Mr. Tim Kenneally:

Can I focus in on a particular point? I know Mr. O'Brien made reference in his submission to the fact that we believed some things were improperly done and information withheld. There are two key memos which we have analysed in relation to this thing. I have copied to hand if it would help the members. Ours views are based on what is in these two memos and how the Department acting on one particular day. Mr. O'Brien mentioned the flurry of activity on 9 December. There was a flurry of activity to clear everything in order that the award could be paid before the new pay cuts came into place. The Secretary General instructed his assistant secretary to issue a statement to the Minister to that effect. You would think that would be the end of it but no way. There were two memos written and the first was written on the morning of 10 December by an assistant secretary, RIP, and cleared the way to finally pay senior health service managers. The memo was written on the instruction of the Secretary General and a key point within referred to an agreement reached with the Department of Finance days previously.

However, shortly afterwards on that morning and completely out of the blue, a new memo was typed up by the same assistant secretary. It was the first time that the prospect was introduced of the award being blocked or stymied by the FEMPI legislation. FEMPI was not legislation at the time but there was the Bill of the same name. On the first memo, somebody wrote the word "draft", as if to make the first memo obsolete, and the one that was carrying the decisions was written on 9 December. I believe that draft could have been written in 2015 when a freedom of information request had been lodged. It was written subsequently when the Department realised that there were two different memos on file.

This out-of-the-blue memo, which was drafted by the same assistant secretary within minutes or an hour of the first one, has some serious questions to be asked of it. Why would the assistant secretary in the Department of Health, partly off his own bat, decide to take a completely new and different approach to what had been agreed as late as that morning, without any indication whatever or any reason for doing so? Why was it deemed necessary to type up a new memo rather than amending the draft, as would have been the case?

The second memo stymied the payment of the award that have been agreed the previous day. The typed date on it is 2010 but somebody changed it, in handwriting, to 2009. I have some concerns about the authenticity of that memo. I believe that the word “draft” was written on it in 2015 when the freedom of information request was lodged. The handwritten draft was also uninitiated. Why did the assistant secretary omit the key point in the first memo, which was that this had been discussed and agreed with the Department of Finance. That was completely omitted from the new memo. How did the assistant secretary come to the conclusion and inform his Minister that the matter now fell to be dealt with under the proposed FEMPI legislation, when the stated aim and that of his colleagues was to pay the award before the legislation came into effect?

The assistant secretary said in one of his items of correspondence that the FEMPI Bill was published on 10 December, on the same day. In actual fact, the history of the Bill was that it had its first reading on 8 December. There are many anomalies. There is no indication as to how the assistant secretary came to the conclusion that the FEMPI Bill would affect the payment of the award. He sent his memo to the Minister and to his Secretary General saying that the matter now fell to be dealt with under the FEMPI Bill. I am wondering how a matter can be dealt with under a Bill when it has not been enacted.

Later that same day, he wrote to the assistant secretary in the Department of Finance - by the way the very same secretary who had agreed two days previously to pay the award - asking if the award could be dealt with under the FEMPI Bill. He tells his Minister that it has to be dealt with under the FEMPI Bill, and later on in the day, he is asking the secretary in the Department of Finance if it could be dealt with under that Bill. This does not make sense to me.

There is a note in one of the memos, which states that the Minister for Health agreed that it could be referred to the Department of Finance. It would be very unusual if it was an absolute fact that it was covered because the Minister would say that it has to be referred to the Department of Finance. She said that it could be referred to the Department of Finance, and that it was optional. It did not seem to dawn on all of these senior civil servants until that morning that the FEMPI Bill could be an issue for them.

Out of the blue, the only thing which could affect payment of the award was the FEMPI Bill. As legislators, the committee here would know more than I would on such matters. Is it legal and proper to apply the penal terms of legislation before it is actually passed in respect of doing something, and then to retrospectively apply the terms of the legislation when it is enacted as regards an issue which had been dealt with prior to the legislation coming into effect? This certainly does not make sense to me but, as legislators, the committee would clearly know the answer to that question.

The other thing that happened on 10 December, as well as the assistant secretary in the Department of Health writing to his counterpart in the Department of Finance asking could this matter be dealt with under the FEMPI Bill, was that assistant secretary in the Department of Finance, in a subsequent letter on 7 January, said that he did not expect an early conclusion to the matter. He was right because it was not actually dealt with for a further five months.

If it was so urgent on 9 December, why was it sat on until 28 or 29 May? If it is in order to do this afterwards, I believe it would be worth looking at the memos because we are quoting exactly what the Department’s own actions are.

The one thing that is glaringly obvious from looking at the memos, and one thing that is absent, apart from one mention that the Secretary General was at a meeting that day with the Minister where it was discussed; is that there is not the slightest indication of his influence, input or anything to the process. This is a process that was adopted on one foot and, within hours and minutes, had changed tack completely.

Mr. O’Brien has covered some of these issues but he mentioned the Secretary General acting as judge and jury in the matter. He had decided that the Government award, the Department-sanctioned and approved award, would not be paid, unless he was happy to do so. This is a fairly strong statement to make. He then decided to unilaterally reduce the amount of the award. Not alone did he not listen to his own senior officials, including even the memo writer, were urging him to pay the award that he had agreed himself the previous night on 9 December, he did listen to the HSE CEO who advocated that the award should be paid, he did not listen to the national director of HR, nor did he abide by his own views, which he stated repeatedly were that it would be unfair and would be a double hit not to pay this award.

My final comment is that something prompted a change of heart within minutes or hours on the morning of 10 December and the only thing that I can think of is that there was a headline in the Irish Independent, which stated, “Pay cuts do Harney a favour ...”. While this money was fully funded and confirmed by the Department at the time, this is one of the reasons the Secretary General said to hold on and that if we play smart, and use the FEMPI Bill, we can avoid paying this award.

If the then Government wanted this award to be covered by the FEMPI legislation, all it had to do was to wait until 1 January when this legislation was in place.

Overall, what they did raises serious questions of probity and correctness. Their memos are contradictory; it is amazing that things could be written on memos or drafts, or that memos were produced subsequently to reflect decisions which were made on the day.