PAC Meeting | June 11, 2015

PRELUDE [Extract]
Chairman [John McGuinness TD]:  Item 3A.4 is correspondence, dated 5 June 2015, from Mr. Jim Breslin, Secretary General of the Department of Heath, regarding an investigation into abuse of people with disabilities in a foster home in the south east. 

It is to be noted and published . . .  There are HSE issues regarding the foster home that was being investigated. I express my absolute dismay that the gardaí who have come back to me directly have said that there may not be prosecutions owing to insufficient evidence and so on. I find it absolutely appalling and it needs to be discussed again by the committee.

In the course of the replies from the HSE there are issues about those who were employed to investigate and the committee needs to revisit the matter. The correspondence mentions that the HSE spends €40 million on legal fees and we need to investigate that.
 
Deputy John Deasy: The committee has dealt with the foster home issue. We need to remember that the Garda investigated all this in the early 1990s and no prosecutions resulted. The fear I and other committee members had was that it would be repeated. 

For that reason there was an imperative on Government to take the review or investigation process very seriously. That was what the committee was asking the Government to do. I believe the Government is about to make a definitive decision not only on the course of action the Department will take, but also on the policy issues that arise from the contents of the report we will submit to it. 

Perhaps we should hold off for a week or so. I always had the fear, which I expressed, as, I believe, did the Chairman, that it was going to be very difficult for the Garda because of the timeline involved and because most of the individuals who were affected were non-verbal. Some of the people involved have died since these issues arose. However, we need to wait a little longer because those decisions are being made right now.
 
Chairman: That is why I am saying we will revisit this batch of correspondence, which covers a considerable amount of ground.

PAC Meeting | May 14, 2015

PRELUDE [Extract]
Chairman [John McGuinness TD]: We were dealing with correspondence from the HSE which is a follow-up from the 23 April 2015 meeting. There are a number of other outstanding matters that the executive has to deal with but this correspondence answers some of the questions raised. 

In the context of the HSE reflecting on our meeting I suggest that we forward a transcript of that meeting to the Garda Commissioner in light of the issues raised separately, relating to the home... and other matters. We are told the Garda is investigating. It is extremely lax on the part of the HSE and the Garda that this matter is not being dealt with in a more open way. 

On one side there are approximately 30 young adults who have been affected by what happened there, but I get no sense from the HSE that there is an urgency about this or any desire to resolve it.

The position is likewise in respect of the investigation into the procurement process. That has not been rightly explained to us either. Perhaps the transcript may be of help to the Garda.

A protected disclosure was made, under legislation, on more than one occasion from more than one person, but nothing has happened since. The Garda Commissioner needs to understand that we have had our hearing, that protected disclosures have been made and that we would have expected a far greater urgency as a result of that meeting. 

The care of these 30 or more individuals is a matter of concern to us. Given all the reports undertaken into incidents within the HSE one wonders whether the executive is fit for purpose at all. Perhaps the transcripts should also go to the Minister out of concern for the issues raised.

Deputy John Deasy: There is a good deal in this. As you have said, one of the issues the committee dealt with has to do with procurement and tendering. The Comptroller and Auditor General has carried out reports on the matter. 

Across the board when it comes to the HSE it is clear that the executive is a bad actor, frankly, when it comes to tendering within public procurement guidelines. When it comes to the issue that you have just raised and what the committee has dealt with in recent weeks, the appropriateness of hiring former HSE employees to do reports for the HSE on issues as disturbing as those we have been dealing with is questionable.

When Mr. O'Brien was before the committee and questioned with regard to the process whereby the tender was awarded, he pointed to some regulations that needed to be followed. When he was questioned about whether they had been followed in that particular case and for the particular contract in question, it was clear that they had not because the procurement office said it had no communication with the HSE on the matter. 

In hindsight the answer he gave was disingenuous. We have done a great deal of work when it comes to this issue as well as the tendering of contracts by the HSE and the potential conflicts of interest that arise when former employees of the HSE get these contracts.

