Eoghan Kenny Presses Witness on Missing €4m and £8m Loan Bid
Eoghan Kenny questioned Mr Daugherty about alleged financial irregularities at the Peter Macfrey Trust, including an empty Capricorn donation account and a last-minute £8 million loan application. Kenny pressed for clarity on recovered funds, the chair's withholding of a briefing note, and whether trustees should consider Gardaí referral.
Mr Daugherty said he began with the Peter Macfrey Trust as Fundraising Communications Officer in October 2012. He told the committee he rarely saw senior management decisions directly and that the organisation had a limited press profile in his early years.
During his testimony Mr Daugherty said the Capricorn donation account, which should have held four million euros, was found empty. He described efforts to trace the money, identified transfers to a CC and to New Directions, and said €350,000 was recovered while other sums were shown not to have been spent on agreed property purchases.
Mr Daugherty gave the chair a briefing note dated 6 July 2023 that he expected to be shared ahead of an emergency board meeting, but he was later told the note had not been circulated. He said the chair's immediate reaction to the findings was one of shock when informed of the missing funds.
Kenny questioned the timing of a loan application submitted by the former long-term CEO about an hour and a half before his role ended. The application was for £8 million to a pillar bank; Mr Daugherty said the board had previously discussed seeking a smaller loan of £4-5 million for cash flow but that the £8 million application was only seen by him and the chair after it had been submitted.
Mr Daugherty said his immediate actions were to recover funds and to report findings to the chair and trustees. He and the deputy CEO sought independent legal advice and on 18 September 2023 wrote to the chair and trustees asking them to reflect on whether to investigate the former CEO and the former auditor and whether the matters should be referred to the Gardaí. He also noted the former CEO remained on payroll until the end of July while still in charge of the charity's finances up to 11:59pm on his final night.
Background of the witness and role
Mr Daugherty said he began with the Peter Macfrey Trust as Fundraising Communications Officer in October 2012. He told the committee he rarely saw senior management decisions directly and that the organisation had a limited press profile in his early years.
Discovery of missing Capricorn funds
During his testimony Mr Daugherty said the Capricorn donation account, which should have held four million euros, was found empty. He described efforts to trace the money, identified transfers to a CC and to New Directions, and said €350,000 was recovered while other sums were shown not to have been spent on agreed property purchases.
Board briefing and chair's actions
Mr Daugherty gave the chair a briefing note dated 6 July 2023 that he expected to be shared ahead of an emergency board meeting, but he was later told the note had not been circulated. He said the chair's immediate reaction to the findings was one of shock when informed of the missing funds.
Timed loan application by the former CEO
Kenny questioned the timing of a loan application submitted by the former long-term CEO about an hour and a half before his role ended. The application was for £8 million to a pillar bank; Mr Daugherty said the board had previously discussed seeking a smaller loan of £4-5 million for cash flow but that the £8 million application was only seen by him and the chair after it had been submitted.
Reporting, recovery and recommended next steps
Mr Daugherty said his immediate actions were to recover funds and to report findings to the chair and trustees. He and the deputy CEO sought independent legal advice and on 18 September 2023 wrote to the chair and trustees asking them to reflect on whether to investigate the former CEO and the former auditor and whether the matters should be referred to the Gardaí. He also noted the former CEO remained on payroll until the end of July while still in charge of the charity's finances up to 11:59pm on his final night.
