Des Peelo, an accountant who represented Charlie Haughey and Bertie Ahern, was on the board of the Central Remedial Clinic for 24 years. He was also chairman of the organisation from 2002 to 2010.
He spoke to Seán O’Rourke this morning and told him the HSE has known that the charity’s money was used to pay its managers.
Peelo: “Every year since 2010 the HSE gets a list of the salaries – and they know about it. There is no secret, there is no sudden publication by the HSE – they have been fully on the record and agreed by the HSE.”
O’Rourke: “In writing?”
Peelo: “Yes, in writing.”
Sean O’Rourke: “So, the previous Chief Executive, for instance – the way the information has come out now – a salary of 106,000 which was topped-up by various other add-ons to the tune of 136,000.”
Peelo: “He was one of the nine, he’s now retired from the board – he’s now retired.”
O’Rourke: “But was the full amount paid previously by the HSE?”
Peelo: “Yes it was.”
Sean O’Rourke: “So they just subtracted the 136,000 and used substituted, alternative monies?”
Peelo: “He was just one of the nine, I stress he was of the nine – the HSE was fully aware of – now I don’t know what the position is over the past four years , but my understanding following a brief chat with the Chairman this morning is that the arrangement has continued. The real point I’m trying to make here Sean is that there’s nothing hidden about this – the HSE – and by the way I stress in meeting with the HSE in 2009 this is not by any means…”
Sean O’Rourke: “So they knew all along?”
Peelo: “Yes, it’s not a criticism of the HSE they sat down and…”
O’Rourke: “Who, who was at the meeting?”
Peelo: “Shall I name names – shall I name them?”
O’Rourke: “Yes, well I think that there’d be no harm if you were to name them – because presumably there’s a record of this?”
Peelo: “Yes, there is of course. The person I met but I stress now they operated completely professionally. I met Laverne McGuinness, who was a national director in primary community and continuing care. I met Liam Woods who was the head finance man and three other people, all of whom I think had a connection with disability. But I stress, I’m not making any criticisms of these people.”
Sean O’Rourke: “No but they were the ones who raised the questions, you went along and you explained these are…”
O’Rourke:“…contractual obligations that the CRC has.”
O’Rourke: “The understanding was ‘ok, we’re going to reduce our salary payment to get it in line with public sector requirements and what you do then, you’re going to top up the…”
Peelo: “No, it wasn’t a top-up, it was…”
Talk over each other.
O’Rourke: “Sorry you restored the balance.”
Peelo: “And, also, an important thing to add here, but I stress I’m not criticising these people, they were very good to us and we explained professionally you know what the problem was and what the difficulty was. We operate to high standards at the CRC, and always have.”
O’Rourke: “So was there any question of the HSE saying to you ‘look this is not acceptable, there have to be pay cuts, we’re going to discontinue funding you, or anything like that?”
Peelo: “In a way they were discontinuing the funding because on the 31st of December, of the 1st of January, we had to take on the obligation which we willingly did by the way. And there’s no difficulty about that. We willingly did it..and they can understand…look at it this way, it’s employment. We’re an independent organisation, we couldn’t literally just unilaterally, we would be sued for god knows what under employment legislation, by the people concerned. We would also, by the way, lose what is top management. The CRC is tops in what it does and always has been.”
O’Rourke: “But the current chief executive is being paid I think €106, there’s no top-up, that’s just…”
Talk over each other.
Peelo: “The arrangement with is, I’ll actually quote what was said in the letter that we wrote confirming the arrangements. I quoted, this is writing to the HSE confirming the arrangements of that meeting in June 2009. It was November 200, before either the whole thing could get kind of sorted but this is one, I’m just quoting one aspect from it. But I keep saying I have no criticism of them, they tried to help us and they always have in the HSE. We’re one of the people who speak well of them. It says here, as and when I wrote the letter: ‘As and when the management post concerned fall to be replaced through retirement or resignation, the salary of the incoming replacement will be discussed and agreed with the HSE’. In other words, this is a problem that would disappear with time. But I do stress, it was like the hospital consultants, there’s contractual obligations. If we walked away, we’d end up paying more money…which we had to find somewhere anyway. So all we were doing was addressing what was a problem. Very important here is, a bit like the Government, when you’re faced with difficult problems, you still have to make a decision. Directors must make a decision because..and faced with circumstances, that’s what we did and that’s what the HSE did and we think we did the right thing.”
O’Rourke: “So, is it your basic contention that there were no top-ups, there was simply a substitution of one kind of funding for salaries…”
O’Rourke: “By another?”
O’Rourke: “And the HSE was allowed, by virtue of the agreement, that you made with them, to reduce its contribution towards the salaries to the across-the-board level salaries in the health services.”
Peelo: “Yes, they were very good. We had this problem..”
O’Rourke: “Did they say ‘that’s OK with us’ and ‘this is how we’ll solve the problem’?”
O’Rourke: “Well that puts things, I think, in a somewhat different light. What about this amount though, of €14million in funds that you had at the end of 2011, again after you had left again I think as chairperson, and also that you got funding of €4million from the Lotto between 2010 and 2011, and some of this money then was used to prop up the pension scheme?”
