Friday, September 23, 2011

Irish Government's financial watchdog confirms Irish Red Cross had 49 undisclosed bank accounts

Note: On 25th September 2011 the Sunday Independent, Ireland's largest selling newspaper, wrote an article on the Irish Red Cross and the Comptroller and Auditor General's report into malpractice and maladministration at the Society. The newspaper article can be found on the following link:

http://www.independent.ie/national-news/campag-report-into-affairs-at-red-cross-inaccurate-2886889.html


On 19th September 2011 the Irish Government’s financial watchdog, the Office of the Comptroller and Auditor General (C&AG) issued its 2010 annual report. The Report examines government waste, misuse of resources, tax evasion and social welfare fraud. The Report was covered extensively by the national media, TV and print, on the day of its publication.

In what must be regarded as one of the lowest points in the 72 year history of the Irish Red Cross, the C&AG’s Report designates a full chapter to the malpractice, maladministration and misgovernance within the Society.

Inclusion as chapter 32 of the C&AG report will be forever remembered as another very dark and sad episode in the lifetime of the Irish Red Cross. The fact that those responsible for the malpractice and maladministration have not yet been held to account and continue to serve on the board of the Society only worsens an already disgraceful situation. The Irish Red Cross has now found itself in a national document that reports on waste, abuse of funds, misuse of resources, evasion and fraud.

In recent years Ireland has been brought to its knees by cronyism, abuse of power, incompetence and corruption to the tune of millions and billions of Euros. The Comptroller and Auditor General reports comprehensively on these matters in his annual publication. In his latest report he felt it prudent and appropriate to designate a full chapter to the Irish Red Cross. Surely this must speak volumes about the rot at the heart of the Society and the failed leadership that has brought us to this dark and shameful place.

For those readers not familiar with the C&AG Office the Comptroller and Auditor General is an independent Constitutional Officer, appointed by the President of Ireland on the nomination of the Dáil, Ireland’s national parliament.

The C&AG's relationship with the Dáil is essentially a reporting one. All reports of the Comptroller and Auditor General are presented to Dáil Éireann and are examined on behalf of the Dáil by a committee known as the Committee of Public Accounts (PAC).

While there are close working relations between the PAC and the C&AG, the two are quite independent both in law and in practice. The C&AG or in his absence, a senior member of staff, attends the meetings of the PAC as a permanent witness.

The C&AG will consider all circumstances involving an abuse of public funds, brought to his attention. Whether a particular matter warrants investigation or examination as part of the normal financial audit will depend on the particular circumstances of the case, its materiality and the evidence available to substantiate the circumstances surrounding the alleged abuse of public funds.

Some interesting points from the C&AG Report:

Section 32.2 states “Under the Act, the Government has the power to make provisions for a range of matters relating to the organisation, operation and governance of the Society, including its finances and accounts”.

This confirms what the Blog has said on many occasions, that the Government has the right under law to intervene directly in the Irish Red Cross. Given the extent of the crisis it should do so immediately. Successive Ministers for Defence have incorrectly stated on public record that they cannot interfere in the Society’s affairs. The C&AG has now publicly confirmed that it can.

Section 32.7 states “Concerns regarding the capacity of the Society to manage its administration and finance were raised in letters from the Society’s external auditors in respect of the 2005 and 2006 audits. The auditors questioned the Society’s ability to prepare accounts for the organisation as a whole, due to the unreliability of its systems and the lack of financial information in respect of some of its branches. On foot of the 2005 and 2006 audits, the Society appointed two separate financial consultants to review the issues raised. They recommended changes be made to the Finance Department at its headquarters. The external auditors management letter of 2008 noted significant improvements in the finance and administration of the Finance Department but again commented negatively on the Society’s ability to prepare comprehensive financial statements”

Given such weaknesses it is not surprising that individuals including at least one senior board member felt confident in not reporting the existence of certain bank accounts or not submitting branch returns to head office. The weaker head office finance remained the easier for certain branches and their officers to act unilaterally and with impunity. A weak head office finance department was no accident.

