Committee of Public Accounts (Meeting of 9th October 2008)

[Note: Special Report No. 10: National Library of Ireland.]

[The following is an extract relative to the purchase by the National Library of Ireland of 6 MS pages of Finnegans Wake drafted in 1923, the extract being taken from the longer minutes dealing with this and other matters made publically available at the Oireachtas website - online; accessed 20.11.2011.]


 
  MEMBERS PRESENT: Deputy Thomas P. Broughan, Deputy Darragh O’Brien, Deputy Deirdre Clune, Deputy Edward O’Keeffe, Deputy Niall Collins, Deputy Jim O’Keeffe, Deputy Seán Fleming, Deputy Róisín Shortall, Deputy Brendan Kenneally.

 


DEPUTY BERNARD ALLEN IN THE CHAIR.

 

[The enquiry into purchasing affairs of National Library of Ireland commences in the afternoon period of the Committee’s sitting following matters relating to the budget and grants awarded to the Abbey Theatre.]

A. Ó hAonghusa (Director, National Library of Ireland) called and examined.

Chairman: Witnesses should be aware that they do not enjoy absolute privilege. As and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee’s proceedings. These rights include the right to give evidence; the right to produce or send documents to the committee; the right to appear before the committee, either in person or through a representative; the right to make a written and oral submission; the right to request a committee to direct the attendance of witnesses and the production of documents and the right to cross-examine witnesses. For the most part, these rights may only be exercised with the consent of the committee. Persons invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of them and provided with a transcript of the relevant part of the committee’s proceedings, if the committee consider it appropriate in the interests of justice.
  Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in Standing Order 158 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policy or policies.
  I welcome Mr. Aongus Ó hAonghusa, director of the National Library of Ireland. I invite the officials from the Department of Arts, Sport and Tourism to introduce themselves.

 Chris Flynn: I work in the cultural institutions section of the Department which deals with the National Library of Ireland.
 Mr. Dermot Quigley: I work in the procurement unit of the Department of Finance.

 Aongus Ó hAonghusa: I am accompanied by Mr. Gerard Lyne, the library’s keeper of manuscripts.

 Chairman: I invite Mr. Buckley to make his opening comments.

 John Buckley: The National Library of Ireland became an autonomous body in May 2005 under the National Cultural Institutions Act 1997. It now operates under a board of 12 members appointed by the Minister. In 2007 its total expenditure was €13.6 million.
 Special Report No. 10 outlines the circumstances surrounding the procurement by the library of certain Joycean material. The material involved consisted of six pages relating to Finnegans Wake. It was initially sourced at the premises of a Paris book dealer in 2004 and the actual purchase which was finalised in 2005 was funded by a private institution using tax relief provisions set out in section 1003 of the Taxes Consolidation Act 1997. This involves the institution getting a tax credit equivalent to the purchase price.
  There are sensitive issues around the establishment of title in the case of Joycean material and consequently in acquiring it. It is clearly prudent that the library validate the provenance of the documents. Overall, two somewhat competing versions of the facts relating to the acquisition have been put forward. First, a temporary employee of the library inspected the papers in Paris in May 2004 and in the period up to the end of the year kept the library informed on progress in making them available for acquisition. On the other hand, a dealer who was contracted to the Department in respect of running the Bloomsday Festival asserted that she had already acquired title to the papers in April 2004, which was before the employee’s visit to Paris. While the employee had concluded that the documents were available for approximately €400,000, the ultimate cost in terms of tax credits was approximately €1.2 million.
  The documents were bought from the dealer who was contracted to the Department. Both the library and the Department have conducted independent investigations of the matter and the library has concluded that the dealer had, in fact, purchased the papers in April 2004 and that any delay in following up on the material was due to complications in regard to title that would have arisen if a direct approach had been made to the dealer in Paris. The library favoured acquiring this type of material using the services of a reputable dealer. It has provided assurance that it is introducing collection development policies and acquisitions guidelines to cover future procurement. The director will be in a position to update the committee on the progress made in this respect.

 Chairman: I ask Mr. Ó hAonghusa to make his opening statement.

