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.
Tuesday, August 2, 2011
Thursday, July 21, 2011
Irish Government attempts to distance itself from appointment of ex-senior banker to head up Irish Red Cross-according to Sunday Independent
Note: On a separate matter there were more Parliamentary Questions raised in Dail Eireann (Ireland's parliament) about the Irish Red Cross on 20th July 2011. Suggestions were made that the Irish Red Cross be called before the Oireachtas Committee on Justice, Defence and Equality to answer questions on all the problems it continues to have. In addition Minister Shatter stated that substantial reform of the Irish Red Cross is still required. The link to the questions is:
http://debates.oireachtas.ie/dail/2011/07/20/00200.asp
Also Boards.ie is back commenting on the scandals at Irish Red Cross
In an article (17th July 2011) in the Sunday Independent, Ireland’s biggest selling newspaper, it is claimed that the Irish Red Cross did not inform the Government in advance that it planned to appointed an ex-AIB senior banker to head up the Society. The newspaper appears to question the appropriateness of this given the fact that most of the Secretary General’s salary is in fact paid for by the Government.
It is clear from the article and information released under a Freedom of Information request that the Government wished to keep its distance from the appointment. What is not clear is whether the reason was because the Government felt it necessary to respect the independence of the Red Cross or whether the Government was and remains concerned about public reaction to tax payers money being used to pay the salary of a senior ex-AIB manager.
While not referred to in the newspaper article questions also need to be asked about the exact role of the Public Service Appointments Commission (Government Recruitment Agency) in the selection of the Secretary General. At the time (late 2010) the Irish Red Cross Chairperson inferred that the services of the Public Appointments Service Commission were being used to ensure independence and also to reduce costs. There remain, however, serious questions marks over the exact role of this supposed independent third party and why a government recruitment agency was used instead of an independent private recruitment firm, as has been normal practice for the Irish Red Cross in the past. The exact role of the Public Service Appointments Commission needs to be clarified and made public. Perhaps a Freedom of Information request will help shed light on this.
Regardless of any issues surrounding the appointment of the Secretary General or the payment of his salary from tax payer funds the fundamental issues that require drastic action at the Irish Red Cross relate primarily to senior members of the Irish Red Cross board. The removal of these individuals must be prioritised. Other issues, while important, should not distract from this objective.
It’s important to note that it has been a standard practice of the Irish Red Cross ruling elite to turn attention onto serving Secretary Generals when the heat is on and to lay the blame for the Society’s ills at their doorstep. Apart from one recent case the departures of so many Secretary Generals has been damaging for the Society. The current Secretary General must ensure that issues concerning his previous career are not used by certain board members to divert attention away from themselves. The problem is if he attempts in any way to interfere with their power and control they will immediately attack his Achilles heel. For the sake of the Irish Red Cross it can only be hoped Mr. Forde is prepared to go on the offensive against certain board members and remain on the offensive regardless of possible internal dirty tricks against him. If he shows even the slightest sign of fear or hesitation he will follow his predecessors out the front door of 16 Merrion Square never to return.
The full Sunday Independent article is available on the link below and is also printed in its entirety:
http://www.independent.ie/national-news/plum-job-at-red-cross-for-banker-2823674.html
Plum job at Red Cross for banker
Despite paying grants, Minister kept in dark on ex-AIB man’s €95k-a-year role
By HARRY LEECH
Sunday July 17 2011
A spokesperson for the Department of Defence has confirmed that the Irish Red Cross did not consult with it or the then Minister for Defence over the appointment of former AIB Ireland managing director Donal Forde as general secretary of the Irish Red Cross at a salary of €95,000-a-year, most of which is paid from a government grant.
Based on documents released to the Sunday Independent under the Freedom of Information Act, the first that the then Minister for Defence Eamon O Cuiv heard about the appointment was a press release from the society.
A spokesperson for the Department said: "Whilst this Department was notified, there was no requirement for any further correspondence with this Department or with the Minister."
A number of revelations regarding poor governance and weak financial controls in the Irish Red Cross have emerged in recent years.
The society was recently criticised in the Dail by the current Minister for Justice and Defence, Alan Shatter.
The Minister said that as a beneficiary of State funding, the society needed to "ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre".
The Irish Red Cross has acknowledged that there have been problems in the past.
However, a spokesperson said: "A programme of substantial change and reform is under way within the society."
The Department has been at pains to distance itself from the issues within the Irish Red Cross in recent years and the appointment of Mr Forde seems to be no different.
In an email to staff, the Department's principal officer Cathal Duffy said: "Mr Forde is a former managing director of AIB (Ireland). This appointment and the process that led to it are entirely a matter for the Irish Red Cross Society and is not something that we would want to comment on."
Mr Forde was managing director of AIB in the Republic of Ireland between 2002 and 2008 and was later appointed as director of group strategy, a position he held until he stepped down in May 2009.
According to the bank, his salary was €1.3m in 2007 but this subsequently fell to €776,000 in 2008.
He has also held voluntary roles on the boards of the Chambers of Commerce of Ireland and the University of Limerick Foundation, which is a registered charity.
ENDS
http://debates.oireachtas.ie/dail/2011/07/20/00200.asp
Also Boards.ie is back commenting on the scandals at Irish Red Cross
http://www.boards.ie/vbulletin/showthread.php?p=73425481
In addition readers may be interested in the article in the Irish Independent (23rd July) once again referring to Irish Red Cross undeclared Tipperary Bank Account, the Irish Red Cross apology and admissions of "huge regret" and the role played by the Vice Chairman, Tony Lawlor. The Irish Red Cross statement refers to Lawlor's role as "clearly does not look good". Mr Lawlor's position is now surely untenable. He will unlikley resign voluntarily so it is now the responsibility of the Irish Red Cross Chairman to demand his resignation. The Secretary General has done as much as he can by allowing such statements be issued in public. Taking such steps in the Irish Red Cross amount to risking one's job. Mr. Forde is clearly prodding and poking Mr. Lawlor in his attempt to get to the truth, to force him to resign and clean up the Society. Mr. David O' Callaghan, Chairman, must now follow suit and step up to the plate. Nothing short of the Vice Chairman's resignation will be acceptable in order to allow the Irish Red Cross begin the long road to recovery. The Treasurer's resignation would also be a welcome development. It is to be noted, however, that the attempts by the Irish Red Cross to deflect some of the blame for the Vice Chairman's behaviour onto staff, staff turnover and a lack of staff is nothing short of scurrilous.
In an article (17th July 2011) in the Sunday Independent, Ireland’s biggest selling newspaper, it is claimed that the Irish Red Cross did not inform the Government in advance that it planned to appointed an ex-AIB senior banker to head up the Society. The newspaper appears to question the appropriateness of this given the fact that most of the Secretary General’s salary is in fact paid for by the Government.
It is clear from the article and information released under a Freedom of Information request that the Government wished to keep its distance from the appointment. What is not clear is whether the reason was because the Government felt it necessary to respect the independence of the Red Cross or whether the Government was and remains concerned about public reaction to tax payers money being used to pay the salary of a senior ex-AIB manager.
While not referred to in the newspaper article questions also need to be asked about the exact role of the Public Service Appointments Commission (Government Recruitment Agency) in the selection of the Secretary General. At the time (late 2010) the Irish Red Cross Chairperson inferred that the services of the Public Appointments Service Commission were being used to ensure independence and also to reduce costs. There remain, however, serious questions marks over the exact role of this supposed independent third party and why a government recruitment agency was used instead of an independent private recruitment firm, as has been normal practice for the Irish Red Cross in the past. The exact role of the Public Service Appointments Commission needs to be clarified and made public. Perhaps a Freedom of Information request will help shed light on this.