We should put a formal proposal from the committee to the Minister to change this arrangement. Most of the work has already been done by the committee. It would be simple to do. The issues we have raised in the committee have not been raised in any other forum in the Oireachtas and therefore it is reasonable for us to do that.

 . . . The Comptroller and Auditor General has done much work on procurement and HSE tendering. I will preface my comments by saying that one would wonder about value for money as far as the taxpayer is concerned when it comes to a contract being given to a former employee and individuals who were known within the organisation and who had been there for decades but it is far beyond that, frankly. The conflicts of interest that arise in these issues are incredibly disturbing and far supersede that consideration.

The premise is in place. You have done a great deal of work in this area, Chairman, as has the Comptroller and Auditor General. Perhaps you could feed into any report that the committee might do. That would be useful. Rather than simply point out the position, we should come up with a solution. 

I think we should come up with a clear determination, as a committee, about what should not happen when it comes to the issuing of a contract by the HSE. This should include an absolute bar on individuals who are former employees of the HSE getting these contracts. I believe that step will need to be considered by the Minister and we should make that recommendation and consideration.

Mr. Seamus McCarthy [C&AG]: The only comment I would make in that regard is that there may be a problem in law in respect of making a restriction completely debaring people who have legitimately set up in business from tendering for work. 

The complication in this case was that it was people, who had previously worked for or who had been previously engaged with the HSE, who were appointed without any competition.

Deputy John Deasy: If the Government is prepared to pass a law that prevents politicians or former politicians lobbying their former colleagues, I do not see a problem with the Government passing a law preventing former employees of the HSE getting contracts as it applies to cases like these. Anything can be achieved if enough thought and consideration is given to it. I understand Mr. McCarthy's point, but if the will is there and the potential conflicts are understood well enough by the Department, it can probably do that too.

Seamus McCarthy: I do not want to argue for or against the proposition the Deputy is making because it comes into a policy area. I am just saying there may be a restriction in terms of the contestability of the issue and excluding certain categories. However, it is a matter that can be looked into.

Chairman: We can bring forward a draft report that we will present to the Minister in a short format. We can then discuss it and members can decide on recommendations, such as the one Deputy Deasy is putting forward. 

It is clear, in the context of all these reports, that there is a crisis in the management of the HSE. No political system or Minister could manage the HSE the way it is. It will appear before the Joint Committee on Health and Children this morning. 

The stonewalling that goes on when one is trying to sort out a problem is just incredible. It is unacceptable and somebody will have to do something about it. My concern is that while we are discussing this and while we had our meeting with the HSE and are now going to bring forward this short report with recommendations, there are individuals out there who are suffering because of it and nobody seems to mind. 

The system seems to be conditioned to a high level of acceptance of this stuff going on. It is not acceptable. That is what members are saying in the context of trying to achieve balance and a change. Somebody has to change the system in the interest of justice and fair play. It is all one side at the moment and no one seems to be paying a bit of notice to any of the public hearings that are going on. 

That is not acceptable. We will have this short report as soon as possible. We will put it before the members and then we can decide what is necessary.

PAC Meeting | May 14, 2015

PRELUDE [Extract]
Chairman: [John McGuinness TD]: . . . a number of reports were given to us by a whistleblower relating to Cork Insitute of Technology. I know this is a different matter but it is still part of the third level sector. 

Then there were reports on Waterford Institute of Technology, there were problems in regard to the amalgamation of Carlow and Waterford ITs and Tralee and Cork ITs. Within what was said at those meetings, there were serious issues which have not been addressed in an adequate way. 

We should not just remind the Department of Education and Skills but, if necessary, bring forward the date of our hearing with it if we do not get the appropriate replies. Extremely serious allegations were made but it seems to me that the Department has not taken them seriously.

In the context of the amalgamation of institutes at both Carlow and Waterford and Tralee and Cork, significant moneys are involved and the Department has not clarified the matter yet the amalgamations continue apace. 

Again, it is a question of having the information before us, being able to make a decision and not allowing a process to continue that will further cloud the financial circumstances of the colleges involved so that we will never get to the end of the matter. 

