The Government signed-off on a ’golden handshake’ for former FÁS chief Rody Molloy because he threatened legal action to get a €1m euro pension, it was revealed today.
The ex-director general stood down last November at the height of controversy surrounding lavish expenses by top officials at the scandal-hit state agency.
The Dáil’s public spending watchdog was told Mr Molloy strongly warned he would go to the courts if he did not get the lucrative pay-out he wanted in exchange for his resignation.
Sean Gorman, Department of Enterprise secretary general, said Mr Molloy made it clear he would fight for the deal.
“In the negotiations that took place it was made very clear that a part of the terms on which he was prepared to resign was that he was treated reasonably,” Mr Gorman said.
“It was made very clear that if the individual felt he wasn’t being treated reasonably he was reserving his right to take court action.
“That was made very clear.”
Mr Molloy walked away with a pension worth €111,000 a year, a tax-free lump sum of €333,732, and a taxable ex-gratia payment of €111,243.50.
The capital sum on his pension amounted to around €1m, the Dáil Public Accounts Committee heard.
Mr Molloy also had four and a half years added to his pension entitlement.
Committee chairman Bernard Allen lashed out at the Department claiming Mr Molloy was being appeased with a sweetheart deal rewarding failure.
“Why was the value equivalent to winning the lotto, transferred to the former DG (Director General) for his pension, when the man spent and oversaw spending on travel, on a lifestyle more equivalent to a rock star than a public servant?” Mr Allen said.
“I don’t think we should be appeasing people who make mistakes for fear of litigation and certainly to my knowledge, and of the evidence before me, there has been appeasement here because of the threat of court action.”
Laws are expected to be brought forward in the coming weeks giving the Government power to dissolve the 17-member FÁS board following further evidence of massive overspending at the beleaguered agency.
The Comptroller and Auditor General found the body squandered more than half a million euro on television adverts that were never aired.
The investigation also revealed the Gardaí were called in to probe the mysterious payment of €622,000 to two individuals while €9,200 euro was spent on a car that was never delivered.
The damning C&AG report sparked the powerful PAC to reopen its inquiry into the massive waste of taxpayers’ money at the agency responsible for getting people back into employment.
The Labour Party’s Roisín Shortall branded the million euro payment to Mr Molloy a buy-out.
“It’s very hard to stomach at the very least on behalf of the taxpayer, how you could possibly justify that kind of level of expenditure,” she said.