I thank the joint committee for giving me the opportunity to address it. I am joined by the Minister of State with responsibility for tourism and sport, Deputy Brendan Griffin. I am also joined by the departmental officials Mr. Ken Spratt, Mr. Peter Hogan and Mr. James Lavelle from the sports division and the Department’s legal adviser, Mr. Michael Dreelan.
I thank Mr. Justice Moran and his team for their report. Needless to say, it was crucially important that Mr. Justice Moran be afforded the resources and time he needed to produce a report that would clarify, to the greatest extent possible, the matter that was before him. Having published the report on Monday, I am grateful to have this early opportunity to discuss it with the committee.
I will begin by taking the committee back to this time last year. I shall provide some important context. In interests of time, I will summarise the important events in chronological order.
Prior to the Rio Olympic Games, no comparable controversies about the Olympic Council of Ireland, its then president, Mr. Pat Hickey, or the distribution of tickets had surfaced. Public interest rightly centred on the performance and prospects of our athletes, but all that changed on Friday, 5 August 2016 when an Irish citizen, Mr. Kevin Mallon, an executive working for The Hospitality Group, THG, was arrested on suspicion of having been involved in ticket touting at the Rio Olympic Games. He was subsequently charged with offences relating to the practice of crimes of criminal association, the facilitation of illegal ticket reselling and ambush marketing by association. He was held in preventative detention and received consular assistance.
On 8 August 2016 news broke that the tickets at the centre of the allegations had originally been assigned to the Olympic Council of Ireland, OCI. It issued a statement to the effect that it would be establishing an investigation to consider the matter. Between 11 and 14 August 2016 there was intense media and political interest in the matter in Ireland. The reportage and commentary included many calls for an appropriate investigation.
At that point, I had not yet departed for Rio. Given the importance of this to our international reputation, I was considering the options for an appropriate Government response. My key objectives were to establish the facts of the matter and to limit or repair any damage to Ireland’s reputation. At that point I was of the view that there was a compelling case to include a minimum of one independent member on the OCI investigating panel. I saw no credible case for asking the OCI to investigate itself. I understood the OCI investigating panel would be a three person panel and I decided to press for an independent member, preferably a retired judge, to chair it. On my arrival in Rio on the evening of 14 August, straight from the airport, as arranged, I immediately met the then President of the OCI, Pat Hickey, and the organisation's first vice president, Willie O’Brien. At that meeting, Mr Hickey refused point blank to include any independent members on the OCI’s investigating panel. He referred to legal advice which he insisted was very emphatic. Mr Hickey also declined to answer any questions about the recent tickets controversy on the grounds that it might prejudice Mr. Mallon’s case before the Brazilian courts. He added that the OCI would not provide any information to any third party, including any independent inquiry that I might establish, until such time as Mr Mallon's case was concluded.
On 15 August, I followed this up with a meeting with the Secretary General of the IOC, Mr. Christophe de Kepper. Mr Hickey joined us. At the meeting with Mr. de Kepper, I highlighted the importance of having independent members on the OCI investigating panel. To my surprise, Mr. de Kepper agreed and pointed to the independent member already on the investigating panel. When it was explained to him that the person that he considered to be an independent member was in fact the legal adviser to the OCI, Mr. de Kepper appeared to be surprised. At that point in the meeting, Mr. Hickey's position changed and he agreed to reconsider the request for the inclusion of independent membership of the investigating panel. However, Mr. Hickey emphasised to Mr. de Kepper that the final decision would be one for the National Olympic Committee. I asked Mr. de Kepper for a decision as soon as possible. During that day, Monday, 15 August, my official emailed Mr. Donovan Ferreti, the ticketing director at the Rio Organising Committee of the Olympic Games seeking a meeting between him and me. No meeting took place as the request for it was overtaken by the events with which everybody will now be familiar. Later that day, the Chairman of Sport Ireland, Mr. Kieran Mulvey - who was at the Olympics – was in touch with Mr. Hickey. I understand Mr. Mulvey explained my need to have independent representation on the investigating panel and suggested that Mr. Hickey should concede my request.