Regardless of any issues surrounding the appointment of the Secretary General or the payment of his salary from tax payer funds the fundamental issues that require drastic action at the Irish Red Cross relate primarily to senior members of the Irish Red Cross board. The removal of these individuals must be prioritised. Other issues, while important, should not distract from this objective.
It’s important to note that it has been a standard practice of the Irish Red Cross ruling elite to turn attention onto serving Secretary Generals when the heat is on and to lay the blame for the Society’s ills at their doorstep. Apart from one recent case the departures of so many Secretary Generals has been damaging for the Society. The current Secretary General must ensure that issues concerning his previous career are not used by certain board members to divert attention away from themselves. The problem is if he attempts in any way to interfere with their power and control they will immediately attack his Achilles heel. For the sake of the Irish Red Cross it can only be hoped Mr. Forde is prepared to go on the offensive against certain board members and remain on the offensive regardless of possible internal dirty tricks against him. If he shows even the slightest sign of fear or hesitation he will follow his predecessors out the front door of 16 Merrion Square never to return.
The full Sunday Independent article is available on the link below and is also printed in its entirety:
http://www.independent.ie/national-news/plum-job-at-red-cross-for-banker-2823674.html
Plum job at Red Cross for banker
Despite paying grants, Minister kept in dark on ex-AIB man’s €95k-a-year role
By HARRY LEECH
Sunday July 17 2011
A spokesperson for the Department of Defence has confirmed that the Irish Red Cross did not consult with it or the then Minister for Defence over the appointment of former AIB Ireland managing director Donal Forde as general secretary of the Irish Red Cross at a salary of €95,000-a-year, most of which is paid from a government grant.
Based on documents released to the Sunday Independent under the Freedom of Information Act, the first that the then Minister for Defence Eamon O Cuiv heard about the appointment was a press release from the society.
A spokesperson for the Department said: "Whilst this Department was notified, there was no requirement for any further correspondence with this Department or with the Minister."
A number of revelations regarding poor governance and weak financial controls in the Irish Red Cross have emerged in recent years.
The society was recently criticised in the Dail by the current Minister for Justice and Defence, Alan Shatter.
The Minister said that as a beneficiary of State funding, the society needed to "ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre".
The Irish Red Cross has acknowledged that there have been problems in the past.
However, a spokesperson said: "A programme of substantial change and reform is under way within the society."
The Department has been at pains to distance itself from the issues within the Irish Red Cross in recent years and the appointment of Mr Forde seems to be no different.
In an email to staff, the Department's principal officer Cathal Duffy said: "Mr Forde is a former managing director of AIB (Ireland). This appointment and the process that led to it are entirely a matter for the Irish Red Cross Society and is not something that we would want to comment on."
Mr Forde was managing director of AIB in the Republic of Ireland between 2002 and 2008 and was later appointed as director of group strategy, a position he held until he stepped down in May 2009.
According to the bank, his salary was €1.3m in 2007 but this subsequently fell to €776,000 in 2008.
He has also held voluntary roles on the boards of the Chambers of Commerce of Ireland and the University of Limerick Foundation, which is a registered charity.
ENDS
Monday, July 11, 2011
Minister Shatter criticises Irish Red Cross board ahead of review-Sunday Times
The Sunday Times carried another detailed report (3rd July 2011) on the endless problems and difficulties at the Irish Red Cross. According to the respected publication Alan Shatter, Minister for Justice and Defence, has written to the Irish Red Cross stating that he opposes long board service and has requested the Irish Red Cross to expeditiously address this problem.
Unfortunately to date Irish Red Cross has snubbed the Minister’s request. The Minister’s reaction to this snub will only become evident overtime but the Minister’s statement that direct and indirect support from the Government to the Irish Red Cross for 2012 is under review should be a matter of deep concern to all IRC volunteers and staff. It is clear that long serving board members are rapidly becoming a funding and financial liability for the Irish Red Cross. Until they are permanently removed from their positions Irish Red Cross’s credibility and reputation remains in grave danger.
The Minister clearly stated in Dail Eireann on 29th June 2011 that he is opposed to any board member serving in the same position for more than 6 years and in a leadership role for a cumulative period of more than 12 years. Mr. Tony Lawlor has served as Vice Chairman of the Irish Red Cross for 21 years. This is 350% longer or 15 years more than the Minister considers best practice. The Irish Red Cross is inflicting untold damage on itself by choosing to ignore best corporate governance practice and specifially ignoring the wishes of the Minister whose Department’s funding is central to the Society’s survival.
Both the Society’s Vice Chairman, Tony Lawlor and its Treasurer, Ted Noonan, are specifically referred to by the Sunday Times just as they were in the Dail debate on 29th June.
The full Sunday Times (3rd July 2011) article is transcribed below:
Sunday Times
By: Harry Leech
Shatter criticises Red Cross board ahead of Review
Alan Shatter, the justice minister, has criticised the Irish Red Cross (IRC) for allowing members to serve too long on its executive board, and for failing to publish annual reports for 2009 and 2010.
The minister told the Dail on Wednesday that he has written to the organisation’s secretary-general seeking clarification of a number of issues. He said “a comprehensive review” of all legislation relating to the IRC is under way. Shatter was responding to questions by Labour’s Aodhán O Riodáin, who called for the charity’s grant to be withheld pending an independent investigation.
Last year The Sunday Times revealed that €162,000 donated to the society for Asian tsunami victims sat untouched in a Tipperary bank account for more than three years. An internal report said a systems failure meant headquarters were not notified about the money.
The minister revealed he wrote to the IRC on May 16 to express his belief that “as a matter of principle I regard it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years”.
Tony Lawlor was re-elected as honorary vice-chairman for the 21st year running just 12 days after Shatter expressed his concerns. Ted Noonan, the society’s honorary treasurer, was re-elected for the 10th year in a row.
A spokesman for the society said that “the IRC acknowledges the problems of the past and the manner in which poor governance and weak financial controls have contributed to these issues”, and that comprehensive reform has been initiated, including the introduction of mandatory break clauses for executive board members.
It has also emerged that up to €7m worth of properties either owned or given for use by the IRC are not properly entered in the society’s financial statements, which is at variance with recommended accounting practice for charities. In a draft copy of the 2010 accounts, auditors state that “the society owns a number of properties whose cost is not reflected in the book value of fixed assets....the insured value of these properties is approximately €7m. No professional valuation on an open-market existing-use basis has been undertaken”.
The IRC spokesman said that “there is a significant body of work needed to establish the precise value attached to properties that are subject to complex and historic legal arrangements” but the process should be completed within a year”.
The IRC received €960,000 in grant aid from the state for 2011, as well as the use of a state property at 16 Merrion Square as its headquarters. While the government’s own aid organisation, Irish Aid, had its grant cut by 8% in 2008, the IRC’s grant has remained unchanged since 2006.
Shatter said that as a beneficiary of state funding the society needs to “ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre”.
Jimmy Deenihan, A Fine Gael TD, told the Dail last year that “in an international rating of Red Cross societies across the world, the IRC was given a mark of four, with one being the best and five the worst”.
