Michael Lowry's statement prior to Moriarty report

Michael Lowry just released a statement giving his side of the issues the Moriarty Tribunal has covered. The Tribunal is expected to publish its final report within three weeks. I’m publishing his statement in full here for those interested who may not have received it via email. Any comments will be strictly moderated on this post.

Media lawyers will be pouring over this at the moment. I’ll make no other comment than to note that the Tribunal cannot respond at the moment, obviously. You may remember Denis O’Brien also hit the media a few months ago.

13th January 2010

Statement by Michael Lowry TD:

Regarding the impending publication of the final report of the Moriarty Tribunal of Inquiry

I recently made a request, through my solicitor, to the Moriarty Tribunal to allow me the opportunity at the Tribunal to publicly address all of the evidence given to the Tribunal about the licence process since I last gave my evidence in 2005.   It has always been my belief and understanding that I, as the subject person of the Tribunal’s inquiry, would be the last person to give evidence and to address all of the allegations that were made against me.  It was my understanding that this was accepted by the Tribunal.  However, the Tribunal is now refusing me this right.  After eleven years of being investigated by the Moriarty Tribunal, they refuse to allow me time to defend myself in public on the licence process.  I am both surprised and disappointed by this response given that I have been forced to endure this highly expensive and personally corrosive examination over this period.  You could form the impression that the Moriarty Tribunal is intent on destroying my character, shredding the reputation of the Irish civil servants and damaging the international image of the Irish State.  They are attempting to do this in the absence of any real evidence in support of their outlandish theories.  There are numerous issues which I have not had the opportunity to address including the evidence of Richard Nesbitt SC, which is material to the awarding of the GSM licence.

Grievances with the Licence Process:

As Minister, I was well aware of the significance of the second mobile phone licence competition to various commercial interests in Ireland and beyond.  As stated in evidence and in line with my duty as Minister, I met with many of the people involved in the various consortia out of courtesy and respect, and for a discussion on the generalities and objectives of the process. My involvement in the competition evaluation process was minimal therefore there was no difficulty in meeting with them.   As Minister, I could not lock myself away in my Department for four months.

The result of the licence competition process was announced on 25 October 1995.  Almost immediately, my Department and other Government Members were inundated with acrimonious approaches on behalf of Persona.   They simply refused to accept the result.  What followed was the most aggressive political, legal and PR campaign, with Persona launching a massive and savage offensive to overturn the result through any means possible.   Dail question time was hijacked with T.D.’s arguing Persona’s case on the floor of the House and demanding explanations as to why the favourite did not win.  Complaints were filed with and later dismissed by the European Commission.  The Government openly challenged the disgruntled losing consortia to judicially review the result and take the matter through the Courts.  They refused.  There have been many anomalies during the Tribunal.   One of those is the fact that the leading lawyer [REMOVED FOR LEGAL REASONS – Mark], began his involvement when he was advising Persona in its initial attacks on the process back in 1996.  This appears to be a serious conflict of interest which was never adequately addressed by [REMOVED].

Allegations and Suggestions of Wrongdoing:

When the Moriarty Inquiry Report is published there will be no new revelations.  All aspects of the Report have already been the subject of public enquiry and media coverage.  Over the years, numerous allegations have been put forward and subsequently dismissed as without substance or foundation.  The main allegation that the Moriarty Tribunal has made against the process and the civil servants involved in the licence process relates to the involvement of Dermot Desmond as a 20% shareholder in Esat Digifone.  The Tribunal calls this the “ownership” issue.  The Tribunal suggested that Mr. Desmond’s involvement as a 20% shareholder breached the rules of the competition.  This is the main element of the Tribunal’s attack on the second mobile phone licence process.  All other allegations flow from this.  This ownership allegation or theory put forward by the Tribunal was comprehensively defeated last year when Senior Counsel to the State Richard Nesbitt gave evidence to the Tribunal of written and oral legal advices he provided to the Office of the Attorney General one week before the second mobile phone licence was awarded to ESAT Digifone.  Nesbitt’s advice to the Government was perfectly clear.  That was to issue the licence and that there was no problem about this ownership issue.  The licence was issued on foot of Nesbitt’s advice. Far from concealing Dermot Desmond’s involvement as the Moriarty Tribunal has alleged for nine years, this is what actually happened:

The Department officials identified the ownership issues that had to be considered and assessed prior to any licence being awarded to ESAT Digifone Limited.

