Coronavirus grant scandal: Tears in the fabric of Sinn Féin cloak

Sinn Féin president Mary Lou McDonald ordered recipients of incorrectly placed payments to pay back the monies. Picture: Collins

The revelation of unreturned payments into the accounts of Sinn Féin members in the North was a headache party leader Mary Lou McDonald could have done without, write Political Editor Daniel McConnell and Political Correspondent Aoife Moore.

It was a scandal that led to the resignations of four Sinn Féin members, including a senator. The party stood accused of trying to keep it under wraps.

Mary Lou McDonald has described events, in which €30,000 was erroneously deposited and left in Sinn Féin accounts, as “completely unacceptable” and she has apologised to taxpayers.

But questions linger as to why money was only paid back when journalists started asking questions.

Sinn Féin has been rocked, with the resignations of a senator, one NI Assembly member and two party officials.

So what exactly happened?

In March, the Northern Ireland executive through Economy Minister Diane Dodds and her officials devised a scheme to pay up to £10,000 (€11,100) to small and medium businesses as a way of assisting them through the worst of the Covid-19 pandemic.

Under the scheme, businesses did not have to apply as Stormont authorities held the bank account details of 7,000 small business which qualified for the grant.

The money helped thousands of business owners stay afloat during the subsequent months.

However, on Monday, October 26, a problem arose.

The BBC’s Nolan Show ran an item about the small business grants of up to £10,000 paid out to Covid- affected businesses in March by the Department of the Economy, headed by Minister Diane Dodds of the DUP.

Presenter Stephen Nolan highlighted how 52 owners of wind turbines, which had not been affected by Covid-19, received the payments from the department. Callers to the show were irate that up to £500,000 of taxpayers money had been misdirected.

It is believed that on foot of the Nolan show, Sinn Féin bosses in Belfast became aware of the problem in the context that a number of their political offices and their senior politicians were involved.

The Sinn Féin leadership realised they were dealing with what sources have described as a “toxic” situation.

They quickly established that three party offices incorrectly received lodgements of £10,000 and the payments were not applied for. They were automatically received as part of the round of grant payments in late March/ early April from the Land and Property Service.

It was established that payments were paid into constituency accounts in West Tyrone and Lurgan, and into Senator Elisha McCallion’s account in respect of her former Westminster office.

A meeting between senior officials in the party held on the Monday decided that “there was no excuse for it,” one party member said.

Despite the money being received many months’ ago, a “scramble” ensued to ensure the money was paid back in all cases as quickly as possible.

It also seems that a major battle went on behind the scenes in Stormont. Ms Dodds as minister wanted the news of the payments to Sinn Féin offices made public. However, ‘forces’ from various quarters including the Department of Finance prevented that from happening.

Ms McDonald, as party leader was only informed of the scandal on Tuesday, October 27, and she set about what one party member described as “disentangling what in God’s name had gone on”.

Ms McCallion had been in Dublin for Seanad commitments and left abruptly to return home to Derry.

Sinn Féin TDs and senators said this was the first instance in which they had an inkling that there may have been an issue, as they had been kept in the dark about the controversy.

On orders from the Ard Comhairle and Ms McDonald, the three offices were ordered to pay the money back, and this happened on October 26 and 27.

Elisha McCallion. File picture: Niall Carson/PA Wire

On October 28, matters escalated significantly again because of the Nolan show on BBC Radio Ulster.

In his typically bombastic style, the presenter declared that he was dropping a political bombshell.

“A senior Stormont source has told us that Sinn Féin have been battling for days to stop the Nolan programme and therefore you the public finding out details of three bundles of £10,000 in small business grants that were received by the party,” he set out.

He went on to say that Sinn Féin MLA Maolíosa McHugh was believed to have received £10,000 into what McHugh described as “our West Tyrone account”.

Mr Nolan made clear that this huge sum would have been automatically sent into his account without his asking. There was no wrongdoing by him in receiving the money.

The key question is what happened to that money, when did he and Sinn Féin realised they had it. Mr Nolan also named Ms McCallion, the Derry-based member of Seanad Eireann as a recipient of the grant who had not promptly returned it.

Ms McDonald was said to be furious and called for a meeting of the Ard Comhairle that night. She was adamant that nothing short of “full transparency” was required.

She felt that the money should have been returned immediately as no political offices qualified for this grant. She made known to all and any concerned that the fact that this did not happen was unacceptable.

At the party leader’s behest the Ard Chomhairle agreed to censure all those involved. She spoke to Ms McCallion, who was described as “devastated”, that night and gave her no choice but to resign and the senator agreed to do so with a heavy heart.