Early on Tuesday, 16 August, my official emailed Mr. de Kepper requesting an early reply about the admittance of independent membership onto the OCI investigating panel. Mr de Kepper was also requested to update the President of the IOC, Mr. Thomas Bach, on the developments. Later that day, I met Mr Mulvey. He advised me that Mr. Hickey was now agreeable to the inclusion of one independent member on the OCI investigating panel. The text of an agreement was drafted by Mr. Mulvey and was to be considered by Mr. Hickey and by me. I was satisfied with what was being proposed and confirmed my acceptance of the text in the early afternoon. Mr. Mulvey indicated that Mr. Hickey needed to clear the text with the OCI executive committee. There was no further word from the OCI during that day.
Early on the morning of Wednesday, 17 August, news broke of the arrest of Mr. Hickey. I discussed the matter on the phone with Minister of State at the Department of Transport, Tourism and Sport, Deputy O’Donovan, and with the Attorney General. Given the seriousness of the situation, and in the interests of taking swift and decisive action, I decided to return to Dublin immediately, where I could fully consider the options open to the Government and decide the best course of action. I arrived back in Dublin on the afternoon of 18 August. I briefed the then Taoiseach, Deputy Enda Kenny, on the telephone.
On 19 August, I convened a meeting to decide on the next steps.
The meeting, which was held in my Department, was attended by the Minister of State, Deputy O'Donovan, the Attorney General, Máire Whelan, and officials from her office, my Department and the Department of Foreign Affairs. We agreed to establish a non-statutory inquiry to be carried out by a retired judge. We believed then, and I now believe even more strongly, that a judge-led, non-statutory inquiry was the most appropriate mechanism to establish the facts and restore Ireland's reputation. In the terms of reference for the inquiry, we provided the judge with the flexibility to escalate it into a statutory commission of investigation should he decide that was appropriate.
We now have the judge's report before us. I spent the past few minutes recording the chronology of events in order to emphasise some summary points. From the date this controversy broke, it was always my objective, stated publicly, that a rigorous, independent process would be put into place to inquire into the events surrounding the OCI's approach to ticketing for Rio. This has now happened. I wanted an effective and efficient process - effective in the sense that we needed to know what went on and efficient in the sense that I wished to minimise the cost to the Exchequer of any process that would take place. Both have been largely achieved. Mr. Justice Moran has delivered a report that is both effective and efficient.
When I arrived in Rio this time last year, reportage was rife with allegations, speculation, anecdotes, and innuendo. Much of that reportage has been successfully addressed and clarified by the publication of this report. Mr. Justice Moran has revealed a hitherto unknown rotten culture at the heart of the OCI. He has shone a light on these matters. He has highlighted shameful standards of corporate governance under Mr. Hickey’s presidency and a triumph of commerce over competitors. He has exposed the stress and frustration caused to athletes, their families and their friends by the OCI's appointment of a ticketing agent that was nothing other than a charade and totally unfit for purpose. None of this was known a year ago.
The report before the committee links some of the more serious allegations and speculation of August 2016 to actual evidence. The narrative presented in the report is on the basis of information which was uniform and persistent, much of the information being in the form of independent documentation, such as emails, clear in their meaning and the provenance of which has not been questioned by any party. Little, if any, of this was in the public arena before the report was written. While Mr. Justice Moran could not establish all of the facts, he did not need to. He was not in pursuit of criminality, merely a narrative of events, however unpalatable. It has proved unpalatable but it is already being remedied. Others can draw their own conclusions from the narrative. Mr. Hickey claims that there are inaccuracies in the report. However, he was afforded every opportunity to engage with the inquiry and to highlight anything that he might have believed to be inaccurate. He chose not to do so, as is his right. He also decided not to challenge its publication in the courts.