The Department Officials wrote to the Office of the Attorney General specifically in respect of this ownership issue.

The Department Officials properly sought and received written and oral legal advice from a leading Senior Counsel via the Office of the Attorney General about the ownership issue.

The Department Officials acted fully in accordance with the considered legal advices provided by Richard Nesbitt SC, a highly respected and experienced commercial lawyer.

Nesbitt Legal Opinion:

The Moriarty Tribunal knew about the Nesbitt Opinion from the outset of the enquiry. But they chose to ignore it.  They refused to allow parties to question witnesses about the Nesbitt Opinion.   When I gave my evidence in 2005, there was not a single word uttered to me about the Nesbitt Opinion.  The Tribunal never mentioned it; they never brought it up.  It was though it never existed.  It only came into the public domain last year after a long legal battle.   It is an incredible situation.

The Moriarty Tribunal is perfectly happy to make outrageous allegations against me and Department Officials based on theory and hypothesis and to put these allegations into the public domain in a fanfare of devastating publicity.  However, they are not too keen on giving me the opportunity to properly defend myself.  Far from being fair, it is an injustice.

Public Interest Policy Decision:

The great irony of the Moriarty Tribunal’s inquiries into the licence is that this decision was actually one of the most successful decisions ever made by an Irish Government.  When I took over as Minister for Transport, Energy and Communications, Ireland was lagging desperately behind in terms of the development of telecommunications.   We still had only the incumbent monopoly Telecom Eireann with outdated technologies which were priced at exorbitant levels.  Ireland was almost the last country in the European Union to embrace competition in telecommunications.  I, as Minister, and my team of civil servants resolved to quickly address this problem.

We understood that Ireland would be left behind economically and socially unless we brought real and effective competition into the country.  Central to this was finding a second mobile phone operator that could challenge Telecom Eireann in a meaningful way and deliver benefits to the Irish consumer.  The Irish Government set up a project team to run the competition, drawn from the Department of Finance and Department of Transport, Energy and Communications to achieve this.   Every policy objective and goal identified at the outset of this process was achieved.  ESAT Digifone was spectacularly successful and the price of telecommunications services plummeted.  The Irish consumer was the winner.  Existing vested interests were no longer protected they had to fight for their profits, as should be the case in any competitive market.

My Involvement as Minster:

Let me be absolutely clear about this.  As Minister, I was completely and deliberately outside the decision making process.  I had nothing to do with the actual decision.  I did not interfere in any way in the second mobile phone licence process.  I did nothing to favour ESAT Digifone or any other bidder.  All of this has been clearly established in evidence by every witness to the Tribunal.    The task of assessing the bids for the licence was entrusted completely to a dedicated project team of senior and respected civil servants from the Department of Finance and the Department of Transport, Energy and Communications.   This team was capably assisted in their work by specialist telecommunications consultants Anderson Management International (AMI) who were engaged by the Irish Government.  These Danish consultants had a wealth of experience in these type of competitions.  Michael Anderson of AMI who has previously evaluated over 150 of such licence processes stated to the Tribunal that ESAT Digifone “handed in the best application as against the other applicants according to the evaluation criteria and their descending order of priority.  In AMI’s opinion the evaluation result nominating Esat Digifone as the winner thus was and is the right result”.  Again, the Moriarty Tribunal does not include this evidence in its evaluation.

Evidence of Civil Servants:

All seventeen civil servants from the Department of Transport, Energy and Communications and the Department of Finance have given sworn and consistent evidence to the Moriarty Tribunal that I never interfered in, nor did I seek to interfere in, the second mobile phone licence process.  The States most senior and highly regarded civil servants and professional advisors unequivocally confirmed in sworn testimony that I had dealt with the entire process in an even handed and entirely proper manner.  It was not possible for me as Minister to meddle in the process or direct a result without the collusion of a host of civil servants.  I sincerely hope that the civil servants involved in this process will finally have their reputations vindicated.  Any contrary suggestion would imply that each of the seventeen civil servants were engaged in a shocking conspiracy and went on to willfully perjure themselves before the Tribunal.  That would be preposterous.  There is not a shred of evidence since 2001 to indicate that I influenced the licence process.  This is simply because it never happened.

