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Minister Michael Creed and Horse Racing Ireland defend 20-year term of CEO Brian Kavanagh

Creed has said he consented to a new contract for Brian Kavanagh, who earns €25,000 above government guidelines.

HRI chief executive Brian Kavanagh (left).
HRI chief executive Brian Kavanagh (left).
Image: Rollingnews.ie

Updated 9pm

HORSE RACING IRELAND has defended the reappointment of its chief executive on a salary of €190,773, which breaches the specified salary range for a commercial State body by €25,000.

Minister for Agriculture Michael Creed has confirmed that he and Minister for Public Expenditure Paschal Donohoe gave consent for Brian Kavanagh’s third five-year term as the CEO of HRI, following lobbying by HRI chairman Joe Keeling.

Government guidelines stipulate that CEOs of semi-state organisations should serve no more than a single seven-year term.

Kavanagh has been chief executive of HRI since 2001, and began a third term of five years last weekend.

According to the HRI latest accounts Kavanagh’s current salary is €190,773 but, since 2011, the specified salary range for the position of HRI CEO is €137,356- €164,231.

He also receives €56,000 in pension contributions and other taxable benefits every year.

The HRI received almost €60 million in taxpayers’ money this year, up from €45.83 million in 2011.

McConalogue Fianna Fáil's Charlie McConalogue asking questions of Minister Creed this evening. Source: Oireachtas TV

Limited

The Joint Oireachtas Committee on Agriculture is currently in session, and is discussing “issues surrounding  the recent reappointment of the CEO of Horse Racing Ireland”.

This evening Minister for Agriculture Michael Creed tonight reiterated his written Dáil reply on 16 September, when he acknowledged that guidelines on contracts for the CEOs of state bodies provide for a seven year period of appointment.

“There is an issue, however with the sequencing of events,” Creed said this evening.

“In essence, I understand the board had not had a prior discussion about” the reappointment of the CEO when the chairman had contacted the two ministers for their consent.

Creed said this was unfortunate, as the appointment could only be effected by the board.

He said he is satisfied that the HRI board is satisfied that the best outcome has been achieved.

“The business case was the basis of the reappointment,” Creed added. He said that the first letter from the HRI chairman said it was from the HRI board.

“I would have preferred if the sequencing of events was different. And I think the chairman of HRI acknowledges that as well.

“When I get a letter from the chairman I get the legitimate suggestion that the letter is on behalf of the board.”

Creed said that if the board did not want the CEO to be reappointed then it was able to choose someone else. Asked if he was misled, Minister Creed said:

“The misleading has really to do with the sequencing. The issue is to do sequencing.

“I have very specific and limited roles… and they have to do with assenting to, or otherwise, the communication of the board in respect to” appointing a CEO.

Minister Creed added that the business case was presented in a letter, which referenced the HRI’s five-year business plan.

 

Creed Minister Michael Creed with EU Commissioner Phil Hogan earlier this year. Source: Rollingnews.ie

Unprecedented

Charlie McConalogue, Fianna Fáil Agriculture spokesman, said the reappointment of the CEO for a third time was unprecedented, and that serious issues remain over the procedures.

McConalogue asked that it was a serious matter whether the HRI chairman indicated whether he was acting on behalf of the HRI board, or whether he was acting as the chairman.

Clare Daly TD said that the justification for Kavanagh’s third term was that he had unique experience, similar to the reasons given for Pat Hickey’s continual re-election as President of the Olympic Council of Ireland.

Daly said the position was advertised prior to Kavanagh seeking a second term, but not for his latest, third term. She added:

Government guidelines are there for a reason… every organisation needs fresh blood.

Labour TD Willie Penrose said the “cart was put before the horse” when the HRI chairman gave a business case to the ministers without being put before the board.

Penrose said the Department of Agriculture should put together a value-for-money evaluation of Horse Racing Ireland, as advised by consultants Indecon.

Exceptional extension

Creed has previously admitted that he and Minister for Public Expenditure Paschal Donohoe had been lobbied by HRI chairman Joe Keeling.

“In the case of Horse Racing Ireland the chairman of HRI [Joe Keeling] made a case for an exceptional extension to the term of appointment of the CEO, based on a number of business imperatives,” Creed said.

“The appointment of the CEO is a matter for the Board of HRI under the relevant legislation. However, the consent of the Minister for Agriculture, Food and the Marine and the Minister for Public Expenditure and Reform is required.

In this instance both I and the Minister for Public Expenditure and Reform accepted the case made by the chairman and provided the necessary consents for an exceptional appointment by the board.

Creed added that the ministerial “consents provided permitted the board to retain the services of the CEO at his existing salary”.

HRI response

Horse Racing Ireland (HRI) is a commercial state body established under the Horse and Greyhound Racing Act 2001. It is responsible for the overall administration, promotion and development of the horse racing industry.

In a statement this evening, the board of HRI said it met today to review matters concerning Kavanagh’s reappointment.

Speaking about “elements of the commentary and misunderstandings which have followed, the HRI board said it regretted that “that this matter has become the subject of public concern”.

It added: “The board refuted [sic] suggestions that the chairman intentionally misled the relevant government departments with regard to the CEO appointment process.

Dating back to 2011, the then board mandated the then HRI chairman to advance outstanding matters regarding the resolution of the CEO’s contract and any related matters.

“This issue was transferred to the new chairman, Joe Keeling, on his succession to office in March 2013.”

The HRI board said that Keeling’s actions and intentions, over the CEO’s contract, “reflected its views”.

It added:

It also recognised that a more collegiate approach would have improved the process, but were fully agreed that there was no intention to incorrectly inform the Minister or that the board’s views had been misrepresented.

“The board, having endorsed Kavanagh’s appointment previously, confirmed today that it is satisfied that the best result for HRI and the industry has been achieved with the successful completion of the new CEO contract.”

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