Risk of disgrace to the nation is still out there
The very integrity of the State is at stake as the groundbreaking mobile licence dispute moves on, writes Elaine Byrne
'THIS case is absolutely uni-que, without pre-cedent or parallel in the 90-year history of the State. . . There has never been anything like it."
Mr Justice Adrian Hardiman went on to say that if the corruption alleged by the two unsuccessful bidders for the State's second mobile phone licence in 1996 were proven, "it would disgrace the nation and the State".
Judge Hardiman and his four Supreme Court colleagues published their written judgement last Wednesday, giving their reasons why legal claims by the unsuccessful bidders, Persona and Comcast, should not be struck out for delay but should be allowed to continue to seek damages from the State on the basis of a claim that the competition was corrupted by Denis O'Brien and Michael Lowry.
Esat was sold a relatively short time after acquiring the licence to British Telecom in 2000 for IR£2.3bn.
This is not going away.
If Persona and Comcast prove the alleged "fraud, deceit and corruption against the State itself, a government department, the individual minister who then headed the department and who remains a member of Dail Eireann and against the wealthiest businessman in Ireland", the State may become liable to them in damages.
While it is not clear whether any unsuccessful bidder, even on succeeding in their action, would be compensated for lost profits and while only one of the bidders could have won the licence, at the very least it would appear that bidders in such an allegedly flawed licence competition could potentially recover their expenses and outlay as bidders. If any bidder was entitled to be compensated for lost profits, the cost to the exchequer could be enormous.
Apart from the potentially devastating financial consequences to the exchequer, at a time when the State can least afford it, the arguments put forward by the State for striking out the Persona and Comcast claims, were astonishing.
This is about the very integrity of the State.
We are only at the very beginning of a new chapter. A chapter completely different to the tribunal. The purpose of that 13-year inquiry was to investigate facts and make recommendations, but not to punish individuals through civil or criminal sanction or to impose liability.
If the allegations of the plaintiffs are proven "they would amount to amongst the most serious factual determinations made by a court in this jurisdiction since the foundation of the State", according to Mr Justice Frank Clarke.
Why did the State's "ludicrous" argument fail? What of the extraordinary dilemma the State now finds itself in? How did the State respond to Persona last week?
Persona and Comcast first challenged the mobile licence award in 2001. The State secured High Court orders in 2007 stopping the cases against it on grounds of inexcusable delay. It argued that the bidders failed to deliver a statement of claim within the deadline and thereby forfeited the right to pursue their case.
Persona and Comcast contended that the delay was due to the complexity of the case, the allegedly covert circumstances of the money trail, and the repeated denials of all wrongdoing by the State.
They were waiting for the tribunal to conclude so that they could consider all of its evidence before pleading their case.
Nonetheless, the State claimed that the bidders "were not entitled to await the hearing of evidence at the tribunal at all", Hardiman noted with emphasis. The judge appeared to be exasperated by this line of logic. "What were the plaintiffs to do except await the evidence at the tribunal?" he asked.
Justice Nial Fennelly also found in Persona and Comcast's favour, noting the "strong evidence" which suggested that the State "were fully aware and conscious of the fact" that the bidders were awaiting the outcome of the tribunal "but took no action to compel the plaintiffs to proceed with their claims or to have them dismissed".
The State also argued that Persona and Comcast had various procedural options at their disposal, such as a "pre-statement of claim discovery of documents" which may have enabled them to plead their case without awaiting tribunal evidence.
Hardiman's patience had clearly expired, and he described that logic as "wholly lacking in reality. . . it is ludicrous to think that the persons and entities who went to great trouble to hide what was allegedly done would willingly supply evidence of it on discovery or otherwise".
Justice Liam McKechnie said this was an "entirely unrealistic" step given that the tribunal still took a decade to unearth the evidence despite its extensive powers.
The inconsistencies of the State case became even more apparent in the argument that the lapse of time between 1995 and 2012 precludes the prospect of a fair trial.
Yet, on the other hand, within a few weeks of advancing that exact argument, the State had sought to overturn a High Court judgement where a trial of a criminal allegation had been prohibited on the basis of a lapse of time of between 39 and 47 years.
"This line of authority," Hardiman said, "implies an unspoken suggestion that the State should be treated differently to the individual citizens as litigant."
The State is not a law unto itself. The same rules apply to all.
In view of the "integrity and reputation of the nation", Persona and Comcast's claim should not "be struck out on a technicality" Chief Justice Susan Denham ruled. "It is a matter of public interest as to whether a minister of government corrupted a State process."
