The Government approved a package for former Fás director general Rody Molloy because he threatened legal action to get a €1 million pension, it was revealed today.
Mr Molloy stood down last November at the height of controversy surrounding lavish expenses by top officials at the State agency, including spending of €643,000 by Fás officials over four years on transatlantic travel.
The Dáil Committee on Public Accounts was told today Mr Molloy strongly warned he would go to the courts if he did not get the lucrative pay-out he wanted in exchange for his resignation.
Secretary general of the Department of Enterprise, Trade and Employment Seán Gorman, a former director of Fás, told the committee Mr Molloy made it clear he would fight for the deal.
“In the negotiations that took place it was made very clear that a part of the terms on which he was prepared to resign was that he was treated reasonably,” Mr Gorman said.
“It was made very clear that if the individual felt he wasn’t being treated reasonably he was reserving his right to take court action,” he said. “That was made very clear.”
Mr Molloy left the agency with a pension worth €111,000 a year, a tax-free lump sum of €333,732, and a taxable ex-gratia payment of €111,243.50. The capital sum on his pension amounted to about €1 million, the committee heard. Mr Molloy also had four and a half years added to his pension entitlement.
Committee chairman Bernard Allen strongly criticised the Department, claiming Mr Molloy was being appeased with a sweetheart deal rewarding failure.
“Why was the value equivalent to winning the Lotto, transferred to the former DG (Director General) for his pension, when the man spent and oversaw spending on travel, on a lifestyle more equivalent to a rock star than a public servant,” Mr Allen said.
“I don’t think we should be appeasing people who make mistakes for fear of litigation and certainly to my knowledge, and of the evidence before me, there has been appeasement here because of the threat of court action.”
The Labour Party’s Roisin Shortall also expressed dismay at the scale of the deal secured by Mr Molloy. “It’s very hard to stomach at the very least on behalf of the taxpayer, how you could possibly justify that kind of level of expenditure,” she said.
Chairman of Fás Peter McLoone and recently appointed director general Paul O’Toole also appeared before the committee today to answer questions about spending at the agency rising from the latest report from Comptroller and Auditor General John Buckley.
Mr O’Toole expressed his regret at the level of spending. “This regret is based on the knowledge that the confidence of the committee, the Oireachtas and the general public has been undermined by the continual revelations regarding our stewardship of the taxpayers’ money.”
Mr O’Toole said the advertising budget for the agency has been cut by over 90 per cent and foreign travel spending has been reduced by more than 60 per cent this year. Credit cards will no longer be issued for staff and have been withdrawn from those who had them, he added.
Mr McLoone told the committee he is to resign at the end of the agency’s board meeting next week.