Dr Farry was speaking after Communities Minister Paul Givan and DUP Deputy Leader Nigel Dodds were pictured visiting the Lower Shankill Community Association, the day after it had been identified as the local UDA headquarters by a BBC Spotlight investigation.
It follows First Minister Arlene Foster being pictured alongside a self-confessed UDA figure when announcing a £1.7 million grant to the Charter NI organisation, through the controversial Social Investment Fund (SIF).
“This is increasingly an Executive with a defective moral compass,” said Dr Farry.
“Last year, the so-called ‘Fresh Start’ Agreement recognised the ongoing threat paramilitarism posed to the rule of law and wider society. There was acknowledgement of how paramilitary-linked ‘gatekeepers’ continued to exert influence on communities and shutting out alternative voices.
“We have since had a good report from the Paramilitary Panel, but a weak first attempt at an action plan from the Executive. But now even the credibility of that must be in question. If their strategy is to pay off paramilitaries with cash and photo opportunities rather than challenging them and the underlying conditions that allow paramilitarism to take hold, then their action plan will be ineffective and morally bankrupt.
“If there are certain ‘in’ groups, and if special funding programmes, such as SIF, are used to channel funds to preferred organisations, then what type of message is the Executive sending out regarding the alternative voices in communities across Northern Ireland?
“It is now essential the Justice Minister stands up, takes a grip on this situation and rescues the integrity of efforts to finally tackle paramilitarism before this opportunity passes.”