Category: Archive

Panel may probe phone deal

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — If an investigation of the awarding of the country’s second mobile phone license results in proof beyond reasonable doubt that the process wasn’t fair, it would be a "nightmare scenario" for the country, according to Tanaiste Mary Harney.

A series of financial transactions allegedly linking former Fine Gael Communications Minister Michael Lowry and Esat founder Denis O’Brien are about to be probed by the Moriarty tribunal.

O’Brien became one of the country’s richest men as a result of Esat being awarded the GSM license in 1995, when it beat out five other international consortia who had also lodged tenders.

Lowry, who resigned in 1996 as a result of an unrelated financial scandal, was the minister who awarded the license on behalf of rainbow coalition government.

Both Lowry, now an Independent TD, and O’Brien have strongly denied any impropriety and said they are confident they will be able to provide satisfactory evidence about the financial and property transactions being investigated.

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The license led to O’Brien becoming a multi-millionaire. The group was sold to the British BT group last year for £2.2 billion. The key ingredient in the sale was the Esat Digifone mobile phone company.

The new investigation was revealed at the tribunal last week when its lawyers presented an outline of the next phase of their inquiries.

Justice Michael Moriarty warned it would be wrong for anyone to come to conclusions before all the evidence is heard in coming weeks.

The tanaiste stressed it is not yet clear if anything had gone wrong and people had reputations to defend, but she said she was "worried" about what had been revealed so far.

It would be a "nightmare scenario" if fair play didn’t exist in the awarding of the license, she said.

All of the unsuccessful consortia could come together to take a class action and "we could be talking about billions of pounds."

"I don’t even want to think about it, and I certainly hope it is not the case, but if it were to be proved beyond reasonable doubt that there wasn’t fair play involved in the awarding of that license, then I think this State would suffer, not just in terms of money we would have to pay out, but the reputation of Ireland would be literally destroyed."

Ireland had built up a reputation that it is a good society in which to do business to attract in getting foreign companies, she told RTE’s "The Week in Politics" program.

Many of the unsuccessful consortia were unhappy about Esat’s success.

The tanaiste said that when she went to the U.S. in 1997, the Motorola company made clear to her "they were very angry."

She said a relatively small sum of money was paid for the license when others were prepared to pay substantially more.

"If it were the case that something did go wrong and there wasn’t fair play, there wasn’t an open and transparent regime in operation in the way that license was awarded, then the scenario for this country would be very, very serious," she said.

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