I am extremely grateful for the honesty and courage of the senior civil servants who went before the Tribunal to give evidence.  In my experience, civil servants are extremely diligent and place huge importance on following procedures and ensuring that the integrity of their work in not compromised in any way.  I can say without the slightest doubt that the civil servants involved in the second mobile phone process acted with integrity and honesty.  There is absolutely no basis or evidence for anyone to maintain otherwise.  They should not be damned in the absence of evidence.

The ‘Money Trail’:

The Moriarty Tribunal has engaged in an exercise of presenting two English and one Irish property transactions in a slanted and deliberately incomplete manner to give the impression that I gained financially from these transactions in granting the licence.  The following are the details in relation to these transactions involved:

House Purchased by me — 43 Carysfort Avenue, Blackrock, County Dublin

–  I purchased the property on 17th July 1996.  The purchase price was IR£200,000. I was a Government Minister at the time which required my attendance in Dublin on a regular basis. I needed a residence in Dublin.

–  I obtained a mortgage for the full purchase price IR£200,000

–  I entered into a personal loan agreement with David Austin (deceased) for IR£147,000 to fund the refurbishment to make it habitable.  This loan was fully documented and drawn up on agreed commercial terms between myself and Mr. Austin.

–  David Austin personally lodged this amount to an account in my name in an Irish Nationwide (IoM) Ltd on 21st October 1996.

–  I subsequently resigned as Government Minister on 30th November 1996 and had no need for a second home in Dublin.  I never occupied the house as renovations had not been completed.  I sold the house back to the builder in January 1997.

–  I repaid the mortgage of IR£200,114.55.  As I had previously paid four monthly installments of IR£1,828, the settlement figure was IR£200,114.55.

–  As per our written agreement, I repaid the loan in full directly to David Austin’s personal account on 7th February 1997 with a payment of IR£148,816.93.  This repayment consisted of the IR£147,000 loan plus the interest that had accrued over the four month period for which I had the loan.  This was a loan, pure and simple. There was no financial benefit to me in this transaction.

Mansfield(UK)

–  This property was purchased in September 1998, two years after I resigned as Minister.

–  The site cost GBP£250,000.  I paid the deposit of 10% on this property.  I paid it out of my own money.  Aidan Phelan paid the balance of the purchase price.

–  To this day, Mr. Phelan and I own that property on a 90% / 10% basis in line with our respective equity investments.  This arrangement is fully reflected in the appropriate legal documentation.

–  The Mansfield property was never sold.    I believe that my 10% is worth little or nothing at all today.  I received no payment or benefit in this deal.  There is no money trail.

Cheadle (UK)

– In 1999, three years after I resigned as Minster, I negotiated the purchase of this property for GBP £ 445,000 through a company which I had legally registered in the UK.

–  Aidan Phelan paid the 10% deposit GBP£44,500.

– I had difficulty in organising finance to complete the purchase.  Aidan Phelan then organised bank lending for me.

– This lending was subject to a bank guarantee which I was unable to provide.

– At that point Aidan Phelan stepped in and took exclusive ownership of the deal.  It is a fact that he sold the property years later, discharged the loan himself and retained the full proceeds of the balance.

–  All supporting documentation was given to the Tribunal.  There has been no financial benefit to me in this transaction.

Doncaster (UK)

– The investigations into the purchase of Doncaster Rovers commenced in 2001 arising from an anonymous letter sent to the Tribunal.

–  After six years of Tribunal investigation there has been no evidence to suggest that I had any material interest in the project.

– Christopher Vaughen, Solicitor to the project has stated in evidence that he never took any instruction from me regarding Doncaster Rovers.  As far as he was concerned I had no involvement in the project.

– Several other witnesses central to that project confirmed that I had no role or function in that transaction.

–  There is no money trail.  There was no financial benefit to me.

Much has been made of various enquiries into the so called ‘Money Trail’.  It is a matter of fact that one can go through these transactions and come to the definite conclusion that I did not receive any financial gain from these transactions.  The Tribunal should now know that there was no financial benefit for me at the end of the property ‘Money Trail’ — because it does not exist.  When the ‘Money Trail’ is completed it can be absolutely shown that no ‘Money Trail’ ends at my door.  I did not receive anything.  The Tribunal have scoured every financial institution in the world to find an elusive pot of gold.  This was always an impossible task as the money never existed.  A Tribunal forensic examination was carried out on every lodgement to both my personal and business accounts commencing 1986.  I was able to validate and confirm the source and purpose of each and every transaction.  The Tribunal also examined all accounts and transactions in the name of my late mother, my five brothers and my sister.  When that exercise yielded nothing of interest they proceeded to examine the accounts held by my two sons Micheal and Jonathan and my daughter Lorraine.  The truth of my financial history was established by the facts and not by a theory based on supposition.

