We are meeting in public session to consider matters relating to Valentia Marine Limited, the Ombudsman and the Secretary General of the Department of Communications, Marine and Natural Resources. Members have considered the letter from Ms Emily O'Reilly, dated 5 February, declining the opportunity to appear before the committee. Members have agreed that this letter be read in public session. It is regretted that Ms O'Reilly felt constrained not to attend today's meeting. Notwithstanding this, we welcome Mr. Tuohy, Secretary General of the Department of Communications, Marine and Natural Resources.
Valentia Marine Limited: Discussion with Department of Communications, Marine and Natural Resources.
Mr. Brendan Tuohy
I am accompanied by Mr. John Quinlan.
The letter from the Ombudsman is addressed to Mr. Ronan Lenihan, clerk to the Joint Committee on Communications, Marine and Natural Resources.
Dear Mr. Lenihan,
I refer to your letter of 17 January 2007 and the proceedings of the Joint Committee on Communications, Marine and Natural Resources held on 15 November 2005 in connection with a complaint to my Office by Mr Pat Curtin, Valentia Marine Ltd. against the Department of Communications, Marine and Natural Resources.
Firstly, I must say that, generally speaking, I am happy to assist Oireachtas Committees in their work where at all possible. However, I must advise that this present request poses considerable difficulty for me, given my statutory role as Ombudsman. In this present case my Office is conducting an on-going examination of a complaint against the Department. As the Committee is already aware my Office issued a Preliminary Examination Report to the Department in September 2002. The purpose of a Preliminary Examination Report is to set out in clear terms the evidence gathered up to that point in time during the examination of the particular complaint and to set out my tentative views on the case. It is then up to the public body to state its position having regard to all the evidence and views presented to it. Having received the public body's response I then decide whether to reject or uphold the complaint or whether to carry out further enquiries with the public body. If I uphold the complaint in whole or in part, I recommend appropriate redress, in this particular case, as the Committee has noted, the Department did not concur with my views, but notwithstanding this, it did offer to engage further with a view to reaching an "amicable solution".
In the meantime, my Office has been in correspondence and discussions with Mr. Curtin and his representative in relation to a number of aspects of his complaint. Most recently I issued a lengthy letter to Mr Curtin on 6 September 2006 and my Office received a response to this from Mr Curtin on 22 December 2006.
As Ombudsman, I am bound by strict rules of confidentiality and under Section 8 of the Ombudsman Act, 1980 I must conduct any investigation "otherwise than in public". I hope you will understand that, in order to protect the integrity of the examination process, which is in the interest of all concerned, I must respectfully decline to appear before the Committee at this point in time in relation to this complaint. I should say that, in line with the provisions of the Ombudsman Act, I am obliged to notify the Department and Mr Curtin in writing of the outcome of the complaint and the conclusions arrived by me once the examination process has been completed.
The Committee will also be aware that I report annually to each House of the Oireachtas, by means of my Annual Report which includes details of significant cases which I have completed in the previous year. As always, I greatly welcome dialogue and engagement with the Oireachtas and its various Committees in relation to issues covered in my Annual Report.
Yours sincerely,
Emily O'Reilly,
Ombudsman.
I will send Mr. Tuohy a copy of this letter.
I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the Houses or an official, by name or in such a way as to make him or her identifiable.
Are there any comments on the letter?
Yes. In regard to the section where the Ombudsman states: "As the Committee is already aware my Office issued a Preliminary Examination Report to the Department in September 2002. The purpose of a Preliminary Examination Report is to set out in clear terms the evidence gathered up ..." that is an area that needs to be addressed. That was in 2002. There should be some degree of concentration in regard to what the Ombudsman's letter set out at that time.
Many Deputies have had the experience of dealing with the office of the Ombudsman and being dealt with very courteously and efficiently. Investigations take place relatively quickly on matters regarding decisions or maladministration. In this instance, however, since the preliminary examination we are heading into the fifth year of the process, and I presume the process began before that examination. it seems a very long time. I do not know whether that has to do with issues with the Department of Communications, Marine and Natural Resources or whether it is just the nature of the investigation, but it has been an amazingly long process.
I draw the attention of members to the fact that further information was sought on 6 September 2006 and the response time to that was three months.
On that point, the response was as follows: "If I uphold the complaint in whole or in part, I recommend appropriate redress, in this particular case, as the Committee has noted, the Department did not concur with my views, but notwithstanding this, it did offer to engage further with a view to reaching an "amicable solution"."
We will leave the letters. Are we clear on the letter?
No, we are not.
There seems to have been an inordinate delay from 2002 to 2007. This is a fairly lethargic way of conducting business in any circumstances.
There is another question. Is there a blanket ban on the Ombudsman appearing before this or any other committee of the House while there is an ongoing process?
The Ombudsman has given clear information. She said: "If I uphold the complaint in whole or in part, I recommend appropriate redress, in this particular case, as the Committee has noted, the Department did not concur with my views, but notwithstanding this, it did offer to engage further ...". In the event of the Ombudsman making a decision, which the Ombudsman can eventually do, it does not matter whether the Department concurs with her views. The fact is that is the issue that is now before us. That is the issue we must address.
We will have the Department here.
We will, shortly.
We will proceed. Does Mr. Tuohy want to make a statement?
Mr. Tuohy
I have given a statement. Does the Chairman want me to read it into the record or can it be taken as read?
