Playing pitch moves from land to the air waves

Radio licences for sale, £90,000 for a national franchise, £75,000 for a Dublin one, only £50,000 for a local licence

Radio licences for sale, £90,000 for a national franchise, £75,000 for a Dublin one, only £50,000 for a local licence. This was the last and most appalling allegation aired at an extraordinary day of evidence at the tribunal yesterday.

The allegation came from businessman Mr James Stafford, the co-founder of Century Radio, which was awarded the licence to run the first national commercial radio station in 1989. Mr Stafford alleged his partner, Mr Oliver Barry, told him these were the prices you paid to the minister for communications, Mr Ray Burke, and the former Fianna Fail press secretary, Mr P.J. Mara, in order to secure a licence.

Mr Barry was approached on several occasions by Mr Mara, who said Century owed him (Mara) money, according to Mr Stafford. The matter was discussed in mid-1990 at a meeting chaired by financier Mr Dermot Desmond, who said that Century did owe Mr Mara money, Mr Stafford also alleged. However, Mr Mara and Mr Burke hotly disputed the allegations and told the tribunal they were without foundation. It's worth noting that the Independent Radio and Television Commission, rather than the minister, awarded the radio franchises.

Mr Stafford, who says he refused to pay any money, claimed he was approached on one further occasion by Mr Desmond regarding the alleged debt, this time at Mr Ciaran Haughey's wedding in Kinsealy in September 1990. He said the matter was then dropped after he threatened to raise it with the then Taoiseach, Mr Charles Haughey.

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Yesterday was the first day of hearings on Mr Burke's role as minister for communications, and in particular the circumstances in which Mr Barry came to give him £35,000 in cash in May 1989, just months after Century got its radio licence. Was Mr Barry making a personal donation? Or was the money paid on behalf of Century, asked Mr Pat Hanratty SC, for the tribunal, in his opening statement to a hall, packed as never before with lawyers for different parties.

At issue is broadcasting policy and the birth of commercial radio, that "licence to print money" so beloved of business people and politicians.

On the evidence presented by tribunal lawyers yesterday, Mr Burke now faces a series of questions far more searching than those in relation to the payment to him by Mr James Gogarty.

So also do Mr Barry and Mr Stafford, in particular regarding the tribunal's assertion that the two men concealed the involvement of Mr John Mulhern, the son-in-law of Mr Charles Haughey, in Century and therefore misled the IRTC. Although his name appeared nowhere on the list of shareholders, Mr Mulhern had a 14 per cent involvement in the company, Mr Hanratty suggested.

We also learned yesterday that the principals behind Century also had a secret involvement in another party bidding for a radio licence at this time.

Mr Burke is the father of independent radio in Ireland, the man who "levelled the playing pitch" between the State broadcaster, RTE, and commercial stations which went on the air when he was minister.

Seemingly out of nowhere, he came up with the idea of setting up a national commercial broadcaster, and when Century was awarded the licence he made two crucial interventions that worked in its favour.

As Mr Hanratty explained, Mr Burke intervened in March 1989 in a dispute between RTE and Century over transmission fees. He cut the fee demanded by RTE for broadcasting the other station's signal nationally from £614,000 to about £150,000, a saving far greater than anyone had hitherto realised. The result, RTE claimed, was that it ended up subsidising its new commercial rival. In effect, the station claimed, it was acting as a banker to Century by buying equipment which its rival would only pay for over time.

The tribunal can find no documentary evidence that explains why Mr Burke ignored the advice of his own officials to adopt the charges he did. In January 1989 the Department of Communications had reached agreement with RTE on a charge of £692,000, which RTE subsequently offered to reduce to £614,000. Mr Burke himself wrote to the Independent Radio and Television Commission to say these charges were "not unreasonable".

Then, the following year, he introduced a cap on RTE advertising revenue, a move that would inevitably favour rival broadcasters, including Century. He did this after a number of meetings with Mr Barry and Mr Stafford, at which they appealed to him to take that action, or else the station would go out of business. Incredibly, Mr Burke seems also to have met Century's bankers in order to set their minds at rest.

The measure met with widespread opposition. Century got Hugh O'Flaherty, then a senior counsel, to argue that the minister was obliged to "level the playing field" by introducing a cap.

Mr Hanratty pointed out that the proposal was introduced without any advance studies. Was it a valid exercise of the minister's powers, he asked, or was it done on a clientelist basis for Century out of a sense of indebtedness?

In the event, Century went broke and closed down in November 1991. Perhaps the die was cast far earlier, when Gay Byrne, who had been involved in early discussions with Century, opted to stay with RTE.