After biting claims of a “slush fund” in RTÉ, the Mazars report on the station’s barter accounts does not reveal any new spending on junkets, parties, drink or restaurants.
But in the dry language of forensic accountancy, Mazars highlights a glaring absence of controls over millions of euro at the supposedly cash-starved State broadcaster. That helps explain – but does not justify – how certain figures in RTÉ could spend so lavishly on corporate clients and conceal large payments to former presenter Ryan Tubridy. The system may have greased the wheels of RTÉ’s commercial operation but at terrible cost.
This is but one aspect of a multilayered affair that will not be settled for months to come but it is one that caught the public imagination. In many ways the damage was done in extraordinary disclosures to Oireachtas committees in which RTÉ revealed €1.6 million in barter account spending on client entertainment.
Such an account is a kind of trading account used in the media industry, when groups such as RTÉ use advertising space to pay for certain goods and services. Although RTÉ once argued it was “entirely legitimate” to use the funds for corporate hospitality, it faced ridicule for buying balloons for parties, flip-flops for guests and paying for sports junkets. The spending included €110,000 on travel and hotels for the 2019 Rugby World Cup in Japan, and €26,000 on the 2019 soccer Champions League final in Madrid.
The funds also paid for entertainment at concerts by Bruce Springsteen, Garth Brooks, Ed Sheeran, the Eagles, Amy Schumer, Harry Styles and Westlife – and a lot more besides, including €2,306 on membership of a private club in London and expenditure of €138,000 on 10-year Irish Rugby Football Union season tickets.
All of that was disgorged into the open after RTÉ disclosed how it funnelled hidden payments to Tubridy via a UK barter company as part of a contentious three-way deal with Late Late Show sponsor Renault to boost his income. This was explosive politically, all the more so when RTÉ chairwoman Siún Ní Raghallaigh acknowledged the spending was “outrageous” at the Dáil public accounts committee.
Fine Gael TD Colm Burke seemed to strike a chord at the same meeting by putting the label “slush fund” on the barter account. “If we look at the definition of ‘slush fund’, and I got this from Black’s Law Dictionary, it is ‘a reserve of money held secretly by a company that [had] no accountability for its use’,” he said.
“This is exactly what we are talking about. This is a slush fund, so let us stop talking about it being a barter account.”
Such questions were at the centre of the examination by Mazars, although the expression “slush fund” is not mentioned at all in the report. Mazars is silent also on what exactly the barter account funds were used to buy, but it had plenty to say about the lack of controls over the spending.
After all that went before, such findings cannot be said to come as a surprise. Still, they are yet another stark reflection of a dysfunctional culture in RTÉ that has undermined its credibility and sapped public trust.
At root, Mazars said RTÉ “does not appear to have a formally approved policy and procedure” for barter account purchases. In addition, such purchases “do not appear to be subject to” the same approval requirements that apply to general purchases. “These purchases do not appear to be based on formal procurement or quotation procedures applicable to general purchases,” Mazars said.
“The cumulative amount of purchases through barter media agencies does not appear to be tracked as part of monthly budgetary reporting.”
Although RTÉ provided Mazars with a code of conduct containing staff guidelines for gifts and entertainment, the accountants said the code did not set specific thresholds or approvals required that “could be applied” to barter agency purchases.
“RTÉ explained that the code is a principles-based code and, for that reason, thresholds are not contained within it in respect of gifts and entertainment but that RTÉ personnel are expected to adhere to the principles of ‘honesty and integrity in the conduct of business activities’, ‘loyalty to RTÉ’, and ‘confidentiality’,” the report said.
RTÉ said it maintained records of purchases with barter agencies, but Mazars found supporting evidence such as invoices, receipts and booking forms were “not stored” in an easily accessible manner. Detailed searches of more than 1,400 emails were required to identify whether such evidence existed.
If lax procedures were already apparent in the wake of disastrous RTÉ committee hearings in June and July, Mazars has confirmed that the system was very, very loose. RTÉ stopped using barter accounts for buying goods and services in April but the legacy will linger.
