RTE at Public Accounts Committee
Transcript of Question Round 1
Deputy Marc Ó Cathasaigh
It is an appalling vista we are facing. We have to acknowledge there has been huge damage done to public trust in a public broadcaster at a time when high-quality public broadcasting has arguably never been more important for countering the misinformation and disinformation that social media, in particular, tends to be awash with. There is huge damage done to the working relationships of people within RTÉ and to the morale of the many excellent people who are working within that organisation. That has all been acknowledged already.
I want to return briefly to Ms O’Leary on a detail she gave us. She said she only spoke to Renault about year one engagements, no hint at all of arrangements into year two. How many years was the original contract for? Was it a five- or three-year contract?
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
Yes.
Ms Geraldine O’Leary
My concern was the sponsored contract. We were coming to the end of year two of a three-year contract. This was in March 2020. We still had two months of that season to go and then there was a third year in the contract. The contract was due to end in May 2021.
Deputy Marc Ó Cathasaigh
You only spoke about year one arrangements.
Ms Geraldine O’Leary
Yes. I did talk to the client about a potential extension of the contract beyond 2021 but obviously that was not pragmatic because he still had 15 months to run in his contract.
Deputy Marc Ó Cathasaigh
My question then, and it may not be to Ms Geraldine O’Leary, is whether Renault was aware of the underwriting agreement.
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
Was Renault aware that if it removed itself from this contract, RTÉ was left on the hook for the remainder of the payments?
Ms Geraldine O’Leary
Not only was Renault not aware of it, neither was I.
Deputy Marc Ó Cathasaigh
Was there anybody who would demur from that position, who would suggest that Renault was aware of the underwriting? No. Were there any exit penalties for Renault, which was asked to enter into this contract? It would be fairly standard practice and procedure that if somebody exited a contract before end of time, there would be exit penalties attached.
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
It entered into a contract over a number of years.
Ms Geraldine O’Leary
A broadcast sponsorship contract for the “Late Late Show” is what I am referring to, which is what my business is. It was in year two of a three-year broadcast sponsorship contract of the “Late Late Show”.
Deputy Marc Ó Cathasaigh
And decided to end the relationship.
Ms Geraldine O’Leary
No, it did not. It was coming to the end of year two, season two, of a three-year broadcast sponsorship contract, which is standard practice in our business. I was asked to ask them if they would like to have an addendum to their contract which involved appearances by Ryan Tubridy. The broadcast sponsorship contract was up and running and in fact they renewed for the following year. The broadcast sponsorship contract was up and running. It was within the context of this contract I asked them if they were interested in three appearances by Ryan Tubridy, because it was connected to their sponsorship of the “Late Late Show”, which he presented. Broadcast sponsorship ran its course and was renewed.
Deputy Marc Ó Cathasaigh
Okay, but without the additional element. It does not seem there was a great deal of protection for public funding on it. I want to take a look at the suspension of Ms Dee Forbes. The request for resignation happened first – we only found this out yesterday. It happened on Friday, 16 June if I am correct. Can Ms Anne O’Leary tell me whether I am correct in saying the recommendation that Ms Forbes be asked to resign came from the audit and risk committee?
Ms Anne O’Leary
That is correct. As a result of the Grant Thornton report, I thought that what had occurred was significantly serious enough to ask her for her resignation. Subsequent to that, she decided not to reply to our letter on that so we then put her on suspension following a HR disciplinary approach.
Deputy Marc Ó Cathasaigh
Was the recommendation to suspend also a recommendation that you brought?
Ms Anne O’Leary
It was a recommendation that the committee and I brought to the board and then the board approved that recommendation.
Deputy Marc Ó Cathasaigh
Then it became a board decision both to ask for the resignation but also to initiate the suspension. Is that correct?
Ms Anne O’Leary
That is correct and then directly after that, the board created a smaller committee that was going to handle the HR and disciplinary issue.
