MediaLab Europe, the flagship technology research institute in Dublin which closed recently, was crippled by weak management and tensions between its two shareholders, the State and the Massachusetts Institute of Technology (MIT), newly released documents show.
But last month the two parties almost agreed a deal to save it, according to papers released under the terms of the Freedom of Information Act yesterday.
MediaLab Europe, which was set up at a cost of €35.5 million by the Government in 2000, was a favourite project of the Taoiseach, Mr Ahern, conceived during the internet boom. However, it quickly ran into financial difficulties and failed to raise sufficient corporate funding to meet its costs.
Last year MediaLab Europe asked the State to provide emergency funding worth €9 million.
But new documents show that the Government feared it could face a total bill of €35 million to meet its future funding needs.
The full extent of MediaLab Europe's own internal difficulties are detailed in a secret report prepared by the management of MediaLab Europe in May 2004, when the extent of its financial problems became evident.
This described the working environment at MediaLab Europe as "hell", "chaos" and "inmates running the asylum".
The report, which was called MediaLab Europe: Strategic Plan May 2004, detailed an organisational climate that was full of negative energy, low levels of job satisfaction and poor inter-personal relationships. It also accused the Government and MIT - the two stakeholders in MediaLab Europe - of failing to address tensions in their relationship during the enthusiasm of the launch of the project.
The paper said there was a fundamental difference revolving around the expectations of stakeholders with regard to commerciality.
In the excitement of the launch of MediaLab Europe, it might have suited the stakeholders not to confront these tensions, it said. "While it may have been possible to manage or paper over the tension in the expectations of the different stakeholders in a Celtic Tiger environment . . . the downturn made this more problematic," said the report, which went on to argue that many of the early problems at the institute had been addressed under new management.
Despite differences between MediaLab Europe's shareholders, the Government almost reached a deal with MIT that would have saved the research institute.
Just a few days before the announcement of the closure of the institute, the State sent MIT the draft heads of an agreement that offered funding for the project. The funding would have been capped at €3 million per year but MIT would have had to agree to major changes to the institute's management and operation. It would have required the introduction of MIT degree programmes at MediaLab Europe and an agreement to waive payments due to MIT under the deal to set up the MediaLab Europe.
The draft agreement, which was drawn up by the Minister for Communications, Mr Dempsey, was never signed.