Why no prosecutions?
Some unethical behaviour is not criminal; and some prosecuting authorities are slow or inert. So bankers and the villains of our tribunals are not getting justice.
By Michael Smith
The law on corruption
• The main relevant law in place when the activities considered by the tribunals took place was the Prevention of Corruption Acts 1889 to 1916 included the Public Bodies Corrupt Practices Act, 1889 which applied only to local authorities and created an offence of corruptly giving or receiving any consideration as an inducement or reward for exercising official authority in a particular manner. Simply stated, this Act made it an offence for members or servants of such bodies to accept or seek bribes.
• The Prevention of Corruption (Amendment) Act, 2001 made it easier to prove corruption because the person who gave the gift [or consideration or advantage] or on whose behalf the gift [or consideration or advantage] was given had an interest in [the way official powers were exercised] the gift or consideration or advantage was deemed corrupt.
• Established in 1996, the role of the Criminal Assets Bureau is to carry out investigations into and potentially freeze the suspected proceeds of criminal conduct.
• Findings of Tribunals can’t be used in evidence in criminal proceedings.
BOX 2
Ray Burke, Frank Dunlop, Liam Lawlor served prison sentences arising, directly or indirectly from the Planning and Payments Tribunals. The twelve others who feature on the cover of the magazine have not faced prosecution
Ray Burke
Minister for Foreign Affairs June-October October 1997; Minister for Justice 1989-1992; Minister for Industry and Commerce 1988-1989; Minister for Energy 1987-1988; 1987-1991; Minister for the Environment March-December 1982.
Experience in Tribunal
Shortly after his appointment as Minister for Foreign Affairs, allegations resurfaced that Burke had received IR£80,000 from JMSE AND Bovale developments. Burke denied the allegations but resigned from the Cabinet and from the Dáil in 1997, after just four months in office. This allegation led to the establishment of the Planning Tribunal chaired by Justice Feargus Flood. In an interim report of the subsequent Flood Tribunal, Flood judged Burke to be “corrupt”.
The Flood Tribunal found that “the assignment of Briargate by Oakpark Developments Limited to Mr Burke conferred a substantial benefit upon him which in the opinion of the Tribunal was given in order to ensure that he would act in the best interests of Oakpark Developments Limited’s director, Mr. Tom Brennan and his associates when performing his public duties as a member of Dublin County Council and a member of Dáil Eireann. In the opinion of the Tribunal the transfer of Briargate to Burke amounted to a corrupt payment to him from Tom Brennan and his associates.
More problematically, the Tribunal was unable to discover what actions Burke performed for Tom Brennan or his associates in return for the benefit provided to him.
Experience in Court
In July 2004, Burke pleaded guilty to making false tax returns. The charges arose from his failure to declare for tax purposes the payments that he had received from the backers of Century Radio. On 24 January 2005 he was sentenced to 6 months in jail for these offences, though he he got some remission.
Possible Criminal Action
Presumably the difficulty was that the Tribunal as stated “was unable to discover what actions Mr. Burke performed for Mr. Tom Brennan or his associates in return for the benefit [corruptly] provided to him”.
Frank Dunlop
He was appointed Press Secretary of the Fianna Fáil party in 1974, based at Leinster House. He was head of the Irish Government‘s Information Service and Government Press Secretary from 1977 to 1982. He became a lobbyist, specialising in planning matters, and for a while fronted an RTE political programme with Fergus Finlay
Experience in Tribunal
Dunlop was initially brought to the attention of the Tribunal by Tom Gilmartin, who alleged that Dunlop was being used as a bag-man for developers wishing to pay bribes to politicians in return for favours. When he first took the witness stand in 2000, after failing to provide a written statement, Judge Flood responded to his evidence by asking him to reflect overnight on his position. The following day, Dunlop began to reveal payments that he had made to politicians.
Experience in Court
When charged Dunlop replied “we always knew this day was coming and I will not be contesting the charges”. Dunlop was sentenced to two years in prison for corruption, with the final six months suspended. He had pleaded guilty to five charges of corruption.
He admitted handing over money to politicians at the time of crucial rezoning votes at council meetings relating to lands at Carrickmines in Dublin.
The 62-year-old was initially charged with 16 counts of bribing Dublin City Councillors, but he pleaded guilty to five sample charges. In May 2009, he was sentenced to two years in prison for corruption, with the final six months suspended.