Persona and Comcast are entitled to adduce the same evidence heard by the tribunal but not the tribunal's findings.
Ten members of the current cabinet were ministers or ministers of State when Lowry 'delivered' the procurement award for Esat Digifone in 1995. They include Enda Kenny, Michael Noonan, Richard Bruton, Brendan Howlin, Ruairi Quinn, Eamon Gilmore, Pat Rabbitte, Joan Burton and Jimmy Deenihan. Phil Hogan was a minister of state until February 1995.
The Houses of the Oireachtas commissioned the tribunal. Enda Kenny finally used the words 'accept' and 'tribunal findings' in the same sentence at the Magill Summer school in July -- a week after the Supreme Court ruling in Persona and Comcast's favour.
Pat Rabbitte has indicated that the State intends to defend the claims, notwithstanding the Supreme Court result and the terms of last Wednesday's judgement.
It seems likely that the State believed that the bidders' cases would be dismissed on the technicalities outlined. The State probably did not envisage the Supreme Court's findings of "absolutely unique" and "unprecedented" circumstances of the case.
The State now has to reconcile acceptance of the findings of the tribunal with its decision to fully defend the action.
We are now in GUBU territory. The State may find itself in a position where it contradicts the evidence of a tribunal it has already accepted!
Hardiman has already exposed the "ludicrous" logic employed by the State when it comes to interpretations of legal technicalities.
The State will have the opportunity to cross-examine witnesses -- even members of the current cabinet -- and challenge evidence presented to the tribunal.
Is this really what the State wants? Is the State now in danger of being seen as being on the same side as Lowry and O'Brien, who reject the tribunal findings?
The successful Virgin Trains legal challenge, earlier this month, is an instructive lesson for the Government.
This might sound familiar.
An investigation by the UK Department of Transport found there were "technical flaws" in the bidding process. The contract of the winning bidder was cancelled even though the government previously defended the process as "robust". Three officials at the department were suspended. The losing bidders "will be reimbursed in full" for their costs relating to the tender process.
In the UK, the above actions are known as "consequences".
This is something Tony Boyle of Persona is looking for. "I want consequences and to stop this. Enough of this." But Boyle feels the State is being unnecessarily aggressive and is not interested in exploring settlement.
Solicitors for Persona and the Chief State Solicitor's Office have exchanged correspondence since July's Supreme Court ruling.
The State is seeking "security for costs" before proceeding with Persona's court case. It is a discretionary order which the court may grant to force the plaintiffs to lodge sufficient money in court to ensure that if the defendants win, their costs will be met. Persona interprets this as yet another method of obstruction by the State.
In its reply to the Chief State Solicitor's Office, it vowed to "oppose strenuously any application that seeks to impede our client's right to a hearing in this matter. Very different principles now apply".
Last Tuesday, the day before the Supreme Court judgement was published, the Chief State Solicitor's Office wrote to Persona rejecting "any suggestion that the State has acted in an improper manner" and again requesting security of costs.
Boyle noted that his consortium were law-abiding tax-compliant citizens who claim to have had "a grave injustice done to us based upon the Moriarty tribunal; have been given a green light from the Supreme Court to continue the claim, and it is us who are suing them for wronging us, not the other way around. We might ask them to lodge funds in our benefit in the likelihood they lose".
In a statement yesterday Mr O'Brien said: "I have always believed that the appropriate forum in which to have these allegations against the licence process heard and adjudicated upon was the courts and not the tribunal of inquiry; whose legal team was led by Persona's former legal adviser.
"I welcome the earliest opportunity to vigorously defend these allegations in the High Court, where established rules of evidence and procedure will be followed and where hearsay, rumour and innuendo will have no place.
"I am absolutely satisfied that these allegations being pursued by Persona and Mr Ganley will be demonstrated to be devoid of evidence and substance."
Mr O'Brien added he looked forward to the State also vigorously defending these proceedings in order to maintain and protect the integrity and reputation of the civil service and of the individual civil servants involved in conducting the licence competition process.
The judgement was also welcomed by Michael Lowry, who said the courts should facilitate an early hearing.
"I together with the civil servants have been torn to shreds during the tribunal process," Lowry said.
"I've always felt the court scenario where you have proper rules on evidence and procedures and where a decision was based on fact and evidence rather than supposition and hearsay, was the only hope we ever had of getting this matter dealt with properly."