THE former chairman of Bord na Mona, Mr Brendan Halligan, has admitted that managing director, Dr Eddie O'Connor's pay deal breached Government guidelines. And he said that, in hindsight, he should have told other board members of the arrangement he made with Dr O'Connor regarding his pay.

Mr Halligan told the committee that he had approved a £15,000 annual "public affairs" budget with Dr O'Connor, for which receipts did not have to be produced. He also said he was unaware that a cheque for regular amounts would be written, payable to cash and an employee would then go to a local bank, cash it and return with the money for Dr O'Connor.

Mr Halligan agreed with committee members that this was "odd".

He said the budget which was to cover, among other things, business expenses and home entertainment for business reasons was not intended to be a salary substitute or a way of circumventing Government pay guidelines.

Mr Halligan, who had originally agreed a confidential pay deal with Dr O'Connor with the agreement of the then board in 1987, agreed that both he and Dr O'Connor had a fiduciary duty to inform other board members of the deal.

He confirmed he had signed letters telling various Ministers for Energy that Dr O'Connor's pay conformed to Government guidelines. At the time, he believed this to be the case.

"I now have to accept that the cumulative effect of the terms as agreed with the managing director did breach Government guidelines," he said.

Mr Halligan said he did not personally vet Dr O'Connor's expenditure. He said it was a matter of trust between them.