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Ireland’s New Dawn Very Short-Lived

During St Patrick’s week, Irish telecoms billionaire Denis O’Brien and ex Irish Prime Minister John Bruton joined forces at the New York Stock Exchange to boost American investors’ confidence in Ireland. This week their paths crossed again, with consequences that could undo it all.

St. Patrick’s week saw the New York Stock Exchange host Ireland Day, a chance for Ireland to roll out a veritable cabaret of current and former Irish politicians, businessmen and civil servants to make the case for Ireland as a safe investment for American firms.

It was a confidence-building exercise with a very clear message: Ireland’s 12.5 percent corporate tax rate will not be changing. As marketing spin, it was pretty convincing: new government, new financial regulations, new enforcement, new laws, same old tax rate.

Unfortunately for two of the main cheerleaders, telecoms billionaire Denis O’Brien and former Taoiseach (Prime Minister) John Bruton, events soon after would begin to unravel the carefully crafted image of the new Ireland.

The events began with the publication this week of the final report of an inquiry by a High Court Judge, Michael Moriarty, which has brought Ireland back to some pretty tawdry events back in 1995 when Bruton’s party, Fine Gael (pronounced ‘Feena Gale’), was last in power.

The man that connects Bruton to O’Brien is Michael Lowry, who was the minister for transport, energy and communications in Bruton’s government.

In 1995, Lowry’s department was holding a competition to award a mobile telephone license in Ireland. O’Brien’s Esat Digifone company was in the running for the license. In his report, Justice Moriarty says that it is ‘beyond doubt‚ that Lowry gave 'substantive information to Denis O'Brien, of significant value and assistance to him in securing the license' and that Lowry had 'irregular interactions with interested parties at its most sensitive stages.'

He goes on to state that 'in aggregating the known payments from Mr Denis O’Brien to Mr Michael Lowry, it is apposite to note that, between the granting of the [license] to Esat Digiphone [O’Brien’s company] in May 1996, and the transmission of £420,000 sterling to complete the purchase of the latter of Mr Lowry's English properties in December 1999, Mr O'Brien had made or facilitated payments to Mr Lowry of £147,000 sterling, £300,000 sterling and a benefit equivalent to a payment in the form of Mr O'Brien's support for a loan of £420,000 sterling.'

Money that O’Brien could easily afford, since that was the contract that set him on his way to becoming a billionaire.

It is embarrassing for Bruton (who was not implicated in any of this and in fact dumped Lowry out of government and the Fine Gael party). It is very embarrassing for O’Brien (who claims Justice Moriarty was out to get him). And it is hopefully terminal for Lowry (who is still wildly popular in his native constituency of Tipperary North). But it is really bad news for the country and for anyone who thought that the ‘new dawn’ message at Ireland Day might bring some desperately needed foreign investment into the country. (GDP, which includes profits made by US multinationals, dropped 10 percent in 2009 and a further 1 percent in 2010.)

For Fine Gael and the Labour Party, the two parties that make up the new Irish government coalition (and also the two main government parties in the period in question), it is a matter of credibility. Only a few weeks in government, they already find themselves embroiled in their first scandal. And they're not handling it particularly well. Several of the current crop of ministers were cabinet members or high-ranking party members during the period when Moriarty claims that Lowry was on the take. To watch these same politicians, who in the general election just a month ago hit high notes of righteous indignation against the detested Fianna Fail (pronounced ‘Feena Fawl’) government, now wrap themselves up in Jesuitical casuistry is disheartening.

And, of course, none of it helps project the image of a scandal-averse country with a new ethos of fiscal responsibility.

Even worse, it’s beginning to highlight the cracks in the government coalition.

The leader of the coalition’s junior party, Eamon Gilmore of the Labour Party, has called for Lowry to resign from the Dail (pronounced 'Dawl,' it is Ireland's parliament) but Fine Gael’s government ministers have demurred. Labour has walked out of a government before over issues of principle.

If this scandal forces a wedge between the government parties that can’t be worked out, the government will fall. And all the Ireland Days in the world won’t help rebuild the country's reputation.

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