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Two stories: 1) the media and Micheál Martin’s lies; 2) Micheál Martin’s lies

The Media’s treatment of the lies: an epic scandal ignored.

Mulcahy pdf 14-6 22 March 22

It was March 1998. The RTE journalist Geraldine Harney informed me that I was to be dismissed by the ISME directors Peter Faulkner and Eoghan Hynes. She was doing the decent thing. Nevertheless, it was a preposterous suggestion and I told her so. However, in June her prediction materialised. Both Hynes and Faulkner demanded my resignation, with threats. The demand being unlawful, I refused to comply.


(On 11 August 1998 Mr Hynes privately, by fax, instructed the incoming ISME chair Seamus Butler, a Longford businessman, to get on side with my removal.)


In September the Irish Times  journalist Barry O’ Keeffe printed a story that I had cheated on my expenses. I was not afforded the opportunity to refute the allegation. He apologised stating that he had been placed under inordinate pressure. There followed  a stream of front-page stories in the Sunday Business Post stating in turn that I had stolen a suit, insurance and pension payments, a 1996 bonus and other frauds. In September too Aileen Hickey in Business Plus Magazine ran a cover story, blazoned ‘Gunning for Mulcahy’. As with Miss Harney it predicted the future. The article referenced pending accusations so sensitive that they couldn’t be revealed at that stage. I had no idea of what I was being accused of, or was expected to disprove.


(In September Seamus Butler offered me £100,000 to resign with threats that I would “never work in this country again” if I did not oblige.)


In October 1998 Irish Irish Independent journalist Gerry Flynn published several intimidatory faxes that I had received from Eoghan Hynes. Flynn had a reputation for being forthright. Initially, the Independent committed to standing by their journalist. They advised,  “we will be fighting your case”. However, in the end management paid Mr Hynes £20,000 simply for publishing his abusive faxes. A form of apology was printed. I was damaged.


(Nevertheless, in October and November the ISME Finance Committee publicly withdrew the allegations. The ISME members dictated that  I was to be fully reinstated by the AGM in April 1999. When Hynes objected, several council members recorded him explaining his corrupt “game plan”. The council member Pat Coen had possession of the tape. His brother was a respected ranking Garda who had been kept in the loop. The tape was my reassurance. I was advised not to react to the daily provocations; to get to the AGM in April.)


On Saturday 26 January 1999 I was walking on Killiney beach at 6.05 (PM) with the civil servant Diarmaid Breathnach when my phone went wild. It transpired that Seamus Butler, had announced on RTE’s early evening news that I had been sacked because I had fiddled my expenses. The story was utter nonsense. Butler had been interviewed by his neighbour the Longford-based RTE journalist Kieran Mullooly. I had not been afforded the opportunity to refute the charge.  The following day I rang the RTE newsroom. George Lee answered. I registered my complaint – orally – at what had occurred. That evening Pat Coen collapsed and died. The tape was secured by his brother, Garda Sergeant Coen, with whom I later spoke. A year on RTE advised that I should have put my concerns in writing.

(In February the Revenue Commissioners attended ISME at Butler’s request.  Yet within an hour Revenue walked out believing that they were being used to damage me. On being informed, I arranged to meet the same officials. I provided them with my expenses file and the procedures laid down by Eoghan Hynes which I had followed. They replied, “we were never shown that file”.)


The date for my reinstatement was fast approaching. However, at noon on 5 March 1999 Seamus Butler rang the then Irish Independent journalist David Murphy. Butler apologised for “lying” to him the previous day when he had denied removing the audit signatory Don Curry as an ISME director. He was, he said, making good by offering Murphy a scoop. He disclosed that he had called in the Garda in respect of his latest complaint, namely that I had defrauded the EU Commission. I had no prior knowledge of that allegation whatsoever. Aileen Hickey’s prediction had come to pass.


(In April two gardaí visited my home. I provided them with evidence of the faxed threats and the £100,000 inducement. I directed them to Sgt Coen and the tape recording, to the Revenue Commissioner’s conclusion, to the ISME auditors and the audit signatories who affirmed the vexatious nature of the complaint. We expected that the fraud squad would charge Butler with, at the least, wasting police time.)


On 2 May 1999, as the Garda commenced their investigation, I received a call from the editor of the Irish Times business page Cliff Taylor. He disclosed that he had been invited to the ISME board room the previous Thursday, with the offer of yet another “scoop”, namely that I was to be sacked on 6 May. Consequently, my lawyers threatened an “injunction”.  Butler postponed the board meeting of that day.


