Tuesday, September 13, 2011

Irish Red Cross spends €140,000 on legal fees in 12 months

The Irish Red Cross 2010 audited accounts make for some interesting reading. The Blog has already covered the undeclared multi-million Euro Irish Red Cross property portfolio, which according to the external auditors, BDO, the Irish Red Cross is in breach of ‘Standard Accounting Practice for Charities’. BDO has explicitly stated this in the annual accounts every year for at least the last three years. The Irish Red Cross has, to date, failed to address the matter. It remains an ongoing scandal that properties donated to the Irish Red Cross by members of the public not only remain unaccounted for in its books but no-one appears to know what the properties are being used for and if they are generating income where the income is going and who is benefiting from it. Given the recent history of the Irish Red Cross and its undeclared bank account in Tipperary with tens of thousands of Euros discovered in it the property situation must be seen as hugely suspicious and deserving of an immediate independent investigation. Depending on the findings and recommendations of such an independent investigation a decision on whether or not to involve the Garda Fraud Investigation Bureau can be made.

But the Blog digresses! The purpose of today’s article is to report on the enormous waste of Irish Red Cross resources in 2010 on paying exorbitant legal fees. €140,000 to be precise! This is an extraordinary amount of money for a small charitable organisation to waste on legal bills. It is even more scandalous when one considers the reason for the expenditure, namely to silence the truth and protect a ruling cabal of leaders who have dominated the Irish Red Cross for years.

While the leaders remain in place the truth has been revealed and all attempts by the Irish Red Cross to silence dissent, conceal the facts and intimidate reformists have failed spectacularly. This failure cost the Society €140,000 in a 12 month period. Central to this cost was Irish Red Cross’s calamitous decision to sue Google International. The arrogance and folly of Irish Red Cross leaders is hard to fathom but it was nevertheless exposed for the world to see and gasp at. In taking on Google they learned a painful and costly lesson. Having failed in their endeavours Irish Red Cross leaders walked away with their tails between their legs while their solicitors smiled from ear to ear as they handed over their invoices.

The Irish Red Cross continues to incur legal costs in 2011. Unfortunately details on this will only be revealed in mid 2012 when the 2011 audited accounts will be published. As with the 2010 legal bills it will be too late by then to do anything about this waste. Even more disconcerting will be the legal bill the Irish Red Cross incurs in 2012 as case/s related to incidents that took place in 2010 finally come before the courts.

Sadly it will be 2013 before we know the true cost of all these legal battles. What we do know, however, is that the Irish Red Cross has a very long history of incurring enormous legal bills and 2010, 2011, 2012 will follow a long pattern of unacceptably high expenditure on the services of solicitors and barristers. This is, of course, entirely symptomatic of a dysfunctional and a woefully governed organisation. Scratch the surface and the common denominator behind these continuous legal battles over a twenty year period is a limitless obsession with power and an endless desire to remain king of the castle. In the meantime hundreds and hundreds of thousands of Euros of Irish Red Cross money has been squandered. For any solicitor firm the Irish Red Cross is a very lucrative and valued client.

What remains remarkable regarding the scandalous waste of donor money on legal fees in 2010 (€140,000) is that no-one has been held accountable. The Irish Red Cross Treasurer in 2010 was re-appointed in 2011 despite overseeing and presumably authorising this outrageous waste of money. If he didn’t authorise it specifically, through his silence and inaction he certainly permitted it to continue. His failure to prevent it is inexcusable. The Acting Chairman at the time is also complicit in this waste. He too did nothing to stop it and as head of the organisation at the time it must be assumed he sanctioned it. Combined with his central role in the Tipperary tsunami bank scandal surely his position is completely untenable.

Ultimately, however, the Executive Committee of the Irish Red Cross must take collective responsibility. Given the financial and governance scandals that have brought the Irish Red Cross to its knees in recent years the legal bill scandal is only one of a number that would justify the collective resignation of the entire Executive Committee.

In addition to an independent investigation into the hidden Tipperary tsunami bank account, the undeclared property portfolio, the Pakistan blankets, the beef consignment issue etc etc an independent examination of Irish Red Cross’s legal cases and expenses over the last 20 years would serve to expose the rot at the top of the organisation.

What must never be forgotten in all of this is that for every Euro spent on legal fees pursuing the personal agendas of board members there is one less Euro to spend on community services, first aid training, defibrillators, mountain and lake rescue, youth activities and overseas aid.

From which budget does Irish Red Cross take money to pay for its never ending legal costs? Does it come from general funds donated by the Irish public? Does it come from the Government’s grant in aid (tax payer money)? Does it come from Overseas Appeals such as Haiti, Pakistan? Does it come from its Reserves? Does it come from its Commercial activities such as the Shell Corrib account? The Audited accounts do not answer any of these critical questions as they only show the total legal expense incurred but not from which income source the money is taken from. The audited accounts are seriously flawed in this regard. Members of the public, corporate donors and the Government, who so generously donate their money to the Irish Red Cross for humanitarian activities, need to know if their donations are being misused on legal fees.

