The Minister for Finance, Mr McCreevy, breached the State's own funding cap for the development of the Punchestown agricultural event centre when he awarded an extra €1.5 million in grant aid to the project in late 2001 after it went over budget, writes Liam Reid.
The additional funding was made in early October 2001 after he met representatives of the racecourse, the second such meeting to have taken place. It brought total State funding of the centre, which is in the Minister's Kildare constituency, to €14.8 million.
A previous agreement between the Department of Agriculture and Punchestown racecourse in August 2000, seen by The Irish Times, capped the Exchequer contribution at €13.3 million. However, a spokeswoman for the Department of Finance said that the Department was not aware of the funding cap and that the fine details of the funding were a matter for the Department of Agriculture.
Yesterday Mr John Perry, chairman of the Public Accounts Committee (PAC), said his committee was not satisfied with answers from both Departments about funding of the centre at a hearing last Thursday.
He said the the controversy would form part of further PAC inquiries into the matter. Revelations about the new meeting and the Department of Finance being unaware of the cap "adds more mystery to the affair", he added.
Controversy over the funding of Punchestown emerged at the PAC hearing when the Comptroller and Auditor General, Mr John Purcell, criticised the lack of proper guidelines in the Government's decision to provide 100 per cent funding for the project.
The original application grew from €6.9 million to €13.3 million between January and June 2000. It was formally approved in August 2000 and the conditions agreed between Punchestown and the State places an absolute cap on Exchequer funding of the centre.
According to condition 13 of the agreement, "there is no further call on Exchequer funding towards the construction costs of the centre beyond a maximum total of £10.5 million [€13.33 million]".
However in the autumn of 2001, Punchestown sought additional funding following planning conditions laid down by Kildare County Council, which required new sewerage-treatment works and extra car-parking facilities for the event centre.
According to letters seen by The Irish Times, on September 17th, 2001, Mr McCreevy met the racecourse's then chief executive, Mr Charlie Murless, and its then chairman, Mr James Osbourne, at a clinic in Naas to discuss the application for extra funding. It was approved less than three weeks later, despite the previous cap.
Last night the Department of Finance confirmed the Minister personally approved the extra funding.
However it defended Mr McCreevy's actions, stating it would be "normal" given the location of Punchestown for the Minister to be updated "from time to time" on developments by the racecourse's management.
According to a statement from his office, Mr McCreevy was "at all times fully supportive of the developments and the provision of world-class facilities at Punchestown, of which everyone can now be justifiably proud". The application for additional funding had the support of the Department of Agriculture, the statement said.
"Whether Punchestown were advised not to apply for further funding, beyond £10.5 million, was a matter for the Department of Agriculture and Food and was not something of which the Department of Finance was aware."
A spokesman for the Department of Agriculture defended the decision to breach the funding cap as being absolutely necessary to comply with planning conditions. "Without meeting these conditions there would not have been an event centre," he told The Irish Times.
The funding of Punchestown was also heavily criticised by Labour leader, Mr Pat Rabbitte, who drew comparisons with its lack of appraisal and fast-tracking with health projects in Mr Rabbitte's constituency which he said had been ignored.
"This is a Government that adopts the most cavalier attitude to money when its own friends are involved, and the most miserly attitude when it comes to those who are most vulnerable," he declared.