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The businessman and the politician

Richard Curran - Sunday Business Post

Fourteen years after beginning its inquiry into events that originated in 1995,we now have a High Court judge’s assessment, findings and conclusions of events that took place around the most lucrative licence ever awarded by the state.

Ironically, it has proved to be one of the most lucrative awards ever, perhaps overshadowed only by the exploration licence that resulted in the Corrib gas find.

Yet it is extraordinary that, while we have Mr Justice Michael Moriarty’s verdict on what happened, we still don’t actually know definitively what occurred.

Taking Moriarty’s findings as fact, in all its 2,000-plus page glory, still leaves gaps in a basic understanding of what actually happened.

The forensics are there, but it is now clear that the full narrative will never be known.

However, Moriarty, who sat through all of the evidence with shrewdness, experience and the independence of a High Court judge, has given enormous insight into, and adjudication on, events.

Denis O’Brien, together with Michael Lowry, Ben Dunne and Dermot Desmond, has rubbished the report and its findings. It is not the first time that individuals who have given evidence at a tribunal have come out dismissing its findings.

Lowry’s claim that he will analyse and assess the report before continuing to challenge its veracity sounds similar to Dermot Desmond’s response to High Court inspector John Glackin’s report into the Telecom Eireann affair in the early 1990s.Desmond vowed to produce his own report, which has never been published.

The Moriarty Tribunal has gone on for so long, and has been so complex and so controversial, that a number of myths and fictions have built up around it.

Thankfully, Moriarty has been able to provide his verdict on key facts.

This part of the tribunal report is infinitely more complex and controversial than the Charles Haughey module. In the case of Haughey, the tribunal established a money trail, and sprayed the place with embarrassing facts about how much money Haughey received.

But it never really pursued in a serious way the truth of precisely what might have been done by Haughey in return for the money he got from businessmen.

We were left with a Haughey module that said the former taoiseach received several million from banks, Ben Dunne and others; that he should have not taken this money; but that it wasn’t clear what he did in return for that cash, if anything.

Once the tribunal went beyond the payments from Ben Dunne to Michael Lowry (the pair had a bizarre commercial business relationship anyway) and ventured towards O’Brien, the stakes became much higher.

Establishing a money trail would be difficult, but if it existed, the quid pro quo would be obvious. In the case of the planning tribunal, both Flood and Mahon were seeking to establish the motives behind payments right from the start.

This required the evidence of star witnesses such as James Gogarty, Tom Gilmartin and then Frank Dunlop.

There were no star witnesses in this tribunal, as O’Brien himself pointed out last week. There was no whistleblower to say ‘‘This is what happened’’. Therefore, establishing both the money trail and the quid pro quo was always going to be more difficult.

Unfortunately, while Moriarty has done an impressively thorough job penetrating the details behind various events and financial transactions, he doesn’t tell us exactly what went on.

He concludes that Lowry received several hundred thousand euro from O’Brien by way of intermediaries and middleman transactions.

He goes on to say that the payments were made to Lowry in relation to his public role.

He also says that Lowry, in return, delivered the licence for the O’Brien consortium by fast racking the final announcement and by passing on vital information about the process to O’Brien.

O’Brien denies both the payments and the interference to his benefit, as does Lowry. Having denied any impropriety throughout, and having failed to come forward with important information that would have assisted Moriarty in getting to the bottom of these transactions, they would hardly change their minds now and say it was an excellent report.

So what are the facts? And where are the fictions?

Fact 1: on three separate occasions, Denis O’Brien’s funds were used in connection with a transaction with another person. That person then engaged in a financial transaction with Michael Lowry, either directly or through further intermediaries.

O’Brien says he never gave money to Lowry but, in order to accept that version of events, the money trail uncovered by Moriarty would have to be based purely on the notion that Ireland is an astonishingly small place to do business.

It would have to be an incredible coincidence that, on three occasions, O’Brien engaged in a transaction with a certain person, who then just happened to engage in three transactions with Lowry.

Fact 2: O’Brien told former Esat Digifone chief executive Barry Maloney that he made payments of IR£200,000, according to evidence from Maloney to the tribunal.

He told him that a payment had got ‘‘stuck’’ with an intermediary. One of the above transactions related to O’Brien funds in Woodchester Bank, moved by his friend Aidan Phelan.

O’Brien, during an internal Esat inquiry prompted by all of this, suggested that the intermediary mentioned may have been Woodchester.

He also said that he had considered paying Lowry, but changed his mind. The tycoon said he was joking with Maloney, and that he didn’t pay Lowry any money.

