When Taoiseach Enda Kenny spoke of finding "maggots under carpets" in the charities sector, he probably did not have Rehab in mind. Since then, however, revelations in this newspaper concerning lobbying payments, conflicts of interest and disproportionate remuneration levels have focused attention on former Rehab chief executive Frank Flannery and on the incumbent, Angela Kerins. Their behaviour and reluctance to explain financial arrangements within a group of companies that relies heavily on public funding have damaged Rehab and the entire charities sector.
Mr Flannery's resignation from the board of Rehab and as Fine Gael strategist and director of elections should not allow him to escape examination by the Public Accounts Committee (PAC). The Taoiseach acknowledged as much and suggested "clarity and co-operation" should inform Mr Flannery's relations with the PAC. Mr Flannery has been asked to attend "at a date to be agreed". If that invitation is declined, the committee may attempt to compel his attendance.
It would be wrong to anticipate that all questions will be answered when, or if, Mr Flannery decides to attend the PAC. He displayed little regard for its authority last month by parading through the corridors of Leinster House and ignoring an invitation to attend. During those fractious discussions, Ms Kerins provided such unsatisfactory replies on monetary issues that 12 detailed questions were subsequently submitted to Rehab.
The PAC had expressed interest in Mr Flannery’s pension arrangements. His association with the husband and brother of Ms Kerins in a company that supplied components to Rehab was also at issue. But disclosure that consultancy payments from a UK subsidiary of Rehab in 2011 and 2012 were made in return for lobbying Government Ministers represented a breaking point. That Mr Flannery should use his Fine Gael contacts to influence legislation – and then charge Rehab for it – was astounding. Closure of a lottery compensation fund had threatened to cost Rehab a great deal of money and it resisted aggressively. Last year, Ms Kerins and Mr Flannery criticised that legislation before a Dáil committee.
On the basis of subsequent developments, they may have miscalculated. Minister for Justice Alan Shatter told the Dáil that Rehab was "leveraging" sales of scratch cards in order to maximise public funding. All hell broke loose. The PAC switched its attention to Rehab and it has remained there. The absence of State regulation within the voluntary/charitable sector invites financial confusion and Rehab, which regards itself as a hybrid charity/commercial entity, poses particular problems. Greater transparency and higher ethical standards are required.
