Transparency International calls for independent investigation into Irish Red Cross

On the 9th December 2011 Transparency International (Ireland), the highly reputable global organisation that fights corruption and abuse of power, wrote an open letter to the Minister for Justice, Defence and Equality, Mr. Alan Shatter, calling on the Irish Red Cross to commission an independent investigation into reports of weak financial management and governance at the Society.

Previously Transparency International wrote to the Irish Red Cross but their request for an independent investigation fell on deaf ears. It is of course a damning indictment on the Irish Red Cross that an organisation as credible and highly respected as Transparency International deems it appropriate to call for an independent investigation into the Society’s affairs.

It remains to be seen if Minister Shatter responds in any meaningful way to the call by Transparency International. Certain individuals (past and present) at the Irish Red Cross have much to hide and much to fear from an independent investigation. At a minimum it is likely its board members would come in for severe criticism. It is also a possibility that any independent investigation would result in the Garda Fraud Bureau of Investigation being asked to assist although any such call would be a matter for the independent investigation.

The question is whether the Minister has the stomach for an investigation as it would undoubtedly involve scrutiny of his own Department. It can be assumed with near certainty, given their record of indifference and inaction and therefore complicity, that senior civil servants in the Department of Defence would not be keen to see any independent investigation take place.

The full transcript of the Transparency International letter is transcribed below and can also be seen on the Transparency International Ireland website on the link:

http://www.transparency.ie/news_events/ti-ireland-open-letter-minister-alan-shatter-irish-red-cross

Mr Alan Shatter T.D.
Minister for Justice, Equality and Defence
Department of Justice and Equality
94 St Stephen’s Green
Dublin 2

9 December 2011

Dear Minister Shatter,

I write on the occasion of UN Anti-Corruption Day to firstly congratulate the Irish Government on the ratification of the UN Convention against Corruption this year. We are convinced that this important legal instrument will help Ireland meet its commitments to reaching and maintaining international standards of good governance and are happy to offer whatever help your department should require in reviewing its implementation.

As you are aware, Article 33 of the Convention recognises the important role of good faith reporting in protecting the public interest.

I should therefore also use this opportunity to draw your attention to the continued concerns of Transparency International Ireland (TI Ireland) over the failure of the Irish Red Cross Society (IRC) to commission an independent investigation into reports of weak financial management and governance at the Society made by Mr Noel Wardick, former Head of the IRC’s International Department.

Mr Wardick was dismissed on the grounds of gross misconduct on 10 November 2010 for having publicly commented on the governance of the IRC. He is still unemployed and unable to gain employment pending his appeal for unfair dismissal to the Employment Appeals Tribunal.

On 9 December 2010, TI Ireland wrote to the Central Council of the IRC encouraging them to commission an independent investigation into Mr Wardick’s claims. In spite of the Comptroller and Auditor General’s critical report into poor financial management of state funding at the IRC, no independent investigation has taken place into Mr Wardick’s public statements on the management of public donations and governance at the charity.

We believe that the IRC’s refusal to commission an independent investigation into his claims will serve as a great disincentive to anyone wishing to report financial irregularities or the risk of wrongdoing in the charity sector. We would therefore ask you to press upon the IRC the importance of an independent investigation into Mr Wardick’s reports. Such a measure would not only help seek a fair resolution to all the parties in this case, but also serve the public interest.

Yours sincerely,

John Devitt
Chief Executive

On a Separate Matter:

1. It appears the issue of the very poor 2011 Floods Appeal was not properly discussed at the recent Central Council meeting on 10th December 2011. For those not familiar with the situation an unwise decision was taken after the highly localised but severe flooding that took place primarily in Dublin in November to launch a nationwide appeal. The appeal involved radio and newspaper advertisements and as such significant costs would likely have been incurred. The appeal raised a gross amount of circa €30,000, extremely small for a national appeal. When the costs of the appeal advertisements are deducted the net amount would have been very much less. To put €30,000 in context in 2009 when vast areas of the country were flooded over €1 million was raised. It is highly unusual for the Irish Red Cross to launch a costly national appeal for a localised emergency that received no more than a day or two of national media coverage. Those experienced in such matters, had they been available, would have advised against a national appeal as the response permitted from raising smalls sums of money leaves many affected families disappointed and frustrated. Unfortunately for the Society many saw the appeal for what it was, namely a public relations exercise that had little real substance to it. Hopefully some valuable lessons have been learned by senior Irish Red Cross management who made the questionable call to launch a national appeal.

2. The decision, if confirmed, to suspend the purchases of all ambulances in 2012 and to ask branches to cover costs directly related to their branches that were previously covered by head office is welcome and long overdue. In recent years the Irish Red Cross head office has incurred some sizeable and costly annual operating deficits and these have severely impacted the Society’s ability to grow and develop. Much of this was due to head office being forced to incur massive costs covering branch expenses and outlays related to purchasing new ambulances. Millions of Euros reside in bank accounts across the country which belongs to local branches yet head office is obliged to pay many branch direct costs, a clearly unsustainable policy and one that has cost the organisation many hundreds of thousands of Euros in recent years. It could easily be argued that the pressure to close the worsening head office operating deficits led to the decision in 2010 to allocate over €600,000 donated by the public and intended for Haiti into the domestic fund. By doing so the 2010 annual accounts showed a near breakeven point for the Society. The reality, however, was that a huge deficit had been incurred. Earthquake victims in Haiti paid the price on this occasion.

3. In relation to ambulances no new purchases should take place until such time as a full scale assessment and performance audit is carried out on the 140 or so vehicles that operate under the name of the Irish Red Cross. Such a performance audit with recommendations should be carried out by independent fleet management specialists and not by internal Red Cross staff, volunteers or board members. A comprehensive fleet management and accountability system needs to be implemented. All future ambulance purchases post the suspension should only be made after a comprehensive cost/benefit analysis and should be based on a real need and an ability to efficiently and effectively address that need. Ambulances as status symbols and a means to influence, reward and control must have no future in the Irish Red Cross.

4. It is hoped that the suspension of ambulance purchases will ensure the Irish Red Cross no longer drains valuable resources and energy away from other critically important humanitarian programs carried out domestically by the Irish Red Cross such as the ever growing and expanding Youth Program, the highly impressive Restoring Family Links Program, the HIV/AIDS Program, the Community Services Program including therapeutic hand care etc and the highly innovative and pioneering Prisons Health Care Program. It is essential these programs are properly resourced and invested in. While they are no more important than first aid and ambulances equally they are no less important.

Will Irish Red Cross issue formal apology to families who donated properties?

For over twenty years the national media in Ireland has reported on the financial irregularities, misuse of resources and poor governance at the Irish Red Cross. During this time, and particularly in recent years, there has been a number of shocking revelations. One of the more significant of these has been the discovery that the Irish Red Cross has an extensive property portfolio that it has failed to declare in its financial statements, in breach of Standard Accounting Practice for Charities. The Irish Red Cross estimated in 2010 that the value of these properties was in the region of €7 million. While presumably the value has declined substantially over the last year or two due to the recession the omission of assets worth millions of Euro from the Society accounts is a matter of utmost public concern.

What is important to note re the undeclared properties is that the Irish Red Cross has been fully aware for nearly twenty years that it was in blatant breach of accounting and financial protocol by purposefully and consciously omitting valuable assets from its financial statements. The current external auditors of the Irish Red Cross, BDO, have highlighted the matter every year since 2000. As a result of its actions the Irish Red Cross has wilfully misrepresented its financial accounts to the Irish Government, its members and volunteers, its staff and to the Irish public every year for nearly two decades.

The location of these properties, the use to which they are put (if any), their state of repair, who is responsible for them, their rental income if any and who donated them has been kept a closely guarded secret by a tight inner circle of individuals. The information has been kept from the highest governing authority of the Society, the governing Central Council. Many on the closed and secretive Executive Committee have little knowledge or detail on the property portfolio. The question must therefore be asked, and answered by way of an independent investigation, why this is so.

If any such independent investigation deems it appropriate, the Garda Bureau of Fraud Investigation could be asked to assist.

The failure of governance, senior financial management and fiduciary oversight at the Irish Red Cross has allowed this situation arise and continue for years. As with the litany of other scandals at the Society no-one has been held accountable. Because the charity sector in Ireland is so poorly regulated the Irish Red Cross has been permitted to breach proper accounting procedure year on year without any person ever being prosecuted or held to account for doing so.

For those not familiar with the correct accounting procedure for the treatment of donated assets such as properties to the Society the property must be professionally valued and the amount recorded as INCOME in the financial statements. The value of the donation must also be recorded as an ASSET on the balance sheet. For every property donated to the Irish Red Cross the Society failed to do this. As such the annual accounts massively misreported the income of the Society and under reported the value of its assets by millions and millions of Euros.

In understanding the nature of this scandal it is very important to realise that these unrecorded and unaccounted for properties were, in the main and possibly in entirety, donated to the Irish Red Cross by members of the public following the death of the property’s owner. As Irish people will know only too well one’s home is usually by far the most valuable asset a person accrues in their lifetime. For any Irish person or family to donate a property to a charity is a hugely generous and selfless act.

These properties were donated by the families for use by the Irish Red Cross in its pursuit, as per its mandate, of humanitarian activities and to be used in the best interests of the Society and its intended beneficiaries. The fact that the Irish Red Cross repeatedly failed to keep track of these properties, has mislaid title deeds and ownership documents, failed to record the properties in the Society’s accounts, has left a number of properties idle and vacant and has been unable to explain how or what the properties are used for is a shocking betrayal of public trust. It represents a scandalous misuse of assets worth millions of Euros.

