[Article] Dismissed Irish Rail director alleges €8.7m fraud in company

[Colm Moore]

Dismissed Irish Rail director alleges €8.7m fraud in company

IARNRÓD ÉIREANN’S human resources director John Keenan has claimed before the High Court that differences over the level of fraud in the company, allegedly costing up to €8.7 million, formed the background to his suspension last month.

The company has argued that Mr Keenan’s suspension should continue as a holding position pending investigations into his alleged 10-day delay in informing chief executive Richard Fearn of an €189,000 Equality Tribunal award to a female employee who alleged gender discrimination relating to promotion.

Mr Fearn had lost confidence in Mr Keenan as a result, Roddy Horan SC, for the company, said.

The company also said the suspension should continue arising from new allegations that Mr Keenan was involved in incorrect surveillance of employees.

It is alleged Mr Keenan was involved in 32 instances of surveillance of employee computer records, incorrect accessing of sensitive medical records and the placing of tracking devices on employees’ cars.

Mr Horan said the company believed Mr Keenan was using his office as a “personal fiefdom”.

Mr Keenan, who has been human resources boss at the rail company for 15 years, yesterday sought an injunction lifting the suspension imposed on him on December 3rd last by Mr Fearn.

The hearing of the injunction application concluded yesterday before Mr Justice John MacMenamin, who reserved judgment until next week. The order is sought pending a full hearing.

Mr Keenan has denied claims against him and said the latest allegations could be explained in terms of his role in an internal cost audit unit in Iarnród Éireann. There is nothing to stop the company conducting its investigation without suspending, he says.

Oisín Quinn SC, for Mr Keenan, argued that the suspension was not on any rational or reasonable basis. He said his client had not delayed in informing the chief executive of the Equality Tribunal decision and there was no basis for claims he ran a personal fiefdom.

In affidavits, Mr Keenan outlined a series of events within Iarnród Éireann over alleged fraud involving collusion between certain company personnel and third-party contractors.

Mr Keenan said he was responsible for the cost audit committee within the company and had recommended engaging forensic accountants to look into the matter.

In the accountants’ 2007 report, it was found the company made estimated losses over a three-year period of about €8.7 million from fraud.


http://www.irishtimes.com/newspaper/...262472357.html

[Mark Gleeson]

More of the same

Originally Posted by Sunday Independent

A spotlight on the inner workings of Irish Rail
A court battle threatens to turn messy as a former HR director and his boss trade accusations, writes Maeve Sheehan

Sunday January 17 2010
ON December 3 John Keenan was told to clear his desk at Irish Rail, where he had been director of human resources for 15 years, triggering a High Court action that has once again put the inner workings of the State transport company under an uncomfortably public spotlight.

Mr Keenan made allegations that the potential fraud losses in the group were being played down by the company, while in a series of counter allegations, Mr Keenan was accused of spying on employees by accessing emails and monitoring bank accounts.

The extraordinary claims -- denied by both sides -- emerged when Mr Keenan applied to the High Court on Friday for an injunction lifting his suspension from the firm.

Mr Justice John McMenamin has reserved his judgement for a week. But the stage is set for a bruising battle between some of the state transport company's most senior executives.

The CIE chairman John Lynch and the chief executive of the CIE subsidiary, Irish Rail, feature at the heart of the dispute. Mr Keenan's legal action comes at the end of a tough period for Irish Rail bosses.

In September, a confidential Baker Tilly consultants' report was leaked to the Sunday Independent, revealing that the company lost an estimated €8.7m to fraud. The resulting political outcry resulted in CIE group chairman John Lynch and Irish Rail chief executive officer Dick Fearn being summoned to explain the figures before an Oireachtas Committee in October.

On top of that, an Equality Tribunal ruling last month was, in the words of Irish Rail's barrister, a "damning indictment" of the company. The tribunal awarded a record €189,000 to a female executive who was consigned to a basement and passed over for promotion when she returned from a career break.

Irish Rail claims that Mr Keenan's handling of this tribunal ruling was the sole reason for his suspension. Ten days passed before Mr Fearn found out about it, a delay the chief executive found so unacceptable that he suspended Mr Keenan.

But Mr Keenan asked the court to consider his suspension against a backdrop of differences between him and his bosses over the extent of fraud losses at the company, a subject that had attracted intense media and political interest.

"Tensions" between the director of human resources and his chief executive, Mr Fearn, have simmered for some time, according to evidence given to the High Court, and centre around his role in investigating fraud at the firm.

Mr Keenan joined CIE on leaving school and rose to manage Irish Rail's HR department. As head of their cost audit unit, he has also led vigorous inquiries into fraud.

In 2005, the unit uncovered a web of collusion between some contractors and employees suspected of defrauding the company. Gardai were informed, employees were dismissed and investigations continued.

On Mr Keenan's recommendation, forensic auditors Baker Tilly were brought in to review procurement procedures and to forensically examine a number of financial transactions over three years.

