Civil servant quizzed over letter
Yesterday at the Moriarty Tribunal, Mr Towey vigorously defended the decision to effectively ignore the contents of the letter and to send it back, without even keeping a filed copy in the Department of Communications.
He did so, he argued, on the basis it had breached clearly stated GSM competition protocol and therefore should not be considered by members of the project team then evaluating all six applications for the licence.
Dated September 29, 1995, the letter confirmed International Investments and Underwriting Ltd (UUI) which later emerged to be Mr Desmond's privately-owned company then recently set up had arranged to underwrite all of the equity in Digifone other than the 40% owned by Norwegian company Telenor.
It said the consortium would have equity finance available in excess of £58 million (73.64m) and if any more equity was required there would be "no difficulty" in arranging it.
Mr Towey said he had completely forgotten about the letter when, in April 1996, the department was informed during the licence negotiations that Mr Desmond would also be investing in Digifone.
When Mr Towey saw the IIU letter he didn't know Mr Desmond was involved with IIU, or of his relationship with IIU managing director Professor Michael Walsh. He told tribunal lawyer John Coughlan SC he didn't even know the identity of IIU. Mr Walsh had addressed the letter to Martin Brennan, chairman of the GSM project team, but it was returned to Mr O'Brien as Digifone chairman.
Mr Towey told Mr Coughlan he hadn't noticed that "DF Desmond" was listed as chairman of the company at the foot of the letter which showed the names of partners and directors.
Before sending the letter to the Difigone chairman, Mr Towey said he consulted with Mr Brennan.
He had no recollection of using the words "you don't want to know the contents of it" but believed he had conveyed the information in the letter to Mr Brennan.
Referring to department inspector John Glackin's report on the controversial sale of the Johnston Mooney & O'Brien Ballsbridge site in Dublin in the late 1980s, Mr Coughlan said there had been "very strong negative findings" about Mr Desmond in the report.
Richard Nesbitt SC, for the department of communications, objected on the grounds Mr Towey was being asked to comment on the report when he said he hadn't read it.
How any answer he gave concerning Mr Coughlan's speculation had any relevance to this tribunal was "impossible to see".
Ruling that Mr Coughlan could continue to question Mr Towey on the topic, the chairman added: "I would effectively be holding that this tribunal is operating in Cloud Cuckoo-land if I did not hear this portion of the evidence."
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