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Final Questions to Rehab Execs on Charitable Donations

Questions to Rehab Execs Over Charitable Lotteries Scheme

Day of reckoning looms for defiant Rehab duo

HAVE Angela Kerins and Frank Flannery stymied the Public Accounts Committee?

The appearance of battered relics of the Rehab board at the PAC last week was Hamlet without the princess – or the prince. The absence of Angela and Frank spoke volumes. Two fingers to the PAC. Send in the courtiers. They know little because they were never told very much.

The Rehab directors looked drawn, nervous and humble. Arrogant Angela could have eaten them for breakfast.

The two former Rehab powerhouses have thrown down the gauntlet to the PAC. They have eyeballed us, but the PAC is not in blinking mood. The refusal of the Rehab duo to appear as witnesses last Thursday may bring temporary relief, but will merely prolong the agony for all parties.

The biggest losers are the disabled clients of Rehab. Funding from the collection boxes is drying up. Even the State may take a fresh look at supporting Rehab, as both Kerins and Flannery have defied the express wishes of the Taoiseach.

The imperative to bring the two refugees from Rehab into the PAC has moved up a gear. At the hearings attended by Rehab board members on Thursday, Ms Kerins’s defence – that commercial confidentiality prevented her from revealing her salary and bonuses–- went up in smoke. Committee members Mary Lou McDonald, John McGuinness , Kieran O’Donnell and Sean Fleming put paid to that little canard.

Part of her salary was shown to have come from taxpayers’ money. Contrary to Angela’s assertions, the PAC has a key role in determining if the money is well spent. Her claim – that it is none of our business at the PAC – was shredded.

Legal letters from solicitors acting for both former chief executives landed in the laps of the PAC last week. Veiled threats were included in the correspondence. Significantly, defiant as they were, neither party excluded the possibility of an appearance in the future.

We look forward to welcoming Angela Kerins when she recovers her health and Frank Flannery when he sees the PAC as an opportunity to clear the air. If they refuse the next invitation, we will seek compulsory powers. It may take a few months, but delay will not be a deterrent.

As it happens, we may never need either of them. Information is leaking its way to committee members drop by drop. Last week, the embattled board itself began to release nuggets. The directors, pleading that they were gagged by legal letters from Kerins and Flannery, forbidding them to give details of their pay and bonuses, still managed to release a €409,000 figure for Flannery’s consultancy fees over a seven-year period.

That figure alone was dynamite, suggesting that there are more explosives buried in Rehab’s arsenal.

The board is contrite. Angela and Frank are defiant. The split in the survival strategies of former friends is certain to cause others to spill the beans. Bitterness will soon set in.

Angela Kerins seems to have made plenty of enemies during her tenure at Rehab. Her dominant style rubbed many former employees up the wrong way. Members of the PAC are receiving daily calls from them, some disgruntled, others seemingly detached observers of a charity that has been run like a personal fiefdom. The scales over the eyes of formerly star-struck board members may begin to fall.

More significantly, the board was pathetically repentant on Thursday. Their public relations outfit had advised them to emerge with their hands up, admitting glaring corporate governance lapses. The chairman had been in office for 32 years, the chairman of the remuneration committee for nearly 25. They were tired, but well-meaning, believers in the charity and long-time, loyal followers of Angela.

Chairman Brian Kerr, a decent elderly man in a wheelchair, seemed dazzled. He had obviously not been kept in the loop about much, including earlier consultancy payments to Frank Flannery. He was speechless when it came to questions about Rehab’s whistleblower’s policy; but he was eager to admit that he had made mistakes, as were they all.

When queried about whether they were a board dominated by one woman, Kerr was willing to concede the possibility, while his three male colleagues protested. They still sang her praises, despite all that had happened.

Rehab’s finance director Keith Poole is not a board member. He looked detached from the others, distinctly uncomfortable when I asked each of the witnesses about working with Kerins. It was a telling moment. First of all, he simply did not want to comment. The silence said everything. Under pressure for further comment he muttered token tributes. Earlier it had emerged that Poole, the second in command, had been one of only two senior managers to decline a bonus in 2012, citing redundancies at Rehab as the reason. The other top employee with a semblance of ethical humanity was human resources director Shona Boyne. The conscience of Rehab was barely breathing at the upper echelons of the charity. The culture of greed has taken over. Charity hardly seems to enter the equation.

