Rehab paid Frank Flannery €409,000 from 2007-2013 for consultancy workThursday 10 April 2014 21.57
Former Rehab CEO Frank Flannery, or his firm Laragh Consulting, received over €409,000 from Rehab from 2007-2013 for consultancy services.
Rehab Director of Finance Keith Poole said he did not commission the work and it would have been commissioned by outgoing CEO Angela Kerins and two other employees.
He said while preparing the 2012 annual accounts, he had checked the company's registration office and found that Laragh Consulting had been dissolved.
He informed Mr Flannery that he would have to be invoiced in his own name.
Mr Poole said it seems to have been for international representation for the organisation, for lobbying on issues such as the Charitable Lottery Fund and assisting with other items.
Sinn Féin deputy leader Mary Lou McDonald has put it to Rehab representatives that Complete Eco Solutions had not been set up until after a board meeting approving its use.
She pointed out that Ms Kerins raised the suggestion of the use of her brother's company to the board on 29 November 2009.
Deputy McDonald said Complete Eco Solutions was not set up until December 2009.
Ms McDonald asked representatives if any of them knew the company was set up two weeks after that meeting.
Rehab representatives told the committee that they were unaware of this.
"So, that's a problem", she said.
The Sinn Féin TD asked if it was odd that "Ms Kerins made a representation in respect of an organisation that has not been formed".
Asked where she got the information, Ms McDonald said it was "from public records".
Angela Kerins declared an interest in Complete Eco Solutions Nov 2009. The company wasn't established till December 2009. Strange or what?— Mary Lou McDonald (@MaryLouMcDonald) April 10, 2014
Ms McDonald said Mr Flannery and Ms Kerins are "sheltering behind" data protection legislation.
She said they had effectively "gagged" the organisation and were preventing other Rehab executives from disclosing information to the PAC.
Speaking to RTÉ's News At One, she said the PAC may need to take legal advice about the options available to it in relation to disclosure of further information from Ms Kerins and Mr Flannery.
Ms McDonald said the reality is that Rehab is a recipient of significant State funding and so has absolute responsibility to account for how those monies are used.
She said the Rehab Board now accepted it was remiss in carrying out some of its functions.
She said it would be unfortunate, but perhaps necessary, to compel the pair to come before the committee.
In opening statements, Declan Doyle, Chairman of the Remuneration Committee, said Ms Kerins' solicitor has written to the committee strictly forbidding any public access to details about her salary.
Mr Flannery has also said he will not allow his pay to be released to PAC.
The committee received letters yesterday from solicitors representing Ms Kerins and Mr Flannery.
In a letter from her solicitors yesterday, Ms Kerins cited ill health for her non-attendance.
Her solicitors also said it was unfair that she had been subjected to questioning for seven hours with one short break at the committee's last hearing.
Her legal representatives also clarified that she was not correct when she told the committee that her salary had not been reduced this year.
Opening the hearing, committee chairman John McGuinness wished Ms Kerins a speedy recovery as she is suffering from ill-health but he said the committee takes issue with some of the points in her letter.
He said that some of the issues raised in Mr Flannery's letter were not accurate.
He said that one issue refers to Mr Flannery not receiving a letter of invitation to the PAC yet he was in Leinster House on the day Rehab representatives were before the PAC.
He said that it was made perfectly clear that he was asked to attend.
Addressing the committee, Rehab Chairman Brian Kerr said that the organisation wrote to both Mr Flannery and Ms Kerins and asked them to attend today's meeting but neither said they could. He said that they cannot be compelled to attend.
He said the reputation of Rehab has been seriously damaged. He said that he recognises that Rehab's response to PAC for information has been "inadequate".
He said that the board has not exercised strict and appropriate oversight and the priority now is to administer a programme of change, rebuild staff morale. He spoke of the importance of the need to rebuild trust with the public.
Mr Kerr said that changes will be made to ensure the full confidence of those who use Rehab's services and the public.
He said that success can be achieved and there can be a new dawn for Rehab.
Last night in a letter to Ms Kerins' solicitors, the committee said that on her full recovery it hoped she would be in a position to assist them if required.
In its response to Mr Flannery, the committee described the reasons for his non-attendance as nothing short of contemptible.
Ross queries strength of board
Independent TD Shane Ross said that the Irish corporate experience was boards being dominated by one person with disastrous results. He asked if the mistakes made by Rehab was because it was a weak board that had been dominated by one person.
Mr Kerr said it could be seen that way - that they had been weak. He said he thought the board could have been stronger. I think it will be stronger, we are going in the right direction.
Mr Doyle said it was solvent organisation, it was in many ways a success story in these difficult times - he said that the only reason why they were all here was because of the people who depend on Rehab.
Mr Ross said he hadn't asked the question - Mr Doyle said no, the board hadn't been dominated, it was quite questioning but in many ways it could have tougher.
Hugh Governy said that he had only experience of one chairman who may have made errors of judgement but had been an outstanding ambassador for Rehab, and for the charity sector both here and abroad.
He said that some members of the board are more vocal than others, but his honest view was that one of the board's problems was not a dominant chief executive.
Mr Poole declined to comment. When pushed about Angela Kerins approach, he said that a lot of good stuff had been done during her tenure.
Describing her as "a forceful individual" he said that was a great asset for the organisation.
Liam Hogan said she had been extremely successful.
Mr Ross said that this was a funny definition of success.
Document details senior staff pay
A document released by Rehab to the Public Accounts Committee shows that seven senior members of staff earn between €104,000 and €174,000.
The Director of Training, Employment and Education earns €174,000, while the Director of Finance has a salary of €152,667.
The Director of Health and Social Care Services earns €150,000, while the HR Director earns €141,552.
The Director of Fundraising and Lotteries has a salary of €130,000, the Director of Public Affairs, Communications and IT also earns €130,000, while the Director of Policy and Service compliance is paid €104,000.
Rehab also told the PAC that Ms Kerins threatened Rehab with legal action if any further details about her salary are disclosed.