Yes.
Mr. Tuohy
I am not here to defend the Ombudsman. I represent the Department. We have responded to the Ombudsman's draft report. We have not heard anything. We have contacted them a number of times to ask if they wished to respond. There is nothing outstanding on our side. We have co-operated fully and will continue to co-operate fully with the Ombudsman. All the files have been made available and we await a response from the Ombudsman. It is not a Department issue. We have been as helpful as possible.
What timeframe was submitted? After the preliminary examination there was an engagement with the Department. At that stage, in late 2002 and 2003-----
Mr. Tuohy
No. We got a request from the Ombudsman in 2002 and we submitted on the 27th of that month. The Ombudsman wrote to us on 4 September and we responded on 27 September. This is not an unreasonable time, given the size of the file, to examine the matter and respond to the Ombudsman's draft report. It is less than four weeks.
Did Mr. Tuohy have contact with the Ombudsman subsequently?
Mr. Tuohy
Not unless there were queries. Mr. John Quinlan is on the decentralised staff and the people dealing with this matter, other than me, have all left the Department. Information was left on file and there may have been queries or requests for clarification. I cannot give detail of that. It would be up to the Ombudsman to come back to us.
Is Mr. Tuohy aware of the phrase, "an amicable solution"?
Mr. Tuohy
Yes. That was in the letter. We offered to engage. I have submitted the letter we sent to the Ombudsman to the committee. The phrase is ours. I used it in the second last paragraph of my response. I stated, "We would, however, as an exceptional measure, without prejudice and without any admission of liability on the part of the Department, be prepared to explore with your office the possibility for arriving at an amicable resolution of this matter".
What are you reading from?
Mr. Tuohy
My letter to the Ombudsman of 27 September 2002.
I take Mr. Tuohy's point that he is not here to defend the Ombudsman's remarkable failure to respond. The Department says it is willing to consider an amicable resolution; the Ombudsman has clearly indicated that she believes there has been malpractice, yet nothing has happened for five years. To any independent outside observer, this is very strange.
Mr. Tuohy
I must point out that this is not the Ombudsman's final report. It is a draft report.
It is the Ombudsman's report.
Mr. Tuohy
It is a draft report. It is very important to differentiate. We only got the opportunity to respond to the draft report.
From the perspective of the committee it is as clear as day that there was malpractice. We are not surprised the Ombudsman would make such a point. It would also seem that the High Court agreement, which the Department reached in 1997, was an acknowledgement that there had been malpractice. The Indecon report's suggestion that the parties involved go to the Ombudsman was an indication that Indecon thought there was malpractice. Everyone, except the Department, sees it is as plain as day that there has been malpractice.
This is not something for which officials currently working in the Department are responsible. However, I am surprised that the Department, in the submission made to a previous meeting of the committee on this issue, did not recognise the simple facts of the malpractice. In Mr. Tuohy's briefing note to the committee he states that, following the Commission's decision of 1993 to approve the project, Valentia Marine "intimated to the Department of the Marine that it considered that it was a matter for the Department to provide a member state aid contribution of up to €565,000 for the project and the Department did not accept that was the case and informed the company in September 2003 that it was primarily a matter for the company itself". The documentation we have seen regarding the European Commission's original decision was absolutely clear that the Department was managing the application and had signed on the dotted line as the only national competent body which was supporting the project. A little before that in the document there was a commitment to the State contribution to be made.
During our first hearing, there was a remarkable contradiction between what the Department said and what the clear evidence showed, which was that the Department supported this project from the beginning and committed State aid that it failed to deliver. In that sense the Department was wrong. In addition, in not agreeing to and providing the State funding, the Department caused a successful and well run business to collapse and Mr. Curtin to spend 15 years seeking redress for the original mistake. He tried desperately during the first few years, despite the Department's failings, to get the project up and running. When he was given the choice in 1997 of taking compensation or proceeding with the project, to his credit, his honourable intention was to try again but the Department let him down again.
He has since employed advisers, including Derry Gray from BDO Simpson Xavier and others, on an expensive basis to seek redress for that basic mistake. If the Department had held up its hands, said it was wrong in the first instance, it did not manage the project properly and would try to make up for it, we would not be dealing with this 15 years later. The original mistake cannot be contradicted. The former Secretary General of the Department, in a letter appended to the Indecon report, set out that his understanding was the Department had not fulfilled its obligations. It did not have its house in order.
It is important that this issue should be resolved because it is wrong if the State does not recognise when it has done something wrong. It is not right for the State to get it wrong and for someone to be out of business and suffer severe hardship without the State acknowledging it. How is my understanding incorrect? The State was wrong regarding the original application and ever since in refusing to recognise this.
The committee has not drawn conclusions on this issue. We discussed this on 12 November 2006. Is Mr. Tuohy aware of the transcript?
Mr. Tuohy
I have the transcript.
That is the committee's position.
I outlined my position.
The Deputy spoke on behalf of the committee briefly but I acknowledge he did not mean to do so. We received two pages, which were an excerpt of a preliminary report by the Ombudsman and, therefore, we have not read a detailed report on this. When I asked Mr. Curtin how he received it, he said it arrived in the post anonymously. It is important to clarify that. Did Mr. Tuohy receive a copy of the preliminary report?
Mr. Tuohy
Yes. My hands are well and truly tied on this in the sense that I have access to the Ombudsman's report, which was submitted to the Department, and to the confidential High Court settlement. The committee has seen parts of it.