If even one family donated cash of say €100,000 to the Irish Red Cross and the money was not recorded in the accounts and the money was difficult to locate or track down or its use not readily identifiable it is likely the Gardai would be immediately be called in. Or at least that is what would happen in a well functioning organisation. Failure to record and keep track of extremely valuable property donations is no different than failing to record and keep track of cash donations.

As a direct result of the Dail’s (Ireland’s Parliament) Public Accounts Committee Hearing on the 13th October 2011 into allegations of financial irregularities at the Irish Red Cross and following the inclusion of the Society (Chapter 32) in the Comptroller and Auditor General’s Annual Report the Department of Defence was forced to admit for the first time that the Irish Red Cross has at least 18 properties around Ireland that it has failed to record or properly account for. The Department did not state whether 18 was the totality of the missing properties. The Department did state that for ten of these properties it would take at least another 6-12 months “to re-construct documents of title for 10 of these”. This is a shocking indictment of incompetence and negligence at the Society.

Readers may be interested to know that the Society was instructed to deal with the property problem as far back as 1992. To-date not one person has been held to account for this spectacular failure of governance and management. It can only be hoped that the Dail’s Public Accounts Committee follow-on Hearing into the Irish Red Cross scheduled for 2012 will shed some further light on this distasteful affair.

In the meantime nothing short of a full scale public apology to the families of bereaved loved ones and kind benefactors who donated properties is immediately required of the Irish Red Cross.

In addition to the public apology the Irish Red Cross needs to be seen to hold those responsible to account and it needs to state on public record that such misuse of resources and financial irregularity will never occur again. It will also be critically important that the Irish Red Cross state categorically (assuming it can do so with conviction) that no criminal offence or activities took place in relation to the properties. This apology, given the scale of the betrayal of trust, should be issued by way of large public advertisements in the main national newspapers (Irish Times, Irish Independent and Sunday Independent) as well as on TV and radio. It is also an absolute necessity that all families who donated properties are individually contacted and the situation and future plans explained in detail to them.

On the 10th December 2011 the Central Council of the Irish Red Cross will meet. It can only be assumed that the Central Council report issued to members in advance of the meeting has an extensive and detailed report on the Dail Public Accounts Committee’s ongoing investigation into the Irish Red Cross. One also assumes that the upcoming Public Accounts Committee hearing into the Irish Red Cross in 2012 will be discussed and debated at length. It is a matter for the Central Council to decide how this matter should be handled and as such they need to direct the Secretary General and Executive Committee accordingly.

The inclusion of a full chapter on financial mismanagement at the Irish Red Cross in the Government’s Comptroller and Auditor General’s Annual Report will also presumably be high on the agenda.

In the event that the Central Council report omits the fact that the Irish Red Cross is under investigation by the Dail’s most powerful and influential cross party Committee it will prove beyond doubt that nothing has changed and that the Irish Red Cross remains as closed, secretive and misgoverned as ever. It will also demonstrate once again that information is purposely held from the highest deliberative authority of the Society.

Given the staggering incompetence and deceit shown over PropertyGate this Blog calls on Central Council members to instruct the Secretary General to initiate an independent investigation into the affair. In the meantime the Central Council should reassert its ultimate authority and demand a full list of all Irish Red Cross properties, their location, their current use, their current physical state and who has day to day responsibility for each one. These assets are worth millions of Euro and the supreme governing authority of the Society (the Central Council) needs to demand and insist on full disclosure.

Consideration should be given to the establishment of a special Property Sub-Committee of the Central Council to interact with any independent investigation. Members of this sub-committee would, as part of their terms of reference, visit and physically inspect every single Irish Red Cross property. It would be much more preferable if such a sub-committee was made up of non-Executive Committee members in order to avoid any conflict of interest. Any independent investigation would then liaise with this sub-committee, the Department of Defence and if necessary the Garda Fraud Bureau. Perhaps a representative from the International Committee of the Red Cross (ICRC) could also sit on either the CC Property Sub-Committee or the Independent Committee.

Time will tell whether the Irish Red Cross has the moral courage to apologise to all those donor families it has failed so badly. The history and culture at the top of the Irish Red Cross tells us no such apology will ever be forthcoming. There are those who tell us things are changing at the Society and changing for the better. Perhaps these individuals would be better advised to desist from their empty propaganda and spin. Instead proof via actions and substance that the Irish Red Cross has changed would be far more desirable. Hold people to account, demand resignations, enforce them if not forthcoming and issue a public apology. Then perhaps we might believe.

True remorse is never just a regret over consequence, it is a regret over motive-Mignon McLaughlin

Call in Ireland's parliament for Irish Red Cross Vice Chairman and Treasurer to step down

Not for the first time in recent months there has been another call in Ireland’s parliament, Dail Eireann, for the Irish Red Cross national Vice Chairman, Anthony (Tony) Lawlor, to step down from his post after serving a staggering 21 years in the position. In addition to calls for Mr. Lawlor to step down an additional call was made for the Irish Red Cross Treasurer, Mr. Ted Noonan, to also consider stepping down. Mr. Noonan has been a member of the Executive Committee for ten years and the Treasurer for the past three years. He has been at the helm as Treasurer throughout recent controversies at the Society.

In suggesting both Mr. Lawlor and Mr. Noonan step down, Deputy Finian McGrath stated on the 9th November 2011

“To ask the Minister for Defence his views that the time is now appropriate for the Vice Chairman and Treasurer of the Irish Red Cross to step down from their positions in order to allow for a more reasonable turnover of personnel at leadership positions within the Irish Red Cross”.

In addition Deputy McGrath stated:

“To ask the Minister for Defence if following his letter to the Chairman of the Irish Red Cross of 16th July 2011 (should have read 16th May) regarding corporate governance issues the Society has now considered a more comprehensive reform of its corporate governance arrangements; his views on the fact that the current vice chairman of the IRC is still serving in that position for the 21st year in a row, that the current Treasurer in that position for ten years in a row and both on the Executive Committee for 21 and 10 years respectively; his further views on whether this arrangement is in line with best practice corporate governance guidelines; and if he will make a statement on the matter”

On the issue of governance and the misgovernance at the Irish Red Cross Deputy McGrath had a third question for the Minister:

“To ask the Minister for Defence if consideration has been given to incorporating term-limits and retrospection of service for members of the Irish Red Cross executive committee in the amendments to the Irish Red Cross Order 1939; when he expects to bring forward the draft legislation on the Red Cross to Cabinet for approval; and if he will make a statement on the matter”

Deputy Finian McGrath is a senior, well respected and influential politician in Ireland’s parliament. His interventions in the Irish Red Cross crisis are both important and welcome. In calling for the resignation of the Society’s Vice Chairman and its Treasurer Deputy McGrath is targeting the heart of the deep rooted problems and dysfunction that exists. Internally within the Irish Red Cross there is a great fear and reluctance to tackle the core issues that have brought humiliation, shame and disgrace on the Society. Such fear and reluctance is often typical of dysfunctional governance structures where group think and a herd mentality become accepted practice. When this becomes ingrained, as it has within the Irish Red Cross, only decisive external intervention will resolve the problems.

Minister Alan Shatter has taken a much more robust approach to the Irish Red Cross than any of his predecessors who remained completely indifferent during their tenures in office, the consequences of which we are paying for today. Minister’s Shatter’s letter of 16th May 2011 to the Irish Red Cross Chairman, which was subsequently kept from Central Council members until revealed on this Blog, made it very clear he wished to see long serving board members depart the board of the Irish Red Cross. The Irish Red Cross rejected the Minister’s suggestion and reappointed the Vice Chairman and Treasurer. It remains to be seen if the Minister penalises the Irish Red Cross for its insistence in persisting with appalling governance practices by reducing the annual government grant to the Society in 2012.

In typical Irish Red Cross fashion the date and agenda of the upcoming Central Council meeting are being kept a closely guarded secret. Such secrecy is reflective of the fear and paranoia of the Society’s leadership. With an extremely weak and complient Central Council the ruling elite and the controlling cabal continually get away with treating fellow board members in this dismissive manner.

It can only be hoped that at the November/December Central Council meeting that Central Council members will find their independence and courage and finally demand the resignations and removal of the Vice Chairman and the Treasurer. It is humiliating and embarrassing for the Society that such courage is left to those external to the Society. Until such time as the Vice Chairman is held to account for his actions and the Treasurer for his inactions and both removed from all Irish Red Cross governance structures the Society will suffer indefinitely.

No amount of tinkering at the edges of reform and producing endless written policies will compensate for the damage done by not holding people responsible for wrongdoing and negligence to account.

The link to the Parliamentary Questions of the 9th November 2011 and the Minister’s replies is:

http://www.kildarestreet.com/wrans/?id=2011-11-09.904.0

The parliamentary question put down on the awarding of an Irish Red Cross IT/Web Design contract to a UK company was not answered and appears to have been withdrawn.

All persons ought to endeavour to follow what is right, and not what is established-Aristotle

Minister indicates a cut in Irish Red Cross government funding maybe on the cards

Minister for Justice, Defence and Equality, Mr. Alan Shatter, in an appearance before the Irish Parliament’s Joint Committee on Justice and Defence, gave the strongest indication yet that he is considering a cut in the government’s grant to the Irish Red Cross.

In response to questioning by Deputy Dara Calleary, Fianna Fail, on the ongoing misgovernance and mismanagement at the Society the Minister said “The capacity of my Department to pay to the Irish Red Cross a sum next year the same as this year-particularly with regard to its funding of its headquarters-is an issue that must be addressed. At this moment I am unable to guarantee the funding position for this year for any particular agency outside the Department”.