Ms Paula Mullooly
I might be able to help with that as company secretary, just to set out the timeline. There was an audit and risk meeting on the Friday. There was a number of recommendations out of that, including the request to ask the director general to resign. I think the chair spoke to her in relation to that. There was a response by letter either on the Sunday or the Monday, I cannot recall. There was a board meeting on the Monday where the chair of the audit and risk committee brought the recommendations to the board of the audit and risk committee. The board agreed to set up a disciplinary sub-committee to look at the disciplinary matters surrounding the director general.
Deputy Marc Ó Cathasaigh
This is a decision with very significant implications. As a board member, when this was brought to the board, what was the rationale given for initiating these proceedings? The board must have been told, “We are recommending that we ask for her resignation and we are asking for that on these grounds.” What were the grounds given?
Ms Anne O’Leary
The grounds were given of the Grant Thornton report that the members all have a copy of. I thought it was significantly serious.
Deputy Marc Ó Cathasaigh
That was it, it was as baldly stated as that, based on the findings of the Grant Thornton report.
Ms Anne O’Leary
Deputy Marc Ó Cathasaigh
Very good. Thank you. I want to ask about the barter account, which has been much discussed. The value of transactions in and out is given to us in some of the details we have here. How many trading partners are represented within that barter account?
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
Yes.
Ms Geraldine O’Leary
In 2022 it was 56 campaigns, so probably about ten to 15 clients approximately.
Deputy Marc Ó Cathasaigh
Would there be any credit or debit cards attached to the barter account?
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
Not that you are aware of.
Ms Geraldine O’Leary
Not that I am aware of. It is something I would need to check but not that I am aware of.
Deputy Marc Ó Cathasaigh
In terms of the type of expenditure that—–
Ms Geraldine O’Leary
Sorry, can I ask the Deputy to ask me that question again? When he says a credit or debit card—-
Deputy Marc Ó Cathasaigh
It is about how it operates, whether there are credit cards. It is about transparency and having a good insight on how exactly this is being used. Is it also being used to fund things like travel? Is it being used to fund things like entertainment? What is the mechanism? What is the oversight mechanism in terms of making sure, if it is funding travel, for instance, or accommodation or entertainment, that those have a legitimate business purpose within the organisation?
Mr. Richard Collins
There were no credit or debit cards attached to it. Payments were made out of the barter account by giving an instruction to the barter company.
Ms Geraldine O’Leary
I want to be 100% clear that the barter company may use a credit card when they are paying for something. I cannot say, if that is what the Deputy is asking me. There is no credit card at our end but the barter company may use a credit card.
Deputy Marc Ó Cathasaigh
Just in terms of bare figures, €150,000 is what ends up being paid to Tuttle Productions Limited., which is the two tranches of €75,000. The transfer from the barter account, however, is €231,000. Correct me if I am wrong.
Ms Geraldine O’Leary
Deputy Marc Ó Cathasaigh
Where is the €81,000?
Ms Geraldine O’Leary
The way the barter account works is that when the campaigns come through, 50% is cash and 50% is credits. Those credits are accumulated and reconciled monthly. We can use those credits for travel. Anything we have used them for has been client related up to now. At the end of the year, if there is money in the account we cash it out and the cash-out rate is 0.65. If there is €100,000 left in the account at the end of the year, it is cashed out at €65,000 and that is put into our revenue. The cash-out rate for the barter companies is 0.65.
Deputy Marc Ó Cathasaigh
This is all very opaque. In the end of the story here, has €150,000 in fact cost us €231,000?
Ms Geraldine O’Leary
It has cost us €150,000 in cash.
Deputy Marc Ó Cathasaigh
I am not sure I fully accept that answer.
I want to pick up on a statement by Mr. Lynch. At the very end of his opening statement, he said: “I have spoken to Kevin Bakhurst last night and I understand from him that his first task when he begins on 10 July will be a complete reconstitution of the executive board of RTÉ.” That is a very significant statement. I want to give Mr. Lynch an opportunity to expand on it.
Mr. Adrian Lynch
Thank you. I have been talking to Kevin over the last two weeks since I stepped up to be interim deputy director general.
We spoke this morning, particularly coming out of yesterday’s meeting, about the register of interests. We are looking at immediately drawing up terms of reference for a register of interests for all senior editorial staff. In terms of the line here, though, it is up to the incoming director general to make all the necessary changes given what has happened.