Was the case not settled out of court?
Mr. Tuohy
It was registered in the court.
But it was not a High Court judgment.
Mr. Tuohy
It was registered in the court and a confidential clause was inserted. Even before this committee, I cannot divulge the settlement. I am in an awkward position. The problem is that the committee members have seen some, but not all, of the evidence. The basic principle of natural justice where the Department, Mr. Curtin or anyone else is concerned is audi alteram partem and we are entitled to defend ourselves. As part of that, we are dealing with the Ombudsman, who has access to all the information. The Ombudsman is a creature of this House and legislation.
Would Mr. Tuohy accept the Ombudsman's decision if it was not in accord with his view?
Mr. Tuohy
In my time I have never had an Ombudsman decision against the Department.
That is not my question.
Mr. Tuohy
The normal practice for the public service is to accept an Ombudsman's decision and I would be no different from anybody else.
But Mr. Tuohy did not accept the Ombudsman's preliminary report.
Mr. Tuohy
The preliminary report may not be correct and we do not believe—
Now—
Mr. Tuohy
With respect, it is a preliminary report.
Let us get the answers please, Mr. Tuohy.
Mr. Tuohy
It is a preliminary report that allows us to respond. That is part of the process.
Before we take questions from Deputy Durkan I invite Mr. Tuohy to respond to the questions and statements made by Deputy Ryan.
Mr. Tuohy
The issues Deputy Ryan raised go back to the time prior to the court case in January 1997 following which the settlement was agreed. The settlement was a full and final one up to then, including the plaintiff's acknowledgement that there was no obligation on the Department of Communications, Marine and Natural Resources to provide or source further funds in connection with the plaintiff's application or the modified version of same. The period up to then was dealt with by the court case which took place in January 1997.
I dispute that, in the sense that this has been the one project from start to finish. As I understand it, the result of the court case and settlement was that the project would be started off again. We are not looking at two different projects, we are looking at the same one. The Department promoted something twice and then pulled out. I do not see any difference in terms of pre or post 1997. The only reason the court case occurred was that the party was trying to get the Department to fulfil its obligations. The court case did not result in the project beginning afresh; it was the same project, the same application and the same European funding. The only issue is that the Department got it wrong twice. The original error is being compounded by the second one but it is still the same error.
Mr. Tuohy
I ask the Deputy, with respect, whether he has seen the settlement?
I have seen details of the settlement.
Mr. Tuohy
With respect, has the Deputy seen the settlement?
If I have been informed correctly, I understand the settlement allowed Mr. Curtin to either take a compensation amount or for the same amount to be used as a renewed investment by the State in the project.
Mr. Tuohy
A number of other conditions were attached.
The basis of that—
Mr. Tuohy
The Department fulfilled all the conditions in the settlement.
This is a confidential settlement.
Mr. Tuohy
That is why my hands are tied. The settlement is confidential. It is available to the Ombudsman. I would like to reveal the terms because it is in my defence but I am not allowed to do so.
I wish to return to the point about the original mistake that was made.
Will Deputy Ryan please clarify whether he has a copy of the settlement?
No, I do not have a copy of it but I have a broad outline of what the settlement involved.
Did Deputy Ryan see it?
No, but the broad outline of it has been confirmed.
Has Deputy Ryan been briefed on the settlement?
I was informed that the settlement was that the State, in a sense, agreed it was backing this project and had failed to provide the finance. It recommitted itself to put in funding. It was nothing radically new or different. If anything, it showed the honest intention of Mr. Curtin to get this project off the ground.
I wish to ask Mr. Tuohy another question about the original error on which I seek acknowledgement. The material relating to this matter has come to me from Mr. Curtin. A letter from the European Commission on 17 February 2004 outlined that the national authority — the Department — had failed to establish what national aid was worth to the project before forwarding the application to the Commission. Was that not the original error? The fundamental problem we are dealing with here is that the Department did not have the scheme in place, as required by European regulations, to provide for funding for the project, and that is the malpractice.
Mr. Tuohy
I cannot comment on that because that is the issue before the Ombudsman. The original application was dealt with by the High Court settlement. The Ombudsman is looking at the whole process—
Let me put it a different way.
Mr. Tuohy
My hands are tied in what I can say.
If I can put it in a different way, according to Article 3 of Commission Regulation EEC 3856/91 of 18 December 1991, it was the member state which was responsible for the checking and verifying of details contained in the application for Community financial aid. Did the Department have the correct mechanisms in place in 1992 or 1993 when this application was made to comply with all European regulations to ensure that State funding was approved in advance of its being approved by the European Commission? This is a general question rather than one specific to the case in question. Did the Department have those proper funding mechanisms in place?
Mr. Tuohy
General procedures were in place but the specific scheme that was submitted was sui generis. It was a one-off scheme.
Did the Department have the correct procedures set up to ensure that funding would be approved by the State in advance of its being approved by the Commission?
Mr. Tuohy
There were no applications other than this.
Were there no regulations in place to manage this?
Mr. Tuohy
At that time?
Yes.
Mr. Tuohy
This was a one-off scheme.
Is that not the problem and the malpractice? The State did not have its—
Mr. Tuohy
I am not stating that it was malpractice—
Whatever word one uses.
Mr. Tuohy
This was dealt with by an agreement in court, which is registered in the High Court. It is not for me to second guess what the court decides.