Unfortunately to date Irish Red Cross has snubbed the Minister’s request. The Minister’s reaction to this snub will only become evident overtime but the Minister’s statement that direct and indirect support from the Government to the Irish Red Cross for 2012 is under review should be a matter of deep concern to all IRC volunteers and staff. It is clear that long serving board members are rapidly becoming a funding and financial liability for the Irish Red Cross. Until they are permanently removed from their positions Irish Red Cross’s credibility and reputation remains in grave danger.
The Minister clearly stated in Dail Eireann on 29th June 2011 that he is opposed to any board member serving in the same position for more than 6 years and in a leadership role for a cumulative period of more than 12 years. Mr. Tony Lawlor has served as Vice Chairman of the Irish Red Cross for 21 years. This is 350% longer or 15 years more than the Minister considers best practice. The Irish Red Cross is inflicting untold damage on itself by choosing to ignore best corporate governance practice and specifially ignoring the wishes of the Minister whose Department’s funding is central to the Society’s survival.
Both the Society’s Vice Chairman, Tony Lawlor and its Treasurer, Ted Noonan, are specifically referred to by the Sunday Times just as they were in the Dail debate on 29th June.
The full Sunday Times (3rd July 2011) article is transcribed below:
Sunday Times
By: Harry Leech
Shatter criticises Red Cross board ahead of Review
Alan Shatter, the justice minister, has criticised the Irish Red Cross (IRC) for allowing members to serve too long on its executive board, and for failing to publish annual reports for 2009 and 2010.
The minister told the Dail on Wednesday that he has written to the organisation’s secretary-general seeking clarification of a number of issues. He said “a comprehensive review” of all legislation relating to the IRC is under way. Shatter was responding to questions by Labour’s Aodhán O Riodáin, who called for the charity’s grant to be withheld pending an independent investigation.
Last year The Sunday Times revealed that €162,000 donated to the society for Asian tsunami victims sat untouched in a Tipperary bank account for more than three years. An internal report said a systems failure meant headquarters were not notified about the money.
The minister revealed he wrote to the IRC on May 16 to express his belief that “as a matter of principle I regard it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years”.
Tony Lawlor was re-elected as honorary vice-chairman for the 21st year running just 12 days after Shatter expressed his concerns. Ted Noonan, the society’s honorary treasurer, was re-elected for the 10th year in a row.
A spokesman for the society said that “the IRC acknowledges the problems of the past and the manner in which poor governance and weak financial controls have contributed to these issues”, and that comprehensive reform has been initiated, including the introduction of mandatory break clauses for executive board members.
It has also emerged that up to €7m worth of properties either owned or given for use by the IRC are not properly entered in the society’s financial statements, which is at variance with recommended accounting practice for charities. In a draft copy of the 2010 accounts, auditors state that “the society owns a number of properties whose cost is not reflected in the book value of fixed assets....the insured value of these properties is approximately €7m. No professional valuation on an open-market existing-use basis has been undertaken”.
The IRC spokesman said that “there is a significant body of work needed to establish the precise value attached to properties that are subject to complex and historic legal arrangements” but the process should be completed within a year”.
The IRC received €960,000 in grant aid from the state for 2011, as well as the use of a state property at 16 Merrion Square as its headquarters. While the government’s own aid organisation, Irish Aid, had its grant cut by 8% in 2008, the IRC’s grant has remained unchanged since 2006.
Shatter said that as a beneficiary of state funding the society needs to “ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre”.
Jimmy Deenihan, A Fine Gael TD, told the Dail last year that “in an international rating of Red Cross societies across the world, the IRC was given a mark of four, with one being the best and five the worst”.
Saturday, July 2, 2011
Irish Red Cross government funding under review amidst Ministerial concerns over board members length of service
The debate in Ireland’s parliament (Dail Eireann) on 29th June 2011 concerning the Irish Red Cross has revealed the extent of the Irish Government’s frustration with Irish Red Cross intransigence, obstinacy and inflexibility with regard to reform of its antiquated and outdated governance structures.
The damage being done to the Society by the refusal of long serving board members to step down and resign is at this stage incalculable. Their continued display of disdain towards the government’s wishes and their egotistical refusal to accept that excessive service on a board is reflective of very poor practice is jeopardising not only the reputation of the Irish Red Cross but also its annual €1 million grant from the Department of Defence. Should the Government decide to cut the grant then everyone should be in no doubt where the blame lies.
The Minister has specifically stated in written correspondence on 16th May 2011 to the Irish Red Cross that he views it as “unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years”. In response to this correspondence the Irish Red Cross re-appointed Tony Lawlor as Vice Chairman for the 21st year in a row. Readers will judge for themselves how a senior minister can be expected to react to such an affront to his advice.
For the first time in the Dail the issue of allocating €600,000 of public money donated to the IRC intended for the Haiti Earthquake appeal to IRC’s domestic account has been highlighted. This is a very significant development. An immediate independent investigation is required in order to ensure the money is returned to the Haiti fund.
It is also noteworthy that Fianna Fail TD (MP), Dara Calleary, raised a parliamentary question on the Irish Red Cross on the 28th June 2011. It would now appear that both government and opposition TDs have serious concerns about the Society.
Below are highlights from the debate as well as the full detailed transcript. Involved were Labour TD (MP) Aoidáin O’ Riordáin and Minister for Justice, Defence and Equality, Alan Shatter.
Before outlining the detailed transcript the Blog has highlighted some key remarks made by both Deputies, as follows:
Deputy O’Riordáin:
“Concerns about misuse of power and financial irregularities in the IRC have been raised by staff, board members, media and politicians for over 20 years”
“Transparency International Ireland has called for whistleblowing legislation to include provisions allowing for criminal prosecutions to be taken against employers who take retaliatory action against whistleblowers who report the truth in good faith”
“The signatory on the aforementioned account (Tipperary), the society’s vice chairman, Tony Lawlor, was re-appointed as vice chairman in May 2011 for the 21st year in a row”
“The treasurer, Ted Noonan, who failed to investigate the matter at the time, was re-appointed in May this year to the board for the tenth year running”
“It (the IRC) broke even in 2010 only because more than €600,000 intended for Haiti was recorded as domestic income. This is a practice that has apparently gone on for years within the IRC and is morally reprehensible”
“Based on the evidence to date, all the information now in the public domain and the real concerns that exist inside and outside this House, the Minister must seriously consider withholding the annual grant of €1 million and review its donation of free property to the IRC for use as its headquarters until such time as a comprehensive independent investigation into the society takes place and is concluded”
Minister Shatter:
“The grant to be paid (to IRC) in 2012 is being considered as part of the review of departmental spending currently being undertaken”
“However, in light of the claims of maladministration within the society, I asked for assurances from the chairman of the society regarding the use to which funds that are granted annually from the Vote of the Department of Defence are put”
“I am of the view that organisations in receipt of funding from the Exchequer should publish detailed accounts that provide transparency on how such funds are used”. Note: IRC does not produce any details on how the government grant is spent.
“Such organisations should also publish their annual reports on time. It is not satisfactory that the annual reports (of the IRC) for 2009 and 2010 remain yet to be published”. Note: This Blog understands that the 2008 Annual Report has also not been published yet.
“While some progress has been made by the society in this regard, it is critical it makes further substantial progress to ensure its corporate governance structures comply with the highest standards. For instance, it is not conducive to good corporate governance that any individual should serve indefinitely on the central council, the executive committee or in the same appointment. I made a case on this through correspondence with the society”
“In correspondence with the society on 16th May 2011, I expressed the view that as a matter of principle I regarded it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years. With this in mind, I asked the Society whether a more comprehensive reform of the corporate governance arrangements than previously proposed might be considered”.