Mr Keenan estimated in a report to management that potential losses could run to a "seven- or eight-figure sum".

His estimate was met with "great displeasure" by Mr Lynch, the court heard, and the chairman allegedly instructed that no more minutes were to be taken at meetings about the matter and that nothing should be kept in writing. Mr Lynch denied these allegations.

When the forensic accountants later reported estimated losses from fraud of €8.7m over three years, the estimate was rejected by the chief executive as unsubstantiated and outside of the accountants' terms of reference.

Mr Keenan claimed that he advised against removing the figure. It was later reduced to €2.5m in the final report.

When the draft report was leaked to the Sunday Independent, leading to an Oireachtas inquiry, Mr Keenan claimed that he got an irate telephone call from Mr Lynch warning him to button his lip and accusing him of leaking the document.

"There is no doubt that there is some tension between Mr Keenan and Mr Fearn," said Mr Keenan's counsel and Labour Party councillor Oisin Quinn.

Irish Rail dismissed Mr Keenan's claims as a "conspiracy theory"; the reason for his suspension was his failure to report the Equality Tribunal ruling to his boss.

For his part, Mr Keenan had denied that he delayed informing his boss.

The court heard how he got a copy of the ruling in late November, and afterwards met with the company solicitor to discuss it. They agreed to appeal the findings, in the belief that the ruling was flawed and inaccurate. With that action in train, he intended to brief the chief executive on the matter at a one-on-one meeting in early December.

But the day before that meeting, Mr Fearn "suffered the grave embarrassment" of being told about the Equality Tribunal ruling by his chairman Mr Lynch, who had in turn been told by the company solicitor.

"If the complainant's allegations are only 50 per cent true, it paints the most appalling vista of the conditions of her employment," said Roddy Horan, barrister for Irish Rail.

He said Mr Fearn and other executives were criticised in the report, but claimed that Mr Keenan came out worst. "The CEO is entitled to be told immediately about a decision such as that," he said. "There were all sorts of ramifications." After his suspension, the company claimed other matters came to light, in what Mr Keenan's lawyers claimed was a "digging exercise" to find a "back-up" argument.

The company claimed it had since learned that Mr Keenan had accessed 32 computers used by "very senior" members of staff.

"There is now information that the plaintiff accessed bank accounts of individuals which, if true, is a very serious matter," said Mr Horan. He claimed Mr Keenan had "a tracking device placed in the vehicle of a third party" and claimed that emails on a computer containing confidential medical information had been accessed.

Mr Horan claimed that it was "only now" that people were coming forward with information, including the head of the company's IT section and another employees from the cost audit unit.

"They have volunteered information. We have to analyse whether it has substance," he said.

In the meantime, Irish Rail argued that Mr Keenan's suspension should remain in place as a "holding measure".

But Mr Keenan countered that email monitoring was done on his instruction, as director of human resources investigating fraud in Irish Rail. The work was in line with company policy and was fully documented. He claimed he had never accessed personal medical records. He claimed that the company had acted unreasonably and that his suspension was unlawful.

Judge McMenamin reserved judgement until later this week. But given the Garda Bureau of Fraud Investigations' ongoing inquiries and the prospect of further inquiries by the Oireachtas Transport Committee, the drama at Irish Rail is expected to play out for some time.

Sunday Independent

http://www.independent.ie/opinion/an...l-2017389.html

There is worse to come

[Park Royal]

Is this train still in section, I understood the judge was to bring it to the Station weeks ago.

Lucky their not running the railway.

[Mark Gleeson]

Originally Posted by Irish Times

Action against Iarnród Éireann settled

A LEGAL challenge by Iarnród Éireann human resources director John Keenan over his alleged wrongful suspension last December has been settled at the High Court.

Mr Keenan said later he had no comment to make as the settlement was confidential but he pointed out he remained an employee of CIÉ. Mr Keenan is also to be paid his legal costs.

Last January, Mr Keenan failed to obtain an injunction preventing his suspension pending his full court action against the company.

That action was due to open yesterday before Ms Justice Mary Laffoy but, following discussions, Oisín Quinn SC, for Mr Keenan, said the case had been settled on written terms to be lodged with the court.

Ms Justice Laffoy said she was glad the matter had been resolved.

During the injunction hearing, it was claimed Mr Keenan was suspended for an alleged delay in telling his chief executive officer Richard Fearn about a substantial award against the company to an employee who alleged gender discrimination.

The court also heard Mr Keenan had accused Mr Fearn and CIÉ chairman John Lynch of a cover-up in relation to the extent of fraud in Iarnród Éireann.

Iarnród Éireann counter-claimed that Mr Keenan was involved in unauthorised accessing of employee e-mails, medical records and in having a tracking device placed on an employee’s car.

Mr Keenan denied those claims and said they could be explained as part of his role in tackling alleged fraud in the company.

The court heard the initial reason for his suspension was his alleged delay in notifying Mr Fearn of the result of an Equality Tribunal award of €189,000 to a woman who alleged gender discrimination over promotion within the company.

