The past casts a shadow. Events that occurred during the tenure of the former co-directors of the Abbey Theatre are still having reverberations in late 2022.

A number of previously undisclosed documents recently seen by The Irish Times put in context what happened behind the scenes during and since Graham McLaren and Neil Murray’s five-year term at the helm of the national theatre, which ended in July 2021.

New light is now shed on the background to the controversy, whose roots go back to January 2019 and earlier, and on why controversial payments were made to the former co-directors.

The Mazars report

An unpublished report by consultants Mazars, now seen by The Irish Times, has confirmed that the Abbey Theatre spent €693,000 on costs associated with “HR investigations” and termination payments for its former co-directors, Graham McLaren and Neil Murray. These costs include substantial legal fees over a long period.

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This verifies media reports over the past year that payments to the outgoing directors and associated legal fees totalled around €700,000.

The Mazars review of key financial controls and governance at the Abbey was commissioned by the Arts Council after it heard about the payments, third-hand. The review started in autumn 2021, and Mazars reported in March 2022.

The Arts Council has since declined to publish the report or make its findings known. The Irish Times made a request to the council under Freedom of Information (FOI) legislation for the report. After consultation with third parties (the Abbey Theatre) it was released, but with the entire 35-page document (bar the title page) redacted. The Irish Times has since obtained key parts of the Mazars report from another source.

Mazars describes the €693,000 costs as “high value”, and notes “a provision was booked for €285,000″ in the Abbey’s 2019 financial statements with the remaining costs of €408,000 provided in the 2020 financial statements.

A single pot

Part of the Mazars review was to “consider whether public funds were applied for the purposes intended for them” and in compliance with requirements for management of and accountability for grants from Exchequer funds, though it points out the council’s 2020 funding agreement with the Abbey doesn’t specifically prohibit expenditure such as HR investigations and termination payments.

The review says that while the Abbey Theatre gave a breakdown of its income and expenditure for 2020 into 2021, “Mazars cannot definitively state what sources of funding were used to cover the HR investigations and termination payments, as the Abbey Theatre has several sources of unrestricted funding and does not specifically allocate expenditure against income sources in their normal accounting records.”

So the €693,000 cannot definitively be said to have been from public funding – but it could be said to have an effect on public funding. While the theatre has some income from productions and fundraising, the annual State subsidy of €7.5 million is by far to the national theatre’s largest source of funding. As indicated by the review, the theatre’s outgoings all come from the one pot. Money spent on “HR investigations” and termination payments was therefore not available for the Abbey’s prime purpose, which is to make theatre.

The Abbey chairwoman Frances Ruane in a letter to council chair Kevin Rafter, released under FOI, writes: “The Board was reassured and would like it to be noted that Mazars did not identify any significant or high-risk (red) items in relation to either financial controls or governance... This was in line with the Board’s expectations”.

The letter also says the “Mazars audit report not only accepted that the Abbey Theatre had resources of its own to fund these expenditures but also did not find any evidence to contradict the Abbey Theatre’s repeated statement that it did not use Arts Council grant funding...” for (we have to presume here; the phrase is redacted) the controversial payments.

There are multiple recommendations in the Mazars report, and the Arts Council attached several conditions to its Abbey funding this year, which was confirmed much later than usual. Conditions “to safeguard the expenditure of public monies now and into the future” included “a culture audit of the organisation”, plus reviews of policy and procedures, in procurement, HR and behaving with integrity, leading people, working effectively and being accountable and transparent, monitoring and reporting on board appointments.

One of Mazars’ recommendations, due to the “high value” of the HR investigation and termination payments, was for “an external review of the entire investigation process to establish whether there are any lessons learned to be adopted”.

On foot of Arts Council funding conditions, the Abbey recently tendered for a consultant to conduct an independent review of its governance and policies, including internal policies and procedures related to governance, internal controls (HR, legal, financial) and stakeholder management.

