Taoiseach, Tánaiste, multiple Ministers, civil service, Garda, official inquiries and EU complicit in wrecking the life of one of Ireland’s leading business representatives.
How a former CEO of ISME has been shafted by the State because of two key sensitivities in Irish politics: the relationship between the Social Partners (unions and employers) and government, of which he was critical; and the relationship between the EU and the government.
In July’s Village magazine Frank Mulcahy detailed the malevolent and spurious accusations of criminal fraud levelled against him in 1999, about which he has now lodged a criminal complaint.
This is an updated online account of his experiences over the last two decades including his response to the Tánaiste’s latest reply of 29 July 2021 in which Micheál Martin passed the buck to his civil servants.
By Frank Mulcahy
How I got dragged into this mess
During the currency crisis in 1993 Bertie Ahern broke protocol. To my utter amazement, he instructed me as the then Director of the Small Firms Association (SFA), to reveal to the waiting press that he was making available £50 million for troubled businesses. Perhaps he had his own reasons.
Nevertheless, overnight I became a mini celebrity in the small business community. I used that status to criticise various powerful sectoral institutions, most notably the associated banks. When two years later IBEC acted on these sectoral written demands that I be silenced – under threat by the four associated banks that they would stop funding the big business organisation, I had gained sufficient authority and support to successfully launch the Irish Small and Medium Enterprise Association (ISME).
As the Executive Director of ISME I expressed the growing frustration among our members with the direction of social partnership and the failure, as the members perceived it, of big business-representative bodies to articulate the damage that the was doing to small businesses.
ISME developed a distinctive media profile focusing on a critical approach that was distinctly at odds with the then-prevailing consensus. We were, I thought, the Robin Hood of lobby groups – principled, provocative and persistent.
That gave ISME a unique status among business groups, and a disproportionate media profile greatly envied by others clamouring for column inches. I became a thorn in the side of the civil service, big business, the banks and the unions. Contrary to all predictions, within a short period ISME had established itself as a financial and political success.
Within a short few years we had purchased and paid for a four-storey office building on Kildare St on the back of funding that eluded most equivalent representative bodies. I had part-funded that purchase by not drawing any salary in the first year. In the subsequent years I had accepted a salary, half what I had enjoyed in IBEC, on the basis that my losses would eventually be made good.
I was somewhat surprised when in 1997, after a mere four years, both Michael McDowell and Liz O’Donnell, protagonists in the pro-market Progressive Democrats, informed me that they regarded ISME as the genuine voice of business, an opinion that Tánaiste Mary Harney had, they said, mirrored to the CEO of IBEC.
Many years later, several retired civil servants confirmed that that was the political stance, adding that they had vigorously disagreed with the Tánaiste’s position. It was an unusual fracture between government and civil service, that was to play out as tragedy, for me.
The following year, at the ISME AGM in March 1998, Geraldine Harney, the then-Tánaiste’s sister, a well-known business journalist, took me to one side; she then cautioned that I was going to be removed by the three of my fellow directors with whom I had established ISME – close drinking friends! Naturally I dismissed the suggestion as preposterous. It made no sense.
ISME was to be given co-equal status with IBEC in the partnership process.
ISME was to be given co-equal status with IBEC in the partnership process. However, as my role in that offer was unacceptable to my former employers IBEC, to the banks and the civil servants, all of whom had been the focused target of my trenchant criticisms, I was to be sacrificed.
I had no idea of these behind the scene developments when suddenly in September 1998 the ISME Chairman Seamus Butler offered £100,000 to have me voluntarily depart. His inducement was accompanied by several faxed threats from ISME directors Hynes and Faulkner, including of a “hatchet job” and the faxed reminders that “nobody has implied anything Yet, other than poor controls…” and “you know how I like to win”.
The sinister threat, Hynes’ fax “No one has implied anything Yet….“
“I am answerable to nobody” – Seamus Butler.
The ISME Chairman who offered the £100,000 inducement. As we shall see in Part 3, many years later he sought to deny the inducement, emailing: “what part of fuck off dont you understand“.
When I spurned his financial inducement, the campaign of vilification in private and in the national media kicked off, leading to my eventual dismissal in May 1999.
That dismissal came on foot of a complaint to the Garda in which Seamus Butler complained that I had defrauded the EU in 1997 in the drawing down of grants from the Department of Enterprise, Trade and Employment.
The allegation was based solely on the claim that ISME had infringed the EU’s administrative rules by submitting invoices to claim reimbursement in advance of the invoices being paid. Note, I was not accused of having benefited in any way from the alleged infringement of EU rules.
