Chasing a Manx tale


The Isle of Man is proud of its consensus form of government, but it can be a costly place to express dissent, writes Carol Coulter, Legal Affairs Correspondent.

A ministerial resignation, an inquiry into allegations of corruption in planning, a libel action taken against a journalist who highlighted alleged abuses . . . does this have a familiar ring? It is all happening on a small neighbouring island, the Isle of Man, which saw its chief minister resign last week following his arrest by police on suspicion of fraud in connection with tourism grants. The Web journalist who broke the story, however, has had his computers seized and is the subject of a gagging order because of his coverage of a planning scandal.

The story began with a major building project on the island undertaken by companies controlled by controversial entrepreneur Albert Gubay, one-time Irish resident and former owner of the Kwik Save supermarket chain. Planning permission, plus tax reliefs worth £10 million, was granted for a hotel, golf course and scheme for what purported to be holiday cottages in a rural area at Mount Murray. However, it later transpired that the holiday cottages (which are in fact substantial houses) had been sold as permanent, private residences.

Peter Karran, a member of the lower house of the Isle of Man's parliament, the House of Keys, pressed for a public inquiry into what had happened. This was set up under the chairmanship of an English QC, Nigel McLeod, but was dogged by ultimately unsuccessful legal challenges to its attempts to find out the beneficial owners of the various companies involved in the development.

In its report in July last year the inquiry concluded: "There was corruption of the system of government in the sense that it failed to withstand pressure determinedly applied to it by the experienced developers, it failed to protect the planning system from excessive internal pressure, both political and professional, and it failed to detect officers who were condoning or activating wrongdoing."

It did not find that any member of the government received money from the developer.

Many criticisms, of both the government and Gubay, were aired on a small local website run by computer technician Roly Drower. He has been sued for libel by Gubay, and the case is listed before a court in Liverpool, which will hear the case next February. Gubay demanded that Drower reveal his sources, which Drower refused to do.

Gubay's lawyers then sought an "Anton Pillar order" against Drower in the Manx courts, which would allow them to enter and search his home without notice, and to seize his computer. This order was granted, and Drower was also prohibited from discussing the case with anyone (including his family) except his legal advisers. He was threatened with six months' imprisonment for refusing to reveal his sources, and eventually fined £2,500.

"The English authorities say that even a week is excessive for a gagging order," says his advocate, Paul O'Neill. "There are three distinctive features of this case: the length of the gagging order; the use of an Anton Pillar order purely to support a libel action, for which we could find no precedent; and the combination of a gagging order with the threat of imprisonment for failing to reveal sources, which was in place for six months. A feature of this case throughout has been inequality of arms."

DROWER WAS SERVED with the Anton Pillar order months after he had begun posting reports about another suspected scandal on his website. This concerned the chief minister, Richard Corkill, who had applied for and got a tourism grant for a development of holiday cottages on land adjoining his home.

The scheme was set up in 2000, when Corkill himself was treasury minister and approved the proposal from the tourism minister. Between 2000 and 2004 only £360,000 was paid out under the scheme, £91,000 of it to Corkill and his wife, Julie.

In December, 2003, Drower got wind of a dispute between Corkill and his builder, who claimed he had not been paid for work done on the development, and started proceedings for payment of £102,000 he claimed was owing. This was highly significant, as a condition of receiving the grants was that receipted invoices be provided. Corkill counter-sued, claiming the work was not adequately completed.

Following a number of reports on Drower's website, questions were asked in the House of Keys by Karran and others, and eventually a parliamentary inquiry was set up, which held hearings last August. During that hearing there was much discussion about the exact meaning of the term "receipted payments". The hearings were suspended when it was reported that the police were investigating.

Meanwhile, the builder has alleged that he was asked to include work done on the Corkills' own house on the invoices for the work on the holiday homes.

Last week the Corkills were arrested and questioned by police, before being released on bail. Corkill resigned as chief minister and was replaced by James Gelling, who pledged to continue his policies. The Corkills have denied any wrongdoing.

The government of the Isle of Man is very sensitive about the image these events project about the self-governing island, which hosts a major financial services industry. This sector accounts for about 50 per cent of the island's economy, and provides the basis for much of the wealth which has flooded in in recent years, prompting massive growth in house prices and in the construction industry. There have been more than 200 references to the Isle of Man in the course of the Mahon (formerly the Flood) planning tribunal so far.

The island's Treasury Minister, Alan Bell, stresses that the financial services industry meets the highest international standards. Asked about the use of Isle of Man accounts by Irish tax evaders, he says: "We have never wanted to encourage tax evasion. We operate a legitimate banking business."

He points out that the Mount Murray inquiry referred to events 14 years ago, when the island desperately needed to develop tourism.

"It does not reflect present-day practice on the island," he says.

Asked about the inquiry's conclusion that he personally had misled the parliament, he says that conclusion was wrong.

"The information I gave was what I had available to me at the time, that the houses were for tourist use," he says. Referring to the Corkill affair, he acknowledges only that "there was an element of naivety from the perception point of view. We are working hard to improve the image and awareness of the Isle of Man as the dynamic and well-regulated place it is".

Drower is dismissed by government spokesman, Alistair Ramsay, as an individual with no journalistic credentials, despite his record in revealing scandals.

SOME OF THE problems with the Isle of Man's image at the moment may derive from the very fact that dissent appears to be so difficult. Drower's writing about the Mount Murray affair resulted in seizure of his computers and gagging orders.

Bernard Moffat is the secretary of the Transport and General Workers' Union on the island, and also of the Celtic League, which is highly critical of the government.

"In a small community there is an incestuous relationship between the police, the judiciary and public officials," he says.

Moffat found himself arrested, charged and convicted of a drink-driving offence soon after it emerged that the Manx Council for Civil Liberties was run from his office. Moffat is convinced that his arrest and conviction arose from his political activities. The conviction was overturned on appeal.

Mark Kermode is chairman of the Manx nationalist party, Mec Vannin, which is not represented in the parliament. He says the island's media are not independent of the government, citing the fact that local newspapers never reported the hearings of the Mount Murray inquiry, to most observers the biggest story on the island for years.

In reply to a letter from his party about this issue, the deputy editor of Isle of Man Newspapers, Jo Overty, said: "It is extremely dangerous to report such matters on a piecemeal basis . . . We opted from the outset to report in detail on the outcome."

Manx radio is owned by the government. In such a situation it is not surprising that websites run by individuals are the only places where allegations of wrongdoing surface.

The Isle of Man boasts of its consensus form of government, which means that there are no parties and no parliamentary opposition. Karran describes himself - and is described by others - as a one-man opposition in the House of Keys.

"I'm absolutely hated," he says cheerfully. "There are no checks and balances here. Government and parliament are the one thing. It's too clubby-clubby, too matey-matey. No one is held to account. What we need on this island is a real opposition."