Tommy Broughan (Dublin North East, Labour)

The massive Moriarty report before us is an horrific reflection on the former Minister, Deputy Lowry, Mr. Denis O'Brien, the Fine Gael Party, the Department of Transport, Energy and Communications, and indeed the rainbow Government of the mid-1990s itself. In another of his poetic-type speeches the Taoiseach referred to key catchphrases of the McCracken, Mahon and other tribunals. He could have added another from the Moriarty report, namely "Denis was behind it", as the conclusions of this report are certainly summarised in the phrase.

At the outset let me salute Mr. Justice Michael Moriarty for his remarkable diligence, courage and great determination throughout the long lifetime of the Moriarty tribunal. Deputy Lowry referred to a Sunday Tribune poll of Deputies towards the end of the 30th Dáil asking if they had confidence in Mr. Justice Moriarty. I am proud to say that I was one of the 20% or so who answered the newspaper's question in the affirmative. The very comprehensive and painstaking report Mr. Justice Moriarty has produced is a clear vindication of that confidence. I accept its well researched and strongly argued conclusions and on behalf of my constituents I thank Mr. Justice Moriarty and his team for their service to the nation.

We have rightly had lengthy discussions about the great cost and duration of tribunals. I strongly favour the parliamentary reporter-style of Oireachtas investigations promoted by the Labour Party in the past and I admire the investigating magistrate-style of inquiries in civil law administrations such as France, Italy and Spain. Of course, we also now have the better focused commission of investigation-style inquiries under the McDowell legislation. As Dr. Elaine Byrne noted in a recent article in The Irish Times, the likely cost of the Moriarty, Flood and Mahon tribunals are still much lower than the billion euro or so of unpaid and evaded taxes revealed by tribunals such as that conducted by Mr. Justice Moriarty.

The second GSM mobile licence was a licence to print money. Everybody knew it at the time. I remember the atmosphere at the start of my first Dáil, the 27th Dáil, with programme managers and various flunkies running around the Dáil with their ears glued to mobile phones and the constant refrain in Fianna Fáil, Fine Gael and the media to the effect that the new technology and EU regulations meant the inevitable sale of Eircom and an exciting competitive fixed line and mobile market.

It therefore beggars belief that the Department of Transport, Energy and Communications and the rainbow coalition Government decided to issue a second GSM licence for derisory sums of between £5 million and £15 million. The system that was designed to sell off the second GSM licence is described by Mr. Justice Moriarty on page 1,062 of Volume 1 of the report as a "hybrid auction and beauty contest approach".

Yet, the process for the six applicants was essentially a beauty contest with all the serious difficulties of such competitions without the huge financial benefits which a simple auction would have brought the Irish people. I was the communications spokesman for the Labour Party in the 29th Dáil and it is clear that the auction approach has always ensured the absolute maximisation of revenue for the State for such valuable public commodities. A comprehensive 2001 review by the University of Virginia of the European mobile 3G universal mobile telecommunications system, for example, contrasts the beauty contest approach versus the auction approach.

The report describes how the beauty contest approach with its "lack of transparency means that government-favoured firms will be more easily able to win". It also states beauty contests are in fact "tacit attempts by the government to provide state aid". In fact, beauty contests appear to have most often been used in other states to favour an incumbent telecoms operator, which of course Esat was. In this case however, the Moriarty report clearly finds that the beauty contest approach favoured by the former Minister, Deputy Lowry, and the then Department of Transport, Energy and Communications provided the circumstances whereby the former Minister, Deputy Lowry, by his "insidious and pervasive" influence helped to deliver the second GSM licence to Esat and Communicorp.

The debacle of the sale of the second GSM licence is, in fact, a case study in the massive inherent flaws in a beauty contest style approach. The first auction of 3G licences in the UK had 150 rounds of bidding by 13 companies over seven weeks and the process raised $35 billion for the British Treasury. The Minister, Deputy Rabbitte, spoke of a "hermetically sealed competition process" and that the Moriarty tribunal finds that the process itself worked.

In fact, the opposite of these two propositions is true. The trail of influence and delivery of key information to Esat and Mr. O'Brien is well documented in the report and the baffling and astonishing decision to change the quantitative weightings in Copenhagen in late September 1995 conferred a deeply unfair advantage on Esat. The profound differences in the project team clearly needed intense further research and deliberation, which did not happen.

The leadership of the Department of Transport, Energy and Communications appears in a very poor light in the report. The disgraceful decision to guillotine the process by the former Minster, Deputy Lowry, was outrageous and the then Secretary General John Loughrey allowed himself to be bamboozled by the Minister. The then Secretary General seemed more concerned with presenting the result than inquiring whether it was the correct one. Even after the announcement in October 1995, the deeply flawed process was haunted by the changes in the financial structure of the Esat bid following the involvement of Mr. Dermot Desmond.

In many internal Labour Party debates I described Fianna Fáil and Fine Gael as the two side of the same coin and argued strongly against going into Government with either, especially as a minority party. It is therefore no surprise that Mr. Justice Moriarty draws a similar analogy in regard to payments to Mr. Haughey and Mr. Lowry and to Fianna Fáil and Fine Gael.