(Nevertheless, on 6 May ISME’s solicitors recorded Ercus Stewart SC stating “the board has been forced to dismiss Frank and that has been done. He should have sought an injunction but he didn’t…The only question now is how much he will be awarded by a court”. Clearly ISME had lied to my then lawyers, Binchys, and their lawyer Ercus Stewart SC.)


In November 2005 the daily press reported in passing that the EU courts had penalised Rehab  20 million euros because of its maladministration of European grants.The Department of Enterprise spun the story that that penalty was somehow a win for Ireland. Despite my pleas that something was badly wrong, nobody was inclined to look under the hood.

Rehab analogy to ISME

What follows is the statement by the National Learning Network, a subsidiary of Rehab in relation to grants under the Human Resources Development Operational Programme 1994-1999. It paints a picture remarkably analogous to my own situation.

  1. In relation to the ruling by the European Court of Justice, the National Learning Network wishes to put on record that all its claims for ESF grants were fully compliant with the guidelines and instructions of the National Rehabilitation Board (NRB).
  2. All these claims were audited by the NRB and were subsequently paid. We also want to state clearly that all our claims for funding were accepted by the Government as being completely valid and were paid out in full.
  3. By way of background, the funds in question were administered by the now-disbanded National Rehabilitation Board (NRB) on the basis that organisations participating in ESF schemes would first claim 75 percent of net eligible expenditure as EU funding. The remaining 25 per cent would be met from other sources i.e. both State and private. For more than 20 years ESF funding was allocated to all eligible service-providers on that basis.
  4. Throughout this period the European Court of Auditors and the NRB carried out audits. It is a matter of record that there was never any difficulty with the claims submitted by NTDI.
  5. In 2000, after the Human Resources Development Operational Programme 1994-1999 had ended and the NRB was in the process of being dissolved, an EU Auditor pointed out that all organisations were entitled to claim up to 75 percent of net eligible expenditure and not a minimum of 75 per cent as had been the instructed guideline.
  6. NTDI resubmitted claims from the 1994-1999 Operational Programme on the basis of this new interpretation of the regulations. Following this, the Department of Enterprise accepted the validity of all claims for grants by NTDI under the Operational Programme and reimbursed all monies due.


Apart from Rehab’s obvious utter confusion, four facts arise from the statement:


  1. On 18 May 2004 the Minister for Enterprise  stated  in reply to Ruairí Quinn, that the rules governing EU grants had not been changed in 1997. Yet, as the statement shows, at that exact time Paul Gallagher SC was  pleading in the EU courts that the rules had indeed been changed in 1997 and “compulsorily” applied “retroactive to 1994”.
  2. The Department of Enterprise had   (since 1973) acted on the basis that the EU social grant guaranteed 75%. The Department had made available several  billion Euro to FÁS on that basis over a 40 year period.
  3. The Department had crudely used Rehab as a guinea pig to test the validity of the retrospective legislation, whereas they were always in fact the culpable party. In 2008 FÁS of course knew that history, which may explain Roddy Molloy’s gratuity
  4. If the Department were prepared to put Rehab through the ringer (for a budget of many millions) how much easier was it to lie about me where the value of the alleged fraud amounted to just £12,375. And of course the fraud had been perpetrated by the Department of Enterprise.


Then in November 2006 I was contacted by Michael Heney, a senior RTE producer and director. He undertook to investigate my claim that I had been reported to the DPP because of “retroactive” EU legislation. That Butler had exploited that retrospective process to level false allegations. However, the programme fell  at the first fence when the Taoiseach’s spokesperson (Michael Sludds) specifically denied any “retroactive process”. RTE had intended that issue to be the focal point of the intended programme.


However, by chance Eoghan Hynes rang the producer. The call was interpreted as a threat.  Consequently, Today Tonight elected to investigate the claim that Butler had corrupted audited accounts to justify his complaint. The programme was broadcast on 30 January 2007. In the absence of resources, the makers simply asked questions. There was no investigation of the accounts. It arrived at no firm conclusion. In the end I was left hanging. Heney volunteered that if evidence of retroactive audits emerged RTE would broadcast the story.


(The  Department of the Taoiseach was relieved. They  recorded the broadcast as “not forensic”. The State closed their files. The Garda ceased their investigations.)


