Exclusive: Donegal councillors John O’Donnell and Michael McBride funded by Údarás na Gaeltachta

At a time when controversial ‘cash for favors’ Donegal councillor John O’Donnell was refusing to pay more than 33,000 euro compensation to a Creeslough woman he injured in a car accident 16 years ago, Údarás na Gaeltachta granted him and fellow councillor Michael McBride more than 122,000 euro in public money (see document here Udaras grant), I can reveal exclusively in this blog.

John O Donnell Donegal, independent councilor Donegal

O’Donnell was founder, director and secretary of Dúncrua Teoranta, the company receiving the money. Interestingly, a second director of the company was fellow councillor, Michael McBride, who also acted as company secretary. Both men – now declaring themselves independent councillors – were then members of Fianna Fail. A third director named was Sarah Doherty.

Documents show McBride and O’Donnell became directors of Dúncrua Teoranta on the same day, 14 Sep 2006, when it was set up to sell metal ore. They are also listed as company secretaries. McBride was director for a year and four months, until February 2008 when he resigned. The company’s address was listed as just inside the Gaeltacht, at Cuirin, Termon.

Dúncrua Teoranta

Údarás approved funding for Dúncrua Teoranta of 122,300 euro in 2008, paying out 66,850 euro in that year alone. The owners put the company into bankruptcy within months of the money being given. Aidan Garcia of Collins Garcia Corporate Recovery, 28 Fitzwilliam Place, Dublin was appointed as liquidator.

“As the money was given at a time when the company was close to bankruptcy, it seems it’s yet another case of cronyism, money given to two Fianna Fail politicians by a Fianna Fail dominated organization,” commented one observer with inside knowledge of Údarás operations.

Interestingly, O’Donnell was granted the money by Údarás at a time when he owned another company, Kilmac Form Work Limited, which later went into receivership with documents showing it had liabilities of 4.8 million Euro. Much of that debt, as declared during a High Court hearing in 2012, was owed to AIB Finance, thus to ordinary Irish people as the bank was bailed out by the State through injections of billions of euro of public money.

Kilmac Form Work Limited

O’Donnell registered Kilmac Form Work Limited on 6 April, 2005 in Ballyherrin, Kilmacrennan, several kilometers from Duncrua Teo, described as being involved in the manufacture of metal structures. It is currently listed as ‘Receivership’ with two directors, O’Donnell and his brother. The ‘Irish Independent’ reported recently that O’Donnell was forced to make back settlements to the taxman totaling over 330,000 euro. I have contacted both Councillors McBride and O’Donnell for comment but neither has responded. Údarás finally released a statement confirming it did grant O’Donnell the money. Where were Údarás officials when the RTE ‘cash for favors’ investigation was aired to such national furore weeks ago? Cowering in a corner hoping no-one would notice it had given scarce public money away so recklessly?

Urgent questions require immediate answers

The documents unearthed for this blog call into question the actions of both O’Donnell and Údarás na Gaeltachta.

O’Donnell is already firmly in the public spotlight due to his being caught on RTE camera allegedly offering ‘favors for cash’ on Donegal council business, as well as being under threat of arrest for failing to pay compensation due to Ms. Petra Kucklick of Creeslough whom he injured when he drove his car over her foot in 2000. District Court Judge Paul Kelly was quoted in the local media saying he will have the councillor arrested if he does not appear in person at the Letterkenny court on February 3rd to explain why he has failed to pay any of the compensation to the injured woman. O’Donnell seemed to have had lots of money at one time and could have easily paid the compensation, why did he decide not to do so?

Almost all of the main political party representatives in Donegal have called directly for O’Donnell’s resignation, as did Independent councillors, Micheal Cholm Mac Giolla Easpuig, who has called for a boycott of next week’s full council meeting due to take place on Monday, January 25, Dessie Shiels, who left a meeting Letterkenny Municipal District Council last week in protest, and Frank McBrearty, former Mayor, who resigned last week from the Independent Grouping on Donegal County Council in protest as O’Donnell not being expelled.

