Public Accounts Committee: Appropriation and Expenditure of Public Moneys by RTÉ

Deputy Marc Ó Cathasaigh: That was the first question I was going to ask. The Cathaoirleach took the words out of my mouth there.
I will return to the metaphor to which Deputy Murphy was alluding, in that we are trying
to build a picture here. We have key pieces of the jigsaw that were hidden down the back of
the couch for a while but we are still missing central pieces. We have Breda O’Keeffe who has
never appeared before this committee, Geraldine O’Leary who refused an invite today, and Dee
Forbes and Jim Jennings who are not in a position to attend. Then we are left with this frustrating impasse around a note of the meeting of 7 May 2020. There has been a moving of goalposts
regarding the privilege attached to that document. That has been resolved and now it is a case
of client confidentiality. Does Mr. Bakhurst accept in principle that RTÉ could waive this client
confidentiality if it chose to do so?

Mr. Kevin Bakhurst: That is the advice I have been given, yes.

Deputy Marc Ó Cathasaigh: It is a decision not to waive that confidentiality.

Mr. Kevin Bakhurst: Yes, but I will repeat what I just said, which is that we have Noel
Kelly’s version of what was said at that meeting.

Deputy Marc Ó Cathasaigh: I understand that.

Mr. Kevin Bakhurst: We have Dee Forbes agreeing that. We do not dispute either of those
accounts. In terms of the information that it may or may not shed, we already have the accounts
of the two individuals who were at that meeting.

Deputy Marc Ó Cathasaigh: Mr Lynch has doubled down on the fact that this was the
key moment where the tripartite agreement is finally underwritten. This is the point at which,
indirectly to some extent, the taxpayer is put on the hook for €225,000. It happens in this meeting and we are blind to what happened in that meeting, notwithstanding Mr. Bakhurst saying
we have one side of the account.

Mr. Kevin Bakhurst: We have both sides of it.

Deputy Marc Ó Cathasaigh: How long was the meeting? Was it a ten-minute meeting or
a three-hour meeting? Did we have multiple—–

An Cathaoirleach: Ms Mullooly may be able to shed some light on this.

Ms Paula Mullooly: We do not have any detail as regards that.

Deputy Marc Ó Cathasaigh: I find that difficult to comprehend.

Mr. Kevin Bakhurst: Was it on Microsoft Teams?

Ms Paula Mullooly: Yes. It was a remote meeting. It was during Covid.

Mr. Adrian Lynch: I think we have supplied the start time of the meeting but we do not
know what the end time was.

Deputy Marc Ó Cathasaigh: I am gobsmacked by that, if I am honest. The frustration
is that the minuting of the meeting has not been separated out from the legal advice part of it.
Whatever legal sidebars have happened in terms of RTÉ getting legal advice within that meeting, I am not sure if the committee has an interest in that or not, but I certainly have an interest
in is the timeline of the over and back between the people who were in that meeting. I am assuming Mr. Bakhurst has read the note.

Mr. Kevin Bakhurst: I have not read the note.

Deputy Marc Ó Cathasaigh: What I wanted to know was whether it was possible to separate out whatever those legal sidebars were from the blow by blow – what I would expect to see
minuted in a regular meeting. Even to meet us halfway in that regard, we could be provided
with a redacted version that would give us a blow-by-blow account. However, Mr. Bakhurst is
saying he has not read the note. We cannot tell a start and stop time so—–
Ms Paula Mullooly: I can help somewhat with that. At the last meeting, I gave a commitment to this committee that I would get the entire legal file reviewed by external lawyers in relation to what could and could not be shared. Following that review, a very significant amount
of information was subsequently shared with this committee and the Deputy will have received
it. We tried to put it in an order that would make sense to committee members. However, there
is a small amount of documentation that has not been shared, which is either covered by legal
advice privilege or by client confidentiality. For RTÉ as an organisation and for the functioning
of the independent solicitor’s office within RTÉ, it is important that those lines are maintained
because it fundamentally affects how this solicitor’s office and how RTÉ function.
In respect of the specific note, the committee has the two emails from Noel Kelly which set
out what took place in that meeting and the Grant Thornton report which sets out the former
director general’s version of what took place in that meeting. We do not dispute either of those
versions of events. The committee has all of the information. The only thing it does not have
is the physical note.

Deputy Marc Ó Cathasaigh: There is a continued frustration on the part of this committee. As I said, we are looking for the pieces of the jigsaw, some of which are getting stuffed
down the back of the couch, for us to build a picture on behalf of the taxpayer, which is what
we are interested in doing here. There is an element of the return of the circus here this morning. I know other committee members share my frustration that we do not have that McCann
FitzGerald report, which was going to be a substantial piece of work that we could have used
in interrogating this decision.

