I again welcome the Minister of State, Deputy Alex White, to the House.
Adjournment Matters
NAMA Staff Recruitment
I thank the Minister of State, Deputy White, for coming into the House this evening, but I am a little disappointed that the Minister for Finance is not here, given that the issue I raise on the Adjournment is a matter of national importance and of particular concern and interest to the taxpayer. This matter relates to the recent revelations regarding a former employee of NAMA who secured employment in the private sector immediately following his employment with NAMA.
I raised with the Minister for Finance in the House a related issue, relating to the lack of a proper non-compete clause in employment contracts with the agency. The lack of such a clause leaves the taxpayer unprotected. I am concerned about the fact that, in Ireland, there is a record of financial institutions having no morals or scruples in dealing with their customers and the taxpayer. I highlighted some of the terrible treatment that Irish customers of Ulster Bank faced last year. We also have evidence of the widespread mis-selling of financial products. We are now also privy to the tapes of conversations between executive of the former Anglo Irish Bank.
I am particularly concerned by a situation relating to the individual in question, which was raised with me last week. I received damning information that the same individual had communication with third parties in respect of a customer's business with NAMA, which possibly contravenes sections of the Data Protection Act, the Official Secrets Act, the National Asset Management Agency Act, the National Treasury Management Agency Act, and which may be prejudicial to NAMA's customer in question. The information can be substantiated and confirms to me that there has been continual and ongoing communication between a Paul Hennigan and a third party in respect of a customer's business affairs in NAMA.
Will the Senator please refrain from naming persons in the House.
I apologise. It will not happen again. This communication may be prejudicial to NAMA's customer and has left the State and the taxpayer exposed to a potential claim for damages for hundreds of millions. It is quite clear to me that NAMA did not act in the best interest of its customer in this instance. My concern is that this may very well be the tip of the iceberg. Will the State be left exposed to other potential claims as a result of how NAMA conducts its business? That is of utmost concern to me.
This is not the only incident regarding this individual. It was reported in the Sunday Independent only last week that the individual in question also dealt with a property transaction at St. James' Square in London which was bought by a company, of which he became a partner immediately after leaving NAMA. I wonder at the level and manner of contacts there were between this individual and the people of Prime London Partners while the negotiation process was in train.
What contracts were there between the London property investment company and the former NAMA employee since the deal's completion? Did they have contact regarding other potential or actual deals between the completion of the St. James's Square deal and his departure from NAMA?
We must remember that this is the very same individual involved in the sale of a property to another NAMA employee who was the subject of an internal investigation, and all these combined actions are possibly significantly undermining NAMA's ability to recover the optimum amount for its assets and return for the Irish taxpayer. The individual I speak of is the same person who tried to silence me on an issue by threatening me with legal action when I mentioned non-compete clauses in contracts for NAMA employees. I wonder if he telephoned my office and left the voicemail because of the details I have submitted to the House this evening and if he was afraid of them coming in to the public domain. In view of the seriousness of the matters I have brought before the House, I request the Minister for Finance to instruct the Garda Commissioner in what I would consider a most serious issue of misconduct, particularly in respect of potential offences under the Data Protection Acts, the Official Secrets Acts, the National Treasury Management Agency Act and the NAMA Act. This investigation should not be restricted just to the legal aspects of these issues and should largely incorporate examination of the potential risks of possible future claims against this State arising from the actions of employees or former employees of NAMA.
The board of NAMA should be directed to implement a risk management policy to incorporate all the issues I have brought before the House. Ultimately, we must protect the family silver and we cannot have practices like this being facilitated for possible personal gain by people who are very conflicted. It is clear the agency and the taxpayer remains vulnerable to abuse by the actions of employees past and present, which is why I have raised the matter this evening. I look forward to the response of the Minister for Finance.
The Senator has raised the matter of referring to the Garda national bureau of criminal investigation the fact that an ex-employee of NAMA has now taken up employment with a private sector entity with which NAMA has previously engaged in a business transaction. It is unclear on what basis the Senator believes that this is a matter that the Minister for Finance should refer to the bureau. The remit of the national bureau of criminal investigation includes the investigation of crimes such as murder, serious and organised crime and other serious assaults. Accordingly I am unclear as to what role there may be for the Minister to refer this matter to the bureau in this instance. If the Senator has information which suggests that wrongdoing has occurred, I know she will bring it to the immediate attention of the Garda Síochána.
