Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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2. To ask the Minister for Health if he will set out in full the circumstances in which he appointed a founder and 50% shareholder in a private health consultancy firm as chairperson of the West-North West Hospitals Group, which subsequently awarded a contract to said firm; if the potential conflict of interest was known to him when he appointed the person and, if not, when he became aware of same; the date on which he became aware of the breach of the financial procedures of his Department in the awarding of the contract; the further steps he has taken since the resignation of the person concerned; if he has considered his own position; and if he will make a statement on the matter. [27109/14]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I seek a detailed explanation from the Minister for Health on the matter of the appointment of Mr. Noel Daly to the position of chairperson of the West-North West Hospitals Group, despite the clear conflict of interest created by his role and interest in D & F Health Partnership, a private company in which he was then a 50% stakeholder.

James Reilly (Dublin North, Fine Gael)
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In order to address concerns about persistent underperformance which had arisen in a number of hospitals in Galway-Roscommon, a CEO was appointed to the Galway-Roscommon Hospitals Group which was subsequently extended to become the West-North West Hospital Group in January 2012 and Mr. Daly was appointed chair of the non-executive board on 29 May 2012.

My Department and the HSE first became aware that an issue had arisen in the commissioning of the review of maternity services on behalf of the West-North West Hospitals Group from a media query on 19 May 2014. The director general of the HSE informed my Department on that day that he had requested a team from the HSE's internal audit unit to conduct a report on the matter. In the course of its investigations the HSE internal audit team was assured by the CEO that he had made the decision to source D & F Health Partnership based on its suitability for the project and that the chair had no role in this. The investigation found that while Mr. Daly had disclosed to the board that he was a former employee and former director of D & F Health Partnership, he had failed to disclose that he continued to hold a 50% shareholding in the company. The investigation also established that the procurement of services had not been in accordance with HSE national financial regulations.

On 22 May the findings of the audit were presented to the director general of the HSE who informed my Department and wrote to both Mr. Daly and the CEO to make it clear that further breaches of procurement rules would be unacceptable and that Mr. Daly should have made it clear to board members that he retained a 50% shareholding in the company concerned. The letter to the chair of the board also requested that the chair take immediate steps to ensure a register of members' interests was established and maintained at the hospital group in order that potential conflicts of interest would be avoided. It is important that anyone serving on the board of a public body make a full disclosure of his or her interests in order that potential conflicts of interest can be avoided. Mr. Daly did not want his reputation or that of the West-North West Hospitals Group to be compromised. I shared these concerns and accepted Mr. Daly's resignation.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I have a number of questions. Did the Minister know Mr. Daly personally and, if so, for how long? Did he know in June 2012 when he appointed Mr. Daly to the position of chairperson of the West-North West Hospitals Group that he had been the founder, director and joint owner of D & F Health Partnership, with a 50% stake in it? If he did know, why did he appoint him? If he did not know, does he agree that it begs the question of the basis on which he is appointing people to these positions if he does not know the very basic facts about them. He has indicated that Mr. Daly did not bring his position to the attention of the board. Did he not bring to the Minister's attention his other interests? Did Mr. Daly not see a conflict of interest? Does the Minister recall when appointing the new boards to the hospitals groups that he cited the need for an assessment of potential conflicts of interest of potential board members? Does he accept that there was a clear conflict of interest in this appointment?

James Reilly (Dublin North, Fine Gael)
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The last question is astonishing in some respects. Is the Deputy suggesting anybody with business interests is not fit to be chair of a board? I do not accept this. It may be the Sinn Féin way and the Sinn Féin's Ireland of the future, but it certainly is not the Government's view that people involved in private enterprise, with a tremendous skills set in terms of organisational and leadership skills, should be excluded from membership or becoming chairs of boards. I reject this out of hand.

The Deputy asked me if I had known Mr. Daly before I appointed him. I did not know him and do not believe I had ever met him before then. Perhaps I had met him, but I certainly did not know him or of him. However, I was told about his curriculum vitae and the fact that he had been a great servant of County Roscommon, having been an excellent footballer who had represented his county, and had knowledge of the health service and that he would be an ideal candidate to be chair of a board. I was particularly taken by the idea that, being from County Roscommon, we would send a very clear message that the hospital groups would be representative of the hospitals in the entire group, not just the large university hospital at the centre of them.

I regret that Mr. Daly did not declare his shareholding in the company. I think he was concerned about his reputation being damaged and that of the group and that is why he stood down and I accepted his resignation.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Does the Minister accept that his reputation is somewhat in question as a result of this appointment? Make no mistake about it, his effort to digress in regard to Sinn Féin's position vis-à-visappointments is the nonsense he usually employs. What is the status of the HSE's internal investigation? What was the nature of the breach of the HSE's national financial regulations in the award of the tender to D & F Health Partnership, as the Minister understands it? Will he confirm that Mr. Daly's D & F Health Partnership was paid €20,000, plus VAT, for its report? What is the status of the report prepared by D & F Health Partnership which recommended cuts to vital maternity services at Portiuncula Hospital in Ballinasloe and Letterkenny General Hospital? Does the Minister recognise, despite his blustering comments, that, in this instance, there most certainly was a breach, a conflict of interest and a failure on his part and that of Mr. Daly and system, if the Minister is dependent on others to advise and inform him properly and adequately before approving said appointments?

James Reilly (Dublin North, Fine Gael)
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Bluster and nonsense are more particular to the Deputy and his style, but I have made it very clear what happened, that Mr. Daly stood down and that I regret the fact that he did not disclose his shareholding to the board. The Deputy asked me a range of specific questions which I am not in a position to answer, but if he writes to me for further details, I will have no issue with giving him the full details of the procurement issue. Normally, in the procurement of smaller contracts of the nature we are talking about three tenders are required, but it is my understanding three tenders were not received, which is why the CEO of the hospital received the rebuke he did from the head of the HSE.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I would have thought within the time available-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Question No. 3 is in the name of Deputy Thomas Pringle.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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-----that the Minister would have the answers with him, rather than inviting me to write to him.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I have called Deputy Thomas Pringle.

James Reilly (Dublin North, Fine Gael)
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More fiction from Sinn Féin.