Events company a ‘debacle’ admits top civil servant

Luciano Pavarotti was one of the star names attracted to Northern Ireland by the NIEC
Luciano Pavarotti was one of the star names attracted to Northern Ireland by the NIEC

Stormont officials faced heavy criticism as they appeared before Assembly members investigating the financial fiasco that sank a scandal-hit quango.

The Public Accounts Committee (PAC) is examining the demise of the Northern Ireland Events Company (NIEC) in the wake of a damning auditors’ report that found its chief executive covered up losses with misleading and sometimes fabricated records while racking up debts of almost £1.5 million.

The NI Audit Office also criticised oversight failures by NIEC’s board and the Department of Culture, Arts and Leisure (DCAL) to prevent what happened under the stewardship of CEO Janice McAleese.

The PSNI is currently investigating what happened within the publicly funded body.

The company was set up in 1997 as a by-product of the peace process and in its early years was instrumental in bringing star names to perform in the grounds of the Stormont Assembly, such as Sir Elton John and Luciano Pavarotti.

But its success was short-lived and just over a decade later, having received a total of £18 million in public funds, it effectively folded amid the financial scandal.

Current and former DCAL permanent secretaries Denis McMahon and Paul Sweeney and ex-NIEC board chair Mervyn Elder faced tough questions from members of the PAC at Parliament Buildings.

On a number of occasions witnesses were unable to provide specific details to MLAs on a range of issues, including a recruitment process that saw Ms McAleese hired in 2003 despite not meeting the essential qualifying criteria.

In one instance, when Mr McMahon said he would need to recheck records, SDLP committee vice-chair John Dallat said: “Why is it you don’t have the answers at hand today to most of the questions that are being asked – I mean this is the worst I’ve ever sat through.

“We have to check everything, yet you knew this was coming up and I’ve no doubt you were rehearsing for a couple of weeks.”

Earlier, Mr McMahon apologised for DCAL’s failures in handling the company.

“We acknowledge fully that, in this case, we did not get it right, we got it wrong – the safeguards were not adequate,” he said.

Mr Sweeney, who was permanent secretary at the time the huge overspend was discovered, said what went on in NIEC was a “debacle”.

He added: “It was a comprehensive failure on the part of the department to fully discharge its responsibilities in terms of sponsorship, it was a failure on the part of the board to do likewise, and likewise it was a failure on the part of the chief executive and accounting officer (Ms McAleese) of the company.”

Mr Elder said he took his share of responsibility as chair of the company’s board, claiming it had left a “cloud” over his private and public life.

“I am 71 – immediately after the discovery of the NIEC’s overspend in September ‘07 and as a direct result of the pressure I as chairman was under for the following few months, I suffered a heart attack in January 2008,” he said.

He added: “I do feel responsible, it has been a terrible time in my life and I am just now glad we have got an opportunity to address it.”

The former board chair said with hindsight, he regretted Ms McAleese’s appointment.

DUP member Trevor Clarke asked Mr Elder how he had allowed the financial irregularities to happen.

He replied: “I allowed it to happen because I didn’t know it was happening until the balloon went up in 2007.”

Sinn Fein committee member Phil Flanagan described the demise of the NIEC as “the biggest scandal that’s arisen before this committee”.

Ulster Unionist member Roy Beggs said he was “aghast” the company board failed to establish a sub-committee to scrutinise the company’s spending, yet did set one up to examine how to bring golf events to Northern Ireland.

Stormont inspectors who stepped in to examine the company’s records in the wake of its demise found a deficit of almost £1.5 million – £1.3 million of which was run up overspending on events it promoted between 2005 and 2007.