Twelve years later it would emerge that the Department perpetrated the infringement and I was the fall guy!
However, what was not known to those outside the privileged bureaucratic bubble was that the grant rules had been significantly changed two months after ISME’s application for payment had been submitted in September 1997. Those new audit rules were set out in EU Regulation 2064/97.
Proof that the State lied from the outset.
In Part 2 of this article I will outline in some detail how and why the highest officials in the land got personally ensnared in a dog fight with the EU Commission. How, from self interest, I was collateral damage, easily surrendered along with the integrity of the Dáil, several ministers for Enterprise including Micheál Martin and the former Taoiseach Bertie Ahern, among other prominent politicians
Complaint made by Butler to fraud squad
Some history is here warranted. At 3 pm on 5 March 1999 I was informed by the prominent journalist, David Murphy, of Butler’s complaint to the Fraud Squad.
I was temporarily stunned, since I had no prior knowledge and had neither been advised nor questioned by the ISME chairman or indeed anybody before he complained to the Garda that I had defrauded the EU.
Given that Butler had been party to the earlier faxed threats of a hatchet job and of using poor controls to allege fraud, I assumed that the Garda would see the complaint for what it was. In addition, since the Department had effectively prepared ISME’s payment application, I expected that the truth would out itself in due course. How could it not?
Yet, to my utter consternation and continuing disbelief a file was somehow sent by the Garda to the DPP. As a consequence of that report, before the DPP had adjudicated, I was dismissed, rendered unemployable and have now been deprived of my good name for more than two decades.
As I write, it remains the public position of the Department of Enterprise and the Garda authorities that Butler’s original complaint to the Garda was justified.
Exhausted and befuddled after two years of public hostilities, in 2000 I set about establishing the facts. It took me several years before I began to suspect that the State might be engaged in subterfuge and several more years before I knew that the State was so involved, but the question always remained – why?
Between 1999 and 2004, my 50 or so Freedom of Information (FOI) requests served only to support the State’s ostensible complete good faith when it maintained that the allegation was justified. However, I would eventually establish that their disclosures had been extremely selective as is evidenced by the following engagements.
The King with no clothes
In 2002, the Department of Finance posted Ian Devlin to the Department of Enterprise. He was a junior simply charged with checking and verifying the Department’s EU-funded expenditures between 1994 and 1999 and with preventing further errors and irregularities being reported to Brussels.
While there, in his innocence, he let the proverbial cat run wild with potential serious financial consequences. In an interdepartmental memo he asked why he was required to report me to Brussels for an irregularity, when there had been no fraud but much more tellingly “no irregularity” to justify even the suspicion of fraud.
That was an explosive revelation since it showed the the report to the DPP had been without merit. But, much more importantly (for reasons that will be explained in part 2) it left the Department open to serious financial penalties by the EU Commission with significant repercussions for the senior officials involved.
So the authorities moved with admirable speed to minimise the damage. The Department of Enterprise sent a report to the EU Commission in which it concocted a story to justify its earlier “irregularity reports”, the reports that Devlin had exposed as unwarranted. In 2002 the Department invented the story that the suspect invoices attributed to me only came to light after I had retired.
However, the Department knew well that I hadn’t retired in 1999. Its officials had been consulted by the ISME chairman Seamus Butler about my public shaming over a period of several months before the retention of the Garda. Subsequently, the Department had a ringside seat to my high-profile dismissal because of those exact invoices. Indeed, it was Councillor Butler’s significant testimony in 1999 that he had the support of three senior civil servants, whom he named, for deploying the Garda. He has maintained that claim, while the State has remained mute.
Small Business Operational Programme
Whereas the facts Are:
The Department was informed of the invoices on the 29th Jan 1999 two months in advance of the fraud squad being retained. The Department sang dumb. When Butler subsequently claimed that he had the support of three officials for deploying the Garda, the Department again sang dumb. I learned of the complaint from the media after the Garda were retained. The extracts from the report identified above are pure fiction designed to protect the Department.
To this day both the Garda and the Department insist that the allegations and ensuing report to the DPP were justified. Similarly, the Garda have never withdrawn or corrected Chief Superintendent Austin McNally who stated on or about 17 November 2004, “We did not find you innocent, we just didn’t get the evidence to prosecute you”.