Given that the Irish Red Cross rejected the Minister’s written request of 16th May 2011 to address the issue of long serving board members by re-appointing the Society’s Vice Chairman for the 21st year in a row and reappointing the Treasurer to serve for his 10th year on the board it should come as no surprise that the Minister is considering cutting the grant to the Society. In speaking before the Justice and Defence Committee the Minister, in relation to board service, said the following:

“However, I have a concern that the board of the Irish Red Cross in particular-the main oversight group within the Red Cross-should have a reasonable turnover of individual members. I do not regard it as good for an organisation that an individual may fill an executive position for 15 or 20 years and that no one else has an opportunity in real terms as opposed to in theory, to fill that position. Every organisation needs to encourage its grassroots members to stand for executive positions to give them an opportunity to participate at a higher level and to be engaged in making managerial, strategic and administrative decisions”

Democracy is about choice and without choice there is no democracy. For years and years the Irish Red Cross national Vice Chairman has been returned as Vice Chairman by virtue of being the sole candidate nominated. This is reflective of, in reality as opposed to in theory to quote the Minister, a highly undemocratic and unhealthy organisation.

In relation to Minister Shatter’s letter of 16th May 2011 serious questions must be asked and answers demanded as to why this letter was not brought to the attention of Central Council members at their meeting of 28th May 2011. It is incredulous that an organisation that received a very specific written request from a senior government minister directly concerning the election and appointment of its board members would fail to bring such correspondence to the attention of those very same board members. It is even more incredulous when one considers that the Central Council meeting of the 28th May had as one of its primary agenda items the election of the 2011/12 Executive Committee, an area in which the Minister wished to see reform and change.

Not bringing the above letter to the attention of Central Council members can only be described as outright and flagrant misgovernance of the highest order. The Minister’s letter was addressed to the Society’s Chairman, Mr. David O’ Callaghan. He must explain why it was decided and by whom that only he and a select few were made aware of the letter and why its existence and contents were kept undisclosed to all other Central Council members.

The letter's existence only became known when the Minister himself made public reference to it in a speech in the Dail in June 2011. This Blog, in pursuing its objective to bring transparency and truth to the Irish Red Cross, then updated members on its existence and contents.

It can only be hoped that at the upcoming Central Council meeting due to be held later this month (still no date though!) that Central Council members will demand answers and insist they be shown the respect they deserve as the supreme deliberative authority of the Society. Failure to do so will ensure they remain consigned to irrelevance where they have allowed themselves be confined for years.

The unfortunate aspect of any government funding cut is that it will potentially jeopardise jobs at the Society’s headquarters. Already there have been redundancies during 2011 in two of the regional offices.

As with many aspects of Irish society those most impacted by negligence, incompetence, misuse of resources and financial irregularities are those most innocent of any wrongdoing. The Irish Red Cross is no exception to this. As such it is likely staff will pay the heaviest price for the wrongs of their superiors.

Should Irish Red Cross staff face redundancy in the New Year they can lay the blame squarely at the feet of their intransigent, obdurate and incompetent board. The Minister’s responsibility is to protect Irish tax payers money and if he in any way feels the competency, probity or ability of the board to safeguard those and other funds is under any question he has no option but to reduce or suspend the grant in its entirety. The Minister has clearly sent a warning shot across the bow of the Irish Red Cross in his comments to the Oireachtas Justice and Defence Committee. Based on historical evidence, however, it can be assumed with near certainty that the Irish Red Cross will ignore it. They have acted with impunity for decades and believe they can continue to do so.

The Minister, in discussing the undeclared Tipperary tsunami bank account with the Committee stated “I refer to the infamous situation within the Irish Red Cross where substantial funds were raised in one area and were retained in a bank account and not utilised”. It would appear from the Minister’s speech that even in government ministerial circles the Irish Red Cross Tipperary tsunami undeclared bank account on which the Society’s national Vice Chairman, Anthony (Tony) Lawlor, was a signatory, is considered “infamous”.

In his concluding remarks to the members of the Committee the Minister made clear his feelings when he said “It is in the interests of the Irish Red Cross that further change occurs...”. At this stage the dogs in the street know exactly what change is required. Those responsible for the financial irregularities and years of negligence and misuse of resources at the Society need to be removed. Failure to do so and the next shot from the Minister may not be across the bow but directly at it.

When you do something like this, you do increase the vulnerability for fraud, plain waste, abuse and mismanagement. We are very apprehensive about what we are seeing-Richard Skinner

On a separate matter:

The Irish Red Cross was briefly discussed again at the all party Oireachtas Public Accounts Committee in the Dail on the 20th October 2011. This followed on from the previous week (13th Oct) when financial irregularities at the Society constituted the main discussion. It is clear the Public Accounts Committee intends to continue its investigations into matters at the Irish Red Cross, something that in the public interest is to be very much welcomed.

Irish Red Cross to be called before parliamentary committee to face questions on use of overseas donations

NOTE: The full transcript to the Parliamentary Public Accounts Committee Hearing into the malpractice and maladministration at the Irish Red Cross is now available on the following link:

http://debates.oireachtas.ie/ACC/2011/10/13/00005.asp


On 13th October 2011 further light was shed on the practices and behaviour occurring within the Irish Red Cross. The Dail’s (Ireland’s Parliament) Public Accounts Committee (PAC) questioned intensely and robustly the Head of the Department of Defence, Michael Howard, on a range of extremely serious matters related to the Society, from mis-governance, financial irregularities and misuse of public money. Despite the Irish Government (via the Department of Defence) appointing the Irish Red Cross Chairman, one third of its 42 member Central Council and granting the Society €1m annually Mr. Howard did not appear to have the answers and seemed to imply his Department had no say or role to play in its running. The PAC members, all elected members of parliament, seemed both surprised and dissatisfied with his responses.

For much of the questioning Mr. Howard appeared distinctly uncomfortable and at times had trouble answering questions with certainty and conviction. All in all the Committee hearing left many questions unanswered and doubts further raised. Thankfully the Chair of the Committee, Mr. John Mc Guinness, a highly respected member of parliament, appeared to recognise this and agreed the Public Accounts Committee would continue to examine the matter. Mr. Mc Guinness decided the Irish Red Cross will be invited before the Committee to respond to the serious allegations made against it.

All in all October 13th 2011 was a bad day for the Department of Defence and their officials as they struggled to assuage deep rooted concerns about the Irish Red Cross. Whatever though about the Department of Defence it was another catastrophic day for the Irish Red Cross who, along with their supporters in the Department of Defence, and like other disgraced organisations in the country such as the Catholic Church, continue to defend the indefensible.

Until the membership of the Irish Red Cross finally decide to hold to account those responsible for the malaise the organisation they so dearly love and dedicate so much of their free time to will continue to be dragged through the mud. As always when leaders fail it is those they serve who suffer most but there comes a tipping point when leaders must be deposed or the reputational damage to all becomes irreparable.

Following the Public Accounts Committee hearing which are held in public and monitored closely by the media, the ‘establishment’ and the public, there was wide media coverage (TV, print and internet) and commentary. Ireland’s national broadcaster, RTE, covered the proceedings on television on Thursday evening on its program Oireachtas Report. The hearing was also covered on RTE’s web service, the Irish Times breaking news web service and in two print national newspapers on Friday 14th October (The Irish Times and the Examiner).

The links to some of the media coverage is below and the full Irish Times article is transcribed.

Lest any readers not believe that the endless woes of the Irish Red Cross are in existence for many years the Blog has also included a link to an RTE news item in 1999 reporting on a call at the time by Irish Red Cross staff for an independent investigation into their own employer in order “to protect the integrity of the organisation”.

The link to the PAC Press Release preceding the hearing into the Irish Red Cross and Noel Wardick’s letter to the PAC (which the PAC published and put into the public domain) are included again.

RTE Breaking News on 13th October 2011:
http://www.anhourago.eu/show.aspx?l=32088154&d=504

Irish Times breaking news on 13th October 2011:
http://www.irishtimes.com/newspaper/breaking/2011/1013/breaking47.html

John Mc Guinness TD (Chairman of the PAC) Blog:
http://johnmcguinness.ie/public-accounts-committee-chairman-john-mcguinness-had-said-he-will-write-to-the-irish-red-cross-with-the-transcripts-of-todays-proceedings-during-which-a-number-of-issues-were-raised

Examiner newspaper, October 14th 2011:
http://www.examiner.ie/ireland/closure-of-army-barracks-could-save-millions-and-strengthen-peacekeeping-170656.html

RTE News report in 1999 on dysfunction within Irish Red Cross and calls by staff for an independent investigation:
http://www.rte.ie/news/1999/1123/redcross.html

Link to PAC Press Release:
http://www.oireachtas.ie/parliament/mediazone/pressreleases/name-2655-en.html

Link to Noel Wardick’s letter to PAC:
http://www.oireachtas.ie/viewdoc.asp?DocID=19158&CatID=170

Irish Times newspaper article on 14th October 2011:
http://www.irishtimes.com/newspaper/ireland/2011/1014/1224305756426.html

Article transcribed in full below:

Red Cross to face questions on overseas aid donations
TIM O'BRIEN

THE IRISH Red Cross society is to be asked to respond to allegations that millions of euro, much of which was collected for overseas aid, was retained by the society in domestic accounts.

The Dáil Committee on Public Accounts agreed yesterday to invite the Red Cross to answer questions of corporate governance, including allegations that some €160,000 collected for those affected by a tsunami in Asia remained for a number of years in a bank account in Tipperary.

Committee chairman John McGuinness said similar complaints had been received, including one relating to another instance of €600,000 that had allegedly been retained following a collection in February 2010. He said the overall figure mentioned in this complaint was “millions”.

Mr McGuinness proposed the invitation at the suggestion of Eoghan Murphy TD (FG) after the committee was told by Comptroller and Auditor General John Buckley the Red Cross was largely beyond his remit.

The committee was told the Department of Defence, which provides a block grant of €1 million a year to the Irish Red Cross as well as appointing a chairman and about one-third of the Red Cross “council”, had no power to direct the organisation.