Mr. Kevin Bakhurst: I apologise for that. I explained the delay, which was a request from
McCann FitzGerald in terms of getting the full facts to deliver that report. It was not my intention because I asked for it by the end of September.

Deputy Marc Ó Cathasaigh: This committee deliberately gave breathing space at the start
of this Dáil term because we had anticipated that report in particular being completed, which
would have allowed us to interrogate, in a meaningful way, that corporate culture we are looking to get to.

Mr. Kevin Bakhurst: I also anticipated that and that is what I asked for. I am also disappointed but it is important when you commission independent reports, you give time.

Deputy Marc Ó Cathasaigh: I have a couple of places I still want to go and time is against
me.
Mr. Bakhurst identified that 51% of the organisation’s costs are related to “people costs”, as
he termed it, that is, salary and wages. We know there have been findings made against RTÉ
regarding freelancers and what is essentially bogus self-employment. We know there is still
some work under way in that regard. I am assuming this is part of the work the expert advisory group is looking at. Have we any sense of all of future liabilities, either to Revenue or the
Department of Social Protection, that may be outstanding for RTÉ? I understand there is an
element of crystal ball-gazing in this but as we are modelling our future funding forecasts, and
Mr. Fives has spoken about when we expect the money might run out unless other things come
into play, do we know what is coming down the tracks here? Have we any sort of modelling
and is that factored in?

Mr. Kevin Bakhurst: We have done it as best we can and that is why the level of the provision is there in the accounts that Mr. Fives described earlier on. That is our best estimate of
what the liability could be. We are working through this closely. I have had a meeting with the
scope section of the Department to look at and discuss the process because it is a very significant—–

Deputy Marc Ó Cathasaigh: Exposure.

Mr. Kevin Bakhurst: It is a significant exposure but it is a significant amount of work, both
for us and for scope as well.

Deputy Marc Ó Cathasaigh: One of the key frustrations for me is this. It was not that
there was a lack of corporate governance structures but that the structures that were there did
not work. This is particularly true of the reporting between the executive board and the board.
While I do not want to draw this analogy, I used to serve on my school board. You would think
a school board would be much more of a Mickey Mouse affair in comparison to RTÉ and the
size of the cash flows. However, on a school board level, the principal has to make a child
protection oversight report every single time the board of management comes together. More
often than not – and what one hopes for – is that the board members will say there is nothing
to report. There is, however, a formalised process where, every single month, the question is
asked whether there is anything happening in terms of the child protection oversight report.
I want to focus on the remuneration committee. It met patchily at best. It was poorly attended and the minuting was not up the job. Mr. Bakhurst stated the oversight of new contracts
is being taken up by the remuneration committee. How many people are being put on that committee? How often is it meeting? What are its obligations to report to the executive board or to
the board proper, which is the real oversight on behalf of the taxpayer? Have those issues been
rectified and proper functioning set in stone?

Ms Paula Mullooly: There has been a significant rewriting of the terms of reference for the
remuneration committee. It—–

Deputy Marc Ó Cathasaigh: Has that been shared with the committee? I do not remember reading it.

Ms Paula Mullooly: I am not sure whether it has been shared with the committee. I can
provide it if that helps. It was approved at the most recent board meeting, which was on 26
September.

Deputy Marc Ó Cathasaigh: A blizzard of documentation has been received and I may
not have seen that document.

Ms Paula Mullooly: I can share it with the committee. It is designed to cover not only executive pay and presenters’ pay but also things like exit packages or voluntary exit programmes,
VEPs, for executive members. It is more thorough. The remuneration committee has met five
times since April this year. It will report to the board at every meeting. All subcommittees will
now present a report to the board at every board meeting.

Deputy Marc Ó Cathasaigh: I have a quick question for the Department. The taxpayer is
funding RTÉ out of Vote 33 to the tune of €200 million or whatever it is every year. Does the
Department have oversight of this review of those reporting mechanisms in order that it can
be satisfied on behalf of the taxpayer that the mistakes of the past will not be repeated? What
proactive steps has the Department taken in that regard?

Ms Katherine Licken: When this issue first emerged on 22 July, the Minister moved quickly to appoint an expert advisory committee in respect of governance and culture at RTÉ for
precisely that reason, that is, to dig in to see whether the corporate governance is fit for purpose,
whether it is delivering and how we can learn from the mistakes that happened and ensure
they do not happen again. She also met with the staff and unions and set up a separate expert
advisory committee relating to HR and other matters. Those reports are ongoing. Crowe Advisory has been appointed as adviser to the two expert committees and obviously we have the
Mazars report, all looking at the barter account. All of that is designed to inform us. They are
independent reports to inform us as to what are the next steps in terms of governance. In the
meantime, RTÉ is taking its own steps, as Ms Mullooly pointed out, in terms of the board and
the structures, that it needs to do. We did not expect RTÉ just to wait until these reports are
concluded. We expect it to get on with the job in the meantime and we will see what comes out
of those reports early in the new year.

