I do not run Dillon's nor am I responsible for Mr. Duffy. On 28 April 1999, as set out in a note of 8 June 1999 from the Minister for Public Enterprise, Deputy O'Rourke, she was telephoned by Deputy Dukes and she met him in her office that morning. Deputy Dukes told the Minister that he had been given information that Mr. Paddy Duffy was on the board of Dillon Consultants. The Minister, Deputy O'Rourke, undertook to get back to Deputy Dukes on the matter. She then informed the Secretary General of her Department and myself of her conversation with Deputy Dukes. Later in the day, I told the Minister that I had spoken with Paddy Duffy, who told me he had no connection with Dillon's or NTL. He did tell me he knew Paul Dillon and was considering involvement with Dillon Consultants Limited after leaving his position as a special adviser. That evening, Mr. Duffy telephoned the Minister and told her personally and trenchantly that he had no connection with Dillon's or NTL but that at the end of 1999 he was going to go into public relations, without mentioning any specific company. However, he told me and the Minister that he had made no final decisions.
On 29 April 1999 the Minister, Deputy O'Rourke, telephoned Deputy Dukes in Bonn and told him that Mr. Duffy had denied any involvement in Dillon's or NTL. Mr. Duffy clearly stated what he believed to be factually correct, but he has acknowledged that he should have put the full facts to me and to the Minister for Public Enterprise.
When the story subsequently broke in The Irish Times, it created, prima facie, the impression that Mr. Duffy had not been open about previous contacts, future plans and contractual arrangements and that he had placed the Minister in a false and invidious position. That was the most serious aspect of the case. The problem stemmed from the misunderstanding between Mr. Duffy and Dillon's with regard to his status and none of us was in possession of the full picture, in other words, what had happened the previous December.
On 26 May 1999, Cablelink was sold to NTL for £535 million. On 4 June 1999, The Irish Times revealed a story entitled “Ahern aide linked to Cablelink sale advisers”. Apropos of that, I emphasise that Dillon's were in no sense financial advisers to the sale, being involved in only a public relations role, not for Cablelink or the sellers, but for one of the bidders. The Irish Times front page article stated that Mr. Duffy joined the board of Dillon Consultants in recent months. It went on state that a B10 form had been lodged in the Companies Office on 12 March and that Mr. Duffy had become a director in the previous December. Mr. Duffy's signature was on the form. It was also stated that Mr. Duffy had attended a meeting between Dillon's and APCO, a major international firm with which Dillon's was forming a strategic alliance, in London in February. Dillon's and APCO had a client in common, NTL. The Dillon-APCO deal was done on 10 May. Mr. Duffy said this meeting was about his future and that he was not there as a representative of Dillon's.
On 4 June 1999, Mr. Duffy resigned. On 11 June 1999, the Irish Independent lead article stated that Mr. Duffy was also a director of the firm of consultants, Dillon's, that lobbied the Government's millennium committee on behalf of the Gaiety Theatre, which is seeking a £5 million grant. Mr. Duffy was a member of the 15 member millennium committee and part of a smaller group that attended a presentation by the Gaiety, organised by Dillon's. I am informed by Dillon's that it had no involvement in, or knowledge of, any earlier proposal for the State to purchase the Gaiety Theatre. That idea dates back to the autumn of 1997, long before there was any involvement with Dillon's, and relates to the possible use of the Gaiety Theatre as an opera house, and its acquisition by the State for that purpose.
It was one of dozens of ideas relating to cultural institutions or national monuments, real or potential, being put forward as part of an initial trawl. The idea did not come from the Gaiety or anyone representing it, and the focus was the provision of an opera house.
Mr. Duffy had no role in preparing the Gaiety's presentation with Dillon's, and he was lobbied like other members of the committee, although he was in a different position to them. The application came to Mr. Duffy on 4 December from the executive director of the Gaiety theatre, Mr. John Costigan. A spokesperson for the Millennium Committee is quoted as saying that he "never said that he was a director" of Dillon's. For most of the period when it was under consideration, Mr. Duffy did not believe that he was a director of Dillon's. The spokesperson also said that, although some funding had been agreed in principle, many issues remained to be teased out. On the day the article appeared, Mr. Duffy issued a strong statement asserting that his involvement with regard to the proposal was proper and above board, and that the refurbishment of the Gaiety Theatre was a worthy cause.