Section 32.8 in quoting from the internal investigation into the undeclared Tipperary tsunami bank account states “The headquarters was not aware of the existence of the bank account until a trawl of all Bank of Ireland accounts in the name of the Society was undertaken in April 2008, at its request. This trawl led to the uncovering of 49 undisclosed accounts holding amounts that totaled €214,000, of which the Tipperary account (then standing at €162,960, including bank interest) was the most significant”.

As is public knowledge following extensive media coverage at the time the current national Vice Chairman was a signatory on the Tipperary account above.

What is most striking from the report is that the trawl of bank accounts was restricted to only those held by Bank of Ireland. Despite this limitation 49 undisclosed bank accounts were discovered with nearly a quarter of a million Euro sitting in them. The question remains how many undisclosed bank accounts would have been discovered had all banks been included, AIB, National Irish Bank, Ulster Bank etc?

If this trawl has not been extended to all other banks in the meantime then the question must be asked why not? If the trawl of one banking institution reveals €214,000 of undisclosed funds then there is no reason to believe a trawl of the other major banks would not reveal a similar amount of money hidden, undeclared and undisclosed. How many hundreds of thousands of Euros belonging to the Irish Red Cross and donated for humanitarian purposes is lying hidden in undisclosed bank accounts around Ireland? How many people are involved in concealing these bank accounts?

Another question that must be asked is have those individuals involved in keeping undisclosed and undeclared bank accounts been asked to sign statements that there is no additional hidden bank accounts in other banking institutions that they are aware of under their/Irish Red Cross name?

In light of the fact that 49 undisclosed bank accounts were discovered in one banking institution alone has the Irish Red Cross ever genuinely or seriously considered asking the Garda Bureau of Fraud Investigation to assist them in trawling all banking institutions in the country and to advise if any criminal activity has taken place?

The inclusion of the Irish Red Cross in the Comptroller and Auditor General’s annual report would in any normal well functioning and properly governed organisation result in the immediate removal of those individuals responsible for the malpractice and maladministration. This will unlikely happen in the Irish Red Cross. Enough said.

To know what is right and not to do it is the worst cowardice-Confucius

27 comments:

  1. Anonymous3:55 AM

    Its beyond my comprehension that a charity like Irish Red Cross could sink so low and no-one be fired or removed from its board. The Irish Red Cross must sum up everything that is rotten about Irish society.

    49 undisclosed bank accounts in one banking institution. Christ almighty. Will someone in that place please call the Guards. Diall 999 for god's sake.

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  2. Anonymous3:59 AM

    On September 20th there was more Parliamentary Questions in the Dail about Irish Red Cross.

    Mostly they related to Tony Lawlor and why he is still allowed sit on the baord after 21 years.

    Anyone reading between the lines of the Minister's response will know the Minister wants rid of him as well. Irish Red Cross ignore the Minister as is the norm for them.

    The questions can be read on the Dail website or by using the link:

    http://debates.oireachtas.ie/dail/2011/09/20/00294.asp

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  3. Anonymous7:50 AM

    Accountability and Transparency IRC style!
    The National HQ of IRC can disclaim responsibility for Branch accounting as does their auditors with their audited accounts 2010 statement;
    “Branch, area accounts and region accounts are not consolidated in the Head Office financial statements”.
    With such a disclaimer it is presumably up to Branches independently to provide accounting for any disaster or other contributions made at their level. The bank accounts recently discovered at Branch level should not come as a surprise given that there has apparently been no requirement for them to be disclosed. Given the lack of transparency at HQ Merion Square level, what level of transparency and accountability should be expected to be demanded from IRC Branches?
    The IRC has failed to publicly address the accounting problems: Lack of transparency other financial issues such as its still secret property portfolio gives no reason to believe that the situation is to improve. Surely some accounts must exist for these undisclosed properties to show income, maintenance costs, utilities, depreciation or appreciation etc? Surely there must be property deeds and records at the IRCs lawyers’ office? Why the secrecy despite years of auditor’s qualification statements such as:-
    “Properties given for use by and owned by the Society are not currently recognised in the Society’s financial statements. This is at variance with Statement of Recommended Practice ‘Accounting for 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.”
    Note also the auditor’s statement: “The rules of the Society require the Honorary Treasurer to provide financial statement which gives a true and fair view of the results and state of affairs of the society.”
    No satisfactory explanation is given as to why the money donated for the immediate relief of suffering in the tsunami disaster was held for years in the hidden Tipperary account.
    Nobody is held to account.
    Still tsunami money remains unspent: Current 2010 audited accounts show that money donated by concerned people for the 2004 tsunami relief to the tune of €2,003,558 remained unspent as at 1 January this year. During the past year IRC spent or pledged to spend a paltry €695,461.
    What a disgrace that IRC is unique in holding on to 2004 tsunami donated money which was needed for immediate relief or early recovery by those so devastatingly affected? IRC must be aware that there has been serious international criticism of those holding onto tsunami money as far back as 2007.
    Surely there are good people in the Branches or at HQ who as humanitarians or otherwise can expose these and other irregularities under the new whistleblower protection scheme to start the process of reorganising IRC?

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  4. Anonymous3:14 AM

    Good article in the Sunday Independent yesterday (25th Sept) critisising the Irish Red Cross and Comptroller and Auditor General's report.

    Fair play to the Sunday Independent for always highlighting the scandals of the Irish Red Cross. The public has a right to know as its their money funding the place. Link to article:

    http://www.independent.ie/national-news/campag-report-into-affairs-at-red-cross-inaccurate-2886889.html

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  5. Anonymous11:15 AM

    The same financial watchdog knew that the Irish Red Cross in 1970 was facilitating the purchase of weapons in Northern Ireland. To this day not a sigle person has been held accountable.

    When the irish Red Cross was hiding away millions in banks accounts so they could make money on deposits, not a single word other than the dismissal of James Walsh for speaking to the press. When money was being shifted into the EBS not a word... Thee are stories to be told when will Alan Shatter expose the truth or will keep sitting on his hands?

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  6. Anonymous7:24 AM

    Accountability and Transparency IRC style!
    The National HQ of IRC can disclaim responsibility for Branch accounting as does their auditors with their audited accounts 2010 statement;
    “Branch, area accounts and region accounts are not consolidated in the Head Office financial statements”.
    With such a disclaimer it is presumably up to Branches independently to provide accounting for any disaster or other contributions made at their level. The bank accounts recently discovered at Branch level should not come as a surprise given that there has apparently been no requirement for them to be disclosed. Given the lack of transparency at HQ Merion Square level, what level of transparency and accountability should be expected to be demanded from IRC Branches?
    The IRC has failed to publicly address the accounting problems: Lack of transparency other financial issues such as its still secret property portfolio gives no reason to believe that the situation is to improve. Surely some accounts must exist for these undisclosed properties to show income, maintenance costs, utilities, depreciation or appreciation etc? Surely there must be property deeds and records at the IRCs lawyers’ office? Why the secrecy despite years of auditor’s qualification statements such as:-
    “Properties given for use by and owned by the Society are not currently recognised in the Society’s financial statements. This is at variance with Statement of Recommended Practice ‘Accounting for 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.”
    Note also the auditor’s statement: “The rules of the Society require the Honorary Treasurer to provide financial statement which gives a true and fair view of the results and state of affairs of the society.”
    No satisfactory explanation is given as to why the money donated for the immediate relief of suffering in the tsunami disaster was held for years in the hidden Tipperary account.
    Nobody is held to account.
    Still tsunami money remains unspent: Current 2010 audited accounts show that money donated by concerned people for the 2004 tsunami relief to the tune of €2,003,558 remained unspent as at 1 January this year. During the past year IRC spent or pledged to spend a paltry €695,461.
    What a disgrace that IRC is unique in holding on to 2004 tsunami donated money which was needed for immediate relief or early recovery by those so devastatingly affected? IRC must be aware that there has been serious international criticism of those holding onto tsunami money as far back as 2007.
    Surely there are good people in the Branches or at HQ who as humanitarians or otherwise can expose these and other irregularities under the new whistleblower protection scheme to start the process of reorganising IRC?