If it is agreed by the High Court, why is it the view of the Ombudsman that this amounted to malpractice?
Mr. Tuohy
With respect, the Ombudsman has not yet published a definitive report. She has submitted a draft report of 18 pages and we responded to it within three weeks of the submission in September 2002. We are happy to deal with this issue but the Ombudsman is a creature of the Oireachtas, set up to deal issues of this type. We will facilitate the office in any way we can.
Why was this application different from other port development applications processed at the time, such as those of Killybegs, Castletownbere and others?
Mr. Tuohy
Those were State developments but this was a private development.
What was the State's difficulty with providing funding to which it had committed when it signed the European Commission application?
Mr. Tuohy
The State did not commit to the funding, a matter that arose in the court case. It is not for me to second guess the outcome of the court case. The timeline of this is most important. The application had to be submitted by 31 October. It was submitted on 29 October. The dispute centres on the belief that the Department sought approval in principle on the assumption that there would be elements of private sector, member state and Community funding. This issue formed the basis of the High Court settlement.
It was also the view of the European Commission that the State had committed to the funding. Why would Mr. Curtin be of the view that the State would not provide funding when the Minister issued a press release about the application and departmental officials organised it?
Mr. Tuohy
The Deputy refers to the court case settlement.
No, I refer to the original application.
Mr. Tuohy
This was dealt with by the court case settlement, covering the period to 1997.
The settlement implied that in the original scheme there was provision for State support up to €565,000.
Mr. Tuohy
It was accepted that there was no obligation whatsoever upon the Department of the Marine to provide or source further funding in connection with the plaintiff's application.
Did the original scheme not allow for 50% input from the EU, which we were familiar with, and State support of up to 50%?
Mr. Tuohy
It depends what one means by State support, which does not necessarily mean support from the Department of the Marine and could refer to a grant from another agency.
Was the Department of the Marine the only national competent body as set out by European regulations?
Mr. Tuohy
Yes but only in respect of making the submission. That does not mean the Department would be the one funding it.
If the Department did not wish to support the project why did it agree to a court settlement that instigated it once again? Was it not the European Commission that raised questions about the project because the Department did not have mechanisms to provide the funding?
Mr. Tuohy
With respect, I suggest Deputy Ryan read the court settlement. It makes quite clear what was agreed by the Department.
Would Mr. Curtin have a copy of that?
Mr. Tuohy
I am sure he would, but if there is a confidentiality clause in it—
Forgetting about the court settlement, why did the Department recommit to this project in 1997 and 1998?
Mr. Tuohy
Part of the agreement was to go back to get the Commission to extend the time on the project and part of it was that the Department would provide further assistance to assist the plaintiff on the restructured project. As the Deputy is aware — I have seen it in some of the published material — there was an option for Mr. Curtin in regard to the £135,000 to take it at the time or to have it regarded as a member state contribution for a different scaled down project.
Why did the Department not wish to proceed with the project in 1998?
Mr. Tuohy
There was a specific condition from the Commission that an independent consultant's report should be made available to it and this is when the discussion started. Coopers & Lybrand did a report. Ernst & Young did a report. O'Hare & Associates did a report. All three were critical of the viability of the project. BDO Simpson Xavier, on behalf of Mr. Curtin, disagreed. The obligation was on Mr. Curtin to prove the viability of the project.
I have to declare that I am a friend of Mr. Gray from BDO Simpson Xavier. I have known him for many years. Independent of that sort of connection, I would have to say that in my experience he is one of the best business consultants and an expert in the area of the viability of developments. However, that does not matter because to a certain extent it is impossible to know in advance whether a business will be successful. One cannot be definitive.
My view, having talked to Mr. Curtin and having looked at the background to this, is that he had a viable business. This was a good business expansion plan. This was something one would back. There are many projects that are obviously harum scarum but this was a viable ongoing business which was closed down because of how this matter was handled. One cannot be definitive on matters such as this. It is not right for the State to support a project on a number of occasions and, when it runs into difficulties with the European Union, to appoint consultants, say it is not a viable project and go in a different direction. That is also malpractice.
Did Deputy Ryan say he was a friend of Mr. Derry Gray?
I know Mr. Derry Gray from school.
I want to put it on the record that the Deputy is acknowledging that he personally knows Mr. Gray who is a partner in the accountancy firm BDO Simpson Xavier.
I thought it was appropriate to mention that.
There are two matters on which I wish to comment. It behoves the Department and the Ombudsman to sort this out. If this cannot be resolved between the Ombudsman and the Department it behoves this committee to do whatever it can. If necessary, it should go back and examine exactly what systems the Department had in place in the early 1990s, the detail of the European Commission's involvement, and whether the State was committing to fund the application or was merely a facilitator. It is wrong for something to be left five years in a limbo between the Department and the Ombudsman. If it cannot be worked out, the joint Oireachtas committee should bring both the Department and the Ombudsman to account for why they have not sorted this out.
Thank you, Deputy Ryan.
Mr. Tuohy
I emphasise that the Department has co-operated fully with the Office of the Ombudsman. There is nothing outstanding in our correspondence. We have made everything available and done it in good time.
In the submission that has been taken as read and which will not be in the report, Mr. Tuohy states that he has yet to receive a response from the Ombudsman to the letter of December 2002. Is that correct?
Mr. Tuohy
That is correct.