In February 2007, within weeks of the RTE broadcast, the Irish Times ran a story that Chambers Ireland had, overnight, turned a healthy profit into a sizeable  deficit of €1.5 million. They noted that the problem was seemingly caused by European grants. When I asked for an explanation Chambers Ireland declined to comment. They claimed that the Department was “paranoid” and trying to bury the story. I emailed and rang the author of the story, Arthur Beesley. My emails and calls to him went unanswered. I had become a pariah.


(Later that year there were two significant developments. Firstly, the Department of Finance official Ian Devlin advised that the Minister for Enterprise and Martin Callinan had been wrong in confirming Butler’s allegation. There had been, he wrote, “no irregularity”, Simultaneously the Garda forensic accountant disclosed that Martin Callinan had been wrong when he insisted that Butler, in levelling his allegations, had not corrupted the accounts of ISME. However, extraordinarily, both of these favourable confirmations were denied by the state. As proof, the Garda referred me to the Director of Corporate Enforcement Paul Appleby for the definitive view. Appleby wrote that his “professional evaluation”  had caused him to  “professionally assess” that the audits had not been changed. So long as that claim was maintained, Butler was in the clear.)


By 2008 the national press had recorded stories that at least three prominent NGOs had been accused of maladministration by the Department of Enterprise. It went unnoticed that the allegations had two things in common, namely that a) the accusations related to European social funding and that b) in each case the NGOs claimed to have followed faithfully the instructions laid down by the Department of Enterprise.


And then the misuse of EU funds by FAS hit the headlines. The same EU social funds that had caused Rehab to be dragged through the European courts, and had caused the forced resignation of the CEO of Chambers Ireland. I in turn  had been reported to the DPP as having defrauded the EU of those social funds and dismissed, permanently. When, subsequently, the Garda and the Department of Enterprise had verified the allegations my lawyers deemed I had no case. They walked away.


In my bitterest moments I compare  the outcome in my case with that in the case of the FAS scandal relating to the same EUfunds.  A €1.4 million euros pension top up for the boss. But then FAS knew the inside story: they knew of the retroactive audits: they knew that culpable party had from the outset been the Department of Enterprise itself. For Ireland Inc it was worth the €1.4 million to keep that story quiet. I wasn’t part of Ireland Inc.


By mid 2010 Ruairi Quinn had ample proof that in pursuit of the truth he had been consistently lied to. He wrote the “State wronged Frank”. He has a need and right to have the record corrected”.  Not for the first time, his endeavour in 2010 to have the Department stand by the facts and correct the Dáil record was spurned. Consequently, Deputy Quinn rang the Irish Times and Colm Keena, then perhaps Ireland’s leading investigative journalist. Quinn offered to go on the record and disclose how he had been lied to by the officials and in parliamentary replies as the Department applied new audit rules post 2000 “retroactive to 1994”. That retroactive process had been imposed by the EU after the EU concluded that the Irish authorities had “systematically mal-administered” the €9 billion that had been secured for Ireland in 1994.


The bullying nature of that story and the “horrendous” consequences for named individuals, whose only crime was in trusting in the integrity of the state,  was a story that any investigative journalist would have been delighted to have handed to them., particularly, if the source was a senior Government Minister supported by the Director General of the EU Commission’s Internal Audit Service and the EU Secretary General, Catherine Day.  Quinn and Keena agreed to meet over Christmas to record the details. However the Government fell and by March Ruairi Quinn was the Minister for Education. In that elevated position Quinn and his chief of staff emailed that he intended to deliver on his commitment to have the record corrected.


Yet for some reason the Irish Times lost interest. It declined any interest even after Deputy Micheál Martin, then in opposition, confirmed that the parliamentary replies he had given when the relevant Minister had been wrong. He too, the former Minister for Enterprise, claimed to have been lied to. He undertook to correct his Ministerial record. He hasn’t, yet.


In 2012 I engaged Colm Keena again after the original ISME auditors and the Institute of Chartered Accountants belatedly corroborated that Butler had changed the audits. Having received proof of this, Keena undertook to speak with Appleby and secure an explanation for the parody that he had presented as his ‘professional assessment’ . What then occurred was a travesty. In conversation with the latter Keena secured a scoop. The Irish Times broke the news that Appleby had, on the eve of the Anglo Irish case going to court, suddenly decided to take early retirement. It was an incredible development. It made little sense for Appleby to choose to retire then.  And yet, alongside the news story, Keena published a glowing profile of Mr Appleby. There was no mention of his “professional evaluation” which had done so much damage to me.

A little later, Don Curry, formerly of ISME but by then a friend of mine, wrote to Keena, in frustration at the lapse in energy.

