For several weeks starting in late September Rody Molloy’s pension led news reports. I wish to return to it as I’ve some new questions to raise following weeks of fairly frustrating research.
This is a lengthy post. The next series of paragraphs are all context to the whole Rody Molloy pension issue. You may find being reminded of the details useful, if so, read on. If not scroll down and click ‘Continued’ and it’ll bring right into the main subject…
Readers may remember Mr Molloy finished in his role at Fás in strange circumstances following a prolonged period where various questions regarding his excessive expenses, his handling of internal procedures and his general management abilities, were raised.
For a period in September 2009 there was confusion about whether he resigned or had been removed from his position. This would later become important as it would have effected his pension entitlements.
On September 24 the Public Accounts Committee was told he had received a generous pension enhancement valued at more than €1m. Peter McCloone and Sean Gorman spoke of how they brokered deal on behalf of Fás with Mr Molloy, part of which involved him agreeing to resign. Questions were immediately asked about how the deal was negotiated. “There was no question of pals or anything like that”, Gorman told the PAC. They admitted no legal advice had been taken.
As the media pounded on the stunning admission that no legal advice had been sought, ministers desperately attempted to pass the buck. It became clear that both the minister for enterprise, then Mary Coughlan, and minister for finance, Brian Lenihan would have been required to sign-off on the deal. The Green Party quickly distanced themselves from the story, obviously uncomfortable with the deal and how it came about. Mary Coughlan ordered a review into the circumstances surrounding the deal.
Two days after the PAC meeting An Taoiseach Brian Cowen was pushed on the issue. He admitted that Mr Molloy did not threaten legal action during discussions. He said Mr Molloy acted “honourably” by resigning and claimed the enhanced pension fell within departmental guidelines. Prior to this ,in an attempt to excuse the the cost of the deal, ministers had insinuated that Mr Molloy would have initiated a lengthy legal action which would have cost the taxpayer far more than the €1m golden handshake. Nobody (me included) bar one letter writer, seemed to notice that even if this had been the case Fas could seemingly have used the Employment Appeals Tribunal or Rights Commissioner, both of which are inexpensive as they require no legal teams. Even if Mr Molloy had won his case there the maximum award would have been two years salary – about €440,000 – much less than the million euro deal signed-off by Government.
We were the first to question whether Mr Molloy’s pension did in fact fall within the guidelines cited by An Taoiseach when we published them in full on this website. It wasn’t until two weeks later that the print media returned to this element. Several more reports in various media outlets continued to state unchallenged that the deal was within departmental guidelines. Some two weeks later Shane Phelan of The Irish Independent destroyed that myth with a frontpage story about how even senior civil servants in the department didn’t believe the enhanced pension fell within the guidelines. The enhancements should only have been available as part of a contract termination by the Government but Mr Molloy had resigned, as we’d noted earlier on this website.
The new revelations, contained in emails and correspondence seen by the Irish Independent, will come as a major embarrassment to Taoiseach Brian Cowen.
He insisted just weeks ago that all proper guidelines had been followed.
[…] The memos show at least three different Department of Finance officials warned prior to the deal being approved that it fell outside of what was allowed in the guidelines.
In comments made on September 25, he also said formal cabinet approval was not needed for the deal, even though it is now known there was clear advice from within the department that the matter should be referred to the Government.
When asked about the issue three days after the Taoiseach’s comments, Tanaiste Mary Coughlan made no reference to the department guidelines and instead said the legal basis for the deal was covered by the Labour Services Act.
However, none of the extensive departmental correspondence seen by the Irish Independent refers to this act. In fact, notes from negotiations show that those involved were only concerned about two main issues — the terms of Mr Molloy’s contract and what was allowable under the department guidelines.
Guidelines are essentially plain-English versions of legislation.
As part of the review initiated by Mary Coughlan legal advice was sought from the attorney general and thereafter no alteration was made to the pension deal.
Continue reading “Revisiting Rody Molloy's golden handshake”