Serious questions must be asked of the IRC leadership as to why the Minister’s 16th May 2011 letter to the Society was not shared with Central Council members in advance of the May 28th Central Council meeting, at which at least two long serving members were re-appointed, contrary to the Minister’s wishes.
Readers of this Blog should be aware that members of the public can obtain access to the Minister’s letters to IRC and IRC’s responses by submitting a Freedom of Information (FOI) request to the Department.
The full transcript of the Dail debate is below or available at:
http://debates.oireachtas.ie/dail/2011/06/29/00026.asp
Deputy Aodhán Ó Ríordáin:
I appreciate the opportunity to raise this matter.
I first refer to the commitment given in the programme for Government, which states: “We will initiate a detailed legal review of the basis, structures and governance of the Red Cross in Ireland to improve its functioning in the light of changing circumstances.” Serious concerns and questions have been raised about alleged abuses of power, misgovernance and misuse of financial resources in the Irish Red Cross Society for over 20 years, yet the State unquestioningly gives it an annual grant of nearly €1 million. The OPW also provides the IRC with its head office at 16 Merrion Square effectively free of charge. In comparison, the budget of Irish Aid has been cut by 8% since late 2008, while the IRC has suffered no cut whatsoever.
Concerns about misuse of power and financial irregularities in the IRC have been raised by staff, board members, media and politicians for over 20 years. There was a surge in revelations in 2009 and 2010 following an intensive media campaign and the decision by Noel Wardick, former head of the international department at the IRC, to go public with his concerns. Mr. Wardick spent four years trying to have the matters addressed internally - all, unfortunately, to no avail. Mr. Wardick was fired for gross misconduct in November 2010 under the charge of breaking his confidentiality agreement. This is yet another example of an employee reporting serious concerns in good faith and in the public interest and suffering serious employer reprisal. Seven months later, Mr. Wardick remains unemployed. Transparency International Ireland has called for whistleblowing legislation to include provisions allowing for criminal prosecutions to be taken against employers who take retaliatory action against whistleblowers who report the truth in good faith. It would have been easier for Mr. Wardick to remain silent.
In the past, the Government has always taken a hands-off approach to questions raised about the integrity of IRC actions, despite appointing its chairman and 16 members of its central council and despite the presence of a Department of Defence official on the IRC governing executive committee. It appears that Governments have been happy to involve themselves in absolutely every aspect of IRC operations except those relating to governance reform, financial irregularities and abuse of power.
The Minster will be aware of the scandal regarding the undeclared Tipperary bank account which was found to have €162,000 intended for the victims of the 2004 Asian tsunami lying in it for over three years. The organisation’s vice chairman was a signatory on the account. The matter was swept under the carpet despite the resignation of the then honorary secretary in protest over the society’s failure to investigate the matter. She formally wrote to the then Minister for Defence, Deputy Willie O’Dea, and was effectively ignored. An internal investigation was carried out in late 2010 but despite the identification of major breaches of financial policy and certain actions deemed as “a threat to IRC governance”, no one was held to account or blamed. Nothing has changed. The signatory on the aforementioned account, the society’s vice chairman, Tony Lawlor, was re-appointed as vice chairman in May 2011 for the 21st year in a row. The treasurer, Ted Noonan, who failed to investigate the matter at the time, was re-appointed in May this year to the board for the tenth year running.
The IRC made substantial operating losses in 2008 and 2009. It broke even in 2010 only because more than €600,000 intended for Haiti was recorded as domestic income. This is a practice that has apparently gone on for years within the IRC and is morally reprehensible. In reality, the society made a large operational loss in 2010, yet it still managed to pay its secretary general €165,000 and spend €140,000 on legal fees in trying to silence Mr. Wardick, including legal suits against Google and UPC.
Any independent examination of media reports, industrial relations hearings and parliamentary questions over the past 20 years will bear out the fact that the IRC is a highly dysfunctional organisation with real and serious questions to answer about its financial affairs. Since 2007, the IRC has had four secretaries general, which is a clear sign of the problems that remain unresolved in the society.
The so-called new IRC constitution is also deeply flawed and is designed to ensure those in power remain in power for many years to come. I believe there was minimal organisation-wide consultation on its drafting and it must not be approved by the Government or enshrined in legislation without significant amendment. The Minister has said he is in consultation with the Office of the Attorney General with regard to the legal review, as outlined in the programme for Government. There is a real worry that the Minister will use the new legislation to enshrine the new IRC constitution into law, which will in effect secure the power bases of the long-serving, discredited incumbents, which is exactly what they are hoping for.
The IRC is not obliged to report separately, in financial or narrative form, on its €1 million Government grant. It appears as a one-line income and expenditure item in its audited accounts. The Government basically gives the grant annually to the IRC and thereafter washes its hands of its responsibilities. Based on the evidence to date, all the information now in the public domain and the real concerns that exist inside and outside this House, the Minister must seriously consider withholding the annual grant of €1 million and review its donation of free property to the IRC for use as its headquarters until such time as a comprehensive independent investigation into the society takes place and is concluded.
Minister for Defence (Deputy Alan Shatter):
I thank the Deputy for raising this important matter.
As the Deputy mentioned, the Irish Red Cross Society is the recipient of an annual grant-in-aid allocated from the Department of Defence Vote. The following are details of the grants paid to the society from the Defence Vote over the past ten years. In 2002 the grant was €809,000; in 2003 it was €821,000; in 2004 it was €866,000; in 2005 it was €880,000; in 2006 it increased to €951,000, and up to and including this year it has remained at that level. The grant to be paid in 2012 is being considered as part of the review of departmental spending currently being undertaken.
The grant from the Defence Vote is paid to the society each year in quarterly amounts and includes a sum of €130,000 which represents the Government’s annual contribution to the International Committee of the Red Cross. The balance of the grant goes towards the salary and administration costs of running the headquarters of the Irish society. In addition, the society also pays, from its own resources, an affiliation fee to the International Federation of Red Cross and Red Crescent Societies, which this year is expected to amount to approximately €160,000. Each year, the society publishes its independently audited annual accounts and nothing has come to light to indicate that the grant-in-aid has not been properly expended.
As the society is a body corporate which, in accordance with the legislation, is responsible for the handling of its own internal affairs, it is not a matter for my Department to be involved in the day-to-day running of the society. However, in light of the claims of maladministration within the society, I asked for assurances from the chairman of the society regarding the use to which the funds that are granted annually from the Vote of the Department of Defence are put. Comprehensive and satisfactory answers have been provided by the chairman, which showed that the total cost of running the head office of the society in 2010 amounted to just under €1.3 million.
I am of the view that organisations in receipt of funding from the Exchequer should publish detailed accounts that provide transparency on how such funds are used.
Such organisations should also publish their annual reports on time. It is not satisfactory that the annual reports for 2009 and 2010 remain yet to be published.
The programme for Government provides for the initiation of a detailed legal review of the basis, structures and governance of the Red Cross in Ireland to improve its functioning in light of changing circumstances. Proposals for reform of the governance of the Irish Red Cross Society initially arose from a resolution that was passed in November 2007 by the council of delegates of the International Federation of Red Cross and Red Crescent Societies. It urged all national societies to examine and update their statutes, rules and related legal texts by 2010.
