Monday 5 October 2015

Elaine Byrne: Investors' loss of faith in us is bad for business here

Inaction on the tribunals sends the dangerous message that nothing has changed, writes Elaine Byrne

Published 01/04/2012 | 05:00

'HE'S guilty of nothing; he's guilty of creating jobs" -- so said Denis O'Brien's legal adviser on RTE's Prime Time on Thursday night.

The Moriarty tribunal must be so irritating for Denis. It just won't go away. He's a busy man. There are queens, taoiseachs and former American presidents to see. It is in the national interest that he just gets bloody well on with it. This is an economic crisis. There are jobs to create. Who cares about tribunals? Accountability can be so inconvenient.

As Paul Meagher said on Prime Time, if Denis "happens to show up at the opening/closing of the stock exchange, that's a good thing for Ireland".


It was a good thing for Denis too, by the way. The Taoiseach rang the bell in an event sponsored by Ireland Inc. Denis is a key advisory member of that organisation. He did not just happen to show up. Malta is not exactly next door to New York.

And it is not a good thing for Ireland, Paul.

Here's why.

Research after research shows that golden circle favouritism discourages private and foreign direct investment into a country. The perception of corruption limits economic growth. For example, the financial services company Standard and Poor's rely on perception-based indicators to determine investment priorities.

Bill Clinton's advice that investors would be "crazy" not to invest in Ireland is heartening. But foreign investors are instead asking themselves if they are crazy to invest in Ireland in the first place if the law of favouritism applies where highly valuable procurement awards are delivered to those with political access.

The Moriarty report is not something that happened 16 years ago. Fine Gael and Labour are about to go through a major procurement process with the selling of state assets, such as the National Lottery, ESB, Bord Gais and Eirgrid.

Michael Lowry's "insidious and pervasive influence" in the awarding of the second mobile phone licence cost jobs, cost the taxpayer and damaged Ireland's international business reputation.

The Moriarty Tribunal is estimated to cost at least €200m. Tony Boyle is the chairman of Persona, the company who believe that if Lowry had not interfered in the process and the original rules of the competition had been followed, it would have been the legitimate winner of the evaluation process. Boyle is looking for €10m -- the cost and ancillary legal outlays of applying for a licence in what was a flawed process.

Adverse findings against the State have opened up the possibility of claims for substantial compensation from rival bidders who failed to win the lucrative mobile phone licence.

It did cost jobs. Fifteen hundred.

The boss of Motorola warned the then Taoiseach, John Bruton, that the US multinational company might withdraw because of the "serious questions" about the awarding of the second mobile phone licence to Denis O'Brien in 1995.

Wearing his heart on his sleeve, John J Mitchell told Bruton that "appraisal of Motorola involvement in Ireland -- present and future -- is presently under serious review".

Tony Boyle, the chair of Persona, said: "There was collateral damage; the net result is that jobs were gone."

"Disillusionment set in at corporate level", according to Boyle. A loss of trust and faith in the very ability to do business in Ireland happened.

Even the US embassy got involved at the time. US diplomats directly intervened with the Irish government on behalf of four US companies who had been partners with consortia seeking to win the licence. Privately, US companies were saying that the Irish process for winning the second GSM licence was more like a process they had encountered in "banana republics".

There is a self-interested definition of national interest at work here. It is a national interest subjectively interpreted by this Government as the narrow interests of Denis O'Brien. Any challenge to that orthodoxy is the claim that you are against jobs and investment.

Is the Government afraid that Denis O'Brien will pull out of Ireland if he is held accountable? Economic blackmail?

The national interest is whatever the Government decides it is. Why is that? Why have no senior Fine Gael ministers publicly reprimanded or expressed disapproval of Denis O'Brien's actions?

Enda Kenny, Michael Noonan, Richard Bruton, Brendan Howlin and Ruairi Quinn all sat around John Bruton's cabinet table when Michael Lowry 'delivered' the procurement award for Esat Digifone in 1995. Eamon Gilmore, Pat Rabbitte, Joan Burton and Jimmy Deenihan were Ministers of State at the time.

Ten members of the current cabinet were ministers or Ministers of State when the largest procurement award in the history of the State was awarded. Phil Hogan was a Minister of State until February 1995.

The positive political reform initiatives of the Government ring hollow when the sentiment of the Mahon Tribunal is ignored -- "If anti-corruption measures are to succeed and high ethical standards are to prevail, then the example must come from the top".

In effect, the implicit licence to act with impunity has now been established explicitly. In the national interest. There is no punishment or condemnation for those at the heart of the Moriarty Tribunal. Lowry has got over €382,000 from the independent TD special allowance scheme since 2001.

It has only served to confirm in the public mind that suspicions of golden circles are not only justified, but beyond legal, political and moral reproach or sanction. International business interests are watching Ireland closely. There is a knock-on effect to Government inaction on Moriarty -- the perception that nothing has changed.

There is impunity from consequences for impropriety. Again and again. And that's a national interest that I don't want to part of.

Elaine Byrne is the author of 'Political Corruption in Ireland 1922-2010, A Crooked Harp', which is published by Manchester University Press this month

Twitter: @elainebyrne

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