We should express our concern directly to the Department about these matters that have been raised. If we do not receive a comprehensive reply to the queries raised by members and whistleblowers, then we should have an earlier than planned meeting with the Department, the Higher Education Authority and representatives from the different colleges concerned. 

Deputies could deal with the issues raised in the correspondence supplied by the Department at that meeting. The allegations are far too serious for this committee to ignore.

Deputy John Deasy: We should wait until Mr. Michael Kelly finishes his report. It might be more useful to have him in when we meet the HEA and the Department. I have spoken to him and he has agreed to meet the Committee of Public Accounts once he has finalised his report.  

My understanding is that he is taking a look at some of the issues you raised as well. He has had to wait until the two governing bodies in Waterford and Carlow met and until they have been put together before he issues his report. 

There has been a delay because of that and I believe that is reasonable. However, if we are asking in the Higher Education Authority with the Department of Education and Skills then I believe it would be useful to bring him in and discuss his report and findings as well, because he is examining the issues you have raised.

Chairman [John McGuinness]: I have no difficulty with that, Deputy Deasy, save to say that what Deputy Costello has raised and what I have raised are almost separate from the particular issue of Waterford and Carlow ITs.

Deputy John Deasy: Yes, that's grand.

Chairman: It is a broader issue of governance and reporting between the colleges and the Department, and, in turn, reporting between the Department, the HEA and the Committee of Public Accounts. It is obvious that we are not getting the information. It is clear to me that there is almost an attempt not to give us full information, and that is not acceptable.

Deputy John Deasy: That is fair enough. He is probably the one person who has been tasked with independently reviewing the governance matters that you are talking about. Therefore, if we are going to have a meeting on the matter it might be useful to have him before the committee to talk about his findings when it comes to the governance and the stream of information between the Department, the Committee of Public Accounts and the HEA.

PAC Meeting | March 26, 2015

[Extract]
Chairman (Deputy John McGuinness): No. 3B.9 is correspondence, dated Wednesday, 11 March 2015, from Mr. Aidan O’Driscoll, Secretary General, Department of Agriculture, Food and the Marine, concerning vacant properties at fishery harbour centres. 

We are now in a position to report on the fishery harbour centres... With regard to the individuals in business whom we met at Howth there are significant questions regarding a number of matters that we need to deal with in the context of our report. 

While that may be the response of the Department it certainly falls way short of what is required with regard to the response that the business people in that locality are asking for. 

From looking at the different sites there the response falls far short of what a commercial operator might do in terms of the development of Howth. 

There are lots of issues still to be dealt with and we can deal with these issues in the context of the report and raise the fact that there are many other issues at ports around the country of which we are aware... The State has a lot to learn from the commercial world which it seems to continue to ignore.

Members will have input in the report as a result of our visit that day. I ask that we would pay particular attention to it because it is probably the best example I have seen to date of poor practice and poor commercial insights or poor commercial knowledge on the part of the State.

Deputy John Deasy: I agree with the Chairman in so far as Howth is concerned and it is hard not to agree. The situation might not be as bad with regard to the other State ports. 

I did some checking with regard to Dunmore East where there are some vacant buildings and they are looking for leaseholds. There is a difference of opinion among people who actually use the port as to the utilisation of certain buildings within the port but certainly it would not be as bad as Howth.

I am not familiar with the situation in the other four State ports but I spoke to the Minister about this after we had visited Howth. I think it is fair to say that he has an open mind with regard to what the committee might report on. 

My question is as to where we are going with this report. Are we going to suggest that another State agency be involved in these properties to assist the Department when it comes to the utilisation of the vacant buildings? 

Sometimes if one takes an adversarial attitude with the Department, one will not get anywhere, but there is probably an opportunity to get something done here. That is the attitude that was registered. What direction does the committee plan to take with regard to the buildings?

Deputy Joe Costello:  ...Five properties in Howth not currently in use are subject to legal, operational or planning considerations. I suggest that we request a breakdown of the category of consideration, whether legal, operational or planning and the nature of the difficulty. Such further material would be very useful before we make recommendations as to how to move forward.

