Report by the Assembly Commissioner for Standards on a complaint against Maolíosa McHugh MLA by Steve Aiken OBE MLA and Jim Allister QC MLA

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Summary

On 28 October 2020, I received a complaint from Mr Jim Allister QC MLA alleging that Mr Maolíosa McHugh MLA breached provisions of the Members’ Code of Conduct (‘the Code’) by not returning to the public purse £10,000 received from NI Land and Property Services (“LPS”) under the Covid-19 Business Support Scheme. On 2 November 2020, I received a complaint from Dr Steve Aiken OBE MLA alleging that Mr Maolíosa McHugh MLA breached provisions of the Members’ Code of Conduct by failing on at least three occasions to declare to the Committee for Finance that he was in receipt of a £10,000 Covid-19 Business Support grant while sitting as a member of the Committee for Finance when LPS was giving evidence and on multiple occasions in September and October 2020 when the Small Business Covod- 19 grants were discussed.

During the course of my investigation, it became clear that Mr McHugh received notification from LPS to his constituency office alerting him to the fact that 10,000 had been paid into the LPS account named “Maolíosa McHugh MLA – Strabane Sinn Féin Office”. Mr McHugh contacted the constituency coordinator, Barry McColgan, who confirmed the money was received into an account that Mr McHugh had nothing to do with and no authorisation or connection to. Nonetheless, Mr McHugh knew it was an error and that MLA offices were not entitled to grant money, and confirmed with Mr McColgan, that it would be paid back to the LPS. After a number of assurances from Mr McColgan in May and June, Mr McHugh believed the money was paid back. In October when contacted by the BBC Nolan Show, Mr McHugh became aware it had not been paid back. Further internal review of the matter by Sinn Féin led to job losses, Mr McColgan being but one.

As Mr McHugh was not the legal bank account holder, he had no control over or access to the funds, and therefore did not breach Rule 1 in relation to the public interest in not returning the funds nor did he have an interest to register in the Assembly’s Register of Members’ Interests (Rule 4). Mr McHugh believed the money was paid back in June, therefore he did not believe he had a conflict of interest to declare in September and October (Rule 5). Having no access to the account into which the money was deposited, he could not have acted to confer an advantage or preferential treatment to himself or others (Rule 14). Mr McHugh did what could reasonably have been expected of him in alerting the person that could and should have returned the money (Mr McColgan) to the LPS and seeking assurances on at least three occasions that the money had been paid back, and so did not breach Rule 19.

Chronology of events

Investigation

1. In the course of my investigation, I carried out the following:

• Interviewed Mr Maolíosa McHugh MLA¹, Mr Ruari McHugh² and DFM Michelle O’Neill MLA³.
• Reviewed the transcripts of the Nolan Show’s reporting of this case as outlined in the evidence submitted by Mr Allister and Dr Aiken⁴
• Watched Finance Committee meetings of 23 September⁵, 30 September⁶, 7 October⁷, 14 October ⁸, 21 October⁹ and 18 November¹⁰ (all 2020)
• Requested and received information from Mr Ian Snowden, Chief Executive of LPS^{11,12,13,14,15}
• Requested and received information from Richard Stewart, Director or Corporate Services, NI Assembly¹⁶

2. The provisions of the Code most relevant to the consideration of this complaint are at Annex A.

3. A copy of the complaint and all other documents I have relied on in reaching my decision are at Annex B.

Findings of Fact

I found the following facts established to the required standard of proof:

4. On 3 April LPS deposited 10,000 into the LPS account named “Maolíosa McHugh MLA – Strabane Sinn Féin Office”.

5. The LPS sent a remittance notification via post to Mr McHugh at his constituency office address of Unit 31a Melvin Road Strabane BT82 9PP which showed that £10,000 had been paid to the LPS account named “Maolíosa McHugh MLA – Strabane Sinn Féin Office” on 3 April 2020.¹⁷

6. The bank account associated to that LPS account was “West Tyrone Development Fund” which is where the £10,000 was deposited.¹⁸

7. Mr McHugh had no access or authority over the “West Tyrone Development Fund” account.

8. Mr McHugh contacted Mr McColgan soon after receiving the remittance notification to find out where the money was paid and why it was paid.

