Rehab Lotteries director John McGuire described its low-profit scratch-card products as the "sick baby in the family" after the decimation of the product by rival the National Lottery and a State cap on its prize funds.
The group’s lottery business has been the subject of controversy since Minister for Justice Alan Shatter questioned the low profit margins highlighted in an audit by his department.
The audit was soon followed by a Government decision in 2012 to phase out a special support scheme for charity lotteries, of which Rehab was a beneficiary to the tune of almost €86 million since 1997.
Although Rehab's legal challenge to that move remains before the High Court, a flavour of the tension between it and the Department of Justice was evident in the Public Accounts Committee hearing.
Department secretary general Brian Purcell told the committee that funding under the scheme could not be used for "administrative purposes", but said the audit found some scheme funding had been applied to activities of an administrative nature.
“The recommendations were that allowable costs and the specific use of the funds be clearly defined and agreed annually. The report noted that the Rehab Lotteries had high costs,” he said.
But Ms Kerins said 2013 criteria were being applied in respect of information from 2011. At that time, she said, there was no definition as to what constituted administrative expenses in the scheme. Rehab had never been challenged on that front so it assumed its use of scheme funding was in order.
Terminated
Rehab received a draft of the audit in June 2012 and Ms Kerins sought a meeting with the department in August. While no meeting followed, the support scheme was terminated without any discussion warning.
Questioned by committee chairman John McGuinness, Mr Purcell said it was correct that no meeting followed. The Government decided to terminate the scheme in October 2012 and no meeting was possible once Rehab took legal action .
“I don’t think there was any factual issues raised,” he said. Ms Kerins disputed this however. Mr Purcell later said there may have been an “issue of principle” as to whether the audit should cover the scheme.
Citing media reports on the audit, Ms Kerins said the impression given conjured up “entirely false” images of entertaining politicians.
“Funds were not used for lobbying but for our advocacy work with clients, to help our clients advocate for themselves . . . and to make submissions on major areas of policy,” she said.
