The discovery of Waterworld UK's dormancy prompted a considerable andprolonged degree of activity within a small circle of people at Campus and Stadium Ireland Development, writes Arthur Beesley.
The Campus and Stadium Ireland Development (CSID) executive chairman Mr Paddy Teahon claimed again yesterday that he did no wrong when contracts were awarded to operate the €62 million National Aquatic Centre at Abbotstown, Dublin.
But his words were difficult to reconcile with the report by the Attorney General, Mr Michael McDowell, which avoided discussing whether the EU Procurement Directive was observed during the tender process "because it would not serve the public interest".
When the end came for the retired secretary general at the Department of the Taoiseach, it was definitive. At 11.30 a.m. yesterday, he was asked by his successor Mr Dermot McCarthy whether he would accept the Government's appointment of a new chairman. Barely a week had passed since Mr Teahon said he would not resign, yet he had no alternative yesterday but to accept the Cabinet's directive.
Though still a board member at CSID, it was a humiliating climbdown for the Kerryman who has made much of his distinguished career in the Civil Service. His track record was such that he was chosen to lead the pet project of the Taoiseach, Mr Ahern. But when it came to the crunch, that was not enough to save him.
As disclosed in The Irish Times three weeks ago, heads of agreement to operate the aquatic centre were signed by Waterworld UK, a dormant company worth £4 and registered at a solicitors' office in London.
Mr Teahon and his executive services manager, Ms Laura Magahy, were aware of this important detail. For reasons that are still unclear, it was one that was kept from the Government, the CSID board and the special panel which awarded the contract. Mr Teahon said he was acting with delegated authority, and that he had done so on many occasions during his public service career. Mr McDowell was less than convinced.
There is nothing wrong per se when business is done with dormant companies, providing they are adequately funded when the real business of signing and underwriting contracts gets underway. What happened in this case was that the guarantees which Waterworld UK claimed it could secure were not forthcoming.
Instead, the company relied on a letter of comfort from Anglo Irish Bank against the assets of a Co Kerry property developer and civil engineer, Mr John Moriarty. Despite not seeking the contract in the first place, Mr Moriarty became the 60 per cent shareholder in Dublin Waterworld, the Irish entity now preparing to run the centre. He only emerged when rival bidders were eliminated and will run the centre with Waterworld UK's two Irish representatives, Mr Kieran Ruttledge and Mr Liam Bohan, who are minority shareholders in Dublin Waterworld.
Mr McDowell's report does not directly address how Mr Moriarty came into the frame to secure a contract that required bidders to demonstrate experience of operating aquatic centres internationally. It adds, however, that Mr Moriarty was a "bona fide" white knight and that Mr Ruttledge and Mr Bohan became involved in "good faith".
What the report does reveal is that there was serious concern within the Government when the contracts were sanctioned that this had come to pass. It also reveals that the discovery of Waterworld UK's dormancy prompted a considerable and prolongued degree of activity within a very small circle of people at CSID.
Unusually, the report's annexes contain the Memorandum to Government used when a decision was sought last December to grant the final contract to Dublin Waterworld and the building firm Rohcon. Work - to designs by S&P Architects - was well begun at that stage, on foot of letters of intent. But according to the Memorandum, the Tánaiste Ms Harney expressed concern that there had been expenditure without the benefit of contracts. She added that the State could be liable to damages if the contract was awarded - and similarly liable if the contract did not proceed. Responding, the Minister for Tourism, Sport and Recreation, Dr McDaid, said that Mr McDowell had advised that signing the contract represented "the least risk" among the options open to the State.
If this raises the distrubing prospect of the project advancing so quickly that Government decisions made were based on calculations of the option least likely to prompt court action, the explanation lies in the rush to complete the aquatic centre in time for the Special Olympics next year. That explanation was used to justify Mr Teahon's cutting of corners. Indeed, it was the Taoiseach who said the project would not be so far advanced were it not for Mr Teahon's drive and initiative.
In the eyes of Mr McDowell, that does not excuse Mr Teahon. There was "no good reason" why the attention of the Department of the Taoiseach or the Department of Tourism, Sport and Recreation was not drawn.
He added: "Failture to alert those politically accountable to the true situation seems to seriously call into question the existence of a proper relationship between the executive and the board and between the board and its State shareholders."
He added: "The claims made for the experience and success of Waterworld UK Ltd appear to be unfounded and unchecked. The response questions the basis for my conclusion that an attempt was made to foster in the mind of CSID the impression that the company was itself a leading water-park operator with approximately 20 years experience."
Both Mr Teahon and Ms Magahy learned that this assertion - by Waterworld UK's original construction partner Multi Development Corporation - was untrue yet they continued to deal with the consortium. The unanswered question is: why?
Given that the Taoiseach was so closely linked to the Abbotstown plan - known after all as the "Bertie Bowl" - the Opposition was quick to accuse Mr Ahern of casting Mr Teahon to the wolves.
The Labour TD Mr Pat Rabbitte said: "I'm not particularly anxious to see a situation where Mr Teahon falls on his sword and the Taoiseach escapes scot-free . . . To say now that because Mr Teahon has stepped aside that the Taoiseach has no questions to answer, I don't think we can accept that."