9. On at least three occasions during May and June, Mr McHugh sought assurance from Mr McColgan that the £10,000 grant money would be paid back.

10. On 25 October, it emerged through media coverage that four MLA and MP constituency offices and a number of wind turbines wrongly received Covid-19 Business Support Grants of £10,000 each.¹⁹

11. Early on 26 October Mr Snowden was contacted by a member of staff from the West Tyrone Sinn Féin office in Omagh asking for details on how a grant could be repaid to LPS. He became aware subsequently, as a consequence of the media coverage, that the request was in respect of the Sinn Féin Office in Strabane.²⁰

12. The money was repaid by cheque into the Ulster Bank Cloughfern Branch on the 26th October and receipted by Account NI on that date. The funds were cleared by the bank on the 27th October.²¹

13. In accordance with paragraph 7.14 of the General Procedures Direction, Mr McHugh was afforded an opportunity to challenge any of these findings before I finalised my report. He did not avail of that opportunity.

Allegations

14. Mr Allister and Dr Aiken’s complaints are similar; for clarity in relation to alleged breaches, Mr Allister stated the following in relation to Rules within the Code which he is alleging have been breached by Mr McHugh²²:

1. Rule 1: In that his complicity in failing to return the £10,000 until public exposure, though he had knowledge of its receipt, amounted to a failure to adequately or at all consider the public interest.
2. Rule 4: In that he failed to register in the Assembly’s Register of Members’ Interests details of his interest in the subject property which benefitted from a COVID grant of £10,000.
3. Rule 5: In that he failed to declare in the Assembly Finance Committee his interest in a constituency office in respect of which a £10,000 grant had been paid when the Head of LPS was before the committee on a number of occasions discussing the said payments and scheme.
4. Rule 19: In that he failed to take reasonable care to ensure that his staff, when acting on his behalf, took adequate steps to ensure the said £10,000 was returned, not least since he had knowledge of the payment and having regard to the expectations of the rules of conduct.
5. By reason of the above I believe Mr McHugh failed to conduct himself in a manner which would tend to maintain and strengthen the public’s trust and confidence in the integrity of the Assembly and thereby he brought the Assembly into disrepute.“

15. Dr Aiken’s complaint alleges the following Rules within the Code have been breached by Mr McHugh²³:

1. Rule 1: Given that Mr McHugh had a very personal interest in the shape of £10,000 form LPS in a bank account in his name, he should have declared that on any occasion when Small Business Grants were discussed or LPS officials appeared before the Committee. He did not do and is therefore in breach of this Rule.
2. Rule 4: It is my contention that a £10,000 Small Business Grant from LPS deposited in a bank account in Mr McHugh’s name constitutes a ‘registrable interest’ which he should have clearly declared that in the Register of Members’ Interests. He did not do so and therefore is in breach of this Rule.
3. Rule 5: It is my contention that the £10,000 Small Business Grant received from LPS into a bank account in Mr McHugh’s name could reasonably be held to be something which ‘might be thought to influence your approach to the matter under consideration’—not least if further schemes emerged with new payments. No such interest was declared and so Mr McHugh is in breach of this Rule.
4. Rule 14: The failure to declare the £10,000 Small Business Grant from LPS deposited in a bank account in Mr McHugh’s name potentially leaves Mr McHugh vulnerable to the charge that any comments in the Committee or the Assembly about any grant schemes, he was seeking to ‘confer an advantage or preferential treatment for either yourself or any other person.’ As such he is in breach of this Rule.
5. Rule 19: As stated earlier, if Mr McHugh should seek to explain this matter away by claiming he did not know about the account in his name or had no access to it, then that takes us into an even more serious situation requiring a wider investigation. If Mr McHugh’s staff or party officials have acted on his behalf to open a bank account bearing his name, and into which large sums of money have been deposited, and he has no knowledge or control over this account, then he certainly had not taken ‘reasonable care’ to ensure that those staff, acting on his behalf have upheld the rules of conduct. As a result, he is in breach of this Rule.”