 Aongus Ó hAonghusa: I am pleased to have this opportunity to appear before the committee to discuss the Comptroller and Auditor General’s recent report on procurement in the National Library of Ireland. As the report points out, the acquisition that is the subject of the report was the third significant collection of James Joyce material to be acquired by the library in the space of just over four years. The acquisition was completed in a thorough manner. The authenticity of the material was verified and its importance from a literary perspective confirmed by external experts. Independent professional valuations were also carried out. The vendor provided appropriate information on the provenance of the material. The library was anxious at all times in the acquisition process to ensure the State received value for money in the transaction. Working closely with our legal advisers, appropriate contractual arrangements were put in place to safeguard the library’s interest in the matter.
  The conclusions of the report, as set out in paragraph 4.30, are worth noting:
 While the State ultimately acquired the manuscripts in question for a price representing market value, the circumstances surrounding the sourcing of the material and the level of interaction that is inevitable within a limited community of persons in a specialised field strongly suggests that more robust contractual and ethical arrangements may be required to protect the State’s interests where such factors come into play.
  The key point is that the material was obtained at market value. The report does not record any impropriety on the part of library staff.
  The acquisition was effected through the use of section 1003 of the Taxes Consolidation Act 1997. The Joyce material was purchased by a commercial bank which then donated the papers to the National Library. Subsequently, the bank sought and received a tax credit in the same amount as the amount it had paid for the material. The application for the tax credit was approved by the selection committee established under section 1003. The committee determined that the material in question met the statutory criteria that apply under the scheme. These criteria are that the material should be an outstanding example of the type of item involved, pre-eminent in its class, the export of which from the State would constitute a diminution of the accumulated cultural heritage of Ireland or the import of which into the State would constitute a significant enhancement of the accumulated cultural heritage of Ireland. Under the tax credit scheme, the Revenue Commissioners are required to obtain an independent valuation of an item approved by the committee for donation. Such a valuation was obtained in this case - one of three valuations commissioned in the whole process.
  The National Library has an active acquisitions programme funded from its annual voted allocation. We also have access to instruments such as the tax credit scheme and the heritage fund. I am pleased that the institution continues to receive donations of material; this varies from single items to large collections. Acquisitions can be and are a time consuming and long drawn out process, as a range of issues must be addressed. These include the importance, authenticity and provenance of material. Negotiations with vendors can be tedious but I must stress that the library endeavours to acquire material for inclusion in its collections at the lowest possible cost to the State. In that respect, it adopts a commercial approach in its negotiations with vendors.
  The three Joyce acquisitions mentioned have helped make the National Library probably the world’s foremost repository of Joyce material. Scholars and researchers come from around the world to undertake research on this material. Material from the 2000 and 2002 acquisitions formed a central part of the library’s ground breaking Joyce exhibition which ran from 2004 to 2006. It is fair to say these acquisitions have helped to raise the profile of the library and allowed the institution to develop new and innovative programmes and attract new visitors.
  Returning to the report, it appears the Comptroller and Auditor General’s concerns, in so far as they relate to the National Library, can be summarised as relating to possible conflicts of interest on the part of library staff and possible delays in pursuing an acquisition once the existence of the material became known. I have addressed these points in my responses which have been incorporated in the report, but I wish to add a few more comments.
 With regard to possible conflict of interest, I must stress that there is no evidence of any conflict of interest on the part of any library staff member involved in this acquisition. In a report commissioned by the Minister for Arts, Sport and Tourism - a copy of which is in the Oireachtas Library - the vendor has made clear that no information was received from anyone in the library in relation to the material or the library’s interest, or lack of interest, in pursuing a possible acquisition.
  In early 2007, the board of the National Library commissioned an external review of the acquisition. As part of that review all of the key library staff involved in the transaction were interviewed. The external reviewer did not find any evidence of a conflict of interest on the part of library staff. The wider review which, as I mentioned, was conducted on behalf of the Minister for Arts, Sport and Tourism, reached the same conclusion.
  As director of the National Library, I became aware of the existence of this cache of Joyce material in the early summer of 2004. I believed at the time that it would be difficult for the library to pursue an acquisition through a Paris based vendor - the material having been discovered in a Paris bookshop. My rationale for that decision was that the library did not have the resources to pursue an acquisition through an unknown Paris book-dealer. That is no reflection on that person; it was simply an acknowledgement of the reality that, at that point, not only did we not know the bookseller, but we did not have the resources or the capacity to commit to what was likely to be a complex and time-consuming acquisition process.
  The material ultimately came on the market some months later via Sotheby’s of London, which had handled a previous Joyce sale to the library on behalf of a different vendor. Sotheby’s had a good understanding of what the library would require in order to complete the purchase. Therefore, the acquisition proceeded quite smoothly from the time Sotheby’s first came to the library in late 2004 to the conclusion of the process in June 2005. A six-month period to conclude an acquisition such as this is by no means unusual. I make no apologies for the approach taken. It may seem conservative, but I regarded it then, and I still do, as a prudent and reasonable approach.
  I should stress that the Joyce material was never on offer to the library before December 2004 and that up to that time the institution had nothing remotely resembling an entitlement to acquire the material for any price lower than that at which it was ultimately acquired. It subsequently transpired that the vendor had acquired the material from the Parisian book-dealer in April 2004 and, therefore, any direct approach by the library to the book-dealer would not have achieved success.
  The library and its board have taken steps to ensure that appropriate policy and governance arrangements are in place dealing with acquisitions. This process began when the board was established in 2005. Arising from the concerns that arose in relation to this particular acquisition, the board, in early 2007, established an acquisitions policy advisory committee. The remit of this committee is to support the board in terms of acquisitions policy generally. Work is nearing completion on a collection development policy which will spell out the library’s policy on the type of material the institution wishes to acquire.
  A further element that is planned is the preparation of a set of acquisitions guidelines that will lay down for staff the key principles to be followed in the acquisitions process. Ethical issues will undoubtedly feature in these guidelines.
  The library already complies fully with its obligations under ethics legislation. In particular, staff holding designated positions are required to complete declarations in accordance with the legislation, staff contracts and terms of employment are consistent with the appropriate guidelines, and an ethics policy is in place for staff. This ethics policy is in the course of being reviewed. The existing policy already explicitly addresses the issue of conflict of interest. However, as part of the review consideration will be given to strengthening further the relevant section.

 Chairman: May we publish Mr. Ó hAonghusa’s statement?

 Aongus Ó hAonghusa: Yes.

 Chairman: Thank you.

 Aongus Ó hAonghusa: There might be some minor changes to it, but nothing of substance.

 Jim O’Keeffe: Does the director accept that, on the face of it, some serious issues arise concerning this purchase, in particular from the point of view of conflict of interest aspects? I am not thinking of his point of view of course, but that of the people who were involved.

 Aongus Ó hAonghusa: Conflict of interest is always a difficult issue to understand. I am satisfied that, in this case, on the part of library staff there was no inappropriate action. No information about the library’s negotiation position or its commercial decisions was released to anybody. That is clear and I am satisfied that was the case.

