‘Lowry’s influence was direct, indirect and insidious’
This was the overriding message of Mr Justice Michael Moriarty’s tribunal into the awarding of the licence to Esat Digifone in 1995. The report said Mr Lowry had used his influence over civil servants and Cabinet colleagues to help gloss over fundamental flaws in Mr O’Brien’s bid.
In the autumn of 1995, the Tipperary North TD steered the 10-man project group charged with analysing six rival bids for the licence.
Afterwards, when he was called to account in the witness box, Mr Lowry’s evidence was described as “wholly unconvincing” as well as “formulaic, evasive and unhelpful”.
* Sought and obtained sensitive information on the deliberations of the project group which was supposed to operate free of political influence.
* Fed sensitive information to bidders, in particular to Denis O’Brien, which allowed Esat Digifone to dress up its bid.
* Met Mr O’Brien privately after the All-Ireland football final and told him where Esat Digifone’s bid was falling down.
* Suggested ways of presenting Esat Digifone’s win to the public so that doubts about its ability to finance the project would not be obvious.
* Shut down departmental discussion of the rival bids and overturned a decision of his secretary general to allow more time to examine competitors.
* Introduced a concept, called “bankability”, to excuse financial weaknesses in Esat Digifone’s bid until after the licence was awarded.
*Provided inside information to Mr O’Brien at an early stage regarding the potential willingness of France Telecom to partner a licence bid.
* Helped conceal the involvement of financier Dermot Desmond in the Esat bid until after the process.
* Peddled unfounded rumours that the rival to Mr O’Brien, Persona, had paid off a senior Fianna Fáil politician and would become a “nest egg” for the opposition party.
* Misled his Cabinet colleagues, denied them the opportunity to scrutinise his recommendation and over reached the Taoiseach John Bruton by keeping the rest of the Government in the dark.
In short, Mr O’Brien had one major problem in his bid to win Ireland’s second mobile phone licence. And Mr Moriarty found that throughout the selection process Mr Lowry directly and indirectly worked to minimise and ultimately eliminate it.
The problem was money and Mr O’Brien’s lack if it.
To win the licence the Esat Digifone consortium, and in particular Denis O’Brien’s vehicle Communicorp, had to prove it could fund the project. But, in May 1995, when bidding began, Communicorp was in “a perilous state and in dire need of working capital to stay afloat”. Mr O’Brien did not have the £24m needed for his bid.
Mr Moriarty said Communicorp could not have met the financial requirements in the qualification process. According to Moriarty, this is where Mr Lowry came in: “Mr Lowry’s influence in the process was both direct, as in his disgraceful action in bringing a guillotine down on the work of the project group, and indirect and insidious, arising from the interaction with the chairman of the project group.”
Once the competition for the second licence was launched, in March 1995, a project group was set up to independently assess international bids.
It was chaired by Martin Brennan and was designed to be free of commercial and political influence. It decided to curtail contact with bidders.
In the summer and autumn Mr Lowry facilitated communications with members of different consortia. At these Mr Lowry passed on knowledge from within his department.
In September he told Tony O’Reilly a bid he was associated with had not done well. Two days later Denis O’Brien went to the All-Ireland football final in the hope of meeting the minister.
At it they arranged to meet again at a pub on Leeson St. Mr Moriarty described it as a “profoundly reprehensible occasion” in which the two men discussed Esat Digifone’s lack of finance and the potential for financier Dermot Desmond to help out.
From early October the minister sought to hasten the ultimate licensing decision, once Esat Digifone was likely to be the preferred bidder.
Later he expressed a desire to downplay the financial weakness of the bid in the final report. The first draft of the project group’s report was altered to include the three lowest ranked bidders. This made Esat Digifone’s position look less bad against the weaker consortia.
“The most pervasive and abusive instance of Mr Lowry’s influence on the awarding of the GSM licence to Esat Digifone was his action in withdrawing time from the project group...
“[The project group] were not convinced that Esat Digifone should be nominated as the winner of the process... By withdrawing that extra time, and terminating consideration by the project group, Mr Lowry ensured that the risk of that result being disturbed by the project group did not arise.”
Ahead of the bidding war, the Government set out how the process should be conducted. It allowed four to six weeks for the final recommendations to be considered by the Cabinet before a decision was announced.
Mr Moriarty said Mr Lowry deliberately guillotined consideration by the project group and circumvented Cabinet discussion. At the beginning of October he decided to shut down the process in four weeks.
At that time two group members where in possession of information on the weakness of Esat Digifone’s financial pitch but did not share it.
The problems became more pronounced in the final hours of deliberations. It was so bad that the Department’s secretary general John Loughrey agreed to an extra week of analysis. Mr Lowry blocked this and demanded an answer overnight.
“Mr Lowry not only misled the party leaders as to the clarity and certainty of the result that he recommended, and as to the absence of any financial or other reservations, but even more reprehensibly he sought to over reach his own party leader, the Taoiseach John Bruton TD, by intimating that Government should have no discretion in the matter… Mr Lowry deprived Government of its decision-making function, prevented scrutiny of his recommendation, and thereby also ensured that Esat Digifone’s position as the winning consortium would not be altered.”
Mr Moriarty said Mr Lowry was so anxious to have a decision announced on October 25, 1995, he worked to dispense with the formality of having it approved at Cabinet, because the next meeting would be a day late.
Instead he met the leaders of the parties and briefed them on the status of the report and the outcome of the project group’s deliberations.
He did not furnish them with a full account or discuss the financial problems of Esat Digifone.
Mr Lowry inaccurately told Taoiseach John Bruton that Mr O’Brien’s bid was well ahead of the other companies and the decision of the group was unanimous.
He produced a score, which showed Esat Digifone was better, but did not mention that this rating was mired in controversy.
The judge said Mr Lowry misled the Government and the Cabinet simply rubber-stamped his fast-tracked and ill-considered decision to give the lucrative licence to Esat Digifone.
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