3 August 2004




They're all at it

Denis Healey's advice was: "When you're in a hole - stop digging."
But those wise words are rarely heeded by most institutions because they fear that abandoning the excavation will invite questions about why it was started in the first place.
So, when Pembrokeshire County Council finds itself in a hole it digs with increased vigour in the hope of convincing us that the hole was a good idea all along.
I came across a classic example of this phenomena in Saturday's Daily Telegraph which reported the resignation of the Keeper of the Royal Academy after £80,000 was found to be missing from the accounts.
This is not the first time financial irregularities have blemished the reputation of the RA.
Back in 1996, the Telegraph reports, the bursar Trevor Clark was jailed for five years after pleading guilty to theft from the Academy.
The interesting part of this story is that Clark had been fingered, earlier, after £45,000 went missing, "But fearing adverse publicity, officials kept him on and allowed him to convert the missing money into a loan."
This decision not to confiscate Clark's pick and shovel turned out rather expensive because he spurned the opportunity to go straight and when he eventually came to court the hole had become £397,000 deep.
And if such a prestigious body as the Royal Academy can become involved in a cover up, not to mention the FA, why not Pembrokeshire County Council.


Fairy tale ending


This week, I return to the auditor's report into the business relationship between Cllr Brian Hall and Dr Michael Ryan.
This report is really nothing more than a recitation of the story concocted by the County Council and Dr Ryan, with no attempt by the auditor to check the veracity of the yarns he was being spun.
And some parts of the story read more like "Alice Through the Looking Glass" than the product of a serious investigation.
As I reported a few weeks ago, what the auditor refers to as "this apparent inconsistency" involves a letter supposedly written three weeks before the events to which it refers could possibly have taken place.
In an attempt to bring clarity I put down some questions for the July's meeting of the County Council.
One of them asked for the date (my emphasis) on which the Chief Executive become aware of the business relationship between the two men.
And the answer: "Early Autumn 2000".
Another asked for the date (my emphasis) on which Dr Ryan told his line manager Mr David Thomas about his dealings with Cllr Hall.
"October/November 2000", came the answer.
Strangely, there is no mention of this latter disclosure in the auditor's report.
Stranger still is that nobody in County Hall seems to keep a diary.
The tale related to the auditor attempts to give the impression that Cllr Hall, at least, was up front about his business relationship with Dr Ryan.
However, there is no mention in the auditor's report that either of them ever told anyone about their detailed plans to trade in Pembrokeshire set out in Ryan's fax to Hall dated 16 October 2000 (see Hall-Ryan)
As this seemed rather crucial - after all, it wouldn't matter much if the intention was to set up a chain of fish and chip shops in Cardiff - I also asked whether David Thomas had been made aware of this fax.
Unfortunately, the Leader omitted to address this question at the meeting, though, when I drew this to his attention, he emailed me with the answer.
The email reads: "Apologise for the oversight regarding Mr David Thomas' knowledge of the alleged fax. My understanding is that Mr Thomas had no knowledge of the fax allegedly sent to Cllr Hall from Dr Ryan on 16 October 2000. I hope this answers your question."
As there is nothing in the auditor's report to suggest that either Hall or Ryan made any attempt to challenge the authenticity of the 16 October fax, the use of the words "alleged" and "allegedly" takes on sinister Orwellian undertones.
It could of course be that the Leader, having read the auditor's report and realised that the council's version of events has more holes than a Rich Tea biscuit, is preparing a second line of defence

Down on the farm

Speaking of Orwell, I have in the past quoted his brilliant description of the typical County Council meeting in his great book "Animal Farm".
"After hoisting the flag all the animals trooped into the big barn for a general assembly known as the Meeting. Here the work of the coming week was planned out and resolutions put forward and debated. It was always the pigs that put forward the resolutions. The other animals knew how to vote but could never think of any resolutions of their own."(Page 28).
That was how it was before the introduction of the Cabinet system by the Local Government Act 2000.
Orwell seems to have foreseen this development because at page 58 he records how, following Snowball's flight into exile, the pigs imposed a new regime.
"He [Napoleon] announced that from now on Sunday morning Meetings would come to an end. They were unnecessary, he said, and wasted time. In future all questions relating to the working of the farm would be settled by a special meeting of pigs, presided over by himself. These would meet in private and afterwards communicate their decisions to the others. The animals would still assemble on Sunday mornings to salute the flag, sing 'Beasts of England', and receive their orders for the week; but there would be no more debates."




Much has been made of the fact that Dr Ryan and Cllr Hall's company, Euro-Ryall Ltd, never traded.
It is true that, for 2000/01 - the only year for which it lodged accounts with Companies House - it showed a loss of £658 (expenditure £811, income £153).
However, there is nothing to stop a company trading at a loss.
In this case, the £658 is described in the accounts as "Deficit carried forward" which I understand means it is a trading loss which can be offset against the following year's profits for tax purposes.
According to the auditor, the £811 is incidental expenditure related to the establishment of the company.
If that is true, it would mean that not only did the company not "trade" but it made no attempt to trade: at least no attempt that cost anything.
Are we to believe that after this company was set up on 29 December 2000 no effort was made to bring to fruition the grandiose plans outlined in Dr Ryan's October 16 fax (see Hall-Ryan)?
Could I remind you what the business plan accompanying that fax had to say under the heading "Marketing".
"To date Dr Ryan and Brian Hall have been requested to participate in a number of projects, such as:
Hotel, Recreation & Conference Center (sic) Project (Masterplanning and Project Management)
International Investment Project aligned to Pembroke Dock redevelopment
European Commission Objective 1 Project Finance Design & Submission."
These are the not sort of significant business opportunities that fall off trees.
It is hard to imagine someone sidling up to them in a pub and saying: "You look a likely pair of lads - fancy a bit of Masterplanning and Project Management on this Hotel, Recreation and Conference Centre I am building."
No! To generate these sort of significant business opportunities needs detailed negotiation over several meetings.
And are we to suppose that once Euro-Ryall Ltd was incorporated,10 weeks after the fax was sent, these significant business opportunities were allowed to go by the board?
That would seem to be the case because to participate in an "International Investment Project aligned to Pembroke Dock redevelopment" would have surely have required Euro-Ryall to pay for Dr Ryan to travel over from Limerick to meet his client.
Yet, according to the auditor's report, no such costs were incurred.
I suspect that the reason there was no cost to Euro-Ryall Ltd is because these deals were put together during Dr Ryan's frequent, County Council-funded visits to Pembrokeshire .

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