 Jim O’Keeffe: As regards the library staff, however, that is not the central issue. In May 2004, the employee of the library inspected the Joycean material in question, which was for sale at that time apparently for the sum of €400,000, and duly reported back to the library. Yet, subsequently, the dealer who was under contract to the Department claims to have purchased this material the previous month. That does not seem to add up, does it?

 Aongus Ó hAonghusa: There are a couple of points. The library employee who visited Paris was a temporary employee and visited Paris in a personal capacity. I know the distinction between a personal capacity and one’s employment is not always clear to temporary employees. That is one of the lessons we have learned in this process, so we have to make it clear to temporary staff what they can and cannot do. To some extent, however, that is a side issue. He went to Paris on a private project in keeping with his own professional area of expertise, which relates to Joycean texts. That is why he went to Paris - to see if there was any truth in this rumour, what the documentary material was and where it might fit in to the overall scheme of Joycean things.
  I cannot say much about the other aspect of it. I mentioned the report that had been commissioned by the Minister for Arts, Sport and Tourism. The person who conducted that report, the previous Secretary General of that Department, had addressed some of these issues and, I think, had contact with the vendor. That person has confirmed that the material had been bought, or that the deal to complete that sale had been done, in late April 2004. He expressed the opinion that it was nothing unusual and was still available to be perused in Paris. As regards the issue of the possible relevance or otherwise of the figure of €400,000, we simply do not know. Certainly, that was never brought to my attention as being an asking price. The deal seems to have been done anyway between the Paris book-dealer and the vendor. Even if we had tried there and then to start an acquisitions process and begin negotiations, it seems that there was nothing to buy.
 
  Jim O’Keeffe: The director must understand the concerns we have on behalf of the taxpayer, who is indirectly paying for this material, arising from the fact that this material appears to have been openly for sale in May 2004 at a price of €400,000, which was duly reported to the library by the employee. Yet, the library subsequently had to pay a figure of €1,170,000. Does the director understand our concerns arising from that situation?

 Aongus Ó hAonghusa: Of course I appreciate and understand the concerns, but the reality is that the material was not available to the National Library. It was not on offer to the National Library and we were not in negotiations with the vendor in Paris. The figure of €400,000 was not made available to me until much later in the process.

 Jim O’Keeffe: Would the director further understand our perhaps more serious concerns that the material in question appears to have been acquired by somebody who was being paid by the taxpayer under contract to the Department, working at that time as administrator of the Bloomsday centenary committee?

 Aongus Ó hAonghusa: That information only became available much closer to the time when the contract was being concluded in the middle of 2005. We were dealing with Sotheby’s from December 2004 on a one-to-one basis with a senior person in Sotheby’s who was clearly acting on behalf of an unknown vendor. I cannot answer on behalf of a third party as to what was their role in the process or how they became involved in the transaction.

 Jim O’Keeffe: What third party?

 Aongus Ó hAonghusa: The vendor.

 Chairman: Your agent?

 Aongus Ó hAonghusa: No, the person who ultimately sold the material to the commercial bank.

 Jim O’Keeffe: It was the dealer who was working for the Department at the time.

 Chairman: It was your agent, was it not?

 Aongus Ó hAonghusa: Perhaps the Department might like to deal with that. I cannot really deal with it. The National Library had no contractual arrangement with this person.

 Jim O’Keeffe: At what stage did Mr. Ó hAonghusa become aware that this dealer had acquired this material?

 Aongus Ó hAonghusa: Does the Deputy mean an identifiable individual?

 Jim O’Keeffe: Yes.

 Aongus Ó hAonghusa: In May 2005. That was the first time I was made aware that the person, who was on the other end of Sotheby’s if you like, was this person.

 Jim O’Keeffe: Was that a voluntary disclosure or was it at the insistence of the library?

 Aongus Ó hAonghusa: When we started to talk to Sotheby’s in December 2004, we had always made clear to it that at some stage in the process we would need to be informed as to the identity of the vendor because a contract for sale would need to be signed. We would have needed to know with whom we were dealing. It was not an issue for the first couple of months because we were dealing with the range of paperwork at our end but then as it came close to preparing final drafts of the contract, we insisted that Sotheby’s reveal the name of the individual and it did so approximately a month before the contract for sale was signed.

 Jim O’Keeffe: Apparently what was then disclosed was a claim that the material in question had been purchased in April 2004 and that the payment, therefore, had been finalised in December 2004. Is that correct?

 Aongus Ó hAonghusa: That is my understanding. In the documentation the vendor supplied through Sotheby’s, a copy of an invoice for a receipt indicating that the sale was completed in December 2004 was included with it.

 Jim O’Keeffe: My next question is more for the Department. At the time of the purchase, the person in question was under contract and working for the Department. Is it correct that her contract provided that she should not engage in any other work for the duration of her contract that would constitute a conflict of interest?

 Chris Flynn: The contract for the individual in question contained a fairly standard clause in relation to other work. It stated:
 It is understood that you will not engage in other paid work that could constitute a conflict of interest for the duration of this contract. Failure to disclose any such conflict of interest would cause determination of this contract if the Minister, at his discretion, judges such termination to be warranted.
  On entering into that contract with the individual, the Department was aware that the individual was a collector and a dealer as well as being a Joycean. That was our starting point.
  Going on the data we have from Mr. Furlong’s report into the acquisition and other events, it is clear the collector, or the vendor if we can call her that, agreed to purchase this collection at a time when she was under contract to the Department. She concluded the actual sale when she was outside contract and Mr. Furlong’s conclusion, having looked at all the facts, was that there was no conflict of interest in her continuing to do what she had done prior to entering into contract with us.