During my investigation I established the following:

16. Mr McHugh denies all allegations made against him.²⁴

17. Soon after receiving the LPS remittance notification on 3rd April, Mr McHugh’s Office Manager Ruairi McHugh brought it to the attention of Mr McHugh.^25,26

18. Mr McHugh then contacted the West Tyrone Sinn Féin office in Omagh to figure out what this payment was, why it was paid and what account it was paid into.²⁷

19. Barry McColgan, the constituency organiser, informed him that the money had been received into the West Tyrone Development Fund bank account.²⁸

20. Mr McHugh had no control over this bank account; he was not a named signatory for this bank account, nor did he have access to bank statements, cheques, or anything relating to this bank account.²⁹

21. The LPS account was named “Maolíosa McHugh MLA – Strabane Sinn Féin Office”, a name allocated to it by Sinn Féin administration.

22. When Mr McHugh received the notification from LPS, he asked Mr McColgan to return the money as he knew the office wasn’t entitled to it. Mr McColgan told him he was ‘dealing with it.’³⁰

23. During a number of Mr McColgan’s regular visits to Mr McHugh’s constituency office throughout May and June, Mr McHugh sought confirmation from Mr McColgan that the money had been returned to LPS. Mr McHugh confirmed at interview that on at least three occasions during May and June Mr McColgan confirmed it was being dealt with which Mr McHugh believed meant it was being paid back.³¹

24. Mr McHugh did not mention it again to Mr McColgan after June as he believed it had been paid back as per Mr McColgan’s assurances.³²

25. At no time did Mr McHugh ask Mr McColgan for written confirmation that it had been paid back.³³

26. I interviewed DFM Michelle O’Neill MLA who confirmed:

“In Maolíosa's case, and I had spoken to Barry McColgan myself actually at different times, and Barry had said that Maolíosa had said to him repeatedly to get it sorted.”

27. I contacted Mr McColgan to arrange a meeting or get a statement to confirm this, but he did not respond.

28. At the time of the Finance Committee meetings of 23 September, 30 September, 7 October, 14 October and 21 October (all 2020) when these grants were discussed and where on a few of these occasions Mr Snowden gave evidence, Mr McHugh believed the grant payment made to the West Tyrone Development Fund by the LPS had been paid back months earlier.³⁴

29. Mr McHugh was contacted by a reporter from the BBC Nolan Show on October 26. It was soon after that call that Mr McHugh became aware the money had not been paid back as Mr McColgan had led him to believe in June.³⁵

30. At the same time as this story broke, someone contacted the LPS early on 26 October to ask how to pay back the grant.36 Mr McHugh believes this would have been Mr McColgan.³⁷

31. The repayment was made by cheque on 26th October and was signed by West Tyrone MLA Catherine Kelly and Helena McElhone³⁸ as confirmed by Mr McHugh at interview.³⁹

32. A review of the situation was swiftly carried out by Sinn Féin, and a few days after the story broke a number of people lost their jobs.⁴⁰

33. It is of note that Mr McHugh confirmed at interview that Mr McColgan was one of the people who lost their job.

34. Mr McHugh said at interview that Mr McColgan said to him “If I had given this as much attention at the time you raised it with me as I did do today, it would have been resolved long before now.”⁴¹

