NI Water: “As for the minister, he’s not commenting…”

I see Senator Mary White’s husband Padraic is taking on the role of Chair for NI Water. I hope he has a guarantee that he cannot be sacked for failing to address a problem he’s not been told about until he’s actually under investigation.

Okay, back to the main story. There’s a nice piece by Martina Purdy which probably sums up most people’s feeling about this Byzantine tale from NI Water. It’s interesting that she concludes with a note that the Minister is refusing to comment on the story, despite the fact that what is under examination here is the behaviour of his own Permanent Secretary.

It contrasts sharply with the response of the Chair of Phoenix Gas, and former head of NI Civil Service, Gerry Loughran who clearly appraised himself of the problem thrown up by another stray letter in this matter and took immediate action to put some clear blue water between himself and his CEO.

But the Minister is not the only one keeping schtum on this matter.

One of the three MLA’s who asked some of the more pointed questions in last month’s heated PAC session, Patsy McGlone has written two letters to Bruce Robinson (Bruce Robinson 1 and Bruce Robinson 2), the current head of the Civil Service in Northern Ireland appraising him of Mr Priestley’s email to the Auditor General and that the Permanent Secretary had a copy of Dixon’s letter 24 hours before the PAC.

In the first McGlone specifically states the problem, as he sees it, to Robinson:

I find it most unusual for any civil servant to seek to prompt the C and AG that others, apparently independent of DRD, should assist “the PAC in coming up with their final report” in the manner suggested or that a senior civil servant be seen to act as proxy in conveying the opinions of two individuals about the scrutiny of the PAC to the Comptroller and Auditor General.

But it’s the pointed clarification in McGlone’s second that defines precisely what Mr Robinson should be considering in some detail here:

In light of the now established fact that Mr Priestly had received and distributed this letter well before the formal addressee had even received it, it is for you to discern what exact role the Permanent Secretary for DRD fulfilled in these matters and how the public good was being served through dissemination of a letter, neither from him, nor the Department, but from a person avowedly independent of the Department, making serious criticism of public representatives as they pursue their duties at the PAC. You will also be aware this letter was promptly retracted with subsequent clarification by the Chair of the company which employs Mr Dixon [emphasis added].

The first was sent two weeks ago today. Yet Slugger understands that Mr Robinson’s office has yet to even acknowledge receipt of the letters, never mind indicating what actions he may or may not take. There is, not to put too fine a point on it, an eery silence over this matter from both the political and the civil service side.

Which is all the more strange since, Slugger understands, both the Minister and the Head of the Civil Service actually know a great deal more about the precise detail of this story than has yet been made public.

If between them they fail to start clearing this mess up, then perhaps (as more and more detail leaks out – and we are pretty sure it will) John Dallat’s lone call for a Public Inquiry may be deemed the only way to get to the bottom of real reason why those Non Executive Directors were fired. At the very least, they owe it to the new lot, not to mention the wider community.

Maybe then NI Water can back to the business of delivering a public service. And the sacked directors can get on with the rest of their lives…

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  • “failing to address a problem he’s not been told about”

    Mick, the problem but not its magnitude was allegedly drawn to the attention of the previous chairman and the board by Laurence MacKenzie shortly after his suspicions were aroused but the board apparently showed little interest.

  • Mick Fealty

    Okay then, let’s have the detail?

  • “the Minister is refusing to comment on the story”

    As I’ve already indicated on an earlier thread a pesky journalist might ask if the appointment of the six ‘interim’ NEDs satisfy the Minister’s “community confidence” criteria.

  • Mick Fealty

    Ah, but one out of the six is permanent (or as permanent as any NED has any right to expect)…

  • MacKenzie, July 1, 2010: “At that point in time, the individual told us that they had identified savings of £23 million. If you multiply £23 million by 6%, you get a very large number. I immediately brought the matter to the then chairman of Northern Ireland Water and, concurrently, made the departmental accounting officer aware of the findings. To be fair, I had made them aware as soon as my antennae had gone up in August/September.

    I will read from board minutes that followed that report.

    “The chairman noted that in his view a success-fee arrangement of 6% on the value of the sum recovered was not unusual in a commercial environment.”

