Dunnes says it can prove leaks by Department to the media

Dunnes Stores says it can prove the Department of Enterprise and Employment "deliberately and illegally" leaked to the media material obtained as a result of investigations by authorised officers appointed under the Companies Act, the High Court has been told.

At the opening yesterday of its challenge to the appointment by the Minister for Enterprise and Employment, Ms Harney, of an authorised officer to two of its companies, Dunnes claimed she was seeking to "have her cake and eat it" in choosing to appoint an authorised officer for "threadbare" reasons.

Given damaging leaks to the media and the conduct of the investigation, Dunnes believed it would be better, fairer and more final to have a court-appointed inspector rather than the Minister's authorised officer, Mr Adrian Hardiman SC, with Mr Richard Nesbitt SC, for Dunnes, said.

Mr Hardiman argued the Minister was seeking to have an inquiry under her control and was trying to have it as broad as possible. The root-and-branch inquiry which the Minister was seeking to conduct required court sanction.

The same ground was being picked over in the present inquiry as had already been covered by inquiries carried out by Judge Buchanan, Mr Justice McCracken, the Revenue Commissioners and Mr Justice Blayney. Dunnes gave a confidential Price Waterhouse report on the company's affairs to some of these inquiries because it had faith in them, but it would not give that report to the Minister's officer because it could not be expected to have the same faith.

He said Dunnes saw a letter from the director of another company complaining that he received a phone call from a national newspaper stating it had received information about that company from Mr George Moloney, an authorised officer appointed by Ms Harney to Dunnes Stores last July.

The document was among many discovered by the Department on Monday night for the action by Dunnes challenging the appointment of Mr Ryan as authorised officer to Dunnes Stores Ireland Company and Dunnes Stores Ilac Centre Limited.

Mr Hardiman said the letter suggested a line of investigation which might enable Dunnes to show a policy of "deliberate leaking" was well established within the Department. It was denying that such a policy existed but Dunnes had exhibited media articles which claimed to be based on official sources and were consistent only with such.

It had always been an important aspect of Dunnes' challenge that part of the impropriety of Mr Ryan's appointment was that it was motivated by a desire to get material and leak it to the media though there was an express prohibition under the Companies Act against disclosing material obtained under the Act.

Mr Hardiman said the case went back to the appointment of authorised officers to Garuda Ltd and Celtic Helicopters arising out of the findings of the McCracken tribunal which investigated payments to politicians.

Between September 1997 and July 1998, at the request of Ms Harney, Dunnes gave extensive co-operation to the authorised officers and produced enormous documentation.

On July 22nd, 1998, Ms Harney appointed Mr George Moloney as authorised officer to the two Dunnes companies. Ms Margaret Heffernan of Dunnes protested and asked the Minister to state reasons for it but she said she was not obliged to give reasons.

Mr Moloney then demanded documents, which had to be complied with within a number of days. Correspondence between the Minister and Dunnes concluded abruptly later in July 1998 when Ms Harney threatened criminal sanctions if Dunnes did not comply with her officer's demand.

Dunnes challenged the appointment in a judicial review. Ms Justice Laffoy last November held Dunnes was entitled to take the challenge and Ms Harney's failure to give reasons for the appointment had stymied its opportunity to do so. The judge directed the Minister should give reasons, which were furnished in December.

Last January 10th the Sunday Times carried material which was damaging and in some cases incorrect and misleading, which could only have come as a result of illegal disclosure of material to the newspaper. Dunnes secured leave to take separate judicial re view proceedings challenging Mr Ryan's appointment.

Mr Hardiman said Dunnes' original judicial review proceedings related to Ms Harney's failure to give reasons for the appointment of the authorised officer. In these proceedings, Dunnes was arguing the reasons were threadbare and could not justify the appointment which was not a proper application of Section 19 of the Companies Act.

In an affidavit, Ms Heffernan set out the background to the Mc Cracken tribunal and said the company co-operated with Ms Harney following investigations authorised on foot of the McCracken report. In correspondence between Ms Heffernan and Ms Harney regarding those inquiries, Ms Heffernan expressed concerns about the effect of a prolonged investigation.

Mr Hardiman said the State would deliver a further affidavit of discovery today with accompanying documents. Mr Justice Kinlen will determine whether privilege applies to any.