Minister Reilly’s statement to the Dail

I would like to thank the Ceann Comhairle for giving me the
opportunity to make a personal explanation, arising from questions
raised in the House yesterday, which will outline the circumstances by
which my name came to appear in Stubbs Gazette. I believe this
explanation will show fellow deputies that I have at all times acted
with complete propriety and that the problem stems from complicated
litigation surrounding an investment made 12 years ago.


In November 2000, I entered into a Co-Ownership Agreement for the
purchase and development of lands at Green Hills, Carrick-in-Suir, Co.
Tipperary for use as a nursing home.  I was one of 13 co-owners who
bought the lands for the purpose of building a nursing home and then
leasing the home to a nursing home operator.  I hold just over a 9%
share in the Co-Ownership.

The Co-Ownership Agreement provided for two categories of co-owner,
namely Recourse Co-Owners (of whom I am one of five) and Non-Recourse
Co-Owners, of whom there are eight.  Under the terms of the
Co-Ownership Agreement, the eight Non-Recourse Co-Owners were entitled
to be bought out in June 2011.

The construction of the nursing home was completed by July 2001. In
that month Dr. Dilip Jondhale and Dr. Vasudha Jondhale signed a lease
for the premises to operate a nursing home business. Dr. Jondhale and
his wife are the owners of the Greenhill Nursing Home business and not
the Co-Ownership. It is important to clarify however that Dr. Dilip
Jondhale was also one of the original five Recourse Co-Owners.

Now I have already told deputies that the current difficulties stem
from complex litigation and I feel it is important to give the house
information in that regard.

In May 2004 Dr. Vasudha Jondhale wrote to the Co-Owners indicating
that the nursing home was not fully completed and the tenants were
unhappy to pay further rent.   This was responded to by correspondence
confirming the building was complete and calling on the tenants to pay
rent as it fell due along with all arrears.

Solicitors’ correspondence ensued and ultimately proceedings were
issued for the recovery of rental arrears from the nursing home
business. Those proceedings were taken in 2009 in the High Court
against Dr. Dilip Jondhale and Vasudha Jondhale (High Court Record No.
2009/1012S).

Then in January of last year – before the last General Election – I
sought to dispose of my interest in accordance with the terms of the
Co-Ownership Agreement by offering my interest to the other Co-Owners.
However a buyer could not be found at that stage.

Subsequently, following my appointment to the Government in March
2011, I granted a Power of Attorney to my Solicitor for the purposes
of doing all acts necessary to dispose of my interest in the
Co-Ownership.  On the 4th of April 2011, a second Transfer Notice was
served by my solicitor as my Attorney seeking again to dispose of my
interest at a reduced price.  Once again this was not taken up by any
of the Co-Owners.

As you already know, the Non-Recourse Co-Owners were due to be bought
out in June 2011 however a further dispute arose in relation to the
Terms of a new lease to be granted to the Nursing Home Operators and
it was not possible to resolve matters at that stage. Accordingly the
Non-Recourse Co-Owners instituted proceedings against the Recourse
Co-Owners in the Commercial Court in July 2011.

In October 2011, my attorney having failed to dispose of my interest
despite several attempts to do so, and in circumstances where it had
not been possible to resolve matters with the nursing home operators,
I sought the advice of the Standards in Public Office Commission under
Section 10(12) of the Standards in Public Office Act 2001.

Discussions with the Standards in Public Office Commission initially
centred on the creation of a “Blind Trust” to set aside my interest
for such period as I remained a Minister.  The establishment of such a
Blind Trust would have involved the transfer of my interest to a
Trustee and in those circumstances required Bank consent.  Bank
consent was sought. However, the Bank felt it would be inappropriate
to grant consent to such a transfer in circumstances where litigation
was in being in the Commercial Courts.

Subsequently the Standards in Public Office Commission advised that it
would be acceptable to proceed by way of a Power of Attorney provided
the Power of Attorney gave the Attorney complete and unfettered
discretion to deal with my interest in the nursing home as he or she
deemed fit and provided that person satisfied the conditions of the
Public Ethics legislation.