    In my world, “recovered” is different from “identified”. At that meeting, I confirmed my intention of continuing to look at contracts to see whether there were others. I was working on the basis that if there was one there could be others. I was generally surprised that the issue was not regarded as unusual in the organisation.

    The minutes of the October 2009 meeting might provide additional illumination.

  • Which one is permanent, Mick?

  • drumlins rock

    this member of the community is not feeling very confident 🙁

  • Presumably Don Price who one month after criticising the IRT report agreed to inplement it which it appears was the price for remaining on the board or is that an inference too far.

  • drumlins rock

    Has anyone googled Padraic White yet? he has his fingers in that many pies he would need another 2 or 3 sets of hands. Still very much a “jobs for the boys” candidate, only this time its the IDA and not the IDB, seems he has made a career of sitting on boards. Close connections with the FF government over the years, thats leaving the wife out it, I know he not part of the NI “incestuous” quangoland but do we really want to be bringing in someone from an even worse one over the border?

  • Mick Fealty

    27th October is when the Board ordered Brennan’s review. Brennan delivers that on the 12th January to the CEO who tells the Board on the 18th (via a two page email summary), and then resigns.

    Next day Mr Priestley decides to set up the IRT (which is then operational within 24 hours). The Board get to meet for the first time to discuss the the review they commissioned when the Independent Review Board is already sitting on the following Monday (25th January).

    Now if you can falsify any of that, I would be very grateful. But it’s smells distinctly rat like to me.

  • Joseph Addison

    There are gagging orders in the past and no doubt they will be used in the future. This is Murphy’s law.

  • “27th October is when the Board ordered Brennan’s review.”

    MacKenzie makes no reference to this, Mick, which is why I drew attention to those October minutes.

    MacKenzie – following on from the above quote: “I asked Nicola Brennan to undertake the first review, which was the contracts approval audit, which proved a difficult and time-consuming process. I received a first draft in the week commencing 11 January, and there was still some work to be done on it. However, the report highlighted the significance of the emerging issues.

  • Mick Fealty

    I’ll get back to you on that. Have you FOIed the minutes for the October Board meeting?

  • Cynic

    Nor me

  • Cynic

    …………and just what was the appointment process used this time?

  • drumlins rock

    Probably a conversation with a motive, sorry purpose.

  • Mick Fealty

    The sequence, as near as I can get without the minutes, appears to be as follows:

    McKenzie raises the issue of procurement with the Board for the first time on 27th. It may be that he makes the recommendation to hold an audit, but it is the Board, approves of that action and orders that it be done.

    By the time the Board gets to read and act upon the findings of a report they ordered, the IRT is already in session and they are ordered by DRD not to talk about it.

    Jugged, in other words.

  • Oracle

    Hi Mick,

    Mick you’ve been knocking it into N.I Water on a regular basis now and you seem to be getting other media outlets lifting this ball and running with it.
    I must admit I’ve been snowed under with contracts at work and haven’t dedicated enough time to Slugger to have followed it in anyway worth a damn, but it looks like it’s a juicy if not squalid little affair…. So a request

    Can you do a revamp/crash course for beginners on the subject and the players involved saving I and I’m sure others who are too polite to ask having to page trawl for a week.

  • drumlins rock

    Oracle, try the timeline one http://sluggerotoole.com/2010/07/16/ni-water-timeline-administrative-procedures-are-the-responsibility-of-management/
    Mick summed everything up in that thread quite well, give you the bones of it all.

  • Mick Fealty

    Drumlin’s backlink is the best I can do I’m afraid at the moment Oracle. I’m redding up to go to Wicklow tomorrow… and I’ve spent way too much free time on it already…

    I may be being a little over cautious to people at the moment, but that’s partly because there are soo many strands to this story, I don’t want to lose any by making sloppy assumptions before I have the evidence to hand.

  • Mick Fealty

    I think you may be being a little unfair to Mr White there lads. I’d be reluctant to jump to any conclusions about any of the new interims at this stage.

    They should be given a chance to get on with what they have to. But it is up to the Department and NICS to make sure they aren’t mired in the crap that went before.

    Which takes us back to that eery silence…

  • willis

    This is so crying out for the application of a simulation solution. It is not really my field. My guess is that Paul Evans might know what the right tool is.