Donegal Now‘ news service said Cllr. McBrearty explained that Cllr Michael McBride’s casting vote as party whip means he has the power to expel Cllr John O’Donnell from the group and the committees given to him under the all inclusive deal. The news service quoted McBrearty saying: “I will perform my duties as an Independent councillor and do my very best for the people that elected me. I will not be associated with Cllr John O Donnell when he clearly said he could get the backing of 25 to 30 other councillors. I am not one of these councillors and am making my position clear by taking this stand. I do not understand the reluctance of some councillors to support my decision but that’s for them to decide.”

The information these documents reveal also come as councilor Shiels, who will contest the next national elections, recently left a meeting of the 10-member Letterkenny Municipal District Council in protest at O’Donnell’s attendance. “In the aftermath of the RTE investigates programme which aired on RTE in November past, I personally cannot involve myself in county council meetings, whether at Municipal District Level or at full plenary council level in the presence of councillor O’Donnell,” Shiels said. “To do so would, to my mind, compromise everything that I have tried to do to date since being elected to Donegal County Council to restore public confidence in politics in Donegal.”

Added another observer, who prefers his identification to remain confidential at this times, said, “I wondered why Michael McBride was so quiet in his condemnation of O’Donnell.”

Is John O’Donnell the kind of political leader the people of Donegal want? Is this what we mean when we say proudly, “we’re different up here?”

Does Údarás na Gaeltachta lack good governance?

Key questions also remain about the operations of Údarás na Gaeltachta, particularly in Donegal.

Did anyone at the organization check into the financial health of O’Donnell and his companies before granting him 122,000 euro of public money? If so, why did it go ahead and approve the grant? If it did not check, then it is guilty of ignoring its duties to the public whose money supports the organisation’s entire operation.

Perhaps, in addition to the controversial wind farm development issue that was the focus of the RTE program, perhaps O’Donnell can clarify how he got the money from Údarás for Dúncrua Teoranta. It is not believed either O’Donnell or McBride have paid any of the money back.

Also, as the Office of the Director of Corporate Enforcement (ODCE) identified the requirement for a ‘Section 56’ on O’Donnell’s company – which allows interested parties to bring concerns before the liquidator and thus try to recuperate their money – has Údarás done so in relation to the loss of public money (the grant)? If, not, why not? Is this yet again willful disrespect of public interest?

Or in the light of the allegations arising from the RTE program – did some people at Údarás get kick-backs for pushing the money through for O’Donnell? Considering Fianna Fail’s long-time dominance of Údarás and that party’s record of skullduggery in bankrupting Ireland, such allegations cannot be ignored. In addition, this blog revealed that Údarás hired Finbarr Boyle as business training manager for local entrepreneurs through the EU funded CeanaglG project in Donegal even though Boyle was already under investigation, had already pleaded guilty as part of a plea bargain and was later proven guilty of stealing more than 200,000 euro from a village school, including money earmarked for children’s food. Does the organization suffer from a severe lack of good governance?

Oh, and by the way, where did the 122,000 euro go? As Cuba Gooding Jr. said in that wonderful film, ‘Jerry Maguire’ – “Show us the money!”

Changes required at Údarás?

With frequent revelations about the operations of Údarás – including free trips for executives, board members and their wives to Las Vegas (to meet officials of Enterprise Ireland) and ‘insider trading’ schemes whereby former Údarás board members and top executives received money for their own organizations and projects – economic experts are questioning whether the group is fit for purpose. These concerns are especially sensitive locally as well as in Brussels as the Government decided recently it will operate the multi-million euro EU LEADER programme in the Donegal Gaeltacht where decisions on money allocation will take place over the coming months.

