Vol. 429 No. 6
4 Mr. Yates asked the Taoiseach if he will give details of the contracts between his Department and a consultancy company (details supplied); the way in which these differ from previous arrangements between his Department and a person (details supplied); and if he has satisfied himself that no conflict of interest arises in relation to other consultancy work undertaken by Nemesis.
5 Mr. Rabbitte asked the Taoiseach if his attention has been drawn to reports that a person (details supplied) plans to establish a consultancy firm to offer a range of services to the private sector; if he has given his approval for this in view of the possible conflict of interest that could arise; and if he will make a statement on the matter.
6 Mr. Rabbitte asked the Taoiseach if any of the employment contracts with his Department are with limited companies; the arrangements, if any, which are made for the taxation of fees or remuneration paid in respect of such contracts; and if he will make a statement on the matter.
53 Mr. Yates asked the Taoiseach if he will give details of the firms which have been retained by State-sponsored bodies in his Departmental area and that of his Minister of State for market research, advertising, public relations and marketing purposes; the projects, if any, which are being carried out by each of these firms; the fees or retainers, if any, which are being paid for each of these projects; the duration of the contract for each project; if all services were secured through tendering; and if he will give details of the tendering procedures.
54 Mr. Yates asked the Taoiseach if he will give details of the firms which have been retained in his Departmental area and that of his Minister of State for market research, advertising, public relations and marketing purposes; the projects, if any, which are being carried out by each of these firms; the fees or retainers, if any, which are being carried out for each of these projects; the duration of the contract for each project; if all such services were secured through tendering; and if he will give details of the tendering procedures used.
I propose to take Questions Nos. 4, 5, 6, 53 and 54 together.
Dr. Con Power was employed, on secondment from the Irish Business and Employers' Confederation, as special economic development officer to the Taoiseach from 1 April 1992. This arrangement will end on 30 April 1993. From 1 May 1993, Nemesis Limited a consultancy company of which Dr. Power is a director, will commence trading and will: (i) take over and complete on a consultancy assignment to the Department of the Taoiseach any projects which have been commenced by Dr. Con Power, as special economic development officer to the Taoiseach, and not completed at 1 May 1993 and (ii) undertake such other projects as may be specified from time to time by the Taoiseach. I am circulating to Deputies details of the contract between my Department and Nemesis Limited.
Under the terms of the contract, Nemesis Limited has undertaken that it will not, while this agreement is in force, engage in any activities which could reasonably be regarded as interfering with, or being incompatible with, the full and proper discharge of its functions. I am satisfied that the arrangements put in place to govern the interaction between my Department and Nemesis Limited will ensure that no practical conflict of interest will arise.
Carr Communications have been retained on a consultancy basis to provide advice and assistance to me as Taoiseach, and to Ministers of State at the Department of the Taoiseach on the text, format and presentation of speeches, announcements, etc., for print media and television. A fee of £30,000 per annum plus VAT is payable. The contract commenced on 12 January 1993 for a period of 12 months or for the term of office of the Taoiseach, whichever is the lesser.
It has always been the practice to employ consultants on the basis of proven skills and experience in particular fields. The established practice was followed in these instances. The normal arrangements regarding withholding tax on consultants' fees apply to all individuals and firms engaged by the Department on a consultancy basis. The National Economic and Social Council which operates under the aegis of my Department has not retained any firms for the purposes set out in Question No. 53.
Terms of contract between the Department of the Taoiseach and Nemesis Limited.
1. Nemesis Limited.
(i) take over and complete on a consultancy assignment to the Department of the Taoiseach any projects which have been commenced by Dr. Con Power, as special economic development officer to the Taoiseach, and not completed at 1 May 1993, and
(ii) undertake such other projects as may be specified from time to time by the Taoiseach.
2. Nemesis Limited.
(i) will utilise the services of Dr. Con Power in discharging its obligations under this agreement
(ii) will undertake that the company will not, while this agreement is in force, engage in any activities which could reasonably be regarded as interfering with, or being incompatible with, the full and proper discharge of the functions set out in paragraph 1.
3. In consideration of the services to be provided by Nemesis Limitied the Department of the Taoiseach will pay to the company an inclusive fee of £300 per consultant day of seven hours (plus value added tax) on the following basis:
—days worked will be invoiced, by project and by nature of service, for each four weeks period in arrears. The project days will be agreed with and certified by a designated officer of the Department.
In addition, vouched expenses for travelling and subsistence necessarily incurred by Dr. Power in discharging the company's duties under this agreement will be reimbursed to the company.
4. (i) This agreement will commence on 1 May 1993 and will terminate when the Taoiseach, Mr. Albert Reynolds, TD, ceases to hold that office.
(ii) In the event of misconduct by the company or its agents the agreement may be terminated for stated reasons without notice.
(iii) Subject to 4 (ii), this agreement shall not be terminated within one year of its commencement but may be terminated at any time thereafter by either side at one month's notice.
(iv) In the event of the agreement being terminated under 4 (i), 4 (ii) or 4 (iii) no fee or compensation will be payable other than that applicable to services already rendered.
Were the contacts with Carr Communications and Nemesis Limited put out to tender so that everyone would have an opportunity to quote and, if not, why not?
I am sure the Deputy is well aware — if he is not aware of this he should ask his colleagues who were in Government — that the established practice was followed in both instances. It has always been the practice to employ consultants on the basis of proven skills in certain areas and experience in particular fields. The established practice was followed in both instances.