A working group to propose changes in the governance of the Irish society was established by the Irish Red Cross in 2008. Its chairman presented the findings, which included changes recommended by the international federation, to the central council of the Irish Red Cross Society at a meeting held in November 2009. The working group’s report was then submitted to the Department of Defence early last year.
Following the Department’s review of these proposals and the related legislation, a draft order that would amend the Irish Red Cross ministerial order 1939 was submitted to the Office of the Attorney General. The 1939 order sets out the basis upon which the society is governed and was made pursuant to the Red Cross Act 1938. Discussions with the Office of the Attorney General on the extent of changes that can be made to the 1939 order are continuing. Whatever changes are made to it, a comprehensive review of all Red Cross legislation, and in particular the primary legislation, will then be commenced by my Department.
In this regard, while I am conscious of the importance attaching to the independence of the society, I have been in contact with the chairman of the Irish Red Cross recently about the society’s corporate governance arrangements. On 8 June 2011, he advised me that work is well under way with regard to corporate governance changes. Initiatives introduced have included statement of directors’ roles, responsibilities and accountabilities; a signed code of conduct for directors and management; a strategic planning framework; a register of organisational risks; an induction process for new directors; the establishment of an independent audit committee with external participation; performance evaluation for senior management and plans for board evaluation; a statement of fund-raising principles and behavioural code; and analysis and reporting of non-compliant branch financial returns. Work is well advanced in drafting financial policies relating to reserves management, borrowing capital expenditure, procurement and investment.
While some progress has been made by the society in this regard, it is crucial it makes further substantial progress to ensure its corporate governance structures comply with the highest standards. For instance, it is not conducive to good corporate governance that any individual should serve indefinitely on the central council, the executive committee or in the same appointment. I made a case on this through correspondence to the society. As a beneficiary of State funding, both directly and indirectly, I have urged the society to make further substantial progress in this area to ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre.
In correspondence with the society on 16 May 2011, I expressed the view that as a matter of principle I regarded it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years. With this in mind, I asked the society whether a more comprehensive reform of the corporate governance arrangements than previously proposed might be considered. The chairman, in response, explained the society is making progress in developing a much more robust corporate governance system.
The issue of turnover and rotation at leadership levels was raised at the recent central council meeting. The chairman informed me agreement was reached on a mandatory three-year break or one full-term break for executive committee members in circumstances where a member may have previously served for two full terms. This agreement occurred subsequent to correspondence with the society in which I engaged.
I have arranged to meet with the chairman of the society presently. An overriding principle must be to ensure that any legislative changes made have the full support of the international federation and that the society’s management framework requires the full and required standards acceptable in the 21st century.
ENDS
The damage being done to the Society by the refusal of long serving board members to step down and resign is at this stage incalculable. Their continued display of disdain towards the government’s wishes and their egotistical refusal to accept that excessive service on a board is reflective of very poor practice is jeopardising not only the reputation of the Irish Red Cross but also its annual €1 million grant from the Department of Defence. Should the Government decide to cut the grant then everyone should be in no doubt where the blame lies.
The Minister has specifically stated in written correspondence on 16th May 2011 to the Irish Red Cross that he views it as “unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years”. In response to this correspondence the Irish Red Cross re-appointed Tony Lawlor as Vice Chairman for the 21st year in a row. Readers will judge for themselves how a senior minister can be expected to react to such an affront to his advice.
For the first time in the Dail the issue of allocating €600,000 of public money donated to the IRC intended for the Haiti Earthquake appeal to IRC’s domestic account has been highlighted. This is a very significant development. An immediate independent investigation is required in order to ensure the money is returned to the Haiti fund.
It is also noteworthy that Fianna Fail TD (MP), Dara Calleary, raised a parliamentary question on the Irish Red Cross on the 28th June 2011. It would now appear that both government and opposition TDs have serious concerns about the Society.
Below are highlights from the debate as well as the full detailed transcript. Involved were Labour TD (MP) Aoidáin O’ Riordáin and Minister for Justice, Defence and Equality, Alan Shatter.
Before outlining the detailed transcript the Blog has highlighted some key remarks made by both Deputies, as follows:
Deputy O’Riordáin:
“Concerns about misuse of power and financial irregularities in the IRC have been raised by staff, board members, media and politicians for over 20 years”
“Transparency International Ireland has called for whistleblowing legislation to include provisions allowing for criminal prosecutions to be taken against employers who take retaliatory action against whistleblowers who report the truth in good faith”
“The signatory on the aforementioned account (Tipperary), the society’s vice chairman, Tony Lawlor, was re-appointed as vice chairman in May 2011 for the 21st year in a row”
“The treasurer, Ted Noonan, who failed to investigate the matter at the time, was re-appointed in May this year to the board for the tenth year running”
“It (the IRC) broke even in 2010 only because more than €600,000 intended for Haiti was recorded as domestic income. This is a practice that has apparently gone on for years within the IRC and is morally reprehensible”
“Based on the evidence to date, all the information now in the public domain and the real concerns that exist inside and outside this House, the Minister must seriously consider withholding the annual grant of €1 million and review its donation of free property to the IRC for use as its headquarters until such time as a comprehensive independent investigation into the society takes place and is concluded”
Minister Shatter:
“The grant to be paid (to IRC) in 2012 is being considered as part of the review of departmental spending currently being undertaken”
“However, in light of the claims of maladministration within the society, I asked for assurances from the chairman of the society regarding the use to which funds that are granted annually from the Vote of the Department of Defence are put”
“I am of the view that organisations in receipt of funding from the Exchequer should publish detailed accounts that provide transparency on how such funds are used”. Note: IRC does not produce any details on how the government grant is spent.
“Such organisations should also publish their annual reports on time. It is not satisfactory that the annual reports (of the IRC) for 2009 and 2010 remain yet to be published”. Note: This Blog understands that the 2008 Annual Report has also not been published yet.
“While some progress has been made by the society in this regard, it is critical it makes further substantial progress to ensure its corporate governance structures comply with the highest standards. For instance, it is not conducive to good corporate governance that any individual should serve indefinitely on the central council, the executive committee or in the same appointment. I made a case on this through correspondence with the society”
“In correspondence with the society on 16th May 2011, I expressed the view that as a matter of principle I regarded it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years. With this in mind, I asked the Society whether a more comprehensive reform of the corporate governance arrangements than previously proposed might be considered”.
Serious questions must be asked of the IRC leadership as to why the Minister’s 16th May 2011 letter to the Society was not shared with Central Council members in advance of the May 28th Central Council meeting, at which at least two long serving members were re-appointed, contrary to the Minister’s wishes.
Readers of this Blog should be aware that members of the public can obtain access to the Minister’s letters to IRC and IRC’s responses by submitting a Freedom of Information (FOI) request to the Department.
The full transcript of the Dail debate is below or available at:
http://debates.oireachtas.ie/dail/2011/06/29/00026.asp
Deputy Aodhán Ó Ríordáin:
I appreciate the opportunity to raise this matter.
I first refer to the commitment given in the programme for Government, which states: “We will initiate a detailed legal review of the basis, structures and governance of the Red Cross in Ireland to improve its functioning in the light of changing circumstances.” Serious concerns and questions have been raised about alleged abuses of power, misgovernance and misuse of financial resources in the Irish Red Cross Society for over 20 years, yet the State unquestioningly gives it an annual grant of nearly €1 million. The OPW also provides the IRC with its head office at 16 Merrion Square effectively free of charge. In comparison, the budget of Irish Aid has been cut by 8% since late 2008, while the IRC has suffered no cut whatsoever.