    ReplyDelete
  7. Anonymous4:04 AM

    One good thing about the Comptroller and Auditor General's report is that it confirmed beyond doubt that under legislation the government is allowed to intervene directly in the affairs of the Irish Red Cross including in its finance and administration.

    So Minister Shatter, there is no excuse. Intervene and sort this mess out once and for all.

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  8. Anonymous12:30 PM

    Alan Shatter is showing up to be a Minister being wagged by the dog, which is the Dept. of Defence. The current Chairman of the Irish Red Cross used to head up the Department of Defence and so he has to protect his former colleagues. Minister Shatter is a pre-recorded public servant who will only act if it means that he will benifit himself and the party. His party gave an undertaking at the general election to reform the Irish Red Cross and to date he has been told to take a hike by the board of the Irish Red Cross. What he will do about this is anyones guess, but so far he is being made an absolute fool of by Lawlor and his buddies who are totally ignoring him and continuing on as they have always done.

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  9. Anonymous3:05 PM

    The Irish Government is the most wonderful cash cow to the Irish Red Cross. Who else would hand over millions and not even ask how it is being spent. Of course the Govenment is getting some information, but only what Lawlor and co decide is appropriate. The Irish Red Cross could run a world renowned course on creative book keeping.

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  10. Anonymous8:17 AM

    Its very important that parliamentary questions are asked on an ongoing basis about the Irish Red Cross. Its important that information is put on public record. Well done to those people who organise them, keep it up. The questions last week in the Dail were very important especially the ones about why the national vice chairman, Tony Lawlor, is allowed remain on the board after 21 years service, never mind his track record.

    Like Michael Fingleton of Irish Nationwide a number of Irish Red Cross board members are disgraced and their reputations will rightly be forever sullied. There will always be the scent of suspicion around them. Like Fingleton they have no honour and so give the two fingers to Society. This they think makes them look like big men. Sadly they dont realise its only small men who lack honour.

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  11. Anonymous4:44 PM

    The Presidential election will no doubt be quite interesting, no doubt the candidates will be asked how they will deal with corruption within the Irish Red Cross when they become President of that organisation. This matter will be an interesting part of the debates. I wonder will any light be shed on the involvement of the Irish Red Cross in financing the provos, at least one candidate might be able to provide some information on this historical fact.

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  12. Anonymous11:47 AM

    I see Tony Lawlor is opening a conference for Volunteers run by the IRC Kerry Area and he is also giving a talk on "The Emergency Volunteer" at the same conference. What a joke that he was even invited to this event, it goes to show you the type of denial the Areas and Branches are in about this sham of a man.It also says a lot about his ego that he still has the audacity to attend these events.

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  13. Anonymous12:19 AM

    If Martin Mc Guinness becomes President will he act to also insure that all those who work under the auspices of the Office of President. What I mean is, will he make Donal Forde ex Head of AIB, work for the average industrial wage? This is going to be an interesting election. Of course the troubles at the REd Cross will have to be addressed by at least one of the candidates. Whilst our current President is wonderful, she did nothing to insure that good Governance was introduced into the only other organisation she is President of.

    Why is it that Presidents want nothing to do with the Red Cross?

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  14. Anonymous1:10 AM

    Best wishes to those in the Kerry Irish Red Cross Area with organising the conference on First Aid and Volunteering. Im sure alot of work is going into the confernce. Sadly the conference will be over shadowed by the Irish Red Cross Vice Chairman opening the event and speaking on the topic of 'The Emergency Volunteer'. The national IRC Vice Chairman has brought great shame on the Irish Red Cross and his continued presence as national Vice Chairman is in breach of good corporate governance. Calls for his resignation have extended to Dail Eireann. He should have been expelled from the IRC for his role in the Tipperary tsunami bank account scandal.