Correspondence released under FOI indicates the difficulties the delay in this year’s funding created for the new Abbey leaders, artistic director Caitríona McLaughlin and executive director Mark O’Brien, in planning the theatre’s work.

What led to the payments

In January 2019, a large number of prominent theatre professionals (initially 311 signatories, later over 425 in support of it) wrote a public letter of concern about the Abbey’s model of production at the time, and its negative impact on the wider “ecosystem” of Irish theatre. The letter led to long consultations between the Abbey and the sector, and to several reforms and changes.

Three months later, in March 2019, it was reported that the Abbey was believed to have received three letters from people formerly employed there, complaining about separate incidents involving co-director Graham McLaren.

Investigations into those complaints appear to have got somewhat stuck. We gather this from two substantial correspondences from McLaren to the Abbey board, in October 2020 and January 2021, which The Irish Times has seen. McLaren’s correspondence indicates that the theatre’s law firm, Arthur Cox, began working on the matter on February 5th, 2019, about four weeks before formal complaints were received by the board at the beginning of March. At least one board member met the complainants, who were represented at an early stage by Equity Union. Much later in the process, in late 2020, a facilitator was appointed. * McLaren refers to making a statement to a partner at Cox alongside a board subcommittee of chairwoman Frances Ruane and barrister and board member Michael Wall.

This process lasted more than two years. This is what is referred to in the Mazars report as the “HR investigation”; despite the HR reference, it’s understood the investigation was handled at board level.

McLaren has many complaints about what was then an ongoing, unresolved investigation. In January 2021, nearly two years after the complaints, he notified the board formally that he was seeking redress and was handing the matter to his lawyer, Daniel Spring.

He appears to have ultimately received a settlement from the Abbey because of how the matter was handled, having complained about how long it dragged on and the effect of this on his health.

A key bone of contention, from McLaren’s correspondence, is: “I was assured in writing, signed by the Chair of the Abbey on April 23, 2019 that the board looked to ‘complete the investigation within a period of eight weeks from the commencement’. However, it took seven months for me to even be interviewed, all the while my legal costs mounted.” At the time he wrote this, October 2020, it was 20 months into the process, he says. And it was far from over.

His correspondence fleshes out why the investigation into complaints about him eventually led to him taking action against the Abbey.

He writes that he endured mental and physical stress because of the protracted process, leading to an ambulance being called to the theatre for him, an elective procedure and ongoing medication. He claims there was a “demonstrable lack of confidentiality surrounding the process”.

Elsewhere, he says he was “hounded by the media” and his personal and professional reputation was tarnished.

McLaren felt aggrieved, writing that his employer did not stand by him, or fulfil its duty of care to him, when complaints were made against him and when the letter of concern was sent, and says the Abbey didn’t comply with its own dignity-at-work guidelines and breached confidentiality.

He sought to have his legal costs paid by the Abbey, for defending himself against the three complaints and the sector’s letter of concern. He details being advised in person and in writing by the Abbey to seek legal counsel, which he says he understood the Abbey would cover.

He also complains of “xenophobic, bullying and abusive behaviour towards me” from some of the signatories and from “members of the theatre community”.

The Abbey ultimately paid a settlement to McLaren, following a “protracted two-year HR process, instigated by the board itself”, according to a protected disclosure made by McLaren and co-director Neil Murray to Minister Catherine Martin in June 2022. The disclosure refers to an “unreserved written apology” from the board to McLaren, expressing “deep regret... for the distress and suffering he experienced”.

The disclosure has been seen by The Irish Times, and Murray and McLaren have confirmed its existence. It was deemed a valid protected disclosure by the department, according to documents seen by The Irish Times, but the disclosure’s calls for an investigation were rejected, as the Arts Council-commissioned review had addressed the issues.

When asked about the current standing of the disclosure, the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media said protected disclosures it receives are addressed according to the department’s Policy on Disclosure of Wrongdoing in the Workplace, and that all such disclosures are dealt with confidentially.