Concerns about misuse of power and financial irregularities in the IRC have been raised by staff, board members, media and politicians for over 20 years. There was a surge in revelations in 2009 and 2010 following an intensive media campaign and the decision by Noel Wardick, former head of the international department at the IRC, to go public with his concerns. Mr. Wardick spent four years trying to have the matters addressed internally - all, unfortunately, to no avail. Mr. Wardick was fired for gross misconduct in November 2010 under the charge of breaking his confidentiality agreement. This is yet another example of an employee reporting serious concerns in good faith and in the public interest and suffering serious employer reprisal. Seven months later, Mr. Wardick remains unemployed. Transparency International Ireland has called for whistleblowing legislation to include provisions allowing for criminal prosecutions to be taken against employers who take retaliatory action against whistleblowers who report the truth in good faith. It would have been easier for Mr. Wardick to remain silent.
In the past, the Government has always taken a hands-off approach to questions raised about the integrity of IRC actions, despite appointing its chairman and 16 members of its central council and despite the presence of a Department of Defence official on the IRC governing executive committee. It appears that Governments have been happy to involve themselves in absolutely every aspect of IRC operations except those relating to governance reform, financial irregularities and abuse of power.
The Minster will be aware of the scandal regarding the undeclared Tipperary bank account which was found to have €162,000 intended for the victims of the 2004 Asian tsunami lying in it for over three years. The organisation’s vice chairman was a signatory on the account. The matter was swept under the carpet despite the resignation of the then honorary secretary in protest over the society’s failure to investigate the matter. She formally wrote to the then Minister for Defence, Deputy Willie O’Dea, and was effectively ignored. An internal investigation was carried out in late 2010 but despite the identification of major breaches of financial policy and certain actions deemed as “a threat to IRC governance”, no one was held to account or blamed. Nothing has changed. The signatory on the aforementioned account, the society’s vice chairman, Tony Lawlor, was re-appointed as vice chairman in May 2011 for the 21st year in a row. The treasurer, Ted Noonan, who failed to investigate the matter at the time, was re-appointed in May this year to the board for the tenth year running.
The IRC made substantial operating losses in 2008 and 2009. It broke even in 2010 only because more than €600,000 intended for Haiti was recorded as domestic income. This is a practice that has apparently gone on for years within the IRC and is morally reprehensible. In reality, the society made a large operational loss in 2010, yet it still managed to pay its secretary general €165,000 and spend €140,000 on legal fees in trying to silence Mr. Wardick, including legal suits against Google and UPC.
Any independent examination of media reports, industrial relations hearings and parliamentary questions over the past 20 years will bear out the fact that the IRC is a highly dysfunctional organisation with real and serious questions to answer about its financial affairs. Since 2007, the IRC has had four secretaries general, which is a clear sign of the problems that remain unresolved in the society.
The so-called new IRC constitution is also deeply flawed and is designed to ensure those in power remain in power for many years to come. I believe there was minimal organisation-wide consultation on its drafting and it must not be approved by the Government or enshrined in legislation without significant amendment. The Minister has said he is in consultation with the Office of the Attorney General with regard to the legal review, as outlined in the programme for Government. There is a real worry that the Minister will use the new legislation to enshrine the new IRC constitution into law, which will in effect secure the power bases of the long-serving, discredited incumbents, which is exactly what they are hoping for.
The IRC is not obliged to report separately, in financial or narrative form, on its €1 million Government grant. It appears as a one-line income and expenditure item in its audited accounts. The Government basically gives the grant annually to the IRC and thereafter washes its hands of its responsibilities. Based on the evidence to date, all the information now in the public domain and the real concerns that exist inside and outside this House, the Minister must seriously consider withholding the annual grant of €1 million and review its donation of free property to the IRC for use as its headquarters until such time as a comprehensive independent investigation into the society takes place and is concluded.
Minister for Defence (Deputy Alan Shatter):
I thank the Deputy for raising this important matter.
As the Deputy mentioned, the Irish Red Cross Society is the recipient of an annual grant-in-aid allocated from the Department of Defence Vote. The following are details of the grants paid to the society from the Defence Vote over the past ten years. In 2002 the grant was €809,000; in 2003 it was €821,000; in 2004 it was €866,000; in 2005 it was €880,000; in 2006 it increased to €951,000, and up to and including this year it has remained at that level. The grant to be paid in 2012 is being considered as part of the review of departmental spending currently being undertaken.
The grant from the Defence Vote is paid to the society each year in quarterly amounts and includes a sum of €130,000 which represents the Government’s annual contribution to the International Committee of the Red Cross. The balance of the grant goes towards the salary and administration costs of running the headquarters of the Irish society. In addition, the society also pays, from its own resources, an affiliation fee to the International Federation of Red Cross and Red Crescent Societies, which this year is expected to amount to approximately €160,000. Each year, the society publishes its independently audited annual accounts and nothing has come to light to indicate that the grant-in-aid has not been properly expended.
As the society is a body corporate which, in accordance with the legislation, is responsible for the handling of its own internal affairs, it is not a matter for my Department to be involved in the day-to-day running of the society. However, in light of the claims of maladministration within the society, I asked for assurances from the chairman of the society regarding the use to which the funds that are granted annually from the Vote of the Department of Defence are put. Comprehensive and satisfactory answers have been provided by the chairman, which showed that the total cost of running the head office of the society in 2010 amounted to just under €1.3 million.
I am of the view that organisations in receipt of funding from the Exchequer should publish detailed accounts that provide transparency on how such funds are used.
Such organisations should also publish their annual reports on time. It is not satisfactory that the annual reports for 2009 and 2010 remain yet to be published.
The programme for Government provides for the initiation of a detailed legal review of the basis, structures and governance of the Red Cross in Ireland to improve its functioning in light of changing circumstances. Proposals for reform of the governance of the Irish Red Cross Society initially arose from a resolution that was passed in November 2007 by the council of delegates of the International Federation of Red Cross and Red Crescent Societies. It urged all national societies to examine and update their statutes, rules and related legal texts by 2010.
A working group to propose changes in the governance of the Irish society was established by the Irish Red Cross in 2008. Its chairman presented the findings, which included changes recommended by the international federation, to the central council of the Irish Red Cross Society at a meeting held in November 2009. The working group’s report was then submitted to the Department of Defence early last year.
Following the Department’s review of these proposals and the related legislation, a draft order that would amend the Irish Red Cross ministerial order 1939 was submitted to the Office of the Attorney General. The 1939 order sets out the basis upon which the society is governed and was made pursuant to the Red Cross Act 1938. Discussions with the Office of the Attorney General on the extent of changes that can be made to the 1939 order are continuing. Whatever changes are made to it, a comprehensive review of all Red Cross legislation, and in particular the primary legislation, will then be commenced by my Department.
In this regard, while I am conscious of the importance attaching to the independence of the society, I have been in contact with the chairman of the Irish Red Cross recently about the society’s corporate governance arrangements. On 8 June 2011, he advised me that work is well under way with regard to corporate governance changes. Initiatives introduced have included statement of directors’ roles, responsibilities and accountabilities; a signed code of conduct for directors and management; a strategic planning framework; a register of organisational risks; an induction process for new directors; the establishment of an independent audit committee with external participation; performance evaluation for senior management and plans for board evaluation; a statement of fund-raising principles and behavioural code; and analysis and reporting of non-compliant branch financial returns. Work is well advanced in drafting financial policies relating to reserves management, borrowing capital expenditure, procurement and investment.
