Business, Economics and Jobs

Billionaire Denis O'Brien paid off Irish government official


Denis O'Brien, chairman of Digicel, converses with former U.S. President Bill Clinton before the panel session "The Recovery in Haiti" hosted by Clinton Global Initiative on Sept. 23, 2010 in New York City.


Brian Harkin

DUBLIN, Ireland — Billionaire Denis O’Brien, who started his working life as a bellboy in a Dublin Hotel, is one of Ireland’s greatest success stories. The 52-year-old Cork-born entrepreneur has extensive interests in mobile phone companies abroad, and is a major shareholder in Ireland’s biggest newspaper and radio group, Independent News & Media.

But O’Brien’s standing as an Irish business icon has been tarnished by the findings of an independent tribunal that he made secret payments to a government minister, Michael Lowry, whose decision helped lay the foundation for his fortune.

Lowry granted O’Brien’s company, Esat Digifone, the license for a second mobile phone service in Ireland in 1996 — the most sought-after commercial license ever granted by the Irish government.

Coming in the aftermath of a series of banking scandals in the last three years, the finding of the tribunal, chaired by Judge Michael Moriarty, is likely to further damage the reputation of Ireland as an open economy where ministers do not take bribes for business favors. Ireland currently ranks 14th in the world on Transparency International's global corruption perceptions index, ahead of Germany and the United Kingdom. 

Both O’Brien and Lowry have strenuously challenged the finding of the tribunal, which deliberated for 14 years at a cost to Irish taxpayers of 40 million euros ($57 million) and issued its final report Tuesday. O’Brien denied ever giving “a red cent” to Lowry, and the former Fine Gael minister said the report was “factually wrong and deliberately misleading.” 

The tribunal concluded that Lowry passed to O’Brien substantial information that benefited his bid and that he had an “insidious and pervasive” influence on what was designed to be an independent selection process.

At the time it won the license, O’Brien’s company, Esat, was considered the underdog against five other bidders, including the Persona consortium that included U.S. mobile phone giant Motorola. The tribunal followed a money trail to reach its conclusion that O’Brien gave cash to Lowry on three occasions, using intermediaries and off-shore accounts, within months of the mobile phone license being awarded in May 1996.

O’Brien transferred 150,000 British pounds ($244,000) from an account in the Isle of Man to an account in Jersey that was opened to receive the money by Fine Gael fundraiser David Austin (who has since died), who then forwarded 147,000 pounds to an account opened by Lowry in the Isle of Man.

This 147,000 pounds was “hastily repaid out of fear of possible disclosure” when an inquiry was announced into payments to some politicians, the tribunal found.
The same year Lowry put down a 25,000 pound deposit on a property in England and O’Brien forwarded 300,000 pounds from another account in London to close the deal. Of the 300,000 pounds, 44,500 pounds was subsequently used by Lowry to place a deposit on another property in England and the 420,000 pounds needed to close this deal was provided through a loan sourced from a British savings and loan company by O’Brien’s accountant.

Following the money had helped to expose the “corrupt underbelly” of Irish politics, the Irish Times said in an editorial Wednesday.

It said that despite the denials, “if it looks like a duck, walks like a duck and quacks like a duck, then it probably is a duck.”

When he sold his share in Esat in 2000, O’Brien personally received 317 million euros. He subsequently created another mobile phone company, Digicel, which has more than 6 million subscribers in the Caribbean and central America and has acquired licenses in the Pacific. Digicel is the largest single investor in Haiti, where O’Brien reconstructed the famous Iron Market in the capital Port-au-Prince as a symbol of the city’s recovery after the 2010 earthquake.

Last year O’Brien was listed as the richest native-born Irish citizen with an estimated value of 2.55 billion euros ($3.62 billion).

The word corrupt is not used in the 2,000-page report concerning O’Brien’s dealings with Lowry, but in a separate finding, the judge concluded that an attempt by Lowry to benefit another prominent buinessman, Ben Dunne, was “profoundly corrupt to a degree that was nothing short of breath-taking.”

“In the cynical and venal abuse of office … Mr Lowry has cast a further shadow over this country’s public life,” Moriarty wrote in his long-awaited judgement.

Lowry was forced to resign as a Fine Gael minister in 1996 because of other corrupt dealings with Dunne that became public, but he has since held his seat in the Irish parliament, the Dail, as an independent member for North Tipperary.

The tribunal findings are embarrassing for Fine Gael leader Enda Kenny, who heads the recently-elected coalition government. Kenny and eight other current government ministers were members of the cabinet that accepted Lowry’s judgment to grant the mobile phone licence to O’Brien in 1996. Moreover the Fine Gael party received a donation of 50,000 pounds ($71,000) facilitated by O’Brien two months after the mobile phone licence was granted, and party officials subsequently attempted to conceal the gift.

While the tribunal findings have exposed murky doings at the interface of politics and business, they also demonstrate a willingness in Ireland to clean up its act.
Businessman Declan Ganley, a member of the losing Cellstar consortium in the 1996 bid for the mobile phone licence, said it was in fact a good day for Ireland “because it shows that the Republic works.”