By such duplicity the Department and the Garda authorities continued and continue to insist that the report to the DPP had been warranted
Garda investigation and lies
As demonstrated in John Reilly’s email above, as early as April 1999 the Department had advised the Fraud Squad why the allegation was fictitious. Nevertheless between 2000 and 2005 the Garda, including the head of the fraud squad, Chief Superintendent Austin McNally, insisted that the report to the DPP had been justified. He declined to record the evidence that we had accumulated including evidence provided by the Department of Enterprise official Turlough O’Molloy, who in October 2003 indicated to me that the use of unpaid invoices was perfectly proper.
I met Chief Superintendent McNally for the last time in November 2004 coinciding with that month’s related Parliamentary Question to Micheál Martin. McNally was adamant the file was closed. In his exasperation at my temerity he advised, “we did not find you innocent we just did not get the evidence to prosecute”. He threatened to prosecute me for wasting Garda time if I persisted in seeking to clear my name. He dismissed me, permanently.
A Berlin Wall
Indeed it seems that the parties had got together and decided on a strategy, since on the 17th and 18th Nov 2004 I was advised in turn by the Garda authorities, a high level EU official and the Minister for Enterprise that the files were closed. I did not appreciate it at the time but a metaphorical Berlin Wall had been speedily erected between me and the truth.
Martin Callinan Gets Involved
In 2005 I met Assistant Commissioner Martin Callinan. We sought that meeting after securing evidence from the auditors Doody Crowley, the auditors Lewis and Co, and the ISME treasurer Daniel Hickey. The evidence pointed to the ISME chairman Butler and his colleagues having had corrupted audited accounts during the Garda investigation in 1999 into the alleged defrauding of the EU.
As a consequence Callinan initiated a review of the original Garda investigation. He appointed the fraud squad to investigate the fraud squad. When I objected, he gave his “personal guarantee” of a thorough and comprehensive Inquiry. Consequently, as his investigation advanced, I insisted on emailing Callinan updates via his personal Garda email address which I had deliberately procured.
As demonstrated below, that technique for holding Callinan and other officers personally accountable for their decisions, namely the use of their personal email addresses, was to have very serious consequences for the integrity of the Garda.
His investigation progressed at pace, a snail’s pace.
It took a full year, usually at weekends, for the fraud squad to take my statement. I took that as a measure of their commitment until I learned that the officers had been ‘on treble pay’. I signed for the statement in September 2006. However, little or nothing happened.
In mid-2007 I presented Callinan with the Devlin memo from 2002 and other significant evidence which clearly showed that the allegations had been contrived and had been knowingly false. In November, because of the strength of that evidence, I wrote to Garda Commissioners Callinan and Donnellan. I speculated on the mere possibility of collusion between the Garda and the Department as one explanation for what was happening.
Callinan ditches his personal guarantee
Callinan then passed his guarantee in total to Assistant Commissioner Martin Donnellan, who point blank refused to own or honour it. Nevertheless a meeting was scheduled for 20 December 2007.
On the given date, I was accompanied by three significant witnesses. Nevertheless, we had barely taken our seats when I was being verbally abused. Donnellan accused me of emailing an instruction to the investigating team not to attend the meeting. It was a ridiculous assertion since their absence only benefited the Garda. When asked, Donnellan was unable to produce the alleged email.
The officers then brazenly, in front of my three witnesses, offered a trade-off. They undertook not to investigate my “private life” if I withdrew my complaint. I retorted that if they had any evidence of wrongdoing on my part they should immediately arrest me and not let me leave the building.
In the end, given the absence of the relevant officers, the meeting was adjourned to mid February 2008 at the latest.
Within days my emails were blocked to all Garda addresses. They were to remain blocked up to 2017 despite several Garda internal inquiries, inquiries by the Minister for Justice and the continuing denial of the email block by the Garda authorites.
GSOC GETS INVOLVED“I’m under no obligation to make sense to you” – Mad Hatter
In March 2008, after the date for the rescheduled meeting had passed without the required meeting, I made a formal complaint to the Garda Ombudsman. I did not inform the Garda authorities.
The following month, in April 2008 no fewer than three senior gardaí, in person and in writing, advised that Martin Callinan’s investigation had been terminated without notice. There was to be no report to the DPP.
A further year passed. In February 2009 Garda Commissioner Murphy was unexpectedly challenged by Conor Lenihan, then a junior Minister. In response the Commissioner advised that a report was about to be sent to the DPP. That was news to us. Consequently we wrote to Mr Callinan. On 29 April 2009 he replied in writing, “in 2005 the fraud squad conducted aninvestigation concerning your goodself, which resulted in an investigation file being submitted to the Law Officers”.
Since that was manifestly contrary to the facts, we challenged that claim. Nevertheless, Callinan issued a second letter (see below) in which he reasserted that a report had been sent to the DPP. But there had been no investigation and there was no report to the DPP. So much for his personal guarantee and the integrity of the Garda.