To be clear, the Ombudsman's examination of the case has not yet been brought to finality, the Department has yet to receive a response to its letter of 27 September 2002 and has co-operated fully with the Ombudsman and will continue to do so. That is Mr. Tuohy's statement.
Mr. Tuohy
Absolutely.
There is an outstanding piece of correspondence.
Mr. Tuohy
We have complied. We submitted the information within three weeks of getting a request for it from the Ombudsman. It was a detailed response. We are available to assist. It is clear from the earlier letter that the Ombudsman has been in contact with Mr. Curtin. I do not know how the Ombudsman's office operates. I presume they talk to both sides.
We are familiar with how the Ombudsman's office operates. In cases of maladministration, for instance, by a county council, decisions are generally prompt. This seems an amazing length of time for a consideration to be made. Is it not clear from the Ombudsman's report of 2002 that the manner in which the Department processed the original application may have been flawed, based on undesirable administrative practice and contrary to fair and sound administration? The Ombudsman had a key concern in September 2002 that this was the case. The Ombudsman further stated that the Department was directly involved in the preparation of the application but it appeared to the Ombudsman that the application did not meet the requirements set out in Regulations 4028/86 and 3856/91 because the project was not part of a Commission-approved programme. The Ombudsman was concerned that "the Department may not have been in a position to fulfil its part of the court settlement in that conditions attaching to the Commission decision had not been met by it".
I find the office of the Ombudsman a very important defence for the citizen. It has worked extremely well and I am a great admirer of the incumbent of the office. Is it not clear from the Ombudsman's judgment that there was a prima facie case of maladministration?
Deputy Broughan, what are you reading from?
I am quoting from a letter the Ombudsman may have sent to the Department. It is a copy of a letter.
Has the committee seen the document?
I do not think so.
For the sake of completeness, can you tell the committee if it is a report or just a letter? Who is it addressed to and who sent it?
It is not a mystery. It was given to me by Mr. Curtin.
Is it part of the two-page report given to the committee?
I think it is.
We received only two pages of the report. That is the report Mr. Curtin says came anonymously to him. Did you say, Mr. Tuohy, that you received a preliminary report?
Mr. Tuohy
We have a preliminary report, which is 18 pages. The Ombudsman is bound by the confidentiality clause in the Ombudsman Act. It is not for me to make that report available to the committee. I find it very difficult to defend myself when others have access to specific sections and specific information which I do not.
I re-emphasise, this was a draft report submitted to the Department for its comments and observations.
I am familiar with those draft reports, particularly those sent to Fingal County Council, an area I represent. Because I am familiar with them, it seems to be the prima facie view of the Ombudsman that there may have been serious maladministration in this case.
Mr. Tuohy
With respect to Deputy Broughan, this is a draft report. It is not a judgment or a final report and it is not fair to make a comment of that type. The Ombudsman will make a final report that will consider all comments. The basic principle of natural justice applies to the Department as to everybody else.
It means the Ombudsman's office has done a lengthy and serious investigation and felt there was a prima facie case of maladministration and, at the very least, that Mr. Curtin and his company had been misled regarding the way in which European aid would apply to this project.
Mr. Tuohy
If it was as simple as that, presumably, the final report would have issued very soon afterwards. The Ombudsman has reflected on our comments and we have made information available.
Mr. Tuohy has a document, which has no heading. We received two pages. We are a responsible committee of the Oireachtas and we do not wish to deal with anonymous documents. Are any of the words in the document referred to by Deputy Broughan familiar to Mr. Tuohy?
Mr. Tuohy
Every word is familiar but the issue is the order in which they appear. We are in correspondence with the Ombudsman's office on a confidential case, which is the way the Ombudsman operates. Generally, one does not rerun the case in public. The Ombudsman was unable to attend the meeting but I said I would be as helpful as possible. I outlined in my own note that my hands are well tied regarding much of what I can say because a lot of the information is confidential and I am not allowed to break that confidentiality. I cannot comment on that objective because, while I have the 18-page report, it is not up to me to release it. I am not trying to be unhelpful.
The Ombudsman states:
In this present case my office is conducting an ongoing examination of a complaint against the Department. As the committee is already aware, my office issued a preliminary examination report to the Department in September 2002. The purpose of a preliminary examination report is to set out in clear terms the evidence gathered up to that point in time during the examination of the particular complaint and to set out my tentative views on the case. It is then up to the public body to state its position having regard to all the evidence and views presented to it. Having received the public body's response, I then decide whether to reject or uphold a complaint or whether to carry out further inquiries with the public body.
Will Mr. Tuohy comment on her "tentative views"?
Mr. Tuohy
I cannot comment on them. While it is not the equivalent of being sub judice, an issue is being dealt with by a body set up by the Oireachtas which has access to all the files and information. We are co-operating absolutely fully, as can be seen by the timescale in which we are responding. We are available to assist the Ombudsman but it would not be appropriate for me to go into the detail of that report. The Chairman is referring to a specific part of an 18-page report.
Mr. Tuohy said this case is tempering justice with mercy and it has been ongoing for 14 years. He said his hands are tied and he cannot pre-empt what the Ombudsman will say. This debate will be fruitless in the context of achieving a resolution. We await the Ombudsman's report because it will outline the lie of the land and the direction the case will follow. Mr. Tuohy cannot pre-empt the Ombudsman's decision.
