Monday, January 31, 2011

Irish Red Cross: A bright new begining or more of the same???

Today, 31st January 2011, sees the first day at work for the new Irish Red Cross Secretary General, Mr. Donal Ford. This Blog wishes him every success for the challenging assignment ahead. The hopes and aspirations of hundreds of volunteers around the country and staff in Ireland and overseas rest on the shoulders of two men, Mr. Forde and Mr. David O’ Callaghan, the Irish Red Cross Chairman appointed in September 2010.

For nearly two decades Irish Red Cross staff and volunteers have seen the Irish Red Cross misgoverned and mismanaged with negative media coverage, calls for independent investigations and parliamentary questions in Dail Eireann (Irish parliament) a regular occurrence. Primary responsibility for virtually every Irish Red Cross internal crisis, and there have been many, rests with a highly dysfunctional governance. Since 2005 alone there have been four separate Secretary Generals. Since 2005 there have been five Heads of Fundraising. In addition there has been a huge turnover of staff across all other departments. Over the last twenty years there has been eight Secretary Generals all of whom left in highly controversial and often extremely acrimonious circumstances. All this points to an organisation suffering from a deep malaise. Central to this malaise are two or three members of the Executive Committee and Central Council and an overall weak and disempowered Central Council which has refused to sanction or remove these individuals. Until this governance issue is addressed once and for all the malaise will continue unabated regardless of who is Secretary General or Chairperson. The power base of this handful of individuals needs to be immediately dismantled. These individuals, who have served on Executive Committee for between 12 and 20 years, in outright breach of good governance practice, need to be told to step down. Should this not happen the fate that awaits Mr. Ford will be the same as that of his eight predecessors.

Any new Secretary General to the Irish Red Cross is at his or her strongest in their first few weeks and months. It is therefore crucial that they use this time and strength to make sweeping and fundamental change. It is during this time that every effort must be made to ensure the removal of the Vice Chairman and have him held accountable for his actions over the Tipperary Tsunami Bank account. The Irish Red Cross will never fire a secretary general in the first few months after his/her appointment and it is this fact that gives the secretary general their power. The further a secretary general gets into their time in office the less concerned the ruling elite on the board fear the negative publicity of firing another secretary general. As such the power of the secretary general begins to diminish quickly after the first eight or nine months as the ruling elite begin once again to interfere and control the day to day running of the organisation. This deterioration in relations usually coincides with the ‘latest’ governance reform proposals advocated by the new secretary general which invariably threaten the ruling elite. The ruling elite will resist and thwart the secretary general at every step of the way and two things generally happen. The secretary general gets so frustrated and despondent that they resign and depart or alternatively the secretary general shows courage and continues to push reform. If this happens relations with the ruling elite on the board will plummet and over some pretence created by the board the secretary general will be fired. Any independent examination of the last twenty years will prove this correct.

Mr. Ford needs to be aware that there is a current set of Irish Red Cross governance reform proposals before the government. The Vice Chairman was on the committee that devised these so called reform proposals. Mr. Ford, if he seeks advice from the right quarters, will be informed that these proposals are designed with one objective in mind and that is the retention of the status quo. Should the proposals be voted into place by the Central Council at its next meeting in February/March they will consign the Irish Red Cross to another decade of turmoil as the same individuals responsible for the last twenty years of turmoil will remain in positions of influence, power and authority. In fact if these proposals are not scrapped there is every real chance the current Vice Chairman will be the new Chairman in 2012 when Mr. O’ Callaghan’s term expires, a mere seventeen months away. The consequences of this do not bear thinking about.

In order to ensure fundamental reform of the Irish Red Cross a number of things need to happen including:

· All Executive Committee members with ten years or more service should step down in May at the end of their current terms and must not present themselves for election to Central Council or Executive for a minimum of three years.
· The supposed governance reform proposals need to be revised substantially as previously outlined on this blog. In particular when members step down after two terms in office they must remain off all committees and the Executive for a minimum of three years and not one year as currently proposed.
· A new Vice Chairman needs to be appointed with immediate effect. The internal report into the Tipperary tsunami bank account clearly states that the Tipperary branch should have been closed down for repeated violations of Irish Red Cross financial and accounting policy. Had this happened, as it should have according to Irish Red Cross policy, Mr. Lawlor would not be the branch chairman. He would not therefore have been elected to the Area Committee and he would not have been elected by the Area Committee onto Central Council and from there to the Executive Committee. As such there is a real question over the legitimacy of Mr. Lawlor’s position as Vice Chairman. He is in this position only because the Irish Red Cross failed to implement its own policy and close the Tipperary branch. Mr. Lawlor’s position as Vice Chairman is therefore null and void. His appointment was only possible because the Irish Red Cross totally disregarded its own policies and procedures. His appointment is therefore invalid.
· There has been a long term plan to create a new volunteer position of National Director of Units. For some inexplicable reason (although we all really know the reason) it is proposed that the office holder of this post would sit on the Executive Committee. It has long been assumed that the current Vice Chairman would take this position once it is created. Should this role go ahead and be confirmed by Central Council the recruitment should be handled by the new Secretary General and the Chairman. It should be an open competition. Most importantly the National Director of Units should NOT sit on Executive. There is no legitimate reason for the post holder to sit on Executive. The current proposals, designed to ensure a certain individual remains on Executive in the event of his removal from his current position, is shameless enough to make that other master of retaining power, Valdamir Putin, blush.

It can only be hoped that Mr. Ford uses his first few months in office to bring in sweeping changes at the level of governance. He will need the full support and endorsement of the Chairman, David O’ Callaghan, as he implements this difficult and dangerous task. All other reform and restructuring is of secondary importance. Should Mr. Forde not succeed in fundamental governance reform and oversee the removal of certain individuals the Irish Red Cross will lose another secretary general within 2 to 3 years, either through despair or termination. Someone once said “If one is to be successful it is imperative that he works towards removing all the hurdles and obstacles coming in his way”. Mr. Ford has a great opportunity to transform the Irish Red Cross and make it one of Ireland’s leading and most respected not-for-profit organisations. Remove THE obstacle and success will be his. Failure to do so and history will repeat itself for the ninth time.

Dictatorial individuals are no more inevitable in private and not-for-profit businesses than dictators are in national governments. They will arise and prosper, nevertheless, if true believers of democracy-citizens devoted to democratic ideals-do not constantly oppose them-Charles Edison

Friday, January 21, 2011

"Those who plot the destruction of others often fall themselves" and so it is with the Irish Red Cross

The article below was written the morning of 21st January 2011. By afternoon of 21st January 2011 the Irish Red Cross had announced that the new Secretary General will be Mr. Donal Forde, former Executive Director of AIB (one of Ireland's largest banks). This blog would like to sincerely congratulate Mr. Forde on his appointment and wishes him every success in fundamentally reforming and transforming the Irish Red Cross. He has a huge challenge on his hands and any real reform he intends to implement re governance will be feriously resisted by those who have everything to lose from reform, i.e those who have controlled the Irish Red Cross with an iron fist for twenty years. Hopefully Mr. Forde as Secretary General and Mr. O' Callaghan as Chairman will together be able to smash the vested interests that have for so long terribly damaged and shamed the Irish Red Cross.

The announcement of a new and permanent Secretary General of the Irish Red Cross is imminent. It can only be hoped that the Irish Red Cross makes the official statement before the name of the person is leaked out to all and sundry. Central Council members will wish to hear it through proper channels and not through the ever intensifying rumour mill. Time is of the essence.

It is understood the new Secretary General will take up his position on 1st February 2010. In the interim the Chairman of the Society, David O’Callaghan, will take over operational running of the organisation. This follows the departure of the former Acting Secretary General, Declan O’ Sullivan with immediate effect on 20th January 2010. It is understood Mr. O’ Sullivan’s services were no longer required, bringing to a sudden and swift end his twelve month reign.

As soon as the name of the new Secretary General is officially announced this Blog will immediately inform its readers. Recent developments must be seen in an extremely positive light as the process of fundamental reform, which this Blog has made as one of its primary objectives, must begin at the top. The installation of a well qualified, competent, professional, honest, passionate, capable and energetic Secretary General will be an important first step. As such this Blog can only hope the Irish Red Cross has chosen well.