Chairman: In reply to Deputy Deasy's question, we visited Howth and we have had a hearing with the Department. We will set out what we found and we will make recommendations arising from the input of members. As with other reports we will set out our findings followed by our recommendations. We will have a draft report in a couple of weeks with some recommendations. The members can then decide on the tone and extent of the report.

Deputy John Deasy: From my cursory conversations with the Minister, Deputy Coveney, I think there is probably a willingness to deal with it. There is probably an agreement that, in many cases, some of these buildings are vacant for too long and the processes involved are too lengthy. If we were to collaborate with the Department I think some progress would be made.

Chairman: The same applies to Killybegs. If there was a collaborative effort and a willingness to co-operate, there might not be the conflicts between the Department and individuals. 

Perhaps the Minister should reconsider the action being taken by the Department in relation to that particular case. We should make that suggestion to the Minister, in view of his willingness, as mentioned by Deputy Deasy. I think we should test his willingness.

PAC Meeting | March 26, 2015

[Extract]
Chairman: I think we should discuss No. 4, lapses in controls at Waterford Institute of Technology, WIT. The issues raised there had to do also with Carlow, Cork and Tralee. We should put it on the agenda for our next meeting.

Deputy John Deasy: There has been significant movement in regard to Carlow, Waterford, the HEA and education. I understand the President of Waterford IT has left and is now working with the Higher Education Authority. 

Mr. Michael Kelly who is carrying out a report on the merger between Waterford and Carlow ITs is probably finalising that work. Would it be useful to invite Mr. Kelly to present to committee after he makes his report?

Chairman: I understand the report has to go to the Minister before it is available to us. We have already agreed to bring back the Department and the HEA and we can ask them to invite in Mr. Kelly to discuss his report. 

Then, we could perhaps bring into that discussion the report here relating to the WIT and the reports on the other institutes. We are still awaiting the report from the Department on the Vocational Education Committees, which is before the Minister.

Deputy John Deasy: It would be useful to have Mr. Kelly come before us. I believe the hearing we had with the HEA and the Department of Education and Skills woke some people up and that some issues were resolved after that hearing. 

We should continue with that to bring this to a conclusion, if possible. Having Mr. Kelly appear would be useful in that regard.

Chairman: We do not have a date set for that meeting. If we can find out when the report will be available after the Minister completes her examination of it, we can set an early date for that hearing. 

PAC Meeting | March 5, 2015

Deputy John Deasy: I refer to the note we received in regard to a different issue. Does the Chairman want to bring it up now or will he wait?

Chairman (Deputy John McGuinness): I will bring it up in the context of this issue. The documents were released yesterday. They could have been released in error or for any reason but the history of the HSE and the Committee of Public Accounts has been that we have often had hearings and while people from the HSE have been with us, documents would be released to the newspapers. 

There is more than one example of that. Now that this issue is in the public domain, we need to understand why it happened. Some Senators and other people had this document yesterday but we still have not been provided with it out of courtesy in order that we would know what is in it. Luckily enough, we were meeting today and the Comptroller and Auditor General explained it.

I want to tie what has happened into a note members received this morning. Members received the note this morning simply because a big document was presented to me and I gave it to the clerk, about which I informed the committee a number of weeks ago. This document shows where contracts were awarded without any tender. 

They were awarded to former employees of the HSE who are now acting outside of the HSE in an independent business. In more than one instance, these contracts were awarded without a competitive tender and in one case at least a report was prepared at a cost of €98,374.23. That report was reviewed by another company at a cost of €58,216.41 to date. This is all happening between HSE and companies outside of the HSE which happen to employ former employees of the HSE.  

It is alleged in the document that in one instance the Health Service Executive is recommending former staff to section 39 bodies where investigations are needed, at a cost of €1,000 per day. In light of the information that emerged in the public domain yesterday and the allegations made in the note circulated by the clerk to the committee, which is a summary of the information in the larger document, we should have representatives of the HSE come before the committee sooner rather than later.

Deputy John Deasy: The most worrying element of this information is the potential conflict of interest that arises. Having recently dealt with two or three cases involving sexual or physical abuse of people in care, I find it very worrying that someone who may be contracted by the HSE could potentially have a conflict of interest. 