Some sector analysts as well as ordinary people in the Gaeltacht community say that after several decades of failure and with unemployment in the Gaeltacht at an all-time high, the economic regeneration model for the regions is simply not working and that Údarás na Gaeltachta should simply be dismantled and replaced with a new and more efficient organization, one featuring well-trained technocrats, not politically-appointed personnel.

Others say that much-needed changes are already underway, an example being the recent appointment of Letterkenny-based, former county council director of services for community, culture and planning, Micheál Ó hÉanaigh, as director of enterprise and employment, marine and natural resources at Údarás. Ó hÉanaigh, credited with launching the Donegal Diaspora project.

However, one must also note the recent reaction by Joe McHugh, Fine Gael Minister for the Gaeltacht, to the questionable activities at Údarás – he said the organization would receive an extra one million euro in public funding this year.

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Minister of Public Expenditure raps Údarás na Gaeltachta for lack of transparency

Minister of Public Expenditure and Reform, Brendan Howlin, has rapped Údarás na Gaeltachta on the knuckles for failing to release vital information on spending of public money affecting Donegal and other Gaeltacht areas.

Following a refusal by Údarás to provide details on hefty pension payments to former executives that accounts for more than half its annual budget under a Freedom of Information (FOI) request I filed, formal written parliamentary questions were submitted by TDs angry about the lack of transparency by the Gaeltacht economic development group.

FOI

Such questions culminated in one by Mary Lou McDonald, Sinn Fein TD and member of the Public Accounts Committee (PAC) on my behalf, directly to the Minister, “To ask the Minister for Public Expenditure and Reform in view of his stated commitment to transparency and accountability in the spending of public moneys, his views that it is acceptable for a public body fully funded by the Exchequer to withhold from the public record details of public service pension arrangements on retirement for senior managers; and if he will legislate to require all publicly funded bodies to make such information public in the interests of open Government.”

A formal written response has just been received from Minister Howlin, in which he, in effect, tacitly states that Údarás was wrong to turn down my FOI request seeking details of pensions for former executives paid wholly out of public funds, and that it should release the information forthwith.

The Minister writes, “Under the 2014 (Freedom of Information) Act, the terms and conditions of any individual who holds or held any office or other position remunerated from public funds in a public body, rather than just those of a Director or member of staff as provided for under the 1997 Act, are not afforded the protections under the Act in relation to personal information. On that basis, the type of information to which the Deputy’s question refers i.e. public service pension arrangements on retirement for senior managers which would be part of remuneration, would be available from a public body that was subject to FOI, other than where a specific exemption applies against the release of such information.

The Minister elaborates further, “Under the Freedom of Information Act 2014, as was the case in the original Freedom of Information Act in 1997, an exemption from the provisions of Freedom Of Information (FOI) is provided for personal information. The 2014 Act also expanded the definition of what does not constitute personal information in the context of FOI.”

In answer to McDonald’s question as to whether the Minister “will legislate to require all publicly funded bodies to make such information public in the interests of open Government,” the Minister writes, “Given the matter is already provided for by the Freedom of Information Act 2014, I do not consider further legislative action is required.

As we have seen with scandal-hit FAS and other Irish state bodies that abused peoples’ trust and misspent public money, the only way to prevent corruption is by creating greater transparency. The government coalition of Fine Gael and Labour made this a central issue in their electoral platform. In the three years since they took office, little progress has been made.

cartoon

Several weeks ago, Ireland was placed 31st position ‘in the league of transparent nations’ following research by the World Wide Web Foundation. It is the worst of any European nation, even behind countries such as Russia, Mexico and Brazil. The group’s categorized Ireland as a country that faces challenges to “mainstreaming open data across government and institutionalizing it as a sustainable practice.” It also said “core data on how the government is spending taxpayers’ money and how public services are performing remains inaccessible or pay-walled even though such information is critical to fight corruption and promote fair competition is even harder to get.”

