THIS WEEK SAW representatives from the Central Remedial Clinic (CRC) appearing before the Public Accounts Committee over the top-ups scandal – including its former chief executive, who had initially refused to appear.
It was the culmination of months of speculation about the CRC’s activities, after it emerged in November that the clinic had used charity money to top up senior staff salaries.
In late November, the PAC chair had called for the CRC to “come clean” on top-ups. Minister Ruairí Quinn asked on the same day for the CRC board to resign,
Minister for Health James Reilly rejected claims in December that the HSE knew about CRC top-ups; four days later, the chief of the CRC, Brian Conlon, quit, adding that he would not attend a PAC hearing.
On 11 December, TDs grilled CRC officials over top-ups. It was alleged that the Mater Hospital had been paid €660k by CRC to administer a ‘phantom pension fund‘ – this was refuted by the hospital.
Here are the seven things we learned about the CRC at the first PAC hearing.
On 12 December, Conlan agreed to appear before the committee.
It emerged that the HSE had threatened to cut all funding to CRC from 1 January 2014 if the board had not resigned.
That all led us to the latest round of PAC hearings this week.
On Wednesday, in a letter to the Oireachtas Public Accounts Committee (PAC) which was seen by TheJournal.ie, the director general of the HSE said that “serious matters” had arisen regarding the retirement package of Paul Kiely, former chief of the CRC.
By Thursday, and the PAC hearing, we knew more.
Former chief executive of the CRC, Brian Conlan, and the chief executive of St Vincent's Healthcare Group, Nicholas Jerymn, appeared before the PAC on Thursday.
That day, over almost four hours of hearings on the CRC's spending, we heard that it had used hundreds of thousands of euro of charity money to pay-off at least one outgoing executive.
1. The extent of Paul Kiely’s pay-off
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 former chief executive Paul Kiely’s retirement package.
The package included a €200,000 tax-free lump-sum and a €273,336 taxable payment, amounting to €473,336.
There was also €268,689 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’ – which was described by Fine Gael TD John Deasy as deceitful. Kiely had not disclosed the €273,336 taxable payment to the committee in December.
2. Conlan did not know about Kiely's pay-off
Conlan said he was not aware of the Kiely pay-off arrangement until Thursday morning, and said that he was on holiday when the board meeting to approve the pay-off would have been agreed.
He said: “I would say that the decisions made by the board to award Mr Kiely [that] level of remuneration in his pension was wrong.”
3. Why Conlan initially refused to appear before the PAC
The PAC had sought out ways in which to compel Conlon to appear before them, after he first refused to meet with them. Eventually, he relented.
He told the PAC that when he was first asked to appear he was “not in a position to be an effective witness” as he had just returned from his honeymoon in the US.
He also said that his home was “literally besieged for days by journalists, forcing myself and wife to leave”.
Conlan succeeded Kiely as CEO in July 2013 but claimed ignorance about the process under which he was recruited.
However, 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.
Conlan’s representatives have told TheJournal.ie that he “was not on the recruitment panel that subsequently ran the recruitment process” and selected him.
5. Travel and entertainment expenses
Conlan admitted that CRC Medical Devices Ltd – 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.
6. There were many foreign trips
Independent TD Shane Ross asked about 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 ESS Study Days in a number of different countries.
7. There’s more to come
The HSE’s Barry O’Brien told the committee that further audits of CRC spending will be finished by the end of the first quarter of 2014.
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.
Ex-board members of the CRC, including former chair Jim Nugent and ex-CEO Paul Kiely,are now expected to appear before the PAC.
- additional reporting from Michelle Hennessy and Hugh O'Connell.
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