture which has since been sold – had a credit card which was partly used to pay for “certain amounts of travel” and “certain amounts of entertainment”.

This amounted to €14,000 on travel and €3,900 on entertainment in 2012, Conlan said. He did not have figures for how much the CRC itself spent on travel and entertainment.

“What we’re dealing with, chairman, is a pretty twisted web now.” – Fine Gael TD John Deasy said during the hearings today.

6. There were foreign trips… lots of foreign trips

Towards the end of proceedings, independent TD Shane Ross, probed the issue of foreign travel. Firstly, Conlan admitted he “forgot” about a trip to Dusseldorf in Germany in 2006.

Ross than listed trips made by CRC employees to Nashville, Tennessee in 2006 and 2013; Orlando, Florida in 2007 and 2009; Vancouver, Canada in 2010 and 2012; New Delhi, India in 2012; and Buenos Aires, Argentina in 2011 and 2010. Another trip to Vancouver is planned in March of this year.

There was also the European Seating Symposium (ESS) which Ross said is organised by the CRC and which involves “extremely successful” ESS Study Days which took place in Slovenia, Norway, Spain, Portugal, France, and Malta.

“Is that justifiable expenditure?” asked Ross adding that the “CRC is extremely generous in the way it sends people around the globe”.

Conlan said that he did not know about every trip and said that in his four months as CEO “I don’t believe any trips happened”. He added that the ESS “was profitable” to the tune of €80,000 last year and had been successful both for the CRC and the country’s economy.

Ross said that Conlan “ought to know” about the trips and added: “There’s a lot of travel going on that you don’t seem to know anything about.”

7. There’s more to come, including possible garda involvement

The HSE’s Barry O’Brien informed the committee that further audits of CRC spending will be finished by the end of the first quarter of this year.

He said that all remaining matters will be examined and that the HSE “may seek the assistance of An Garda Siochána” over issues that arise.

The committee also agreed to arrange for the now ex-board members of the CRC, including former chair Jim Nugent and ex-CEO Paul Kiely, to come before it to explain their version of the matters that have arisen today.

- additional reporting from Michelle Hennessy

First published 3.17pm

‘Shameful’: Ex-CRC chief got €473k retirement pay-off – all of it from charitable funds