Resignations were also sought and received from Barry McColgan, the party’s West Tyrone constituency manager who had responsibility for the administration of the account and had failed to promptly return the grant money despite being requested to do so by Mr McHugh, who was vindicated by the examination.

The cathaoirleach of the Upper Bann Comhairle Ceantair also tendered his resignation in recognition of its failure to return the grant payment in a timely fashion.

The party, the following day, October 29, released a lengthy statement detailing the resignations, confirming the money was only repaid when media inquiries were received.

Ms McDonald apologised for the controversy on behalf of her party saying it was a “catastrophic” lapse in judgement which required Ms McCallion’s resignation from the Seanad.

Some party members have expressed surprise that the sanctions were as stiff as they were and see the resignation of Ms McCallion as “the final nail in the coffin” for the party’s hopes in Derry, where they had been suffering losses continually.

Ms McCallion sought to explain her side in a statement in which she said the money was lodged into a joint account of “which I am a named signature with my husband. I did not apply for nor solicit this money nor did I receive any correspondence from the department in relation to it.”

“I fully accept that as a named signature on the account that I should have taken extra steps to verify this situation, before it was brought to my attention on Tuesday. The money was repaid in full on Tuesday [October 27],” she confirmed.

“I apologise unreservedly for the poor judgement I showed in relation to this and therefore, last night I spoke to the party leader and tendered my resignation as a member of Seanad Éireann with immediate effect,” she said.

That day, the Department for the Economy said 24,700 grants were paid out under the scheme. Of those, 2% (452) may not have been eligible. It has since recouped 70 of those payments and work is under way to recover all ineligible payments.

Ms McCallion has come under “a barrage of online abuse” in the time since and is said to be “devastated” by the controversy, one party member said.

“It’s been non-stop, she always got a hard time online but she’s having a rough go of it.”

Ms McCallion did not resign as a member of Sinn Féin.

Despite the fulsome apology and expressions of regret, that was not the end of the affair.

The Sunday Life paper had been making inquiries about Catherine Kelly MLA, who is the wife of Barry McColgan.

On October 31, as journalists were consumed by the breaking Leo Varadkar GP leak controversy, just days after her husband resigned, Ms Kelly also resigned, five hours after the paper confronted party chiefs over her links to the £30,000 coronavirus grant scandal.

Catherine Kelly

Catherine Kelly, who represented West Tyrone at Stormont quit after admitting being a signatory to a party account into which £10,000 was paid in error.

“This afternoon I accepted the resignation of Catherine Kelly, MLA for West Tyrone. Catherine is a signatory to an account into which a small business grant of £10,000 was lodged in error,” Ms McDonald confirmed.

“The party’s examination of this matter is now complete”, Ms McDonald said but internally the fallout has continued.

Ms McDonald held a Zoom video conference on Wednesday night with senior members of her party and spoke briefly about the incident.

“She was asked if Elisha [McCallion] had resigned from the party, and what had happened to the other staff who weren’t representatives,” one party to the call told the Irish Examiner.

“She said that those people had been sanctioned by the party and that Elisha still remains a Sinn Féin member.

“She reiterated that she would not in any way tolerate any sort of behaviour that wasn’t completely transparent.

“She did emphasise that there was no criminal intent, Mary Lou seemed anxious to get that across.

“It was very much a case that it had to be nipped in the bud early and that if the party tried to ride it out, they would come in for more abuse over a longer period and it was unacceptable to the leadership that it happened in the first place.”

The Department of the Economy in the North told the Irish Examiner that two payments were made in error under the category of MPs and MLAs constituency offices which were ineligible for the £10,000 grant — one in respect of the office of a current elected representative and one in respect of the offices of a former elected representative.

In addition, a payment was made to the office of a political party.

All three grants have now been repaid — one received on October 26 and the other two on October 27, it said.

“The Department understands that a complaint has been raised by a member of the Assembly. That complaint should be fully investigated. The Department will cooperate fully with the investigation,” it said.

The complaint was made by the DUP.

Timeline

March 2020:

Diane Dodds and the Department of the Economy in Northern Ireland launch scheme of small business grants.

Monday, October 26: Concerns around scheme first raised about companies receiving £10,000 grants they shouldn’t have. Dodds is restrained from making payments to Sinn Féin public.

Sinn Féin bosses discover an issue involving three payments to party colleagues and begin inquiries.

