Moriarty's Depressingly Familiar Findings

There is still no end to the Chinese water torture of the steady drip of revelations concerning shady dealings between Irish politicians and businessmen.

At a time when Ireland needs foreign investment like never before, her reputation as a place to do business has taken a pounding from the publication of the second part of the findings of the Moriarty Tribunal. The first part, published in 2006, chiefly concerned the financial dealings of Charles Haughey. The second part focuses on those of Michael Lowry of Fine Gael during his time as Minister for Transport, Energy and Communications during the “Rainbow Coalition” government of the 1990s.

The latest scandal of the month is the awarding of a lucrative GSM mobile phone license in 1995, which could also be seen as a “license to print money” for whoever won it. Six consortiums bid for the licenses, including major international corporations. The winner was underdog Esat Digifone, a relatively small operation that began as a joint venture between Telenor and Esat Telecommunications under the Chairmanship of Irish entrepreneur Denis O'Brien.

The group prospered as a result and later went on to be sold to British Telecommunications in a deal that earned Mr O'Brien €317 million making him one of Ireland’s richest men. One of O'Brien’s subsequent investments was a successful bid for a mobile phone license in Jamaica that became the springboard for his Digicel venture. Digicel is now a major mobile phone operator in the Caribbean and Central America with over 6 million customers and has a sister operation in the South Pacific. O'Brien has become a billionaire who owns Irish radio stations Newstalk, Today FM, 98FM and two local radio stations. He is also the largest shareholder in Independent News and Media, a media group that owns a multitude of newspapers and publications.

Pivotal to this impressive ascent to wealth was winning that crucial bidding contest for the GSM license in 1995, and Justice Michael Moriarty's report indicates that it was riddled with irregularities. It states that Michael Lowry, the communications minister at the time, received substantial payments with no “commercial purpose" behind them from O'Brien via convoluted circuitous routes involving third parties and offshore accounts. It also states that Lowry gave "substantive information to Denis O'Brien of significant value and assistance to him in securing the license." It was said that Esat did not submit the strongest bid, that the bidding process was opaque, and was subject to inappropriate interference by Lowry which steered it towards delivering the award to O'Brien's consortium.

Mr O'Brien denies the allegations, as does Michael Lowry. O'Brien has even gone as far as to call for Justice Moriarty to be investigated for his handling of the tribunal. This, and other verbal attacks on the judiciary, have been rightly condemned by Alan Shatter, the Minister for Justice.

The report stopped short of stating that the award of the licenses was a corrupt act. O’Brien has denounced the report, highlighted the (admittedly high) cost and time-consuming nature of it, and characterized it as being long on rumor and short on evidence. Apparently we are to believe that the meetings between Lowry and O’Brien, the “non-existent” clandestine payments to Lowry, Lowry’s alteration of procedures that hid the weaknesses in Esat’s bid, and the eventual award of the contract are all coincidental. Hardly a compelling defense. O’Brien’s personal attacks on Justice Moriarty are not convincing and the cost of the tribunal has no bearing on the accuracy of its report.

As of this writing, Taoiseach Enda Kenny has indicated that the report has been passed on to the Director of Public Prosecutions and the Garda Commissioner, and the head of the Criminal Assets Bureau has been enlisted to chart a way forward. These are welcome developments since they are the first steps to a criminal investigation that could see people actually being held accountable.

Corruption is a plague that undermines all attempts to build an advanced economy. Prosperity can only thrive and foreign investment can only be forthcoming in an environment where the rule of law is applied, where personal connections cannot trump the actual strength of your business, and where bids for contracts are determined through the proper channels rather than according to the willingness of government officials to be bribed by personal friends.

It should be noted that Lowry had to resign from the cabinet and from Fine Gael in 1996 following revelations that Ben Dunne, a prominent businessman in the retail sector, had assisted him in evading tax. This history did not stop Lowry from topping the poll in his Tipperary North constituency in the 1997, 2002, 2007 and 2011 general elections. The voters do not seem to realize that corruption undermines the country as a whole irrespective of what favors politicians are able to secure for their friends. In most political systems even the slightest whiff of sordid dealings would signal the end of a political career. In Ireland it seems to be a prerequisite for topping the poll. As long as this culture of tolerance for corruption exists, the voters will get the politicians they deserve and the country will continue to suffer.

The government’s pledge to enact anti corruption measures concerning payments to politicians is an important and necessary step in combating this corrosive “brown envelope” culture. That such scandals are constantly brought into the open by tribunals should act be a deterrent to any aspiring cronies out there. What happens behind closed doors will not always stay behind closed doors.