The Garda fraud squad could be called in to investigate breaches of company law at the Central Remedial Clinic following fresh revelations about payments to its former chief executive using charity funds.
The HSE is examining a range of options after it discovered that Paul Kiely received a gold-plated payoff amounting to more than €740,000 in a deal the board of the agency thought could be kept secret.
At the same time of the payment, €700,000 was paid by the charity arm, Friends and Supporters of the CRC, in what was described in internal accounts as a “donation”.
The discovery was made by an interim administrator, John Cregan, who was appointed by the HSE to step into the organisation after its entire board and chief executive resigned in December.
“The payments to Mr Kiely could not have been made by the CRC if the €700,000 had not been received from the Friends and Supporters,” Mr Cregan wrote in a letter to the HSE chief executive Tony O’Brien on Tuesday, which was released yesterday.
Following a trawl of documentation and discussions with third parties, the HSE will decide what action to take. Sources said last night that, short of the money being given back, the only avenue available may be to call in the gardaí.
A complaint may be made alleging a breach of company law relating to, but not confined to, the claim on the accounts that the €700,000, half of all public money donated to the charity, was a “donation”.
At the Dáil’s Public Accounts Committee, Fine Gael’s John Deasy said there was “an element of deception” in how the money was described as a donation, and asked what health officials intended to do about it.
National director of human resources at the HSE Barry O’Brien said: “When we have all of the full facts and all of the information before us, we will take whatever steps are necessary to ensure there is appropriate probity in governance… It may be necessary, pending the information that arises, to seek the assistance of An Garda Siochána.”
PAC chairman John McGuinness suggested a fraud squad investigation might be needed over the affair with the Office of the Director of Corporate Enforcement being called in.
When questioned about his payoff by the committee in December, Mr Kiely said he was awarded a €200,000 tax-free lump sum.
It emerged yesterday he also got a taxable sum of €273,336 as well as €268,689 paid to Mercer’s consultants for his pension fund, to make sure he had a pension pot as though he had remained in the senior post up until Nov 2016.
The deal was agreed on Mar 25 at a CRC board meeting, who also agreed “a legally binding confidentiality agreement will be put in place” according to minutes of the meeting. It was agreed following a recommendation by the board’s remuneration committee, but minutes of that meeting have not yet been found.
Mr Cregan said he has not yet seen the advice from Ernst & Young and Mercer’s in support of granting the pension package, and “these may cast further light on the board’s rationale for sanctioning the package”.
Mar 11, 2013: Remuneration sub-committee of the CRC board meet to discuss payoff for Paul Kiely.
Mar 25: CRC board meet and approve the package amounting to €742,025.
June: Mr Kiely retires as CEO but remains a member of the board.
Dec 11: Mr Kiely appears before the PAC and says his pension is €200,000,
Dec 15: Board resigns, replaced by HSE interim administrator.
Jan 14, 2014: Administrator writes to HSE boss to tell him of the discovery that the payoff was over €740,000.
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