Cowen: Fás boss did not threaten to sue

THE Fás scandal descended to a new level of farce last night as Taoiseach Brian Cowen flatly contradicted evidence given to a Dáil committee and insisted Rody Molloy had not threatened legal action in order to secure his massive pay-off.

The Taoiseach’s assertion went against testimony by Department of Enterprise secretary general Sean Gorman to the Public Accounts Committee and is also at odds with statements by Green coalition leader John Gormley.

As the Government again attempted to scramble clear from the mess left in the wake of Mr Molloy’s €1m “golden goodbye”, opposition leaders insisted the cabinet’s story was unravelling as “clarifications” were prompting more questions than answers – such as why offer such a lucrative deal if no legal action was threatened?

Labour leader Eamon Gilmore said it smacked of a “sweetheart deal for a Government friend”.

The row intensified as the Government faced the prospect of a national strike by the IMPACT public service union as Mr Cowen refused to rule out compulsory pay cuts of 5%.

Mr Cowen added to confusion regarding Mr Molloy yesterday by insisting the huge pay-out had not been secured due to threats oflegal action.

“There was, as I understand it, no threat of legal action,” he told RTÉ, adding that he believed Mr Molloy would have been reserving his position in that respect.

The statement runs contrary to comments by Environment Minister Mr Gormley when asked about the severance deal in the wake of the PAC revelations.

“We assumed, and everybody assumed, that was the normal package... he then threatened, as I understand it, some sort of legal action... the feeling was from the Tánaiste that this would mean extra money from the taxpayer and as a result she took that action,” he said.

Mr Gorman told the PAC Mr Molloy had made it very clear that he was reserving his right to take court action if he was not treated reasonably.

Fine Gael enterprise spokesman Leo Varadkar said the Government was in disarray. “The Taoiseach has now contradicted the previous statements the Tánaiste has made and those of her department’s secretary general at the PAC. We need clear answers,” he said.

FG leader Enda Kenny insisted he would have fired Mr Molloy.

The Taoiseach insisted Mr Molly’s package was “right and fair” as Justice Minister Dermot Ahern drew opposition fire after claiming there was nothing wrong with giving the former director general “another few pound” in order to avoid the threat of “protracted legal action”.