    I was musing on the difficulty that the MSM is having in covering this story. I did take Mick’s advise and had a go at watching all of the PAC meeting. I could only take an hour.

    Could we start a thread on how to go forward with information presentation?

  • Cynic

    I dont hold out anything against them at all. I just query the whole appointment process and what went before.

  • William Markfelt

    ‘the sacked directors can get on with the rest of their lives…’

    Do they?

    It appears that he DRD/NIW/NIAO will do all in their power to leave a stigma attached to the NEDs who were sacked, of ‘previous’ is anything to go by.

    They are tainted until there is an Inquiry that clears them and attributes vlame where it should be laid, but probably still won’t conclude what the agenda was in driving this farce.

    They’ll be the lucky ones. Other people, little people further down the food chain, won’t get the luxury of a Public Inquiry. Their stigma remains, following their own moment in the headlights of a witch hunt.

  • I’ve not put in any FOI requests, Mick, but I’ve just received some clarification from the Shareholder unit about the meaning of the Minister’s “community conference”.

    “The second interim NED should be an individual who holds the public’s confidence. They would ideally have previously fulfilled roles where a high moral standing, strong integrity, and consumer/ public interest have been clearly visible.”

    I’ve now asked for a listing of the categories under which each of the six NEDs has been appointed and whether or not the seven principles of public appointments were used in this ’emergency’ selection process, in particular the diversity one.

    I’ll now ask NI water for a copy of those October minutes.

  • An organogram of the governance relationships linking NI Water, DRD, CRD, PAC and NIAO 9including their significant component parts) would be very illuminating if anyone is up for the task!!

  • Mick, NI Water subscribes to the ICO Model Publication Scheme and this scheme directs authorities to publish material online. Other authorities, but not the ‘open and transparent’ NI Water, publish agendas, supporting papers and minutes. Another stick to beat NI Water and its bosses with?

  • William, if our elected representatives won’t speak up for the Plain People who are the victims of such witch hunts who will?

  • Oracle

    Thanks drumlin…… what a civil service mess

  • William Markfelt

    Nevin, I am taking some heart that the Plain People appear to be getting some representation from, at the very least (and almost in isolation) the SDLP.

    Mr. McGlone and Mr. Dallat both appear to be doing sterling work in this respect.

  • This is an important move by the SDLP, William. According to the Grapevine some SDLP folks might now be playing catch-up on the Rathlin ferry saga where another member was an obstacle.

  • Mick Fealty

    I started on one. But the significant relationships are the chain of command between McKenzie and the Board on one hand and the Permanent Secretary on the other.

    Line manager versus the Board?

    Nev, when you are putting in your FOI on 27th October, why don’t you ask a few questions about PC10, and the nature of the Board’s position as opposed to Mr McKenzie’s line manager.

    My suspicion is that there lies at least one real reason for McKenzie’s resignation in January… In particular the Department making demands from Mr McKenzie that the Board in all clear conscience could not accede to.

    The rest is just a convenient fiction.

  • William Markfelt

    I hope that is the case Nevin, regarding both NIW and Rathlin Island ferry.

    I know that there are families who suffered greatly as a result of great failures by the likes of the NIAO in respect of the ferry escapade. Which is partly the reason why I would like to see the NIAO dragged into the NIW issue and ceremoniously keel-hauled.

    I guess this is a suitable maritime metaphor?

  • Pigeon Toes

    This former member of the community is laughing their socks off.

  • Comrade Stalin

    I’m in the same position as Oracle is but I’m not sure what the actual story is.

    Tell me if I’ve got this wrong. Is the basic ideal that there may, allegedly, be systemic issues around procurement and contract awards within NIW, and that there appear to have been efforts to scapegoat the non-executive directors ?

  • Mick Fealty

    CS,

    The procurement issue appears to have been a means of tainting the Board before sacking them. Why? Well, that is one question to which I can say, I don’t absolutely know. Though I have some strong suspicions.

    The timeline is full of little details which raise serious questions over the very legitimacy of the whole exercise (and from which Deloitte has so far creamed a cool £24,450 – plus another £6,300 just to check work on the internal review).