While accepting that, there is a potential for conflict of interest where a person is adjudicating on, and maybe backing, a proposal on its own merits but which is, nonetheless, being promoted by a firm with which he expects to have a future contractual relationship. It illustrates the unsatisfactory nature of a long transition period between one role and another, where there is a danger of some overlap or conflict of interest. However, I would not wish to see the Gaiety's application prejudiced, one way or the other, because of what has occurred. I am attaching to my reply to the sequence of events with regard to the consideration of this project, which was not considered suitable in its original form.
The only other millennium project being promoted by Dillon's is an application on behalf of the "Hole in the Wall Gang" at Barretstown Castle, which is a very worthy social cause.
On Monday my office was also informed by Mr. Duffy that he and his wife are directors of a company called The Right Word Company Ltd, which is concerned with the sale and promotion of musical and written compositions. For the sake of completeness, I mention that it is my understanding that Mr. Paddy Duffy is also director of the recently formed Anna Livia Opera Festival, the Seán O Riada Trust. He apparently took legal advice in 1996 and was informed that, since there was no question of his directorship of the Right Word Company Limited influencing his function in employment, on that basis he did not need to declare it. Under the Ethics in Public Office Act, which was passed by both Houses on 14 July 1995, section 19(3) requires a special adviser to declare interests which could materially influence the person in the performance of his functions, by reason that the performance could so affect those interests as to confer or withhold a substantial benefit on that person or his or her spouse or child. While schedule 2 defines all directorships as registrable interests, I am advised that, on a strict construction of the Act, if it can be demonstrated that the interest in question could not materially influence the performance of functions, in the sense just referred to, then it is not required to be declared under section 19(3). That is the strict legal position, but, without going into its merits or otherwise in this particular instance, I think it is advisable to err on the side of caution and declare significant outside involvements
I will refer to some of the other more general issues raised by this affair, at a time when our ethics legislation is still developing. It is important that advice given to Government, whether from the Civil Service or from special advisers or any agency of the State, should be financially disinterested, or where there is any financial interest of even indirect relevance that it be clear and transparent, so that there is no undue or improper influence.
The problem that arose in this instance was that a special adviser was arguably in the process of forming a relationship with a private company that would be important for his future career after leaving the public service. That company was, most probably due to a serious misunderstanding, already advertising the special adviser on the Internet as an asset. It underlines the dangers of forming even a tentative relationship with a commercial company dealing with the State prior to leaving the public service.
There has been a growth, not only of political lobbying and consultancy but an encouragement in some parts of the public sector, to people to continue working on a self-employed contract basis. The whole area requires deeper reflection and debate, including whether some gap needs to be instituted between public and private employment where special knowledge or a regulatory position would give an inside track. These are difficult problems that require much more discussion in the public service by the Dáil and in the media. We have to remember that we are a small country and it may not always be easy or practicable here to construct Chinese walls. Given that many of us believe that more contact and cross-fertilisation between the public and private sectors may be more to the public advantage than its disadvantage, we should not automatically assume that we know the right answers before studying the situation more deeply.
I regret that I have lost a valued colleague. I wish Mr. Duffy and his family well. Recognising the potential for damaging controversy, he acted very promptly in offering his resignation, which I reluctantly accepted. There have undoubtedly been unfortunate mistakes, misunderstandings and errors of judgment. However, there are also dangers in taking decisions or forming judgments too quickly on the basis of bad appearances, which may have devastating consequences for individuals who have sought at all times, by their own lights, to act with proper honour and integrity. From the point of view of public ethics, that legislation is still in its infancy. We can all learn from the experience, and I believe that there may be cautionary lessons which have an application that go far beyond the individual involved.
I thank the House for listening to my lengthy reply but it was necessary for me to make it.