Telenor should be final nail in coffin of corporate funding

At first glance it might seem strange that the most significant political response to Fine Gael's embarrassments this week came from a Fianna Fail Minister.

Misery loves company, and Fianna Fail made little effort to disguise its delight that, for a change, someone else was struggling with tales of offshore accounts, secretive donors and an apparent cover-up. Behind the facade of glee, however, Noel Dempsey's suggestion that he might withdraw his proposal to increase the amounts which electoral candidates can spend hinted at a deep unease. The whole system of funding politics through corporate donations is becoming untenable.

There are elements of high farce in the saga of Telenor's $50,000 (£33,000) donation to Fine Gael. It would be hard for any satirist to compete with the reality of a cheque which was refused but then given anyway, which ultimately came from the account of a man (Denis O'Brien) who vehemently insists he did not donate it, which was returned to the donor but yet remained in the party's bank account, and that, to this day, nobody wants.

Before we start rolling in the aisles, however, we have to remind ourselves of one salient fact: this is the way we run our democracy.

In spite of a plethora of statements, basic questions remain unanswered. Since the donation was entirely legal and above board, why was it made in such a circuitous fashion, ending up essentially as an anonymous gift from an offshore account? Since, as he insists, Denis O'Brien did not make the donation, why did he subsequently repay the money to Telenor? Why did Telenor's books record it, not as a political donation, but as a "consultancy" fee? Why did John Bruton use the odd phrase "Leave it where it is" when he was issuing an instruction to refuse the donation? Why, when Fine Gael realised that the cheque by which it intended to return the money had not been cashed, did it not issue a bank draft instead?

Questions remain, above all, about the party's decision not to tell the Moriarty tribunal about the money. Fine Gael has come up with two separate explanations for this failure. One is the legal advice given by the distinguished senior counsel James Nugent. The other is that the party had entered into a confidentiality agreement with Telenor. Neither of them stands up to any scrutiny.

James Nugent's advice (and that is all a legal opinion is) was simply to the effect that the party was not legally obliged to inform the tribunal. It has no bearing on whether Fine Gael had a political obligation to co-operate as fully as possible with an investigation which it had demanded and voted for in the Oireachtas.

The agreement with Telenor to keep the whole thing confidential, meanwhile, raises more questions than it answers. The explanation offered by John Bruton this week is essentially that the party had to enter into this agreement in order to get the information from Telenor in the first place.

In other words, a Norwegian company calls party headquarters out of the blue and says: "We have something to tell you, but we will only meet you with our lawyers present and thus under conditions of legal privilege." The explicit context for this request is a fear that the Moriarty tribunal might get involved.

Yet John Bruton, who already had good reason to suspect that Telenor might have been involved in making a donation to the party, apparently agreed. This suggests either an extraordinary naivety or a degree of collusion with Telenor's desire to keep the whole matter under wraps.

Fine Gael, after all, had never been shy about taking big cheques from big business. Alan Dukes, as party leader in the late 1980s, wrote to 200 businesses seeking funds and, as he told the McCracken tribunal, personally begged money from a dozen of them over lunch or dinner. Twice in the last decade alone, the party raised huge sums to get it out of the red.

In 1991, when John Bruton became leader, he inherited a debt of £1.3 million, which was subsequently cleared. Again after 1994, when the party re-entered government in the rainbow coalition, it quickly wiped out debts of more than £1 million. Most of this money came from weal thy business donors, among them Ben Dunne, who also contributed directly to Michael Noonan, Ivan Yates and Alan Dukes.

John Bruton, moreover, was not exactly a model of frankness in his dealings with tribunals over these donations.

IN 1992 his evidence to the beef tribunal gave the clear impression that he was not in general personally involved in seeking business donations. Five years later, at the McCracken tribunal, it emerged that he was, during that very period, engaged in a major fund-raising campaign. He told Mr Justice McCracken that between 1991 and 1994 he was "intensively involved" in seeking donations and sought funds directly from about a hundred business people.

No one has ever suggested that John Bruton has a corrupt bone in his body. But that, in a sense, is precisely why the Telenor saga should be the final nail in the coffin of corporate funding of politics.

What we see is that while that system is allowed to operate, even a politician whose personal integrity is unquestioned gets dragged into an episode characterised by secrecy, evasion, mystery and cover-up. If it works like that for the honest politicians, how does it work for the dishonest ones?

The public, meanwhile, is left with two indisputable facts.

On the one hand there is a very odd donation for which no one wants to take responsibility. On the other, there is a business which got an extraordinary range of benefits from the State, including an extremely cheap mobile-phone licence, a deal with CIE which is costing the taxpayer a fortune and a deal with the Garda which has provoked anger in many local communities.

Until there is radical reform, the tendency to jump to the wrong conclusions will continue to land the system in a mire of suspicion and mistrust.