When Poole was pressed on whether he agreed with Kerins that her remuneration came from the commercial arm, he distanced himself even further from his former boss. He obviously disagreed, insisting that this was “her interpretation”. Perhaps Rehab has a future after all? Poole was a reminder that the vast majority of the thousands of staff working hard for Rehab are committed to the charity.

Mysteries remain, but they are being solved by the day. Under questioning, chairman Brian Kerr admitted that the board had received a serious complaint about Angela Kerins. It is currently being investigated by the directors. He refused to elaborate – again conveniently citing lawyers – but few secrets in the possession of so many people will remain in the closet for long.

The directors, now totally out of their depth, have employed consultant Eddie Molloy to identify the corporate governance flaws. Unfortunately the horses have bolted. Molloy is likely to ask all of the board members to step down within a short period of time. Theirs has been a disastrous tenure. He will want to hear the views of staff and customers, especially the content of the complaint against Ms Kerins.

Rehab is a model of how a company/charity or semi-state body should not be run. It had a hopelessly weak board that was self- perpetuating. For 30 years it has been run by overbearing chief executives, whose domination of the directors appears to have been absolute. A classic model of how not to do it.

Contrary to what was claimed by Flannery last week, the PAC is not on a witch hunt. It merely wishes to probe whether taxpayers’ money is being spent wisely. Judging by last week’s hearing, the hapless directors are unfortunately not the right people to answer the question. The only witnesses who fill the bill are on a collision course with the committee. We look forward to Angela’s return to full health and to Frank’s U-turn.

 

Questions to Rehab Execs Over Salaries

Judicial Appointments Bill Closing Statement

Taxpayers and donors deserve more from Rehab

ON Monday evening, Rehab gave two big fingers to the Irish public. One finger for the taxpayers. One finger for the fundraisers.

On Thursday morning, I was given the third finger.

No problem with Rehab giving me the bum’s rush – but taxpayers, fundraisers and donors deserve better from a cash-rich charity, because much of Rehab’s cash is their cash.

In response to a public outcry about its opaque accounts, in particular its refusal to reveal its boss Angela Kerin’s salary, Rehab – painfully, slowly – called a board meeting. After the meeting it made a rude gesture. Two fingers to the outside world.

The two fingers were camouflaged in a velvet glove, a headline revelation: Kerins’ salary was announced at a mere €240,000. She had waived all bonuses in the past four years. She has a defined contribution pension scheme and a company car. What was all the fuss about? That scotched all the rumours that her package was far higher.

And that was that.

If we wanted any more information we would have to wait until mid-2016. Or sing for it.

Happily, Rehab is coming to see us at the Public Accounts Committee (PAC) on Thursday. Even more happily, Mary Lou McDonald TD is leading for the PAC. She rarely takes prisoners.

Not that there is any witch-hunt for Angela. Far from it. But there is a healthy public appetite for more information on how outfits such as CRC and Rehab really operate. Judging by its behaviour, Rehab does not want the public to know what is going on behind closed doors at its Dublin 4 headquarters in Sandymount.

Its statement on Monday was minimalist. The reasons for being in hiding for so long were laughable. They were dripping with condescension.

They asserted that Angela was entitled to withhold her salary details because “Rehab continuously competes for business at home and abroad with a range of private companies which do not have to disclose such information”.

A non-sequitur if ever there was one. Information about salaries withheld on competition grounds? What about every big bank, every publicly quoted company operating in a fiercely competitive climate?

Even bankers are forced to reveal their chief executive’s salary. But not Rehab. Rehab does not have to. It is a charity, above such indignities.

The other reasons offered for such lack of information in its statement were absurd. They wheeled out the old canard of “legal advice” and how they were worried about breaching the Data Protection Act. But good old Angela had graciously waived her rights to confidentiality.

