At the end of a week when the RTÉ payments scandal has dominated the national conversation, it falls on me to comment on its place in The Currency’s coverage. Our Editor Ian Kehoe, who usually reflects on the week that was, is a member of RTÉ’s board and of its Audit and Risk Committee. This conflict of interest means that he has handed over to me editorial oversight of all coverage of the state broadcaster, which was reported on by Tom and Rosanna.

There are two reasons why the whereabouts of relatively small amounts of money – as far as we know to this day – have rightly become a talking point from the changing rooms of my public swimming pool to Oireachtas committees. For context, the €345,000 in hidden payments to Ryan Tubridy and the wider “€1 million to €1.25 million” reported – again, so far – by RTÉ’s chief financial officer Richard Collins to have transited through the company’s until recently off-balance-sheet barter account compare with the broadcaster’s annual revenue of over €340 million.

The first reason is that this was all the public’s money. The second one is the web of lies deployed to hide its use in certain scenarios from the public it belongs to. There is strong evidence that this lying has not yet come to an end.

For all the complaints about RTÉ’s dual funding and the risk of confusion between its competitive presence in the commercial advertising market and its mission as a public-service broadcaster, there is no doubt about who owns it and to whom it is answerable. The taxpayer owns 100 per cent of RTÉ as its shareholder, and is also its largest customer through the €200 million in licence fee remitted to RTÉ annually.

There is no corporate separation between RTÉ’s commercial and public-service businesses. Selling advertising to produce commercial programmes is in itself of no value to a state-owned broadcaster. This is best left to the private sector. RTÉ’s admittance into the advertising market is legitimate only because commercial revenue can leverage licence fee income to multiply public-service output – things like news coverage or commissioning of original works from Irish artists, which would be difficult to fund through advertising only.

This means that every euro paid to RTÉ for advertising is taxpayers’ money. Conversely, every euro foregone in advertising revenue, or diverted from commercial revenue streams for other purposes than public-service broadcasting, is taken away from the taxpayer.

It was apparent in outgoing RTÉ director general Dee Forbes’s resignation statement on Monday that she did not understand this. She described as a “cost-saving agreement” the short-lived arrangement that saw Renault pay €75,000 to Tubridy via his agent in 2020 in exchange for a €75,000 credit note against advertising airtime that the car brand would otherwise have paid for. 

This was directly contradicted the following day in the Grant Thornton report commissioned by the state broadcaster’s Audit and Risk Committee, which concluded that “in effect RTÉ funded the €75,000 payment to talent” that year.

Not only was there no saving, but RTÉ commercial director Geraldine O’Leary has since told the Oireachtas Public Accounts Committee that RTÉ also incurred a €30,586 cost to organise three Renault events at which Tubridy appeared under the agreement. Because this was paid with funds cashed out of RTÉ’s barter account (more on this later) the real cost of Forbes’s “saving” was over €47,400. It was a lie.

That was before the disastrous decision to underwrite similar payments to Tubridy for two more years whether the sponsor renewed the deal or not – a guarantee RTÉ’s interim deputy director general Adrian Lynch says was given verbally by Forbes on a video call with Tubridy’s agent Noel Kelly on May 7, 2020. (How anyone could soundly decide to underwrite payments based on attendance at public events while Ireland was six weeks into the first Covid-19 lockdown is a debate for another day.)

This justification for two more off-the-books payments of €75,000 each to Tubridy is convenient. The alleged verbal agreement was written down by a solicitor witnessing the video call between Forbes and Kelly, but RTÉ legal director Paula Mullooly told members of the Public Accounts Committee that they could not see those notes because they were covered by legal privilege. How one person’s verbal agreement came to be regarded as an enforceable contract remains a mystery.

These two subsequent payments, made last year, were invoiced by Kelly to Astus, the contractor managing RTÉ’s barter account in the UK, for “consultancy services”. When queried by auditors about these, Collins testified before the Public Accounts Committee that he went to Forbes and was told they were “consultancy invoices relating to services during Covid that Noel Kelly had provided … The services related to how RTÉ restructured its operations… He was giving advice to RTÉ as to how we dealt with sponsors.”