Without commenting specifically, O’Brien’s position seems to be that it was all just coincidence that the £150,000 he paid to his friend David Austin for a house in Spain ended up being given to Lowry to buy a house in Blackrock in Dublin. He said he knew nothing of what Austin did with the money.

The payment to Lowry was later classified as a loan, after it had gone through an Irish Nationwide account in the Isle of Man.

Former Irish Nationwide chief executive Michael Fingleton said that the key executive involved could not give evidence because the Nationwide board in the Isle of Man would not allow it. Moriarty said this was ‘‘reprehensible’’.

The money was repaid to Austin by Lowry on the day the McCracken Tribunal was established. Lowry originally said he got the loan from Irish Nationwide, but no mortgage was registered on the property.

Equally, two other property transactions in Britain, involving Michael Lowry, where there had been a separate financial transaction involving another party and Denis O’Brien, can only be sheer coincidence, based on O’Brien’s account.

Fact 3: Denis O’Brien met Michael Lowry in Hartigan’s pub in Dublin on September 17, 1995, the Sunday of the AllIreland football final between Dublin and Tyrone.

This was one day before the participation of Dermot Desmond in the Esat/Telenor consortium was submitted to the Department of Communications.

The presence of Desmond significantly strengthened the Esat bid, which had been lacking in financial depth - something which Michael Lowry was made aware of by his officials.

Moriarty said it was simply not plausible that both men could have met in private during such a sensitive period in the bid process and not talked about the bid. Both O’Brien and Lowry say they talked about something else - namely issues around fixed-line telephony.

Yet O’Brien had communications, either face to face or by phone, with Desmond that evening about the Hartigan’s chat. According to testimony, O’Brien told Per Simonsen, the Telenor executive most heavily involved with the bid, that he had met Lowry on the Sunday, and that Lowry suggested getting Desmond involved. Simonsen told the tribunal of O’Brien’s remarks to him.

O’Brien said Simonsen must have been mixed up or confused, and that he told him no such thing. Moriarty is of the view that he did.

Fiction 1: Michael Lowry was the sole reason why Esat won the licence.

It is inconceivable that any assistance Lowry was capable of giving O’Brien would have been the single solitary factor in him winning.

O’Brien’s bid had to have been strong anyway, because we need only look at the management team he had and the success of the company afterwards. As if that weren’t enough, O’Brien went out in 2001 to totally new markets on the other side of the world and did it again.

Fiction 2: Denis O’Brien has been badly damaged by having the tribunal hanging over him for so long.

Undoubtedly, the tribunal has taken up a lot of O’Brien’s time and energy. Those who know him say he has been fixated on it for a long time, and in the run-upto its publication in particular.

The biggest test of the actual damage to his business interest is Digicel, the mobile company he founded in 2001. It operates in over 30 markets, all of which require licences, either won or acquired through buyouts by O’Brien. The company has revenues of several billion dollars and O’Brien has extracted over $1 billion from the company.

He is the biggest shareholder in the biggest newspaper group in Ireland, and he owns the radio stations Today FM, Newstalk 106, Spin 103, 98FM and South West.

The publication of the report will cause embarrassment, as every rival company in his Digicel markets will throw it out there, but it is highly unlikely to prevent him winning any new licences in Pacific islands which he is targeting. It is highly unlikely to restrict his ability to raise funds from banks or Wall Street investors either.

If we accept Moriarty’s findings as fact - and they are the closest thing we have to an independent assessment of what happened - why did O’Brien give Lowry the money? If it was in return for the help that Moriarty says Lowry gave him with the licence, then when did they agree to help each other?

If Lowry was in a position to give some assistance to O’Brien, when did he know that he could deliver the licence to him? Why would he have allowed his department to run this totally new kind of insulated bidding process if he was preparing to do a deal with one of the bidders?

Even within Moriarty’s assertions of what happened, there are gaps. Parts of the story are either incomplete or just don’t add up. Moriarty does not describe as ‘‘corrupt’’ the process of O’Brien paying Lowry money and Lowry intervening to help him win the licence. Why not? Presumably he mustn’t believe that it was corrupt or he would have said it.

Is it possible there are other more complex, more subtle and less clear realities behind all of this?

Many of these questions will never be answered.

The time it has taken for Moriarty to deliver his report has robbed it of its urgency and its power. The deep financial crisis that has brought the country to the brink of bankruptcy has actually diminished the report’s relevance for many people.

Unfortunately, they don’t care much about events that happened 16 years ago, and see the money involved as marginal when we are pumping €50 billion into the banks with nobody in jail, and no meaningful public inquiry into those more recent events.

The reality is that these matters had to be investigated - and that this was the only effective way of doing it.

Unfortunately, it took too long, and the limitations of the tribunal format have become painfully obvious.

Posted Date: 
29 March 2011