While some progress has been made by the society in this regard, it is crucial it makes further substantial progress to ensure its corporate governance structures comply with the highest standards. For instance, it is not conducive to good corporate governance that any individual should serve indefinitely on the central council, the executive committee or in the same appointment. I made a case on this through correspondence to the society. As a beneficiary of State funding, both directly and indirectly, I have urged the society to make further substantial progress in this area to ensure its corporate governance standards meet what would be regarded as acceptable for an organisation of its calibre.
In correspondence with the society on 16 May 2011, I expressed the view that as a matter of principle I regarded it as unhealthy for any organisation to have individuals serving at leadership level in excess of 12 years in total and in any one position for longer than six years. With this in mind, I asked the society whether a more comprehensive reform of the corporate governance arrangements than previously proposed might be considered. The chairman, in response, explained the society is making progress in developing a much more robust corporate governance system.
The issue of turnover and rotation at leadership levels was raised at the recent central council meeting. The chairman informed me agreement was reached on a mandatory three-year break or one full-term break for executive committee members in circumstances where a member may have previously served for two full terms. This agreement occurred subsequent to correspondence with the society in which I engaged.
I have arranged to meet with the chairman of the society presently. An overriding principle must be to ensure that any legislative changes made have the full support of the international federation and that the society’s management framework requires the full and required standards acceptable in the 21st century.
ENDS
Thursday, June 30, 2011
Minister requests Irish Red Cross to address issue of long serving Board members but his request is ignored
On Wednesday 29th June 2011 an Adjournment Debate in Dail Eireann (Irish Parliament) on the continuing problems at the Irish Red Cross took place.
Labour Party (member of coalition government) deputy Aodhán O Riordáin made an excellent speech outlining the 20 year crisis at the Irish Red Cross. He raised numerous issues including abuse of power, financial irregularities and in particular the excessive length of service of certain board members. He called for government funding to the Irish Red Cross to be suspended until a full independent investigation takes place.
Minister for Justice and Defence, Alan Shatter, responded to Deputy O' Riordáin. While the Minister issued the standard civil servant drafted reply in parts he did, however, go much further than his predecessors and this is to be welcomed and acknowledged. It is clear from his responses that he and the Government have very serious issues with the long service of certain board members and the overall governance of the Irish Red Cross.
The Minister informed Parliament that on 16th May 2011 he wrote to the Irish Red Cross asking them that they address the issue of long service members. 12 days after receiving this letter the Irish Red Cross gave the Minister his answer. They re-appointed Tony Lawlor and Ted Noonan, something which clearly flew in the face of the Minister's request.
It is quite incredulous that the Irish Red Cross would ignore a specific written request from a high ranking government minister in such an arrogant, dismissive and egotistic manner. One can only imagine the reaction of the Minister. Minister Shatter stated that Irish Red Cross funding from the Government for 2012 is under review. Perhaps the Minister will use the funding as the tool to express his displeasure. If he does the Irish Red Cross only has itself to blame.
Another question that must be asked is why Irish Red Cross Central Council members were NOT informed about the Minister's May 16th letter? This letter was not shared with CC members. Perhaps if they had been issued with a copy and therefore aware that the Minister had formally requested they address the issue of long service members they would not have re-appointed Tony Lawlor and Ted Noonan. They may have thereby avoided the ire of the Minister.
The Examiner newspaper of 30th June 2011 carries an article under the heading "Minister Shatter seeks assurances on Irish Red Cross funding". The Minister has obviously felt it necessary to write to the Irish Red Cross to seek assurances that its government grant is being honestly and properly spent. This in itself is an indictment on the Society.
Link is:
http://www.examiner.ie/ireland/shatter-seeks-assurances-on-red-cross-spending-159485.html
The full Dail debate will be up on the Blog once Parliament publishes it.
Labour Party (member of coalition government) deputy Aodhán O Riordáin made an excellent speech outlining the 20 year crisis at the Irish Red Cross. He raised numerous issues including abuse of power, financial irregularities and in particular the excessive length of service of certain board members. He called for government funding to the Irish Red Cross to be suspended until a full independent investigation takes place.
Minister for Justice and Defence, Alan Shatter, responded to Deputy O' Riordáin. While the Minister issued the standard civil servant drafted reply in parts he did, however, go much further than his predecessors and this is to be welcomed and acknowledged. It is clear from his responses that he and the Government have very serious issues with the long service of certain board members and the overall governance of the Irish Red Cross.
The Minister informed Parliament that on 16th May 2011 he wrote to the Irish Red Cross asking them that they address the issue of long service members. 12 days after receiving this letter the Irish Red Cross gave the Minister his answer. They re-appointed Tony Lawlor and Ted Noonan, something which clearly flew in the face of the Minister's request.
It is quite incredulous that the Irish Red Cross would ignore a specific written request from a high ranking government minister in such an arrogant, dismissive and egotistic manner. One can only imagine the reaction of the Minister. Minister Shatter stated that Irish Red Cross funding from the Government for 2012 is under review. Perhaps the Minister will use the funding as the tool to express his displeasure. If he does the Irish Red Cross only has itself to blame.
Another question that must be asked is why Irish Red Cross Central Council members were NOT informed about the Minister's May 16th letter? This letter was not shared with CC members. Perhaps if they had been issued with a copy and therefore aware that the Minister had formally requested they address the issue of long service members they would not have re-appointed Tony Lawlor and Ted Noonan. They may have thereby avoided the ire of the Minister.
The Examiner newspaper of 30th June 2011 carries an article under the heading "Minister Shatter seeks assurances on Irish Red Cross funding". The Minister has obviously felt it necessary to write to the Irish Red Cross to seek assurances that its government grant is being honestly and properly spent. This in itself is an indictment on the Society.
Link is:
http://www.examiner.ie/ireland/shatter-seeks-assurances-on-red-cross-spending-159485.html
The full Dail debate will be up on the Blog once Parliament publishes it.
Monday, June 27, 2011
Could Irish Red Cross Board members face criminal prosecution under proposed whistleblower legislation?
On Thursday 23rd June 2011 Ireland’s national broadcaster, RTE, carried a report on its flagship current affairs program, Prime Time, examining the issue of whistleblowing in Ireland and the lack of legal protection for whistleblowers. The context was the recent scandal at the Rostrevor nursing home which has been closed by the health authorities following reports from whistleblowers of widespread abuse of elderly patients.
On the panel discussion was Mr. John Devitt, CEO of Transparency International Ireland. For those not familiar with Transparency International it is a global organisation that fights corruption and abuse of power. Its views are listened to by people of influence and in high office around the world. Transparency International Ireland, has on two separate occasions, called for an independent investigation into the Irish Red Cross and has written to the Secretary General of the International Federation of the Red Cross Red Crescent (IFRC) and the President of the International Committee of the Red Cross (ICRC) on the matter. Transparency International has also called for the reinstatement of Noel Wardick as Head of the International Department pending the results of such an independent investigation.
In the course of the RTE program Mr. Devitt not only said that comprehensive whistleblowing legislation was urgently required in Ireland he also insisted that any legislation should contain provisions which would allow criminal prosecutions to be taken against employers and individuals who retaliate against whistleblowers.
