Method of payment `difficult to justify'

The Fine Gael leader, Mr John Bruton, said that the Magill revelations once again raised disquieting questions about the way Fianna Fail in government conducted business and its "curiously lax" approach to investigating allegations of wrongdoing.

"The Taoiseach has admitted investigating Mr Ray Burke last year prior to appointing him as minister for foreign affairs. We are led to believe he reassured the Tanaiste that Mr Burke had nothing to hide.

"Much was made of the travels to London by Minister Dermot Ahern to ensure that this investigation was comprehensive and complete. The Taoiseach said he was satisfied nothing improper had occurred. Yet out of the blue today we learn of another huge donation to Mr Burke from a related company with which his Department had extensive and potentially lucrative dealings.

"On the basis of this performance, Minister Dermot Ahern would not get a job as an investigative inspector in his own Department."

Mr Bruton said it was extraordinary that a donation, which was supposed to be for the national party headquarters, would be handed to a particular minister who had discretion to divert it to cash for his own benefit.

"It would have been much easier for Fitzwilton to post the cheque to party headquarters. Is it usual for a public company to behave like this?"

Mr Bruton said that the bizarre method of payment was all the more difficult to justify if the minister had had dealings in a ministerial capacity with Fitzwilton or companies with overlapping ownership.

It was important, he said, that all dealings by Mr Burke, as a Fianna Fail minister, with companies overlapping ownership with Fitzwilton, now be fully investigated. Discussions between Mr Burke and all other ministers on any such dealings with companies with overlapping ownership with Fitzwilton were also a matter of valid public concern in those circumstances.

"Mr Burke may have good and valid explanations. So also may Fitzwilton. But the matter must be publicly explained."

Mr Bruton said that the chairman of Fitzwilton plc, Dr A.J.F. O'Reilly, was an immensely successful businessman, who had created jobs and wealth in Ireland which all governments had acknowledged. As was well known, he had extensive business interests in Ireland in a wide range of areas.

"One of Dr O'Reilly's interests concerns the television transmission system, MMDS. That was the source of considerable controversy in the lead-up to, and the aftermath of, the general election of June 1997. Mr Burke was linked to that controversy.

"Dr O'Reilly's newspapers took a quite unprecedented interest in the result of the 1997 general election."

He said that as minister for communications in the late 1980s Mr Burke issued licences for the operation of the MMDS. Of the 29 licences awarded, 19 were allocated to Princes Holdings, a company associated with Independent Newspapers plc, which was controlled by Dr O'Reilly.

Nineteen of the 29 exclusive licences were issued to one company, despite the fact that the regulations specifically required him to have regard to "the desirability of allowing any person to have control of an undue number of programme transmissions systems".

In the change of portfolios after the 1989 election, Mr Burke, although changing departments, still retained the portfolio of Communications, which was transferred from his old Department of Industry to his new Department of Justice.

This was considered a most unusual combination at the time, he said, adding that Communications was Mr Burke's "personal baggage."

In February 1991 Mr Burke, as minister for justice and communications, wrote to Mr Joe Hayes, managing director of Independent Newspapers plc, a major shareholder in Princes Holdings, on the status of the MMDS franchise. He had written:

"You were invited to apply for exclusive franchises, and it is accepted that no further licences for television programme retransmissions, wired broadcast, relay or other rebroadcast or relay within or to your franchise regions will be granted for the duration of your television programme retransmissions licences.

"Neither will the Minister, during this time, permit geographical extensions to any wired broadcast relay (cable television) licences which now exist in the region.

"Immediately MMDS service is available in any of your franchise regions, my Department will apply the full rigours of the law to illegal operations affecting that franchise region. My Department will use its best endeavours to ensure that there are no illegal rebroadcasting systems affecting that region within six months after commencement of MMDS transmissions."

Mr Bruton said that Mr Burke had given this exclusively without bothering to survey, identify and exempt areas where it was physically impossible for Princes Holdings to provide any TV service at all.

"Why did Mr Burke give such far-reaching private assurances to a private company? Was he influenced by the donation two years earlier?

"These written assurances by Mr Burke to Mr Hayes tied the State's hands, and opened it to huge legal claims if it changed its TV retransmission policy. Did Mr Burke discuss this letter to Mr Hayes with the Cabinet at the time, five of whom, including the Taoiseach and Minister Molloy, sit at the present Cabinet table?"

Mr Bruton said that if it was not possible to extend the remit of existing tribunals, he wanted a full inquiry into the matter, with powers to compel attendance of witnesses.