“In your last email to me you again undertook to report this story if I
could produce documented evidence that any Minister had committed to
correcting the injustice. I believe that in response I passed to you
very sound evidence that Ruairi Quinn (with the active support of the
Tanaiste and other politicians, including MEP Jim Higgins) has been
steadfast, clear and consistent in relation to what he described on 24th
September 2011 (and repeated on 4th May 2012) as “the outstanding matter
of justice for Frank Mulcahy””.  But the required follow-up simply never occurred.

Deputy Micheál Martin and the media, in particular RTE – 2013 to 2014.

In early 2013 we met in Minister Quinn’s office. Faced with staunch opposition by his cabinet colleague Richard Bruton,, Minister Quinn reflected that the media had a critical function in keeping our democracy healthy and encouraged us to speak with the press. To that end he offered to talk to RTE.


By then RTE Current Affairs and News had been fully briefed on the underlying story. They knew that the Taoiseach’s spokesperson had lied to Michael Heney in 2006, when he (Michael Sludds) denied the application of new audit rules post 2001 “retroactive to 1994”. They were briefed on the horrendous story of how the employees of several NGOs had their lives and reputations badly tarnished because of lies by the Department of Enterprise.They were reminded of Heney’s commitment, if it was ever established that the audit rules were applied retroactively.

Quinn was as good as his word. He met the RTE director of news and current affairs. He offered to confirm the extraordinary story outlined above.  Nevertheless RTE elected to “deep 6” the story. The public service broadcaster argued that it would cost “€250,000” to prepare the programme. Secondly RTE current affairs feared that I would have a “panic attack”. Consequently, years of investigation by my team and the nine months work of briefing RTE journalists went down the drain.

Nevertheless, Quinn did not give up. He took steps to avoid involving the officials. In April 2014 he had a memo typed privately which he hand-delivered to Taoiseach Kenny at the end of the penultimate cabinet meeting that he ever attended. The memo asked Kenny as a first step to have the record of Dáil Eireann corrected. It was unprecedented that one Minister would ask a Taoiseach to support him in his complaint against a cabinet colleague, Richard Bruton. Quinn’s exclusion of the officials was the first time that my complaint escaped the clutches of the civil servants and the Garda. Consequently, my concerns got referred to the Independent Review Mechanism (a panel of 10 independent barristers). In early 2017 those lawyers rejected the 300 or so cases that had been referred to them as possible miscarriages of justice. They made an exception in my case.

The journalist David Murphy, who was first with the news in 1999 that the Garda had been deployed, was first with the news again in 2017 (He is now Political Coverage Editor).  On the main evening RTÉ news he reported that a Statutory Inquiry was to investigate my complaint. I was elated. Finally, the Dáil record would be corrected. The truth would be established with the logical consequences for my good name. However, I did not know that the Inquiry having been sanctioned, the officials were back in control.

(The parliamentary records to be corrected are  those belonging to Micheál Martin’s period as Minister for Enterprise. In 2012 Martin had blamed his officials for lying to him and had undertaken to correct the Dáil record of what he said.  However, he then reneged, claiming that the Ombudsman had exonerated him. That excuse had never made sense until we established by chance, during the broadcast of Albert Reynolds’ funeral in 2014, that the ISME Chairman who fabricated the original complaint, Seamus Butler, was a County Councillor. He was in fact the Fianna Fáil Leader on Longford County Council. Had Martin delivered on his commitment, he would have exposed his colleague Councillor Butler to criminal charges. Fianna Fáil and Martin may have been in concealment mode since 2017)


Conclusion: the media, in 2022, is nowhere on this story

Armed with that evidence and the latest shocking development, namely the shredding of the minutes (see adjoining narrative relating to the Data Protection Commissioner and Micheál Martin),  we have since tried on numerous occasions to engage with the Irish Times and the head of RTÉ current affairs Jon Williams. However, they have simply ignored our communications. They have never replied.

Fine Gael and Fianna Fáil are now batting for each other. Micheál Martin, Richard Bruton and to some extent Leo Varadkar  as former Ministers for Enterprise have vested interests in keeping the embarrassing details hidden despite the affront to democracy, and fairness.

So then I went to Village.  We battled to keep it simple, keep it short. but the magazine has now, in the last six months, published four serious attempts to outline the rudiments of my case.  The case is there; but the rest of the media is nowhere.

A scandal tainting a swathe of public life and its central institutions has been peripheralise.  WHY have the media avoided this story – Over Twenty-Five Years, and will they now redress their damning deficit?