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Explainer: How dinners with a US telecoms millionaire cost Denis Naughten his job

Naughten resigned as Communications Minister earlier today.

Former Communications Minister Denis Naughten.
Former Communications Minister Denis Naughten.
Image: Leah Farrell/RollingNews.ie

DENIS NAUGHTEN SHOCKED the Dáil earlier today when he announced his resignation.

The independent TD told the chamber that “the Taoiseach does not have confidence in me” and that it forced his hand.

The news came just hours after the Taoiseach had said that he was “satisfied” with Naughten’s explanation about the controversy that has surrounded him relating to the National Broadband Plan (NDP).

The controversy stems from Naughten’s dealings with David McCourt, head of the only consortium left in the running for the NDP tender.

Naughten had previously admitted to attending a dinner with McCourt, but details of other meetings had increased pressure on the minister.

So how did we get to this point?

National Broadband Plan

The National Broadband Plan has been hit by repeated delays since it was it was first announced in 2012.

Under the plan, a tender has been sought to bring high-speed broadband to 540,000 homes and businesses in rural areas.

Eir, having already proceeded with its own rural broadband project to 300,000 premises, had been seen as the most likely winner of the tender.

Eir was one of the bidders for the tender but pulled out of the running in February, effectively stating that it was not financially viable to proceed.

Another one of the bidders, a joint submission by ESB-Vodafone, had already pulled out in September of last year.

The upshot of these two decisions was that only one bidder remained for the tender.

That bidder is a consortium led by US-based investment firm Granahan McCourt and also containing Limerick-based broadband provider Enet.

David C. McCourt is the CEO and founder of Granahan McCourt.

Irish-American investor McCourt made a fortune in the broadband industry, setting up, buying and selling multiple companies. In 2012, his net worth was estimated to be $750 million (€640 million).

David_McCourt David McCourt of Granahan McCourt. Source: Wikimedia

Last week, Naughten admitted to attending a dinner in New York with David McCourt in July of this year.

He insisted that he regularly met with investors as part of his ministerial duties and suggested that the NBP was only discussed briefly.

However, following that admission, The Ireland Edition of the Times reported that the discussion between the pair was more detailed than a brief discussion.

The newspaper reported that the pair had discussed details of the bid, including its leadership, financing, internal decision-making and the impending deadline.

It was subsequently reported that minutes were taken at the meeting and that it constituted a breach of protocol.

‘Contaminated’

The revelations about Naughten’s meeting with McCourt were raised yesterday during Leaders’ Questions when Fianna Fáil leader Micheál Martin questioned what happened at the New York dinner.

Martin said that ministers should be insulated from lobbying during a tendering process and that McCourt’s dealings with the minister amounted to “canvassing” and “lobbying”.

Taoiseach Leo Varadkar defended Naughten’s attendance at the dinner but further revelations were to come.

It emerged that the minister had facilitated a lunch in the Dáil for McCourt’s daughter in April of this year and that Naughten had paid for it.

Speaking to TheJournal.ie this morning, the Taoiseach said that he was “satisfied” with Naughten’s explanations to date but added that this position could change.

“I don’t have all the information yet. I’m certainly satisfied with what he said to me last night at the meeting,” Varadkar said.

The situation all changed this afternoon, however.

Naughten addressed the Dáil and said that he was stepping down despite not being asked to do so.

“Do I wait for that decision myself, to resign, or do I wait for someone else to make that decision for me?,” Naughten said, adding that the outcome “is more about opinion polls than telephone polls.”

Naughten’s announcement clearly shocked the deputies remaining in the Dáil and he left the chamber directly afterwards.

ceann comh Ceann Comhairle Seán Ó Fearghaíl after Naughten's departure in the Dáil earlier. Source: Oireachtas.ie

Addressing the Dáil about an hour after Naughten’s resignation, the Taoiseach gave further details about the events that led to the minister’s departure.

Varadkar told the Dáil that he had a private meeting with Naughten last night, and was told after midnight by Naughten that he remembered he had had a private dinner with David McCourt.

He said that Minister of State Pat Breen had also met McCourt at this dinner.

Varadkar said he met with Naughten again this morning, who told him that he had at least three other private dinners with McCourt, with no officials present.

“I have no doubt that his intentions were honourable at all points but I do believe he left himself open to allegations of a conflict of interest and an inappropriate relationship with Mr. McCourt, which could have in turn brought the process into question, thus potentially jeopardising the project in its entirety,” Varadkar said.

The Taoiseach said that Education Minister Richard Bruton would be taking on Naughten’s ministerial responsibilities on a temporary basis.

Speaking on RTÉ Six One News, Naughten said that he told Varadkar about all four dinners at their meeting last night.

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About the author:

Rónán Duffy

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