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11-10-2009, 10:53   #1
 
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CIÉ is rotten to the core - SHOCK REPORT!

From today's Sunday Indo comes the surprising news that CIE's mismanagement of its operations makes FAS/John O'Donoghue/Mary Harney look good. What a surprise!

Kickbacks, waste and bogus orders costing CIE millions
Top secret report blows the lid off litany of rampant abuses at the semi-state transport giant
Sunday Independent - October 11 2009
AN explosive top secret report on Iarnrod Eireann has found that kickbacks, squandering of millions of euro in taxpayers' money and collusion with contractors, and incompetence has been rife in the loss making semi-state company for several years, a Sunday Independent investigation can reveal.

The damning report which covers close to €120m in third party contracts and spending reveals that the taxpayer faces losses of nearly €9m as a result of rampant malpractices and lack of controls at Irish Rail. "We also note from internal investigations and internal reports that several other inspectors are suspected of involvement in fraud or collusion with vendors," the report notes. It also highlighted dealings with one contractor where it could find "little documentation available to determine whether the job had been completed or not".

The state gives CIE over €300m per year to disperse among Iarnrod Eireann, Dublin Bus and Bus Eireann. CIE is the second massive semi-state company to be exposed for squandering taxpayers money, following Sunday Independent revelations about FAS last year.
CIE has confirmed that the report, which was completed nearly 18 months ago by consultancy firm Baker Tilly Ryan Glennon, was given to the Iarnrod Eireann board audit review group and the main CIE board audit committee. "The implementation plan arising from these recommendations is progressing well," said a CIE spokesman.

However, the Sunday Independent has learnt that one of the key contractors highlighted in the report -- a major Irish firm -- has yet to be informed of the findings. It is also believed the company in question continues to conduct millions of euro of business with the CIE group. A copy of the report has been sent to the Garda Bureau of Fraud Investigations.

CIE, which is chaired by John Lynch, ordered an investigation into theft and malpractice at the semi-state following the break up of a railway equipment theft racket by Wicklow gardai in July 2006. The scope of an investigation was widened to include contract and tendering practices, which had been subject to internal speculation for some time. Baker Tilly completed the report in May 2008. Apart from Lynch and a glut of worker directors, CIE's main board includes Offaly property investor Seamus Sheerin, former Smurfit executive Dermot Killen and university professor Yvonne Scannell.

The discovery of these extraordinary breaches of company tendering policy and suggestions of collusion may lead to major litigation against the semi-state body, Baker Tilly has warned. Massive amounts of grant aid from the European Union have been lost to the Irish taxpayer as a result of the tendering chaos.

The report, which has never been revealed in public, focussed on a very small part of Iarnrod Eireann's operations but warned that abuses were obvious at other parts of the business. "Further significant breaches were found in areas which are outside the scope of our report including significant non-compliance" in other key departments, the report notes. The authors' determination to keep the contents under wraps was underlined by their decision to number all copies.

The forensic investigators, who questioned key management and staff, found that some employees were "manipulating transactions so that they remain within their procurement authority thus enabling them to appoint their chosen or contractor". It added "there is high likelihood of collusion between one of the[key maintenance staff] and one of the vendors."
The report considered these activities a " serious breach" of procurement policy as large value transactions can be manipulated to reduce their size to smaller amounts "thus bypassing controls set up to govern larger procurement transactions".

Missing documentation was another obstacle to the investigation, the report said. It claims there are frequent cases of missing quotes, missing original documentation or cases where purchase orders were set up based on a lower number of quotes than what is required to comply with procurement policy". It spells out incorrect documentation, faulty invoicing, non-compliance with procedures and an absence of supporting documentation in respect of plant hire as major flaws in the procurement process.

Baker Tilly expresses particular concern over a case where a contract was issued for removal of soil at Dublin's North Wall/Spencer Dock project. Iarnrod Eireann lost nearly €900,000 on this project alone. The company's New Works Division prepared a tender package for the removal of hazardous and non-hazardous soil in 2006. One company tendered unsuccessfully for the contract to remove the soil. Another company won the contract but the first company later sent in invoices that were paid. Iarnrod Eireann maintains the first company was never hired to, nor ever perform the soil removal. This extraordinary incident leave Iarnrod Eireann exposed to the loss of up to €257,000 in possible EU grants. These companies and the names of the contractors have been identified by the Sunday Independent but as yet cannot be named for legal reasons.

