ST: 'Fas in new cronyism row over lease'

Very busy. Will add context later. Our piece from this week’s Sunday Times. Related documents here.

FAS, the state training agency, is renting a warehouse from the former tax partner of a consultancy firm which has been “consistently successful” in tendering for work from the agency.

Unit 9 at Tolka Valley business park in Finglas, north Dublin, has been rented since 2000 from Terry Oliver, formerly of OSK, an accounting and business consultancy. Internal audits have concluded that Greg Craig, the former head of corporate affairs at Fas, had a conflict of interest in awarding contracts to OSK because of his close personal relationship with Oliver.

Craig was suspended as the audit was compiled, and has since returned to the state training agency as head of health and safety.

According to documentation obtained under the Freedom of Information act, the Finglas warehouse was to be used to train apprentice plumbers and electricians. It appears no-one has ever been trained there and instead it has been used for storage or left empty due to concerns about it meeting planning standards. The rent is more than €40,000 per annum. Fas was given legal advice in November 2000 that it should ensure the building was fit-for-purpose and met the required standards before signing the lease. It is not clear if this happened.

Before the lease was signed, emails between Fas staff and solicitors noted that the then manager of finance and administration at the Finglas training centre, Patrick Kivlehan, wanted to see the lease signed off “as expeditiously as possible”. Kivlehan is now head of internal audit at Fas.
In 2003, local management attempted to cancel the lease as the building was surplus to requirement. Oliver disputed the cancellation. Local management was later overruled. In 2005 the lease was extended to run until November 2011.

In February 2007 Richard Keegan, a Fas Building Services specialist, was asked to assess the site’s suitability for training apprentices. He found it didn’t have a “fundamental requirement” to hold courses for trainee plumbers and apprentices working with electronics. Keegan also noted in an email to management that the unit was not fire-safety compliant and would require planning permission before it could be used. He said the local Fas centre had “closed down the building in the past” because it “didn’t meet basic health and safety standards”. Email records show that last October, local Fas management again attempted to get out of the lease. “We looked into negotiating an agreement with the landlord but there was not a successful outcome,” wrote Robert Nicholson, a local manager. Legal advice was that the lease was “watertight”.

Nicholson said that altering the building would not be cost effective, nor would sub-letting, as the market for that type of site was too weak and “significant work” would be required to bring it up to the required standard for a tenant. It is believed Fas has paid nearly €400,000 in rent to Oliver, since the lease began. Thousands more has been spent on maintenance costs. Oliver refused to answer questions about the building, claiming it was a matter for Fas. The training agency confirmed that the warehouse is being examined as part of an ongoing internal audit. Internal auditors in Fas have already concluded that there was a “conflict of interest” arising from the fact Oliver and Craig were friends. Oliver, who retired recently from OSK, provided the Fas executive with personal financial advice.

OSK was found to have done a considerable amount of consultancy work for Fas in the early part of the decade, the majority of which related to corporate affairs. “OSK has been consistently successful when applying for work from corporate affairs, whether directly, via advertising agencies, or via Fas procurement,” an internal report concluded.