Following the events of yesterday the next major step must be to hold the Vice Chairman of the Irish Red Cross accountable for his unacceptable role in the Tipperary Tsunami bank scandal and the multi-year violation of Irish Red Cross financial and accounting policy. His resignation must be sought and obtained. Should the Irish Red Cross continue to be controlled and dominated by one or two individuals who have breached all recognised good governance practice by remaining in their positions for up to twenty years in some cases then the removal of one Secretary General and the installation of another will be as effective as switching the captain on the titanic after it hit the iceberg.

Justice is the firm and continuous desire to render to everyone that which is his due-Author unknown

Thursday, January 20, 2011

Irish Red Cross "at variance with Statement of Recommended Practice for Accounting by Charities" according to its external auditors

In 2008 and again in 2009 the external auditors of the Irish Red Cross, BDO, found that the organisation was in breach of standard accounting procedure in relation to its mysterious and secret property portfolio.

In 2008 the external auditor’s report stated:

Properties given for use by and now owned by the Society are not currently recognised in the Society’s financial statements. This is at variance with Statement of Recommended Practice ‘Accounting by Charities’ which requires that assets given for use by the charity should be included as income when received and an equivalent amount capitalised on the Balance Sheet.

The Society owns a number of properties whose cost is not reflected in the book value of fixed assets. It is believed that these properties were given for use by the Society over a period of years. The insured value of these properties is approximately €4.5 m. No professional valuation on an open market existing use basis has been undertaken. The Society is currently examining the best way to incorporate these assets in the Society’s financial statements in the future.

Twelve months later what progress had been made in ‘incorporating’ these assets in the Society’s financial statements? The answer is NONE! In 2009 the external auditor’s report carried the exact same statement as it had included in 2008. There is, however, one significant difference. In 2009 the external auditors reported that ‘The insured value of these properties is approximately €7 million’. This is a whopping €2.5 million increase in the value of the Irish Red Cross property portfolio in a twelve month period. This is all the more remarkable given that in 2009 property prices across Ireland were in near free fall but yet the value of Irish Red Cross’s property portfolio increased by 56%. Despite this extraordinary increase the Irish Red Cross failed in its duty to record even one property in its financial statements.

The fact that the Irish Red Cross property fiasco has occurred is another example of corporate governance failure at the Society. No-one has been held accountable. Spectacular corporate governance failure and a complete absence of accountability is a defining feature of the Irish Red Cross. Certain individuals are responsible for the property scandal and they are easily identifiable. It is incumbent on the Executive Committee and its master, the Central Council, to take decisive action on this matter. Failure to do so implicates everybody on these bodies. Abraham Lincoln, US President 1861-65, was correct when he said ‘To sin by silence when they should protest makes cowards of men’.

The Irish Red Cross has confirmed it has properties insured to the value of €7 million. It has, to-date, refused to release to its own board members on the Executive Committee and Central Council details of these properties. Who exactly is making the decision to breach Standard Accounting Practice and who is making the decision not to provide a detailed list of these properties to board members? And on what authority are they making such decisions?

It is to be remembered that these properties were donated by individuals and families to the Irish Red Cross for the benefit of the Society and the continued refusal to provide the details to members is a complete betrayal of the trust of these kind benefactors. More importantly it will surely discourage any future property donations to the Irish Red Cross.

If the €7 million value on Irish Red Cross property is accurate then this would imply that in the current depressed property market the Irish Red Cross could have upwards of twenty five individual properties around the country. This calculation is based on an average house price of circa €275,000. This Blog is aware of five properties owned by the Irish Red Cross, details of which are provided below. The value of these properties does not, however, come within a country mile of €7 million. It must also be remembered that the Irish Red Cross head office in Dublin is not a property owned by the Society. It is owned by the Irish Government (Office of Public Works) and as such cannot be included in the €7 million valuation.

