Fine Gael has claimed the Health Service Executive (HSE) paid €1.97 million to a shelf company with a Guernsey address for work done on the PPARs computer project.
The company, Blackmore Group Assets Limited, received €1.97 million in respect of the recruitment of seven staff to work on the controversial project. It is believed this fee includes payment of the staff, but this could not be confirmed last night.
Work on the computerised payroll system for the health services was suspended by the HSE in October pending a review of the project, which by then had cost approximately €150 million.
Blackmore was one of 14 companies paid a total of almost €7 million by the HSE for recruiting specialised staff to work on the system. They recruited 28 staff between them.
The Tánaiste and Minister for Health, Mary Harney, listed these firms in a reply to a Dáil question from Enda Kenny in October. The reply listed Blackmore as being based in England, although the HSE last night described it as "UK based".
Mr Kenny said last night that this company was not registered either in Ireland or the UK, and was a shelf company. It uses a privately owned trust company in Guernsey to bill the HSE, according to Mr Kenny. This trust company normally forms its companies in the British Virgin Islands or Guernsey, and Blackmore is not registered in Guernsey.
"In the light of these facts, critical questions must arise for the HSE, the Minister for Health and the Minister for Finance," he said in a statement last night.
He demanded to know how a "shelf company" was selected to provide seven staff to the project; how it could be considered to comply with normal public procurement procedures; what checks were made on the company before it was selected; are the correct taxation rules being applied to Blackmore; is withholding tax being deducted from payments to this company in accordance with Part 18, Chapter 1, Taxes Consolidation Act 1997; and whether VAT is being charged, given that the services concerned are being supplied in Ireland.
In a statement last night the HSE insisted Blackmore was "a UK-based organisation with the staff provided being UK-based".
The company was among the recruitment agencies selected to supply specialist technical staff after a procurement process held under EU regulations in November 2002. The bids were independently evaluated on behalf of the PPARs project, it said.
They were engaged on PPARs between April 2002 and November 2004, supplying between one and three contract staff at any one time. One contractor was reappointed from July 2005 to October 2005.
The statement went on: "All contractors recruited through Blackmore performed satisfactorily and in accordance with their contracts.
"Professional services 'withholding tax' was not deducted, as under the finance regulations recruitment agencies are not subject to such deductions."