If this was what was said, it was a lie – the invoices were to make top-up payments to Tubridy. The purpose of the convoluted transaction was that they would not appear in Tubridy’s published earnings – another lie.

O’Leary, who managed the barter account, has said repeatedly that she cannot remember who had decided to label the invoices as consultancy services. Convenient answers are, at this stage, establishing a pattern of popping up after a lie is exposed.

The barter account itself has yet to reveal how much of the business conducted through it was legitimate and how much of its use was for obfuscation purposes by senior RTÉ executives. (There is no suggestion of wrongdoing by Astus in the operation of the account under RTÉ’s instructions.)

On Thursday, I reported on the details available about the barter account. In summary, it allows some clients to pay for some of their advertising bills to RTÉ in kind in the form of credits against their products or services.

The practice is widespread in commercial media. You can see where it could be of interest to RTÉ to use credits from advertisers to acquire goods or services that were useful to its public-service broadcasting mission – flights for its journalists to report abroad, for example.

If those credits are unused, RTÉ can cash in the value of the corresponding products or services – minus a 35 per cent commission for Astus, who then takes on the risk of selling them on elsewhere. This is what happened when RTÉ decided to honour the verbal agreement to pay Turbidy €150,000 by cashing out credits from the barter account, resulting in a cost after commission of €230,760.

Since Thursday’s Public Accounts Committee hearing, we know that this is also what happened when O’Leary travelled to the 2019 rugby world cup in Japan with one colleague and four unidentified “guests”. While the cost of the trip was €72,000, Collins told the committee it cost RTÉ €111,000 to cash credits out of the barter account and pay for it. O’Leary’s commercial team seems to have routinely left barter credits unused, converted them to cash at enormous cost and used the proceeds to pay for nicer travel and hospitality instead – “always with clients,” she insisted.

It is very difficult to understand why RTÉ would enter into barter deals with clients if it was not intending to use the resulting credits. There is no possible justification for acquiring tickets to sporting events, concerts and flights this way, when you could fund the same purchases out of cash and save the 35 per cent commission in the process. Unless, of course, you were trying to make those purchases away from widespread view.

“I was not happy with it when I saw it first,” said Collins, who added he brought the barter account onto RTÉ’s balance sheet after he took up his position in 2020. “It is outrageous. Expenditure like that should go through the procurement system. I believe that has now been put in place,” added Siún Ní Raghallaigh, the chair of RTÉ’s board. I asked RTÉ a list of further questions concerning the use of the barter account on Friday and received no response.

This one avenue for lies and dissimulation is now, hopefully, closed down.

*****

It so happened that transparency and accountability were to the fore in two unrelated interviews we published this week. 

Sean met Bank of Ireland’s chief executive Myles O’Grady as the bank saw the State leave its shareholding only last September for the first time since the bailout initiated in 2008. “For anyone who was part of the last financial crisis, those memories don’t fade. The scars don’t fade either,” O’Grady said. 

In his case, this continues to translate into an obligation to run Bank of Ireland with much higher capital ratios than European peers, which in turn has deep ramifications for its business.

I also interviewed European Ombudsman Emily O’Reilly, who moved to the EU watchdog role 10 years ago after holding the same position in Ireland. You can also listen to her on our podcast.

“The word I’d use to sum up the area which we’re involved in is influence,” O’Reilly said. “Who’s influencing? And how are people influencing EU legislation?” The tip of the iceberg is the cartoonish Qatargate scandal, which has seen European Parliament officials arrested with bags of cash. But there are more subtle ways of buying influence, she explained – such as the “revolving doors” allowing former regulators to move into well-paid connected lobbying jobs in connected industries.

Meanwhile, in a much-discussed first contribution to The Currency, Equine MediRecord’s founder Pierce Dargan brought up the cuts to young entrepreneur programmes north and south of the border and placed them in the context of what he sees as the shrinking space available to young people willing to start a business.