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Fine Gael reels over donation controversy

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — The new Fine Gael leader’s honeymoon period has come to an abrupt end. The party has been engulfed by a controversy about a $50,000 donation paid by the Norwegian Telenor communications company, which, as part of the Esat group, had been granted the State’s second mobile phone license.

Despite his announcement of a ban on corporate donations the day he was elected to succeed John Bruton, Noonan has been damaged by the row. He only learned of the donation after he became leader.

A Sunday Independent/IMS opinion poll carried out in urban areas because of the FMD crisis, revealed the fallout. Noonan’s support rating is at 32 percent, three points lower than for Bruton in November last year.

Noonan has reversed a previous party decision not to declare the matter to the Moriarty Tribunal investigating payments to politicians. That decision had been based on legal advice.

While some of the various accounts about what exactly happened are contradictory, the money was originally paid by Telenor.

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Telenor said it made the payment on behalf of Esat and was later refunded. However, Esat’s Denis O’Brien categorically denies making or arranging the payment.

O’Brien said his behavior in regard to the Esat mobile license was at all times "entirely proper." He has threatened to sue anyone who suggests he was the source of the money.

He says he was approached by the late Smurfit executive David Austen in 1995 about a Fine Gael fund-raising dinner to be held in New York. He said he declined the invitation and put Austin in contact with Telenor, which wanted to develop Irish political contacts.

Telenor paid the money into a Jersey bank account of Austen, who was a Fine Gael supporter.

When it received the money, Fine Gael said it thought it was a donation from Austin himself. To complicate matters further, the check was routed by Austen through another Fine Gael supporter

When the party became aware of the "unclear origin" of the money and the circuitous method of delivery, Fine Gael tried to pay it back to Telenor. The repayment check was sent to the Norwegian firm, but it didn’t cash it and sent it to Esat. Esat sent it back to Fine Gael.

Noonan has now instructed that a $33,000 bank draft be sent to Telenor.

The confusion and controversy has been hugely damaging to Fine Gael. Former Communications Minister Michael Lowry had granted the mobile license when Fine Gael led the Rainbow Coalition government.

Lowry said he never requested a political donation from Esat, Telenor or anyone connected with the companies.

The opinion poll showed support for Fine Gael was down by six points to 13 percent.

Fianna Fail’s support was up six points to 51 percent, Labour was unchanged at 14 percent and the PDs were down two points at 3 percent.

Sinn Fein was up three points to 9 percent showing it is an increasing threat to the established parties and could be a major power broker in coalition negotiations after the next election.

The poll also showed that only 10 percent of those surveyed believed O’Brien when he says Esat did not ask Telenor to make the donation to Fine Gael.

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