CAB/Anything else
The Criminal Assets Bureau successfully obtained a High Court order in 2006, freezing relevant land assets of 107 acres at Carrickmines owned by Jackson Way Properties Ltd and preventing their sale. Rezoning increased the value of just 17 acres of the property from €8 million to €61 million.
It is within the discretion of the DPP to prosecute Dunlop for other crimes implied in the Mahon Report. And CAB can be expected to pursue other lands deemed to have been the object of illegal zonings such as Cherrywood or Quarryvale. Nothing so far, mind you.
Liam Lawlor
First elected to the Dáil in 1977, two years later he became a member of Dublin County Council.
In 1987 he was appointed Chairman of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies. Bertie Ahern appointed him chair of his “ethics” committee.
In 2000 he was expelled from Fianna Fail who took a dim view of his presence in the tribunal, and its revelations.
He did not contest his seat at the 2002 general election, and began seeking business opportunities in Eastern Europe. In 2005, while being driven to a meeting in Moscow as part of one of his new ventures he was killed in a car accident.
Experience in Tribunal
Liam Lawlor admitted receiving sums of money from the lobbyist Frank Dunlop which he stated were political donations and not bribes.
Tribunal lawyers estimated £4.66 million had passed through about 30 bank accounts and 10 companies associated with the TD and the source of over £2.5 million is still unexplained.
The Mahon Tribunal’s final report concluded that Lawlor effectively “conducted a personal business” where he sold his influence and experience for his own personal gain.
The final report found that Lawlor had “abused his role as an elected public representative […] to a very significant degree” while he was a councillor until 1991, and while he was a TD between 1977 and 2002.
The Tribunal was satisfied that the relationship between Mr Lawlor on one hand, and Messrs O’Callaghan and Dunlop on the other hand, was one firmly based on corruption.
Experience in Court
Lawlor was imprisoned on three occasions over 2001 and 2002, for a total of six weeks in Mountjoy Prison for contempt of court arising from Orders of the High Court requiring him to co-operate with the tribunal.
Possible Criminal Action
Would presumably have faced DPP action for corrupt payments but died in 2005.
Charles Haughey
Charles Haughey was Minister for Justice, 1961-64; Minister for Agriculture and Fisheries, 1964-66; and Minister for Finance, 1966-70. He served as Taoiseach for four periods -1979 until 1981, in 1982 and again from 1987-89 and 1989-92. The Haughey years were intrigue-filled. He established the Irish Financial Services Centre (IFSC) and turned Temple Bar into a tourist area.
Experience in Tribunals (McCracken and Moriarty)
Haughey received the equivalent of €45m in gifts between 1979 and 1996. Colm Keena has noted that “when in power the money tended to flow in, and when he was out of power the money tended to dry up”. Benefactors included John Byrne, PV Doyle, Ben Dunne, Dermot Desmond, Patrick Gallagher and Michael Smurfit. The McCracken Tribunal established that donations to Haughey were lodged in Dublin banks in the name of Ansbacher (Cayman). Although it considered there was no “political impropriety” by Haughey, it stated “it is quite unacceptable that a Taoiseach should be supported in his personal lifestyle by gifts particularly gifts from prominent businessmen. If such gifts are permissible they could inevitably lead in some cases to bribery and corruption”. Furthermore Haughey sent the chairman of the revenue commissioners to meet Ben Dunne as a result of which capital gains tax for his family was reduced by £22m. Haughey “acted with a view to intervening improperly in a pending tax case of great magnitude” in return for payments of £282,500. There was “a valuable and substantial benefit conferred on Mr Dunne, directly consequent on Mr Haughey’s actions”. In 2006 the Moriarty Tribunal confirmed the McCracken findings and found that Haughey stole a “sizeable proportion” from the Brian Lenihan medical fund and took steps to conceal his actions; and that Charles Haughey accepted cash in return for favours throughout his political career. The tribunal also said a £50,000 payment he received from a Saudi diplomat and businessman in 1985 was corrupt.
Experience in Court
When Haughey was prosecuted in the Dublin Circuit Court in June 2000 for obstructing the McCracken Tribunal of Inquiry by hiding evidence of his offshore bank accounts, the judge decided that it would be impossible for him to receive a fair trial in view of statements by the Tanaiste, Mary Harney, who had called for jail penalties for corrupt politicians.
The trial was adjourned indefinitely. A £2 million retrospective income tax assessment was settled by Haughey for half that amount.
