O'Brien's `joke' lands him in more hot water

Mr Denis O'Brien looked very unhappy in Dublin Castle yesterday, sitting near the front of George's Hall listening to the latest…

Mr Denis O'Brien looked very unhappy in Dublin Castle yesterday, sitting near the front of George's Hall listening to the latest opening statement from the Moriarty tribunal.

If his version of events is accurate, then all the fuss arises from a joke he made in 1996 while out on a morning run in the Wicklow mountains with an old friend and business colleague, Mr Barry Maloney. The joke was that he had paid £100,000 to Mr Michael Lowry, the man who had announced a year earlier that Esat Digifone was getting the lucrative second mobile phone licence.

He had given another, unnamed individual £100,000 as well, he added for good measure. It was all by way of bravado among friends who liked to joke together about business, sport and women, according to Mr O'Brien.

When Esat Digifone examined the matter in 1997, it found no evidence to support the contention that any payment had been made to Mr Lowry.

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However in the background in late 1996 something was happening with £100,000 belonging to Mr O'Brien. According to statements he made to fellow Esat Digifone directors in 1997, he decided in late 1996 that he would give £100,000 to Mr Lowry. At the time he had, as he said, a few million in cash in the bank. Mr Lowry was getting a hard time in the media and the word on the street was that his refrigeration company, Garuda Ltd, was not doing so well.

Mr O'Brien earmarked £100,000 in an account in Woodchester Bank for Mr Lowry. What exactly this means has not yet been examined in detail. Whatever the case, Mr O'Brien said he then decided, "thank God", not to go ahead with the payment, because it might look improper.

In 1997 directors involved in Esat Digifone and Esat Telecom had Mr O'Brien's accounts checked for payments which might have been to Mr Lowry. Nothing was found. At the time Mr O'Brien's associate, Mr Aidan Phelan, was asked if any other significant accounts belonging to Mr O'Brien existed. He said no.

After making this point, Mr Jerry Healy SC, for the tribunal, said Mr Phelan appeared to have been involved in July 1996 in "arranging for two substantial transfers of £100,000 and £50,000 respectively on Mr O'Brien's behalf from offshore accounts in the Channel Islands and the Isle of Man. "These payments of £100,000 and £50,000 were made to David Austin and appear, as the tribunal has already indicated in an earlier opening statement, to be connected with a subsequent payment by Mr Austin to an account in the Isle of Man in the name of Mr Michael Lowry in the sum of £147,000."

Mr Healy made it clear there were now five, not four, matters concerning Mr O'Brien that the tribunal is investigating. These are: the £100,000 payment comment and the arrangements in Woodchester; the £147,000 sterling; the $50,000 donation to Fine Gael; and two English property deals Mr Lowry was involved in the late 1990s and which involved Mr Phelan withdrawing £300,000 sterling from a London account of Mr O'Brien's. Money also came from Woodchester as part of these dealings, and at one stage a Woodchester executive was told Mr O'Brien was behind the loans, and so they were safe.

Arguably Mr O'Brien's greatest difficulty is the number of links between him and the minister who oversaw the most critical business development of his rise to riches.

It has not been much noted, but last week Mr Justice Moriarty said the tribunal was likely to examine how the licence award was made to Esat Digifone. He had earlier said that a "high hurdle" would be set before any decision made by Mr Lowry or Mr Haughey while in office would qualify to be examined by the tribunal.

The licence decision, one of the largest commercial decisions ever made by a government minister, is the first to be publicly identified as having been deemed to have crossed this hurdle.

The beneficiaries of the decision were Mr O'Brien's Esat Telecom; the Norwegian firm, Telenor; and Mr Dermot Desmond's IIU Nominees Ltd.