Deputy Marc Ó Cathasaigh: I am not sure we have achieved what I had hoped we would
achieve today, which is the staunching of the flow of blood, particularly in terms of the TV
licence fee. I do not think anybody wants to see more damage inflicted on an organisation that
we have all publicly said is so important in terms of its public service remit.
I have what is perhaps a niche question. I had a question at one of the previous meetings,
and I do not know if it was Mr. Lynch or Mr. Collins who replied to me. I asked whether the
treatment of the invoices was tax-compliant or not because there was, essentially, funny busi-
ness around the invoices; they were paid in a different jurisdiction and the reason they were
paid out is not what was said on the tin. I was told at the time that that was being looked into
to establish whether there was any tax liability arising. Has that work been completed and are
we tax-compliant?

Mr. Mike Fives: Yes, we are tax-compliant. We have added that back and we have taken
no deduction from our corporation tax for those invoices.

Deputy Marc Ó Cathasaigh: Very good, we have that at least. I will return to the topic
that Deputy Dillon was addressing. If you are a top presenter in RTÉ, a lot of your attractiveness to companies derives from the fact you have a profile that comes from RTÉ. I hope it
would be relatively straightforward in respect of direct employees to apply things like a register
of interests or a gifts register. On product placement, I know RTÉ has strict rules around that
and it seems to be content that they are being implemented. Things like brand ambassador roles
may be a little more difficult because they exist outside of RTÉ. I want to ask how watertight
that is going to be. In particular, how many of the top RTÉ presenters are now freelance presenters and how many are direct employees?

Mr. Kevin Bakhurst: I could not give an exact figure but it is a significant number of contractors.

Deputy Marc Ó Cathasaigh: Is it more difficult to apply to things like brand ambassador
roles?

Mr. Kevin Bakhurst: Yes, it is. The reality is that, particularly on services like 2FM, we
recruit people because they have a profile on, say, social media to bring in that audience. We
need to be clear and transparent about what they are allowed or not allowed to do, and we will
publish what they do. However, we need to be realistic that we bring them in because they
bring a following from social media in some cases.

Deputy Marc Ó Cathasaigh: Yes, and it is a two-way street because RTÉ is the biggest
show in town.

Mr. Kevin Bakhurst: It is. They benefit from that, and that is reflected in how much we
pay them.

Deputy Marc Ó Cathasaigh: When those arrangements come to be renegotiated, are we
establishing guidelines that are going to tighten up all of these areas?

Mr. Kevin Bakhurst: Yes, the guidelines will be published at the end of the year.

Deputy Marc Ó Cathasaigh: At the moment, we have an interim leadership team. I have
concerns. The person who cut the most forlorn figure in all of this was actually Siún Ní Raghallaigh. I felt very badly for the board because they were left in the dark for an enormous amount
of this and were not properly informed. We have this interim leadership team. My concern
is, first, when are we going to move past that and when are we going to reconstitute – I do not
know if we are going to call it an executive board, or whether there is going to be a difference
in language—–

Mr. Kevin Bakhurst: It is just the leadership team.

Deputy Marc Ó Cathasaigh: A leadership team. Can Mr. Bakhurst tell me about the communication pathways that he is planning to put in place to make sure this leadership team does
not become, essentially, a silo decision-making area, which is what had happened, and reports
more directly to the board? An ordinary board member—–

An Cathaoirleach: We might let Mr. Bakhurst reply to that clear question.

Mr. Kevin Bakhurst: It has been really important and has been a priority for me and for
Ms Ní Raghallaigh to make sure there is proper communication. The board members who appeared at the other committee confirmed there was a much greater degree of transparency and
discussion about key decisions. There are a few things. First, I do a written director general’s
report to the board for every board meeting, which I do not think was the case before, as it was
a verbal update. There is now a full written report of several pages. We have a discussion about
the key areas that feature in that, and I try to make sure that the key decisions are in that report
and can be fully discussed. The second thing is that we attach to that the minutes of all of the
leadership meetings, so for anything I have not mentioned, they can see it is minuted from the
leadership meetings.
There is a degree of openness now. The current company secretary, Ms Mullooly, is also
the head of legal and sits on the board but also sits on the leadership team, so she is a conduit as
well, but there is an absolute move towards greater transparency. The Deputy is certainly right
that key to some of the issues that RTÉ has had is that not enough was presented to the board or
challenged at the board, or not enough information was made available to them. We have put
in place a lot of measures to do that.