Róisín Shortall (Dublin North West, Labour)

The Labour Party motion before the House tonight is about basic accountability. It is about addressing low standards in high places, which have been the hallmark of Fianna Fáil's hold on power over the past decade.

The scandals exposed in FÁS and the failure of the Government to address them adequately, typifies all that is wrong with the Government's attitude to the public service. The FÁS saga has been characterised by significant failings on several fronts, namely, a scandalous waste of taxpayers' money, an absence of accountability, serious breaches of procurement rules, a disregard for proper corporate governance, a lack of oversight by the board, an all too-cosy relationship with the supervising Department, a back-scratching culture arising from close personal and political connections between the executive, the board, the Department and the Ministers, and a disgraceful indulgence by senior executives in lavish entertainment and first class travel for themselves, their wives, their ministerial masters and various other hangers-on.

What makes the revelations in FÁS so difficult to take is the context in which they are set. There are 424,000 people signing on the live register at present. For many, notably those in the construction and retail sectors, there is unlikely to be much work for the foreseeable future. In that context, they need a training agency that is fit for purpose. They need an agency that is focused on identifying where they should upskill, and an agency that provides relevant and high quality training. The scandals hanging over FÁS for the past 18 months have deflected attention from this basic goal of the organisation. To some extent they have masked the dubious quality of many FÁS courses for the newly unemployed, the lack of co-ordination of services in certain areas and the short-term nature of much of the training courses offered. This is where the focus of the organisation should be, and the absence of this focus is probably the Minister's greatest failing.

The scandals are also set in the context of the call for wage restraint across the economy, but especially in the public sector. How can the Government possibly hope to convince any public servant to accept pay restraint when public servants witness the massive waste and see a senior executive with a dubious track record walk away with a €1.1 million handshake and a free car to boot — especially when that golden handshake was overseen and sanctioned by the very Ministers who are advocating pay cuts? How can the Minister possibly think people will accept that? At a time when Government Ministers are talking about cutting basic welfare payments to save money, how can this pay-out be justified? Just a few weeks before the golden handshake the Government told us it could not afford a cervical cancer vaccine for young girls.

For workers, taxpayers and citizens, this is contemptuous. Taken together with the bailout of the banks, the bailout of reckless property developers and the ongoing excesses in the Office of the Ceann Comhairle, it sends a clear message that Government Ministers and others who hold senior public positions care more about themselves and their cronies than the public they are meant to serve. The profligate attitude to public money so prevalent at a senior level in FÁS has tarnished the entire public service. The failure of Ministers to deal with this wastefulness has also completely undermined the moral authority of Government and has played into the hands of those commentators who question the very principle of public service.

I now turn to the severance package agreed with Mr. Rody Molloy. There are several aspects to this agreement that remain clouded in mystery. In the first instance, it is unclear under what legal instrument the top-up arrangements were made. At the meeting of the Committee of Public Accounts on 24 September 2009, the Secretary General of the Department of Enterprise, Trade and Employment stated that the top-up was provided for under section 6(3) of the Labour Services Act 1987, yet Government Ministers now insist it was made under guidelines issued by the Department of Finance. If it were made under these guidelines, did anybody in the Department read them before they concluded the negotiations?

The regulations show quite clearly that increased lump sum payments and enhanced pension entitlement for the departing executive of a semi-State body are only permissible in the case of the non-renewal of a contract or where a decision has been made to terminate a CEO's employment before the termination of the contract. The guidelines specifically state, "It is not therefore appropriate to make such payments where the initiative for the termination of a contract comes from the CEO concerned." However, both the Taoiseach and the Tánaiste are on the record as stating that Mr. Molloy resigned voluntarily. The Taoiseach told the Dáil on 26 November 2008 that Mr. Molloy "tendered his resignation to the board of that organisation", adding later that "he tendered his resignation of his own volition...". The statement issued by the Tánaiste on the previous day was headlined, "Tánaiste confirms resignation of FÁS Director General". Equally, the Secretary General of the Department of Enterprise, Trade and Employment, Mr. Sean Gorman, referred consistently to the departure of Mr. Molloy as a resignation during his recent contribution to the Committee of Public Accounts.

If Mr. Molloy resigned of his own volition, there was no basis for the huge financial package he was awarded at the expense of the Irish taxpayer, and the Tánaiste acted ultra vires. If Mr. Molloy did not resign of his own volition, the Dáil has been misled in a most serious way by the Taoiseach. There is a direct conflict between the accounts of Mr. Molloy's departure given to the Dáil in November 2008 and claims now being made by the Government. The only way to clarify this is for the Government to publish the text of the written agreement concluded with Mr. Molloy at that time. I call on the Tánaiste to do that now.

We also need clarity as to the role played by the Minister for Finance in approving the Molloy deal. The Minister has ducked and dodged on this issue, avoiding giving a direct answer at all costs. It was incumbent on the Minister for Finance, before he gave his consent to the deal, to be satisfied that both section 7 of the Superannuation and Pensions Act 1963 and his own Department's guidelines were adhered to. The Minister and his Department would also have required evidence of the status of Mr. Molloy's departure — if it was a retirement or a removal from office.