What can be determined with certainty is that €140,000 spent on humanitarian activity in say Somalia, instead of on legal bills, would save the lives of hundreds if not thousands of men, women and children. Instead the Irish Red Cross is content to line the pockets of Ireland’s legal profession.

The waste of money cures itself, for soon there is no more to waste-M.W Harrison


  1. Anonymous12:57 PM

    It is most likely that the IRC uses income from its hidden property porfolio as a slush fund to cover all those incidentals that rarely see the light of day.
    Payments of legal fees only come into vision because of their value relative to turnover.
    The lack of clarity on earmarked funding v designated expenditure is evident of an organistation which has long since lost any pretence of providing any degree of accountability.
    Such are the limitations of auditing that the presentation of accounts remains in the hands of the account holders and the IRC are clearly using the letter of the law rather than the spirit of the law to get away with non-disclosure of what is really going on.
    The Tippeary account scenario is typical of the behaviour of "tax avoidance" type accounting and the IRC as a humanitarian organisation should be ashamed.
    We look to the day when they will be called to account.

  2. Anonymous1:03 AM

    The closure last week of the funded body MFG in West Donegal is a reflection of things to come. Funded bodies are now under greater scrutiny than ever before. Yesterday, I spoke to a lady who several years ago sent in a detailed file of her concerns to the Minister of Gaeltacht Affairs relating to a another group (not MFG) regarding the fact that the Manager was drawing down a salary which was possibly the highest in the EU for an equivalent grade. The contents of this file more than warranted an investigation into financial irregularities. Despite several meetings the complainant was told, this was one can of worms no one was willing to open, as it would lead to looking at everyone. This is how the likes of Rody Molloy and Co. got away with the carry on for years, it is still going on as Pobal are now spending more money than ever doing Audits into funded bodies who have obviously not done the right thing for years.

    So here we are several years later and the lid is open and all the worms are looking for stones to crawl under. The Irish Red Cross is no different. The lavish spending within the Irish Red Cross needs to be investigated and the cute whore syndrome that is so pervasive within Ireland needs to be firmly assigned to history, and those responsible exposed for the treason committed.

    Will Alan Shatter have the strength to retaliate to the ‘piss off’, message the Central Council gave him re: his letter of the 16th May, will he follow in the footsteps of his FF predecessors? Is he a wimp? We shall see.

  3. Anonymous2:10 AM

    The Irish Red Cross are now eager to employ those with a Commercial interest. This is obviously to compliment the skill set of the new Secretary General. More time and energy will be engaged in insuring that any and all Humanitarian projects will be firmly designated to the scrapheap. Forde will insure that only those projects which bring in the dosh will be entertained. Will he also bring in a property manager so that the rent agreements and back money can be collected? Recent closures of Regional Offices are an indication of the real plan to isolate the Areas Committees and insure compliance to the needs of Lawlor and Co.

    Looking good for the November Meeting of the faithful.

  4. Anonymous6:35 AM

    Yes the closure of the Irish Red Cross Regional Office in Mayo and the redundancy there is a very sad day for the Irish Red Cross. There was also redundancies in the Limerick Regional Office and its role has been downgraded.

    These closures and redundancies are sad but not anywhere near as sad as the large number of redundancies that will be necessary in head office if Minister Shatter decides to reduce the annual government grant to the Irish Red Cross. There has to be a good chance he will cut this in direct response to the Irish Red Cross ignoring his express wishes in his letter of 16th May 2011 whereby IRC reappointed Lawlor, Noonan and co back onto the board. No minister likes to have his wishes (personnel change on the board) thrown back in his face and especially not Shatter who likes to get his way. If he cuts the grant it will be very sad for Irish Red Cross staff, a number of whom will find themselves unemployed but they will know that its Lawlor and co to blame. You can be sure though the Executive Committee wont shed any tears at a scaled down head office as the weaker head office is the more they can get away with.

  5. Anonymous1:34 AM

    Very sad about Irish Red Cross redundancies and the closure of the Mayo Regional office and downgrading of the Limerick Regional Office.

    As with most things related to Irish Red Cross the first I heard about it (and the shocking waste of money on legal fees) was on this blog. Thank god for its existence as otherwise the truth and the facts would remain buried and buried deep.

  6. Anonymous5:00 AM

    I was looking at the jobs Irish Red Cross is advertising on their website. Both are Commercial Sales positions. Is Irish Red Cross a commercial for-profit organisation or a humanitarian charity? I think the Irish Red Cross has lost its way and lost its soul.

    The Irish Red Cross will provide a COMPANY CAR to the newly recruited Commercial Sales Manager as well as a bonus!!! Its true, read the website. A charity providing a company car and cash bonuses!!! Only at the Irish Red Cross.

    I wonder is there any other charity in Ireland that provides a company car to its staff and cash bonuses for sales?

