Fás boss’s deal broke state rules, PAC told

THE golden handshake deal agreed with former Fás boss Rody Molloy was in breach of the Government’s own rules, which state it should have been sent to cabinet for approval by all ministers.

The Dáil Public Accounts Committee heard how a “special arrangement” was made by officials at the Department of Finance to exempt the payment from the official guidelines on severance payments.

A senior civil servant in the department went against the advice of three of his colleagues to refer the deal to cabinet and was simply asked by Finance Minister Brian Lenihan if it was “in line with the norms” and answered that it was.

The controversial payoff and pension amounting to more than €1.1 million was “well above” normal severance payments, according to Fine Gael’s Jim O’Keeffe, who said the department was obliged to refer it to cabinet for approval.

“The Government guidelines clearly and specifically provide that the Minister for Finance does not anticipate approving any agreement on terms of severance, even in individual exceptional cases, other than on foot of a Government decision.”

Fianna Fáil TD Darragh O’Brien said under normal circumstances, Mr Molloy would have been entitled to €77,000 per annum instead of the €110,000 that was eventually agreed.

He said exceptional cases must be signed off by Government under guidelines drawn up in 1998.

But Ciarán Connolly, a secretary general at the Department of Finance, argued that the deal was not subject to the normal rules because it was “neither a redundancy nor a termination”.

He said the department was “prepared to accept a special arrangement in Mr Molloy’s case”.

Mr Connolly irritated committee members with his use of words, arguing the guidelines did not apply in this case: “The determination was not dealt with under the guidelines, but the guidelines did inform the terms of the package.”

Labour’s Roisín Shortall said he was “entirely misinterpreting” the guidelines, which, she said, relate to the payments itself and not the nature of departure.

“You were not at liberty to decide that you would deal with the case outside the guidelines,” she said.

Mr Connolly said he informed Mr Lenihan of the terms of the deal: “He asked if it was within the norms and I said it was,” he said.

Committee chairman, Bernard Allen (Fine Gael) asked if the minister had been “misinformed” on the matter but Mr Connolly said “no”.

Asked who ultimately agreed to the terms, Mr Connolly said: “There would have been various discussions back and forth, but ultimately, that would have been myself.”