Possible Criminal Action
Haughey could have faced criminal action for theft of Brian Lenihan Senior’s medical fund, for corruption in his dealings with Ben Dunne and for corruption in taking money from the Saudi diplomat
CAB/anything else
It is surprising CAB did not pursue the €45m proceeds of the sale of Kinsealy. The value of payments by businessmen to Haughey is estimated at around €45m also and much of that was deemed corrupt. It is arguable CAB should still be pursuing this case.
Albert Reynolds
Albert Reynolds was Minister for Posts and Telegraphs 1979-81; Minister for Industry and Energy in 1982 ; Minister for Industry and Commerce in 1987-88; and Minister for Finance, 1988-91 in which capacity he reduced all personal tax rates for the first time in twenty years.
He became Taoiseach in 1991 in a continuation of the coalition government with the Progressive Democrats and in 1993 was returned to office in coalition with the Labour Party. His greatest achievement was the Downing Street Declaration in 1993 leading to the IRA ceasefire in 1994.
Experience in Tribunal
In 1993, Reynolds and Bertie Ahern, who was then Minister for Finance, wrote to developer Owen O’Callaghan seeking a substantial donation. At the time O’Callaghan was heavily involved in lobbying for state support for a stadium project at Neilstown, County Dublin. According to the report, O’Callaghan felt compelled to donate a sum of IR£80,000 to Fianna Fáil in order to get funding for the stadium. The Mahon Tribunal said it did not find the payment to be corrupt. However, the report said pressurising a businessman to donate money when he was seeking support for a commercial project was “entirely inappropriate, and was an abuse of political power and government authority”.
Experience in Court
None
Possible Criminal Action
Reynolds’ offence was ethical not legal and he is in poor health so action is highly unlikely.
Bertie Ahern
Bertie Ahern was lord mayor of Dublin, 1986-7; Minister for Labour 1987; Minister for Finance 1991-1994 and leader of Fianna Fáil 1994-. He served as Taoiseach 1997-2008, prevailing in three general elections. In 1998 he signed the Belfast Agreement which secured a historic peace in Northern Ireland. He presided over considerable economic success and a property bubble, leaving economy under-regulated, dependent on property-related taxes and very fragile.
Experience in Tribunal (Mahon)
The Mahon Tribunal concluded that “much of the explanation provided by Ahern, as to the source of the substantial funds available to him, were deemed by the Tribunal to be ‘untrue'”. While the report did not accuse Ahern of corruption, it stated that it totally rejected his evidence and that of related witnesses about the sources of monies in his own and related bank accounts, and that Ahern failed to truthfully account for a total of IR£165, 214.25 passing through accounts connected with him.
Experience in Court
None
Possible Criminal Action
Aside altogether from any legally-difficult attempt to force Ahern to explain how he accumulated €215, 000 inexplicably in bank accounts in circumstances where he felt compelled to lie on oath about where the cash came from, Ahern should face action for perjury at the tribunal and for conspiracy with some of his buddies to give false evidence. The Tribunals of Inquiry (Evidence) (Amendment) Act, 1979 states: “If a person wilfully gives evidence to a tribunal which is material to the inquiry to which the tribunal relates and which he knows to be false or does not believe to be true” then that person “shall be guilty of an offence”. The maximum penalty upon conviction is two years in prison and a fine of €300,000. The common law offence of conspiracy is an agreement between two or more persons to carry out an unlawful purpose such as giving false evidence to a tribunal.
The Bailey Brothers
The Bailey Brothers own Bovale Developments, an unlimited company founded in 1983 which accumulated a large landbank in the Dublin area and became one of Ireland’s most successful developers. Lifelong Fianna Fail supporters, the pair appeared at many fundraising events and were always seen in the party’s VIP tent at the Galway races. In the 2002 general election, Mick Bailey took time off from his business to canvass for a Fianna Fail candidate in his native Co Roscommon.
Experience in Tribunal
Mick Bailey was found to have bribed Ray Burke and George Redmond; and both Baileys were found to have lied to and obstructed, the tribunal. Their runs-in with the Flood Tribunal and James Gogarty provided some of its most dramatic moments and colourful quotes: Mick Bailey’s “will we f***” response to Gogarty’s query about the chances of getting a receipt for a political contribution.
Experience in Court
Extraordinarily, none – and it is fifteen years since their wrongdoings first surfaced.
