Fallout as Siteserv inquiry 'could take eight years'

Source: independent.ie Nov 13, 2015

Denis O'Brien

Kevin Doyle

A suggestion in a draft interim report in the Commission of Investigation into IBRC that the probe could take up to eight years has been met with astonishment.

Bodies who are party to the inquiry are prohibited by law from discussing the contents of the interim report before its publication, but a well-placed source said: "Getting proper engagement from people will be impossible if it drags on for that long."

The Irish Independent revealed yesterday that Mr Justice Brian Creagan, who is the sole member of the investigation, wants Taoiseach Enda Kenny to assign a second judge to help him study 38 IBRC sales, each of which involved write-offs of more than €10m.

His interim report is also understood to say that it will take "several years" before any detailed report can be produced. The judge is believed to have given a timeframe of seven to eight years to get through the workload.

The original deadline set by the Government when the commission was set up was the end of this year.

"The investigation is looking at transactions that took a few months to complete, so it's hard to comprehend that it would take years," said a source.

Controversy surrounding the sale of contracting firm Siteserv to Denis O'Brien's Millington, with a write-down of €119m, sparked calls for the commission to be set up last summer.

However, it is understood that the interim report, which is expected to be sent to the Taoiseach next week, does not mention Siteserv specifically.

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Siteserv not yet contacted under remit of IBRC inquiry

Cabinet to consider emergency legislation to overcome legal obstacle hampering commission

The Commission of Inquiry into IBRC is investigating disposals by the bank - which was the former Anglo Irish Bank - involving write-downs of €10 million or more - including the sale of Siteserv. Image: The Irish Times

Harry McGee Irish Times

The Commission of Inquiry into IBRC has yet to make contact with Siteserv, the sale of which by the former Anglo Irish Bank forms an important part of the IBRC investigation.

The Cabinet is expected to consider rushing emergency legislation through the Dáil this week to overcome a legal obstacle that has effectively ground to a halt the work of the Commission of Investigation into IBRC.

However, the disclosure that Siteserv has still to be contacted will throw fresh doubt on the commission completing its work before the general election in February or March.

The commission, set up last summer, is investigating disposals by IBRC - the former Anglo Irish Bank - involving write-downs of €10 million or more.

They include the sale of Siteserv to a company controlled by businessman Denis O’Brien, a disposal which involved a write-down of €119 million.

The commission is also investigating a claim made in the Dáil by Social Democrats co-leader Catherine Murphy that preferential interest rates were given to some large borrowers. It was due to publish its final report by the end of December.

Confidentiality

In a short statement last night, Siteserv said that four months after it was established in July, the commission “has made no contact whatsoever with Siteserv or its shareholders. From the outset, the company had expressed its willingness to co-operate fully with the Commission”.

Taoiseach Enda Kenny confirmed on Sunday he had received a letter from Judge Brian Cregan, the chair of the Commission of Investigation.

Judge Cregan informed the Government that an issue surrounding his powers in determining on issues of confidentiality and privilege had meant he “was not in a position to proceed” with his investigation of any relevant transaction where “write-offs” occurred.

The issue, it is believed, relates to the 2004 Act setting up Commissions of Investigation. It is understood the commission did not have the powers to make a determination as to whether or not confidential documents in the possession of IBRC liquidators KPMG should be distributed to parties other than the commission. The liquidators have claimed legal and banking privilege over the documents.

Extension

The statement also refers to a request for an extension of time, which suggests that it will not be in a position to report by the deadline of the end of December 2015, set out by its terms of reference.

Ms Murphy and Fianna Fáil finance spokesman Michael McGrath both said the report would not be published until well after the general election. In several interviews, Ms Murphy also warned of the possibility of a collapse of the investigation.

“There is a real possibility of it collapsing, she said, adding: “That will cause absolute outrage. The people will not be taken for fools on this. It is absolutely essential that this information is known.”

The Taoiseach’s statement said he contacted Attorney General Maire Whelan on Friday on the implications of the determination. He asked her to advise him on the legal options available to ensure the investigation can by competed effectively and quickly.

Both Mr Kenny and Minister for Transport Paschal Donohoe, in separate interviews, raised the possibility of emergency legislation being rushed through the Dáil.

Sinn Féin finance spokesman Pearse Doherty said: “For [the inquiry] to fall flat on its face just before a general election will quiet rightly raise suspicion.”

