Elaine Byrne: Volumes of convoluted detail, but its essence was straightforward
The Moriarty tribunal slayed the myth that unethical political exploits were the preserve of FF, writes Elaine Byrne in this extract from her new book
Denis O'Brien was in his mid-30s when he attained the reputation as a businessman of international repute.
The son of a veterinary supplier founded Esat Telecommunications Limited in 1991 to provide competitive telecommunications services both in Ireland and worldwide. The ambitious UCD history and politics graduate was already successful with 98FM, the Dublin commercial radio station.
His triumphant bid for the State's second mobile phone licence in 1996 dramatically propelled his business career and financial resources. In 2001 he established and became chair of the privately- owned Digicel Group, one of the fastest growing cellular companies in the world. Forbes listed him as Ireland's second-richest billionaire in 2011 and he was ranked at 254th internationally.
O'Brien has engaged in spectacular acts of philanthropy, most notably in post-earthquake Haiti. Appointed to the Bank of Ireland board in 2000, he was then promoted as deputy to the bank governor in 2005, one of the most prestigious positions in Irish business. In many ways he is a synonymous public figure and is a powerful individual in the business, sporting, philanthropy and media communities in Ireland. O'Brien's commanding wealth is just one source of his power. His immense media interests include national radio stations Newstalk, Today FM and 98FM and two local radio stations and he is the largest shareholder in Independent News & Media (INM).
O'Brien made or facilitated payments of IR£923,934 (IR£147,000, stg£300,000 and a 'benefit equivalent to a payment' in the form of support for a loan of stg£420,000.66) in 'clandestine circumstances' and loan support to Michael Lowry between July 1996 and December 1999. According to the Moriarty report, these came in three separate instalments, the first less than seven weeks after the mobile phone licence was granted, and include IR£147,000, stg£300,000 and a 'benefit equivalent to a payment' in the form of support for a loan of stg£420,000.66. The IR£147,000 payment was returned by Lowry when the McCracken tribunal was established in February 1997.
O'Brien contributed substantially less to Fine Gael, just IR£22,140. The timing of these donations, between March 1995 and June 1996, was according to the tribunal, part of "a strategy of promoting himself and his companies with members of Fine Gael". The tribunal also believed that O'Brien's attendance at 14 Fine Gael fundraising events during this time formed part of his preparations for the second mobile licence bid, as they occurred "during the currency of the GSM competition and subsequent licensing negotiations". The tribunal found that the $50,000 (IR£33,000) Telenor donation in 1996 was a "payment to Fine Gael, on behalf of Esat Digifone, at the instigation and promotion of Mr Denis O'Brien". The Taoiseach, John Bruton, later rejected the donation.
The former minister of communications and serving Fine Gael TD Jim Mitchell, and prominent party member Dan Egan, were appointed as political consultants for the purposes of advising on financial contributions and effecting meetings with senior Fine Gael ministers.
The tribunal investigated if Lowry intervened or influenced the outcome of an evaluation process which decided the destination of Ireland's valuable second mobile phone licence, the single largest procurement award in the history of the State. As Minister for Transport, Energy and Communications, Lowry's department had responsibility for the competitive process which had six bidders. O'Brien was chair of, and a significant beneficiary in Esat Digifone, the eventual winner of the licence in 1996. Esat was later sold in 2000 to British Telecom for IR£2.3bn. O'Brien was reported to have netted IR£289m from the sale, and his decision to become a tax exile in Portugal is estimated to have saved him IR£55m in capital gains tax.
The timing of O'Brien's donations to Lowry and Fine Gael, and the interventions by Lowry, appear to coincide with critical stages in the evaluation process. The Government decision to authorise the holding of a process in March 1995 coincided with two small donations of IR£2,000 and IR£1,000 by O'Brien to Fine Gael. Mr Justice Michael Moriarty, chairman of the Moriarty tribunal, was unable to disguise his scepticism regarding Lowry and O'Brien's account of their 15 September, 1995, chance encounter where both men: happened to attend the All- Ireland Football Final at Croke Park; they happened to be seated in the same area; they happened to encounter each other during the half-time interval; and they happened to arrange to meet later . . . [they] repaired to Hartigans pub, where they remained alone for some half hour and talked of nothing other than the match, and Mr O'Brien's fixed- line business.
Relying solely on circumstantial evidence, Moriarty determined that O'Brien "must have shared with Mr Lowry the single matter that was preoccupying his thoughts, namely, his strategy of strengthening the Department's perception of his side of the finances of Esat Digifone". Two weeks later, at the beginning of October, Lowry conceived the notion of 'bankability' as a solution to the financial frailties of Esat's bid. Although Esat was the top-ranked applicant at this time, it did not meet the precondition of financial capability.
Bankability, however, allowed for the prospect that banks would regard the mobile phone project as an attractive investment and seek to invest after the licence was issued. The introduction of bankability into the evaluation criteria by Lowry, some eight months after the process commenced, was crucial to the success of Esat's bid and circumvented stated government policy.
In mid October, Esat donated IR£4,000 in what the tribunal described as "a deliberately discreet if not anony- mous sponsor, of a Fine Gael Golf Classic" which was distinguished by "its proximity in time to the conclusion of the evaluation process". Lowry applied a guillotine to the work of the Project Group the following week. The Project Group, comprised of civil servants and external Danish consultants, had responsibility for evaluating the competitive process and was not convinced that Esat should be nominated as the winner of the process.