Just like the accompanying applause for Angela, who had “waived all bonus entitlements in the last four years”. It was news to many of us that bonus “entitlements” were normal for charity queens? And Angela had even – claimed the statement, with little credibility – “encouraged the publication of this information”.

Why then did she not tell Gavin Jennings on RTE’s Morning Ireland the details of her salary when persistently asked six weeks earlier? She is a sudden convert to transparency. Once the Taoiseach had spoken, the die was cast.

Enda Kenny had extracted a single piece of information. Now let us hear more from herself and Rehab’s remuneration committee.

Like, how in the name of God her pay rose from €234,000 in 2011 to €240,000 in 2013? A pay rise was inexplicable while others were suffering from severe austerity, but what happened in the intervening year – 2012? Was Angela’s pay much higher, or suddenly much lower in 2012? Had it been hiked or reduced to €240,000?

We need to know. According to the statement, the €240,000 was decided “following the recent review by Towers Watson” consultants. Towers Watson are one of two gurus of executive pay cited as “expert independent” advisers by Rehab. The other prop rolled out in support of their high pay regime is the Hay Group.

Any employee of an Irish charity should be happy to see the Hay Group advising his employer on pay. This is the same Hay Group that advised the plutocrats in AIB on pay. It is an international outfit measuring Irish charities against a global benchmark. Rehab claims to be a global group, an unconvincing claim as it employs two-thirds of its workforce in Ireland. As Irish charities go, €240,000 a year is in the stratosphere.

Mary Lou McDonald and the rest of us will want to see the Towers Watson report. We are entitled to ask how recently it was written? Was Angela’s salary far higher – or far lower – following the report?

Was the report commissioned rapidly, even in preparation for the committee meeting? We need to see not just the headline figure, but the recent pattern of Angela’s remuneration and the pay of other senior managers.

The board’s approach to revealing the pay of senior management is intransigent. It will kindly comply with accountancy rules that come into place in 2015. And it will only reveal the total remuneration of senior management in the 2015 annual report.

Big deal. We will be given an overall figure in 2016. They will not tell us what individuals are paid, just an aggregate number. That little wheeze was ended in the most diehard public companies many years ago. Silence on the subject would be equally enlightening.

The statement is silent, too, on Angela’s contract. Yet the devil is often in the detail. We need to be certain that there is no provision for a Paul Kiely/CRC-style, six-figure exit payment. We need to know that there are no more bonuses. We need to know if she really received a €70,000 bonus in 2009 as claimed in Phoenix Magazine. The bald €240,000 salary figure could mask a lot more largesse. Or it could be the full story. Neither the Rehab accounts nor the statement throw any light on this.

Rehab puts up a blanket defence to its secretive culture. Its staff are not members of a public service pension fund. It is an independent group of charities and commercial companies. In other words, “hands off, this charity is none of your business”.

Unfortunately, Rehab is the biggest recipient of taxpayers’ money in the charity sector. In 2012, the State paid €83m to various divisions of Rehab. The HSE gave it €51m, mostly for day services to disabled people; Solas/Fas paid over €28m, much for disability training programmes; while the Department of Justice gave it €4m under the Lottery Compensation Scheme.

Rehab insists that these payments are for purchases for services, straightforward commercial transactions. They are not direct grants. Rehab is different.

Fair enough. Yet these are enormous sums of state money paid to a charity. The State is entitled to know whether its money is well spent, whether proper governance rules apply in its client companies and how Rehab can afford to pay its chief executive so much. Is the taxpayer overpaying for Rehab’s services? How do the Service Level Agreements stack up?

And the fundraisers, the donors, are equally entitled to know the ultimate destination of their generosity. If it goes to Angela’s pay, they can vote with their pockets.

We need not hold our breath. Last Thursday, after giving the Irish public two fingers, Rehab gave me the third.

In preparation for this week’s PAC meeting, I asked Rehab the names of members of its remuneration committee. Incredibly, it was not in its annual report. First it ducked and dived. Then it despatched a lofty email.

“Further to your request for information from the Rehab Group… We would ask that all queries be dealt with through the Clerk of the Public Accounts Committee.”

Or, in other words: go jump in a lake. Charities like us do not talk to mortals.

 

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