Reprisals and retaliation by employers against whistleblowers in Ireland have been and continue to be standard practice. Mr. Devitt was of the view that the ability to take a criminal prosecution against employers and individuals was absolutely necessary in order to protect whistleblowers who report in good faith abuse of power and misuse of resources and in order to encourage employees to report in the first place. The current situation allows employers operate with near impunity and the fear that results from this keeps the vast majority of employees silent.
This Blog welcomes the comments by Transparency International and fully supports the call that any whistleblowing legislation introduced contains provisions that will allow criminal prosecutions against employers and those individuals that retaliate against employees for speaking the truth.
If such legislation is finally introduced the mis-balance of power that currently exists within the Irish Red Cross may finally be corrected. Those board members who have overseen reprisals against staff or turned a blind eye will be forced to think twice in the future.
Should the provisions in the legislation advocated by Transparency International be adopted then it is entirely possible that in the not so distant future criminal prosecutions may be initiated against Irish Red Cross board members who have been involved in retaliatory action against whistleblowers.
The RTE Prime Time program can be viewed on:
http://www.rte.ie/news/av/2011/0623/media-2985710.html#
We have not sought war, nor do we seek war, but if war be made upon us we must defend ourselves and shall do so-Eamon de Valera in a letter to British Prime Minister, Lloyd George, 1921
On the panel discussion was Mr. John Devitt, CEO of Transparency International Ireland. For those not familiar with Transparency International it is a global organisation that fights corruption and abuse of power. Its views are listened to by people of influence and in high office around the world. Transparency International Ireland, has on two separate occasions, called for an independent investigation into the Irish Red Cross and has written to the Secretary General of the International Federation of the Red Cross Red Crescent (IFRC) and the President of the International Committee of the Red Cross (ICRC) on the matter. Transparency International has also called for the reinstatement of Noel Wardick as Head of the International Department pending the results of such an independent investigation.
In the course of the RTE program Mr. Devitt not only said that comprehensive whistleblowing legislation was urgently required in Ireland he also insisted that any legislation should contain provisions which would allow criminal prosecutions to be taken against employers and individuals who retaliate against whistleblowers.
Reprisals and retaliation by employers against whistleblowers in Ireland have been and continue to be standard practice. Mr. Devitt was of the view that the ability to take a criminal prosecution against employers and individuals was absolutely necessary in order to protect whistleblowers who report in good faith abuse of power and misuse of resources and in order to encourage employees to report in the first place. The current situation allows employers operate with near impunity and the fear that results from this keeps the vast majority of employees silent.
This Blog welcomes the comments by Transparency International and fully supports the call that any whistleblowing legislation introduced contains provisions that will allow criminal prosecutions against employers and those individuals that retaliate against employees for speaking the truth.
If such legislation is finally introduced the mis-balance of power that currently exists within the Irish Red Cross may finally be corrected. Those board members who have overseen reprisals against staff or turned a blind eye will be forced to think twice in the future.
Should the provisions in the legislation advocated by Transparency International be adopted then it is entirely possible that in the not so distant future criminal prosecutions may be initiated against Irish Red Cross board members who have been involved in retaliatory action against whistleblowers.
The RTE Prime Time program can be viewed on:
http://www.rte.ie/news/av/2011/0623/media-2985710.html#
We have not sought war, nor do we seek war, but if war be made upon us we must defend ourselves and shall do so-Eamon de Valera in a letter to British Prime Minister, Lloyd George, 1921
Tuesday, June 14, 2011
One of Ireland's leading political magazines publishes article on crisis ridden Irish Red Cross
The Village magazine, one of Ireland’s leading political publications has included the following article in its latest June-August 2011 edition:A whistle-blower’s tale
By Noel Wardick
In July 2005 I came home after seven months in Darfur and seven years working in Africa. I accepted a job with the Irish Red Cross (IRC) as Head of its International Department, based in Dublin.
Perhaps I should have listened to a colleague of mine who informed me it was considered a dysfunctional organisation and had a high staff turnover. I was, however, glad to be home and the Red Cross was a global organisation with an impeccable reputation.
After my first month it was clear that the IRC had problems. Within weeks I had reservations about the capacity of the Finance Department. More worryingly I was very uncomfortable with certain procurement practices which were largely out of the hands of senior management and instead under the control of certain board members. I expressed concern. I was advised “this is the way business is done here” and not to challenge the two or three individuals who dominated the board.
In June 2007 the Secretary General (SG) left in acrimonious circumstances. She had been pushing for reform, a dangerous pursuit in IRC. By 2009 there were problems with a huge financial deficit, staff redundancies, staff morale, failures to rotate board members and delays in distributing funds raised for that year’s domestic flooding. Throughout the period 2005-2010 I challenged the prevailing culture at the Society. I sought reform, accountability, transparency and openness. Where I could implement it, on the international side, I did. Where I couldn’t, at the level of the board, I documented my concerns to the organisation’s hierarchy. I was forever being told “Noel, you are a marked man”.
The discovery of an undeclared bank account in mid-2008 in Tipperary under the name of the IRC, which had had €162,000 lying in it for over three years, caused consternation and panic. The money was supposed to be for victims of the 2004 Asian tsunami but money was not forwarded to IRC head office as per IRC financial procedures. The Vice Chairman of the IRC was a signatory on the account. He denied any wrongdoing. At least one call for his resignation was made.
Questions were asked in the Dáil, particularly by Labour’s Brian O’Shea and towards the end of 2009 many of these matters were covered in Village Magazine, which named names and outlined details of the undeclared bank account for the first time; and in some, though not many other organs. With one or two notable exceptions, the establishment media seemed uninterested that a pillar of the charitable sector was in fact seriously delinquent. Another SG resigned suddenly and unexpectedly in November 2009 and a discomfited David Andrews, Chairman for 10 years, resigned on the same day. Chaos and turmoil followed.
Eventually an investigation, highly compromised as it was internal, took place in late 2010 following intense media and political pressure. Serious errors, breaches of policy and mistakes were identified. Blame was apportioned to no-one. The signatories on the account were not sanctioned or reprimanded. The Vice Chairman was re-appointed to the IRC board for the 21st year in a row on May 28th 2011. This despite the IRC’s public position that it intended reforming its governance.
By 2010 every attempt was being made to silence dissent and protect long established power bases. I began writing an anonymous blog outlining the IRC’s problems. Attempts were made to inform IRC members about the blog and to encourage them to take action.
Shutting the blog down became an obsession for the IRC hierarchy. This culminated in the extraordinary decision in mid 2010 to take legal action against Google HQ in California demanding they reveal the identity of the blog author. Google refused. IRC incurred huge legal costs in the failed legal action.
In August 2010 I publicly revealed for the first time, on RTE’s Prime Time, that I was the blog author. I had, just days before, told the IRC.
In November 2010 I was fired “for gross misconduct”. I have taken an Unfair Dismissals action against the IRC. The backlog of cases means it will be many months yet before the case is heard. In the meantime I remain unemployed.
The complete absence in Ireland of whistle-blowing protection for employees who in good faith report abuses means the weapon of fear can and is used to great effect in ensuring those who witness wrongdoing remain silent.
Those responsible for the financial irregularities and the breaches of good corporate governance at the IRC remain in positions of authority and seniority. The government knows this and still it unquestioningly gives €1 million of tax payers’ money to the IRC every year.
One government-appointed member of the IRC Central Council summed it up “Until those responsible for the Tipperary tsunami bank account scandal are removed and until those board members with excessive service step down the future of the IRC remains seriously jeopardised”.
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