Having summarised the events and emphasised some important points, I would now like to expand on what I feel are the two major themes of Mr. Justice Moran's report. The first is the overriding emphasis placed by the OCI and its president, Pat Hickey, on maximising the commercial opportunities of ticketing for the Olympic Games. I was struck, reading the report, by the extent to which the commercial interests of THG, Pro10 and the OCI were Mr. Hickey's number one priority. The athletes, their relations and Irish supporters came a poor second. The OCI went to great lengths to secure high-value tickets for resale by these companies. For some reason, they fought tooth and nail to convince the Rio organising committee and the International Olympic Committee, IOC, to accept THG's appointment as authorised ticket reseller, with Mr. Hickey drawing on his extensive contacts within the IOC in pursuit of that goal.
When that company was rejected, Mr. Hickey, Mr. Marcus Evans of THG and others collaborated to create the sham of Pro10, the sole purpose of which was to disguise the rejected THG's continued involvement in ticket sales.
According to Mr. Justice Moran's report, Mr. Hickey's personal assistant agreed that Pro10 was effectively a "cover" and a "front" to allow Mr. Marcus Evans and THG to remain in the picture. Mr. Justice Moran does not mince his words when he talks about Mr. Hickey's apparent attempt to conceal his relationship with Mr. Marcus Evans, the Marcus Evans group or THG in his denial in the television interview on RTE. Mr. Justice Moran said this was hard to "reconcile" with the email trail between the two men. Sham companies do not deliver. When the crisis broke last August, with the arrest of Mr. Kevin Mallon, they tried to cover up their actions, with the OCI and the companies issuing public statements that we now know to be false, most notably in an interview Mr. Hickey gave to RTE News.
Mr. Justice Moran describes Pro10's service to its customers as "inadequate and chaotic". The report sets out multiple failings in its operations, which were to be expected from a company with no prior experience of ticket sales for a major sports event. The OCI and Mr. Hickey were well aware of Pro10's dubious origins and abject failings, but they showed utter disregard for the interests of athletes, their families and friends and Irish spectators generally. The OCI's demands clearly targeted high value tickets for blue riband events over events with Irish competitors' involvement. In addition, there is evidence in the report of National Olympic Committee of family tickets being handed over for sale by Pro10-THG, directly contrary to the ticketing rules established for the Rio Olympic Games. It is true that these arrangements created a lucrative stream of income for the OCI and its programmes to support Irish athletes. Nothing in the report suggests individuals in the OCI were benefiting personally from the arrangements. Clearly, however, commercial interests can never again be afforded priority over the interests of athletes, their friends and families and ordinary spectators. I regret that the OCI, under the leadership of Mr. Hickey, defied this doctrine.
The second major theme of the report is feeble corporate governance in the OCI. In this respect, Mr. Justice Moran's report should be required reading for anyone with an interest in bad governance, lack of oversight and transparency. It dubbed it as a case of "unilateral presidential decision making". It is clear from it that the governance structures of the OCI failed entirely in their purpose to direct and control the management of the organisation. The leadership of the OCI, in particular its then president, Mr. Hickey, operated almost entirely without oversight. The board was little more than a rubber stamp for decisions taken by the president.
There is evidence in the report that information of the highest importance was withheld from the board by Mr. Hickey such as on the rejection of THG's application to be the authorised ticket reseller. Functions of the council's board, treasurer and chief executive were transferred to the president. It was utterly inappropriate that they had no role whatsoever in the process of negotiating ticketing agreements that attracted rights fees of up to $1 million. These agreements were negotiated and approved by one man, Mr. Hickey, and we have learned since the inquiry concluded that the agreements he signed with THG extend well into the future.
The circumstances of the honorarium to the president also raise serious concerns. The amount paid to Mr Hickey - €60,000 per annum - was far in excess of what might reasonably have been considered an honorarium.
Indeed, Mr. Justice Moran notes that the payment may have been in breach of the Olympic Council of Ireland's memorandum and articles of association.
