Friday 9 December 2016

Probe reveals ex-minister's 'insidious' role in Esat award

Published 23/03/2011 | 05:00

WHEN the Irish-Norwegian Esat Digifone consortium won the contract for the country's second mobile-phone licence in 1995 it was the single largest commercial award in the history of the State.

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In securing the lucrative licence it saw off competition from five rival consortia.

The deal set Denis O'Brien, a 40pc shareholder in Esat, on the road to becoming a billionaire.

However, within months of the licence award, rumours emerged of financial links between Mr O'Brien and Michael Lowry, the government minister whose department, Transport, Energy and Communications, had overseen the selection process.

A tribunal, chaired by Mr Justice Michael Moriarty, was established in 1997 to look into payments to Mr Lowry and former Taoiseach Charles Haughey.

But the process of getting to the bottom of what exactly happened would prove achingly slow and extremely costly.

The total bill to taxpayers could end up being as much as €150m.

There is little doubt that efforts to hide evidence greatly added to the length of the final report.

Running to almost 2,400 pages, the report is explosive and devastating to the reputations of the politician and the businessman, who both continue to deny any wrongdoing.

The report found that not only did Mr Lowry significantly influence the outcome of the licence contest in Esat's favour, but Mr O'Brien routed large sums of money to Mr Lowry after the licence was granted.

In total IR£170,000 and Stg£720,000 was routed through various channels for the benefit of Mr Lowry, the tribunal found.

Although the selection process was supposed to be administered by an independent project group, Mr Lowry did much to prompt the ultimate selection of Esat, the tribunal found.

His influence was described in the report as "insidious and pervasive".

He lent currency within his department to groundless rumours that if Persona, one of the rival bidders, won the licence it would result in a "nest egg" for a former prominent Fianna Fail politician.

Mr Lowry also sought to neutralise scrutiny by his government colleagues of the decision to award Esat the licence by indicating a brother of a Labour politician had links to another consortium, Irish Mobicall.

Information was sought by him from within the project group.

The Tipperary TD later passed some of this "substantive information" to Mr O'Brien that assisted Esat in securing the licence.

During a private meeting in September 1995, described by Mr Justice Moriarty as a "profoundly reprehensible occasion", Mr Lowry shared information with Mr O'Brien which had been conveyed to him by the chairman of the project group.

But the "most pervasive and abusive instance of Mr Lowry's influence" came in October of that year, the report stated.

Mr Lowry cut short the time available to the project group, some of whom were concerned Esat was not the best bidder and wanted to review the evaluation. Mr Lowry's intervention meant the group did not get the time needed for further scrutiny.

"Mr Lowry's influence on the process was both direct, as in his disgraceful action in bringing a guillotine down on the work of the project group, and indirect and insidious, arising from this interaction with the chairman of the project group," the report stated.

The tribunal also found Mr Lowry had a strategy to deprive his Cabinet colleagues of the opportunity to scrutinise the results of the selection process.

He was also "equally determined" that once Esat was selected nothing would deprive the consortium of the licence.

The report details how payments began to be routed to Mr Lowry within months of the licence being officially secured.

According to Mr Justice Moriarty, Mr O'Brien made or facilitated payments to Mr Lowry of IR£147,000 and Stg£300,000.

Mr Lowry also received a benefit equivalent to a payment from Mr O'Brien in the form of Mr O'Brien's support of a Stg£420,000 loan.

The payments were made between May 1996 and December 1999.

None of the money moved directly between the politician and the businessman, with conduits used in all cases.

Separately, the tribunal found Mr Lowry had tried to influence an increase in the lease for the Marlborough House office block in Dublin for the benefit of businessman Ben Dunne.

Telecom Eireann, then a semi-state agency, was based in the building at the time.

"What was contemplated and attempted on the part of Mr Dunne and Mr Lowry was profoundly corrupt to a degree that was nothing short of breathtaking," the report said.

Mr Justice Moriarty added that while the money accrued by Mr Lowry never reached the levels of former Taoiseach Charles Haughey, there were similarities between both men.

"In the cynical and venal abuse of office, the brazen refusal to acknowledge the impropriety of his financial arrangements with Mr Denis O'Brien and Mr Ben Dunne, and by his contemptuous disregard for his taxation obligations, Mr Lowry displayed qualities similar in nature (to Mr Haughey), and cast a further shadow over this country's public life," the report stated.

Irish Independent

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