Possible Criminal Actions
Corruption, bribery, perjury, conspiracy to give false evidence to a tribunal.
According to Fintan O’ Toole, writing in the Irish Times: “there are three separate counts on which, in say the US or the UK, Michael and Tom Bailey would almost certainly have faced criminal sanctions. The first is massive tax evasion. In 2006, the Bailey company, Bovale Developments, reached a settlement of €22 million with the Revenue – believed to be the largest made.
Secondly, Mick Bailey engaged in bribery; making, according to the Flood tribunal reports, at least four corrupt payments, one to Ray Burke and three to the assistant Dublin city and county manager George Redmond. Thirdly, the Baileys lied under oath and otherwise attempted to mislead and block a tribunal of inquiry established by the Oireachtas. Both of the Bailey brothers were found to have “hindered and obstructed” the Flood tribunal in a number of ways, including making untrue statements under oath. Not only did Mick and Tom Bailey each give false evidence under oath, but the tribunal found that they had colluded together to tell the same lies.
It would be utterly astonishing for them not to be prosecuted for any of this”, noted O’Toole in 2010. But they have not been.
Seán Fitzparick
In the early 1970s Seán FitzPatrick joined what was to become a component of PricewaterhouseCoopers. One of his colleagues there was Charlie McCreevy. “In all the years I have known him, he never lost the run of himself. He wasn’t into great big houses, no jets. We used to laugh at him because he always sat at the back of the plane,” McCreevy claimed later. In 1976, FitzPatrick got a job as an accountant at Irish Bank of Commerce, an investment bank with only four employees. It would become Anglo Irish Bank – “Anglo”. Anglo grew spectacularly, centring on builders and developers.
The Problem
In 2010 it was revealed that Sean Fitzpatrick and others had ‘prima facie‘ cases to answer in relation to their roles in controversial dealings at Anglo and transactions whereby FitzPatrick temporarily transferring his loans from Anglo to Irish Life and Permanent to avoid financial statements that would concern shareholders, according to reports prepared by John Purcell a special investigator for the Complaints Committee of the Chartered Accountants Regulatory Board.
Possible Criminal Action
In 2010 Gardaí were given a warrant to search Seán Fitzpatrick’s house. FitzPatrick was arrested by the Garda Bureau of Fraud Investigation. He was questioned under Section 4 of the Criminal Justice Act 1984. Under this he was able to be held for up to six hours without charge, but this was later extended, The Gardaí were also assisting another investigation by the Office of the Director of Corporate Enforcement (ODCE) for breaches of company law. After more than 24 hours of questioning, he was released without charge on 19 March 2010. A file was prepared for the DPP. In December 2011 Fitzpatrick was arrested again by Gardaí. A suspect can only be arrested for a second time in any criminal investigation if new information arises that investigators need to put to the suspect.
Gardaí and the corporate enforcement agency are investigating three issues at Anglo:
• Seán FitzPatrick and former chief executive David Drumm arranged to stave off the crisis caused by Sean Quinn’s accumulating a secret shareholding of 28% in Anglo through contracts for difference. They got ten of the bank’s richest customers, ‘the Maple Ten’, to buy Quinn’s shares with money lent by the bank primarily on a “non-recourse” basis, which meant that the main security the bank had for the huge loans they were giving these rich customers was the shares themselves. This could possibly be deemed to be share price-fixing on a grand scale in contravention of Section 108 of the 1990 Companies Act which says: “It shall not be lawful for a [a senior officer of a company where he has inside information that would be price sensitive to deal] in any securities, to cause or procure any other person to deal in those securities”. Some insight into this was given in Niall O’Dowd’s interview with David Drumm in the Sunday Business Post in which he said: “The Financial Regulator and the Central Bank were in every meeting with me and other directors of the bank throughout 2008…They called me day after day after day to find out how it was going and when we called them up and said we are thinking of doing something”. Obviously clearance by regulatory authorities would substantially mitigate any possible criminal offence.
This secret arrangement disguised information that would have collapsed the share price had it been made public.
Vincent Browne has written, “How could it be that those who subsequently bought shares in Anglo through the stock exchange, not knowing that the shares were worth a fraction of the price they were paying, were not defrauded? How is it that, at least prima facie, a criminal offence was not committed by some of those who arranged this and on the part of those who knowingly aided and abetted them or gave them a nod of approval?”.