Confused about the weightings applied and how the result had emerged, the group sought more time to revisit and review the evaluation. Lowry prevented it from doing so. The $50,000 (IR£33,000) donation by Esat, via Telenor -- the Norwegian shareholder in Esat -- was made to Fine Gael immediately after it emerged that Esat had won the competition. This was the donation rejected by John Bruton.
O'Brien donated IR£147,000 to Lowry in July 1996, a month after the licence was granted.
Despite a voluminous report saturated with convoluted detail, the essence of it is straightforward. Lowry was the recipient of direct or facilitated financial contributions, as was his political party, by a businessman who benefited from a decision made by his department. Aside from the money trail, a cocktail of irregularities within the evaluation process was complemented by the "insidious and pervasive influence" of a minister. The wordy report can be reduced to this paragraph by the judge:
"Lowry displayed an appreciable interest in the substantive process, had irregular interactions with interested parties at its most sensitive stages, sought and received substantive information on emerging trends, made his preferences as between the leading candidates known, conveyed his views on how the financial weakness of Esat Digifone should be countered, ultimately brought a guillotine down on the work of the Project Group, proceeded to bypass consideration by his Cabinet colleagues, and thereby not only influenced, but delivered, the result that he announced on 25th October, 1995, that Esat Digifone had won the evaluation process, which ultimately led to the licensing of Esat Digifone on 16th May, 1996."
The Moriarty tribunal slayed the myth that unethical political exploits were the exclusive preserve of Fianna Fail. Membership of this particular political party was not a necessary prerequisite for unorthodox behaviour. The tribunal report instead attested that it was due to a proximity to power.
Moriarty determined that both Haughey and Lowry, in their "cynical and venal abuse of office. . . displayed qualities similar in nature". Although both men were in separate governments of entirely different political composition, they showed "favour to wealthy or prominent individuals, and in recompense obtain payments or other benefits, in each instance bringing improper influence to bear on public servants for the end as sought".
No previous tribunal had to endure such sustained criticism of its work, which Moriarty referred to as "splenetic outpourings of abuse". O'Brien depicted the work of the tribunal as "totally biased", and wrote that its activities constituted "a new low in Irish judicial history".
O'Brien, who personally made over a quarter of a billion Irish pounds arising from the sale of an asset granted by the State and immediately afterwards became a tax exile, became an unlikely knight in shining armour for the Irish taxpayer. He focused trenchantly on the implications of the tribunal findings regarding the possibility of substantial compensation from rival bidders who failed to win the lucrative mobile phone licence and the legal costs of the tribunal.
"We've had to take the fight to the tribunal otherwise the government will be faced with a massive claim for damages," he told the Sunday Times.
He also established a website, www.moriartytribunal. com, to present his own views on the tribunal evidence, which was described by the director general of the Law Society, Ken Murphy, as a "sustained polemic against the Moriarty tribunal and certain named individuals associated with it".
Lowry alleged that "Moriarty's credibility was shattered because of his selective approach to evidence during the private and public enquiry".
In essence, both O'Brien and Lowry implied that a judge regarded as the epitome of judicial sobriety and propriety had gone rogue and become obsessed with destroying Ireland's international reputation.
The intensity, of what amounted to a direct attack on the very integrity of the judiciary was such that the Minister for Justice, Alan Shatter, felt it necessary to publicly defend the "independent and impartial role of the judiciary".
For instance, a key point of contention between the Moriarty tribunal and O'Brien and Lowry was the judge's interpretation of the evidence by the experienced Professor Michael Andersen, the lead consultant in the Project Group. Andersen, a Danish expert who was involved in over 120 such licence processes in almost 50 jurisdictions worldwide prior to the Irish competition, testified that the bid by Esat was one of the best he had ever seen.
Andersen and the two key civil servants who steered the evaluation said that they witnessed no indication of any political interference on the part of Lowry. Nonetheless, Moriarty concluded that the civil servants' concern for administrative efficiency of the project meant that they "unwittingly lost sight of its adjudicative character".
Moriarty also dismissed Andersen's deposition, instead asserting that: The retention of expert consultants provided no guarantee of an objective process, free of political influence. . . That the consultants presided over and endorsed an evaluation process, that deviated so markedly from their recommended methodology, was at odds with any reasonable expectation that the rigour of the process would be underwritten by their input.
The conclusions by Moriarty have been vehemently contested on the grounds that he inferred transactions, exchanges and conversations between Lowry and O'Brien on the basis of circumstantial evidence.
The People (AG) v William Sullivan, however, determined that circumstantial evidence may be corroborative evidence where a collection of circumstantial evidence has a cumulative effect and tends to implicate the accused. Or, as Moriarty put it: "Put more bluntly, surveying the odd backdrop of happenstance, silence and implausibility comprised by much of the evidence, and the manner and time in which it came to be recounted, it is inevitable that a stage is reached when the tribunal must ask, does all this have the ring of truth?, and conclude that much emphatically does not."
Furthermore, at the heart of Lowry and O'Brien's objections was this assertion by Lowry that the High Court judge, with over four decades of legal experience, had "outrageously abused the tribunal's ability to form opinions which are not substantiated by evidence or fact". In essence this amounted to a tension between two diverse interpretations of how corruption is defined.
'Political Corruption in Ireland 1922-2010, A Crooked Harp?' by Elaine Byrne, will be published by Manchester University Press on April 26