The Taoiseach did not answer my question, and I assume that the contracts were not put out to tender. Will the Taoiseach confirm that Dr. Power was paid £65,000 for his full-time involvement in his Department and will now receive, through Nemesis, £69,000 for his part-time involvement in view of the fact that he will be catering for its private sector clients?
The Deputy is again incorrect. Dr. Power was seconded from IBEC and all the costs of his employment——
Were repaid to IBEC by his Department.
Let us hear the Taoiseach's reply.
——were reimbursed to IBEC. These were in excess of the figure given by the Deputy.
I call Deputy Rabbitte who has two questions tabled on this subject.
I do not have any complaints about the Carr Communications contract as the Government needs it. In relation to Nemesis Limited, how can the Taoiseach say that normal practice is being followed when, effectively, somebody who was employed on a full-time basis to advise the Taoiseach is being converted into a contractor and the stated public purpose of that person's company is to advise the private sector on how to "overcome barriers" imposed by legislation and public administration? Surely there is a manifest danger of a conflict of interest arising in that situation? I hasten to add I am not suggesting that Dr. Power would act in any way improperly. It is an appalling precedent to establish a John Birt style arrangement for an adviser at the heart of Government.
I am glad that Deputy Rabbitte at least agrees that Dr. Con Power is above the kind of activity the Deputy might insinuate will be carried on. A misunderstanding or misinterpretation is being imputed here, deliberately or otherwise, to the activities of Dr. Con Power, what he has been doing and what he will be doing. Dr. Power was employed by my Department on secondment from the Irish Business and Employers' Confederation to carry out the same project development duties for which two members of the IDA were seconded on previous occasions. Dr. Power's role is to help to develop certain projects. Now that Dr. Power has finalised his position with the IBEC and is a director of Nemesis Limited he will complete the projects in which he has been engaged. There is no difference. The areas that Deputy Rabbitte is trying to insinuate might lead to a conflict of interest, it certainly will not be a conflict of interest.
Does the Taoiseach know that in order to avoid conflicts of interest several other conditions provide for a break in time between people ceasing to act as public servants and commencing work as consultants for the public service. Will he consider that such a time break, perhaps six months, might be appropriate in Ireland?
No. Projects that Dr. Power is working on at present need to be processed as soon as possible. Those projects will help in job creation, an issue that Deputy Bruton spoke about earlier. Dr. Power's functions were clear when he was on secondment from the IBEC and it is clear what his functions will be now. There is no way that the conflict of interest being imputed to those activities by some Deputies will arise.
Will the Taoiseach agree that Nemesis Limited has offered the public a lobbying service and that there is a clear conflict of interest when a company offers the public a lobbying service if, at the same time, it offers the most senior politician in the State an advisory service through one individual? What interest does Dr. Power have in Nemesis Limited? Who is Nemesis Limited and what capital structure does it have? Is the Taoiseach not engaging the services of a person who proposes to act as a lobbyist as his own personal adviser?
I have stated clearly and distinctly that the duties of Dr. Con Power will be in the development of economic projects. He will be completing projects in which he has been engaged up to now. That is a completely different matter and does not allow for conflicts of interest. There is clear protection in this regard in the contract drawn up between Nemesis Limited and my Department. There is no question of a conflict of interest. There is a vast difference between lobbying in cerain areas and pursuing and trying to develop particular projects. This functional duty was carried out on two previous occasions by two staff members of the IDA who were seconded to do the same job. Deputies will see that there is clear protection in the contract. Dr. Con Power would be the last person to engage in a conflict of interest, all Deputies know that.
Who is Nemesis Limited?
When the Taoiseach was in the United States did anybody bring to his attention the widespread concern with regard to the lobbying system in Congress, whereby people in high powered positions in government cannot wait to leave their employment in order to advise major companies on ways in which to circumvent laws they helped to draft? Would Ireland not be going well beyond anything in the American system in that somebody who is still at the heart of government is offering advice to the private sector on ways in which to circumvent legislation? Following from the question asked by Deputy McDowell, does the Taoiseach know that Nemesis was the Greek god of retribution? Perhaps the Taoiseach should beware.
I know who Nemesis was. Deputy Rabbitte is making a mistake in that Dr. Con Power is not at the heart of government, he has specific projects to carry out. That is the misunderstanding of the Deputy in relation to Dr. Power's role. There are provisions for termination in Dr. Power's contract.
Why is it being terminated?
Dr. Power's function is to follow up the developmental projects in which he has been engaged up to now. He is not engaged as an adviser to the Government, he is not engaged as an adviser to me and he is not at the heart of government and able to exercise influence over the Government.
Will the Taoiseach confirm that one of the projects in which Dr. Power is involved is the mythical proposal for a transshipment port in Shannon? In view of Dr. Power's direct involvement with that project, would all transport companies concerned and potential construction contracts be beyond or within the scope of Dr. Power's advice in the private sector? In that specific instance, what steps have been taken to ensure that there is no conflict of interest?
I have said that I shall circulate the contract to Members of the House. Deputies may make their own judgment and should feel free to ask further questions if they are not satisfied. I believe that Deputies will be satisfied with the contract and will find that Dr. Power is not involved in activites in the way in which Deputies have tried to portray. Dr. Power is not at the heart of government and does not have involvement in areas in which he could have the influence Deputies may think he has.
