Cowen under pressure over Dáil speech on Fás chief

TAOISEACH Brian Cowen is under pressure to explain whether he was aware that Rody Molloy had threatened the Government with legal action when he told the Dáil that the former director general of Fás did the “honourable thing” in resigning his position.

Fine Gael leader Enda Kenny said last night there was a “clear contradiction” between details of Mr Molloy’s resignation revealed in the Dáil’s Public Accounts Committee (PAC) yesterday and what Mr Cowen told the Dáil at the time.

Mr Molloy resigned from his €203,000-a-year post last November after controversy over excessive spending at the agency, including a travel and expenses bill of €5.7 million in 2007.

It emerged yesterday he reluctantly agreed to resign and only did so on the basis that the Government agreed to better pension terms.

Mr Molloy left 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 ex-Fás boss had four and a half years added to his pension entitlement, worth around €1m, if he drew it down for 30 years.

The next day, Mr Cowen told the Dáil that Mr Molloy was not pushed and “did the honourable thing on behalf of the organisation that he lead and tendered his resignation to the board of the organisation and I defend him on that”.

In a staunch defence of Mr Molloy in response to questions by Mr Kenny, Mr Cowen said: “He has taken on the accountability issue and I commend him on that... the honourable thing was done here and it was done correctly.”

Last night, Mr Kenny called on the Taoiseach to explain what he knew then about the deal: “There is now a clear contradiction between the Taoiseach’s comments in the Dáil when answering my questions and what has emerged in the PAC meeting.

“The Taoiseach should clarify whether or not he knew in the Dáil, when I was questioning him on the issue, that Rody Molloy was receiving a pay off. And does he still consider the actions at the top level of Fás surrounding this issue to be honourable?”

A Government spokesman was unable to say last night what Mr Cowen knew of the deal at the time.

But speaking earlier at the ploughing championships, Mr Cowen defended the payment: “The consideration has to be taken into account of what cost would there be to the taxpayer were a prolonged legal dispute in relation to it.”

While Mr Molloy stated he would take court action if his terms weren’t met, the Department of Enterprise did not seek legal advice as officials were “conscious of the cost” of doing so.

PAC chairman Bernard Allen of Fine Gael accused the Government of appeasing Mr Molloy: “There was no legal advice taken by the state when they entered into this deal, which is a source of scandal to the public out there who are suffering day in and day out from the economic crisis.”


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