At a discussion on financial control in the Irish Red Cross Society, secretary general of the department Michael Howard told committee members: “The Government of Ireland cannot hold the Red Cross to answer.”

He said it was very important to understand no member of the Red Cross was accused of misappropriating money, and while “a number of deficiencies were exposed”, new corporate governance controls were being put in place.

Among the deficiencies was the discovery in recent years of some 49 bank accounts, one of which, in Co Tipperary, contained some €160,000, he acknowledged.

Labour TD Michael McCarthy repeatedly asked Mr Howard when his department had been made aware of the complaints, and what action it had taken. Mr Howard said he could not be certain regarding the complaints, but he had been assured by the society that when people made a donation to it, normal International Red Cross best practice was followed.

This would involve the society making a specific appeal for particular disaster relief, and all donations received for that purpose would serve that purpose. He said in times of specific appeals it was frequently the case that normal donations to the Irish Red Cross, outside the disaster relief appeal, would be received. This latter collection was considered available to the society domestically.

Simon Harris (FG) asked what was the point of having a Government appointing a chairman and about one-third of the council of the Red Cross if they were not available to report on uses of taxpayers’ money.
ENDS

Parliament's Public Accounts Committee to examine financial control in the Irish Red Cross Society

The Blog is pleased to report that the malpractice, maladministration and financial irregularities at the Irish Red Cross are to be discussed by the Dail's (Irish Parliament) Public Accounts Committee (PAC) on 13th October 2011. This is further evidence of the low standards applying at the organisation. In particular the PAC appears concerned about the undeclared Tipperary Tsunami bank account and the manner in which the Society did or did not deal with it and those involved.

The Dail's Public Accounts Committee (PAC), made up of cross party politicians, is tasked to ensure all government funding and grants are spent effectively and as intended. The PAC review of the Irish Red Cross follows hot on the heels of the review by the Government's financial watchdog, the Comptroller and Auditor General, whereby a full chapter was given to the Irish Red Cross and its problems.

The disgraced Society continues to refuse to hold those responsible to account and as a result concerns at every level of Irish society, public, media and political, have increased over the last two years. Until those individuals who have brought the Irish Red Cross to this sorry state are held accountable and removed from their posts the damage and loss of reputation will continue unabated.

The Home Page of the Oireachtas (Ireland's Parliament) website announces the PAC's intention to examine financial irregularities at the Irish Red Cross. The link is below as is the full article. In addition to the announcement the PAC has also decided to publish and put into the public domain correspondence it has received from former Irish Red Cross Head of International, Noel Wardick. The link to this correspondence is also below.

Link to PAC announcement to examine Irish Red Cross:

http://www.oireachtas.ie/parliament/mediazone/pressreleases/name-2655-en.html

Link to Noel Wardick's letter:

http://www.oireachtas.ie/viewdoc.asp?DocID=19158&CatID=170

Public Accounts Committee to examine financial control in the Irish Red Cross Society

The Secretary General of the Department of Defence; Orla Barry Murphy, Accounting Officer in the Office of the Commissioners of Charitable Donations and Bequests; and officials from the Department of Justice will appear before the Public Accounts Committee tomorrow, Thursday, 13th October 2011

A key issue which will be examined at the meeting is the financial control in the Irish Red Cross Society.

Chairman of the Committee, John McGuinness, TD said: “Concerns regarding the capacity of the Society to manage its administration and finance were raised in the past, particularly in relation to a sum of €162,960 that was donated to the 2005 Asian Tsunami Appeal which was left in a local bank account in Tipperary from 2005 to 2008. While no evidence of misappropriation of funds was found and the money was eventually transferred to the appeal fund in September 2008, the case highlighted problems with the governance and financial structures of the organisation.

The Committee will want in particular to see what guidelines, structures and procedures have been put in place to prevent such a situation happening again. We will also be interested in seeing what rules on the handling and tracking of donations have been implemented and if staff and members are receiving adequate training.”

The Committee will meet tomorrow, 13th October at 10am in Committee Room 1, Leinster House 2000.

Committee proceedings can be followed live at:http://www.oireachtas.ie/ViewDoc.asp?fn=/documents/livewebcast/Web-Live.htm&CatID=83&m=o

Ends

For further information please contact:

Ciaran Brennan,Houses of the Oireachtas,Communications Unit,Leinster House,Dublin 2
P: +3531 618 3903M: 086-0496518F: +3531 618 4551

Committee of Public Accounts Membership comprises the following TDs (MPs):

John McGuinness (FF, Chairman), Kieran O’Donnell (FG, Chairman), Paul J Connaughton FG, John Deasy FG, Paschal Donohoe FG, Anne Ferris Lab, Simon Harris FG, Michael Mc Carthy Lab, Mary Lou Mc Donald SF, Michael Mc Grath FF, Eoghan Murphy FG, Derek Nolan Lab, Shane Ross Ind.

A question for Sinn Fein's leading presidential hopeful regarding Irish Red Cross

In the event presidential hopeful Mr. Martin Mc Guinness decides to enlighten us in detail on his IRA past perhaps he could clarify the exact role played by the Irish Red Cross in the establishment of the Provisional IRA.

At the time of the Arms Trial involving Charles Haughey and co, the late Leslie Bean De Barra, wife of guerrilla leader Tom Barry, and someone with known IRA sympathies, was director of the Irish Red Cross. Justin O'Brien, in his highly authoritative work, the Arms Trial, says the money from the Department of Finance, originally transferred to the Irish Red Cross Society to protect refugees from the North, was in fact used "to finance the emergence of the Provisional IRA". For readers not familiar, Charles Haughey, a former Irish Prime Minister, was charged with smuggling guns and funding to the Provisional IRA in the early days of his political career (1970s). It led to one of the most controversial and bitter trials in Irish history.

If Mr. Mc Guinness becomes President he automatically becomes President of the Irish Red Cross. Now there's irony for you. President of Ireland and President of the very organisation that played a role in the establishment of the IRA, which as everyone knows was an illegal terrorist organisation. Martin Mc Guinness was a leading member of the IRA for decades.

Each man is questioned by life; and he can only answer to life by answering for his own life; to life he can only respond by being responsible-Victor Frankl (1905-1997)

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

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

Could certain Irish Red Cross board members face criminal prosecution under the new Criminal Justice Act 2011?

The Irish Times has reported that legislation aimed at strengthening Garda (Irish police) powers when investigating white-collar crime and legally protecting those who turn whistleblower came into operation earlier this month.

According to the newspaper “a key part of the white collar crime provisions in the Criminal Justice Act 2011 creates a new offence of failing to report business and corporate-related crimes, which is punishable by a term of imprisonment of up to five years”.

Of particular note in relation to the Irish Red Cross is the section in the Irish Times article which states “An employer who penalises a whistleblower in any way can face up to two years in prison and the whistleblower can sue for damages”.

Only time will tell whether organisations such as the Irish Red Cross who have fired whistleblowers will have criminal prosecutions taken against them and if so whether individuals from those organisations will serve custodial sentences.

At the very least the legislation is to be welcomed and any protection afforded to whistleblowers who report wrongdoing in good faith, whether in the past or in the future, is a critically important step forward. For far too long employers have systematically and wilfully threatened, harassed and punished organisational whistleblowers. They have done so with complete impunity. That day is now over.

The first criminal prosecutions and jail sentences against individuals who have fired or targeted whistleblowers will send shock waves across Ireland but shock waves is exactly what is required. No organisation, whether private, public or charity is now above the law. All that remains to be seen over the coming months and years is which individuals and organisations are prosecuted under the new legislation and for how long those found guilty will serve in prison.

No doubt there are plenty of individuals out there who are having sleepless nights since Minister Alan Shatter brought this pioneering piece of legislation before the Irish Parliament and saw it successfully passed into law. The possible threat of criminal prosecution and a jail sentence will definitely cause insomnia even for the most brazen and shameless.

Minister Shatter said the Act was an important step in ensuring the white collar criminal would be vigorously pursued. “We must put an end to any hint of a culture that suggests that the white-collar criminal can act with impunity,” he said.

Under the Act, a person who has information that could help prevent a white collar crime or help the investigation of an offence committed is guilty of an offence unless they provide the information to the Garda. The information must be supplied “as soon as practicable”. Failure to supply the information, and to do so quickly, carries a jail term of up to five years on conviction.

Minister Alan Shatter, as well as having responsibility for passing the Criminal Justice Act 2011 also has statutory oversight of the Irish Red Cross.

Spin, Inaccuracies, Half Truths, Watered Down Apologies and still no-one held accountable at Irish Red Cross

The Irish Red Cross has recently attempted to address a range of issues which it has been hauled over the coals on during the past couple of years. The Society has claimed the issues are ‘nuanced and complex’. As is often the case with the Irish Red Cross nothing could be further from the truth. The issues are straightforward and simple. Dysfunction, lies, deceit, financial irregularities, misuse of resources, failure to declare assets, bullying, harassment and appalling corporate governance are defining characteristics of the Irish Red Cross. That is the simple truth and a non-nuanced fact.

The recent spin and PR stunt carried out by the Irish Red Cross (see its Q&A on its website and material posted to donors) demonstrates clearly that the upper echelons of the Society continue in their efforts to deceive the general public. They openly admit they have spent months preparing this latest response, which not surprisingly when it comes to the Irish Red Cross, falls significantly short of the truth.

Instead of spending months drafting responses that do not hold up to the facts and instead of senior staff wasting their time trying to find excuses for unacceptable behaviour, time which is funded by tax payer money, the Irish Red Cross would be far better served by expelling those individuals who everyone now knows are responsible for the deceit, lies and mis-use of public money. It is nothing short of their expulsion that will allow the Irish Red Cross regain any semblance of credibility in the eyes of the public and its peer organisations.