Under the heading "Collusion with Contractors" the consultants report that in one instance an inspector had been signing fraudulent time sheets or requesting labour and plant hire when not required. The report states that they had been advised by earlier internal investigators that an employee had been receiving a "kick back" of 25 per cent of the proceeds from the transaction. They quantified the loss to the company as a result of several fraudulent invoices in this area to be €272,000 over a number of years. The employee in question is believed to have repaid Iarnrod Eireann €100,000 in compensation.

Transactions with another third-party contractor -- one with employee links to CIE -- cost the state-owned company a minimum of €1.6m due to breaches of procedures, the report found. The consultants emphasise that they have not been able to monitor all transactions with the company due to volume, time constraints and IT system constraints.

Specifically turning to the Rosslare and Westport lines the consultants calculate that the company has lost nearly €800,000 on these two projects; the loss is due to further loss of eligibility for EU aid due to the breaches of procurement policy. Similarly it warns of a significant risk of a claw back of grant aid to the value of €798,000 on the development of radio sites along the Mini CTC signalling project.

Assessing the risk of future losses the report says they could be substantially reduced if a new procurement policy was enforced. A difficulty arose because the company failed to provide them with a roadmap of future projected expenditure. Items chosen for immediate review included the relationship of certain named suppliers with Irish rail staff, the estimated losses in Dublin's North Wall and the estimated loss of stock in Portlaoise .

Last edited by Victor; 11-10-2009 at 20:52. Reason: [font][size], paragraphs
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11-10-2009, 11:01   #2
MagicMarker
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Paragraphs?
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11-10-2009, 11:06   #3
 
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http://www.independent.ie/business/i...s-1910407.html

Hope this is what you are looking for.
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11-10-2009, 11:22   #4
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What are the procurement procedures relative to contract values?
i.e. under €2,000 three quotes are required
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11-10-2009, 20:35   #5
 
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FFS. The Sunday Sindo was quite a read today. Between CIE/IE drama and Bertie Ahern it all sat very nicely together.

By the way, Im a proud former IE contractor that was paid twice for a job I did once. Nice one lads!

Based on my former profession, I can confirm that this story is just the tip of the iceberg. I dealt with FAS aswell. Glad to see its all starting to spill over.

For a link, just think about the FAS dude in court over the video production scam.
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11-10-2009, 22:56   #6
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wouldn't surprise me if there were kickbacks in the tendering process for producing this report
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12-10-2009, 17:04   #7
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The thing is that what'll happen is that this will be used/spun as proof that "public transport investment is bad for the country's finances", and not that CIE is bad for public transport. This is how they have always got away with this in the past.

The end result of all this will be scrapped rail lines and closed bus routes rather than guilty individuals in CIE being punished.
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19-11-2009, 10:20   #8
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Irish Rail dismissal after second chance deemed fair

http://www.irishtimes.com/newspaper/...259108686.html
Quote:
Irish Rail dismissal after second chance deemed fair
ANDREW BUSHE

AN Iarnród Éireann supervisor who narrowly escaped dismissal in connection with a rail and sleeper theft scam has lost an unfair dismissal claim after he was later fired when the company discovered payments for work that was not done.

Damien Smullen, Friars Hill, Wicklow, an acting permanent way inspector, was first recommended for dismissal in March 2007 for alleged involvement in the illegal disposal of rails and sleepers, the Employment Appeals Tribunal was told.

After an ad miseracordiam appeal heard by Iarnród Éireann’s director of strategy and business development in the presence a union official who is also a worker director, it was decided to give him another chance. The decision was subject to a number of conditions, including payment of €100,000 in recompense, a final warning and two years of special monitoring.

“During this period, should new evidence of past wrongdoing emerge which was not currently available or any breach of any element of discipline, there will be a mandatory sanction of dismissal,” the appeal finding said.