Tuesday, October 27: Party leader Mary Lou McDonald finds out and demands monies are paid back by those involved and that occurs only after media inquiries.

Wednesday, October 28: BBC Nolan show names McHugh and McCallion as recipients of grants. McHugh later explains he was not involved.

Sinn Féin Ard Comhairle meets and McDonald demands party takes action and forces resignations of McCallion and two-party officials including Barry McColgan

Thursday, October 29: Sinn Féin publicly confirms resignations of McCallion and officials saying failure to repay money promptly was “completely unacceptable”

Saturday, October 31: Sunday Life newspaper confronts McColgan’s wife, MLA Catherine Kelly about receiving a grant. Her resignation follows a short time later. McDonald says the party’s examination of this issue has concluded.

McCallion was in the ascendant

Elisha McCallion had a meteoric rise, if not typical for the area, within the ranks of Sinn Féin after joining the party’s youth wing at 15.

From a well-known Republican family in Derry City, her aunt is former IRA prisoner, MEP and current MLA Martina Anderson, Elisha was first elected as a Sinn Féin councillor for Shantallow on Derry City Council in 2005 aged 23. In 2015 she became the first mayor of Derry and Strabane.

During her tenure as mayor, her husband Declan was given a suspended sentence for assaulting a couple out on a walk when he was drunk.

In March 2017, she was elected as MLA for Foyle winning the seat of her former mentor and friend, deputy First Minister Martin McGuinness just weeks before his death.

Just months later, building on her success, she historically became the first female MP for Foyle following the 2017 general election with a tiny majority of 169 votes.

Elisha McCallion. File picture: SamBoal/Rollingnews.ie

“Elisha was viewed as someone who had talent, she was seen as on the rise, her family connection would’ve helped matters, but at the time no one was falling over themselves to be a candidate, she was drawn from a shallow pool,” one former member of Derry city Sinn Féin said.

The seat had been held by the SDLP since its creation, historically the seat of John Hume and Mark Durkan since 2005. The SDLP had seen decreasing influence in Stormont since the early 2000s and even with support for Sinn Féin rising in light of Martin McGuinness’s leadership and sympathy for his illness, Ms McCallion’s election was still seen as an embarrassing loss to the SDLP.

Her time as an MP, due to the party’s policy of abstentionism was unremarkable however. Ms McCallion was called on to apologise for a number of gaffes including in her first weeks in the job, complained her hotel room in London was “smaller than her bathroom at home” and inadvertently insulted residents in a deprived estate in Derry after she joked that they were afraid to open the door to canvassers in case it was the “debt-collector”.

Looming Brexit, a Stormont stalemate due to the RHI heating scandal and consistent antipathy toward Sinn Féin in the city caused a serious decline in Sinn Féin’s popularity and McCallion was defeated by Colum Eastwood, the current leader of the SDLP, in the 2019 general election by a huge majority of 17,110 (36.3%). The result was seen as an indictment of Sinn Fein’s decline in Derry City. The area’s comhairle ceantar has long been seen as a “basket case” according to senior party figures in Belfast.

The group, run by a number of well known republican families, has lost its capacity to retain dynamic membership, according to former and current members.

The current MLA Karen Mullan’s partner is the former chair of the comhairle ceantar, while the current chair is a nephew of Martina Anderson.

The loss was stark for Sinn Féin’s head office most notably by the realisation that large swathes of the republican base didn’t vote, or voted for Colum Eastwood.

“There are ex-lifers who voted SDLP in the last election, that’s unheard of,” one former prisoner said.

“The ex-prisoner community in Derry is anywhere between 2,000-3000 people and they do not manifest with Sinn Féin whatsoever.”

Not to be left out in the cold by Sinn Féin, in April 2020, Ms McCallion was elected to the 26th Seanad as a senator, topping the poll on the Industrial and Commercial Panel with 95,000 votes on the first count.

She spent six months as a senator before she resigned.

Promising politician with youth portfolio

Catherine Kelly, a former Irish language nursery school teacher from Loughmacrory, a small village considered a republican heartland in Tyrone, joined Sinn Féin in 2009.

She was unsuccessful in her first election to represent Omagh Town in the 2014 local elections.

Through her work in the party, she met her husband, longtime party member Barry McColgan. They married in 2018.

McColgan was also forced to resign last week amid the ongoing controversy.

Kelly worked as political adviser to Barry McElduff before he was elected to the House of Commons, and was co-opted to his seat representing West Tyrone in Stormont in 2017.

Kelly was seen as an up and coming representative in the party, and was the party’s spokesperson in Stormont on children and young people.