The failure by the Irish Red Cross leadership to hold to account the personalities involved in bringing shame and opprobrium on the Society is a dereliction of their duties. Making up excuses, however, that are factually incorrect is not only a dereliction of their duties but behaviour that can only be described as complicit.

Narcissistic was a phrase used by the Taoiseach, Enda Kenny, to describe the Catholic Church in his extraordinary and brilliant speech condemning the failure of the Church’s hierarchy to hold people to account, their half hearted investigations and failure to report matters to the Gardai. Some of the language used by the Taoiseach, including the words narcissistic, elitist and arrogant, could be used to describe senior personalities within the Irish Red Cross. The Catholic Church, the Financial Regulators, Politicians have all been disgraced for their failure to hold people to account. Add to this list the Irish Red Cross. Accountability is required. Spin is despised. Always it will be rejected by the public who can spot it a mile off.

The Blog would like to take the opportunity to give the truth and facts in relation to the issues raised. What is most striking about the recent Question and Answer spin published by the Irish Red Cross is the complete absence of any commentary on the scandal of the Society’s €7 million undeclared property portfolio, something the external auditors have repeatedly stated is in violation of Standard Accounting Procedures for Charities.

The fact that the Irish Red Cross has failed to declare €7 million as income and assets on its balance sheet is a scandal in the extreme. These properties were donated by members of the public and not declaring them on the Society’s books is exactly equivalent to failing to declare or record, say, a €100,000 cash donation.

The Blog has noticed a number of comments on the previous article calling for the Garda Fraud Bureau to be called in to investigate the property issue. Perhaps this is now necessary. The Chairman of the Irish Red Cross, David O’ Callaghan, should give serious consideration to requesting the services of the Gardai (Irish police force) in once and for all getting to the bottom of this matter. Following recent legislation passed in Dail Eireann (Irish Parliament) it is now a criminal offence not to report white collar crime if one has suspicions it has taken place. This should be borne in mind by senior staff and board members at the Irish Red Cross.

Below the Blog outlines the Questions and Answers as articulated and written by the Irish Red Cross. In addition the Blog outlines the ‘Blog Response’ which, in contrast to the Irish Red Cross, contains the facts and omits the spin.

As follows:

Dear Supporter,
Thank you for taking the time to read visit the site and read this page. The Irish Red Cross was in the national media in Ireland in 2010 for all the wrong reasons. In addition to the criticisms levelled during an RTE Primetime television feature, a number of extra criticisms have been made in the on-line fora. This page will attempt to answer these criticisms. We would value your comments, feedback and questions. If there isn’t anything we have not covered, please let us know and we will add it to what you are about to read.

Blog: Continuous criticism has been leveled at the Irish Red Cross not only during 2010 but also during 2011 in the national media, on-line and in the Irish Parliament where the Minister for Justice and Defence on the 29th June 2011 reprimanded the Irish Red Cross on a number of fronts. It is also important to note that the Irish Red Cross has been regularly criticised in the national media over the last 20 years for its dysfunction and highly questionable financial practices.

Tipperary Bank Account/Asian Tsunami Bank Account

Q1: Did the Irish Red Cross leave €162,960 that was donated to the 2005 Asian Tsunami Appeal in a bank account from 2005 to 2008?
Yes. It is a matter of huge regret to the Society that this is true. Our governance and financial structures were not to the highest standards that we demand of ourselves.

Blog: This had nothing to do with financial structures. The bank account was kept undeclared for over 3 years by a number of individuals one of whom is the national Vice Chairman. The money was only returned to head office when the individuals involved were caught following a secret internal audit. The Blog welcomes the admission that ‘governance was not to the highest standard’ but once again calls on the Irish Red Cross to hold the individual/s responsible to account. The Irish Red Cross must only have people as members and on its governing board with ‘the highest standards’. Those lacking the ‘highest standards’ and whose actions severely damage the Society must be removed. The primary person responsible for the scandal of the Tipperary bank account was re-appointed Vice Chairman of the Society in May 2011 for the 21st year in a row. This is in flagrant breach of good corporate governance practice. As such Irish Red Cross governance still does not meet ‘the highest standards’.


Q2: How much was raised in total for the 2005 Asia Tsunami Appeal?
€32,160,256

Blog: The total sum raised is irrelevant. The fact is that a senior board member was involved in keeping an undeclared bank account with €163,000 in it for three years until he was caught. No action has been taken against him. The Irish Red Cross made every attempt at the time to sweep the matter under the carpet but because of the Blog, the media and a number of politicians the Irish Red Cross was forced kicking and screaming to at least appear to look into the matter.

How long this money would have remained in this undeclared bank account had the individuals not being caught and how, if ever, it would have been spent can only be a matter of conjecture.

Q3: What happened?
A local branch of the Irish Red Cross in Tipperary collected the money for the Tsunami Appeal. The money rested in a special appeal account locally and wasn’t transferred to the overall Tsunami Appeal Fund. The monies were eventually transferred to the appeal fund on 23rd September 2008.

Blog: Not transferring the money to Irish Red Cross head office was a flagrant violation of Irish Red Cross financial procedures. It was also a flagrant violation of Irish Red Cross policy not to declare the monies actual existence in financial reports sent to Dublin. So not only was the money not sent to head office, head office was NEVER informed of the monies existence. Every branch that raises money for an international disaster appeal is OBLIGATED to immediately forward every penny of that money to headquarters. They have NO entitlement to retain that money and have absolutely NO say in how it is spent. This is standard operating procedure and it was outrageously abused by officers of the Tipperary branch including the national Vice Chairman who was a signatory on the account. The money was only transferred to Dublin when the individuals were caught with the undeclared bank account and they were then forced to declare the money and immediately return it, over three years after the people of Tipperary had donated it.

It is absolutely incredulous that the Irish Red Cross would use a phrase “rested in a special account” given that the phrase ‘resting in my account’ has entered the Irish lexicon as a euphemism for corruption. Is the Irish Red Cross trying to send a subliminal message?

Q4: Was any money taken?
No. No monies went missing in any way.

Blog: There were two separate withdrawals on the undeclared account during the time it was kept secret. Both amounts of money were subsequently returned. No proper investigation into why this money was withdrawn has taken place and it has not been determined whether the money was returned after the secret audit discovered the account’s existence. An immediate independent investigation is required to determine who withdrew this money from an account NO-ONE has an entitlement to withdraw money from, why the money was withdrawn and whether or not the money was only returned after the undeclared account was discovered.

Q5: What happened to the money then?
It was added to the appeal funds as soon as the oversight came to light.

Blog: In July 2010 the Vice Chairman stated on record in an interview with the Tipperary Nationalist newspaper that the Tsunami money from the Tipperary bank account had been spent on tsunami projects. This was absolutely false as the money had not been spent. Following intense media questioning on this matter the Irish Red Cross eventually admitted that the money had not been spent on tsunmai projects but that eventually it would be. No-one was held to account for giving factually incorrect information to the media.

Q6: Did any of the disaster affected communities in South East Asia lose out in any way?
No. Money raised in the Asian Tsunami Appeal is being spent over an 8 year period that will be completed in 2012. Once the €162,000 came to light in 2008, it was added to this planned spend. All donor money did and will go to the affected communities within the planned time frame.

Blog: This is nonsense from the Irish Red Cross. The Tipperary branch had no entitlement whatsoever to retain monies collected for victims of an overseas disaster for years and years. It is not their decision how long to keep it or when to release it. They failed in their fiduciary duties and as such should be removed from office. The general public who donated the money and the victims in Asia were all betrayed by the decision of certain people to keep €163,000 in donations secret from the organisation and not return the money until they were caught. As the International Department had no knowledge whatsoever of the existence of this money it was never budgeted into plans and operations in Asia. Plans had to be altered and amended when the money was eventually recovered, three years late, from the individuals involved. If the secret audit had not caught the individuals it is highly possible the money would never have been forwarded to Dublin and as such would have been lost forever to the victims of the tsunami and would never have been used by Irish Red Cross in its tsunami response operations.

Q7: But surely if they didn’t receive the money until 2008 they must have lost out?
With large-scale emergencies, pressing needs in the short term are often for things such as clean drinking water, shelter and sanitation. The unprecedented generosity of the Irish public and the scale of the monies raised meant the Irish Red Cross was in a strong position to respond to both immediate and long-term needs.In the case of the longer term needs, it can take some time for them to become clear. In the case of the Asian Tsunami, it became evident the affected communities would have long-term assistance and infrastructure needs.The decision was taken to not just respond in the short term, but to also spend appeal funds over a number of years. The monies raised have made a tremendous positive impact in the lives of people across South East Asia and continue to do so. If you’d like to see some examples, follow this link.

Blog: This is more Irish Red Cross spin and a pathetic attempt to distract from the real issue. The Tipperary branch has no entitlement or say whatsoever in how international disaster monies are spent and over what time frame. Once money is collected they are obligated to declare every penny of that money in their accounts and as soon as possible forward every penny of that money to Dublin. The professional staff employed at the International Department then determine how and where the money is spent and over what timeframe. These decisions are based on the total amount of money raised and this can only be determined when all branches honestly, openly and accurately declare and submit all monies donated. The Tipperary branch failed to declare the existence of this money as well as failing to forward it to Dublin. No-one in the Irish Red Cross headquarters knew the money existed until the individuals who had it were caught and were forced to return it. Whether the Irish Red Cross response in Asia is 1 year, 2 years or 8 years is entirely irrelevant to the discussion and the seriousness of what happened. A very real and serious wrong was committed. Despite knowing the individuals responsible for this wrong no-one has been held to account. The fact that the money was rescued and recovered is a positive but those involved in the wrong did not themselves willingly hand over the money as was their responsibility. They were caught and then and only then did they hand it over.