• The concealment of loans owing by FitzPatrick which were transferred off the books of Anglo using short-term loans from Irish Nationwide Building Society over an eight-year period;
•The lodgment of €7.45 billion in short-term deposits by Irish Life and Permanent into Anglo over its financial year-end in September 2008;
The Director of the ODCE said in late 2011 his office’s investigation into practices at Anglo is very close to completion after interviewing over 200 people, though there seem to be problems with co-operativeness of key Anglo personnel.
David Drumm
Drumm qualified as a chartered accountant with Deloitte & Touche and joined Anglo as assistant manager in 1993. In 1995 David Drumm was promoted to manager at Anglo. In 1997 David Drumm and his family moved to the US to lead the North American business expansion of Anglo. He became CEO of Anglo in 2005 as FitzPatrick moved up to become an active Chaiman.
The problem
According to Drumm, in an effort to prop up Anglo’s swooning stock price following the difficulties with Quinn, Ulra Alpha-male FitzPatrick ordered his senior staff, including Drumm, to stage a public vote of confidence and buy up large quantities of the bank’s stock. The bank loaned its executives the cash to facilitate the stock purchases. This sort of insider dealing was common at Anglo.
Drumm took on more than €7m million in debt to buy his share of Anglo stock, and within months, the stock was worthless. Anglo’s January 2009 nationalisation wiped out shareholders, meaning Drumm had borrowed millions to buy a stack of paper. He fled to Cape Cod in mid-2009, ahead of a series of investigations into Anglo’s collapse, and its secret insider deals. Anglo followed Drumm to Cape Cod. In a bid to head off lawsuits and a lynching in Dublin, Drumm filed for bankruptcy in Boston.
The bid initially looked like it might pay off but in the end Drumm’s bankruptcy trustee joined the bank in asking a judge to enforce the $12 million Anglo stock loan. In January Drumm lost a bid to have a challenge against his bankruptcy proceedings thrown out when it was contested by Anglo/IRBC and it will now be heard in January 2013. Meanwhile his wife is to pay almost €1 million to the Bankruptcy Trustee and will be entitled to keep a share of the assets she owns jointly with her husband including of the sales proceeds of houses in Massachussets and Malahide, Dublin.
Possible Criminal Action
Anglo/IBRC claims Drumm committed numerous frauds on the bank during his time as chief executive from 2005 to 2008, and that he lied repeatedly during his bankruptcy proceedings in Boston.
Anglo may pursue Drumm in Massachussets for fraud in dealing with his assets in the US.
He could also be pursued and extradited for insider trading in Ireland under Section 108 of the 1990 Companies Act – as with Seán FitzPatrick.
And as with FitzPatrick the price-support mechanism for Anglo shares seems like a fraud on shareholders when Drumm had particular fiduciary duties to them.
Seán Quinn
Cavan/Fermanagh-based Seán Quinn made billions out of quarrying, cement, plastic, glass, insurance, currency, property and shares. Once famous for being Ireland’s richest businessman, Quinn now has achieved the reputation of Ireland’s biggest debtor who may yet face jail time.
The Problem
In October 2005 – when the Celtic Tiger was still booming in Ireland – Seán Quinn took risky positions at Anglo, AIB, and Bank of Ireland using contracts for difference (CFDs – whereby an investor can enter into a contract to buy shares at a predetermined price at some future time). Quinn went on to own over 28 percent of Anglo in “what was the worst-ever stock market gamble by an Irishman”. When Ireland’s property bubble burst, Anglo was nationalised, causing the Quinn family to lose about €3.2 billion. While the Quinn family says that the bank “illegally used them to prop up its share price”, the taxpayers are still stuck with the bill. Quinn has been excluded from serving as a company director under Irish law following his bankruptcy earlier this year. Anglo is having grave difficulty tracing the assets it is entitled to following the bankruptcy.
Court Action
High Court judge Elizabeth Dunne indicated in late June that she would consider punitive measures if Seán Quinn, his son Sean Jnr and nephew Peter Darragh Quinn failed to comply with orders aimed at reversing a “conspiracy” to move assets in the Quinn international property group (IPG) beyond the reach of the former Anglo.
She did not disagree with the bank’s description of the contempt as “flagrant” and was disappointed there was no acknowledgement by the three, “even at this stage”, of the “great wrongdoing” involved.
She was satisfied all three were involved in a conspiracy to deprive Anglo of access to assets in circumstances where they admitted the bank was owed €455 million while disputing its claim for a further €2.3 billion.