Central Councils members, Executive Committee members and general members should be asking the following questions:

1. Why is the Irish Red Cross, over many years, in breach of Standard Accounting Practice and why, despite instructions from the external auditors, BDO, has the matter not been rectified? Will those responsible be held accountable?
2. Why has a full and detailed list of all Irish Red Cross properties never been provided to Central Council members and Executive Committee members? Such a list should immediately be compiled and issued by post or email to all Central Council members. This will allow members sufficient time to review the list and discuss in detail at the February Central Council meeting.
3. If the properties are insured for €7 million that implies the insurance company was provided with a detailed list of all the properties, their location, size, number of rooms, whether residential or business etc. It is not acceptable that a faceless insurance company would have this information while members of the Central Council and Executive Committee do not.
4. If the Irish Red Cross has an extensive property portfolio then why is it not generating a substantial income for the Irish Red Cross? No property or rental income appears in the accounts of the Irish Red Cross. If rent is being paid where is it going?
5. What are all these properties around the country being used for?
6. Are there individuals and/or families living in these properties? If so are they paying rent? If they are paying rent who are they paying rent to? Who signed the leases? Who decides on the rental charge? Who determines the tenants?
7. Are Irish Red Cross branches using these properties? Are the properties registered in the name of individual branches or the head office? Are any of these properties generating income for branches?
8. Are private businesses using these properties? If so what type of businesses? Are they paying rent to the Irish Red Cross? Who decides such matters? Where are all the lease agreements? If there is rental income where is it going as no rental income appears in Irish Red Cross accounts?
9. Where are all the deeds of ownership to these properties? In whose custody are the deeds? Are they all in the head office? In the safe of a designated bank? If not where are they, who has them?
10. With such a valuable portfolio why is there no Property Management Strategy in place? Are people with no property portfolio expertise making the decisions?
11. If members of Executive and Central Council do not have a list of the properties then who is making the decisions on the properties and where did they get the authority to make such decisions and why do they keep these decisions from the majority of board members?
12. Why were some of the properties not sold during the property boom and the money invested appropriately for the long term benefit f the Irish Red Cross?

As referred to above this Blog is aware of at least five properties in the name of the Irish Red Cross and they are as follows:
1. Brackbaun, Kilbeheny, Co. Limerick (This property is used by Irish Red Cross for occasional training and storing of stocks and supplies. It is hugely underutilized)
2. Rathdown Upper, Delgany, Rathdown, Co. Wicklow
3. Laragh East, Brockagh, Ballinacor North, Co. Wicklow
4. Gully, Bandon, Kinalmeaky, Co. Cork (this would appear to be in use by the Bandon Branch of the Irish Red Cross)
5. Town-Plots, Kinsale Urban, Kinsale, Co. Cork

Irish Red Cross branch members in the above areas may or may not be familiar with these properties especially if they are in use by the Irish Red Cross. It is obvious, however, that the value of the above five properties is nowhere in the region of €7 million and it is questionable if their combined value would reach the €1 million mark. That leaves a possible €6 million in properties unaccounted for.

Strength is Happiness. Strength is itself victory. In weakness and cowardice there is no happiness. When you wage a struggle you might win or you might lose. But regardless of the short term outcome, the very fact of your continuing struggle is proof of your victory as a human being-Daisaku Ikeda, Japanese Peace Activist

Monday, January 10, 2011

Actions of senior voluntary members a "serious governance risk for the Irish Red Cross" according to internal investigation

Following intense political and media pressure after revelations that officers of the Irish Red Cross Tipperary Branch, including the organisation’s current Vice Chairman, Tony Lawlor, had an undeclared bank account for over three years containing €162,000 collected for victims of the Asian tsunami in 2005, the Irish Red Cross launched an internal investigation in November 2010. Despite many weaknesses in the report, a clear conflict of interest for the three investigators who are part of Irish Red Cross governance structures and the failure to interview key informants the report nevertheless highlights a litany of financial and administrative failures by the officers of the Tipperary branch. It categorically demonstrates that certain individuals, who have yet to be held accountable, were guilty of constant violations of Irish Red Cross accounting policy over at least a three year period. The damning report opens up as many questions as it attempts to answer. It will therefore be incumbent on the new Secretary General, once appointed, to ensure these questions are both answered and dealt with.

The internal report, which is available on line at

concludes on at least three occasions that what transpired at the Tipperary branch and at other branches posed a serious risk to the governance of the Irish Red Cross. In one section the report states:

Concerns were also raised to the reviewers that senior voluntary members serving on National Committees were reluctant to support the professional staff in applying rules relating to how non compliant Branches would be dealt with”. The report accepts that “this may have been so” while also noting that “it was not in our view malicious in motivation but motivated by a concern for volunteers who may be under pressure”. Most importantly, however, in relation to the excuses and explanations given by senior volunteers, the internal report states “These concerns while understandable are misguided and pose a serious governance risk for the Irish Red Cross”.