Q8: So what went wrong with regard to the money left in the Tipperary bank account?
With hindsight we now know it would have been wiser to employ more staff, especially finance staff, to help with managing and controlling such a large appeal fund.
Our financial systems were outdated when the appeal was launched and high turnover at a senior level in the organisation in the years at the time compounded this.
Much more robust systems were installed in 2007 and now all local branch accounts are consolidated into the overall accounts of the organisation, allowing for better governance of all Irish Red Cross donations.
Specifically, the money could and should have been transferred sooner. There are various reasons it didn’t happen, and there was no attempt to hide or retain the monies in any way, but nonetheless it has been a painful and timely lesson to all of us at the Irish Red Cross Society.

Blog: This response is an utter disgrace from the Irish Red Cross. The message from this answer is that the culture of lies, spin and deceit is alive and well within the Irish Red Cross. There is one reason and one reason only for the Tipperary bank account scandal. Certain individuals in the Tipperary branch including the tsunami account signatory, national Vice Chairman, Tony Lawlor, failed to declare the existence of €163,000 collected from the general public and kept the money in an undeclared account for over three years until they were caught and forced to return the money to Irish Red Cross HQ. Their failure to declare the monies existence and forward it to HQ had ABSOLUELY NOTHING to do with lack of staff or weak financial procedures. In relation to this matter the procedures at the time were crystal clear and known to those involved. The Vice Chairman, as a senior board member, was one of those responsible for ensuring such procedures were adhered to by all branches nationally and ensuring such procedures were enforced. The Tipperary branch officers, including the national Vice Chairman, totally and completely violated and ignored EXISTING IRC procedure. They kept the existence of this money secret from head office. No amount of staff in Dublin would have altered their decision not to inform HQ about the monies existence. The procedures were clear across the country: all income to branches must be honestly and openly declared in written branch accounts and all overseas disaster monies collected must be declared and forwarded immediately to HQ. Once again the Irish Red Cross is attempting to muddy the waters and blame ‘administrative errors and weaknesses’ when nothing could be further from the truth. The scandal happened because of the absolute and total failure of certain individuals to meet their fiduciary responsibilities and to behave in an appropriate, transparent and professional manner. The attempt to blame the failure of these individuals on a lack of staff is an outrage. It is this disgusting attempt to apportion blame to innocent staff for the resignable failures of a senior board member that confirms nothing has changed within the Society. The continued use of subterfuge and spin to explain unacceptable behavior and action will only serve to consign the Irish Red Cross to many more years of dysfunction, distrust and disrepute.

Even the Irish Red Cross’s highly compromised and delayed internal report on the Tipperary scandal declared the actions of the Tipperary officers including the Vice Chairman as a ‘threat to organisational governance’. Those individuals trying to deflect blame onto staff or a lack of staff are being entirely disingenuous and they should seriously consider resigning. Before doing so they should issue an immediate apology to all existing and former staff.

Financial Procedures:
Q9: What have you done to rectify things?
We have introduced strict financial guidelines, structures and rules to prevent anything like this ever recurring. Branches must now submit all their accounts to head office to be consolidated into an overall set of accounts. There are strict rules on the handling and tracking of donations. Staff and members are receiving training on the importance of adhering to the fundraising code of conduct, and the Irish Red Cross will be one of the early adopters of this voluntary code for charities.
As well as new financial structures, new governance structures, policies and procedures have been put in place. There is a new board, a democratic process for members of the Society to be elected to this board, and term limits for them once they get there. Board members and senior management must adhere to a new code of conduct. If you’d like to see more, do come and have a look. We are proud that all our new governance structures are in line with the highest standards internationally in the Red Cross Red Crescent movement.
There is a new Senior Management Team in place at the Society, including a new Secretary General (CEO). Every one of us is working hard to ensure the trust of our supporters is earned and deserved every day.

Blog: While it is correct to address major weaknesses in the financial management capacity of the Irish Red Cross which up to the end of 2010 still did not have the internal knowledge or head quarters capacity to properly oversee a multi-million Euro operation it is important to re-iterate that the Tipperary scandal occurred because EXISTING financial procedures were violated by a number of individuals. There is therefore no point in having new financial procedures if a precedent has been set that one can violate procedures without consequence. Those responsible for the disgraceful behavior which led to the Tipperary account scandal have never been held to account. In fact one of them was rewarded with a reappointment as Vice Chairman for the 21st year in a row. The message is clear: fail in your fiduciary responsibilities, keep monies and bank accounts undeclared, only hand over monies when caught but dont worry you will never be held to account in the Irish Red Cross. In fact you will be rewarded with a senior board position.

Because of this culture no amount of ‘new’ procedures will alter anything. The Irish Red Cross has demonstrated clearly that it is afraid and completely reluctant to punish damaging and serious financial violations, abuse and irregularity.

It is factually incorrect to say Irish Red Cross has a new board. Please! Give readers some credit. The Irish Red Cross reappointed its Vice Chairman for the 21st year in a row, its Treasurer has served on the Executive for 10 years. Take a look at the Irish Red Cross board. It’s the same faces that have so poorly served the Society for years and years. The Blog agrees a new board is required but unfortunately the incumbents are anything but ‘new’. Why does Irish Red Cross lie and deceive like this? How unbelievably insecure an organisation the Society is.

The new constitution is designed to keep long serving members in power for many more years. How can Irish Red Cross honestly say their new constitution will reform the Society when they reappointed the Vice Chairman for the 21st year in a row in outrageous breach of all known good governance practice? It reappointed its Treasurer, the man who failed to sack the Vice Chairman over the Tipperary bank account and as such is entirely complicit by his failure to act. If there is a new Senior Management Team in place (a very debatable fact given two managers that remain had votes of no confidence placed in them by the Cork Area) then why has nothing changed and why did these supposed new senior managers sign off on this Q&A deceit and spin? Covering up for the outrageous actions of your bosses does not do much for the public’s confidence that reform is under way.

Q10: Was there an investigation?
Yes. The Society did an internal investigation.

Blog: The Irish Red Cross once again is being highly economical with the truth. When the undeclared account in Tipperary with €163,000 was discovered in mid 2008 the Society panicked and swept the matter under the carpet. Why? Because central to the scandal was the national Vice Chairman, the most powerful figure in the Society, and no-one was prepared to demand he be investigated. At least one member of senior management at the time formally wrote to his supervisors requesting an independent investigation and calling for the Vice Chairman’s resignation. No investigation took place, no-one was held accountable for this massive failure of governance and financial probity. The Honorary Secretary at the time Jennifer Bulbulia demanded an investigation and in the end resigned because of the Society’s failure to properly address the issue. She wrote a scathing letter to the Minister of Defence calling for action and fundamental reform of the Society. Nothing was done but such outrageous abuse of donor funding could not be buried forever. In 2010 the general public, national media and the wider political sphere became aware of it and other controversies at the Irish Red Cross. The Irish Red Cross denied any wrongdoing, denied the need for an investigation but in late 2010 ultimately caved in to public and political pressure and announced an independent investigation. The utterly cringe worthy and humiliating performance by Irish Red Cross on RTE’s Prime Time TV investigation on 26th August 2010 was probably the tipping point as Irish Red Cross’s credibility and reputation was now in tatters.

In a move that will forever damage the Irish Red Cross four weeks after announcing to the media that an independent investigation would be carried out it was cancelled and the new Chairman announced that an internal investigation would instead take place. Any hope that a new Chairman would address the ills of the Society were instantly dashed and those implicated in the Tipperary scandal no doubt breathed a big sigh of relief.

The internal investigation was carried out by persons with a real conflict of interest and as such its findings were highly compromised and watered down. Unsurprisingly no individual/s were blamed or named as is to be expected in weak compromised internal investigations. Nevertheless and in fairness to the report there was sufficient commentary to warrant the immediate expulsion of the national Vice Chairman and to request the resignation of the national Treasurer. Sadly for the reputation and future of the Irish Red Cross the new Chairman did not demonstrate the requisite courage and resolve to do so. The consequences of this will remain with the Society for many years to come.

Q11: There have been calls for an external/independent investigation. What is your response to this?
It’s a fair point and perhaps we could have gone further and done something like this. There seems little gain in doing so now. Apart from anything else, it would be very expensive. We have instead focused our efforts in reforming and overhauling our governance structures and internal financial controls (outlined above).

Blog: From the perspective of openness, honesty, transparency and accountability EVERYTHING is to be gained from an independent external investigation. An independent investigation, in the view of the Blog, would report damning and scandalous findings which would absolutely force the expulsion of a number of individuals. As such the Irish Red Cross will never willingly agree to an independent investigation. Ireland’s two governing parties, Fine Gael and Labour have repeatedly called for an independent investigation into the affairs of the Irish Red Cross as has Transparency International, the global organisation that fights corruption and abuse of power. At the very least the two mysterious cash withdrawals from the undeclared Tipperary bank account and the undeclared €7 million in property assets demand an immediate external investigation, probably with the assistance of the Garda Fraud Bureau. The excuse that an independent investigation would cost too much is so disingenuous that it beggars belief. This coming from the people who spent €140,000 in 2010 on legal fees trying to shut down this Blog and who continue to incur legal costs trying to shut down this Blog.

Q12: Are the people in charge at the time still there?
There is a new Secretary General, who runs the day to day affairs of the Society, since that time. There is also a new Senior Management Team

Blog: The recruitment of a new Secretary General in February 2011 was a very welcome development. This should have happened in early 2010 after the previous Secretary General resigned. Unfortunately it did not happen until early 2011 and the consequences of twelve months without a permanent Secretary General were dire for the organisation, consequences it will be dealing with for years to come. The board members responsible for what happened and decisions taken by them in 2010 need to be severely reprimanded and removed from their positions.