    Take this for instance:

    “Thursday, 21st January – Just after midnight, Priestley writes to Gary Fair, Head of the Shareholder Unit reporting back from meeting with IRT and also asking him for clarification of what they might need to sack Directors. Later in the day, the Board gets sight of a full copy of Brennan’s Audit Report (note that McKenzie has it from the 12th January).”

    So Priestley is already planning to sack the Board for not acting on a report they have still not read?

    Then there’s the Department’s ropey explanation over those BLOCK CAPs in the Perm Sec’s email to the Auditor General.

    Meanwhile that quaint notion of the Noble Lie is, in this case, hanging by a very meagre thread…

  • This from the NIW Annual Report 2009/2010 authorised by the Accounting Officer on 29 June 2010 and laid before NIA by DRD on 23 July 2010:

    Procurement of goods and services – It became apparent, in October 2009, that there were irregularities in the award of a particular contract let in April 2007 with regards to an assignment of that contract in February 2009. I made the Departmental Accounting Officer aware of these irregularities and agreed to pursue further work aimed at identifying the possibility of other such exceptions. I received an internal audit report in January 2010 which pointed towards further significant issues in procurement governance. The Board and the Departmental Accounting Officer were made aware of these issues. In response the Departmental Accounting Officer and I appointed an independent review of procurement governance in NI Water. The Independent Review Team (IRT) published its report on 25 February (this can be found on the DRD website) and was presented to the DRD Minister in March 2010. In the light of this report he decided to remove the Chairman and three non-Executive Directors from the Company’s Board.”

    MacKenzie’s choice of words (highlighted) is rather strange. Was he directly involved in the appointment of the Independent Review Team?

  • “Line manager versus the Board?”

    There may be several overlapping stories at play here; NIW’s difficulty could have been Minister Murphy’s opportunity.

    The key players seem to me to be Murphy, Priestly, MacKenzie, Mellor and Donnelly. Who kicks ass and who are the weakest links; who are the rottweilers and who the poodles. Whose cronies have been slotted into positions of power and/or influence since April/May 2007? When is ‘independent’ a cover for ‘in-house’?

  • Comrade Stalin

    Can I play devil’s advocate a bit here ?

    If there is some sort of malpractice going on and officials know who is responsible, the decision to sack whoever it is will likely already have been made. Isn’t it normal in these scenarios to have a report which records the facts before the decision is implemented ? The fact that the decision to fire people has been made before the enquiry has completed surely does not mean that the decision is wrong. All it highlights is that these enquiries are a paper exercise but hey, we all knew that already.

    I wouldn’t want to overcook the block caps thing too much. The first letter he typed when the caps began was “A”, and “A” is right beside the caps lock key, so it’s not possible that he miskeyed it. On my work email I know I have a “regards” note at the very end of the message which is inserted by the email client, and other colleagues do too. The only thing that I’m getting out of that is that the guy lacks the experience and common sense to know that a quick proof-read of emails is useful before sending them, and that it’s surprising that someone in such a senior role does not know this.

    Again, stop me if I’m wrong, but the main message I’m getting here is that officials here lack experience in dealing with political institutions and the media, and are not very good at communications. I attribute much of that to the up-until-now somewhat unaccountable bubble that is the NICS.

  • Pigeon Toes

    From that PAC meeting
    “Mr McLaughlin:
    Should I take that as a no and that you would not think it necessary to refer it to the anti-fraud
    unit?
    Mr Priestly:
    There has to be at least prima facie evidence of a fraud before it should be referred.”

    That doesn’t reflect DFP “guidance” and relevant legislation
    http://www.dfpni.gov.uk/df1_08_11649__dfp_fraud_prevention_policy_-_revised_january_2008.pdf
    ” The Fraud Act 2006 came into effect on 15th January 2007. The Act states that a
    person is guilty of fraud if he is in breach of any of the following….

    Fraud by abuse of position, ie if he occupies a position in which he is expected
    to safeguard, or not to act against, the financial interests of another person, and
    he dishonestly abuses that position, and intends, by means of the abuse of that
    position, to make a gain for himself or another, or to cause loss to another or to
    expose another to a risk of loss….”

    Unless of course he has that it’s other peoples money paying for this…

  • Mick Fealty

    CS,

    “The fact that the decision to fire people has been made before the enquiry has completed surely does not mean that the decision is wrong.”