In any well functioning organisation individuals or groups of individuals whose actions are deemed to “pose a serious governance risk” to the organisation would be removed immediately and banned from holding office in that organisation ever again.

The last sentence of the internal report states that this whole episode has been a “very painful learning experience for the IRC at all levels and has significantly undermined the organisation”. At the end of the day there can be only one conclusion and it’s that the internal report is clearly implying certain individuals have, through their actions and behaviours, “undermined” the Irish Red Cross. The question must therefore be asked why those same individuals have not only not been held to account but why does at least one of them continue to occupy a senior honorary officer position on the National Executive of the organisation?

The internal report also calls for “appropriate and clear procedures to protect the organisation and its dedicated volunteers and staff”. If those very individuals responsible for “undermining” the organisation are not comprehensively dealt with and remain in positions of power and authority then the report is absolutely correct in calling for “procedures to protect the organisation”. Senior individuals have clearly shown themselves more than capable of violating critically important organisational rules and regulations to the detriment of the Society. In the absence of their immediate removal from office extremely rigorous and robust procedures combined with their strict implementation are urgently required to protect the Irish Red Cross and to significantly dilute the influence of these people.

Our lives begin to end the day we become silent about things that happen-Martin Luther King

Saturday, January 1, 2011

"Serious administrative failures" and "serious deficiencies in accounting procedures" at Irish Red Cross but still no-one is held accountable

The lack of accountability within the Irish Red Cross must be one of its most defining characteristics.

An internal report by the Irish Red Cross on the handling of the Tipperary Tsunami bank account, despite many serious shortcomings, is nevertheless a damning indictment on the organisation and those responsible for what happened. The internal report not only exposes the violation of financial procedures around the Tipperary Tsunami bank account it highlights the fact that officers of the Tipperary Branch, of whom the current organisational Vice Chairman is one, flagrantly ignored Irish Red Cross policy concerning all branch bank accounts and finances over at least a three year period. Why did they behave in this fashion? Why was it allowed happen year after year? And why, after it has been officially exposed in an internal report, is no-one being held accountable?

The internal report makes it very clear that such behaviour and practise is “unacceptable”. The report also states that the Tipperary branch should have been issued a final written warning and if it still continued with its violation of policy it should have been closed down. Given that the Tipperary Branch Officers regularly and year on year violated Irish Red Cross financial and accounting policy the question must be asked why the branch was not closed and all officers stood down. Had this happened and had Irish Red Cross regulations been implemented the current organisational Vice Chairman, who has been in his post for twenty years, would have been automatically forced to resign his post. The current Vice Chairman is elected to the post via the Tipperary Branch to the Area Committee to Central Council to the Executive Committee. If the Tipperary Branch was closed down, as it should have been due to its repeated failure to adhere to organisational finance procedures, then the Vice Chairman’s election to the Area Committee, Central Council and Executive Committee would automatically be null and void. Therefore his election as Vice Chairman would automatically be null and void and he would have been forced to step down.

The issuing of a final written warning to the Tipperary Branch and its eventual closure should have taken place somewhere between 2005 and 2008. This is clearly noted in the internal Irish Red Cross report. Why did this not happen? Why did members of the Executive Committee not close the Tipperary Branch or at the very least insist that those officers responsible for the unacceptable actions resign immediately? Who were they afraid of? Why did they fail in their duties? Who was protecting whom? And what was really happening in the Tipperary Branch?

Had the Executive Committee and its master, the Central Council, acted decisively in 2005/06/07 the Irish Red Cross would most certainly have a different Vice Chairman today. In addition an organisational reform and transformation agenda would have been well and truly underway. A very different Irish Red Cross would now exist. Unfortunately the reality is a damaged and under performing organisation. No-one has been held accountable for clear violations of policy and an outrageous misuse/non use of publicly donated money over nearly a four year period.

Much of the focus of this Blog during 2011 will be on accountability. It has now been established beyond doubt that there are serious failings within the Irish Red Cross. The Minister for Defence, Tony Killeen, has admitted this in the Dail. The Irish Red Cross Chairman, David J. O’ Callaghan, has admitted this on public record. Those responsible for these failings MUST be held accountable. Until they are the Irish Red Cross will be unable to move forward.

