Bertie’s board appointments
14 December, 2009
Shane Ross’s story last month about goings-on at Iarnrod Eireann and CIE was interesting on a number of fronts (see “CIE’s story of secrecy and evasion“). Ross got his hands on an internal and highly-sensitive report on various malpractices and control failures which cost the company (i.e. the taxpayers) millions of Euros. He wrote:
Next, the final Baker Tilly report travelled from the secretive steering committee to the CIE and Iarnrod Eireann audit committees in summer 2008. It was dynamite.
Down on the CIE audit committee it met some really interesting people. Unusually, for six months, the audit committee consisted of just two members. Such a tiny key committee must be another world record for a company with total spending of €1.2bn. Two audit committee vacancies remained unfilled at a critical time.
The most interesting person the report bumped into — when it finally left the steering committee for the CIE audit committee — was a guy called Paul Kiely. He was chairman of this committee of two. Paul Kiely is the most powerful figure in CIE, second only to overall boss, Dr Lynch. He is chairman of three crucial committees — audit, remuneration and finance.
But who is the real Paul Kiely? …… Paul Kiely is not any old accountant. Paul Kiely is a very powerful bloke. CIE’s Paul Kiely is a master of figures. In his autobiography, Bertie Ahern describes Paul as “one of my tallymen”. In Shane Coleman and Michael Clifford’s brilliant book Bertie Ahern and the Drumcondra Mafia, Paul is one of Bertie’s inner circle. Whatever his knowledge of railways, Paul the tallyman landed a plum job in CIE….
….. Paul’s audit committee of two was in no hurry to hand over the top-secret report to the full board of CIE. Indeed, according to Dr Lynch, the CIE audit committee and the Irish Rail equivalent took “four, five, six months” to release it to the full boards. Why? Because according to him they were “digesting” the report. My guess is that the report was causing more than indigestion.
There is a book (or at least a series of articles) to be written about the impact on our economy and our reputation and our governance standards by the practice of Irish ministers (for which read Fianna Fáil ministers) of making less than optimal appointments to State boards of directors. I choose my words carefully. Paul Kiely is no doubt an intelligent and capable man, and well able to discharge his duties as a director of any State board. This is surely evidenced, for instance, by the fact that he is CEO of the Central Remedial Clinic. However, I have no doubt that his allegiance to Fianna Fáil and Bertie Ahern was a more important factor than any other quality in his propulsion to the board of CIE, and that there were other potential appointees who were even more qualified, and who were not appointed.
Our hero Bertie Ahern is of course known to have accepted money from certain other friends and businessmen whom he appointed to state boards. In his attempted defence of his actions, he famously said that “…. I didn’t appoint them to state boards because they gave me money, I appointed them to state boards because they were me friends”.
There you have it in a nutshell. Bertie can’t see the problem with any of this. To be a state appointee to a board of directors, the primary qualification was often not ability or probity or experience; it was sufficient that you were a pal of Bertie’s.
I previously wrote a post about the strange composition of the board of the ESB. And I referred therein to an excellent article in the Sunday Business Post called “O’Rourke appointed eight from constituency” which is well worth reading.
And what of the über-developer Bernard McNamara? I read in the Irish Independent:
Long before [McNamara] became its part-owner, he was a regular Friday night fixture in the Shelbourne’s Horseshoe Bar. There, the sociable former county councillor and aspiring property developer found that his Fianna Fail connections did him no harm at all. It also helped that his old party appointed him to several state boards, including those of Great Southern Hotels, the National Roads Authority and the National Gallery, over the years.
The apparent need on the part of Fianna Fáil to appoint its own supporters to whatever position happens to be vacant suggests (to an amateur psychologist at any rate) an inferiority complex, or that they may have something to hide. Most likely both.
I look forward to writing about this subject again. There is so much material, it’s almost too easy.