    Those of us that know and understand the Irish Red Cross know that speaking at such events is Mr. Lawlor's way of rehabilitating his reputation and more importantly maintaining his power base. Forde is trying to keep tabs on him but so long as Lawlor steers clear of Merrion Square there is nothing Forde can do to control Lawlor controlling the rest of the Society.

    Sad that the Kerry conference will be badly overshadowed by its choice of one of its key speakers.

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  15. Anonymous12:18 AM

    I wonder will Mr Lawlor ever come to Donegal or anywhere in the North I look forward to having the opportunity to debate with him in Public, the issues which I have highlighted over the last 30 years. Perhaps if he is giving a talk in Dublin I could arrange to attend I am sure many members would delight in the opportunity to question him.

    I would like to be able to make comments o the Red Cross Facebook page, but I have been sanctioned from doing so. The Irish Red Cross has a policy, if they don't like what you say they will ban you from their Facebook page. I know this is a breach of the European convention, on the right to freedom of speech. The Irish Red Cross has shown clearly how it deals with anyone who questions its irresponsibility’s

    I wonder what Facebooks view on this would be? it is supposed to be a Social Network site.

    Gerard Moyne
    Life Member Irish Red Cross

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  16. Anonymous1:05 AM

    Perhaps a protest outside the conference hotel in Kerry is something to consider. Part of me wouldnt want to see the hard work by Kerry volunteers of Irish Red Cross in preparing for this conference put at risk but if they are foolish enough to ask Tony Lawlor, someone so discredited and tarnished, to speak at their event they cant blame people for protesting outside it. On balance I think a protest is warranted as people have to stand up for the integrity of the Society.

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  17. Anonymous1:11 PM

    I hope the Executive Committee debated at their last meeting the awarding of the Irish Red Cross web design contract to a UK company and accusations that staff are being spied on to prevent and control dissent. Those responsible for these matters must be held to account if proven to be true. The reasons an Irish company was not chosen must be explained.

    The only way to prove these matters is in court so perhaps its best that the Irish Red Cross and/or individuals involved with the Irish Red Cross end up in court where all these matters can be brought to the public's attention. It would be good if someone could initiate a court action against someone so all involved in the Irish Red Cross scandal could be hauled up before the courts and finally held to account. A court case is always a good way to clear the air and get everything out in the open. All the Irish Red Cross skeletons can then be exposed for all to see. So bring on a court action.

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  18. Anonymous1:45 PM

    If the Kerry Red Cross members allow this discredited individual to stand on a platform and purport to represent the good name of the Irish Red Cross then shame on them, shame on them for allowing the name of the Irish Red Cross to be further tarnished by association with this individual. I am sure the persons of the Kerry Irish Red Cross Branch are people of the utmost integrity and organising the conference is a great idea. Sadly they have made a very poor choice in choosing one of their speakers. When will the national Vice Chairman get the message that the days when he and his cronies could lord it over the Irish Red Cross and act with impunity are finished. They may remain in their positions but going forward everything they have done and try to do in the future will be put into the public domain.

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  19. Anonymous1:51 PM

    Court, Court did I hear someone say Court.

    Yipee, when is it on, can we book seats? Is it open to the public, will there be refreshments?

    Can I bring my great Aunt bessie she just loves a good farse!

    The Red Cross has been in court before, I seem to remember there being one where the Judge after hearing the Red Cross side ruled against them without hearing the plaintiff. Unique !

    I hope its near christmas because we can perhaps fit in two pantos in the one day !

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  20. Anonymous5:40 AM

    For a long time it has been obvious that a court case is required to get to the bottom of all the Irish Red Cross scandals and expose those responsible. The pretext for the court case is not so relevant, what matters is that someone brings a court case and once it has a broad connection to Irish Red Cross issues then all those guilty of negligence and abuse of power over the years can be exposed.

