Smurfit played crucial role in bringing Microsoft and Intel to Ireland
Businessman believes his vision as chairman of Telecom Éireann helped create the conditions for the Celtic Tiger
Michael Smurfit leaving the Moriarty tribunal: “Tribunal reports are extremely flawed”, he says. “A finding is considered to be de rigueur law, but it is not. It is one man’s opinion of what he thinks has happened.”
Michael Smurfit says he played a crucial role in creating the conditions for Ireland to become a hub for technology giants like Microsoft and Intel. It was a role that was not without controversy and Smurfit has strong views on the interactions between money and power.
Smurfit was chairman of Telecom Éireann between 1979 and 1991 and believes his vision while chairman helped create the conditions for the Celtic Tiger. He did the job for zero pay and zero expenses.
Smurfit recalls how the government had committed itself to a second-tier technology when rolling out a new phone system. Tony Mullen, Eircom’s chief engineer, convinced him to instead go with the latest fibre optic-based digital technology.
“Straight away I got it. I didn’t have to be persuaded twice,” Smurfit says. “It was much quicker and much faster.” Without State authorisation he cancelled the second- rate equipment and ordered the best available in the world.
“That was probably one of the master strokes of the board of Telecom Éireann during my tenure there,” Smurfit says. “We were way ahead of Britain. Without that decision, Ireland would not be as it is today. Forget it. Microsoft would not be here, Yahoo, none of them.”
Smurfit had been due to retire in October 1991, but that summer a controversy emerged. An allegation was made that he was a secret beneficiary of the sale of a site in Ballsbridge to the semi- State. He had chosen it to be the site of a new head office.
Smurfit denied all wrongdoing, but as the controversy raged, the then taoiseach Charlie Haughey said during an RTÉ interview he felt it would be “prudent” if Smurfit “step aside” pending an investigation into dealings concerning the site.
On hearing the interview, Smurfit felt he had no choice but to resign. It would take two years for an inspector’s report into the affair to clear his name.
In A Life Worth Living , Smurfit says: “I never spoke to Charles Haughey again. I make a great friend, but I don’t make a good enemy. I’m not a vindictive person, I just cut people who do me a bad turn out of my life and have nothing more to do with them.”
Asked about how he feels now about what happened now, he says: “What I was angry about at the time was that neither the minister, Séamus Brennan, nor Haughey, both of whom have since passed on, would accept my word that there is nothing untoward here and don’t worry about it.
“I thought that my word was good enough for anybody. That angered me greatly. When Haughey made that infamous step aside speech on the Saturday morning, the day actually I opened the K Club . . .
“I said you can’t step aside and leave a vacuum for one or two years while someone investigates whether there was any wrong doing on my behalf or anybody else’s. I was assured by the chief executive that nobody in Telecom had anything to do with it. I said I certainly had no worries about it.”
Made mind up to go
“But you don’t know if somebody was on the inside of something that I didn’t know about. I just made up my mind to go.”
“Well, if Charlie had of treated me fairly, he probably would have joined the board of Smurfit in the natural course of things.”
Smurfit says that up until then, he had had dinner with Haughey in his home in Abbeville, an 18th-century house in Kinsealy, Co Dublin, about 10 times.
“He was a very gracious host. He never asked me for money and I never offered money.”
“The only time we paid him was when David [Austin, a Smurfit executive] paid him £70,000 for Fianna Fáil and he took the money himself,” Smurfit adds.
“Moriarty [the tribunal] said I should have known that the taoiseach was going to keep the money himself. Give me a break! How should I have known he was going to keep the money himself? If I’d thought for a split second he would keep the money himself, I would have said ‘David we are not giving it’.”
The late senator Eoin Ryan snr was on the board of Smurfit and a frequent fundraiser for Fianna Fáil.
“He would come to me regularly for money for Fianna Fáil which I would give him,” Smurfit recalled. “I told him we had just given him £70,000 for Fianna Fáil through Charles Haughey. He said okay. He never came back to me and said he didn’t get it! He was on my board and a good friend.”
Power and money
Do politicians and business people need to keep their distance or is it inevitable that the power and money come together?
“The culture of Ireland that I grew up in was very much intermingled. There were things happening that couldn’t be dreamt of today,” Smurfit says.
“The Galway races for example; Fianna Fáil had a huge tent and all the donors were in there and so on. Fine Gael had their event in the K Club, €2,500 a team and so on, all these things have gone walkabout, never coming back.
“The culture has changed. The country has matured. It has been clearly decided that this form of crony capitalism and relationships between business and politicians doesn’t work. It has taken that time to arrive in Ireland.”
Smurfit says the tribunal reports had played a part in that, but he disagreed strongly with their methodology and findings.
“I think the reports are extremely flawed. A finding is considered to be de rigueur law, but it is not. It is one man’s opinion of what he thinks has happened.
“Take the Moriarty thing against Denis O’Brien. I think that report is so flawed that it is ridiculous. I don’t think Denis has anything to worry about when it comes to a court of law because all the civil servants said it was done above board.”
Has O’Brien’s name been forever damaged by the tribunal?
“Of course, unfortunately you guys bring it up from time to time,” Smurfit says. “Not with me. As far as I am concerned, Denis O’Brien is one of the greatest guys I have ever met and he is a great businessman.”
Smurfit invested in an O’Brien venture into television and he considers the businessman a good friend.
Smurfit was also an influence on the rise of another of Ireland’s wealthiest men, Dermot Desmond.
The two first met in the 1980s, not long after Desmond founded NCB Stockbrokers.
“When he first came to see me, smartly dressed in an Armani suit, he was really trying to impress which he did. I said, ‘okay I am going to give you a break because I hope that someone in my position would do the same thing for me’,” Smurfit recalls.
This break was to give NCB half of the Smurfit stock business, a coup when the market was dominated by the “establishment” brokers.
In different ways, Smurfit helped both men on their way to becoming billionaires.
Both O’Brien and Desmond will launch Smurfit’s book tonight in the UCD Michael Smurfit Graduate Business School.