Deputy Marc Ó Cathasaigh
On that issue of a register of interests, will it be extended to presenters?
Mr. Adrian Lynch
Deputy Marc Ó Cathasaigh
Okay
Transcript of Question Round 2
Deputy Marc Ó Cathasaigh
I will return to the issue of the remuneration committee that was raised by Deputy Catherine Murphy. According to the RTÉ website, the remuneration and management committee has a specific remit in terms of reviewing policy in relation to the top talent contractor contracts. That is very specific to what we are talking about. It is also to review the remuneration of executives and the director general. I understand Ms Doherty was a member of the committee at the time. Was Ms O’Leary also a member?
Ms Moya Doherty
I was the chair of the committee.
Deputy Marc Ó Cathasaigh
Ms Doherty was chair of the committee. It met every year from 2004 to 2021, which I have records for, apart from this particular year, which is an extraordinary coincidence, if I am honest. It did, however, meet in 2021. That was when we would have expected to have seen the outworking of this underwriting. Were any details discussed at the meeting of the remuneration committee about the underwriting?
Ms Moya Doherty
No. It is incredibly difficult to ask questions and to expect answers if there are secret and clandestine agreements that are not registered on the books.
Deputy Marc Ó Cathasaigh
Ms Doherty would have expected the details of that underwriting to be presented to the committee in the normal course of things.
Ms Moya Doherty
Deputy Marc Ó Cathasaigh
Who speaks at that committee? Ms Doherty convenes a meeting. Who else attends and who presents the details the committee is supposed to review?
Ms Moya Doherty
We would call on the director general or on any other bodies who may be relevant to the information we require at the time.
Deputy Marc Ó Cathasaigh
In 2021, did the director general present to the committee when it met?
Ms Paula Mullooly
I will come in, as company secretary. I do not believe she did. I could not be certain and would have to go back and check, but I do not believe she did.
Deputy Marc Ó Cathasaigh
The committee met at this time. The period should have covered the Renault deal, considering there had not been a meeting in 2020. It should also have covered the underwriting.
Ms Paula Mullooly
The terms of the committee state that the director general shall consult the committee in respect of top talent earnings and shall bring executive pay to the committee. Those are the specific terms of reference.
Deputy Marc Ó Cathasaigh
The director general did not come or consult the committee on this occasion. Did anybody come in her stead?
Ms Paula Mullooly
No. May I say something here? This question is being directed to the chair of the audit and risk committee and the previous chair.
I am the company secretary to the board, so if there was a lapse in calling meetings during that time, I must bear some responsibility for that. I needed to pursue it more vigorously and I did not.
Deputy Marc Ó Cathasaigh
I assume this committee would have expected to know if there was a discrepancy between the figure of €440,000 that was published versus the €515,000 that was actually making its way to Mr. Tubridy. The committee would have expected to hear that information on the meeting of 2021.
Ms Moya Doherty
We were at all times seeking reductions in the salaries of the high earners. Our remit was 15%. We understood that 15% was secured across the board. That is the—–
Deputy Marc Ó Cathasaigh
It goes back to that opening statement where—–
Ms Moya Doherty
—–formal information, audited, that we were given.
Deputy Marc Ó Cathasaigh
As Ms. Ní Raghallaigh said, it appears that this was an act designed to deceive or, at the very best, to conceal. It should have been presented to that committee. Regarding the payments that came through this clandestine and labyrinthine method of invoices and the divil and all, there is the issue of tax compliance. These have moved between jurisdictions and we have been told there is no VAT liability because they emanated from the UK. They are part of a payment in lieu of salary or as a top-up to salary. Are we satisfied that the tax liabilities have been covered off? In the end of year reporting in terms of tax liabilities, were the transactions undertaken by the barter account – this one is the largest and most notable – adequately captured when preparing and submitting tax returns at end of year?
Mr. Richard Collins
In relation to those invoices going through the barter account, we are taking advice on that on the tax liability and what tax exposure we have.
Deputy Marc Ó Cathasaigh
The witnesses are not currently satisfied that the tax liability is adequately provided for?
Mr. Richard Collins
I cannot say for 100%. We are taking advice on it.