Note too, that Callinan denied ever designating the fraud squad to investigate the fraud squad which he dismissed as ‘absurd’. But that was the very basis for his 2005 inquiry and as shown above the reason for his personal guarantee.
Seargeant McCabe was not the first victim of Callinan
A fifth Garda commissioner gets involved
In late 2009 Assistant Commissioner Derek Byrne was appointed as my sole point of contact with the Garda. Despite my misgivings, I wrote to him concerning the November 2007 letter in which I had merely raised the possibility of collusion. I simply asked if he had read it. He didn’t reply.
However, in March 2010 Assistant Commissioner Byrne was instructed to respond. He wrote: “I have retained the letter previously referred to and if you wish to see it you are welcome to call to my office by appointment and I will facilitate you”.
I then called to his office by appointment to view the letter, but was refused access. Then on 17 June 2010 AssistantCommissioner Byrne wrote “I do not recall at any time asking you to call to Harcourt Square to view a letter in dispute, further I do not require your attendance in HarcourtSquare to view any such letter…”.
Assistant Commissioner Byrne’s letter to Mulcahy: extreme incompetence or deliberate forgetfulness
The Beginning of the Beginning of the End!
I continued to work day and night in ferreting out the facts with the active support of the ex chair of ISME Don Curry and my other witness, an employee of the state. We were focused, resolute and persistent
Matters came to a head in 2014 when the Minister for Education and Training Ruairí Quinn, having been persuaded by the EU Commission’s intervention that he had been egregiously lied to via the parliamentary chamber, sought access to the relevant files. However, he, the minister, was refused. Ultimately, that refusal caused the Taoiseach, Enda Kenny, to refer my complaint to the Government’s Independent Review Mechanism (IRM). That was the first time that the issues had escaped from the direct control of the officials. I was hopeful.
Having been rebuffed by the officials since 2003, Minister Quinn asked the Taoiseach to have the Dáil record corrected “as a first step”.
Taoiseach refers complaint to IRM
The IRM comprised a team of ten barristers charged with reviewing cases of possible miscarriages of justice countrywide. In referring my case to the IRM, the files that had been closed permanently by the Department of Enterprise since 2004 were potentially open to scrutiny by the IRM.
Two years later the IRM recommended a Statutory Inquiry. Of the three hundred or so cases investigated by the barristers (excluding five cases that involved manslaughter), mine alone was judged to warrant investigation.
We saw nothing untoward when we learned that the Inquiry was to be based on the as yet unpublished GSOC report, product of my formal complaint in 2008 and the evidecne and admissions we subsequently secured. After all the GSOC were the good guys, or so we thought.
Incredabily, that report had been in the making for more than ten years, since the blocking of my emails by the Garda in 2007. Publication had first been due in 2016 but had been pulled after the Garda authorities had objected and threatened litigation.
Month after month, GSOC failed to disclose its report first to us and then to judge McMahon. Fully two years after the report had been due to be released the report was finally released to the Inquiry in 2018 as “Dr Brian Doherty’s GSOC report”.
GSOC wrote that the closure of the report on their system would allow the “process to progress under judge McMahon”.
GSOC report – a whitewash
On reading the report we were utterly shocked to discover that it omitted the key statements which, at Dr Doherty’s insistence, I and my two witnesses had separately recorded in 2014.
The very statements which dealt with the belated proof and admissions provided by the EU Commission, the Institute of Chartered Accountants Minister Quinn, the former Taoiseach Mr Ahern and others, of “mala fides and collusion” between the Garda and the Department of Enterprise.
When asked, the GSOC and Dr Doherty repeatedly declined to explain those omissions and their conclusion that the Gardai were beyond reproach. It was, they said, a matter for the judge. Why the silence?
It evoked the obvious question, why had the Garda objected to the GSOC report when due for publication in 2016 if that original report had also whitewashed them? It made no good sense. When challenged, the Garda Ombudsman and Dr Brian Doherty simply passed the buck in its totality to the judge.
GSOC’s self-imposed silence.
And head of Inquiry judge McMahon makes off, after saying he cannot substantively review the report
On receipt of Dr Doherty’s GSOC report, the judge disclosed that his terms of reference prohibited him from commenting on any aspect of the GSOC report no matter how “inadequate or improper” the report was. At the same time he ruled that that report was comprehensive, leaving him very little to investigate.
I had felt the terminal portent of what was to follow when, before any hearings had commenced, the judge had turned to me and predicted that I would be “unhappy” with the outcome”; whereas, addressing the State Solicitor, he had noted that they would be pleased. It had been an extraordinary framing of the Inquiry.