Iarnród Éireann claimed the delay in informing Mr Fearn of the award had led to Mr Fearn losing confidence in Mr Keenan.

Mr Keenan claimed the difficulties between him and Mr Fearn were really over his reporting of the level of fraudulent practices in the company.

He claimed this had triggered an adverse reaction from his superiors. He got calls from Mr Lynch, berating him and telling him to “button” his lip, after an article about the fraud appeared in a newspaper.

He claimed Mr Lynch and Paul Kiely, chairman of Iarnród Éireann’s audit committee, had told him he was stupid to suggest such high losses and that their positions were jeopardised by this aspect of the report.

He also claimed a forensic accountant’s draft report, which estimated losses from fraud at some €8.7 million, had been altered to a figure of €2.5 million after Mr Fearn argued the estimate was outside the terms of reference of the report.

Mr Keenan claimed Mr Fearn wanted the €8.7 million figure removed, but Mr Keenan advised against this.

http://www.irishtimes.com/newspaper/...273269927.html

[Colm Moore]

http://www.independent.ie/national-n...l-2245571.html

Data watchdog to probe Irish Rail
By MAEVE SHEEHAN

Sunday July 04 2010

THE Data Protection commissioner is to launch an investigation into the State rail company over allegations that it accessed personal bank statements of up to 30 employees.

The bank details of Irish Rail employees were allegedly accessed during internal investigations into company fraud, which is believed to have cost the transport company millions.

The development has caused concern within the State rail company because of the prospect of legal action from affected employees, according to sources. The company has already settled a number of separate costly legal actions from former senior staff who claimed they had been unjustly treated.

Allegations that personal bank accounts were accessed were raised by Irish Rail in the High Court earlier this year, during a bitter legal dispute between Irish Rail and the company's human resources manager, John Keenan, who also headed the cost audit unit.

Defending itself from claims that it had wrongly suspended Mr Keenan, Irish Rail accused him of placing tracking devices on employees' cars and of 32 instances of incorrectly accessing computer records, and said that bank accounts may have been accessed.

But Mr Keenan contested the claims, saying he was authorised to access company emails during his investigations into fraud. He accused Irish Rail of suspending him because he refused to go along with attempts to cover up the scale of the fraud he had discovered within the company.

The company settled the legal action a fortnight ago, reinstating Mr Keenan and paying his legal costs and expenses.

A spokesman for the Data Protection Commissioner said last week that it intended to pursue an investigation into Irish Rail now that the court case had concluded.

The commissioner's office already investigated claims from four Irish Rail employees last year that they had been subjected to inappropriate surveillance by the company.

Irish Rail said this weekend it was "not aware of any pending investigation by the Data Protection Commissioner, nor do we have any notice of complaints by individuals against the company". It is believed that the company hired Martin Donnelan, a former Garda assistant commissioner and a retired chief superintendent, to investigate whether any unauthorised accessing of documents took place, in advance of the High Court case taken by Mr Keenan.

Mr Keenan has been invited to address the Oireachtas committee on transport later this month on the extent of fraud in Irish Rail.

He will be asked about an internal audit report dated October 2007 that has claimed that upwards of 20 employees "from ground level to senior management level" were being "reviewed" following a wider investigation into their relationships with external contractors.

He will also be asked about the Baker Tilly consultants report on fraud, which he commissioned.

The draft report, later leaked to the Sunday Independent, estimated that fraud had cost the company €8.7m but that figure was later revised down to €2.1m in the final report.

Mr Keenan objected to the downward revision.

Mr Keenan was suspended in December amid allegations that he had failed to tell his bosses that the company had been criticised and fined €190,000 by the Equality Tribunal.

Mr Keenan claimed in the High Court that the real reason was that he differed with the chairman and chief executive over the financial cost of fraud to the company.

- MAEVE SHEEHAN

Sunday Independent

[Mark Gleeson]

How exactly you access the bank statements of an employee is a curious one, it suggests you need the help of a bank!

[Colm Moore]

Originally Posted by Mark Gleeson

How exactly you access the bank statements of an employee is a curious one, it suggests you need the help of a bank!

Statements e-mailed to the company e-mail?

[alanb]

Hi i noted the newspaper clipping say that John Keenan had been reinstated.Does this mean he is back in the same job.If so how can his two bosses have confidence in him after recent events.Or is a bit like a party recently who one week had no confidence in their leader and the next week when the jobs were been given out the line spuned was sure all familes have a fall out.Does this mean that the top bosses family of Irish rail have had their fall out and no all is ok.

[Mark Gleeson]

The goings on within Irish Rail would make a great Hollywood movie, its something out of John Grisham novel. I'm looking forward to a scene in the CIE box at an international rugby game when tensions spill over....

Mr Keenan said later he had no comment to make as the settlement was confidential but he pointed out he remained an employee of CIÉ.

It doesn't say Irish Rail. It not unknown for staff to appear working for Bus Eireann after a falling out.