This Blog continues to wish the new Secretary General every success in his role but it must admit to being deeply disappointed with the content and spin inherent in the Q&A publicity campaign. The only way forward is to hold those responsible to account otherwise history WILL repeat itself. These individuals dominate the Society and their damaging power and presence must be eliminated. Defending and/or minimising their actions reinforces their power bases not weakens thems.

There is only two new external staff members on the Senior Management team so it is inaccurate to give the impression that new blood has been brought in. At least one of the senior managers in place had a vote of no confidence in him by one of the largest Irish Red Cross Areas in the country, namely the Cork Area. Hardly encouraging. A junior manager had a similar vote of no confidence from the same Area. Regardless of a new senior management team or not the problems of the Irish Red Cross cannot be resolved by senior managers. History in the Irish Red Cross clearly demonstrates that any senior manager who attempts to address the wrongdoing at the Society will eventually be fired or forced to leave. The Chairman and the Secretary General must take responsibility for reform and holding those guilty to account. Courage is required not acquiescence.

The Vice Chairman of the Irish Red Cross was not forced to resign when he was found to have kept €163,000 in an undeclared account for over three years until he was caught. The Treasurer was not forced to resign for failing to investigate this matter and trying to sweep it under the carpet. Two years later public, political and media pressure forced him to back down and hold an investigation. Noel Wardick, former Head of International, was fired for telling the truth and exposing all the wrongdoing at the Irish Red Cross.

Until the Vice Chairman and Treasurer are removed from office the Irish Red Cross will have demonstrated it is incapable of true reform. The Irish Red Cross remains an organisation that simply cannot be trusted and one that has an ingrained inability to tell the truth.

Q13: I’ve heard that a Board member was a signatory to the account. Is this true?
Yes. All of our Board members are elected by their local branches and districts. The particular Board member involved was at the time an officer (Secretary) of the local branch committee and therefore a signatory to the account.

Blog: This is correct and as has been widely reported in the national media the person in question is the national Vice Chairman. He was recently re-appointed to the Vice Chair position for the 21st year in a row. Not only did he and his colleagues keep €163,000 in an undeclared bank account and fail to inform HQ of the monies existence he and others failed to submit any branch financial returns at all to HQ over a number of years leading an internal investigation to declare what happened “a threat to organisational governance”. In any well functioning organisation he would have been dismissed from office.

Q14: Surely he or she should resign?
It is important to say that there is no evidence of any wrong-doing by this Board member. No monies went missing and none were retained. The individual involved was an officer of the branch and their name was on the account in this capacity.This clearly does not look good, but something not looking good isn’t in itself a reason someone should resign.

Blog: Of course he should resign. There is clear evidence of wrong-doing. It is wrong to keep a bank account undeclared and to keep money, you are not entitled to keep, in an undeclared bank account and to do so until you are caught. There have been calls in Dail Eireann, the national parliament, for Mr. Lawlor’s resignation but like his Tipperary compatriot Michael Lowry the Irish Red Cross Vice Chairman is impervious to such calls. The Irish Red Cross admits “this clearly does not look good”. Well that’s because IT IS NOT GOOD. Keeping €163,000 in an undeclared bank account and not forwarding donations from the public until you are caught with it in an undeclared bank account IS NOT GOOD! Giving the public incorrect information via the media that the money has been properly spent when it has not been spent is NOT GOOD.

The disgraceful actions of the national Vice Chairman are well known by now. His failure to resign is a testament to his character. What is more damaging though is the failure of the Irish Red Cross to expel him from office. The Irish Red Cross has demonstrated incredible organisational deficiency, cowardice and weakness by leaving the decision to resign or not with the Vice Chairman himself. The reality is it should not be a matter for the Vice Chairman to decide on. He has disgraced the Society and behaved in an unacceptable manner and as such he should be removed from office, not by himself but by his peers. Failure to do so implies complicity and condones his actions.

By refusing to take action against individuals who behave so unacceptably the Irish Red Cross is sending a loud and clear message to its donors equivalent to the following: ‘As far as we are concerned it is ok for board members of the Irish Red Cross to keep bank accounts secret and to keep in those bank accounts large sums of money donated by the Irish public. These board members do not have to declare these monies or these bank accounts until such time as they are caught by our financial systems and random secret audits. When they are caught engaging in such unacceptable behavior these board members will then be re-appointed to the board and any staff member who questions this behavior will be sacked, sued, targeted, bullied and harassed’.

Board Members:
Q15: But some board members have been there for a very long time have they not?
Yes, some members have served for a long time and have been re-elected on many occasions.
While acknowledging the debt of gratitude that the Society owes to the generosity of these individuals over many years, we also recognise that best practice in governance is to allow for a greater degree of change and renewal in the membership and officers of governing bodies.
That is why the new constitution of the Society, introduced as a part of the governance reforms at the Society will place terms limits on officers, plus mandatory step-down periods.
This new constitution has been approved by the International Federation of the Red Cross Red Crescent Societies in Geneva and we are confident it represents best practice in the voluntary sector and in the Red Cross Red Crescent movement.

Blog: What utter nonsense and spin from the Irish Red Cross. Under the new constitution the Irish Red Cross in May 2011 reappointed its Vice Chairman to the post for the 21st year in a row. This is a blatant and flagrant violation of all good corporate governance. The continued presence of the Vice Chairman on the Irish Red Cross board is causing dismay and ridicule for the Society both nationally and globally. Under the new constitution the same Vice Chairman can serve in this position for at least another six years bringing his service to 27 years in a row. This is farcical and is making the Irish Red Cross a laughing stock. Despite this supposed new constitution the Treasurer was reappointed and he has sat on the Board for the last 10 years. He can also serve under the new constitution for at least another 6 years bringing his total service to 16 years. If no-one runs against the Vice Chairman and Treasurer in 6 years time then the 3 year mandatory break can be waived under the new constitution and they will both be able to serve for another 3 years bringing their service to 30 years and 19 years respectively. How can anyone take the Society’s claims of reform even remotely serious?

Minister Shatter recently stated in parliament that he believes no person should serve more than 6 years in any one position and no more than 12 years in combined leadership roles. He requested Irish Red Cross immediately address the problem of its long serving board members. What did Irish Red Cross do? They reappointed their long serving board members thereby completely rejecting the formal written request from the Minister. The same Minister who gives nearly €1 million annually to the Irish Red Cross. If this figure is substantially reduced in 2012 members can thank the intransigence and egos of the Vice Chairman and Treasurer and the cowardice of their colleagues on the board who fear challenging them.

Q16: How are board members elected?
The voluntary members, apx. 4500, of the Red Cross elect a Central Council to govern the affairs of the Society. The Central Council elect an executive committee to govern the day-to-day affairs of the Society.
The Chairman is currently appointed by the government, and there a small number of government nominations on the Executive committee. Under the new constitution the link with the government will be broken and this practice will no longer continue.

Blog: It is good to see Irish Red Cross is no longer using the inflated and highly inaccurate figure of 6,000 for membership numbers. One third of the Central Council’s 42 members are appointed by the government for three year terms. This equates to 14 members. The link with the government will NOT be entirely broken under the new constitution. The Chairman will no longer be appointed by the government and the number of government appointees will be greatly reduced (10% of Central Council) to around 4. As such the link will not be severed completely.

Haiti
Q17: I’ve heard you kept €600,000 back that was raised for Haiti. Is this true?
No – this just isn’t true. All money given to Haiti went towards helping those affected by the devastating earthquake there. Our audited accounts show this clearly if you’d like to enquire more.

Blog: The Irish Red Cross position on this is absolutely FALSE. At least €600,000 of publicly donated money that was clearly intended for Haiti was allocated to the Irish Red Cross domestic fund and was never used for Haiti. This action was morally reprehensible. The audited accounts simply state where money was recorded by the Society so it is impossible to tell from the audited accounts that of the monies recorded to the domestic account that €600,000 of this should have been allocated to the Haiti fund.

Q18: Is there any evidence?
The accusation has been made by two individuals in the blogosphere. No evidence has been brought forward to date. But nonetheless, both individuals are people we respect so we investigated the figures very carefully and the result was still the same: all money given to Haiti was spent on the implementation, monitoring and support of programmes helping those affected by the devastating earthquake.
We tasked our auditors to investigate the matter as well and they found the accusation to be groundless.So where does the accusation come from?
It is speculation on our part, but it may be a simple misunderstanding. During large-scale emergency appeals, all overseas aid agencies experience a rise in what are called ‘unattributable’ donations. These are donations marked ‘for the Red Cross’ or ‘towards your good work’ for example. Crucially, they do not specify what the money is to be spent on. It may be that those making the accusation simply have their figures wrong, and are talking about unattributable donations rather than donations for Haiti.
It is also important to note that unattributable income comes in on a daily basis to the Irish Red Cross, even outside appeal times. It fluctuates depending on the time of year and the economy and a host of factors. Thousands of supporters are very happy to support the general work of the Society, helping us respond to disasters at home and overseas.

Blog: While the Blog acknowledges that the Irish Red Cross states it has respect for the individuals making the claims (despite firing one of them!) regarding the €600,000 Haiti funds it would much rather it stopped its spin and deceit on this matter and returned the €600,000 to the Haiti fund which Irish Red Cross wrongfully and intentionally allocated to the domestic fund.