She had already ruled that Mr Quinn had run a “blatant, dishonest and deceitful” scheme involving his €500m international property portfolio.
She has given the three until July 20th to comply with a large number of coercive orders.
It has been reported that the ODCE has already gathered mountains of information on the Quinns’ activities through the three-year probe into the collapse of Anglo.
The High Court judgment may also be examined by the Garda Bureau of Fraud Investigation.
Quinn could also be prosecuted for common law fraud for for example charging a Quinn Group subsidiary the bill, running into hundreds of thousands of euro, for his daughter Aoife’s wedding in the Slieve Russell Hotel. What was unusual was that the Quinns got the family business, the Quinn Group, to stump up the cost of it, The Quinn Group is now of course owned by the taxpayer. Furthermore, an attempt was later made by the subsidiary to claim the VAT back from Revenue on the basis the wedding was a marketing event for the Slieve Russell Hotel.
Recent secret video footage of members of the Quinn family discussing a deal to shift assets out of the reach of the courts even after High Court orders prohibited it. Peter Quinn seems to say in the video that he is prepared to mislead the Irish court looking into the Quinns’ dealings. If the video is not a fake it could ground fraud and contempt proceedings on a grand scale.
Michael Fingleton
In 1971 Michael Fingleton became the secretary of the small Irish Independent Building Society which changed its name to Irish Nationwide in 1975 and began to expand. The key to its expansion was marketing, using the media to build the profile of the business. Many journalists received mortgages from Irish Nationwide. He also provided favourable loans to Charlie McCreevy and Celia Ahern.
Fingleton had a reputation as an autocrat and effectively ran a one-man lending department with loans of over €500,000 being personally approved by him. IBRC has filed a legal action against Fingleton and five former senior figures from the building society, presumably in relation to alleged breach of contract, breach of fiduciary and breach of duty of care.
Possible Criminal Action
Michael Fingleton was interviewed by ODCE officials for more than an hour in July 2011.
Fingleton agreed to answer questions about the “warehousing” of loans made to former Anglo directors, including its former chairman, Seán FitzPatrick.
Furthermore a probe has been ordered into offshore bank accounts held by Fingleton.
Montenegro‘s top state prosecutor – the equivalent of Ireland‘s DPP – has sanctioned the investigation after receiving a report from the country’s anti-money-laundering unit and that it would involve the assistance of foreign banks and police forces. Cash transfers at the centre of the investigation include a sum of €500,000 moved by Mr Fingleton to an account in Montenegro 2010 and thence in 2011 to the London Barclays Bank account of his son, Michael Fingleton Jnr.
Also under scrutiny is €128,498 transferred by Mr Fingleton from a separate, company account in Montenegro to his son’s London bank account.
Both transfers occurred shortly after Mr Fingleton had been hit with a €13.6m debt judgment by Ulster Bank over a failed land deal in Co Cavan.
These actions could also ground an action in fraud under Irish law.
Michael Lowry
Michael was first elected to Tipperary North Riding County Council in 1979. He was elected as a Fine Gael TD for Tipperary North in the 1987 General Election. In 1993 he became Chairman of the Fine Gael Parliamentary Party. He was Minister for Transport, Energy and Communications 1994-6 when he resigned in disgrace from the Fine Gael Party. He continued his political career as an Independent and topped the poll in the following four General Elections.
Experience in Tribunals (McCracken and Moriarty)
At the 1997 McCracken Tribunal it was revealed that Ben Dunne had paid IR£395,000 for an extension to Lowry’s home in Tipperary. The Tribunal concluded that Lowry had evaded tax. In early 2007, Lowry announced that he had made a full and final settlement of all outstanding payments with the Revenue Commissioners in response to the findings concerning his tax evasion. His company Garuda had to pay up €1.2 million after a Revenue audit. He also paid almost €200,000 to settle his personal taxes.
In 2011 the Moriarty Tribunal found that, during his time as Communications Minister, Michael Lowry assisted businessman Denis O’Brien‘s consortium Esat Digiphone in acquiring a lucrative mobile phone licence in the mid-90s which ultimately made O’Brien one of the richest men in Ireland. At an infamous meeting in Hartigan’s in Dublin, Lowry tipped O’Brien off regarding the supposedly secret concerns the Project Group had about Communicorp’s finances – so letting Esat know it was advisable to tap deep-pockets investors such as Dermot Desmond who it added to the consortium. Lowry also accelerated the process by a month so he could present a fait accompli to government and (indeed announced the result before a government decision – it was announced after a Cabinet meeting and presumably decision) and without drawing attention to the potential legal difficulties of having introduced Dermot Desmond in the middle of the process. The Tribunal concluded that one of Lowry’s interventions, which cut the selection process to the advantage of Esat, was “disgraceful” and “insidious”.