    True. But consider this very carefully: the inquiry was not into the problem of the Board. It was an inquiry into the issue the board was fired for not dealing with.

    But they were cashiered before they could deal with it. And further they were prevented from dealing with it because the IRT was in session before they got the report on Procurement.

    So if procurement was not the issue, what was? Wearing a loud shirt in a built up area?

    And why is George Butler and Ronan Martin (either of whom appear to have had anything to do with the supposed issue in hand) under investigation when the head of the Stakeholder Unit (who was right across all of these matters) is not?

    No ask yourself, if this stuff came up in the department controlled by a minister in your own party would you not make it your business to find out what on earth was going on inside the department?

    Or is what the civil service do no business for politicians anymore?

  • Pigeon Toes

    “The fact that the decision to fire people has been made before the enquiry has completed surely does not mean that the decision is wrong.”
    Elsewhere, subjects of similar IRTs have been able to comment/predict in writing on the findings of “Independent” Reviews BEFORE THE REVIEW WAS CONCLUDED, OR INDEED PUBLISHED.

    Which was um foolish.

    (Apologies, but that darned Caps lock is a bugger to switch off)

  • William Markfelt

    ‘Okay, back to the main story. There’s a nice piece by Martina Purdy which probably sums up most people’s feeling about this Byzantine tale from NI Water. It’s interesting that she concludes with a note that the Minister is refusing to comment on the story, despite the fact that what is under examination here is the behaviour of his own Permanent Secretary.’

    And then, a week later, he comments.

    It’s classic ‘losing the PR argument’ tactics.

    First, claim you aren’t going to comment. Then when the PR battle is being lost (and given the relative paucity of commentary elsewhere, it almost infers that Sluggers is -whether it knows it or not- worrying the key figures) make a comment to try and nip the losing battle in the bud.

    Generally, at this point, those winning the PR battle re-focus their efforts and then those who didn’t comment, and then did comment, are losing face as well as the PR battle, and the whole thing comes off.

    How often have we seen this ‘I’m not commenting, oh all right, I’d better comment’ scenario played out before by proper politicians?

    Commenting almost simultaneously to the news that UTV are going to air on the topic is very, very interesting. It’s now wholly evident that the Minister is extremely worried about how this is going or, more likely, his Secretary is driving the Minister’s worry.

    What (or who) changed Murphy’s mind about not commenting? Mark my words, someone, somewhere, is bricking it right now. Often, it’s the prelude to deciding to ‘deciding to spend more time with my family’.

    Norman Fowler. Alan Milburn. Dozens, maybe hundreds, of others. Even Peter Robinson inched towards it when he was roundly thrashed by Naomi Long (although it’s perhaps best to draw a veil over the mental images that sentence conjures).

    No, I think we can conclude that the Minister is exceptionally worried, either on his own, or his Secretary’s, behalf.

  • William, it will be very interesting to see how wide-ranging the UTV programme is. If UTV ignores the new NED selection process it will also be under fire.

    MÓM may be in Hawaii but his utterances are doing the Minister no favours. Strangely enough MÓM’s name doesn’t feature in the published FoI’s which relate to new NED selection. Was he selected using the same process as the others?

    Curiously enough MÓM and Padraic White are both part of the West Belfast and Greater Shankill Enterprise Council – alongside Belfast Telegraph commentator, John Simpson. Perhaps John will examine the representative nature of the six new NEDs in his next item on NI Water.

  • William Markfelt

    ‘I see Senator Mary White’s husband Padraic is taking on the role of Chair for NI Water. I hope he has a guarantee that he cannot be sacked for failing to address a problem he’s not been told about until he’s actually under investigation.’

    We should, perhaps, remind ourselves that Mr. White oversaw the building of LUAS. Three months before it was due to open, serious defects in the lines were discovered that compromised passenger safety. Despite being told of this, Mr. White, or more accurately the board of which he was Chairman, chose to plough on with its opening.

    The RPA decided not to tell Minister of Transport Seamus Brennan or the Taoiseach, Bertie Ahern, about this.

    Which all bodes well for NIW. They can sure pick ’em.

    Perhaps it’s not the issues he’s NOT told about we need to worry about, but the ones he IS told about.