LPS Rates Account

35. I received clarification from the LPS in relation to the naming of LPS accounts and the bank accounts associated with the LPS accounts.⁴² Mr Snowden confirmed to me that a name given to an LPS account is “what the ratepayer tells us their name is or what their business is called” and that “the name on the rates account doesn’t have to reflect any bank account name”.⁴³

36. It appears that Sinn Féin chose the name of the LPS account to be “Maolíosa McHugh MLA – Strabane Sinn Féin Office”. This was likely for administrative purposes. However, it was not because Mr McHugh was responsible for the rates or paid the rates, because he does not (see para 37). Therefore, the name of the LPS account left Mr McHugh open to scrutiny by the media and others relating to the grant payment and non-return of the payment. LPS has confirmed the name of the account has now been changed to “Strabane Sinn Féin Office”.⁴⁴

37. The NI Assembly Director of Corporate Services confirmed that no rates are paid on behalf of Mr McHugh and no rates have been or are reimbursed to Mr McHugh.⁴⁵ Therefore, Mr McHugh has no involvement with rates payments or concerns relating to rates associated to his office or his position as an MLA. Mr McHugh was not responsible for paying the rates for the property.

Bank Account: West Tyrone Development Fund

38. The bank account attached to the LPS account “Maolíosa McHugh MLA – Strabane Sinn Féin Office”, where the £10,000 grant was paid into, was the ‘West Tyrone Development Fund’ account. Mr McHugh was not the owner of that bank account and was not attached to that account in any way; he had no access, control or signatory rights associated with that bank account.

39. Mr McHugh had one member of staff at the time; he too had no access to the West Tyrone Development Fund bank account. The Constituency Officer, Mr McColgan, who was not a member of Mr McHugh’s staff did have access to that bank account, but Mr McHugh did not have any oversight or management responsibilities in relation to Mr McColgan. Mr McHugh alerted Mr McColgan to the remittance notification and sought Mr McColgan’s assurances that the money was returned on at least three occasions and was told by Mr McColgan that it was ‘being dealt with’.

Reasoned Decision

Allegation 1

40. I am satisfied on the basis of the evidence, that Mr McHugh was not the legal rates payer or the bank account holder for the bank account attached to the rates account and therefore not the legal recipient of the £10,000 grant. Mr McHugh indeed received notification of it, but did not have access to nor was he associated with the bank account where the funds were deposited. As such, he did not breach Rule 1 in relation to the public interest in not returning the funds, as he had no control over the bank account or the funds.

41. I do not uphold this allegation.

Allegation 2

42. Mr McHugh was not the legal bank account holder or recipient of the grant money therefore Mr McHugh did not have an interest to register in the Assembly’s Register of Members’ Interests and did not breach Rule 4 of the Code.

43. I do not uphold this allegation.

Allegation 3

44. Mr McHugh believed that the grant money was paid back to the LPS in June 2020, well before the Finance Committee meetings of September and October 2020. Had he known the money was not yet paid back, he may have had an interest to declare as a perception may have existed in relation to his name being part of the named LPS account. However, his belief at that time of the Finance Committee meetings in question (September/October) was that the money had been paid back and therefore he did not have a conflict of interest to declare and did not breach Rule 5 of the Code.

45. I do not uphold this allegation.

Allegation 4

46. Mr McHugh, having not been the legal recipient of the £10,000 grant and having no access to the account into which it was deposited, could not have acted to confer an advantage or preferential treatment to himself or others. Therefore, he did not breach Rule 14 of the Code.

47. I do not uphold this allegation.

Allegation 5

48. Mr McHugh had one member of staff, Mr Ruairi McHugh who was temporary and covering a maternity leave. He also had no access to the West Tyrone Development Fund bank account and was the person who informed Mr McHugh MLA of the LPS notification soon after it arrived. This led to Mr McHugh MLA contacting Mr McColgan, the Constituency Organiser who himself was not a member of Mr McHugh’s staff, to make him aware of the notification and the need to return the funds to the LPS.