 Jim O’Keeffe: Would Mr. Flynn accept that is a conclusion which might not be fully shared in the context of the circumstances now outlined by the Comptroller and Auditor General?

 Chris Flynn: That is the conclusion at which the former Secretary General arrived. We sought legal advice on the matter in the general sense of conflicts of interest and contracts of this nature. I will refer to some of the advice we got back from the Attorney General. Clauses such as restricting people’s activities in contracts of this nature are difficult and can be taken as restricting people’s freedom to trade. One may, in a sense, put a clause into a contract that is unenforceable. If one says to someone that he or she may not do certain things while under contract to the Department, one cannot, therefore, extend that after the contract period which is, effectively, what happened in this case. The deal was closed after the contract had been completed.

 Jim O’Keeffe: Has Mr. Flynn been able to ascertain when the dealer in question first became aware of the existence this material and from whom and in what circumstances she was made aware of it? Has he been able to ascertain the amount of money for which the dealer was able to acquire the material in question? The figure seemed to be €400,000 in May 2004.

 Chris Flynn: No. We do not have that information. To answer the Deputy’s first question, the information we have in relation to when the collection was first notified to the dealer was February 2004.

 Jim O’Keeffe: Will someone explain the role of Sotheby’s in this whole transaction because it appears somebody from Sotheby’s was advising the dealer in relation to this matter as well as the National Library?

 Aongus Ó hAonghusa: Sotheby’s was always working for the vendor in this case. It was never working for the National Library. It was never our agent in the process.

 Jim O’Keeffe: I see. It was clearly for the vendor.

 Aongus Ó hAonghusa: Absolutely. It was out to negotiate the best deal possible for its client and, working with our legal advisers, we were trying to do the same on behalf of the State.

 Jim O’Keeffe: If this material was openly on sale in a bookshop in Paris in May 2004 for €400,000, it is a bit difficult to understand why what would appear to be a circuitous route going through Sotheby’s, and ultimately paying over €1 million for the material, was used.

 Aongus Ó hAonghusa: We will never get the answer to that because we still do not know if it was ever on sale for €400,000. I do not know how much the vendor paid for it in Paris. The Sotheby’s route ...

 Jim O’Keeffe: Mr. Ó hAonghusa’s employee reported that it was for sale in the middle of May 2004 for €400,000.

 Aongus Ó hAonghusa: He reported that it was in Paris. As to whether he gave any indication about the €400,000, myself and my colleagues were never made aware of that. The significance of that is still not clear to me. In the summer of 2004, for a whole variety of reasons, we felt we could not sustain a campaign to buy it from Paris. All our previous experience in these areas had been with the likes of Sotheby’s and before it with Christie’s on an acquisition in 2000 which was done by auction. We were in no particular hurry to buy this. I suppose we have a more cautious policy and we feel it paid off in this case.
  We do not know what would have happened if we had started to try to negotiate with the book dealer in Paris. He might have tried to gazump the vendor. Who knows? We simply do not know, nor will we ever know. Again, the process worked its way. Three separate valuations have confirmed that the price the commercial bank paid for it represented value for money. I suppose all that could be said about the Paris situation is that possibly - it is completely hypothetical - we missed out on a bargain.

 Chairman: Mr. Ó hAonghusa said there was no evidence it was available for €400,000. The Comptroller and Auditor General’s report states that the National Library’s man, the part-time employee, went to Paris and concluded that the asking price would be in the order of €400,000 on the basis of material, recording that figure being placed adjacent to the manuscripts. How can Mr. Ó hAonghusa state then ...

 Aongus Ó hAonghusa: That information was never brought to my attention. The staff member, as I explained earlier, went to Paris in a private capacity. He had no responsibility for the acquisitions. He certainly was not in a position to negotiate on behalf of the National Library. The book-dealer in Paris did not know where he was coming from. He did not know that he was involved in the National Library. He thought, because this gentlemen is not Irish, that probably he was from an American institution or somewhere else. Frankly, we will never get to the bottom of the significance of that figure of €400,000.

 Jim O’Keeffe: The danger of being gazumped in dealing with the book-dealer was mentioned.

 Aongus Ó hAonghusa: It was not that we were being gazumped, rather that perhaps if we had gone to Paris on foot of our staff member’s report and started trying to negotiate with the bookseller, he might have changed his mind and withdrawn the sale from his first client. We will never know the answer to that either.

 Jim O’Keeffe: Does the director not understand how perplexed somebody like me would be looking at it from outside? Surely it would have been worth the price of a Ryanair ticket to Paris to check out something at €400,000 for which we subsequently paid more than €1 million.

 Aongus Ó hAonghusa: In the summer of 2004 the price was not a factor. Certainly, the figure of €400,000 had not been brought to my notice and the price was not a factor in our decision-making process. It was a variety of things. First, we did not have the staff resources to go to Paris. In hindsight, maybe it might have been worth our while, as Deputy Jim O’Keeffe stated, to send somebody to Paris to investigate it further, but the decision we made was that we had other priorities in the summer of 2004.

 Jim O’Keeffe: The director did not rely on the report that he got from his own employee, who apparently is quite an established Joycean scholar.

