Advice 'no doubt' gave go-ahead to Digifone - official

AN OFFICIAL from the Attorney General’s office told the tribunal he had “no doubt” oral legal advice was given in 1996 that a mobile phone licence could be issued to Denis O’Brien’s Esat Digifone.

Denis McFadden also said it was his view at the time, and now, that written legal advice also furnished by Richard Nesbitt SC said the same thing.

Mr Justice Moriarty, in a ruling in February 2008, expressed the view that the written advice from Mr Nesbitt did not cover the “ownership” issue. Mr Nesbitt subsequently gave evidence where he said he had a “crystal clear” recollection of also giving oral advice.

The tribunal is conducting inquiries into the issuing of the licence to Esat Digifone when businessman Dermot Desmond, through his company, IIU Ltd, had taken a 20 per cent shareholding in the consortium.

In its bid for the licence, Esat Digifone had envisaged this shareholding going to four named financial institutions. The department asked Mr Nesbitt if the change in ownership was a barrier to issuing the licence.

Mr McFadden told John Coughlan SC, for the tribunal, that he could recall Mr Nesbitt telling him and some other officials that a change in ownership would only be a barrier if it was a material change and that he did not think the involvement of IIU was a material change.

He said the involvement of IIU only concerned “equity finance” and not the ability of Esat to deliver the promised service.

He said he had not mentioned the oral advice in private dealings with the tribunal in 2002 as he had believed it accepted his view that the written advice covered the matter.

It was only when he learned in 2008 that the tribunal did not share this view that the matter was reviewed within his office, and the significant step taken of asking the Cabinet to lift a claim of legal privilege that was being upheld up to then.

He said his view on the written advice had been informed by the oral advice he had received some days earlier. He said Mr Nesbitt did not hesitate at all about offering his oral advice, since the IIU shareholding was an equity finance issue and did not affect control.

Mr Coughlan asked if the Attorney General’s office had known that IIU was also underwriting Mr O’Brien’s side of the Esat consortium, and that if Mr O’Brien had not been able to fund his obligations, Mr Desmond would have effectively controlled more than 60 per cent of Esat.

Mr McFadden said he had been “totally unaware” of that at the time the ownership issue was being considered.

When a new document that had not been previously disclosed to interested parties was discovered during lunchtime, Mr Coughlan apologised. He said the letter, which dealt with matters concerning the Attorney General and the legal advice received in 1996, had not been with the set of papers dealing with the Attorney General. Rather the letter had been “on a file” because it was an attachment to a letter from solicitor Matthew Shaw, from the Chief State Solicitor’s office.

Mr McFadden continues his evidence today.