The limitation was Dáil-imposed
In effect the state, the culpable party (as affirmed by Minister Quinn and the EU Secretary General Catherine Day), had imposed terms of reference on the judge to protect itself. Not only had the Dáil been used since 2003 to protect the state asprimarily represented by the Department of Enterprise and the Garda, but in 2018 the judicial process was being manipulated to the same effect – the files closed since 2004 were to remain closed.
Ahern states concerns but Taoiseach Varadkar ignores him
On 4 March 2019 Bertie Ahern wrote for the second time to the Taoiseach and restated his concerns, namely that he too had been used by the Department of Enterprise in 2004 to validate untruths. In 2019 Leo Varadkar was the incumbent. Nevertheless the former Taoiseach was ignored.
I withdraw from useless Inquiry
Exasperated, in June 2019 I withdrew from the Inquiry. Our primary reason was that the judge had ruled that the core complaints of collusion and mala fides had been dealt with by Dr Doherty’s GSOC report, whereas we strongly contended to the contrary. The lawyers’ reasons are in part set out in their 12-page letter of explanation to judge McMahon.
And then things get really bizarre
Naturally, we continued to press GSOC and Doherty for answers. In mid-2019 I discovered that Doherty had been the CEO of the newly-established Legal Services Regulatory Authority since August 2017.
On 3 Sept 2019 he emailed claiming “my contract with LSRA provides that I should spend all of my time working for LSRA engaged solely in LSRA activity…I have no contractual, moral or other obligation to respond to your emails or your queries” and somewhat ironically the CEO of LSRA didn’t provide the required explanations.
Nevertheless, a week later he contradicted that statement. He intervened with one side of the Inquiry. He wrote in private to judge McMahon. Dr Doherty, in the context of several incomplete truths, denied being the author of the GSOC report, what the GSOC depicted as “his report” . The very report which Justice Ellen Ring had passed to the Inquiry late in 2018 as “Dr Doherty’s GSOC report”. We were nonplussed. Again, it made no good sense. Why did he wait two full years before disclosing that critical fact and then in private to the judge after I had withdrawn?
GSOC reveals “Dr Doherty’s GSOC report” to be a farce!
Inexplicably GSOC had elected at some stage post-2016, or after the Garda authorities had threatened to litigate, to ignore our core complaints including the immediate issue that had caused us to contact them back in 2007, namely the email block. In ignoring our complaints GSOC had omitted to comment on the blocking of my emails. That was outrageous since we by our own endeavours had secured in late 2017 redacted Garda correspondence confirming the blocked emails.
Significantly, the email disclosed that Doherty’s GSOC report deals with matters registered “between 2007 and 2012”. The problem is that Doherty did not get involved until May 2013.
How is it possible that the six year period of Doherty’s involvement was wiped from the end report? More importantly, how is it possible that GSOC, after its investigations which took eleven years to complete, failed to establish that my emails were blocked?
Naturally, we anticipated that the Minister for Justice would act and at the least reconsider the terms of reference to take account of the GSOC revelations.
Consequently, we were not totally surprised when on 11 March 2021, after a silence of two years, judge McMahon suddenly wrote directly to my chief witness Don Curry and me. He invited us to take part in his extended Inquiry, then of five years duration and on-going.
We assumed that the judge had processed the admissions by Doherty and GSOC in 2019 and 2020 respectively, and had adjusted his ruling to take account of the realities. We thought it prudent to ask for confirmation from the judge. But there was still official recalcitrance.
On 29 March the judge replied that his rulings from 2019 stood. That he was intent on proceeding in accordance with his terms of reference which blindside him to the realities that have been disclosed by the CEO of LSRA and GSOC. Clearly we were in the zone of Lord Denning’s infamous “appalling vista”!
In summary the Department of Enterprise Trade and Employment in tandem with the fraud squad facilitated false allegations to be reported to the DPP in 1999. The State subsequently, over a period of two decades, concealed the facts, even when those facts were sought via Dáil Éireann by senior parliamentarians.
The effect of that cover up and the related untruths was to deny me my right to have the courts vindicate my good name. In fostering those untruths the authorities protected those who contrived to concoct and level the allegations. Which evokes the question, why.
In the follow up narratives we will reveal how the the EU Commission bullied the Irish authorities into confirming as true what they both knew to be untrue. After that we will deal with how the actions of the Taoiseach and the Tánaiste have so far served to protect Fianna Fáil Councillor Seamus Butler.