Millions lost in needless stadium legal row

A litany of government departments and State agencies are expected to be heavily criticised for wasting huge sums of public money in a report to be published by an Oireachtas committee today.

The Public Accounts Committee (PAC) report into how Campus Stadium Ireland (CSID) pursued a redundant legal action against a businessman for €10m criticises the departments of finance, arts, sports, and tourism, as well as the Revenue Commissioners and CSID.

The probe warns the decision to proceed with the legal action has exposed the State to a potential multimillion-euro damages bill.

It is also very critical of the “highly paid experts” retained by CSID, for the advice they gave the State agency. It found the CSID guilty of “sharp practice” in failing to inform the businessman about a valuation report that would have strengthened his case in the legal action, and weakened that of CSID.

The PAC investigated an eight-year legal battle waged by CSID to pursue Kerry-based John Moriarty to pay a €10m Vat bill as part of a contract his company won to run the National Aquatic Centre.

In Sept 2010, the Supreme Court found Mr Moriarty was not liable for the bill, and that even if he had been there would have been no net gain to the exchequer as the monies could have been recouped in a rebate.

The PAC investigated why the legal action was pursued for eight years, despite advice from the Comptroller and Auditor General, and the Attorney General that no case existed. Blame for the fiasco, the PAC found, lay primarily with CSID, but also with Revenue and the two government departments.

The full legal bill for the action is not yet known. Mr Moriarty is expected to launch a major action for damages as a result.

The report states: “The performance of the department in allowing this issue to develop, especially after the High Court decision of 2005, was poor to say the least. It took no steps to get a detailed opinion from the Department of Finance and it set aside sound advice received both from the C&AG and the Attorney General.”

It also states: “At a minimum the Department of Finance, in getting involved in issues such as this, must have procedures whereby its advice and/or instructions are in writing so that a clear record is created for accountability purposes.”

The valuation report kept from Mr Moriarty formed the most devastating finding against CSID.

“The committee finds that this failure to share the information… to be sharp practice, which should have no place in the way the State conducts its legal business. It should not have taken the Supreme Court to tell a State company with direct access to top legal and professional advice and with access to the office of the Attorney General that the legitimacy of any charge and especially one that runs into millions should be clearly outlined to the person who is expected to pay this charge.

“The committee can only conclude that full transparency on the findings of the Valuation Office could have ended the dispute regarding Vat as early as 2002.”


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