One of the tasks of the committee will be to ascertain how widespread is the practice of not tendering contracts and employing former HSE staff to do various jobs and carry out investigations.

Chairman: On the basis of members’ comments, I will ask the representatives of the HSE to appear before the committee sooner rather than later. The clerk will contact the HSE to arrange a meeting. It may be necessary to arrange it outside the dates set out in our work programme.

Deputy John Deasy: How many of the contracts awarded by the HSE in the past ten years went to former staff? That is the simple question we should put to the HSE in the meantime. We could then take the matter from there. That is an easy question that can be answered immediately.

Chairman: We will proceed on the basis that the sooner we can have representatives of the HSE before us, the better.

Deputy John Deasy: We need to find out if certain contracts were tendered.

PAC Meeting | March 5, 2015

[Extract]
Clerk to the Committee: Arising from Chairman's request, I contacted the London office [of HSBC] and I got a phone call late yesterday evening when I came back from Belfast to say that the reason the banks' representatives appeared before the UK Public Accounts Committee is that its headquarters is in the UK. 

It did not mean any disrespect to this committee but it does not have any information. That is the gist of the information they gave me. The letter they sent says they are not in possession of records with regard to this matter.

Chairman (Deputy John McGuinness): Is this from the Dublin office?

Clerk to the Committee: Yes, and the bank is headquartered in London. That is why the bank attended the Public Accounts Committee in London.

Deputy John Deasy: That is a flimsy excuse to give for not coming in. From what the Chairman said, we can take up the offer to attend. Are they willing to come in?

Chairman: The letter says that they are willing and that they would send representatives but they do not know how helpful their representatives could be. If the individual in London was helpful to the Public Accounts Committee in the UK, surely they can provide information via him that is of interest here. 

If it is the wish of members, we can get back to HSBC in Dublin and in the headquarters and suggest they send to the meeting of the PAC someone who has some briefing material.

Deputy John Deasy: We should ask them in and take them up on the offer to come in. Let us not beat around the bush. We can ask them questions correctly. If the representative comes back and says that he does not have the information, we will make our minds up then.

Chairman: They may be separate entities within HSBC, but before getting into that, we should write to Mr. Duffy again and to the individual who appeared before the Public Accounts Committee in the UK and ask if someone can be briefed who can assist us with our efforts with the Revenue Commissioners. That would be helpful. A representative should be here.

[Later]
Chairman: As there is no other business, we will agree our meeting for Thursday, 12 March at which we will have presentations from the Revenue Commissioners and HSBC. I will ask the clerk to report to committee members on the availability of the delegate from HSBC and on what we can expect, so that members are briefed before the meeting.

...I will ask the clerk to ensure members are aware of the response from the HSBC and the extent of the information the delegate will have, so that we are clear in regard to what information can be gleaned through questions.

In regard to the HSE, we should get representatives in as soon as possible. If that is to happen next week, we will sit on Tuesday. The matter is in the public domain and because the HSE caused it to happen, we need an explanation. They will be told we are available to meet them on Tuesday or Wednesday.

PAC Meeting | Feb 26, 2015

[Extract]
Deputy John Deasy: Based on what has been in the news in the past few months and on what Revenue has sent us, is there new information arising from what has appeared in the media recently or does Revenue say they knew this back in 2010 and acted? As I understand it, 27 cases have been completed out of 33 and six are ongoing.

Chairman (Deputy John McGuinness): We have the information from Revenue and we are going to go through the figures with them. We will be asking about the overall take, how it happened and so on.

Deputy John Deasy: I have no problem with doing that but I have a word of caution. If six cases are still ongoing and involve criminal prosecutions, the final figure will not be known. What they say in the committee will have to be open-ended in that regard.

Deputy Joe Costello: The week before last there was a police raid on HSBC offices in Switzerland relating to offshore accounts and various documents were taken. Can we get an update on that? It is still a live issue but it would be interesting to know whether any new documents have come into the public domain.

