Civil servant favoured bringing in Desmond as Esat partner

MORIARTY TRIBUNAL: The former secretary general of the Department of the Taoiseach, Mr Pádraig Ó hUiginn, described financier Mr Dermot Desmond as the "one and only begetter" of the Financial Services Centre and a man who was committed to the Irish economy.

The former non-executive director of Esat Telecom told the tribunal he had been very supportive of the idea of Mr Desmond replacing the four financial institutions that were originally intended as investment partners in the Esat Digifone consortium.

He thought Mr Desmond would be a much better partner and would be much more actively concerned about the project being a success.

He said that he and the former government press secretary, Mr P.J. Mara, met with Mr Denis O'Brien in the wake of the Esat Digifone presentation to the assessors who were to decide the winner of the 1995 mobile phone licence competition.

Mr O'Brien said the presentation had left him feeling something needed to be done to strengthen the consortium's finances.

He mentioned discussions he was having with Mr Desmond in relation to Mr Desmond becoming involved, and Mr Ó hUiginn said he encouraged such a move.

"I knew Dermot Desmond very well. He was the man who invented the Financial Services Centre."

Mr Ó hUiginn said he had had the privilege of setting up the IFSC and had a lot of contact with Mr Desmond.

He had been aware of his investments in Irish companies.

"I felt he would be a far better partner than the group of financial houses listed [in the bid], because of his commitment to the Irish economy as distinct from the attitude of the finance houses, whose interests would be primarily monetary."

He told Ms Jacqueline O'Brien, for the tribunal, that this difference had been illustrated by what happened with Eircom.

"When the finance houses took over Eircom, they stripped out all the assets, took all the money out, and still left us with the same costly and inefficient Eircom."

Mr Ó hUiginn said he invited Mr O'Brien to the All-Ireland football final in Croke Park on September 17th, 1995, as he had two tickets for the Ard Comhairle box. He drove Mr O'Brien to the match as he had a parking space.

At half-time Mr Ó hUiginn bumped into a number of people including the then Taoiseach, Mr John Bruton.

Mr O'Brien informed him at the end of the break that he had met with Mr Michael Lowry, the then minister for transport, energy and communications, and that they had agreed to meet later.

Mr Ó hUiginn said he could not recall his reaction but he would have thought this was a good opportunity for Mr O'Brien to bring to the minister's attention the difficulties Esat Telecom was having in its dealings with Telecom Éireann.

He drove Mr O'Brien to his home in Ballsbridge after the match. Mr O'Brien did not mention that he had a meeting that evening with Mr Desmond.

Mr O'Brien had asked Mr Ó hUiginn to join the Esat board in 1995. Mr Ó hUiginn said he was involved in the partnership process in the economy being put in place.

A competitive economy was the basis for the whole partnership model and he was glad to get involved with a company that was to compete with Telecom Éireann. The liberalisation of the market led to a 40 per cent fall in telephone charges.

"That is what created the Celtic Tiger. We became efficient for the first time in 20 years."