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Transcript
Thank you Mr Daugherty, number one for coming in and number two for the service he has given to the State. Mr Daugherty, when did you begin working with the Peter Macfrey Trust? I began working with the Trust as Fundraising Communications Officer around October 2012. In October 2012, when you were in the Communications Office, did you ever question anything in relation to financial management, senior management team, former CEO? No, and I suppose the layers between me and senior management were several. There was... In any press releases or anything like that, did you ever believe this isn't right? No, I wouldn't put out anything that I didn't understand or scrutinise myself. That I would be able to answer the questions from the journalists. And the organisation actually had a very limited press profile for the first couple of years. And were you surprised that the former CEO was deciding to step down? Yeah, absolutely. It wasn't something that would have been on my radar. Did you decide immediately you wanted to be the next CEO? No, no. My anticipation was that the then Deputy CEO who had been there for a long number of years and had worked with the long-term CEO previously to that, that they would automatically be the next CEO. So on the 11th of May, when you were asked to come to the AGM, your first AGM, the Board advises you at that AGM that the Peter Macfrey Trust could not be handed over in better financial health. What did you believe about that at the time? Did you believe that was true? The only thing I thought was that there was cash flow pressures and the creditor as well. But the person that actually stated that was a very experienced CFO for multinational, so they had better financial experience than I did. The Capricorn donation account, which should have had four million euros in it, and you found out it was empty. What did you do at this stage? The initial action was to try and find out what happened, where the money went, what it was spent on, because I knew that the agreement related to a certain number of properties that the Trust had agreed to purchase, and none of those properties had actually been purchased. So my immediate focus was trying to find out where the money had gone. Then when I understood that the money had gone to a CC, it was to try and track down and recover that money. And then ultimately $350,000 was recovered. There was also information then that was used to identify that the million euro hadn't been spent. And then that was reported back then to the chair of the organisation as well. And what was her response to that? I suppose obviously one of shock. There was a briefing note that I prepared. Did she share that information with the other trustees? The briefing note that I gave to her on the 6th of July 23, that I requested to be shared ahead of the emergency meeting, board meeting a few days later, wasn't actually shared by the chair. That's what she advised me in September of that year. You believed that it was shared? Yeah, absolutely. The whole point was to prepare this note to the wider membership of the board, so that an informed discussion could happen on the 11th of July. When you went on annual leave and you came back to find Mr. Doyle waiting for you at your office, what was your initial reaction? Should I refrain from my former CEO? That he was clearly worried as to what I had asked for. The initial thing was that there was a meeting scheduled for 10am with myself and two other people and the former CEO. But on the way in the door, he asked me to not go into the building, to walk with him in the park to discuss matters. At that conversation in the park, you found out that the money was sent to New Directions for the payment of their new employee and within seven days that was since given back. Did you not believe it appropriate at that stage that the conversation you had should have been reported to Angarda Shea Kana? There was two pieces that I did. One, get the money back, and two, report it to the chair and the board of the organisation. Did you ever advise to the board that it was your firm belief that because of the conversation you've had that you believed there was no compliance with the finances within Peter McFerry Trust, that you believed personally, or in your capacity as the CEO, that this information should be provided to Gardaí? So that was why myself and the deputy CEO at the time, on 18th of September, 23, wrote to the chair and the trustees after we had sought independent legal advice and asked that the trustees reflect on whether it was appropriate to investigate the actions of the former CEO and the former auditor. Okay, thank you. Did you know on the 30th of May, on the 31st of May, that the former CEO had applied for a loan and a credit facility? So the former long-term CEO was in charge of Peter McFerry Trust's finances up until 11.59 on the night he left. He applied for the loan an hour and a half before his term expired. The loan application was for £8 million to one of the pillar banks. Did you advise the CEO or the chair immediately that it was within an hour and a half of him finishing his role as CEO that he had applied for this? The application was forwarded to myself and the chair after it went in. So I rang. Like this was late at night? Yeah, yeah, so I didn't see it until the following day. So the board had previously approved the organisation looking for a loan of between £4 to £5 million to help with cash flow. But this, to my mind... What was the chair's reaction to that? Like obviously your reaction was pure shock. What was the chair's reaction? Was she aware of it? She was aware after the fact. Was she aware previous to the 30th of May that he was going to be applying for this? No. And she didn't... To clarify, the board had agreed to retain the previous CEO on the payroll to make him available to them up until the end of July. So at no point did they go back and say... So they were paying him for two extra months even though you were the CEO? Yes. So at no point did they go back and ask for clarity on any of these matters. Do you know what his salary was? Off the top of my head, no. But it was... Annualised it was around €130,000. So they paid him for two months and he did no work, like? He was available to answer queries. That was the retention. Can I just very quickly ask, when you met with the Minister for Housing, did you outline to him any of the concerns you've had in relation to the conversations you've had with either the previous CEO or the chair? So at the original meeting on the 1st of June, it would have been clear that there was cash flow pressures, there was issues... Did you say that he might have met the former CEO in a park and he's told me about these situations? He's actually... That was probably made aware to the Minister at a later date on an event. Did you not believe it was necessary to make the Minister aware immediately? So the... Really, it was about focusing on getting the full facts, whether the money was going to be recoverable or not, making sure that if I was going to be going in and briefing somebody as to what was happening, that I knew that whatever I was going to say was true or not. Can I quickly... Just quickly... Sorry, in fairness. I'll come back here. Yeah. Thanks very much.