This advice was received early in January 2012 and on the 12th of
January 2012 a Power of Attorney was granted to a 3rd party solicitor
in compliance with the Ethics in Public Office Acts 1995 and 2001 and
in accordance with the Standards in Public Office Commission advice.
The 3rd party solicitor is a different solicitor to the one originally
given power of attorney to dispose of my interest in the property.

I hope it is clear to deputies that I sought at all times to comply
fully with my obligation under the Standards in Public Office Act and
Code of Conduct for Office Holders.

Then in November 2011, the failure to agree new terms of a lease with
the Nursing Home Operator after the expiry of the initial term
resulted in proceedings being issued in the Circuit Court against the
Nursing Home Operator, seeking to fix  the terms of a new Lease to be
granted after the expiry of the initial ten year term.  The
proceedings in the Circuit Court impacted upon the recourse parties’
ability to secure funding to acquire the interest of the Non-Recourse
Co-Owners.

In the Commercial Court the Recourse Co-Owners agreed to the judgment
in February of this year and a stay on the execution of the Judgment
was granted until the 30th of April.  It had been hoped to resolve all
litigation, including the Circuit Court action, prior to the 30th of
April to enable the recourse parties to proceed to raise the required
funds. In this context the matter was to be dealt with by the attorney
appointed by me together with the other parties. However, it was not
possible to meet this deadline due to Court adjournments.

I can advise the house however, the Circuit Court proceedings have
been settled and a new Lease is being finalised.  I am assured by my
Attorney that very significant efforts are underway to agree a
methodology by which the Non-Recourse Co-Owners can be paid.

As previously indicated my interest in the total Co-Ownership of the
property is just over 9% (This is equivalent to 25% of the Recourse
Co-Owners Interest).  My Attorney cannot compel parties to reach a
resolution in circumstances where my interest is a minority interest
but as I have said I am assured by my Attorney that every effort is
being made to resolve matters.

In accepting the Judgment, it is clear that it is the intention of the
Recourse Co-Owners to meet our financial obligations and those will be
met. The means of dealing with the Judgment has been impacted by other
court proceedings, one of which is now resolved and the second was the
subject of a Judgment in favour of the Co-Owners by the High Court
which although under appeal is not anticipated to impact upon a
resolution as it relates to historic rent arrears.

In the circumstances, my Attorney believes that it will be possible to
reach a resolution of the issues.

I do very much regret that it has not proved possible to reach
agreement in advance of being named in Stubbs Gazette.

I’d like to turn my attention to one or two other issues here tonight
as well if I may. There has been a suggestion that I might have a
conflict of interest because of my share in a property that houses a
private nursing home. I like to state very clearly on the record of
the house that nothing could be further from the truth. I say so for
three reasons.

One/ I am not the operator of the Greenhill Nursing Home. I never have
been. That business is run independently.

Two/ I have been attempting to divest myself of my interest in the
property for 16 months.

and Three/ my single interest here is the well being of our older persons.

I have repeatedly stated that I believe too many of our older people
are being placed in Long Term Care and should instead be in their own
homes.

Health journalists and others know this already – but I will shortly
be announcing a major new initiative aimed at empowering older persons
to stay in their own homes rather than go into Long Term Care at all.

I have already revealed that €28 million euro will be invested in a
range of measures – including new pathways through our hospitals –
with the intention of giving the greatest possible assistance to older
persons to stay in their homes, which the vast majority of people want
to do.

I do not have a conflict of interest. I have a single interest and
that is the best interests of older persons and patients under our
health services.

May I also remind deputies that on being appointed as Minister for
Health I received a Special Leave of Absence from my General
Practitioner Practice and I have no hand act or part in the day to day
running of the practice.

Also for completeness can I advise the house that in advance of being
appointed to Government I had intended to develop a primary care
centre with partners in Nevinstown in Swords.

That project is not being proceeded with and the property is for sale.

May I finally say to my colleagues in this house – I entered politics
late in life. I did so in pursuit of no business interest whatsoever.
I did so because I passionately believe that we can provide better
services to our citizens. I passionately believe that we must put the
patient at the heart of what we do in the health services. It may
sound to some like a slogan but to me it’s not. It’s the driving force
behind the changes that I’m putting in place in health services.

Thank you very much Ceann Comhairle