Agriculture minister resigned as director of company days after state body alleged serious financial fraud

Agriculture minister Charlie McConalogue was among a group of directors who resigned from the board of a Donegal radio station days after it received a letter from a state body alleging serious financial fraud.

Inishowen Community Radio (ICRfm) in a six-year spell received more than €800,000 in public funding from Pobal. After repeated allegations of fraud Pobal in 2011 carried out an audit of the company and discovered in one year alone that around €20,000 had been misappropriated.

Fianna Fáil TD McConalogue served as a director of the company from January 2010, the year after he was first elected to Donegal County Council, to late 2011, the year he was elected to the Dáil.

Pobal referred the matter to the Garda National Economic Crime Bureau and as recently as March 2020 one local garda said the investigation into the matter is “a work in progress”. Twelve years after the audit was first carried out the matter is yet to be concluded by An Garda Síochána.

McConalogue was one of 17 directors during his almost two-year stint at the company. Though there was no suggestion in the audit that he was responsible for the misappropriation of state funds, the auditor, in their letter to the station, wrote that all directors should be informed “particularly in light of their corporate responsibilities under Irish law”.

McConalogue resigned four days later.

‘Invoices have been falsified’

Charlie McConalogue served as a Donegal county councillor, representing the Inishowen electoral area, from 2009 till late 2011.

The agriculture minister was appointed a director of ICRfm in January 2010. During this time he was elected to the Dáil as a Fianna Fáil TD in early 2011.

First incorporated in 1998, ICRfm from 2006 to 2011 received €815,229 in funding from Pobal. The vast majority of its funding came from the state development agency and the Broadcasting Authority of Ireland. After repeated allegations that these funds were being mismanaged, Pobal decided to carry out an audit of the station, which began 5 September, 2011.

The audit was damning.

Not even a fortnight had passed after Pobal’s audit coordinator had begun his work before a Pobal official had to write to ICRfm outlining potential fraud at the station.

On 16 September, 2011 the audit director wrote to the ICRfm chairperson, telling him, “A copy of this letter should be circulated to the company directors, particularly in light of their corporate responsibilities under Irish law, as well as their responsibilities as employers.”

The director went on to advise that “an emergency meeting of the directors should be convened with a view to updating them regarding the audit findings to date,” and that ”a comprehensive investigation should be conducted by the directors (or a sub-group thereof) in relation to the concerns raised by Pobal.

Pobal required these measures because, during the first days of its audit, the station manager had “agreed that certain financial records were misleading and that he was guilty of poor financial reporting”. He had also refused to go on the record “regarding the exact sources of some of the invoices queried by Pobal because he didn't understand the consequences of doing so”.

“Pobal,” read the letter, “continues to have significant reservations regarding the validity of certain financial records.”

According to its 2011 accounts ICRfm had 17 directors. Four days after the chairperson received the letter telling him to inform the board of financial irregularities, 16 of these directors resigned.

Rather than address the already serious allegations of fraud at the station, McConalogue was one of the directors who resigned.

The audit finally concluded in early 2012 and, so serious was its contents, Pobal referred it to An Garda Síochána’s fraud squad. “In view of Pobal's statutory obligations… I have decided to pass a copy of the final audit report to the Garda Bureau of Fraud Investigation and I would like to reiterate the advice I previously articulated for you to seek legal advice,” wrote the audit director in a letter to the ICRfm chairperson in March 2012.

“Pobal, according to the audit, “has major concerns regarding the multitude of significant issues referred to within this report and has no confidence in the books and records of ICRfm. Pobal is particularly concerned that certain invoices… have been falsified, which has resulted in the overstatement of the grant claims.”

Despite receiving more than €800,000 from Pobal alone during the previous six years, ICRfm was “in a very precarious financial situation” according to the audit. Of this funding Pobal required ICRfm to repay “€20,000 due to a lack of qualitative documentary evidence regarding the completion of the projects”, as well as two other smaller sums.

The audit only concerned one year’s activity at the station and had been instigated after repeated allegations of fraud.

‘A work in progress’

As a result of the audit Pobal withdrew funding from the station, informing the station of its decision in July 2012.

Pobal chief executive Denis Leamy, in a letter to the station, said that the agency would be pursuing the recovery of some of its funding, in line with the audit’s findings. He also reiterated that the matter had been referred to the garda fraud squad.

In the 11 years since, the guards’ investigation is yet to be finalised.

One local garda, in a March 2020 email, wrote that the investigation “is a work in progress at the minute”, having previously written, in November 2019, that they were “trying to get this file completed and submitted”.

An Garda Síochána, by time of publication, didn’t respond to a request for comment on the status of the investigation.

McConalogue, when asked why he resigned from ICRfm, declined to comment.

The Ditch editors

The Ditch editors