 Aongus Ó hAonghusa: There is no doubt he produced a comprehensive report on the quality of the material. It was a clearly thought-out academic paper on the importance of the material and how it fitted in with other Joycean material, both in the National Library’s collection and in other collections. There was no doubt when that became available that it was quite an important document.
  Our concern was more in terms of the complexities associated with the negotiating position and the commercial side of it. Certainly, I was not happy, and I did not have the resources to start dealing with an unknown book-dealer in Paris.
 As it happened, it came to us ultimately through Sotheby’s. Sotheby’s, although it was acting for the book-dealer, had acted for a previous vendor three years previously and had been through all of the negotiations with the National Library with a previous director, and knew clearly what the National Library would require in terms of contractual arrangements. All of those arrangements were agreed quite smoothly with Sotheby’s.

 Jim O’Keeffe: Does the director understand how difficult it is for us, who are here on behalf of the taxpayer, to reconcile a situation where apparently this material was available for €400,000, at which time it had been looked at and reported on positively by an employee of the National Library, and then that the National Library subsequently ended up paying €1,170,000 to somebody who acquired it while working for the director’s parent Department?

 Aongus Ó hAonghusa: I already indicated that I understand and appreciate the concerns. What is clear is that this material had already been sold on in April 2004 before the National Library staff member even saw it. We cannot rewrite that piece of history.
 My colleague, Mr. Lyne wants to add to this.
 Mr. Gerard Lyne: I wish to make two points. The sum of €400,000 has been tossed about in the course of the discussion.

 Chairman: It is not tossed about; it is in the report.
 Mr. Gerard Lyne: I beg the Chairman’s pardon. Yes, of course. I use that phrase figuratively.
 If we look closely at the report of the employee in question, he states that he came to the conclusion that this material was on offer for €400,000 because of a notice in association with the material. That seems to me a very vague statement. Why did he not go to the dealer and get confirmation that this was price? He did not. Therefore, there was no basis for action on our part. That was an inconclusive statement by the employee in question.
  My second point relates to the director’s decision to proceed through an established and reputable auction house, Sotheby’s. He made that decision in consultation with senior staff in the National Library and we unanimously endorsed his decision in that respect. We did so for very good reasons, that it was a safe route because a reputable established auction house will provide a solid provenance for the material. As the committee will be aware, provenance is most important in any acquisition by an institution such as ours. Those two points need to be taken on board.

 Chairman: I thank Mr. Lyne.

 Jim O’Keeffe: I want to take up where Deputy Jim O’Keeffe left off. The director’s presentation is made in an unapologetic fashion. He has been outmanoeuvred and wrong-footed by people associated with the National Library, and possibly his own staff. That is patently clear.

 Aongus Ó hAonghusa: Hold on a second ...

 Chairman: Mr. Ó hAonghusa should let Deputy Collins finish.

 Jim O’Keeffe: We represent the public and the taxpayers who have ultimately paid the price here. An intermediary came into the process and, obviously, made profit. That profit was borne by the taxpayer. The director is unapologetic about it and that it not appropriate in the situation.
  The director stated he is happy there was no conflict of interest. First, he has not told us how he arrived at that conclusion. Second, it would be fair to say that, regardless of conflict of interest, there had to have been collusion between the temporary employee, who first apparently discovered the material in Paris, and the vendor, from whom the National Library ultimately bought it.
  My final observation on it is that the director states that the National Library is relying on the term market value and on a number of valuations that the National Library received. That is not a fair comment either because it is not a pure market. There is not a number of suppliers of this material and there is not a number of people interested in acquiring it. It is probably fair to state that the National Library, representing the State, would probably be the leading entity targeting that type of material.
  To move it forward, what is the director doing to ensure that something like this will not recur? Is he putting in place confidentiality clauses with all the National Library’s employees, both permanent and temporary, and can he restrict their private activities? How is the National Library tying in people?
 This does not involve small sums of money. There must be a lesson learned from this. The director’s presentation lacks a little humility. He was outmanoeuvred on this and he should acknowledge it.

 Aongus Ó hAonghusa: I am sorry for my earlier intervention. I am concerned that Deputy Collins referred to somebody and has implied collusion between a former staff member and a third party. The record is clear. There was no such collusion.
 There was a report commissioned by the Minister for Arts, Sport and Tourism. The board of the National Library commissioned a report. The public servant, doing that report on behalf of the National Library, sat down with an individual and specifically asked him had he had any contact with the person who sold it to us. He said that he had not such contact. I asked him the same question. There is no evidence whatsoever that any collusion took place. I am disappointed that this would be said because there is absolutely ...

 Jim O’Keeffe: Equally, there is no evidence that collusion did not take place. How do we ...

 Chairman: There is no evidence of collusion. However, there is evidence of quite a serious sting operation ...

 Aongus Ó hAonghusa: I do not accept that.

 Chairman: ...by an agent of the Department and the vendor. In my opinion our guests were the victims of a sting.

 Aongus Ó hAonghusa: A sting also implies collusion. It is unfair to ...

 Chairman: Not with the employee.

 Aongus Ó hAonghusa: However, it still implies that more than one person was involved. There is no doubt that the person who sold this material to the National Library or to the bank that received the tax credit was involved in a contractual relationship with the Department and was known to the library. We had a business relationship with this person.
 We all wish that things could have been done differently. I am not exactly sure what we might have done differently at the time. Perhaps we might have travelled to Paris sooner than we did and commenced discussions with the person there. However, I do not believe this would not have resulted in a different outcome. I am unapologetic about certain matters and it is important to state that we have added an important acquisition to the national collections.
 Deputy Collins referred to confidentiality clauses. Like their counterparts across the civil and public service, our employees are required to sign declarations of confidentiality. As part of their employment contracts, they are required to comply with the provisions of the Official Secrets Act and the Freedom of Information Acts. Those Acts regulate, to a certain extent, the way in which public employees can release information. Mr. Flynn dealt earlier with the issue of whether it might be possible to introduce restrictive practices conditions into employment contracts. I do not know whether it would be feasible to do so. The advice he received indicates that there are concerns with regard to introducing such conditions.

