UL housing deal ‘like a script from Netflix’, says Alan Kelly
● University brought before Public Accounts Committee over inflated price paid for property
Astaircase to the bunkered committee rooms in Leinster House separated two delegations while they waited for almost an hour to meet TDs about a controversial University of Limerick (UL) housing purchase.
There is a mezzanine on both sides of the stairs. Delegates from UL took to a coffee shop on the right-hand side while they waited to be called into the Public Accounts Committee (PAC) meeting last Thursday morning. Officials from the Higher Education Authority (HEA) sat apart from them on the staircase’s other flank.
This was the fourth successive year UL has been before the PAC to explain an inflated price paid for property.
The university is currently the subject of a HEA review following a decision to spend €11.44m on 20 homes at Rhebogue, Limerick, an overspend of about €5.2m.
Both parties were called before the PAC to explain events around the deal, but they faced a lengthy wait. The start of the meeting was delayed by almost an hour while TDs met privately with Oireachtas legal experts.
There were concerns an ongoing garda investigation into intimidatory poison pen letters sent to the university last year could be jeopardised by a certain line of questioning at the meeting. It has been alleged these letters were designed to undermine somebody who queried issues around the purchase.
Once the meeting started, PAC chairman Brian Stanley warned TDs and witnesses to “refrain from commenting on matters that may be the subject of a live criminal investigation”.
Previous exchanges here have been defined by obfuscation, most notably last year when the university’s president Professor Kerstin Mey was asked the same question 23 times before giving a passable answer. This time UL, led by provost Professor Shane Kilcommins while the president is on extended sick leave, had come to hold its hands up and apologise. Labour TD Alan Kelly described UL’s evidence as “startling”.
Prof Kilcommins’s testimony led to Independent TD Verona Murphy suggesting the PAC had been told “a blatant lie” during a 2023 meeting with the university. Mr Stanley had asked Prof Kilcommins why UL’s chief commercial officer (CCO) Andrew Flaherty was not present last Thursday and missed the PAC’s previous meeting.
The CCO was among two employees responsible for the Rhebogue deal and bringing it through approval processes, one of which was flawed according to a recent review, so TDs were keen to hear from him.
Prof Kilcommins said he had selected an “appropriate team” to take PAC’s questions this time.
Last year, Prof Mey told the committee Mr Flaherty was unavailable because of “a long-standing engagement that he could not get out of ”. However, last Thursday, Prof Kilcommins told TDs that this was an “inconsistency” he raised with colleagues after their previous Dáil encounter.
“Before we went to the [2023] PAC meeting, he [Flaherty] told me that he could not attend because there was an ongoing investigation into the [Rhebogue] transaction,” Prof Kilcommins said.
However, Mr Flaherty had been in Dublin with UL’s delegation last year. He met with them the night and morning before the PAC meeting and again afterwards, Prof Kilcommins added.
“My understanding is that he was texting members of the UL delegation during the meeting,” Prof Kilcommins told the PAC.
This angered Ms Murphy.
“That is not what the president told us. When asked, the president said that he had a long-standing engagement and was not available,” she said.
“We took that in good faith. This is a statutory committee. My understanding is that was a blatant lie, if what Prof Kilcommins is saying is true.”
Her anger intensified when she heard concerns Prof Kilcommins raised a year ago about the housing deal were not investigated with a protected disclosure somebody else submitted on Rhebogue.
“Jesus,” she said, before catching herself. “Was that orchestrated?”
Prof Kilcommins’s response suggested a misinterpretation prevented an investigation of his concerns.
Mr Kelly said Mr Flaherty’s absence was “like an episode of Hamlet without the prince”.
“The prince was across the road in some establishment texting people here the last time. The prince is not here this time,” he added.
Most of the PAC’s focus, however, was on the controversial purchase of the 20 Rhebogue homes in 2022. They were paid for last October when students moved in despite the houses having the wrong planning permission.
Before last Thursday’s meeting, Mr Kelly read a copy of a report on the purchase which was prepared by Niamh O’Donoghue, a former secretary general at the Department of Social Protection.
The prince was across the road texting people here last time
“I am not kidding. It is like a script for a mini-series on Netflix because there is so much in it,” he said.
The report is forensic and categoric in explaining how the purchase was approved without crucial information being presented to key decision-makers.
Ms O’Donoghue found contrary views were not made available to senior officials before UL signed a €11.9m contact despite only being approved to spend €10.9m.
Mr Flaherty and UL chief finance and performance officer Gary Butler were responsible for presenting any important information.
“It is unusual and noteworthy that every ‘decision point’ meeting in the procedure is recorded as being a ‘special or exceptional meeting’,” Ms O’Donoghue wrote.
The PAC heard some of these meetings were informal and poorly attended because of how they were called, sometimes at short notice.
Ms O’Donoghue found valuations used during the transaction were inappropriate. She pointed to procurement failures, a lack of due diligence and established possible “familial” conflicts of interest between parties acting on behalf of UL and the vendor, Silvergrove Developments.
“Little if any attention was paid to the suggestions made about ensuring that the university was being transparent in its dealings and willing to consider opportunities to work with other developers,” she said.
“One of the most striking issues in the examination of the documentation provided is how it appears to me those who had a challenging or contrary view in relation to progressing the proposal were treated during the process.
“The expression of legitimate concerns during the development of this proposal were not treated with appropriate seriousness at the time.”
UL’s director of management and planning John Field spoke about this point at the PAC. There was a nervousness in his voice as he addressed the committee, but his evidence was striking and detailed.
He recalled being alarmed at plans to rush the Rhebogue deal through the approval processes while due diligence was still under way.
Mr Field put his concerns in writing in March 2022 — about four months before the deal was signed. He verbalised them a week later at a meeting which was not minuted or recorded.
“We had to effectively agree to disagree, myself and the CCO,” Mr Field said.
“Very little was minuted or documented in relation to this transaction,” he added.
Mr Kelly asked him if information ahead of the deal being approved was presented to create “a strong possibility of a certain outcome”. Mr Field agreed.
UL chancellor Brigid Laffan’s cryptic response to the same question was a little more telling about what might come next.
“Because there are ongoing HR issues, I have no view on what the deputy said about the process. It is prudent not to hold any views,” she told Mr Kelly.
She later indicated “there will be changes and there will be accountability,” but legal considerations prevented her from expanding on what these might be.
What we do know is a statutory review sought by the HEA will be completed within two months. The PAC has reserved the right to call UL back when this report is available. It is likely they will also want to hear more from the HEA.
Ms Murphy accused HEA chief executive Dr Alan Wall of “closing the door when the horse has gone” in relation to UL. She said UL’s previous governance failings should have led to the HEA having giving greater oversight over the university’s affairs.
Dr Wall said he had been given no indication of issues around the Rhebogue deal until last December, more than a year after it had been approved by UL’s governing authority.
“I can see how it looks, but the university was not aware that there was an issue with Rhebogue until December. In January, we wrote a letter stating that we wanted to review how it had implemented the policy.
“The public spending code is quite clear. The [UL] governing authority is the approving authority,” he added.