In the response by the Minister for Finance to a similar Adjournment debate topic proposed by Senator Higgins two weeks ago, the Minister pointed out that the National Treasury Management Agency, NTMA, model, which applies to staff assigned to NAMA, is based on the free movement of staff from the private sector to NTMA and vice versa. It is important that the NTMA's ability to attract private sector employees is not in any way disrupted. Mobility with the private sector is a critical component of the NTMA model and if it is to be successful we have to accept that it can be a two-way street.
The key issue relates to the safeguards in place to protect the confidentiality of information held by NTMA employees, including those assigned to NAMA, who may leave the agency to take up employment in the private sector. The Minister's response of 11 June referred specifically to the statutory prohibitions on the release of confidential information by employees and former employees of the NTMA, including those assigned to NAMA. Employees assigned to NAMA by the NTMA, as is the case with all other NTMA staff, are subject to section 14 of the National Treasury Management Agency Act 1990, which prohibits an employee from disclosing any information obtained while carrying out duties as employees of the NTMA. Employees assigned to NAMA are also subject to a prohibition on release of confidential data under sections 99 and 202 of the NAMA Act 2009. NTMA employees, including those assigned to NAMA, are subject to the Official Secrets Act. Contravention of these prohibitions is a criminal offence, and these protections do not cease at the point of resignation but rather apply indefinitely and extend to former employees.
The Minister for Finance advised the House on 11 June that the notice period for NTMA employees assigned to NAMA is typically three months and that, in line with employers in the private sector, NTMA contracts for employees assigned to NAMA have a provision entitling the NTMA to place the employee on garden leave at any point during the notice period during which time the employee may not work for another employer. Arising from a review conducted by Matheson for the NTMA, the Minister advised that the NTMA is implementing a number of changes to its employment contracts, including the introduction of longer notice periods of three to six months, up from one to three months, for middle and senior NTMA management employees and garden leave provisions to be included in all employment contracts. These changes will be introduced immediately for new NTMA employees and for existing NTMA employees as they are promoted. As pointed out, the three-month notice period and garden leave provisions already apply to NTMA staff assigned to NAMA.
In addition, the Minister advised that additional post-termination restrictions on employment will be considered on a case-by-case basis in respect of senior NTMA management employees in particular. However, the imposition of such restrictions will need to be carefully balanced against the NTMA's need to recruit good candidates for whom such restrictions may act as a significant disincentive to taking up employment with the NTMA. The Minister or Finance also noted that because of its finite life staff assigned to NAMA are recruited on specified purpose contracts, and their period of employment lasts for as long as their function is required by NAMA. Unlike other public sector employees, their contracts do not extend to the normal retirement age and there is clearly a risk that if specialist staff are offered specified-purpose contracts with rigorous clauses limiting their freedom to return to their sector of expertise afterwards so as to earn a living, it would become very difficult to recruit staff.
The Senator's matter implies that some form of wrongdoing may have occurred in this instance but the Minister for Finance is not aware of any such wrongdoing. Unless there is evidence to substantiate such a claim, it is deeply unfair to persons outside of this House, who do not enjoy parliamentary privilege, to have their name questioned in this manner. I reiterate therefore that if the Senator has evidence to suggest wrongdoing, she should bring it to the immediate attention of the Garda Síochána.
I thank the Minister of State for his response and it is unfortunate that the Minister for Finance is not here this evening to address the issue. It is regrettable that he pre-empted my submission this evening.
I am a qualified barrister and I have an understanding of the law. I spent quite a number of years at King's Inns and in practice thereafter. I make it clear that the issue is not limited to the individual in question taking up employment with Prime London Partners, of which he is now a partner. This relates to a more serious issue of him accepting correspondence, replying to it, liaising with third parties and - if one likes the term - being lobbied and allowing himself to be lobbied, contrary to section 221 of the NAMA Act and the Data Protection Act.