I am heartened that today the partly reconstructed OCI has embraced the need to fundamentally reform its corporate governance regime. It has made great strides under the shadow of this report, guided by the new president, Sarah Keane, the new executive committee and the refreshed council. Nevertheless, I find it greatly troubling that, were it not for the events of last August, these failings may never have come to light. Imagine if the OCI's investigating panel, championed by Hickey, had been accepted as the investigator, rather than the Moran inquiry. The mind boggles at the possible findings.
It was clear to me when I returned from Rio that governance in sporting bodies was a nettle to be grasped. My Department has been working with Sport Ireland to hammer home to national governing bodies, NGBs, and other sporting bodies the need to enhance their governance structures. Since 2013, Sport Ireland has been encouraging all sports bodies to adopt the governance code for community and voluntary organisations. Since last August, we have placed an even greater emphasis on signing up to the code. I am pleased to report to the committee that 11 bodies have signed up to the code while a further 42 others, including the OCI, are on the journey to compliance. I expect continued and accelerated progress across the sector. However, if this progress is not maintained, I will implement further measures to get more sports bodies signed up to the governance code.
There has been much comment since I published the report on Monday on the subject of parties who did not co-operate with the inquiry. I would like to recognise here though, that there was excellent co-operation from many parties, in particular the OCI, its president, Sarah Keane, and members of the executive committee. The information they shared, along with the extensive records which the OCI supplied to the inquiry, enabled Mr. Justice Moran to provide invaluable insights and make important recommendations.
It is regrettable other parties chose not to co-operate with Mr. Justice Moran, in particular those parties who indicated a willingness to co-operate at the outset. It is not too late for them to respond to Mr. Justice Moran's call to provide explanations of significant matters, as set out in chapter 12 of his report.
I would like to acknowledge, as Mr. Justice Moran has done, the legitimate right which exists against self-incrimination. Those parties who have chosen to avail of this right are entitled to do so. I have emphasised the utmost importance of due process and the tenets of natural justice at every stage of this process. I know that Mr. Justice Moran has done the same. He has given every opportunity to all parties to respond to the material compiled in his report.
The lack of co-operation has happily not undermined the inquiry. This report contains staggering facts, many of which are new, and significant insights and highlights important lessons for ticketing and corporate governance which extend beyond the OCI or the sport sector. It has been a major influence in the reform of the OCI, in the resignation of Pat Hickey and the restoration of Ireland's reputation in the global sporting sphere. Ireland's Olympic athletes are in a better place than they were before it was published. Their treatment was shambolic.
Before I conclude, I would like to underline that in the terms of reference for this inquiry, it was open to Mr. Justice Moran to recommend a full commission of inquiry be established to look further into these matters. Mr. Justice Moran has decided not to recommend that such a commission be established. I accept this recommendation and agree that a statutory inquiry would be disproportionate. I also agree that the key issues that would likely arise are already being addressed adequately in the reforms under way in the OCI. Furthermore, if the inquiry had possessed powers of compulsion, it would have encountered great difficulty in exercising these powers over parties outside the State, such as THG Sports, the Rio Organising Committee and the International Olympic Committee. In addition to this challenge, the right against self-incrimination would remain even if Mr. Justice Moran could compel witnesses.
The argument that a statutory inquiry would have forced all parties to co-operate fully simply does not stand up. The participation of the OCI provided ample evidence of the unacceptable practices that had infiltrated Ireland's Olympic movement. I do not believe we would have learned any more any sooner if I had decided last August to pursue a statutory inquiry. We would almost certainly have a much larger legal bill to be borne by taxpayers.
This report is a solid account of unacceptable activity on the part of the OCI and its ticket resellers in Rio de Janeiro in 2016. It remains to be established whether the activity in Brazil was illegal. Regardless of the outcome in Brazil, the behaviour engaged in was totally and utterly unacceptable. Mr. Justice Moran, an independent authority, has highlighted those unacceptable practices and provided an important cornerstone that will cement the ongoing transformation of the OCI. It will protect the interests of the biggest losers in this entire episode, namely, the Olympic athletes and their families. I commend Mr. Justice Moran's report to the committee and I welcome any views and questions arising from it.