Róisín Shortall (Dublin North West, Labour)

-----covering a situation where the issue of expenditure of public money arises. I contend that those regulations and guidelines were utterly ignored in the rush to gag Mr. Molloy. I am not alone in saying that because many others have made that claim.

I now wish to talk about the actual process that took place behind the scenes when it was decided that something had to be done about Mr. Molloy. We know he made demands. They were very high demands, given that this man had presided over an organisation about which there were serious questions of accountability. In spite of that, however, he was always a very spirited man and to the very end he demanded entitlements and payments. He sought two years' salary as a "thank you" for walking away from an organisation on which he had inflicted serious damage.

Officials from the Department of Enterprise, Trade and Employment sat down with officials from the Department of Finance and decided what they were going to do about the situation, including the severance package. Perhaps the Taoiseach is denying it now, but everybody knew at that time that what they were doing was governed by a number of Acts and regulations, including the Principal Act establishing FÁS in 1997, under which the Minister for Enterprise, Trade and Employment, with the consent of the Minister for Finance, has discretion in setting superannuation. The Ministers are also governed by the Pensions Acts and, in particular, the guidelines issued by the Department of Finance in 1987 setting down explicitly in a three-page document the terms under which a severance package deal can be done with a departing chief executive officer of a public sector agency. We have finally received that document from the Government.

When this issue hit the headlines recently, the Taoiseach said the guidelines were adhered to and everything was above board. As soon as we read the guidelines, it was evident that the deal was certainly not above board and the guidelines had been breached. They run to ten paragraphs. Paragraph 3 refers to additional years and the top-up available if a contract is terminated and states:

Application of the foregoing terms would be strictly conditional on completion of contract, unless the Board, in agreement with the appropriate Minister and the Minister for Finance, decides to terminate the CEO's employment before the termination of the contract. It is not therefore appropriate to make such payments where the initiative for the termination of a contract comes from the CEO concerned.

This is important because the initiative in this case came from the chief executive officer concerned. We know this principally because the Taoiseach stated this in the House. He sang Mr. Molloy's praises saying he knew him well, he had given good service and he had left of his own volition. Every reference made by the Taoiseach, the Minister for Finance and the Tánaiste subsequently was to this being a voluntary retirement and Mr. Molloy leaving of his own volition.

At the meeting between the two relevant Departments, officials decided sanction for this package was required from the Department of Finance. Officials from the Department of Enterprise, Trade and Employment wrote to the Department of Finance asking whether the letter they had drafted was appropriate for requesting the sanction. The draft letter was sent to three different officials in the Department of Finance for their opinion. There is a great deal of covering up going on and a great deal of smoke and mirrors on the part of Ministers and it is important that the officials at the centre of this are vindicated in the context of the advice they gave. In correspondence between the three officials, each of them drew attention to the fact that on the basis of media reports, they knew Mr. Molloy had resigned of his own volition and, therefore, the guidelines did not apply. The recommendation was that sanction should be refused because the guidelines did not apply. They also pointed out an exceptional case could be made only on foot of a Government decision because paragraph 9 of the Department of Finance guidelines explicitly precludes an exceptional case being made. The advice from three officials with expertise and experience in this area in the Department of Finance was that Government approval was required to sanction the €1.2 million package for Mr. Molloy.

The correspondence available in the public domain ends there and we need to know what happened after that. Was a request made for Government approval of the package? The indications are that there was no request because the Minister for the Environment, Heritage and Local Government denied any knowledge of it. One has to make the assumption that Government approval was not requested or granted. If that was the advice from three senior officials in the Department of Finance, why was such approval not sought? What was the motivation in not seeking approval and adhering to the law? The only conclusion I can draw for the failure to seek Government approval, which is in contravention of the guidelines, is that it was to keep this grubby deal secret from the Green Party members of Cabinet. The Green Party Ministers may have been caught napping on a number of occasions but alarm bells would have rung if a proposal had come before the Cabinet to do a sweetheart deal with an old friend of Fianna Fáil's who was leaving under a serious cloud.

We still live in a democracy and that means Ministers who are required to adhere to the law should come into the House to answer these charges. The three most senior members of Government did not adhere to the guidelines, as required, in reaching agreement on a severance package for a chief executive officer of a State agency. I regret that the Minister is not present but there is a requirement for the Ministers involved to clarify the position and they need to come to the House to make a statement on this. Last week during the debate on the Labour Party motion on FÁS in Private Members' time, I raised all the legal and technical questions that need to be answered. We were not given answers to those questions. If time permitted, I could quote all the advice given by the senior Department of Finance officials, all of whom pointed in the same direction. A Government decision was required. It was not sought, ergo , this deal is not in compliance with the guidelines.

I refer to another aspect of the meeting between the officials of the two Departments. A letter was sent to the Department of Finance by a senior official in the Department of Enterprise, Trade and Employment, which outlined the terms of the package it was proposed to give to Mr. Molloy, including a full pension and a full lump, with four and a half years added on to each, and six months' salary. The Taoiseach has been wriggling and ducking and diving on this issue over the past few weeks. He said the package was broadly in line with what Mr. Molloy would have been entitled to if he had been sacked. He was not sacked and that is the critical issue. Department of Finance officials pointed out that the proposal to give Mr. Molloy six months' salary was in breach of the guidelines even if he had been sacked and his contract terminated because the guidelines only provide for a maximum of three months' salary. Even if his contract had been terminated, Government approval would still have been required to sanction the payment of six months' salary. The Government is, therefore, in breach of the guidelines on two counts.

The letter, dated November 2008, from the Department of Enterprise, Trade and Employment outlining the terms of the proposed package states, "Please note also that the board of FÁS has given the Director General ownership of the car which he has been using as Director General". I cannot understand that sentence. How did this arise? The board did not meet after Mr. Molloy was interviewed on "Today with Pat Kenny" until the middle of December. The former chairman of the board, Mr. Peter McLoone, stated the package, including the car, was presented to the board as a fait accompli. The deal had been agreed and it was just a matter of the board rubber-stamping it. It had been done and dusted and the board, as a matter of course, was giving its approval to it. Where did that come from? This car was the property of FÁS. Nobody else other than the board had a right to make a decision about what should happen to that car. How is it that a senior official in the Department of Enterprise, Trade and Employment should put in writing to the Department of Finance: "Please note also that the Board of FÁS has given the Director General ownership of the car ..." There are serious questions to be answered in that regard. I hope the Minister of State or the senior Minister, the Tánaiste, would clarify that point as well. Three questions of serious accountability arise in respect of the most senior people in Cabinet and their role in regard to this debacle and those questions demand early answers from those three Ministers.

The legislation falls a long way short of what the Committee of Public Accounts sought. The Committee of Public Accounts recommended that it ended the practice of alternating the chair between the social partners and nomination by the social partners of members of the board. What we wanted was a slimmed down, more focused and effective board but we did not want it to be packed with Fianna Fáil cumann members. That is precisely the power the Minister is now proposing to take on herself. The problem with FÁS is that it has been a sinecure of Fianna Fáil. It has been packed with Fianna Fáil supporters and in many ways the culture was created that one must dig with the right foot to get anywhere in FÁS. The proposals in this legislation will make FÁS less accountable, not more accountable. It is a step backwards.

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