Michael McDowell (Independent) | Oireachtas source

I welcome the Minister of State to the House. The report of the Cregan commission of investigation into the sale of Siteserv Limited to a company beneficially owned in the majority by Mr. Denis O'Brien is a matter of public interest. Siteserv was indebted to the State-owned IBRC to the amount of €156 million arising from its debts to Anglo Irish Bank. Accordingly, the terms on which it was sold concerned the people of Ireland as taxpayers and as guarantors of the failed Anglo Irish Bank. Indebtedness of the order of €110 million was written off by IBRC. In these circumstances, there was a grave obligation to conduct the sale of Siteserv in an ethical and lawful manner designed to maximise the return to IBRC and the citizens of Ireland. The commission’s report is very lengthy and detailed but, happily, its conclusions are summarised at chapter 27. These conclusions have been laid before us as Members of the Oireachtas for our brief consideration today. I propose to comment on these conclusions.

The commission found that the sales process was conducted in good faith by IBRC but that it was tainted with impropriety and illegality as a result of the improper actions of three persons in particular, namely, Niall McFadden, Brian Harvey and Robert Dix, whose evidence the commission disbelieved and rejected in relation to crucial aspects of the transaction. Niall McFadden and Brian Harvey concluded a secret deal with Denis O'Brien and persons acting for him under which they would receive 15% of the shares in the acquiring company owned by Mr. O'Brien as a "management incentive". They collectively took steps to ensure that this side deal would be concealed from most members of the Siteserv board and from those in IBRC who were supervising the sale of Siteserv.

McFadden and Harvey abused their positions to ensure that highly confidential information relating to the competitive bidding process was revealed to those conducting the O'Brien bid. Their aim was to give the O'Brien bid the inside track and an unfair and improper advantage as a bidder for Siteserv. The commission found that the compromised sale process could have yielded €8.7 million more for the taxpayer. The presence of McFadden and Dix at a ski resort "boot camp" holiday with Mr. O'Brien at the precise time that crucial decisions were pending or being made in relation to the Siteserv deal does not appear to me to be entirely innocent or mere coincidence. The commission found that Dix improperly and inexplicably concealed this event from his fellow directors.

O’Brien had, on the evidence, made strenuous but unsuccessful interventions with IBRC to reduce or write off the major personal indebtedness of his friend McFadden to the bank. The 15% shareholding deal was deliberately structured offshore to disguise the existence of these shares from creditors of McFadden and Harvey, including IBRC. False backdating of employment documentation, to which Mr. O'Brien’s company was also party, appears to have been done to conceal and evade tax liabilities.

All of these are findings of the commission and they are all to be found in chapter 27. These facts raise the obvious question as to why Mr. O’Brien took no steps to prevent the improper actions of those who tainted the Siteserv transaction. None of these improprieties could have occurred had he lifted a finger to stop them. While the commission forbore to deal with that question, we to whom the facts have now been conveyed must ask this question and seek an explanation, if there is one. The people of Ireland cannot continue to ignore as a mere string of coincidences the findings of the Moriarty tribunal and the Cregan commission and the circumstances giving rise to the data scandal and other serious issues at Independent News & Media, INM, which are under investigation. There is an undeniable common link to all of these events. It is the tainted pursuit of greed by any means, fair or foul.

What I have said is based entirely on the findings the Government has said it has accepted in chapter 27 of the commission's report.Those findings of facts give rise to questions which must be answered. Why did these events take place? Mr. O'Brien knew what was happening and must have known he was receiving confidential information improperly, even though the commission found he did not seek it in the first place. Why did he not say to Mr. McFadden and Mr. Harvey that he was having nothing to do with them, that he wanted the deal to go through fair and square, and that he would deal with it on the same basis as anybody else?

The time has come for the Irish people to demand of those who have received great assistance from them in accumulating their wealth that they demonstrate standards of ethics and propriety in their dealings with State institutions. This is not just a hard deal done between two sets of businessman, both of whom are to be imputed with the capacity to look after their own interests. Rather, this was Irish taxpayers' money in IBRC. This was a deal which was or was not going to try to recover as much as possible for the Irish taxpayer arising from the debts of Siteserv to the IBRC of over €150 million. The Irish people are entitled to high standards. I fully accept what has been said, namely that the IBRC acted honourably and in good faith.

Let us not forget that the commission has found that it was deceived and that facts were kept from it. The result was not merely that the transaction was tainted and unlawful, but also that it probably resulted in the sale of this asset at an undervalue to a company owned by Mr. O'Brien, in which Mr. McFadden and Mr. Harvey were to have a secret offshore shareholder interest, in circumstances which give rise to the reasonable inference that the whole thing was structured to conceal from the Irish Revenue the reality of where the money was going and what money would be available by way of taxation to defray the liabilities of those involved.

I welcome the report, but we should not cover up what has happened. We should not simply say that it is for another day, or for the Revenue Commissioners, the Office of the Director of Corporate Enforcement or somebody else to draw conclusions. These facts speak for themselves.