All monies examined by the Moriarty Tribunal and credited to my personal and business accounts are tax compliant.  My taxation affairs are in order.  I am in possession of tax clearance certificates for my business and as an individual.

The Tribunal Process:

I have been condemned from the outset in this Tribunal Process. The condemnation approach had its most vocal cheerleaders among those who were unsuccessful in the Licence Application.  I am critical of the way the Tribunal conducted its business and I question whether it was fair and balanced.  Instead, the Tribunal Counsel acted as both Accuser and Prosecutor.  I sincerely hope that I will be one of the last subjects of the modern day legal monsters that are the Tribunals of Inquiry.  The Minister for Finance Brian Lenihan recently described Tribunals as a “..fattening up process for lawyers…”.  They are much worse than that. They are hugely expensive, complex, time consuming, but ultimately they are a meaningless processes.  They represent a massive intrusion into the rights of the individual.  You have no protections and no rights.  One of the problems that has emerged in relation to all Tribunals is that in opening statements they feed the public with unsubstantiated information.  This information is then presented as fact long before it can be challenged, repudiated or corroborated.  In the public mind this information becomes true when it is made public.  Any attempt to question or correct this perception becomes impossible.  This goes against the fundamental constitutional concept of “innocent until proven guilty”, which is a central part of our personal freedom as citizens of the State.

Opinion V Fact:

In the absence of proper supporting evidence the Tribunal findings will be merely based on opinion, speculation and conjecture that would not stand up to basic scrutiny in any court of law.  At the end of this prolonged process the Report of this Tribunal will prove nothing.  As was emphasised by the Supreme Court in Lawlor v. Flood [1999] 3IR 107 at 137, “a Tribunal hearing is neither a criminal trial nor a civil court trial, and findings of a Tribunal can impose no criminal sanctions or civil liabilities on any person.  In essence, the findings of this or any other Tribunal are no more than an expression of opinion in relation to matters considered by it.”  A report based on fact would clear me of impropriety in respect of the granting of the licence.  However Justice Moriarty is afforded the latitude of issuing a report based merely on his opinion.

Costs:

It is understandable that the Tribunal has to justify the outrageous legal cost by publishing a critical report.  When it is completed it is estimated to cost in the region of €300 million.  If you put a team of lawyers together with an unlimited budget and unlimited time on any process, they will eventually come to the conclusion that there were flaws.

The Department project team ran the mobile phone competition process over a four month period.  The Moriarty Tribunal has spent nine years and multi-millions of euro inquiring into that four month process.  The lawyers employed by the Moriarty Tribunal to carry out this inquiry have become the highest paid employees in the history of the Irish State.    Two of the Senior Counsel have earned close to €10 million each.  The lawyers to the Tribunal have already shared €40 million between them.   Tribunals are not accountable.  Government have allowed them to spiral out of control.  They have chewed up tens of millions from the public purse.  Senior Counsel for the Tribunal received a guaranteed €14,000 cheque in the post every week for the past eleven years and continues to do so in these times of national economic crisis.  In stark contrast, my legal defence team has received nothing.  They must wait until the Tribunal is concluded to even apply for their costs.  How can that be seen as fair or reasonable?

The Tribunal Process:

The Tribunal process that we have in Ireland is fundamentally flawed.  Tribunals are cumbersome, massively expensive and achieve none of the objectives that they were designed to achieve.  The current Tribunal system does not serve justice.  It is not efficient or cost effective.  We do need a mechanism for inquiries; but we should design a better model which is led and controlled by an Oireachtas Congressional type format of hearing and report.

For fifteen years I have been subjected to unrelenting, sustained extensive investigations by several state agencies.  As a result, the pressure over this time has been intense.  I am relieved it is about to end.  I earnestly hope that I can finally gain closure and enter the future free from institutional scrutiny.  I wish to pay generous tribute to my family, friends and faithful supporters in Tipperary who never lost faith in me.  It was their support that gave me the encouragement and strength to personally cope with a very disruptive and traumatic period of my life.