During the period of the issuance of this second GSM licence, Fine Gael was busy rebuilding its finances and raising millions from big business. Deputy Michael Lowry was the chair of Fine Gael trustees and worked closely with the then Taoiseach, John Bruton, and his then right-hand man, the current Taoiseach, Deputy Enda Kenny. It is in this context that the saga of the disgraceful $50,000 dollar contribution from Denis O'Brien through Telenor must be placed. Mr. O'Brien, who ironically was thought to be a Fianna Fáiler by the new Fine Gael Administration, immediately made it his business to get close to Fine Gael upon its entry to Government, and hence the sorry saga investigated by Mr. Justice Moriarty began to enfold.

Fine Gael's handling of the $50,000 donation was of course disgraceful as was its efforts to conceal it from the tribunal for as long as possible. I have always believed that he who pays the piper calls the tune and hope that all corporate, including trade union, donations will be banned. In the lifetime of Deputy Lowry's ministry, the then Taoiseach, John Bruton, did not seem to have these concerns, although he knew the Minister had availed of the tax amnesty.

The earlier part of the Moriarty tribunal report recounts the detailed way that Mr. Justice Moriarty clearly identifies and proves the money trail that existed and led from the head of Esat Digifone, Mr. Denis O'Brien, in particular, to the former Minister, Deputy Lowry. Mr. Justice Moriarty clearly concludes that a number of significant payments including £150,000, £300,000 and a "benefit equivalent to a payment" for a £420,000 loan, were received by Deputy Lowry through complex transactions involving third parties or companies the source of which was Mr. Denis O'Brien.

Mr. Justice Moriarty's damning conclusion is that a "reasonable inference" can be assumed that these payments were connected to the public office that Deputy Lowry then held, in particular as Minister for Transport, Energy and Communications, and with the sale of the GSM licence. There is absolutely no doubt that Mr. Justice Moriarty has produced overwhelming evidence in this massive report to back up his key conclusions on the outrageous and completely unacceptable ongoing financial connections and payments between Deputy Lowry and Mr. Denis O'Brien of Esat Digifone which followed the award of what should have been a multi million pound licence.

Mr. Justice Moriarty notes that Deputy Lowry summarily announced Esat Digifone as the successful bidder and on page 1,131 states: "The matter was not considered by Government until 26th October 1995, the day following the public announcement when it proceeded to Government merely to note the result already announced by Mr. Lowry". Of course colleagues clearly rely on accurate information being provided to them by other colleagues in the Government system or on any board or organisation. Those of us who served on boards will realise that. It is very unfortunate that the Cabinet was not made aware of the "concerns of certain members of the Project Group", as Mr. Justice Moriarty puts it including, "the significant departures which had been made from the evaluation methodology adopted prior to the closing date of the competitive process and possible consequences of those departures".

It is appalling, however, that a decision of this magnitude for a contract that was so valuable was announced at a Cabinet sub-committee called to examine aviation matters and including Deputy Lowry, the then Taoiseach John Bruton and then Ministers Dick Spring, Deputy Ruairí Quinn and Proinsias De Rossa, MEP. It is reported that the Department of Finance opposed the beauty contest and wanted an auction. If this is the correct view, why did the Department and the then Minister, Deputy Quinn not insist on the auction route?

Clearly the deep concerns of citizens about the fitness of purpose of the Department of Finance during the Celtic tiger bubble years will not be alleviated by this report. Of course recent reports have shown that Ministers were given correct advice in the Celtic tiger era but perversely chose to ignore it. Sadly, the conduct and conclusion of the 2G licence process again casts a poor reflection of the competence of the rainbow coalition Government.

I have always been opposed to the practice of political donations from whatever source. Mr. Justice Moriarty's report again highlights the appalling and pernicious effect of donations to political parties on Irish public life. From the recommendations section of the report, many citizens will angrily conclude that given the details of the corporate donations, there must be no continuation of the old Fianna Fáil or Fine Gael style politics as usual. A major good that can come from this shocking expose of another disgraceful episode in Irish public life if it is to end once and for all the destructive and pernicious influence of corporate donations on political parties and public life.

In the concluding portion of the report, Mr. Justice Moriarty outlines a comprehensive series of recommendations that must be considered with the utmost urgency, given the gravity of the matters referred to. In terms of political donations, I have already indicated what action the judge believes should be taken. I hope that Mr. Justice Moriarty's recommendations on strengthening company law in line with the 2006 UK Companies Act on additional implementation and enforcement measures as well a control of political donations and expenditure are adopted. There are a number of important recommendations in terms of the Revenue Commissioners too, in particular the recommendation that there should be an amending statutory provision to ensure the total independence of the Revenue Commissioners.

I welcome Mr. Justice Moriarty's comprehensive and far-reaching report. I commend him and his team for delivering it and hope that the House and Oireachtas will act urgently on the recommendations in the report.

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