A PAYOUT of £500,000 to the head of a taxpayer-funded agency set up to alleviate poverty has been condemned as an act of “misconduct” and “wholly unsatisfactory” by Scotland’s charity watchdog.
The Glasgow East Regeneration Agency (Gera) handed the sum to former chief executive Ronnie Saez as part of a redundancy and pension package in 2011.
Mr Saez was paid a statutory severance payment of about £40,000, pension contributions of around £200,000 and a discretionary top-up of £232,708 paid directly from Gera, which was set up by Glasgow council as a registered charity.
The Office of the Scottish Charity Regulator (OSCR) began an investigation into the redundancy payment after a number of complaints about what was said to be a “high-value severence package” for Mr Saez, who had worked for the agency since it was set up in 2007.
Its report concluded that money which should have been spent helping to reduce poverty in the east end of Glasgow was instead used to fund Mr Saez’s substantial payout.
“A very considerable sum of the charity’s assets which should have been used to further the charity’s purposes was removed from the charitable sector by the charity trustees for the private benefit of a former employee,” the report stated. “We consider that the actions of the charity trustees in this instance constituted misconduct in the administration of the charity.”
The OSCR report went on to criticise the trustees for having approved the payment to Mr Saez “without first obtaining external professional advice about the advisability of the proposal”.
Last night, it emerged the councillors involved in the decision to hand over the £500,000 payout could also face an investigation by Scotland’s Public Standards Commissioner, after SNP MSP John Mason, who alerted the charity regulator to the payout, said he was considering making a fresh complaint.
“This report is a damning indictment of the Labour councillors who have blatantly misused public money in one of the most unacceptable ways possible,” Mr Mason said.
Gera was one of five local regeneration bodies set up by the council to tackle poverty in economically vulnerable areas, but in 2011 the five merged into Glasgow’s Regeneration Agency.
Three chief executives were made redundant, with new jobs being found for the heads of two agencies. The other two chief executives made redundant received payoffs of about £76,778.
Mr Saez’s golden handshake of £500,000 was agreed two years ago by five directors of the charity, including Labour councillors Jim Coleman, who was board chairman, George Redmond and former councillor Catherine McMaster.
Mr Saez was aged 50 when he was handed the £500,000 pay-off in 2011. His pay-off came out of a £2.2m pot to cover the
redundancy and pensions deals for 164 staff at the charity.
The trustees had claimed the award was increased to reward Mr Saez in a similar way to that of senior executives at Glasgow council, with his pension pot topped up by an extra six and a half years – worth another £232,708.
However, the charity regulator insisted the decision to increase the payment had been made without “sufficient justification that this action was in the interests of the charity”.
The watchdog said it had no powers to recover the £500,000, but ordered that the trustees of the charity, including the Glasgow councillors, take part in training to prevent “similar misconduct recurring”.
A spokesman for Glsagow City Council said: “The Office of the Scottish Charity Regulator recommended that members undergo training, which we will put in place.”
Mr Saez was unavailable for comment last night.