Chairman: We will check that point with Revenue and what we do will depend on their reply.

Deputy John Deasy: Is there any intention of asking a representative from HSBC to come before the committee? The head of HMRC, the UK equivalent of the Revenue Commissioners, testified in Westminster yesterday along with the CEO of HSBC.

Chairman: We have different terms of reference. I would love to extend an invitation to someone from HSBC to attend and if they were willing to do so, I would love to hear what they had to say. Our remit, though, is to work directly with Revenue in this case. It might be worthwhile to write to HSBC to ask if they want to be present at the meeting.

Deputy John Deasy: If the chairman and CEO showed up in Westminster, I think they would find it very hard to refuse to show up here.

Chairman: We will extend an invitation to them.

PAC Meeting | Feb 12, 2015

Chairman (Deputy John McGuinness): Turning to the work programme, Deputy  McDonald has raised a question regarding the Revenue Commissioners and the recent controversy.

Deputy Mary Lou McDonald: I spoke to you, Chairman, and the Clerk of the Committee, about the revelations regarding HSBC and 350 deposit holders with deposits of in excess of €3 billion. We understand that the Revenue Commissioners have recovered €4.55 million by way of tax settlement. 

I am anxious that we contact the Revenue Commissioners to ask them for a detailed briefing on these matters and that we then invite them to appear before the committee so we can examine the matters with them. I wish to make that formal proposal.

Deputy Joe Costello:  I support what Deputy McDonald has proposed. It is a major scandal that over €3 billion in the accounts of over 350 Irish citizens would be in a bank of this nature, which is very questionable in the manner in which it operates. 

A similar situation has transpired in Britain, where over 1,000 British citizens were in the same situation. HM Revenue and Customs have collected approximately £135 million in that country. The small amount that appears to have been collected is causing major issues.

The Revenue Commissioners would have had access to the information almost five years ago and have operated in private in all the investigations that have taken place. We do not know the extent of the investigations. 

We know the extent of the findings, which is that 22 account holders produced €4.5 million. That is from 350 clients and over €3 billion in cash. One is the subject of a criminal investigation. I understand there is also only one criminal investigation in the United Kingdom. In addition, this bank, HSBC, has over 500 subsidiaries which are largely in tax havens. Has that been chased up?

There are major questions to be answered. I agree that we should get a full and frank report on the matter and that we invite the Revenue Commissioners to appear before the committee on this issue.

Deputy John Deasy: First, I do not believe there is anything wrong with having an account in HSBC. Second, before we ask the Revenue Commissioners to appear before the committee we should ask them for the report and then make our decision. 

The Revenue Commissioners have proven to be quite adept at dealing with tax evasion and tax avoidance over the past 20 years. At least we should give them the opportunity to explain the issues. It might not be the case that there is tax avoidance or evasion in some of these cases or that criminality is involved. 

At the very least we should allow them to put together a briefing note for the committee before we make a decision about a public hearing.

Chairman: That is the proposal, that we seek the information and make a decision arising from that. They have to make clear to us the number of account holders, the number investigated by the Revenue Commissioners for suspicion of tax evasion, the number who have been prosecuted, the settlements and the amount involved, including penalties, the resources that were dedicated to examine HSBC and include a note on the way in which the information was obtained in the first place. 

All of that is relevant information that should be sought by the committee, because there is a need to clarify matters for the general public who have simply read the reports in the newspapers. It says something about the work of public accounts that the Public Accounts Committee in the UK is meeting to discuss this issue and it has staff from HM Revenue and Customs appearing before it.

I agree with seeking the report. However, when the news broke initially there might have been a letter from this committee or, perhaps, it should have been a proactive approach by the Revenue Commissioners to say, "This is what we have done. We know you might be concerned about it", and to set the case out before us. 

When the Clerk of the Committee writes to the Revenue Commissioners he should say that we need this information as soon as possible. The information has been compiled over the last number of years, although it has only become public now, so it should be to hand. They should send us a comprehensive report on the matter as soon as possible. 

If it could be done within a week, which I believe it can, we could deal with it at our meeting next Thursday and decide after that.