Deputy Broughan indicated his interpretation was that prima facie evidence was available and the Ombudsman had reached conclusions. However, in her letter she stated she had “tentative views”, which means the examination has not concluded. The committee is not suggesting maladministration on the part of the Department on this issue until the matter is concluded.
Mr. Tuohy
We appreciate that.
I agree entirely. It would be fantastic if the Ombudsman could issue a report on this because it has gone on for 14 years and could affect the reputation of the body politic and all State services, including her office. All the necessary documentation must be available. I hope the Ombudsman will come back on this quickly and bring the case to a conclusion.
My experience from the Committee of Public Accounts is that when the Comptroller and Auditor General investigates a case he produces a report the following year. It is beyond the realm of feasibility for an issue to drag on for 14 years, as documentation and figures become dated which could give rise to questions about the sustainability of such a case. Without prejudicing the case, it is important in terms of justice that a conclusion is reached. I have no doubt Mr. Tuohy wishes that to happen also. It does not do the perception of the Department any good to have a file open for 14 years. I accept it is no reflection on Mr. Tuohy that the Ombudsman has that file since 2002. I am most disappointed that the case has not been acted on. Perhaps there are justifiable reasons for that.
A high level of urgency is evident in the recent correspondence. I am not sure whether it is appropriate for the committee to make a recommendation to the Ombudsman but—
I suggest to the Vice Chairman and the members that we will write to the Ombudsman and ask her whether she will expedite the conclusions of her report by virtue of transferring her tentative views on the case into a final report so that the committee can consider it. Is that agreed?
Yes. It should be done in the lifespan of the 29th Dáil of which approximately 20 weeks remain.
It can be work in progress for the next committee.
The Chairman referred to the Ombudsman's tentative views on the case. This matter has dragged on since 2002. A letter was issued to Mr. Tuohy in the Department but five years later we are still awaiting an outcome. There is no reason we could not get an outcome before Easter.
We will do that.
Mr. Tuohy
To be fair, it is not for me to defend the Ombudsman but I am sure something has been happening because reference was made in the letter to the correspondence between the Ombudsman and Mr. Curtin. It may not have been with us but, in fairness to the Ombudsman, I do not think that office is just sitting on the case.
We are talking about expediency and action.
Mr. Tuohy
I accept that.
Business is business.
We are familiar with the role and function of the Ombudsman's office which is to investigate citizens' complaints against certain specified public bodies. As we know, some bodies are excluded. The normal procedure is that the Ombudsman offers a preliminary report. In this case, it was issued in 2002. That report was contested or rebutted by the Department. I do not know which is the case as I did not see the Department's response. The procedure from there on is quite clear. The normal procedure is that the Ombudsman's report is followed up with another report which substantially contains what was in the original report. Is that true?
Mr. Tuohy
I cannot say because I am not—
Mr. Tuohy can tell me. That is the normal procedure in an investigation.
Mr. Tuohy
That would usually happen fairly quickly.
Who initiated the court case?
Mr. Tuohy
The plaintiff was Mr. Curtin back in 1996 or 1997.
Is Mr. Tuohy sure?
Mr. Tuohy
I am.
My information is that the Department initiated it.
Mr. Tuohy
Let me check my notes. The High Court record No. 1995-6110P relates to a case between Valentia Marine Limited, as plaintiff, and the Minister for Communications, Marine and Natural Resources and the Minister for Finance, Ireland and the Attorney General, as defendant.
I am trying to be helpful. To clarify, in the report Mr. Curtin stated it was at that stage he took legal advice on the options open to him and based on this advice he applied for and was granted a judicial review in 1995. His case was eventually heard in the High Court in 1997. The outcome after four days was a settlement initiated by the Department which Mr. Curtin entered into in good faith. I can read further from the report if Deputy Durkan wishes.
No. I am going along that line. Who initiated the confidentiality clause?
Mr. Tuohy
It was written into the agreement.
I accept that but did either side request it?
Mr. Tuohy
To be honest, I was not there at the time so I have no idea.
Since the confidentiality clause, to which Mr. Tuohy referred, is a major plank in the agreement, does that mean that if confidentiality is not observed the agreement falls?
Mr. Tuohy
I do not know. Confidentiality clauses are not unusual in agreements, particularly commercial agreements.
I am aware of that.
Mr. Tuohy
I do not think it nullifies an agreement.
Let me put it another way. A settlement was reached and registered in the High Court. Have the benefits of that settlement accrued?
Mr. Tuohy
In what sense?
I did not see the settlement, so I must presume there was a conclusion that was accepted by both sides. Has that been honoured?
Let me be helpful. It provided for two options, acceptance of a sum of £135,000 in full satisfaction as damages, or that the sum of £135,000 would form the State aid element in the event of the original contract with its modified funding arrangements being submitted to the Commission for approval. The second option was opted for.
In other words, the amount would be carried forward into a subsequent application.
I could keep going on about it. That had its own difficulty.
I will return to my question. Has the settlement been put into operation? It was a settlement agreed in court by both sides, and stamped and registered by the court.
Mr. Tuohy
The Department has done everything that was required of it.
That was not my question. My question, presuming I did not hear what the Chairman said, was whether the settlement was honoured.
Mr. Tuohy
The Department has done everything that it was required to do under the agreement. There were two parties to the agreement.
Under the agreement the applicant or the plaintiff agreed to accept the settlement. He was given the option of a cash settlement or of the settlement being carried forward as part and parcel of the subsequent application. Is that true?