  7. Anonymous5:56 AM

    Will they now rename the Irish Red Cross to comply with the ethos of banking strategy that Donal Forde has brought to the organisation. Forde has shown his ability to be frugal with the truth when it came to his previous employers AIB, this will suit Lawlor, Noonan and Co. who have been less than honest in that respect for decades. It is yet again proof that the concept of ‘Humanity’, envisaged by Henry Dunant, is well and truly flushed down the toilet of Merrion Square.

  8. Anonymous12:00 PM

    I didnt believe the comment about the Irish Red Cross providing a company car, the recuitment of a commercial sales manager and another commercial manager and the bonus payments for these two managers. Then I read the Irish Red Cross website and discovered its true.

    I mean a charity providing a company car and bonus payments to sales managers. Is this how Irish Red Cross spends public donations and grants from the Irish Government? That is when they are not spending it on legal fees. How has the Irish Red Cross come to this? I agree with the comment above, Irish Red Cross has lost its soul.

  9. Anonymous12:14 PM

    Have I got this correct?

    Irish Red Cross closed its Regional Office in Mayo with redundancies. It has scaled down the role of its Regional Office in Limerick and redundancies resulted. It will hire two commercial sales managers and provide one of them a company car and pay the two of them a salary and bonuses. So the Irish Red Cross will be a Dublin centred organisation paying sales people bonuses and give them a company car. And there was me thinking Irish Red Cross was a nationwide organisation and I genuinely thought it was a charity! But now I see that its a business that sells first aid services.

    Irish Red Cross makes people redundant so it can buy some manager a company car. Very humanitarian!

  10. Anonymous4:53 AM

    Has the author of this blog read the section on the IRC in the C&AG's report published yesterday?


    It gors through the financial maladministration in the IRC in details. It also says that " a
    Statutory Instrument that will amend the Irish Red Cross Society Order, 1939, was drafted and forwarded to the Office of the Attorney General. Discussions are ongoing with the Office of the Attorney General".

    on the extent of the changes that can be made

  11. Anonymous7:42 AM

    It sums everything up when the Government's Comptroller and Auditor General's annual report designates a full separate chapter (chapter 32) to the malpractice and maladministration within the Irish Red Cross. The Irish Red Cross is included alongside issues such as social welfare fraud and tax evasion. And to think the Vice Chairman, the Treasurer and others have still not been expelled for their role in all this.

    The Government's most senior Watchdog, the person whose job it is to safeguard public funding, the Comptroller and Auditor General, felt a review into the Irish Red Cross was necessary and that a full chapter in the report should be allocated to the Irish Red Cross and its financial incapacities. What humiliation. What a disgrace the serving board is that they allowed the organisation be so misgoverned for so long. And their abject failure in holding those responsible to account is shameful.

    The Comptroller and Auditor General's report confirms that 49, yes 49, UNDISCLOSED bank accounts were discovered with Tony Lawlor's Tipperary Branch having the biggest undeclared bank account with €162,000 in it, money that was supposed to go to victims of the Asian tsunami many years before the money was discovered. Mr. Lawlor was a signatory on this account. These accounts only became disclosed when the individuals were caught by an internal audit process. And still the Irish Red Cross reappointed Mr. Lawlor and its Treasurer in May 2011 despite all the evidence that should warrant their explusion.

    Can the Irish Red Cross sink any lower? When will its leaders realise they are disgraced and staying in power only worsens their disgrace and causes grave damage to the future of the organisation

  12. Anonymous5:08 AM

    Can it get any worse????

    The Government's Comptroller and Auditor General's annual report just released has a full chapter designated to the Irish Red Cross and its malpractice, maladministration and misgovernance. When we consider the wanton corruption and waste in this country, which is well covered in the report, it says something that the Comptroller and Auditor General found it necessary to allocate one whole chapter to the Irish Red Cross.

    The report says Irish Red Cross had 49 undeclared bank accounts. It further reports that the Irish Red Cross external auditors had been issuing dire warnings about the incapacity and incapability of the Irish Red Cross to produce proper accounts and financial statements for many years.

    If the likes of the Vice Chairman and Treasurer and others had any honour they would go and go NOW

  13. Anonymous11:39 PM

    There is a more important issue which is highlighted in this report. This refers to the old saying 'like a Turkey voting for Christmas', this report is based on information garnered from the Dept of Defence who in turn received it from the Red Cross. The Minister of Defence says he got assurances from the Chairman (who is an ex civil servant)that all was in hand. Of course he would say that, what else would he say. Of course this is the same chairman who has declined to answer any communications from members of the Red Cross. As regards the financial information and good governance, well this is a load of hogwash. The Red Cross has a culture of irresponsible and highly dubious financial activities. Those responsible remain in office. The report has asked the turkeys if all is OK! Sorry, but the Auditors have said, all is not ok. This situation remains valid.

  14. Anonymous1:59 PM

    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.