The appeal resulted in Mr Smullen being allowed to resume his career after taking into account his “admissions and his family circumstances, including the record of his father”, his work record and the “apparent co-operation given to the gardaí . . . ”

It said “inappropriate activity” was admitted “both internally and before the law courts” of a particular instance where Mr Smullen was involved in arranging the theft of company materials to sell them and share the profits.

It was also acknowledged that there were “many other instances of a similar nature over a long period of time”. Mr Smullen also admitted that he had engaged in “other inappropriate activity”, which resulted in personal gain and cost to the company.

However, following his reinstatement, Mr Smullen was dismissed in January 2008 after alleged discrepancies subsequently emerged surrounding a €250,000 bill to remove spoil from the site of a new Dublin Docklands station.

Mr Smullen was civil supervisor on the site in early 2006 but the audit discrepancies did not emerge until after he got his job back. The tribunal was told Iarnród Éireann’s position was that Mr Smullen had signed off on invoices which showed that more than 600 truck-loads of spoil, representing 11,000 tonnes of material, were removed from the site by a particular contractor.

The company’s investigations suggested that 23 truck-loads, representing 409 tonnes of spoil, was the limit of the contractor’s involvement. Iarnród Éireann said Mr Smullen’s direct supervisor, who was also the subject of disciplinary action arising from the audit, had approved the invoices.

Mr Smullen claimed that in preparation for a ministerial visit, he used his discretion to send material from the site to the Point and from there to the tip.

The tribunal said that under cross-examination, Mr Smullen conceded that, contrary to his direct evidence, he had nominated which contractors were to be used for particular operations at the site.

The tribunal said yesterday it was reasonable for Iarnród Éireann to conclude from the extensive audit that there was “a serious discrepancy” between the amount of material removed from the site and what was invoiced for by the contractor. It also said it was reasonable for the company to conclude that Mr Smullen was involved in this discrepancy and his dismissal for misconduct was not unfair.
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19-11-2009, 11:30   #9
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I'm reading this in amazement:
Quote:
Originally Posted by article
It said “inappropriate activity” was admitted “both internally and before the law courts” of a particular instance where Mr Smullen was involved in arranging the theft of company materials to sell them and share the profits.

It was also acknowledged that there were “many other instances of a similar nature over a long period of time”. Mr Smullen also admitted that he had engaged in “other inappropriate activity”, which resulted in personal gain and cost to the company.
...but this self admitted (after he'd been caught) thief was not fired by Iarnrod Eireann immediately! Can you imagine if you worked for a private sector firm and stole at least €100,000 from them? They'd not only fire you they'd insist you were prosecuted for the criminal offence you'd committed.
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19-11-2009, 12:04   #10
 
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Originally Posted by DWCommuter View Post
By the way, Im a proud former IE contractor that was paid twice for a job I did once. Nice one lads!
Did you return the money?
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19-11-2009, 12:12   #11
 
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This guy is only small fry, it's the fat cats at the top who should get the chop and have their financial shenanigans investigated.

Last edited by Judgement Day; 19-11-2009 at 12:18.
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19-11-2009, 13:29   #12
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Originally Posted by Victor View Post
http://www.irishtimes.com/newspaper/...259108686.html
The appeal resulted in Mr Smullen being allowed to resume his career after taking into account his “admissions and his family circumstances, including the record of his father”, his work record and the “apparent co-operation given to the gardaí . . .
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19-11-2009, 13:48   #13
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Quote:
Can you imagine if you worked for a private sector firm and stole at least €100,000 from them? They'd not only fire you they'd insist you were prosecuted for the criminal offence you'd committed.
Interestingly enough in what was the doyen of the "Private Sector",the banking industry,it was dei-facto policy for many years (and may still be) not to prosecute employees in similar situations once restititution had been made.

The higher echelons appeared to feel that any attendant publicity surrounding the "day in court" would only serve to reduce the Banking sectors standing in the community......Ah...those were the days Joxer...
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19-11-2009, 14:07   #14
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Originally Posted by Judgement Day View Post
This guy is only small fry
Several hundred thousand euro is hardly small fry.
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19-11-2009, 14:13   #15
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D'Peoples Voice - surely the fact that IE is a system built on family trees is not news to you? It's sort of like the Dail that way.
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