 Chris Flynn: On the issue of conflicts of interest, it is important to state that no laws were broken and nothing illegal was done in this instance. The person who sold the material to the National Library is a collector. She also provided material on loan for the exhibition the library mounted in respect of Joyce. She is known internationally as a collector.
 Deputy Collins made a good point on the three valuations obtained in respect of this material. He also stated that the National Library was the lead purchaser in this market. It is not strictly correct to say that. There would be at least three institutions in the United States that would give anything to procure this particular collection. The strictest confidentiality had to be observed in respect of earlier collection of Joyce material that was purchased for a large sum because we were aware that there was one university in the United States which would have procured the collection if it had been in a position to do so. The National Library would not necessarily be the leader in this market and there are others who would be extremely competitive in the context of containing manuscripts of this nature.

 Chairman: How does Mr. Flynn know that?

 Chris Flynn: From previous experience. One of the largest collections of Joyce material is held in the United States.

 Jim O’Keeffe: Is that not all the more reason for the relevant employee to have travelled abroad in May 2004 to check on availability of the material before anyone else could procure it?

 Aongus Ó hAonghusa: We answered that question already. I only became aware of the importance of this acquisition in late June 2004. An initial report was prepared in mid-May of 2004, at which point we were gearing up for a major Joyce exhibition. The National Library has many priorities, of which the making of acquisitions is only one. For example, we are faced with difficulties in respect of our buildings.

 Thomas P. Broughan: Is it not the case that the Joyce research fellow, Dr. Luca Crispi, stated on 29 June - we know this through an FOI request - that the library would have the right of first refusal through July? In other words, it was aware of the material’s existence and had the right of first refusal in respect of it until the end of that month. Is that correct?

 Aongus Ó hAonghusa: The individual has explained what he meant by that. It did not involve the concept of first refusal. In his statements to the independent review commissioned by the board, he effectively withdrew that comment and indicated that, as far as he was aware, no one else was interested in acquiring it at that stage. He was clearly mistaken.

 Chairman: From what source did Deputy Broughan obtain his information?

 Thomas P. Broughan: It came to my attention on foot of an FOI request, which indicates that Dr. Luca Crispi stated on 29 June that the National Library had the right of first refusal through July. Did formal or informal discussions involving Mr. Ó hAonghusa, Ms Laura Barnes - the vendor - the dealer, Dr. Luca Crispi and Dr. Stacey Herbert in respect of these manuscripts take place in 2004?

 Aongus Ó hAonghusa: I can confirm that I only engaged in discussions with the first of the individuals, who was a member of staff of the library, to whom the Deputy refers.

 Chairman: For the sake of fairness, will Deputy Broughan make the information in his possession available to members because they do not know from what he is quoting?

 Thomas P. Broughan: It is a document entitled Irish Historical Mysteries: The Trade in Joyce Manuscripts, which deals mainly with the Léon cache but which also refers to this particular sale.

 Aongus Ó hAonghusa: I am aware of the document and I have a copy with me.

 Thomas P. Broughan: The book dealer in this case is a Jean-Claude Vrain. A key issue for Joycean scholars in purchases of this nature relates to the veracity of documents. There is a lengthy discussion in Irish Historical Mysteries: The Trade in Joyce Manuscripts on the fact that the manuscripts came from the apartment of the writer himself and were apparently sold at auction at the Hotel Drouot between 1941 and 1946 by a dealer named Maurice Bazy. Are we sure of the provenance of the documents? Was what the Americans refer to as “questioned documents” research carried out in respect of them? When the National Library became aware, through the work of its employee, that Jean-Claude Vrain was in possession of the documents, why did it not immediately despatch someone to provide an expert opinion in respect of them and then commence the process of purchasing?

 Aongus Ó hAonghusa: As stated in my presentation, and as the Comptroller and Auditor General pointed out earlier, provenance is extremely important in the context of Joyce material. It is, in fact, important with regard to all collections because we need to know that we are not buying a pig in a poke. However, a particular issue arises in respect of tracking Joyce documents as a result of his transient lifestyle. He lived in many places and he gave material to different people, so it is hard to track every item. Much of his material was taken from his residence in Paris when he left and it was auctioned. Any time we buy Joyce material, we must track back and we put the onus on the vendor to provide solid provenance. The information regarding the provenance Deputy Broughan set out about the auction in the hotel in Paris in 1946, the first dealer, on to the second dealer and, ultimately, to the vendor was provided by the vendor as part of the supporting documentation for the acquisition. That was thoroughly checked out by our legal advisers who sought French legal advice to see that those steps complied with French law and, as a result, the library’s position was protected and no action could be taken against the library if there was an issue over the provenance. There is also a provision in the contract for sale that if the provenance is erroneous or misinformation was given to us, we have a legal route to seek redress against the vendor.
 Mr. Gerard Lyne: The material Deputy Broughan quoted provides an admirable illustration of the complexities surrounding provenance in the case of Joyce manuscripts and it illustrates why the National Library was well advised not to proceed precipitately in this case.

