€3m loan given to Central Remedial Clinic helped pay ex-CEO’s pension

A €3m loan given to the Central Remedial Clinic (CRC) by its fundraising body that was subsequently written off, partially funded the pension of the clinic’s former chief executive Paul Kiely.

It was confirmed yesterday that the body, Friends and Supporters of the CRC, agreed to write off a loan of €3m it advanced three years ago to the CRC to meet its pension liabilities.

The CRC, a Dublin care centre for people and children with disabilities, was engulfed by controversy in late 2013 and early 2014, over pension top up arrangements given to former staff.

But it has now been established some of the written-off funds went to pay the pension pot of Mr Kiely, who retired as chief executive of the CRC in 2013 with a €741,025 pension and loss-of-office payment.

In a statement, the CRC said as a charity, it did not have the means to repay a loan to Friends and Supporters Ltd and cannot undo the actions of previous years, leaving no alternative but to make this request.

“The Central Remedial Clinic made a formal request to Friends and Supporters Ltd to write off a loan of €3m, advanced to it in 2012 to help finance the CRC’s pension liabilities. This request was disclosed in the latest CRC annual accounts and F&S have agreed to the request,” the statement said.

The interest-free, long-term, loan was provided to help the clinic fund its pension liabilities, under its defined benefit scheme.

The current directors of CRC resolved that public and private funds will only be spent in relation to furthering the well-being and health of people with disabilities.

The CRC’s latest accounts also show a long-term pension liability of €9.2m.

An interim administrator was appointed to the clinic by the HSE, and his report in May 2014 referenced the existence of the interest-free loan of €3m. A new board of directors at the CRC was also appointed as a result of the controversy.

The latest accounts show CRC made a surplus of €140,752 last year, compared with a deficit of €721,845 the previous year.

At the time, a HSE internal audit investigation found Mr Kiely, prior to his retirement, had been receiving a total remuneration package of €242,865. This was made up of a State-funded salary of €106,900, a CRC-funded salary of €116,949 and a separate CRC-funded allowance of just over €19,000.

It also emerged that after stepping down Mr Kiely received a retirement lump sum of €200,000. The Public Accounts Committee was told his pension when drawn down would be more than €90,000 a year.

In a letter to the committee, the HSE said it appeared “the payments to Mr Kiely could not have been made by the CRC without funds received from the Friends and Supporters of the CRC”.

The committee also heard Mr Kiely was one of about 70 staff covered by a private pension arrangement organised by the disability group.