The tribunal also found that Lowry sought to procure unwarranted rent increases that over a seven-year period would have benefited businessman Ben Dunne. Lowry sought to influence the outcome of an arbitration being conducted in 1995 in relation to the rent payable by the then state-owned Telecom Éireann for Marlborough House to a company owned and controlled by Dunne. The report said that the matter was “profoundly corrupt to a degree that was nothing short of breathtaking”.
The report also noted that O’Brien had “made or facilitated payments to Lowry of £147,000 sterling, £300,000 sterling and a benefit equivalent to a payment in the form of O’Brien’s support for a loan of £420,000 sterling”.
The Criminal Assets Bureau and the Bureau of Fraud were called in in March 2011 to begin investigating his finances since his €1.4m settlement with the revenue commissioners did not grant him immunity from prosecution.
Of course, no prosecutions have followed though the Irish Independent reported on October 4th, 2011 that the Garda Commissioner was expected to consult with the DPP before deciding if there would be a criminal investigation.
Potential Criminal Actions
Presumably the fact it is not clear that there was a quid pro quo in the payment of money and benefits to Lowry risks prejudicing any criminal action for corruption for those acts. Seeking to alter Ben Dunne’s rent would ground an action for corruption.
CAB/Anything else
Presumably Cab will look at the role of Ben Dunne in funding valuable works to Lowry’s house to ascertain, since Dunne received benefits from Lowry that were “profoundly corrupt to a degree that was nothing short of breathtaking”, whether the house constitutes the proceeds of crime.
Ben Dunne
Ben Dunne is a former director of his family firm, Dunnes Stores, one of the largest chains of department stores in Ireland. In 1981, he was kidnapped by the IRA and held for seven days but released unharmed. In 1992, he was arrested for cocaine possession and soliciting while on a golf holiday in Florida, USA. He now owns a chain of low price fitness centres. He was again embroiled in scandal in the mid-1990s when it emerged he had given large amounts of money to a number of Irish politicians, mainly from the Fianna Fáil party including the then Taoiseach, Charles Haughey. He also gave money to Michael Lowry of Fine Gael.
Experience in Tribunals (Moriarty and McCracken)
The McCracken Tribunal found that Dunne knowingly assisted Lowry evade tax”.
In 2011, the Moriarty Tribunal concluded of Ben Dunne’s dealings with Michael Lowry where Lowry sought to influence a rent review of a building part-owned by Mr Dunne that: “What was contemplated and attempted on the part of Mr Dunne and Mr Lowry was profoundly corrupt to a degree that was nothing short of breathtaking”.
Possible Criminal Action
Dunne could be prosecuted for aiding and abetting Lowry to evade tax. He could also be prosecuted for corruption.
Denis O’Brien
Denis founded the Esat Telecom Group plc and built it throughout the 1990s until its sale to British Telecom plc for €2.4 billion. He is one of Ireland’s leading entrepreneurs with investments in international telecoms, radio, media, property, aircraft leasing, golf and other leisure interests. He owns a nearly 30%, controlling interest in INM In the year to March 2011, revenues at his telecoms company Digicel were up 27% to $2.23bn. He is a very notable philanthropist.
Experience in Tribunal (Moriarty)
The Moriarty Tribunal found that Michael Lowry, “secured the winning” of the 1995 mobile phone licence competition for Denis O’Brien’s Esat Digifone. The tribunal also found that O’Brien made two payments to Lowry, in 1996 and 1999, totalling approximately £500,000, and supported a loan of Stg£420,000 given to Lowry in 1999. In his 2,348-page report, Mr Justice Michael Moriarty found that the payments from O’Brien were “demonstrably referable to the acts and conduct of Mr Lowry” during the licence process, acts which benefited Esat Digifone. In effect O’Brien was trading in influence or ‘legal corruption’.
Possible Criminal Action
It seems that the payments by O’Brien to Lowry, though “referable” to Lowry’s acts may not have been a quid pro quo, such as would be necessary to ground a conviction for corruption.