 Thomas P. Broughan: Is it true that due to the research conducted by the temporary employee, the library had first refusal up to the late summer of 2004?
 Mr. Gerard Lyne: We had a very vague statement of the sum the manuscript was on offer for and we needed to conduct measured and careful research into the provenance. This is why the director, with the full support of his senior staff, chose to proceed to an established and reputable auction house. It made eminent good sense.

 Thomas P. Broughan: Is it not the case that Joycean scholars in Ireland and the US are a closely knit band and, considering this from the public’s point of view, this entire affairs stinks and there is a perception a sting occurred or at the very least sharp practice was involved, which left the State exposed? At the end of the day, the State need not have incurred this significant expenditure if the library had taken action earlier.
 Mr. Gerard Lyne: That is a conclusion the Deputy is entitled to come to. Two separate investigations have come to an opposite conclusion.

 Thomas P. Broughan: In 2006 the Chairman’s esteemed former colleague, Paul McGrath, who was in the House yesterday, made a formal complaint to the Ceann Comhairle apparently after he was contacted by Ms Laura Barnes, the dealer, having submitted a parliamentary question on the matter but before he had received a reply from the Minister for Arts, Sport and Tourism, which is an extraordinary sequence of events. Was this extraordinary matter investigated by the Department? If so, what was the result? How could a parliamentary question from Deputy McGrath, acting in the public interest, become known to any participant in the case?

 Chris Flynn: The issue of the parliamentary question tabled by former Deputy, Paul McGrath, was also gone into by former Secretary General Furlong and the conclusion he came to in his report on that matter was that the Department did not adequately respect the integrity of the parliamentary question process and this resulted in a badly timed telephone call from the vendor to the former Deputy before the latter had received the ministerial reply to his question. The circumstances surrounding the background to that are dealt with in Mr. Furlong’s report. An official in the Department communicated with the vendor to extract details to have the answer for the parliamentary question and, in contacting the vendor, inadvertently made the vendor aware of the parliamentary question. He was trying to elucidate the question but, at the same time, made her aware of the parliamentary question being tabled. That is in a nutshell what happened behind that. It is accepted by the Department and the official in question that the timing was less than desirable.

 Thomas P. Broughan: Was a decision taken to change practices in this regard? It seemed like an outrageous attempt to try to influence a Deputy discharging his public duty.

 Chris Flynn: We have all been very well reminded of the necessity to deal with parliamentary questions through the proper procedure and the necessity to keep information relating to parliamentary questions within the Department and the Dáil until they are answered.

 Thomas P. Broughan: If the original valuation was accurate, what is the net cost of this affair to the Exchequer?

 John Buckley: If the original cost was valid and there is some doubt about that, the premium the State would have paid would have been of the order of €770,000.

  Deputy Darragh O’Brien: Does that include the tax credit?

 John Buckley: The tax credit was the way it was paid for.

  Deputy Darragh O’Brien: It was returned to the commercial bank. That was given to the bank in full.

 John Buckley: It will be offset against the bank’s tax bill. One can offset it against the bill or write a cheque. It is the same thing.

  Deputy Darragh O’Brien: People can draw a number of conclusions and we are at cross purposes regarding some of them. This case is beginning to sound more like Frederick Forsyth than James Joyce given all the trips to Paris, who did what to whom and who did not do this, that or the other. I cannot understand how, based on the Mr. Furlong’s report, it was seen that there was not a conflict of interest involving this person who was effectively paid for by the State, employed by the Department and worked for the National Library and who put a deal together from which she benefitted financially. In no way, shape or form, could I draw the same conclusion. We are discussing someone else’s conclusion. Has this individual been engaged in other work by the Department or the library since this issue emerged regarding the Joyce manuscripts in Paris?

 Chris Flynn: The individual in question has had several contracts following on from the administrator job on the Joyce festival. Three other jobs were carried out for the Department involving Beckett - a feasibility study relating to Beckett, a calendar of events for the Beckett centenary and, as a result of a competitive process ...

  Deputy Darragh O’Brien: How much was she paid?

 Chris Flynn: She was paid a fee of €45,000 in total as Beckett centenary co-ordinator. Her total remuneration from four contracts was more than €100,000. I emphasise that much of that would have been put down to expenses and to paying other parties.

 Jim O’Keeffe: What expenses were paid in addition to the €100,000 to the same person?

 Chris Flynn: A total of €174,000 in expenses in addition to that sum. The auditor has the figures in the report.

  Deputy Darragh O’Brien: I saw it, but the figures Mr. Flynn is giving are separate to the expenses.

 Chris Flynn: There was remuneration of more than €100,000 plus expenses of €174,000.

  Deputy Darragh O’Brien: Was the person in question working in conjunction with the National Library since this? Has she worked with the National Library on other projects or just directly with the Department?

 Chris Flynn: Those were with the Department.

  Deputy Darragh O’Brien: This is what I do not get. Whatever way one looks at it, judging by the evidence from the Comptroller and Auditor General’s report, I do not dispute the fact that nothing illegal has been done, this individual did not live up to the spirit of the law and of her contract. It beggars belief, therefore, that the Department still engages a person who, from the information we have, at the least acted inappropriately, and that we continue to pay for her services through the Department. I do not understand that.
 Many people would have serious concern in this regard. If the original amount of €400,000 is correct, and the State ends up paying €1.1 million, there is at least a €700,000 loss to the taxpayer while in the meantime there is a profit for this person, yet we continue to engage her. It seems from earlier comment that we were almost grateful this person has lent us transcripts for previous Joycean exhibitions. The taxpayer must be protected. How do we know this situation will not recur?