Source: Irish Times, Mon 9, 2015

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Top appointment at Irish Water does not suggest thirst for public service reform

Opinion: It’s simple – if you’ve been in charge during a major screw-up you don’t get promoted

Click to Play.  Top appointment at Irish Water does not suggest thirst for public service reform. Video: Darragh Bambrick

Fintan O'Toole
Tues Jan, 2014

The State lacks many things but a sense of humour is not one of them. Just as the head of Irish Water John Tierney was dropping the news that he had spent €50 million on consultants, Brendan Howlin was advertising for submissions to a consultation process on accountability for senior public servants, to “help build trust among citizens that effective and well-informed choices are being made as to how taxpayers’ money is spent”. The comic timing is exquisite.

So here’s my submission to the consultation process: if there were accountability for senior public officials, John Tierney would never have been appointed as managing director of Irish Water. It’s not a complicated rule: if you are in charge of a major screw-up, you shouldn’t get promoted. John Tierney was Dublin city manager from 2006 until last April. On his watch, we had one of the most egregious failures in the recent history of Irish local government: the almighty debacle of the Poolbeg incinerator. The handling of key parts of this project, involving close to €100 million, has been damned by the local government audit service (LGAS) and by the European Commission.

No detailed budgets
The LGAS report on spending by Dublin City Council for 2011 includes a special appendix on the Poolbeg project. It raises very serious concerns about the controls that were exercised in the spending of €80 million of public money (the cost has since risen to over €95 million): “it is evident that the financial management, as part of project management by the Environment and Engineering Department for this project, has been weak. There needed to be evidence of much more comprehensive oversight in monitoring and controlling expenditure. No proper classification of expenditure on an invoice basis was available to account for monies spent on this project at the initial audit stage (April 2012) . . . The lack of financial reports . . . indicated that the financial control procedures in place were not adequate for such a project. There is no evidence of monitoring of detailed budgets or financial forecasts tied into project schedules or that detailed monthly/quarterly reports were examined to control expenditure apart from client representative summary reports and cumulative cost centre reports presented to Dublin City Council Management. It is also noted that the Project Executive Board did not meet on a formal basis and therefore no minutes of meetings were retained.” To summarise: with €80 million of our money at stake, no adequate monitoring of detailed budgets and no minutes of board meetings.

Unlawful spend
One aspect of this lax control is especially relevant to Irish Water: a ballooning and unlawful spend on consultants. The project became a bonanza for a company called RPS Ireland. It was hired in 2001 to provide “client representative” and PR services, long before John Tierney became city manager. But the gold rush continued under his reign. RPS’s contracts in 2001 were for €8.32 million. By the end of 2011, it had been paid €28.44 million, which subsequently rose to €32 million. This includes, for example, €686,344 for “miscellaneous”, €1.9 million for “expenses” and €3 million for “public relations”.

This spending wasn’t just badly monitored, it was unlawful. By 2005, shortly before John Tierney took over, RPS was already receiving over 50 per cent more money than it had contracted for. When this happens, procurement guidelines demand that the contract has to be readvertised. This was not done. Effectively, RPS was awarded an additional contract worth €24 million without any public tendering process.

The European Commission, acting on a complaint from two citizens, Joe McCarthy and Valerie Jennings, found that this created an “illegal situation”.

The building of a replacement terminal for a firm that had to move to accommodate the incinerator was contracted at €11.9 million but the council under John Tierney paid €22 million. But the deal that RPS got is breathtaking in one specific respect: RPS, as a major beneficiary of the project, was also contracted to manage the project’s finances. It was in charge of managing its own expenditure. Even more wonderfully, it seems that one of the things we paid RPS for was defending the awarding of its own unadvertised contracts. Tierney told the LGAS that: “complaints to the Competition Authority and the EU Commission have all required the experience of the Client Representative [RPS] to prepare the responses.”

Damning report
The damning LGAS report was published in November 2012. John Tierney was appointed head of Irish Water in January 2013. Two of his key appointments for his new team at Irish Water had previously worked for RPS. Irish Water’s head of asset management Jerry Grant was managing director of RPS until August 2012. Its head of corporate services Elizabeth Arnett held the same position at RPS until December 2012. John Tierney has stressed that they were appointed through an “open recruitment” process.

Source: Irish Times Jan 14, 2014

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