THE US TOURISM arm of State transport company CIÉ has had to pay back more than $4.28 million to the American government after a whistleblower flagged that it should not have received the money in pandemic-era supports.

The sum was paid back by CIÉ Tours – a New York-headquartered company that is a wholly owned subsidiary of the CIÉ Group. The wider group contains Bus Éireann and Irish Rail, with CIÉ Tours a separate entity.

In response to questions from The Journal, the CIÉ Group said it entered into a settlement to pay back loans worth $3.4 million with “no admission of liability, wrongdoing, or violation” of the programme’s rules.

The money will be “fully accounted” for from CIÉ Tours’ own resources, with “no exposure” to the Irish State’s finances under the terms of the agreement.

CIÉ Tours is a US corporation with 134 employees, 82 of whom are based in the company’s offices in Morristown, New Jersey.

The company offers package tours across North America, Ireland and other European destinations – with one of its most popular advertised tours offering ‘the very best of the Emerald Isle’ including spots like the Ring of Kerry and the Cliffs of Moher.

The settlement followed a US Department of Justice enquiry into the company’s eligibility for two loans, in April 2020 and March 2021, prompted by the whistleblower’s complaint.

The repayments and added costs totalled $428,985.04, equalling roughly €3.4 million.

The investigation, which began in March last year, found that CIÉ Tours was technically a foreign “government-owned” entity and, furthermore, that it was “ineligible” for the payments due to being classed as a large employer.

The incident has been described as “embarrassing” for the company by the Labour Party, whose transport spokesperson Ciarán Ahern has said “more answers are needed” over the payments.

According to the US Attorney’s Office for New Jersey, CIÉ Tours “entered into a settlement agreement” after the issue was investigated.

These “resolved allegations that the company violated the False Claims Act by applying for and receiving two loans” from the Paycheck Protection Program (PPP), the attorney’s office said in a statement in December. That statement added that the company was “not eligible” for the loans.

The incident has not been reported in Ireland until now.

According to the New Jersey attorney general, CIÉ Tours “fully cooperated” in the investigation and resolution of the issue.

The whistleblower received “$428,985 as his share in the recovery” for reporting the claims thanks to unusual provisions in US law.

These allow whistleblowers to be rewarded for confidentially disclosing incorrect claims for government supports that have resulted in a financial loss to the US government. The whistleblower is entitled to a reward of between 10% to 30% of the collected proceeds.

‘Great uncertainty’ for company

In a response to The Journal, a spokesperson for the CIÉ Group said that CIÉ Tours applied for the loans “at a time when our business as a US employer in the tourism industry was being devastated” due to the pandemic.

The spokesperson said that the programme was applied for after receiving external advice and that it was conducted during a period of “great uncertainty and difficulty” for the company.

When the US Department of Justice initiated enquiries, CIÉ Tours began “voluntarily producing information concerning its PPP loans and its basis for obtaining them”.

“Following notification of the inquiry from the DOJ, and in the interest of avoiding an expensive and time-consuming litigation process, CIÉ Tours elected to enter into a settlement to pay back its two PPP loans, with no admission of liability, wrongdoing, or violation of PPP program rules,” the spokesperson said.

Thanks to the loans, the roles of “many employees whose jobs and families were saved”, the spokesperson continued.

“Prior to making application for its PPP loans, CIÉ Tours investigated and obtained external professional advice, and, on the basis of that advice, CIÉ Tours believed in good faith that it qualified and met the eligibility standards,” the spokesperson for CIÉ Group said.

“At its heart, the PPP was designed and intended to preserve jobs and associated benefits during the unprecedented chaos and uncertainties of the pandemic. CIÉ Tours accepted and utilised the PPP loans for those very purposes and to preserve local jobs and employee income.”

Under the terms of the loans, they would have had a 1% interest rate and been due within 2-5 years, unless they were forgiven.

According to the New Jersey attorney’s office, CIÉ Tours sought and received forgiveness of the total amount of the loans before eventually having

Transport committee

Labour transport spokesperson Ahern said he wants to see CIÉ Group bosses answer questions on the issue before the Oireachtas Transport Committee.

“There are loads of questions about this. How much control, if any, is exercised over CIÉ Tours, as it is a State subsidiary. But also where the checks and balances, and has anyone been held accountable for this?” the Dublin South-West said.

Ahern added that it was “really embarrassing and potentially damaging to Ireland, given the upcoming Oval Office meeting” between the Taoiseach and US president Donald Trump.

When asked about this, the spokesperson for CIÉ said it “would be happy to discuss this matter with the Committee, should they propose to do so”.