Peelo: “No, again, a misnomer and a misdescription that was propping up the pension scheme. Because of what I mentioned about the CRC being an independent organisation is, as time went on, we were very similar in fact, the same problem faced the universities. Is that we had a mix of people working for the CRC, people who are on HSE-style pension arrangements, people who’d been with the CRC before the funding from the HSE came aboard in different ways, in different points. And I stress they were very good to us, is that we had this obligation that you could have two people working in the same, doing the same job. One is funded by the HSE pension scheme and one is not. Now we couldn’t, what I’d describe as, exclude and not honour agreements with these people. Now, in common with any other pension scheme in the country at the time, there was a defined benefit scheme, or the equivalent of and in conjunction with the Irish Pension’s Board, naturally the Irish Pension’s Board examined every scheme in the country, including ourselves. We have a very reputable firm of pension advisers and actuaries, always on board, they’re very reputable people. And we took their advice, as to the funding that was necessary. We had to. This funding arose over a period of time, not just in one foul swoop. And, by the way, my understanding today is, having spoken with the chairman is, that funding that went on, it didn’t provide any kind of top-ups, to use that word, we say there was no top-ups.”
O’Rourke: “But, in the meantime though, with this big pot of money. Is it still the case that the CRC is limiting or cutting back and reducing services to the people that benefit.”
Peelo: “Well I haven’t been there for four years but to understand is that the CRC doesn’t make the decision to cut back the services, the HSE does, it’s their decision, not ours. Because they decide on our service plan, what they expect and they have to see it in the context of the broader HSE, you know, per such. But could I come back to the €14million because that seems to be causing, you know, misunderstandings. This money is accumulated effectively out of our pools operation and arising from which is completely done properly, proper auditors, directors, everything like that and completely above board. But the CRC is unusual within the HSE, in so far as we use that, if there’s a deficit in the year, if we get a child in the door, we can’t let that child down, that’s not our ethos. Also then, the nature of what we do, being a high-tech organisation in many ways, including we run schools and some of our IT people have developed the most marvellous products for the educational needs and disability but this takes money. But we also then have to fund huge capital expenditures, for example just when I was retiring as chairman in 2010, we were about to open a whole new clinic down in Waterford, that had to be funded. They’re doing, there’s a school out in Clondalkin, Scoil na Cuatha, which requires now very extensive capital, I gather €9million is earmarked for that. We’ve daycare centres and also…”
O’Rourke: “Is that money for capital purposes?”
Peelo: “Oh, totally, that’s totally what that money is for.”
O’Rourke: “It’s all spoken for?”
Peelo: “Yeah, except from time to time we have to use the money to top up a deficit.”
O’Rourke: “What about calls then for the resignation of the board, of the CRC? We heard Ruairi Quinn on Drivetime last Friday.”
Peelo: “I didn’t hear him but what I’m reading in the papers… I don’t see why. No-one has done anything wrong. This is a marvellous organisation, that is run to the highest..the board of directors…”
O’Rourke: “And whatever about the public knowing, you say the HSE was fully informed about everything that was done with these monies?”
O’Rourke: “And what about the Department of Health? Did they know?”
Peelo: “Well our dealings wouldn’t be with the Department of Health, we deal with the HSE. In the past, we would have dealt with the, as was, I did, I’ve a long career there and I must admit that, speaking on a personal level, I’m outraged at the comments of Shane Ross and his suggestions that he has made about the improprieties and, by the way, just to lighten the moment, I’m, Shane Ross has included me as some kind of Fianna Fáil cabal, because of my friendship, obvious friendships with Bertie Ahern and Charlie Haughey. Just, personally, to get my dig in back at him, I have been a lifelong member of Fine Gael.”
O’Rourke: “Well, now, that’s a very interesting insight. But I suppose there are some names that have appeared from the past. But your point is the people in the Central Remedial Clinic have behaved openly and independently?”
O’Rourke: “And completely above board in their dealings with…”
Peelo: “There’s nothing secret.”
O’Rourke: “Yeah, but I mean, for instance, Tony O’Brien apparently, I’m just being reminded of it here told the Public Accounts Committee that the HSE had been in dispute with the CRC about how much would be paid to Paul Kiely, he’s the previous chief executive.”
O’Rourke: “Well I don’t know what’s happened the last four years. It could well be and that’s..but I’m not aware of it. Mind you that’s not being evasive, I’m just not aware of it.”
Listen to full interview here
“The arrangement entered into by CRC with its former CEO and other senior staff at the organisation was not at any stage agreed to or sanctioned by the HSE. All HSE-funded agencies are expected to comply with public pay policy.
“It came to the attention of the HSE in 2009 that the CEO and a number of other staff of the CRC were being paid substantially above comparable levels within the HSE or other public bodies.
“The HSE was concerned about these arrangements and as such held a meeting with the Chairman of CRC to address this issue.
“The HSE set out the appropriate salary for these posts in line with public pay scales and informed the CRC that these were the salary levels the organisation was required to comply with.
“For legal contractual reasons the agency stated that it could not change the contractual conditions of these staff at the time.
“The CRC gave a commitment that on the refilling of these posts in the future, rates would be brought in line with public sector pay rates.
“A new CEO was appointed in July 2013.
“The HSE contacted the agency again at this time and the agency has since confirmed to the HSE that the new CEO is now paid at the Local Health Manager scale, which starts at €86,000, and is the appropriate scale for this role in line with public sector pay rates.”
(Sam Boal/Photocall Ireland)