THE legal standing of the contract agreed by Bord na Mona managing director, Dr Eddie O'Connor with the previous chairman, Mr Brendan Halligan, look set to become a crucial question in the ten week old controversy.
The board of the company, under the present chairman Mr Pat Dineen, meets next Monday to consider whether Dr O'Connors package complies with Government guidelines, tax law and with his contract of employment.
If they conclude that the package breeches the guidelines they are expected to advise the Government to that effect. It would then be up to the Government to decide what action to take. Political sources said yesterday that this would pose a difficult dilemma for the Government, with no easy solution presenting itself.
Dr O'Connor is expected to argue that he agreed the package with Mr Halligan and it was the former chairman's responsibility to ensure that he did not overstep Government guidelines in putting it together.
Dr O'Connor also maintains that his package does not exceed these guidelines and has challenged the report by accountants Price Waterhouse, which reviewed his remuneration over the nine years he has been at Bord na Mona.
He maintains that the figure of £1.9 million given for his total remuneration and expenses is a gross exaggeration, as it includes a pension provision of £600,000 and expenses of £580,000. Dr O'Connor has said that the beneficial elements of the package came to less than £700,000.
However, the report also showed that he received £66,000 over the nine years in unvouched expenses. These were paid to him in cash and he was not required to account for how the money was spent.
The board meeting is expected to focus on these expenses, which Dr O'Connor claims where part of a public affairs budget agreed with Mr Halligan. The budget was needed to fund lobbying on behalf of Bord na Mona for a capital injection and support for a new peat fired power station in the midlands, he argues.
The existence of a contract between Dr O'Connor and Mr Halligan is not disputed. However, legal sources point out that under the legislation governing Bord na Mona, Dr O'Connor would still have responsibility as a director of the company to ensure that his package was within Government guidelines.
Mr Halligan was instructed by the board to conclude a confidential agreement with Dr O'Connor, a fact confirmed by board minutes at the time. A preliminary draft of the resulting contract allows for the use of a company car, currently a Ford Scorpio, and also for a life assurance policy which was funded by the company at a cost of £9,020 a year.
It also allows for Dr O'Connor to be accompanied by his wife on four overseas trips a year and the membership of a social club and a sporting club.
Other agreed benefits were the repayment of a loan taken out from his previous employers, the ESB, and VHI cover. Bord na Mona also agreed to cover the cost of his moving house and fund an income continuance plan.
The draft makes no mention of expenses or a public affairs budget. If the board takes the view that these expenses were part of Dr O'Connor's remuneration, then they may conclude that the guidelines were breached.
The crucial nature of next week's board meeting has been amplified by the decision of the chairman and the board to make no further comment until Monday. The board is understood to be under strict legal advice to do nothing that would appear to infringe Dr O'Connor's rights to fair hearing.
