FORMER DIRECTOR general of Fás Rody Molloy resigned because he was given a €1 million “golden handshake”, a Dáil committee was told yesterday.
Responding to the chairman of the Dáil Committee on Public Accounts, Bernard Allen, an official from the Department of Finance, Tony Jordan, said the package negotiated for Mr Molloy was agreed to by his department.
Mr Molloy was prepared to resign, he said, and Minister for Enterprise, Trade and Employment Mary Coughlan wanted to “effect change immediately”.
“He was willing to resign because of a golden handshake?” said Mr Allen. “Indeed,” said Mr Jordan.
The secretary general of Ms Coughlan’s department, Seán Gorman, a former director of Fás, said he negotiated the package in day-long discussions with Mr Molloy and Fás chairman Peter McLoone. “In the negotiations it was made very clear that part of the terms he was prepared to resign on was that he be treated reasonably, and it was made clear that if not, he was reserving his right to take court action.”
Mr Molloy’s length of service was increased by an extra 4½ nominal years, which increased the size of his lump sum payment by approximately €50,000 and his annual pension by approximately €11,000 per annum.
He was also given the equivalent of six months’ pay instead of the three months’ notice he would be entitled to if sacked. Mr Molloy received a tax-free lump sum of €333,732, a taxed sum of €111,243.50, being the equivalent of six months’ salary, and an annual pension of approximately €111,000. The actuarial cost of the deal, on a presumption that Mr Molloy lived for another 30 years, was €1 million, Mr Gorman said. He said a judgment call was made on the night. “There was no question of pals or anything like that.”
No legal advice was taken.
“The Tánaiste and the Minister for Finance spent €1 million of taxpayers’ money paying off someone who had little interest in corporate governance and who presided over a massive waste of public money,” said Labour TD Róisín Shortall.
Taoiseach Brian Cowen later defended the deal, telling reporters the decision was made to facilitate Mr Molloy’s immediate departure.
He suggested that the extra money involved could be more effective than the cost of a legal case, were one to be taken.
“The [board] had to make sure that the decision to move on is effective and that’s what happened in this case,” he said.