The Moriarty tribunal resumes tomorrow amid fears the State could be sued for hundreds of millions of euro. Colm Keena reports
The awarding of the State's second mobile phone licence was one of the largest commercial decisions ever made by an Irish government. The shareholders in Esat Digifone, the company which won the licence, made literally billions of euros from the decision.
Competing for the licence was an expensive business, and the five consortia which were unsuccessful were not graceful losers. One, Persona, complained to the European Commission. Another, Motorola, got the US ambassador to give out on its behalf.
Ever since the Moriarty tribunal started to investigate financial transactions linking Mr Denis O'Brien, the main force behind Esat Digifone, and Mr Michael Lowry, the minister who issued the licence, the losers have been watching with interest.
If the tribunal shows that the licence award process was contaminated, the State is likely to be sued for hundreds of millions of euros.
The tribunal has been investigating the matter in private for a year and when it sits in public session tomorrow the public will be given an outline of what has been discovered. The taking of evidence in public is then due to begin and will last months. The process will itself cost the State millions of euro.
In order to influence the licence award, most observers believe, Mr Lowry would have had to do one of two things. He would have had to influence the project group which made the decision. Or he would have had to convey confidential information to one bidder, in order to give that bidder an advantage over its competitors.
The Irish Times has seen statements to the tribunal from three of the key civil servants running the selection process. They have told the tribunal they do not believe Mr Lowry could have interfered with the process. Furthermore, they say, the process was actually designed so that it could withstand litigation from disgruntled losers.
The decision to issue a second mobile phone licence, in order to create competition against Eircell, was taken by the Fianna Fáil-Labour coalition in 1994. An aide-memoire was prepared for the government by Mr Brian Cowen, the minister for transport, energy and communications, in November 1994.
This aide-memoire, according to the statements to the tribunal seen by The Irish Times, included the criteria for selecting the winning bid for the licence.
No "weightings" for the criteria were given in the document, although the descending order in which the criteria were listed indicated their relative importance.
In 1995 a project group was established, and a group of Danish consultants, Andersen's Consulting, were engaged to run the competition. The overall process was overseen by Mr John Loughrey, secretary of the Department of Transport, Energy and Communications, although he was not a member of the project group. The group was chaired by another senior civil servant from the Department, Mr Martin Brennan.
According to Mr Loughrey the whole process was designed so that the consortia which lost would not be able to sue the State. A protocol was drawn up for contacts between the Department and the bidders.
Information on the competition, and especially on the weightings given to the various assessment criteria, was disclosed on a need-to-know basis. This included compartmentalisation within the project team, according to Mr Loughrey.
He himself did not know the weightings. Mr Lowry, who was not to be told the weightings, was advised as to how careful he should be in relation to contacts with representatives of the bidders. He was not a part of the project group.
"Given the sealed nature of the process, no one other than the participants in the project group had any information of value to impart during the closed process," Mr Loughrey told the tribunal in his statement. There was no way Mr Lowry could have influenced its deliberations, he said.
Mr Brennan, who chaired the project group when it was set up in 1995 to select the winning bid, said in his statement to the tribunal that on May 18th, 1995, the project group discussed the weightings which should be given to the criteria under which the bids were to be judged. The major criteria were the business plans of the consortia and the envisaged "roll-out" of the new network.
At the end of the meeting all the documents used were destroyed apart from three copies of the weightings document, which were kept by three civil servants: Mr Fintan Towey; Mr Sean McMahon; and Mr Jimmy McMeel.
The documents were then kept "under lock and key". Andersen's would also have had a copy of the weightings document.
Mr Brennan said he told Mr Lowry during the course of the competition that some of the applicants' submissions were good and some were bad. By early October he may have told Mr Lowry that there were two front runners and that they were still working on separating them.
"At no time did Mr Lowry show any interest in preferring one application over another," Mr Brennan said in his statement.
Mr Towey, another civil servant in the project group, said he was contacted by Mr Lowry in August or September 1995 and asked how the competition was progressing. He said in his statement to the tribunal that Mr Lowry told him he was getting representations from the bidders.
Mr Towey said he told the minister it was not clear who would win. He may have said to the minister that it was to his advantage not to know how the evaluation was proceeding.
In the end, according to Mr Brennan, Esat Digifone was the clear winner. At the time Esat Telecom was in competition with Telecom Eireann and was often in dispute with the Department.
Some people in the project group felt that Esat Digifone should not be given the licence because "Esat Telecom pushed the law to its limits and put it up to the State to stop them", and this raised the question of "if such a company should be given the licence, but most of the group felt that this provided no basis for overriding the clear result of the competition," Mr Brennan said in his statement.
By October 25th, 1995, the group was satisfied Esat Digifone was the winner. Andersen's warned Mr Brennan that there had been problems in other jurisdictions when losing bidders tried to lobby to overturn a decision.
Mr Brennan told Mr Loughrey this, and he in turn, when conveying the competition result to Mr Lowry, urged the minister to get quick political approval for the decision as any delay could allow for "mischief". Mr Lowry informed a cabinet sub-committee of the decision and then immediately announced that Esat Digifone had won.
"The winning application was the best application according to the criteria," Mr Towey said in his statement. He said that as far as he was aware, no one outside the project group knew the weightings being used.