The Abbey Theatre said it does not comment on individual HR-related matters, and that it had not received a protected disclosure and was not made aware of any protected disclosure concerning the Abbey made to other parties.

Termination payments and legal fees

The €693,000 confirmed by Mazars comprised the McLaren settlement and the Abbey’s legal costs during the long process, plus termination payments of €165,256 for the outgoing directors (plus €11,000 legal costs), paid despite the fact that their term as co-directors was a fixed five years.

The 2020 Abbey accounts refer to the termination payments as well as to the restructuring of the leadership positions, which “resulted in the existing roles filled by the joint CEOs being abolished and the creation of two distinct leadership roles”. The protected disclosure letter says of this situation: “Following concerns we raised with the Board of the Abbey Theatre regarding their recruitment process to restructure the leadership team of the National Theatre, we were offered redundancy packages by the board.”

After the termination costs, that leaves €516,744 (from the total Mazars confirmed) as the cost of the McLaren settlement including the Abbey’s legal fees, on foot of how the investigation into complaints against him were handled.

The legal fees seem significant, even if somewhat unclear in the various documents.

Writing in October 2020 McLaren describes a September 28th, 2020, Abbey board discussion about how to report legal costs of €285,000. McLaren describes this as “€285k of public funds on an ‘HR investigation’“.

In their protected disclosure, McLaren and Murray say that by the time they left in July 2021, the Abbey board had spent approximately €500,000 in legal fees “almost entirely” on the HR process. They assert the majority of the circa €700,000 reported figure was to cover legal costs incurred or payable by the Abbey in relation to the “HR investigation” alone.

It remains unknown at this stage how much of the €516,744 went on legal fees and how much may have gone towards the settlement with McLaren (which is separate from the termination payments). When asked how much of the €693,000 went on legal costs, the Abbey Theatre responded that it “does not comment on individual HR-related matters”.

Protected disclosure

McLaren and Murray’s protected disclosure to the Minister on June 24th, 2022, also contains more detail about their perspective on events during and after their tenure at the Abbey.

They say they were concerned about “spiralling legal costs and breaches of internal controls and governance”, which they say they raised with the chair and board but which were not addressed. From June 2020 (about a year before their term ended), they reported them to the Arts Council, the Comptroller and Auditor General, and the Department of Arts. The disclosure looks for a “full inquiry into governance failings inherent in this matter and into the questionable culture and decision-making” at the Abbey. *

The request for an independent inquiry was rejected on July 29th, 2022, by the department as it said the matters were being considered as part of an independent review of key financial controls and governance at the Abbey (the Mazars review). Murray and McLaren replied, saying that if the Abbey was setting its terms, it couldn’t be independent, and because of the Abbey’s “culture”.

The board

In a second letter on July 29th 2022, Murray and McLaren make a number of serious allegations regarding governance and internal controls at the Abbey, saying these could not be addressed in any form other than an investigation by the department.

That same day, July 29th, Minister for Arts Catherine Martin reappointed Frances Ruane as chairwoman of the Abbey Theatre board; the role had been unfilled since Ruane’s five-year term finished in May. Although eligible for reappointment for another four years, she was appointed for two.

On August 23rd, the department again rejected McLaren and Murray’s call for an investigation, because of the report commissioned by the Arts Council and recommendations including for an external review of the HR investigation. The council will have scrutiny of its terms of reference, the department wrote.

On August 26th they wrote again, “confused” they had not been asked to provide documentation they had offered, and saying they couldn’t see transparency or accountability on the matter “while the same individuals and public bodies are so determinedly minded to scrutinise review and adjudicate their own decisions”.

The wheels of all this have moved slowly, and they don’t look like stopping yet.

*This article was amended on Wednesday, December 14th, 2022, to correct and clarify the dates and circumstances in which some incidents described in the piece occurred.