There is absolutely no mis-understanding on this matter. During any overseas appeal hundreds of thousands of Euros flow into the Society for that appeal. Thousands of Irish people when contributing to a specific overseas disaster often send in cash and/or cheques marked ‘Pay Irish Red Cross’ and do not specify the money is for, say, Somalia. This is because they are not specifically told by IRC to do so and also simply because they respond to the vast media coverage for Somalia and then send in a cheque on the basis that Irish RC is collecting for Somalia (based on TV and media adverts) and that their money will go to the Somali fund. The Irish RC has always consciously and knowingly taken advantage of Irish people in this regard. Given the avalanche of income that comes in during an overseas disaster the Irish RC knows full well that the vast vast majority of this income is intended by the public to go to the particular disaster that has befallen some country and for which IRC is advertising widely. However IRC has always taken advantage of the fact that many people simply dont know they are to write ‘Somalia’ on their cheque or with cash to include a note ‘For Somalia’. When people fail to do this IRC knowingly then allocate the money to their domestic fund and not one penny of this money gets used overseas, ever. Their attitude has always been ‘tough luck you should have marked your cheque ‘Somalia’ or whatever, but since you didnt we are going to put it in our domestic fund instead’. IRC does this even though it knows the person in all likelihood wished the money to go towards the overseas appeal. Technically and legally the Irish RC is not breaking the law as the member of the public did not specify where the money is to go but during a massive overseas disaster and an extensive IRC appeal for that disaster and the sudden surge of income that comes in as a result of that disaster and the resultant advertising it can be taken for granted that the vast amount of this money is for the overseas crisis.

By refusing to take into account that thousands of Irish people are unaware they should specify the appeal with their donation the Irish RC knowingly takes advantage of people’s innocence and takes their money and puts it in their domestic fund. As such hundreds of thousands of Euros that are generated in direct response to an overseas disaster never go overseas but rather go into the domestic fund to pay for domestic expenses such as salaries and legal fees. While not illegal the actions of the Irish Red Cross in knowingly taking advantage of the general public’s trust and naivety is morally reprehensible. This matter has been highly contentious for many years between staff and the board and the senior managers who knowingly implement this disgraceful policy. For decades the Irish Red Cross has used overseas disasters to fill the coffers of their domestic accounts. Millions of Euros have been allocated to the domestic fund when in reality they should have gone to overseas appeals. This is exactly what happened in 2010 in direct response to the Haiti earthquake. The Secretary General at the time was formally requested to stop this practice during the Haiti response as were those senior staff implementing it, all to no avail. As such over €600,000 that was clearly intended for Haiti was allocated to the IRC domestic fund and not one penny of it was spent in Haiti or anywhere else overseas.

Q19. But why don’t you allocate all donations that come in during an emergency appeal to the particular appeal e.g. Haiti or Japan?
There is no doubt a link between a rise in unattributable donations like this, and large emergency appeals. The Heads of Fundraising for all the major Emergency response agencies in Ireland will tell you that they experienced a rise in unattributable income in 2010 due to the Haiti earthquake and Pakistan floods.
In the eighties, it was common practice to attribute these donations to the emergency appeal that was current, under a kind of ‘it’s probably meant for that appeal’ kind of logic. It suited Fundraising managers as it made their appeal figures look good, and it suited programme staff as it gave them more money to spend.

Blog: What utter rubbish from Irish Red Cross. In the Irish Red Cross the fundraising staff have absolutely no say or authority as to where monies are allocated. Such decisions are made by the board and the Secretary General. It is because of this and other dysfunction that the Irish Red Cross has had 6 Heads of Fundraising in 6 years. In the Irish Red Cross the only fund the board has any interest in or concern for is the General Fund, which in IRC is the domestic fund. All pressure on fundraisers has historically been related to this fund and the IRC policy of taking unattributable donations that surged during overseas appeals and putting them into the General Fund/Domestic was done solely to inflate this fund.

It is tragic to see, probably for the first time, a Head of Fundraising, actually defend this morally reprehensible policy. This Blog is not aware that any previous Head of Fundraising attempted to defend such abuse of the wishes of members of the public.

The reason the Irish Red Cross in the past (for a short while only unfortunately) allocated all or most unattributable income raised during an appeal to that appeal was that it recognised this was the most honest and best way to ensure the wishes of the public were honored. The IRC board did not like this though as it meant the coffers of the domestic fund did not receive money during an overseas appeal. As such the policy was abandoned in IRC for one reason and one reason only, to take advantage of those people who did not specify the overseas appeal and then allocate their money to the domestic account.

Q20: So why is this not done any more?
Unfortunately this practice was deeply problematic and is no longer best practice, let alone legal. For a start, it means we are deciding where the donor wants the money to go, which is immoral. Best practice and most honest is not to infer anything, but to attribute the money strictly to where the donor says it should go.
Often what was decided by the charity was deeply subjective in those circumstances – it basically came down to the fundraising manager or the programme officer who shouted the loudest to decide.
Often there are more than one appeal running at any given moment. In early 2011 for example, both the New Zealand Earthquake and the Japan Tsunami Appeal were running concurrently. How would one decide that a cheque marked only for the Irish Red Cross should go to Japan or New Zealand? In reality it would come down to a very subjective decision possible based upon likes and dislikes.

Blog: The spin and deceit by the Irish Red Cross on this matter is actually stunning in its audacity. The practice of allocating unattributable income raised during the height of an appeal to that appeal is absolutely NOT illegal. The legal position is that the IRC can allocate unattributable income anywhere the IRC decides. It is why the Blog has said the actions of the IRC, while morally reprehensible, are not illegal. If according to the IRC it is not legal to allocate unattributable income to an appeal when raised during that appeal then how can the IRC policy of allocating that same money to the domestic fund be legal?

The IRC says it cant decide for the donor where the money is to go but that is EXACTLY what the IRC is doing. It is deciding that unattributable money raised during an overseas appeal will not go to that appeal, will not go to any other overseas appeal but will go to fund domestic expenses here in Ireland. The point made by the IRC above is utterly contradictory. If IRC is not allowed decide where to spend unattributable donations because it ‘cant decide where the donor wants the money to go’ then that implies it can never spend the money because to do so implies making a decision on how and where to spend it.

The example IRC gives re the New Zealand and Japan appeals is ridiculous. Of course its subjective! Thats the nature of unattributable donations but the Society must do its best to within reason honour the wishes of the public. In the highly unusual circumstances where two or more appeals are running simultaneously for overseas disasters then a decision can easily be made to divide up unattributable allocations on a certain percentage basis based on any number of relevant criteria (size of disaster, ability of country to respond, number of fatalities, injuries etc). What the Irish Red Cross does now is the least acceptable and is morally wrong. It doesnt allocate one penny to any of the appeals but decides to allocate 100% of the money to its domestic fund where none of it ever gets spent on any overseas disaster. This is plain and simple wrong.

As for once again trying to blame fundraising staff for morally wrong policies when they not only had nothing to do with them but very often objected to them is another outrage by the Society. Readers should ask why an organisation would have 6 Heads of Fundraising in 6 years and then they might get some understanding of the extreme difficulties IRC fundraisers faced in trying to do their jobs properly and honestly.

It is a hugely disappointing development that the current Head of Fundraising is breaking with his predecessors in trying to defend such unacceptable behavior.

Q21: So who decides where the money is allocated?
The donor decides. Plain and simple. To say that what the donor really meant was something else from what they said in their letter is just plain wrong. We will never do it.

Blog: This is plain and simple a LIE. Hundreds of thousands of Euros, in fact probably millions of Euros over the last 20 years have been allocated to the Irish Red Cross domestic fund, NOT because the donor necessarily wished it to be or specified it but because the Irish Red Cross DECIDED that was where they would allocate it. The Irish Red Cross policy over much of the last 20 years has been very simple. If the donor does not specify where the money is to go, even if the money is raised during a massive overseas disaster appeal, the money goes to the DOMESTIC Fund (known as the General Fund). That is a FACT. The Irish Red Cross decided where to allocate the money. Do not deny it because in court or in any independent investigation you will be shown to have lied.

Bullying Accusations:
Q22: There have been accusations of bullying of staff? Is this true?
There were accusations of bullying of staff around a decade ago. Most current staff of the Irish Red Cross have been with the Society for two years or less.

Blog: The unashamed willingness of Irish Red Cross representatives to lie, spin and deceive is indeed truly sad.

Lets be clear. Bullying, harassment and intimidation of staff continued right up to and including all of 2010. In 2007 there was a major bullying case and a senior manager was ultimately found guilty of bullying a junior member of staff. Later in the 2007 a second bullying claim was brought against another senior manager. Both senior managers left the Society a couple of years ago. In 2007 bullying and harassment allegations were formally made in writing against certain members of the Executive Committee of the Irish Red Cross. At least one of those remains in place on the board. In 2007 19 staff members formally wrote to the then Chairman and Central Council complaining about numerous issues including the culture of bullying, harassment and intimidation. Little or nothing was done. Certain board members have attempted to bully and harass certain staff and members with threats of legal action. These threats have been vigorously countered and like with most bullies when challenged they crumbled and ran away. At least one of these threats of legal action by a board member against a staff member occurred in 2010. Throughout 2010 there was a continual atmosphere of fear, intimidation and paranoia within the Irish Red Cross especially at head office in Merrion Square. This can only be described as institutional and organisational bullying.

The Irish Red Cross admits most of its current staff are with the Society two years or less. This in itself is an admission of huge failure. A failure of human resource policy (of which there is none), a failure of staff training and development, a failure of staff retention, and a failure of staff investment. The admission of such a high turnover is reflective of a completely dysfunctional organisation that has had 6 Heads of Fundraising since 2005 and 4 Secretary Generals since 2007. The turnover at every other level has been very sizeable and far too many to mention. No-one has been held accountable. The same board members remain in charge.

The fact that the Irish Red Cross would make such an admission re staff turnover without actually realising that is what it is doing demonstrates how stunningly inept the Society remains at the top.

This has been a very long Blog but it is very important that the record be set straight, that the truth be recorded and spin and deceit challenged.