49. Mr McHugh accepted Mr McColgan’s word on at least three occasions that the funds had been repaid to the LPS. Arguably, he should instead have sought confirmation of the repayment in writing. However, it is my view that under the circumstances he and his member of staff did what could reasonably have been expected of them in alerting the person that could and should have returned the money to the LPS and seeking assurances from Mr McColgan on at least three occasions. For this reason, I do not believe that this constitutes a breach of Rule 19 of the Code.

50. I do not uphold this allegation.

Conclusion

51. I am satisfied on the basis of the evidence, my analysis and reasoning, that Mr McHugh did not breach Rules 1, 4, 5 and 19 of the Code of Conduct as alleged by Mr Allister QC MLA.

52. I am satisfied on the basis of the evidence, my analysis and reasoning, that Mr McHugh did not breach Rules 1, 4, 5, 14 and 19 of the Code of Conduct as alleged by Dr Aiken OBE MLA.

Footnotes

¹ Document  6

² Document  7

³ Document  8

⁴ Document 9

⁵ Committee for Finance, Wednesday 23 September 2020 (external link)

⁶ Committee for Finance, Wednesday 23 September 2020 (external link) 

⁷ Committee for Finance, Wednesday 7 October 2020 (external link)

⁸ Committee for Finance, Wednesday 14 October 2020 (external link)

⁹ Committee for Finance, Wednesday 21 October 2020 (external link)

¹⁰ Committee for Finance, Wednesday 18 November 2020 (external link)

¹¹ Document 10

¹² Document 11

¹³ Document 12

¹⁴ Document 13

¹⁵ Document 14

¹⁶ Document 15  

¹⁷ Document 12

¹⁸ Document 8 and 9

¹⁹ Document 10

²⁰ Document 11

²¹ Document 11 and 13 

²² Document 3

²³ Document 4

²⁴ Document 5

²⁵ Document 6 at 19:47

²⁶ Dcoument 5

²⁷ Document 6 at 19:47

²⁸ Document 6 at 20:32; 23:51

²⁹ Document 5 and 6

³⁰ Document 5 and 6

³¹ Document 6 at 25:06; 25:24

³² Document 6 at 25:40; 39:36; 40:22

³³ Document 6

³⁴ Document 6 at 37:02

³⁵ Document 6 at 38:29; 44:26

³⁶ Document 7

³⁷ Document 6 at 57:54

³⁸ Document 9

³⁹ Document 6 at 1:04:31

⁴⁰ Document 6 at 27:20; 52:07

⁴¹ Document 6 at 45:00; 45:18

⁴² Document 11

⁴³ Document 14

⁴⁴ Document 14

⁴⁵ Document 16

Most Relevant Provisions of the Code - Annex A

The Rules of Conduct

1. You shall base your conduct on a consideration of the public interest, avoid conflict between personal interest and the public interest and resolve any conflict between the two, at once, and in favour of the public interest.

4. You shall register in the Assembly’s Register of Members’ Interests details of all registrable interests. A registrable interest means an interest specified in Chapter 1 of the Guide to the Rules. [The categories of registrable interest are set out in Schedule 1].

5. You shall declare, whether in Assembly proceedings or in any approach to a Minister, public representative, public body or public official, any relevant interest which might reasonably be thought to influence your approach to the matter under consideration. A relevant interest means an interest to which Chapter 2 of the Guide to the Rules applies, and may include a registrable interest.

14. You shall not use, or attempt to use, your position as a Member to improperly confer an advantage or preferential treatment for either yourself or any other person; or to avoid disadvantage or create disadvantage for someone else.

19. You shall take reasonable care to ensure that your staff, when acting on your behalf, uphold these rules of conduct.

Principles

Members should at all times conduct themselves in a manner which will tend to maintain and strengthen the public’s trust and confidence in the integrity of the Assembly and should never undertake any action which would bring the Assembly into disrepute.

Supporting Documentation - Annex B