 Chris Flynn: I have no knowledge of the €400,000 and cannot comment on it. It is a hypothetical figure.

  Deputy Darragh O’Brien: It is the figure cited by the Comptroller and Auditor General in the special report.

 Chris Flynn: I have no knowledge of that. With regard to the conflict of interest, the first contract specified she would not engage in paid employment that would conflict with her work for the Department. However, the question must be asked whether what she did in pursuing the occupation she habitually pursued, namely, collecting Joyce material, conflicted with the contract. The opinion of the Secretary General, Mr. Furlong, and legal opinion after the event, are that was not a conflict. I must rest on that.

  Deputy Darragh O’Brien: I will put it to Mr. Flynn again. On what grounds does the Department feel it is appropriate to continue to engage this person and to pay her substantial amounts of money following the Comptroller and Auditor General’s report and the comments made here today?

 Chris Flynn: The Deputy should look at the timing. The last work done by the individual in question finished in May 2006.

  Deputy Darragh O’Brien: Has there been nothing since then?

 Chris Flynn: Not for the Department.

  Deputy Darragh O’Brien: What about for the library?

 Aongus Ó hAonghusa: No.

 Chairman: Mr. Flynn mentioned she was a collector. She was not really a collector, but someone who bought and sold, a dealer.

 Chris Flynn: My information from the beginning was that the individual in question was a collector of Joyce material, going back many years. At the time we interviewed for the initial contract, her CV mentioned her involvement in an American company which is a rare book enterprise specialising in 20th century literature, especially the works of James Joyce. I know that through her involvement in that she built up a collection of Joyce material herself. Therefore, it is fair to say she had been a collector, going back to before the year 2000.

 Thomas P. Broughan: The document about which I inquired indicates the complexity of Joycean memorabilia and scholarship. The director said he wanted to try to improve the National Library, which is almost an alma mater for those of us who studied in Dublin and was always a welcoming place. Does this affair, and the controversy over the earlier cache, not reveal a worrying and significant deficiency on the part of the National Library with regard to one of the world’s and our greatest writers? Have we any way of knowing this deficiency does not still exist?

 Aongus Ó hAonghusa: A deficiency in what sense?

 Thomas P. Broughan: In other words, there is a deficiency when the National Library is unable to put its expert on a plane to Paris to give an immediate opinion on whether this was a likely Joycean cache.

 Aongus Ó hAonghusa: I am privileged to have a fantastically professional staff in the National Library, who are experts in their field. However, we are limited in what we can do. We are limited by staff numbers and resources and cannot simply drop everything and jump on planes to go to foreign destinations, much as we might like to. We have an active acquisitions programme. My colleague Mr. Lyne is in regular contact with agents, dealers and individuals, particularly in Ireland, trying to encourage them to donate material to the National Library or to negotiate with them. Our hands are already full.

 Thomas P. Broughan: The library’s budget is approximately €12 million and in this case there is the guts of a €1 million additional cost to the State. This is such a significant part of the expenditure of the library that the public should be entitled to feel the library has the necessary expertise to deal with such issues.

 Aongus Ó hAonghusa: We have excellent expertise and a very committed staff in the library. The staff are experts in their field and know Irish literary, historical and estate papers, photographic and print collections like the back of their hands. They know what is happening. To return to a point the Deputy made earlier, he asked what investigations had taken place in terms of the authenticity of the material. In something as specialised as that, we would have to rely on the external experts. In this case, the external people were able to confirm that the material was in Joyce’s handwriting. Things like this are important.

 Thomas P. Broughan: There are the other issues around Joyce. One must also consider that someone other than the dealer, Sotheby’s or the original bookseller may own the documents. Is that not an issue with regard to Joycean material?

 Aongus Ó hAonghusa: It is. As I explained, the contract for sale we signed with the vendor and to which the commercial bank was a party provided safeguards in the unlikely event anything would happen that would affect our interests. We have safeguards in a range of areas.

 Thomas P. Broughan: A final point, does the director regret this whole affair?

 Aongus Ó hAonghusa: No.

 Chairman: I call on Mr. Buckley for his final comments on behalf of the office of the Comptroller and Auditor General.

 John Buckley: Reflecting on the debate and the report, there are immediate lessons we could learn. One such is that it is necessary to finalise the library’s collection development policies and acquisition guidelines. These must be finalised in a way that takes account of the kinds of risk we have identified in our discussion. The overriding concern must be to protect the interest of the taxpayer. While the Department and the library have given assurances that transactions were arms length, there is a risk to be managed, especially in circumstances where there is a limited number of people with expertise and that small circle interpenetrates the public and private domains.
 We must give consideration to whether it is possible to insert clauses in contracts that restrict trade and the potential of people contracted to the State, in whatever guise, to compete with the State for the kind of material related to the work in which they are engaged under contract or to benefit from any information they get in the course of that engagement. While it was prudent to wait until the material came into the hands of a reputable dealer, the option probably should have been considered of engaging such a reputable dealer to handle the State’s interest and to proceed with more speed, if this were to happen again. Those are my thoughts on the discussion.

 Chairman: I thank Mr. Buckley and the witnesses for their contributions. If I may speak for members, the committee will not pass this report. We will not note it as we need to discuss today’s proceedings and decide what to do with the report. I propose we defer the passing of this report until we have considered it further. Is that agreed? Agreed.

The witnesses withdrew.
  The committee adjourned at 1.10 p.m. until 10 a.m. on Thursday, 16 October 2008.

 

 

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