Tim Berners-Lee, Web, founder of the Web Foundation and the London-based Open Data Institute, said, “Governments continue to shy away from publishing the very data that can be used to enhance accountability and trust” and highlighted the power of open data “to put power in the hands of citizens.”

Údarás is a classic case in point.

lenses

Dinny McGinley, former junior minister for the Gaeltacht, wrote back in a vague response to my FOI request saying simply that Údarás had informed him it was “a data controller, defined under the Acts as a person who either alone or with others controls the contents and use of personal data.

For so many years untouchable hidden behind a veil of Irish-language support, Údarás perhaps is in many ways no different to FAS in terms of greed and individual self-interests. According to Údarás sources, former board members in Donegal remained in boardroom meetings during discussions on lucrative payments to their very own companies and organisations. In addition, not one but at least three Donegal Údarás board members have been up before the Standards in Public Office Commission on corruption charges relating to double dipping on expenses. When one considers the expense claims for board members, particularly under the long-time chairmanship of Liam Cunningham from Glencolmbcille (from 2005 to 2010 he received more than 155,000 euro in fees and expenses, according to Highland Radio), one has an idea of the unchecked, proliferate spending that went on.

Some details as already reported by Highland Radio –

  • Four former Donegal members of the Údarás board each received in excess of 100,000 euro each, over a four-year period, in travel expenses.
  • Fianna Fáil member Daithi Alcorn earned nearly €120,000 between 2005 and 2009;
  • Fianna Fail Senator Brian O Domhnaill received €115,000 while independent Donegal member Padraig O Dochartaigh received €105,000.

Over one billion euro of public money has already gone into supporting Udaras na Gaeltachta yet unemployment rates in Gaetachts are consistently highest in the nation.

Misspending of public money (an issue brought up by the former head of the PAC, see 3-part series article series), includes all-expenses trips to Las Vegas for Udaras board members and their spouses – supposedly to meet a delegation of the IDA;

In truth, Údarás was – and perhaps still is – a cash cow for well-to-do insiders in west Donegal.

It is long past time Údarás prepared proper annual reports instead of the porous documents it now produces that disguise the spending picture and that it holds open public meetings to allow the people of the Gaeltacht to know exactly how their hard-earned money is being spent.

Complaint about Udaras cover-up sent to Ombudsman

Ireland’s biggest fault is lack of accountability – the main reason we’re in the humiliating position of doffing our caps and begging for mercy from the IMF.

Instead of fairness and transparency in public affairs, we get cronyism and cover-ups. The Central Remedial Clinic, The Financial Regulator, FAS, the Rehab Group, the John McNulty scandal …. the list is a depressingly long one.

But what’s even worse is when our supposed independent media collude in supporting this kind of deception.

Damning evidence this week indicates that is exactly what the local office of Udaras na Gaeltachta and the ‘Donegal Daily’ news website have been involved in.

Earlier this year, Udaras’ local tourism officer Gearoid O’Smaolain contacted Stephen Maguire, the news website’s co-owner, complaining that a report on the site contained what he said was “a fabricated quote,” attributed to him when he spoke at the launch of the multi-million euro, EU-funded CeangalG project at An Chuirt hotel.

false accusation

At that conference, I had asked O’Smaolain about a proposed addiction clinic in Falcarragh that was rumored would cost taxpayers several million euro and run by the Catholic church. O’Smaolain said discussions were indeed underway with Udaras, that his organisation didn’t have millions to spend and that no decent projects had been put forward for the site at Ballyconnell House beside the town golf course. Thus the article below:

Angry reaction to setting up addiction clinic in Falcarragh

As it was I who compiled the news report, Maguire promptly called me, saying O’Smaolain told him he had an official transcript of the conference to prove his accusation. I asked if he (Maguire) had read or listened to this transcript. He said he hadn’t but that O’Smaolain had sent him an excerpt. See below –

transcript email

Sean Hillen Q and A

Upon reading this, I offered to give Maguire my notes from the conference so he could make a fair decision. Instead he sent this e-mail to both myself and O’Smaolain.

letter from Maguire

Imagine my shock, therefore when – without further notice – I then read this abject apology on the ‘Donegal Daily’ website the very next day.