Mr. Tuohy
I cannot comment on the agreement.
I am not asking Mr. Tuohy to comment on the agreement. What I am asking is a more fundamental question, and Mr. Tuohy is not answering it. Was the agreement, entered into and stamped by the court, honoured by both parties? In other words, did both parties proceed from that agreement thereafter and honour it?
Mr. Tuohy
The Department has done everything it was asked to do in the agreement. I cannot speak for Mr. Curtin. He must speak for himself.
I suggest to the Secretary General that the Department has not honoured the agreement entered into and stamped by the court. That is how it appears to me. Mr. Curtin is now trapped. He had the option of accepting a cash settlement. If he had accepted a cash settlement he would have been far better off. However, because of the confidentiality clause and all the nonsense that is going on, the Department is now covering itself with a fig leaf. It is quite clear that the Department, having made an agreement in court, has failed to honour it.
Mr. Tuohy
With respect, there are other conditions in the agreement of which the Deputy is not aware. I take great exception to the Deputy's comments in regard to the Department.
Mr. Tuohy can take as much exception as he likes. The fact of the matter is—
Mr. Tuohy
The Deputy is not familiar with the contents of the agreement.
I have asked a straight question. The question is whether the Department honoured the commitment entered into in court? That is a serious matter. It is no good hedging bets. I am not blaming Mr. Tuohy for this. I am telling it the way it is. The agreement was entered into in court. Once an agreement is entered into in court, the court is part and parcel of it and has given its imprimatur to it. The plaintiff had a choice and chose one of the options in regard to that settlement. That settlement was then fundamental to a subsequent application. It appears that what has happened now is that the subsequent application has fallen into the sand and nothing has happened, so the court agreement means nothing.
Mr. Tuohy
I state again that the Department has done everything that was required of it by the agreement.
We will be here all day. I will take Deputy Perry's proposal that we ask the Ombudsman to complete her report as a matter of urgency and transfer her tentative views into a final report so that the committee can bring this matter to a close.
In the term of this Dáil.
In the term of this Dáil.
Can I add that we recognise the existence of a court agreement?
I have not seen any agreement.
Is there an appeal process against a decision of the Ombudsman?
Mr. Tuohy
The Department will consider any proposal from the Ombudsman. I have never been involved in a decision against the Department. I would have to take advice in that case. Generally, the Government tends to accept decisions of the Ombudsman. That would be my own gut feeling on the matter.
That spirit of goodwill is very important. The ball is in the Ombudsman's court. Our letter should state unambiguously that we expect the matter to be resolved, whatever it takes.
I would prefer to stick to Deputy Perry's original proposal. We have not seen any of the papers.
That is the Ombudsman's job.
I accept that this is a very unusual story. It has been the subject of a court decision and has been with the Ombudsman for a very long time. However, the committee has responsibility in matters of maladministration by the Department. We have been given the role of invigilating the work of the Department. We have responsibility, above and beyond anything done by the Ombudsman or the courts. It is important not to pass the matter to the next Dáil.
Was this a unique funding application? I have 20 years experience of applications for EU funding in the social economy. A number of years ago it was often important that a project, perhaps organised through FÁS, had a European mechanism behind it. Was this a unique project or were there others like it?
The Department certified and supported this application in October 1992, continued to support it throughout 1992-93 in Brussels, leading to a Commission decision, and the Minister trumpeted it as an advance for the locality. Was the Department not aware of this and did this not place responsibility on the Department in the matter?
Civil servants at that time were well aware of the Cohesion and Social Development Funds and of how European support mechanisms worked. They were aware of the process of informing sponsors, whether community bodies or, as in this case, an individual business, of how they could maximise European support. Given all of this, does it not seem to Mr. Tuohy that a prima facie case of serious maladministration exists? Mr. Pat Curtin, his family and his locality suffered grievously.
Mr. Tuohy
I do not accept there was maladministration. We are in discussions with the Ombudsman's office on that matter. This was a unique scheme. Deputy Durkan asked that question. Deputy Ryan asked the same question earlier. It was not part of a scheme of other projects in that he talked about harbours which were the subject of departmental schemes. This was a private sector initiative. In that sense it was unique. It was not part of a wider range of schemes.
If there was no maladministration, as suggested by Deputy Broughan, why was there a settlement? The settlement entered into was to address the concerns and the issues of the grievance of the plaintiff. I do not know what that settlement was because theoretically I do not know what was in the agreement. What I am saying is that unless there was a penalty against the plaintiff in the settlement there was something wrong in the way the Department handled it. It is as simple as that. I am not blaming Mr. Tuohy. This is not personal. I am merely telling him that the position as he has outlined it is unsustainable. The fact is that the Department and the plaintiff between them reached a settlement which was stamped and recognised by the court. Unless that settlement penalised the plaintiff a problem arises for the Department. As Deputy Broughan has said, why otherwise would there be any kind of issue? If a penalty was imposed on the Department as a result of what the Department did or how it did it, there was obviously a recognition of the fact that the plaintiff had a grievance.
