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.