When the Department of Finance and the Minister heard the Taoiseach inform the House that Mr. Molloy "tendered his resignation of his own volition," they would have been aware that, prima facie, severance payments were impermissible under the 1963 Act and, further, were inappropriate and in total and express violation of the clear terms of their own guidelines. The Minister for Finance needs to account for his Department's total disregard for the law on this issue and this conscious and deliberate misuse of taxpayers' money. As regards the Minister's role, he appears to acknowledge he was generally aware of the negotiations; he does not say he sanctioned and approved the deal such as would amount to consent for the purposes of the Act. The Minister must also clarify the tax implications of the enhanced lump sum payment made to Mr. Molloy as well as possible benefit-in-kind implications of the famous company car.

The question also remains as to whether there was a legal threat and how that impacted on the generosity of the agreed package. The Secretary General of the Department of Enterprise, Trade and Employment stated, "The threat of the courts was hanging over us." He went on to state. "It was also made clear that, if the individual believed that he was not being treated reasonably, he would reserve his right to take court action." Last week, however, the Taoiseach was quoted as saying, "The situation as I understand it is that the overall package was offered on the basis that it would be the agreed way by which he would leave the organisation quickly...the question of the threatened legal action, that's a matter...which could have emerged subsequently if there wasn't an agreement." Either there was or was not a legal threat. Either a legal threat was or was not made clear to the Government. If there was no legal threat, why the generous severance package? If there was a legal threat, why was legal advice not sought?

Reports suggest Mr. Molloy was granted his car as part of his resignation package. As we learned recently, a FÁS car going missing is not exactly a new phenomenon. This is all the more reason to ask if Mr. Molloy's FÁS car was part of his severance package. If it was part of his package, who approved it and on what basis? If there was no legal basis for it, can we have the car back, please?

The problems at FÁS do not begin and end with Rody Molloy. There is also a question of wider political accountability for the problems that have beset the organisation for several years. The former Ministers for Enterprise, Trade and Employment, Deputies Martin and Harney, must take their share of the blame for the excesses and absence of adequate controls in the organisation in the recent past. They, too, practised their share of cronyism.

In failing to respond to the problems, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, in particular, has a number of questions to answer. Her actions so far bear all the hallmarks of a Minister scurrying for cover rather than tackling the serious issues in a meaningful way. Why did the Tánaiste not take action on FÁS much sooner? The first indications of serious problems at FÁS came from a Comptroller and Auditor General report as far back as May 2008. That report identified a number of breaches of procurement rules, mismanagement of public money, overspending and a failure to achieve value for money. What did the Tánaiste do about the report? It seems she did little or nothing. She dithered and delayed and did nothing until the second Comptroller and Auditor General's report was published last month, at which point renewed media interest forced her into paying some attention to the problems.

As far back as February this year, the Committee of Public Accounts made several recommendations on foot of the first report of the Comptroller and Auditor General. None of these recommendations has been implemented to date. Later revelations in the Sunday Independent about the extravagant spending by FÁS executives brought the full media spotlight on the problem. Rather than sack anyone, the Tánaiste allowed the situation to drift and refused to take charge of the agency which had, for some time, been shown to be wasting huge amounts of taxpayers' money. Eventually, following public pressure she did an extraordinarily generous deal with the man who felt his only option was to resign. The Tánaiste should have consulted the Attorney General for his advice and specifically to have him clarify what rights and entitlements, if any, Mr. Molloy had, given that he was resigning and was neither dismissed nor was he retiring. This legal advice is available free of charge from the Office of the Attorney General. If the Tánaiste had bothered to seek it, she would have been told that Mr. Molloy did not have any rights since he had tendered his resignation.

Clearly, the Tánaiste hoped that by agreeing a sweetheart deal with Mr. Molloy, he would go away quietly and the whole FÁS debacle would fizzle out. Not only did she behave recklessly in throwing away €1.1 million of taxpayers' money and act ultra vires, but she set a very dangerous precedent for other cases in that she has provided what amounts to a general, blanket acknowledgement that resigning chief executive officers are entitled to certain rights and entitlements, irrespective of the true facts and circumstances surrounding their departure. The Tánaiste needs to make a statement regarding the role of the FÁS board in respect of the severance payment regarding the code of practice for the governance of State bodies. It is precisely this kind of action by Ministers which gives the public service a bad name and is seen to be condoning low standards in high places. In any other jurisdiction, the Tánaiste would no longer be in Cabinet.

Today, the Tánaiste published the Labour Services (Amendment) Bill 2009. Yet again, however, she has not gone far enough. From an initial reading, it appears the Minister will retain greater control of who is appointed to the board, perpetuating the cronyism that has riddled the FÁS organisation for many years. This makes matters worse. When the heat dies down FÁS will inevitably return to being the play thing of the Fianna Fáil Party.

See this speech in context