Is there a question?
It is also a breach of privacy and confidentiality agreements, as well the European Convention of Human Rights. These details are on public record and they were part of-----
The Senator has made her submission and she may only ask a question now.
I understand but it is very important to clarify the matter.
We must follow procedure.
I have a right to clarify the issue when the ministerial reply intimated I was abusing parliamentary privilege. I want to make it very clear that I am not. There are serious issues that must be addressed and I will furnish the Minister with the details.
I do not think I can advance the matter any further.
Post Office Network
This issue has troubled me greatly and it troubles significant tranches of rural Ireland, which has felt significantly under threat in the past two decades because of the removal of many services. We have seen the decline of rural pubs because of a myriad of changes, including the smoking ban and drink-driving legislation, all of which have been very appropriate. There has also been the downturn in the economy and we have seen the removal of local Garda stations in many small rural villages. It has been painful and difficult to defend the issue, it was probably necessary to close many of these stations.
The post office network is a completely different issue. A post office is vibrant and provides a comfort zone for the type of vulnerable people we spoke of earlier, including older people. It provides a link for them to communicate and a facility for information gathering.
It provides a community service and community activity. A post office in west Clare held a cake sale on Friday of last week to raise funds for a local charity. It held other activities a number of weeks previously. The post office is a very important element of community life in rural Ireland. The State should be putting more services into the post office. If the facility for paying the household charge had been available through the post office, the compliance rate would have been much higher. Many other services, such as dog licences and other licences and the payment of road fines and parking charges, should be available through the post office. The facility to pay utility bills is available at the moment but, again, these are semi-State companies availing of a useful service.
What troubles me greatly is the threat posed by the outsourcing or tendering out of the social welfare contract. I understand that social welfare and pension payments constitute up to 50% of the weekly business of some post offices in west Clare. It is not necessary to outsource this because it is being done perfectly well by post offices. I contend that one will not get a better service in terms of paying pensions and social welfare payments than one will get at the post office.
The citizens in receipt of social welfare and pension payments feel more comfortable collecting them from the post office than they would from any other type of private institution that may succeed in tendering for this contract. Many generations do not trust the banks but I am talking to older people who certainly do not trust them and would not want their pensions to be paid through them.
The postmasters, postmistresses and staff in the many rural post offices keep an eye on old people and, if they do not turn up for their pension, a red flag will be raised. This is a vital community service. We can look at the bottom line far too often. We must get value for money and have an obligation to do so but we always have a social responsibility as a Government. The Acting Chairman should bear with me because it affects his constituency as well. The Government has a social responsibility in respect of this issue that must be acknowledged and on which a price cannot be put. The threat that has been presented by the speculation surrounding this contract is appalling. The Minister is wrong in trying to save money in this way. If the system needs to be improved and efficiencies achieved, negotiations with An Post management should be entered into. Putting out to tender a contract as significant as this one that probably affects the largest number of vulnerable people is simply wrong. The Government has reversed decisions in the past that were wrong. It did so today in terms of the cuts to the number of special needs assistants and resource teaching hours. There would be nothing wrong with reversing this decision as well.
I thank Senator Conway. I gave him a bit of leeway.
The Department of Social Protection is a key player in the payment services sector in Ireland. The manner in which payments are made to customers impacts on the State, notably in respect of costs. As with all of its activities, the Department is compelled to look at any scope for efficiencies in how it makes payments to ensure it provides value for its customers and for the economy at large. As consumer behaviour shows a very high movement towards online and electronic payments, the Department must look for opportunities to provide better and more secure customer service while also continuing to serve those who are more vulnerable in our society. Therefore, as part of the payment strategy to be brought to Government shortly, the Department envisages using more modern approaches in the future where payments, ultimately, will be delivered to customers electronically. This goal is in line with wider Government policies and objectives. It is based on the objective of better public services and more effective electronic payments, as set out in the public service reform plan and the e-Government strategy 2012-2015. It is aligned to the objectives of the Government's Action Plan for Jobs, the national digital strategy and the recently published national payments plan.