Following this settlement there is all the correspondence between the Department and Mr. Curtin and between the Department and the Commission where the Department clearly seems to be helping to carry on the project. For example there is a Commission letter of 31 March 1999 which concludes by urging the Department to submit all documentation in relation to the revised project as soon as possible because, as it is already aware, there are substantial time constraints. I have a series of similar quotes in the interregnum between 1997 and 2000 in which it seems as if the Commission has agreed to the amount of £135,000 which was awarded under the terms of a legal agreement being viewed as member state capital grant for the purpose of submitting a revised application. The Commission agreed that the Department should examine the project using consultants and independent consultants examined the viability of the project. There is a time extension and the time scale of six years nine months and the court period was allowed as an extension of that. Again, the Department was so heavily involved in that intervening period in the Commission letters of November 1998 and March 1999 that it seems the Department was aware of the broader issues, even the viability issues to which Deputy Ryan referred. It seems to have been aware of the broader general socio-economic case that could have been made for the boat repair facility in the south west. There are implications as to why there might have been a basis for the Ombudsman to have concluded prima facie that there was some maladministration, that the Department was proceeding somehow with the project and that Mr. Curtin and his supporters were encouraged to believe that there would be a fruitful outcome.
The Department collapsed the scrum.
Mr. Tuohy
The Deputy's research is based on part of a report he has seen. He himself accepts that it is two pages of an 18-page report. That is something I cannot comment on because it is confidential. As I said at the start of this session, my hands are tied in regard to almost everything I say.
We will help Mr. Tuohy to untie them.
I am not trying to be unhelpful. There is the Ombudsman Act. However, there is also an obligation on the Department to answer to our committee. We brought Mr. Curtin in here. We invigilated him and heard his case. We have heard it on a number of occasions. Clearly the Department has a responsibility to us as well as to the Ombudsman.
Mr. Tuohy
That is why I am here today. The High Court settlement involves issues other than the financial settlement. There are other issues that are very clear and other responsibilities emanating out of that about which I am not prepared to talk, because I cannot.
They would have been apparent prior to the court case.
This confidentiality clause intrigues me. Anything that has happened since the court case merely replicates what happened beforehand. We are in the same rut and coming to the same conclusion. It appears the Ombudsman made a preliminary report prior to a decision.
It was a tentative view.
It was a standard report. We are familiar with the procedure.
She does this all the time. She will say, for example, that a local authority or Department has a case to answer and ask that the case be answered. I have several of her preliminary reports in my files. She is very efficient. She comes back several times and finally issues a determination.
Mr. Tuohy
My responsibility to the Ombudsman and to the committee is to deal with what comes from the Ombudsman's office as quickly as I can. The Department has done that.
The Ombudsman's letter refers to the Department's offer to engage further with a view to reaching an amicable solution. Does this imply that the Department has been in negotiation with Mr. Curtin?
Mr. Tuohy
We have not. We have made ourselves available but we have had no negotiations.
Available to whom?
Mr. Tuohy
To the Ombudsman.
But not to Mr. Curtin.
Have you had any communication since your letter of 2002?
Mr. Tuohy
The principal officer who was dealing with the case, Mr. John Quinlan's predecessor, may have had calls but there were no efforts at settlements in which I was asked to become involved. Even in advance of today's meeting we asked if we should expect a response to our letter of 2002 and the Ombudsman's office said they were not in a position to respond to it. I do not wish to put words in the Ombudsman's mouth but I think we have done everything we can do.
There is another party in the matter. The Ombudsman has a relationship with Mr. Curtin. I do not know what happens on that side.
Mr. Tuohy, you are saying you have not received a response to your letter to the Ombudsman of 27 September 2002. This is four and a quarter years ago. Are you referring only to that letter? Were other letters written subsequently?
Mr. Tuohy
No. That was our last correspondence.It was a response to the Ombudsman’s draft report. We gave a response, as we are obliged to do and as we wanted to do.We are waiting and available and we have made that clear. The Ombudsman, presumably, evaluates the report on foot of our response. The committee is familiar with this procedure.
We will include your statement to the committee with the committee's letter to the Ombudsman, for her information.
Is it possible to send her a copy of today's proceedings?
We will advise her that it is available on the website. It will be available on the website in two or three days.
I cannot speak for you, Chairman, but Deputies Perry, Durkan and I are all former members of the Committee of Public Accounts. In the early 1990s the issue of the Kilrush marina came before that committee. We travelled down to look at it. We understand how the Department, in that era, was vigilant in committing public money. In this case, the Department, allegedly, decided not to commit public money to a project that was not viable. I can understand the concerns of Mr. Tuohy's predecessors regarding the protection of the public interest. The members of the Committee of Public Accounts shared that concern regarding the spending of public money. Nevertheless, in this case it appears that expectations were raised. The court judgment appears to confirm this and the preliminary view of the Ombudsman appears to support it.
Expectations were raised in the Valentia area by Mr. Curtin to which the Department should have responded. The opposite of the investigations into the Kilrush Creek Marina occurred in this case. We admire the Comptroller and Auditor General and his staff for their investigations into expenditure. This is an unusual case of money that was not spent even though it would have been beneficial to west Kerry.
Deputy Broughan is referring to the Kilrush Creek Marina, a little before the Chairman's time.
I thank Mr. Tuohy and Mr. Quinlan for appearing.
Mr. Tuohy
I understand the committee is interested in visiting the offices in Clonakilty. We extend that invitation to committee members.
We received the invitation from the Department and today the committee decided it will visit on 24 February.
The joint committee adjourned at 3.40 p.m. until 2.30 p.m. on Wednesday, 21 February 2007.