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  21. Anonymous5:48 AM

    Thanks to the commenter above for reminding me of IRC's decision to award an IT contract to a UK company when there is no doubt an Irish company could have done the job equally well. Who are the people who made this decision? I had forgotten about it so good to keep these matters in the mind of the membership, the public and the government.

    What's even more important is the article above which reveals the Irish Government's financial watchdog investigated Irish Red Cross. How shameful for the Society and to have 49 undisclosed bank accounts is shocking. I agree with those people who have expressed the view that the Gardai should be called in immediately. Perhaps the Gardai could investigate the claim that staff emails are/were being spied on although this might be permitted under law so long as the employer adheres to certain guidelines in doing so.

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  22. Anonymous1:19 AM

    Irish Red Cross waste more money on consultants, see link below where Irish Red Cross hired a company to help them with their 'brand identity'. Its a sad state of affairs that after 72 years in existence the Irish Red Cross doesnt understand that the Red Cross is not a brand but is an internationally protected emblem. The Red Cross in Geneva has detailed documents and protocols for the use and design of the Red Cross, all available for free but the Irish Red Cross wastes money going to a commercial company to get the same advice they can get internally but more importantly information they should know themselves if they bothered to understand the emblem and the Movement.

    The problem for the Irish Red Cross is nothing to do with 'brand identity' but everything to do with the leaders who have disgraced the Society. Remove them and immediately the Irish Red Cross's image problem is addressed. If they remain in place no amount of tinkering at the edges and spending thousands of Euros on creative design companies will resolved the organisation's wrecked image.

    The Red Cross emblem is portected under international law, brands arent. The Red Cross emblem is not McDonalds or Coca Cola. The link is:

    http://www.creativeinc.ie/index.php/portfolio/detail/irish_red_cross/

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  23. Anonymous8:00 AM

    As a member of the Irish Red Cross I think any form of a court case would be widely welcomed, it would naturally give the opportunity to formally put before the courts and the Irish people evidence which would undoubtedly prove not in the favour of the Irish Red Cross. Might I presume from this conversation, that someone once again has been threatened with court action? If so, this is a normal course of events. Over the years there have been so many threats its hard to remember who got threatened and for what. It should be taken with the contempt for which it deserves. There are those within the Irish Red Cross whose only means of defence is by way of threats. I guess this is their way of showing that they don’t have the capacity to keep to the Principles of the Red Cross. Sad really, but what can one do.

    All I can say is good luck! In the last 70 years the Irish Red Cross has not won a single case they took before the courts. They are creatures of habit, when in doubt sue! Its easy to do when your not using your own money.

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  24. Anonymous11:35 PM

    Has anyone seen any comments from the Irish Red Cross in relation to their awarding of a contract for work to a company outside the Jurisdiction. It may appear that the buy Oirish compaign is not working !

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  25. Anonymous3:37 AM

    came across this interesting tweet today:

    @Padraig_OMorain
    Padraig O'Morain
    The Irish Red Cross emails to thank me for a donation I haven't made. Not one bit impressed. I will give to Concern.

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  26. Anonymous4:33 AM

    More parliamentary questions in the Dail during the week. The question was raised by an independent TD and directed at the Minister for Defence and related to the Comproller and Auditor General's report which included a full chapter on the dysfunction at the Irish Red Cross. The question was raised on 6th October

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  27. Anonymous12:47 AM

    Further to the comment above about the Irish Red Cross 'brand redesign'!!!! How do you redesign a red cross???!! A red cross on a white background is always a red cross on a white background!!

    There is no need for expensive and unnecessary creative re-design. How much did this cost the Irish Red Cross? How much donor money was wasted on this ridiculous exercise. I cant tell any difference. It was a red cross before the company was hired to 'brand redesign' and its still a red cross after they did their 'brand redesign'!!!

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