The progression to electronic payments is a critical element of the wider national payments plan aimed at removing the very high levels of cash usage in the economy and will contribute to improved national competitiveness. The Department's strategy is contingent on the roll-out of the standard bank account, SBA, which is being driven by the Department of Finance. The combination of the national payments plan, the SBA and the Department's payment strategy can, as three interdependent initiatives, realise tangible benefits in delivering a more efficient payments landscape in Ireland and can grow opportunities and benefits for consumers and business alike over the medium term.
At the moment, some 50% of all transactions are being paid in cash through the post office network. The current contract with An Post expires at the end of 2013. The award of public sector contracts with a significant financial value is subject to various EU directives. Due to the financial value of this particular service, the Department is required by law to publicly invite tenders for any new contract to deliver social welfare payments. This ensures the taxpayer receives value for money and ensures all potential suppliers are given the opportunity to put forward the most efficient, effective and competitive solutions for consideration and evaluation.
Therefore, as part of the payment strategy, the Department is undertaking two procurements which will reform the payment arrangements for the delivery of welfare payments. The first procurement for over-the-counter cash services for social welfare customers commenced in December 2012 and is now well advanced. This will replace the existing service contract with An Post and will ensure continuity in the delivery of cash payments to the Department's almost 1 million cash payment customers. It is anticipated that a contract for these services will be signed over the coming months and will provide services to customers similar to those they currently enjoy.
The Department will be advertising a second procurement later this year for an e-payment solution. This solution will supplement existing levels of payments made directly by electronic funds transfer into customer accounts in financial institutions. It is anticipated that the notification regarding this procurement will be published shortly. The payment programme will contribute to strengthening the Department's approaches to fraud and control through ensuring high risk customers will not be migrated to an electronic payment until appropriate and robust measures are defined and fully implemented to mitigate any increased risk of fraud with an electronic payment.
The transition to new payment approaches will require a significant effort to assist and support our customers. The Department will work energetically to help customers and their representatives in the transition period. The Minister for Communications, Energy and Natural Resources referred to the programme of capital investment and work in recent years which has resulted in the computerisation of all post offices, recognising the inevitable movement towards lower levels of cash in society. The Minister for Social Protection and the Minister for Communications, Energy and Natural Resources, together with the rest of the Government, are very conscious of the important role of the post office throughout the country, notably the extent to which it is now a one-stop-shop where people can pay bills, purchase mobile phone top-ups, use the passport application facility, pay the local property tax and carry out a range of banking and other financial services. The concerns raised here are understandable, particularly in respect of the impact the Department of Social Protection's plans to move to e-payments may have on An Post. However, I reassure the House on behalf of the Minister for Social Protection that the Government has stated and upholds its commitment to maintaining the post office network as set out in the programme for Government.
I appreciate the fact that the Minister of State is delivering this reply on behalf of his senior Government colleague. I would describe it as a very glossy reply. It certainly ticks a lot of boxes in terms of IT and modern communications and ways of doing business. It also states very clearly that we are probably the most compliant Europeans in Europe. Sometimes it would be good not to be such good, compliant Europeans. We do not necessarily have to uphold the law in this area. I am concerned about the thousands of jobs within the post office network that hinge on this contract, the social exclusion that will result from An Post losing this contract and the fact the loss of this contract will be another nail in the coffin of rural Ireland. I stress that it is not all about the bottom line. This decision has serious social consequences. I ask the Minister of State to advise his senior Government colleague that people will not take this lying down and that rural Ireland will fight this head on because it cannot be allowed to happen.
Senator Conway raises an important issue. I agree with him when he says that not everything is about the bottom line. The post office has a crucial role to play, not just in rural Ireland, although it is most important in rural Ireland, but also in urban centres and provincial towns.
There is no suggestion or intention on the part of the Government to do anything other than uphold the commitments in the programme for Government which commits to the maintenance of the post office network. Post offices have shown themselves to be adaptable to changing circumstances. I have no doubt the service which An Post provides throughout the network of post offices will continue into the future.
The Seanad adjourned at 7.40 p.m. until 10.30 a.m. on Wednesday, 26 June 2013.