Much of what this Blog has written about during 2010 has been fully vindicated by Irish Red Cross’s own internal investigation. Sadly much more remains to be investigated and revealed. Even during the recent Christmas period Irish Red Cross could not escape being mentioned on TV3’s program, Ireland’s Biggest Scandals. This program analysed and commented on a number of big Irish scandals over the years. In discussing Charles Haughey, a former Irish Prime Minister implicated in a number of corrupt activities, the well known and respected journalist Kevin Myers stated that ‘Charles Haughey helped create the Provisional IRA. He did this by giving them £100,000 which was channelled through the Irish Red Cross’. This shocking revelation is covered at more length in the Arms Trial transcripts as well as in Jack Lynch’s (former Irish Prime Minister) official biography. All this, however, supposedly happened over thirty years ago. The focus of this blog is not on accusations of funding the IRA but on much more recent issues and the need for those to be investigated. The accusation of funding the IRA via the Irish Red Cross, while deeply disturbing, was dealt with by the Irish Government, the Courts and the Irish police at the time.

When it comes to genuine accountability, something which requires real courage and integrity, the Irish Red Cross could do well to take a leaf out of the book of the Ancient Romans. They had a tradition that took accountability to new heights. Whenever one of their engineers constructed an arch, as the capstone was hoisted into place, the engineer assumed accountability for his work in the most profound way possible: he stood under the arch.

Oh that the Irish Red Cross leadership could demonstrate such bravery and mettle.

During 2011 the Irish Red Cross Central Council, the organisation’s supreme governing authority, will hold a minimum of three meetings, the first in February and thereafter in May and November. They may of course decide to hold more should they deem it necessary. The February meeting will hopefully provide the Central Council an opportunity to meet the newly appointed permanent Secretary General. This Blog would encourage the Central Council to also hold a full scale General Assembly in 2011. There is no legitimate reason for a General Assembly not to have taken place since 2005, when one is supposed to take place every two years. Again this is a failure of accountability and an insult to organisational democracy.

2011 will bring many changes in Ireland and it is hoped that such change will permeate all the way down to the Irish Red Cross. Central Council members must re-assert their authority and control of the organisation. Central Council must accept its responsibility and not continue to abdicate its duties. As someone very wisely said “No snowflake in an avalanche ever feels responsible”. But EVERY snowflake IS responsible.

There are many issues within the Irish Red Cross that need addressing and reform but the following three matters must be a priority for early 2011:

1. Those officers implicated in the Tipperary Tsunami Bank account scandal and responsible for the clear violation, over a number of years, of financial and accounting policy must be held fully accountable for their actions. In addition a number of serious shortcomings in the internal report must be addressed, corrected and further investigated.

2. The long running practice by the Irish Red Cross of using Overseas Disaster Appeal money to fund domestic activities and expenses must cease immediately and a full independent investigation launched so that those responsible are fully held to account and removed from the Society. All monies raised for Overseas Disasters but channelled to domestic expenses must be returned to the International Department. As the sums involved are vast this will need to be carefully managed so as not to jeopardise the financial stability of the organisation.

3. The Irish Red Cross reportedly has a property portfolio of €7 million. The Irish Red Cross external auditors have stated in the accounts of the Irish Red Cross that the Society is “at variance with Standard Accounting Practice for Charities” in not declaring these properties as income in its accounts and recording them as assets on its balance sheet. The auditors have stated this in their formal report in 2008 and again in 2009. Mystery and secrecy surrounds the Irish Red Cross property portfolio. A full independent investigation into this matter needs to commence immediately, the deeds of ownership of all properties declared, a full list of the properties produced and their current uses and income outlined in full to each and every Central Council member. Continued breaches of Standard Accounting Practice must cease forthwith.

The next twelve months can either be a time of change and rebirth for the Irish Red Cross or it can be a time of stagnation and decline. With a new Chairman in place and a soon to be new Secretary General there is no better time for fundamental reform to take place and previous wrongs to be reversed. For this to happen though those responsible for the sins of the past must be held accountable and be seen to be held accountable while those responsible for ensuring they are held accountable must do so.

It’s not only what we do, but also what we do not do, for which we are accountable-Moliere