GEAROID SMOLAIN – CLARIFICATION ON BALLYCONNELL HOUSE ARTICLE

I contacted Maguire repeatedly asking for an explanation and a copy of the official transcript of the conference. Months later, still no response.

I then contacted Sabhal Mòr Ostaig in Scotland, the leader of CeangalG, which had also planned and supervised the conference at An Chuirt, asking them for a copy of the transcript.

Claire Nicolson, the organisation’s administrator, was helpful, initially saying she did not think there was such a transcript, and, when I requested a definitive answer, responded this week in the message below that was also c’d to Alasdair Morrison, a former minister in the Government of Scotland, now CeangalG director.

From: Claire Nicolson <claire@connectg.net>

To: Sean Hillen <sean.hillen@yahoo.com>

Cc: Alasdair Morrison <alasdair@connectg.net>

Sent: Friday, December 12, 2014 5:31 PM

Subject: Re: Donegal conference

Seán, a chara, thanks for your email.

That was our cultural tourism conference in February. I recall you asking for this information before. I’m sorry, there was no transcript or recording of the event.

Le gach dea-ghuí

Claire

O’Smaolain therefore, it emerges, not I, was involved in fabrication. Worse, Stephen Maguire and ‘Donegal Daily,’ fully supported him in doing so based on a transcript that never existed.

One might ask: Why was this subject so sensitive that such lies and deceit were used to keep it from the public eye? And why would an editor kowtow so easily to make an unjustified apology and retract a perfectly accurate news story from a website?

As the reasons for Maguire’s actions are obviously not in pursuit of journalistic excellence, are they merely financial? Did Udaras or organisations or individuals associated with Udaras either threaten him or Donegal Daily Ltd. with a lawsuit or through withdrawal of advertising? Or, indeed, did they promise future ad revenue if he simply did as they demanded?

By coincidence, John Curran whom Fine Gael appointed to the board of Udaras and who subsequently failed to win a local council seat recently, had a paid political banner ad in the ‘Donegal Daily’ when my addiction clinic broke. Did Curran threaten to withdraw his ad if the story was not squashed? See the ad at bottom of the same page as the story : Angry reaction to setting up addiction clinic in Falcarragh

If true, this is a most dismaying development, illustrating the reason why there is a falling level of trust by Irish people in today’s government.

Equally, O’Smaolain’s accusation in defense of Udaras – now shown to be false – illustrates why there’s a growing lack of faith in organisations trusted with spending scarce public money.

Gearoid O’Smaolain (l) and Stephen Maguire (r)

And most dismaying of all in many respects is the conduct of Stephen Maguire and the ‘Donegal Daily.’ As I pointed out in an earlier post, strong independent media underpins any democracy.

After more than 30 years in journalism both here at home and abroad, I still firmly believe this. As truth is the rudder that steers ethical decisions in journalism, it is most disappointing to see how Maguire and the ‘Donegal Daily abrogated responsibility in such a pathetic way.

Having investigated the situation comprehensively over the last few months, I forwarded a file to the Press Ombudsman and the Press Council of Ireland, only to be informed that it could not investigate further as ‘Donegal Daily’ is not a member of the council.

I find this ironic as only a few days ago the ‘Donegal Daily’ boasted of being among the most popular news websites, yet is not even a member of a nationally-respected organization to which all serious news media outlets belong.

I suppose, more than anything, this indicates how earnestly Mr. Maguire considers the importance of accuracy in news reporting.

My file outlining how Mr. O’Smaolain misused his authority in an effort to damage my reputation, is now with the Office of the Ombudsman. What action is taken, if any, will indicate if our government is serious about creating a more transparent and accountable society, thus preventing what happened to me, happening to others.